Bina Modi's plea against son Lalit's Singapore arbitration proceedings not maintainable: Delhi HC

The Delhi High Court has held as not maintainable, a plea by late industrialist KK Modi's wife challenging her son Lalit Modi's move to initiate arbitration proceedings in Singapore over property dispute of the family.

The high court said it does not have the jurisdiction to adjudicate the anti-arbitration injunction suits filed by Lalit Modi's mother Bina, his sister Charu and brother Samir and they are open to take such pleas before the arbitral tribunal in Singapore.

Justice Rajiv Sahai Endlaw said that an anti-arbitration injunction suit does not lie, so the pleas are not maintainable, and dismissed.

Bina, Charu and Samir, in two separate suits, contended that there was a trust deed between the family members and the KK Modi family trust matters cannot be settled through arbitration in a foreign country as per Indian laws.

They had sought permanent injunction restraining Lalit Modi from prosecuting or continuing with the application for emergency measures and any arbitration proceedings against them.

As per the case, the Trust Deed was executed at London by KK Modi as settlor/ managing Trustee and Bina, Lalit, Charu and Samir as Trustees, and in pursuance to oral family settlement recorded between them on the February 10, 2006.

KK Modi died on November 2 last year after which the dispute emerged amongst the trustees.

Lalit contended that after the demise of his father, in view of lack of unanimity amongst the trustees regarding sale of trust assets, a sale of all assets of the trust has been triggered and distribution to beneficiaries has to occur within one year thereof, the court noted.

His mother and the two siblings contended that on a true construction of the trust deed, no such sale has been triggered.

Senior advocate Mukul Rohatgi, representing Bina, Charu and Samir Modi, contended that Lalit was a fugitive and also accused of several gross violations of Indian law, including criminal breach of trust, cheating and criminal conspiracy under the IPC and proceedings under Prevention of Money Laundering Act are pending against him.

To this, the court said: "A thought occurred to the undersigned (judge), that Lalit may be interested in keeping the proceedings outside the country, to be able to reap benefits of his share in the Trust Fund outside India, to escape the liability from the proceedings already pending in this country against him, and whether this qualifies as a reason for this Court to entertain the suit."
The judge further said: "However on a deeper consideration, I am of the view that the Constitution of India, though has vested this court with jurisdiction, while exercising powers under Article 226 of the Constitution of India to grant relief which law does not entitle a party to or to not grant relief to which a person is entitled to in law, but has not vested this court with such discretion while exercising Ordinary Original Civil Jurisdiction and has vested such powers only in the Supreme Court under Article 142 and this court should thus refrain from acting on such considerations."