9911796707
TMI Blog1994 (10) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... of India set up an Expert Committee to assess and evaluate the items of jewellery which could be taken over by the Union of India, keeping in view the provisions of Antiquities and Art Treasures Act, 1972 (hereinafter the Antiquities Act). The Expert Committee in-spected the jewellery in the presence of the Deputy Secretary, Ministry of Education and in August, 1975 the Government of India conveyed to the Trustees its intention to acquire 18 selected pieces of Jewellery at a mutually negotiated price. A further inspection was conducted in December, 1975 by Government officials. In August, 1977, a decision was taken by the Government of India to set up a Gems and Jewellery Museum and another Expert Committee was constituted for making fresh selection of the jewellery. In November, 1977, the committee inspected the jewellery and selected 41 items of jewellery and classified the same in three different grades, approximately valued at about ₹ 16 crores. In February. 1978 the Director General, Archeological Survey of India inspected the jewellery and on 22.2.1978 granted a non- antiquities certificate in respect of 65 items of jewellery out of the total of 89 items of jewellery i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an application before this Court seeking Stay of the auction in order to enable it to take a decision whether it would allow the export of the items of jewellery. The Court was informed by the Additional Solicitor General on 21.9.1979 that the Cabinet Committee on Political Affairs had decided that the jewels of the Nizam, including the items in question, were art treasures and in national interest they should not be allowed to be taken out of the country. The cabinet on 24.10.1979 decided that the Antiquities and Art Treasures Rules be amended with a view to declare the identified pieces of jewellery as art treasures and appointed an Expert Committee to assess the value of 37 items of jewellery and acquire them as art treasures under Sections 19 and 20 of the Antiquities Act. Pursuant to this decision, the Rules were amended. Rule 2A, as amended, provided that a Committee would be set up to examine the items of jewellery to be declared as art treasures. It was this decision of the Government of India which was challenged through writ petition No. 1429/79 by Prince Muffakam Jah. and thorough writ petition No. 1185/79 by the Princess. The petitioners sought that the Government of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led in this court on 14.2.1989. The court was informed that the parties had agreed to settle as a 'package deal' all the issues relating to the jewellery of the Late Nizam which was held in trust by the two Trusts. The parties agreed to have the disputes resolved through arbitration. Each of the parties was to nominate one arbitrator. It was agreed that arbitrators shall appoint an Umpire by mutual consent at the time of entering upon the reference and that the matter shall be referred to the Umpire in case of difference of opinion between the two arbitrators. The terms of reference were detailed in the agreement itself. Para 6 of the agreement provided that the Central Government shall accord necessary permits and facilities for the purpose of facilitating the various procedures under Clause (c) Of Section 20(1) of the Antiquities Act and Clause (7) provided that the Arbitrators shall report the Award to this Court for appropriate orders and also for adjudication of any disputes relating to the Award under the Arbitration Act, 1940. On 25.4.1989 this Court accepted the agreement and directed the writ petitions to be disposed of in terms of the agreement. The petition of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Umpire and confirmed by this Court and therefore, could not avail herself of the opportunity to inspect the jewellery and file a statement of valuation. The Princess, as already noticed, was not a party to the arbitration proceedings but had been granted this indulgence by the Umpire in view of the orders made by this Court. During the pendency of the proceedings before the Umpire, an application was moved by the Union of India seeking orders to the effect that the scope of arbitration proceed- ings be limited to the items of jewellery which are the Trust's property and not to include those which are State's property. The application was based on the plea that some of the items of jewellery comprised in the two Trusts i.e. the main Trust and the supplemental Trust, did not belong to the Nizam and had vested in the nation, after the merger of Hyderabad and therefore, the Nizam had no right to execute any Trust in respect of those items of jewellery and therefore, the Trust could not claim any compensation for the Said items of jewellery. It was brought to the notice of the Umpire that an application had earlier been moved before this Court by the Union of India With the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the said sum of ₹ 225,37,33,959.00 as just and fair price/compensation within the stipulated period of 8 (eight) weeks and the Central Govern-ment intends to exercise its option of acquiring some of the items in terms of the option given to the Central Government under clause 5(b) of the Agreement, the Central Government within 6 (six) weeks from the date of the Award will inform the Trustees accordingly and the Central Government will intimate to the Trus-tees the particular items the Central Government wishes to pur-chase/acquire. 4. In the event of the Central Government intimating to the Trustees the items of jewellery the Central Government wishes to purchase/acquire in terms of the option under Clause 5(b) the matter may be decided by mutual consent as contemplated in the Agreement and such decision by mutual consent is to be arrived at within 2 (two) weeks thereafter. 5. If the matter be not decided by mutual consent within the said period of 2 (two) weeks the difference between the parties shall be referred to arbitration in terms of clause 5(b) of the Agreement. 6. In the event of the Central Government not purchasing/acquiring all the 173 items of jewellery in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reiterated that the Union intends to buy to the entire lot and the reference has continued for determination of the just and fair value of the 173 items of jewellery." The award dated 27.7.1991, was submitted to this Court for appropriate orders. Parties had the notice of the filing of the Award. The award was not implemented and the Union of India, filed I.A. No. 8 of 1991 on .29.8.1991, being a petition under Section 15/16 of the Arbitration Act, 1940, questioning the validity and correctness of the award. The following prayers were made in the said I.A. : "(A) Set aside the Award of the Ld. Umpire dated 27th July 1991 and rebut the same back to him for a fresh determination of the values; (B) Stay the operation of the award of the Ld. Umpire till the disposal of this Petition" The Trustees also filed a petition under Section 15/16 of the Arbitration Act, 1940, being I.A. No. 9 of 1991 on 6.9.1991. The following prayers were made in the said L.A. "It is, therefore, respectfully prayed that this Hon'ble Court be pleased to : (a) remit the Award of the Hon'ble Umpire dated 27th July 1991 for reconsideration under Section 16 of the Arbitration Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conveying the undertaking to purchase 173 items of jewellery would be filed in this Court. An affidavit was accordingly filed on behalf of the Union of India by Shri G. Venkatas- wamy, Director, Department of Culture, Human Resource Development Ministry. In the said affidavit it was inter alia stated : "That it is submitted that the statement made on 12.7.1993 before this Hon'ble Court was made after the Cabinet had approved that the Government of India can accept the learned Umpire's verdict. Save for ₹ 45 crores being the unintended typographical error placed as against item No. 33 of Schedule of valuation of the Award. It is further submitted it is an admitted position between parties that in item No. 33 of the Schedule of valuation in the Award, a typographical error has been committed. That it is submitted the Government of India is willing to purchase all the 173 items of jewellery comprised in the two Trusts for ₹ 180,37,33,959 (being the amount reduced by ₹ 45 crores which represents the typographical error in item. No. 33 of the Schedule of valuation of the Award) and pay the same in six equal annual installments of ₹ 30 crores each, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons stated in the affidavit, and it was prayed that in the facts and circumstances, the Government's right to purchase the 173 items of jewel-lery in terms of the Award should be held to have lapsed and clauses 6 and 8 of the award should be hold to have become operative. On 28.9.1994, when the case was fixed for final arguments on the applications I.A. 8/91 and I.A. 9/91, learned counsel for the parties did not press the applications and the following proceedings were recorded : "We have heard Sri G.L. Sanghi, learned senior counsel for the Trustees and Sri D.P. Gupta, learned Solicitor General for the Union of India. Sri Sanghi submitted that he does not press I.A. No.9. Learned Solicitor General submitted that I.A. No. 8 filed by the Union of India is also not pressed. However, both the counsel submitted that so far as the quantum of award is concerned there is an error of calculation to the extent of ₹ 45 crores which requires to be deducted from the quantum Of the award. Sri Sanghi submitted this without prejudice to the contentions urged by the Trustees." Mr, Sanghi, the learned senior counsel appearing for the Trusts submitted that in the agreement en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b- mitted that the award of the Umpire was not capable of implementation, till it was reported to this Court and appropriate orders were made thereon after "adjudication of the dispute relating to the award". The submission of the learned Solicitor General precisely is that since I.A. 8/91 and L.A. 9/91, filed by the parties challenging the validity and correctness of the award and seeking its remission to the Umpire were pending adjudication in this Court, the Award could not enforced till "adjudication of the disputes" relating to the award by this Court. Accordingly to the learned Solicitor General, the period of 8 weeks fixed in clause (1) of the Award was incapable of being adhered to, as the Award, to become enforceable, was required to have appropriate orders of this Court. Learned Solicitor General, therefore, submitted that after the adjudication of I.A. 8/91 and I.A. 9/91, this Court may prescribe time within which the option can be exercised by the Central Government in terms of the Award and that since the Central Government is willing to purchase 173 items of jewellery, for the valuation determined by the Umpire, after deducting the amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders and also for adjudication of any disputes relat-ing to the Award under the Arbitration Act, 1940." The above clause of the agreement/terms of reference required the Award to be reported to this Court for appropriate orders and also for adjudication of the disputes relating to the Award if any under the Arbitration Act, 1940. The 'award' could, therefore, become capable of implementation only after appropriate orders were made by this Court. Since I.A. 8 and I.A. 9 filed by the parties were pending adjudication in this Court, the Award could not become enforceable till the same were adjudicated and appropriate orders made by this Court. The prescription of the period of 8 weeks in clause (1) of the Award has, of necessary, to be read as subject to clause (7) of the agreement. Since, the validity and correctness of the award was an issue wide open before this Court after the Award came to be reported to this Court for appropriate orders, the Award had remained almost in the state of suspended animation. We, therefore, cannot accept the submission of Mr. Sanghi that on account of the failure of the Union of India to purchase 173 items of jewellery within the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be granted from the date of the agreement and that interest, if at all may be granted only from the date of the order of this Court, when alone the Award becomes operative and enforceable. Though it is true that both parties had challenged the correctness of the Award and had sought its remission to the learned arbitrator by filing applications in this Court before the period prescribed in clause (1) of the Award had expired but it cannot be lost sight of that the Union of India has had the use of the money from the date of Award onwards. Had the Central Government accepted the award and made a submission to this Court accordingly, when the Award was reported to this Court, appropriate orders could have been made and the sale price would have been received by the Trusts in 1991 itself. Inflation is a phenomenon of which this Court take judicial notice. The Court has to strike a balance between the competing equities. It appears to us, therefore just and fair, that interest be awarded on the sum of ₹ 180,37,33,959.00 @ 6 (six) per cent per annum from the date of the Award till the payment is made. Thus, the Central Government shall pay to the Trusts the sum of ₹ 180,37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Govern-ment intends to exercise its option of acquiring some of the items in terms of the option given to the Central Government under Clause 5(b) of the Agreement, the Central Government within 6 (six) weeks from the date of the Award will inform the Trustees accordingly and the Central Government will intimate to the Trus-tees the particular items the Central Government wishes to pur- chase/acquire. 4. In the event of the Central Government intimating to the Trustees the items of jewellery the Central Government wishes to purchase/acquire in terms of the option under Clause 5(b) the matter may be decided by mutual consent as contemplated in the Agreement and such decision by mutual consent is to be arrived at within 2 (two) weeks thereafter. 5. If the matter be not decided by mutual consent within the said period of 2 (two) weeks the difference between the parties shall be referred to arbitration in terms of clause 5(b) of the Agreement. 7. With regard to items the Central Government chooses to acquire by exercising its option in terms of clause 5(b) and with regard to which dispute may be raised for lack of mutual agreement, such disputes will be resolved by arbitrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the price as determined for each item by the Umpire in the schedule to the Award. The Central Government may exercise the option of partial purchase, on the determined price, by intimating to the Trustees, the identified items of jewellery which the Central Government wishes to purchase within a period of one month from the date of this order. On such an intimation being given to the Trustees, the other items of jewellery in respect of which the Central Government does not exercise the option to purchase, shall become available to the Trustees add they shall be free to sell the same and if necessary even the same for sale, subject to the provisions of the existing law. After exercising the option within the period of one month from the date of this order, the Central Government will pay to the Trustees the total price of the selected items of jewellery at the determined price, in lump sum, by 31.12.1994. The Award, therefore, needs, to be modified accordingly. Clause (10) of the Award, also requires to be modified to include the parties purchase of the items of jewellery. However, in all other respect we accept the Award and place on record our deep sense of appreciation to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill pay and bear its own costs and all costs and charges including the remuneration paid to the Arbitrator/Umpire and other in-cidental expenses of the arbitration shall be borne by the parties in equal shares. 8. In the event of the Central Government not acquiring all the 173 items of jewellery in terms of the Award the Central Govern-ment will pay to the Trustees a sum of ₹ 1,50,000,00 only towards the cost of the arbitration proceeding. This Order for costs is made in view of the fact that the Union in course of the proceedings before the Umpire has reiterated that the Union intends to buy the entire lot and the reference has continued for determination of the just and fair value of the 173 items of jewellery." Before parting with the order, we would also like to clarify that in the event the items of jewellery, all or selected items, are not purchased by the Central Government as per the modified Award made by us, the rights in the items of jewellery shall stand crystallised in favour of the Trustees and they shall be entitled to deal with the jewellery in any manner they should choose, subject, however, to the provisions of the existing law/laws. I.A. No. 8/91 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
