PRADEEP NANDRAJOG,J. - (1.) Late Moti Lal Sanghi, the family patriarch died on 1961. There were 3 family businesses. One son, (Late) N.K. Sanghi took charge of family business in Rajasthan. The next son (Late) A.K. Sanghi took charge of the family business at Delhi and the remaining two, R.K. Sanghi and M.K. Sanghi took charge of business at Bombay. In the year 1964 Sanghi Motors Private Limited (Bombay) expanded to establish a factory for manufacture of oxygen in the name of Sanghi Oxygen. R.K. Sanghi started managing the said division and the youngest brother M.K. Sanghi started managing the motor division.
(2.) Whether in the form of partnership firms or companies, the family business was carried by brothers like a partnership firm in which all the brothers had cross holdings. This has been recognised by the Supreme Court in the order dated 1st December, 2015 disposing three Civil Appeals, lead appeal being Civil Appeal No.3687/2006 Rajni Sanghi v. Western Indian State Motors Ltd. and Ors. Friction arose. The four brothers signed an agreement on 06.07.1983. It was to resolve the disputes which was simmering amongst the brothers. Attempt was made to partition the family business. The family agreement involving the methodology of partition was chalked out in a board meeting of M/s Sanghi Motors Private Limited (Bombay) on 22.02.1984. It ran into trouble. The four brothers entered into an arbitration agreement on 06.08.1984 and appointed one Sh. H.K. Sanghi, a family friend as the sole arbitrator. Before the award could be published M.K. Sanghi filed a company petition bearing C.P. No.128/1985 before the High Court of Bombay seeking injunction against A.K. Sanghi and R.K. Sanghi in respect of shares and management of both the divisions of Sanghi Motors Private Limited (Bombay). Proceedings were initiated in Delhi High Court challenging the existence and validity of arbitration agreement dated 06.08.1984. During the pendency of the proceedings an award came to be pronounced on 03.12.1987. The company petition was thereafter filed in this Court concerning Western Indian State Motors Ltd.
(3.) Multifarious proceedings between the family resulted in a scheme by consent being approved by this Court on 05.09.1994. The same was challenged in appeal by M.K. Sanghi bearing Civil Special Appeal No. 30/1994. The appeal was partly allowed. Review thereof was rejected and matter reached Supreme Court.;