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Pusapati Ashok Gajapathi Raju & Anr. v. Pusapati Madhuri Gajapathi Raju & Ors.

Civil Appeal · 2021 INSC 709Decided 9 Nov 2021
Civil Appeal Nos. 6657-6658 of 2021
Justice L. Nageswara Rao · Justice B.R. Gavai

Background

This was a decades-long family property dispute within the erstwhile Vizianagaram royal family. After earlier partitions in 1960 and 1971 and prolonged litigation, the family agreed in 2000 to refer the entire dispute to arbitration before a retired Supreme Court judge. The arbitrator's 2007 interim award dealt with, among other things, 99 diamonds and an emerald ring claimed by one family member (Respondent No. 1) as her personal ("stridhana") property, but ultimately allowed the appellants to keep them. The High Court set aside that part of the award, and the family members holding the jewellery appealed to the Supreme Court.

Decision Breakdown

The Supreme Court agreed with the High Court that the arbitrator had exceeded the scope of what he was asked to decide. The arbitrator was only supposed to decide whether the jewellery was the respondent's personal property, and if so, that settled the matter: he was not authorised to separately decide that handing the jewellery over in 1971 meant she gave up her rights to it. Having found the jewellery was her stridhana property, the arbitrator should have stopped there instead of also ruling on its retention/division. The Court dismissed the appeals, upholding the High Court's decision on this point, and used the opportunity to appoint a new sole arbitrator (Justice Kurian Joseph) to complete the long-pending final award in the broader family partition.

Lesson Learnt

An arbitrator must strictly stay within the specific questions referred for arbitration; a finding or decision that goes beyond the terms of reference can be struck down as a jurisdictional error, even in a long-running family settlement.

Official source (sci.gov.in)View Judgment (PDF)

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