TaxTMI 
TaxTMI 
TaxTMI 
2021 (6) TMI 277
X X X X Extracts X X X X
X X X X Extracts X X X X
....e dealing with pleadings in this application, it is necessary to delve into the background in brief, as it has a chequered history. 3. The present petition CP No. 144/2016 is filed by the Company along with its shareholders/directors, under Sections 241-242 of The Companies Act, 2013 seeking reliefs against total 41 respondents, for the acts of oppression & mismanagement, allegedly perpetrated from past more than one and half decade, mainly by few of the respondents. In fact, the Ist petition was filed by one of the shareholder/director (since deceased late Mrs. Sonia Khosla) in the year 2007 being CP No. 114/2007, under Section 397-398 of The Companies Act, 1956, for acts of oppression and mismanagement, by various respondents, who are also respondents in present petition, along with other added respondents. In that petition of 2007 various civil & criminal proceedings, writ petitions, appeals and special leave petitions were filed by both the sides and acrimonious allegations and counter allegations were made by both the sides. There are several observations made by the Hon'ble Supreme Court and Hon'ble National Company Law Appellate Tribunal (NCLAT) against parties in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d (acting as President of the Tribunal) to be nominated by the two parties nominated as arbitrators. The arbitration shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment of it for the time being in force". b) Where the dispute involves multiple parties, whether as claimant or as respondent, the multiple claimants, jointly, and the multiple respondents, jointly, shall nominate as arbitrator each. In this agreement, Khosla family are one party, VB and the company are the other party. c) In the absence of such a joint nomination and where all parties are unable to agree to a method for the constitution of the Arbitral Tribunal, any party may approach the Delhi High Court for the constitution of the Arbitral Tribunal in accordance with The Indian Arbitration and Conciliation Act, 1996. (ii) That the said "DA" is not only binding on parties but their respective legal heirs, successor-in-interest as well as assignees. (iii) That the said "DA" was acted upon by the parties and as per the terms, respondent No. 2 had made payments while executing the agreement as well as thereafter. (iv) That the rights and obligations of pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ittedly, the parties have acted upon the agreement and monies were transferred between the parties. The Company's bank account reflects the said transactions between the parties to the agreement. This is sufficient to prove that valid contract/DA is in existence. (iii) That in CP No. 114/2007 (which now stands disposed of), an application filed under the same provisions of Arbitration and Conciliation Act, for same reliefs to refer matter to arbitration, which was granted by Hon'ble Delhi High Court vide order dated 29.02.2008 and accordingly Arbitral Tribunal comprising of 3 Arbitrators was appointed. The parties herein had subjected themselves to the jurisdiction of the said Arbitral Tribunal, which is not disputed by any parties in this application. (iv) Though the said Arbitral Tribunal resigned, due to the behavior of the respondent herein (petitioner No. 2) which is also recorded in the order dated 20.03.2009 of Hon'ble Delhi High Court, therefore petitions were filed for constitution of fresh Arbitral Tribunal. III The applicant relies on following judgments with respect to objections raised by the respondents herein (mainly petitioner No. 2). The said judg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nal as well as Hon'ble National Company Law Appellate Tribunal, hence maintainability of this application is ruled out. The present respondent has relied on following judgments to establish that reliefs sought under Company Petition, which are not contractual but of a statutory nature, the Arbitral Tribunal is incapable of granting such relief: * Rashtriya Ispat Nigam Limited Vs. M/s. Verma Transport Co. (2006) 7 SCC 275 * Twentieth Century Finance Corporation Limited Vs. RFB Latex Limited and Others- (1999) 97 CC 636 (CLB) * Khandwala Securities Limited and Others Vs. Kowa Spinning Limited and Others- (1999) 97 CC 632 (CLB) * Bhalchandra Dharmajee Makaji and Others Vs. Alcock, Ashdown & Company Limited and Others - (1972) 42 CC 190 * O.P. Gupta Vs. SFFLV General Finance Private Limited & Ors. (1977) 47 CC 279 (Delhi) * Surendra Kumar Dhawan and another Vs. R. Vir and Ors. CA No. 626 of 1972 in CP No. 73 of 1973, decided by Delhi High Court on 06.05.1974 (v) That parties to the Company petition and parties to Arbitral Agreement are not same. In Company Petition there are 6 petitioners & 40 respondents excluding RoC, whereas there are only four parties to Arbitral ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is own undertaking given before Hon'ble Supreme Court. (xi) That present applicant by filing reply in CA No. 18/2019 argued on point of non-maintainability & lack of merit in main CP No. 144/2016. Hence, applicant forfeited its right to file present application under Section 8 of Arbitration and Conciliation Act, relying on judgment in Rashtriya Ispat Nigam Vs. Verma Transport Co. (2006) 7 SCC 275, wherein the distinction is drawn between reply filed in supplemental proceedings as opposed to written statement in main proceedings. (xii) In view of the Hon'ble National Company Law Tribunal importing the directions of Hon'ble National Company Law Appellate Tribunal in CP No. 114/2007 not to entertain any application further by the parties, no Court/Tribunal can be seen condoning (much less encouraging) contempt of its superior courts by the parties before it. The non-applicant-respondents had emphasized that in case this application is allowed, the parties and/or Tribunal may be attempting contempt of directions of Hon'ble National Company Law Appellate Tribunal. 8. One CA No. 731/2020 was filed by Mr. Vineet Khosla, son of petitioner No. 2, Mr. Deepak Khosla for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment" dated 31.03.2006. The parties to the Memorandum of Understanding dated 21.12.2005 and "Definitive Agreement" dated 31.03.2006 are also parties in both the above company petitions. It is seen from the records that both petitions are filed by petitioner of 'Khosla Group' as mentioned in their above mentioned agreement, under the provisions of respective sections of The Companies Act, 1956 as well as The Companies Act, 2013 for acts of oppression and mismanagement. Though on 07.02.2020, the CP No. 114/2007 stood disposed of as withdrawn, the fact remains that the reference to the arbitration for resolution of disputes between the parties, which is ongoing since 2005, is not invoked for the first time. Furthermore, the nature of the disputes, most of the parties involved, the acts complained of, are of common or of similar nature, in both the above petitions. B. It is an admitted fact that with consent of both the sides the Hon'ble Delhi High Court had appointed Arbitral Tribunal vide order dated 29.02.2008 soon after CP No. 114/2007 was filed. The non-applicant herein has argued that the said "DA" dated 31.03.2006 was challenged by him/them before the said Arbitral....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is executed but frustrated due to repudiation/frustration/breach etc., it is performance of contract that has come to an end, but contract if still valid, arbitration clause operates for the purposes of resolution of disputes. E. In the amendment in the Arbitration and Conciliation Act of the year 2015, the specific word is mentioned as 'shall'. The power of referral court can be exercised even if there is previous court judgment to the contrary. The court must refer parties to arbitration unless it thinks that a valid arbitration agreement does not exist. F. From above discussion, it leaves no doubt in our mind that this matter can be referred to arbitration. The parties are at loggerheads since 2006 onwards and have probably approached every judicial forum to seek reliefs. We see that during the process some parties have left for heavenly abode, some have reached super-senior/senior citizen status and those recently getting involved in this unending litigation, are young generation, who should walk the road of living peaceful life rather than wasting time, energy and money on litigations, which can be resolved amicably. G. During the hearing, we had endeavored to ga....