TaxTMI 
TaxTMI 
2021 (6) TMI 277
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....roper in the facts and circumstances of case. 2. Before 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 Nat....
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....uch agreement, by three arbitrators, one to be nominated by each party and the third (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 ....
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....he word "Unless" may leave some room for considering otherwise, only if prima facie it is of the view that no valid agreement subsists. In the present case, admittedly, 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 f....
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....ppellate Tribunal and not challenged the same, hence, principles of res judicata applies. (iv) That respondents are participating and extensively dealing with issues in main present company petition before Hon'ble National Company Law Tribunal 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 ....
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....is not interested in arbitration by referring incidences of appointment of Arbitral Tribunal in CP No. 114/2007, dissolution and thereafter seeking reconstitution of Arbitral Tribunal. (x) That both parties had agreed before The Hon'ble Supreme Court that entire disputes between parties would be adjudicated by erstwhile Company Law Board, therefore present applicant cannot be allowed to renege of his 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/....
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....e Hon'ble Apex Court while interpreting contagious issues, with respect to the words and intent behind such amendment. The whole purpose for amendment is to bring the maximum issues under the umbrella of Arbitration and Conciliation Act which not only will lessen the burden of litigations, but also cost and time. A. It is observed that CP No. 114/2007 and CP No. 144/2016, both the petitions have prayers with respect to the "Definitive Agreement" 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 natu....
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....anship matters, insolvency and winding up, testamentary matters, tenancy matters (all being governed by special statutes) * It was clarified that specific performance of contract, disputes of rights like agreement to sale/mortgage does not involve right in rem and only personal obligation, hence, are arbitrable. D. In case of, The Branch Manager M/s. Magma Leasing & Finance Limited & Another Versus Potluri Madhavilata & another, AIR 2010 SC-488, it is decided that if the original agreement 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 arbit....
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....nitive Agreement" valid in the eyes of law and being capable of execution. J. To counter this argument, the applicant has filed additional written submissions annexing the latest judgment of the Hon'ble Supreme Court in M/s. N.N. Global Mercantile Private Limited Versus Indo Unique Flame Limited and Others, passed on 11.01.2021, removing the hurdle of the issue of arbitrability of an agreement which is not properly stamped. It was decided that the previous finding in SMS Tea Estates and Garware Wall Ropes Limited, holding that non-payment of stamp duty on commercial contract would invalidate even the arbitration agreement and render it non-existent in law and unenforceable, is not the correct position in law. K. With respect to the arguments of non-applicant about res judicata, as per the records, the Arbitral Tribunal, as appointed by Hon'ble Delhi High Court, has not passed any interim or final award, neither the arbitration had progressed to address and decide any of the issues. We are agreeing with the arguments of the applicant that res judicata does not apply if the same points are not agitated and decided any time prior by any authority. L.....