TaxTMI 
TaxTMI 
2021 (12) TMI 968
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.... connection with this Agreement through consultation in good faith and mutual understanding, provided that such consultation shall not prejudice the exercise of any right or remedy of either Party hereto by any such Party in respect of any such dispute. 6.3 If any dispute of difference that may arise between the Parties (other than any inter se dispute among the Requesting Parties, which shall be outside the scope of this Agreement), and the same is not resolved in mutual good faith discussion, it shall be decided by way of final and binding arbitration to be held in accordance with the Arbitration and Conciliation Act, 1996 ("Arbitration Act") to be conducted by a sole Arbitrator to be nominated by Shivakirti. 6.4 The seat and venue of arbitral proceedings shall be at Delhi, India and the language of the proceedings shall be the English language. 6.5 Subject to the above provisions contained in Article 6, the Parties submit to exclusive jurisdiction of Courts at Delhi, India for any interim or such other emergency relief." Factual Background: 2. The facts relevant for decision on the instant application are as follows: (i) Respondent No. 1....
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....ity Agreement, and therefore, the same is not binding on her either. (ii) Respondent No. 1 is governed by the document of incorporation, which as per the Limited Liability Partnership Act, 2008 [hereinafter "LLP Act"] is the sole source of authority for the LLP. It is governed by the terms of its Incorporation Agreement dated 21st February, 2019 (as amended on 21st June 2019). Mrs. Lata Yadav, on the date of alleged execution of the remaining Facility Agreement, had 99% share, whereas Mr. Ajay Yadav had the remaining 1% share in the said firm. Clause 22 of the said incorporation document mandates that all matters related to Respondent No. 1 shall be decided by a resolution passed by a majority (in number) of the partners and for this purpose each partner shall have a vote according to the profit-sharing ratio. Clause 36 of the incorporation document expressly provided that the firm is not bound by anything done by a partner if: (a) the partner in fact has no authority to act for the LLP in doing a particular act, or (b) the person knows that he has no authority or does not know or believe him to be a partner of the Umaiza Infracon LLP. (iii) Thus....
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.... 4. Respondent No. 2's stand is quite similar to that of the Respondent No. 1 and therefore, for brevity, the same need not be elaborated. It would suffice to note that Respondent No. 2 does not deny his signatures, but contends that the signatures were obtained by misrepresenting the document to be a draft agreement which was to be destroyed later and followed by a final agreement as per agreed terms. He also contends that neither copy of the said agreement was provided, nor any opportunity was afforded to go through the same, to understand its contents, or to modify the same. The Facility Agreement is thus void ab initio as it was obtained without free consent. OBJECTION OF RESPONDENT NO. 4 5. Mr. Arun Aggarwal, counsel for Respondent No. 4 makes the following averments: - (i) Respondent No. 1 is neither a signatory nor a party to the Facility Agreement and therefore, not bound by any of the terms and conditions contained therein. Under the Companies Act, 2013 [hereinafter "Companies Act"], Respondent No. 4, has its own separate legal identity, distinct from its promoters, directors, or shareholders. (ii) At the time of execution of the Facility Agreement....
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....nswer is simple and straightforward. Respondent No. 1, which an LLP, has signed the Facility Agreement through its partner Mr. Ajay Yadav. The constitution of Respondent as a limited liability partnership is not in dispute. Mr. Ajay Yadav also does not deny his signatures or the fact that he is a partner of Respondent No. 1. Thus, the execution of the Facility Agreement, his authority being implied, would prima facie bind Respondent No. 1. Respondent No. 1 and 3 cannot wriggle out of the arbitration agreement contained in the Facility Agreement by merely claiming that her partner Mr. Ajay Yadav has acted without consent or concurrence, particularly when the receipt of the sum of Rs. 1,46,00,00,000/- (Rupees One Hundred and FortySix crores Only) by Respondent No. l has not been denied by any of the Respondents. 9. Further, mere absence of signature of Respondent No. 3 cannot render the agreement ex-facie invalid, since Respondent No. 1 is a limited liability partnership. Reference against her is based on her being a partner of Respondent No. 1 firm, which is not denied. The contention of the Respondents that the LLP's incorporation documents do not give Mr. Ajay Yadav the final a....
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....o. 4 demonstrates that, if the corporate veil is pierced, it is indeed an alter ego of Respondent No. 1. 13. Next, the facility extended by the Petitioner was for the direct benefit of Respondent No. 4, which was in CIRP. The payment made by the Petitioner was utilised for discharging liabilities of Respondent No. 4. But for the payment so made, the resolution plan would not have been implemented, which could perhaps have resulted in the winding up of Respondent No. 4. Thus, undisputedly, Respondent No. 4 is a direct beneficiary of the facility extended by the Petitioner to Respondent No. 1. 14. That apart, in lieu of extending the Facility Amount to Respondent Nos. 1 to 3, certain assets as identified in the Facility Agreement, were agreed to be dealt with, as provided for in Facility Agreement. On this aspect, the Petitioner has drawn the attention of this Court to the terms and conditions of the Facility Agreement, and in particular clauses 3 and 4, which read as under:- "3.4. The Requesting Parties represent, warrant, agree and undertake that they will and shall take all necessary measures to ensure that they may able to transfer all the Sunstar Securities to Shi....
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....irectors of Sunstar and each of the Requesting Parties is handed over to Shivakriti. 4.2. Each of the Requesting Parties hereby covenant and undertake that, until such time Shivakriti NOC is issued to the Requesting Parties: (iii) they will execute any definite agreement (as envisaged in the Resolution Plan with Sunstar and any other stakeholders), without in any manner diluting any of the rights available to Shivakriti hereunder, and only with prior consent of Shivakriti (which consent will not in any manner dilute the obligations of Requesting Parties hereunder). (iv) they will ensure that no security interest and other encumbrances over any of the assets of Sunstar are created except as mentioned in Article 4.1(vi) and no security interest and other encumbrances over any of the shares, debentures, bonds and other securities (including Specified Securities) are created in any manner. (v) They will procure Sunstar to ensure and comply with each and all of the above covenants and undertakings." 15. These clearly indicate that obligations under this Agreement also pertain to Respondent No. 4 and to the operation of its business and contractual ....