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TaxTMI 
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TaxTMI 
2022 (11) TMI 1086
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....Chevella Mandal, Ranga Reddy District, Telangana. Respondent Nos. 2 and 3 are promoters and 100% shareholders of respondent No.1 Company. Respondent No. 4M/ s. Meenakshi Power Pvt. Ltd. is an affiliate of the appellant herein and is a proforma respondent in the present case while the other three respondents are the contesting respondents. 4. Succinctly stated, the facts of the case are that the power project of respondent No.1 herein is generating power and has a twenty year Power Purchase Agreement with Telangana State Southern Power Distribution Company Limited. The power project was partly financed by Corporation Bank, Film Nagar Branch, Hyderabad in the form of a Term Loan vide Account No. 560821000017646 and partly financed by M/s. IFCI Venture Capital Funds Limited (hereinafter referred to as 'IFCI Venture Capital') in the form of 14,68,000 Optionally Convertible Debentures of Rs.100/each at par aggregating to Rs.14,68,00,000/( Rupees Fourteen Crore Sixty Eight Lakhs Only) under a Venture Capital Fund for Schedule Castes. Since it was difficult for respondent No.1 to service the debt availed from the financial institutions, respondent Nos. 2 and 3 its promoters, decided to....
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....lant herein appointed one Dr. P.V. Amarnadha Prasad, Engineer and Techno Legal Consultant, Hyderabad as its arbitrator and vide such letter requested respondent Nos. 1 to 3 to appoint their nominee arbitrator and to constitute an Arbitral Tribunal of three members to adjudicate upon the dispute between the parties. On receiving no response to the aforesaid notice, the aggrieved appellant herein filed an application under Section 11(6) of the Act of 1996 which came to be dismissed vide impugned judgment and order passed by the High Court. 9. Aggrieved by the dismissal of the aforesaid application, the appellant has approached this Court by way of the present appeal. 10. We have heard Ms. Meenakshi Arora, learned Senior Counsel duly instructed by her instructing counsel, appearing for the appellant herein and Sri D. Narendra Naik, learned counsel for the respondent Nos.1 to 3 and perused the material on record. 11. Learned Senior Counsel for the appellant stated that the High Court has grossly erred in dismissing the application under Section 11(6) of the Act of 1996 and that the judgment and order passed by the High Court needs consideration by this Court. The submissions of l....
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....arned counsel appearing for respondent Nos.1 to 3 supported the judgment and order passed by the High Court and contended that no interference of this Court is required. The submissions of the learned counsel for the respondent No.1 to 3 are epitomized as under: 12.1 That the appellant herein failed miserably in making complete payment of the purchase of shares from respondent Nos. 2 and 3 and in fulfilling its obligation before the expiry of the Share Purchase Agreement i.e., as on 10.11.2018, when the Share Purchase Agreement lapsed and stood terminated by operation of Clause 8 of the Share Purchase Agreement. 12.2 That a fresh Tripartite Agreement was entered into, after four months from the date when the Share Purchase Agreement stood terminated, with an intention to help the appellant to recover an amount of Rs.50 lakhs paid by it to the respondents. Pursuant to the Tripartite Agreement, an Addendum was entered into between the parties wherein it was agreed that the consideration for sale of the power project shall be remitted within timelines stipulated under the terms and conditions of the Tripartite Agreement. The Addendum makes no mention of the compliance with any t....
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....eement was a recovery mechanism is untrue and thus unsustainable. Moreover, the Tripartite Agreement governing the transaction makes no mention of the lapsed Share Purchase Agreement intentionally. The appellant was replaced by respondent No.4 in the Tripartite Agreement and IFCI Capital Venture was added as a party and was also given a right to invoke the agreement. Thus, the Tripartite Agreement is a completely different and new agreement between different parties containing different terms and conditions and does not have an arbitration clause. 13. Having heard the learned counsel appearing for the respective parties, the following points would arise for our consideration: (a) Whether the judgment and order of the High Court calls for any interference or modification by this Court? (b) What order? 14. The plea taken by the respondent herein is that owing to novation of share purchase agreement, the arbitration clause no longer existed so as to resolve the dispute between the parties through arbitration. On the other hand, the plea of the appellant is that there was no such novation of the share purchase agreement and the arbitration clause was very much a....
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....e it open with a direction to the Arbitral Tribunal to decide the same. But if the Chief Justice or his designate chooses to examine the issue and decides it, the Arbitral Tribunal cannot re examine the same issue. As far as the issues which arise in the third category are concerned, they have to be dealt with exclusively by the Arbitral Tribunal such as excepted or excluded matters. It would also include merits of any claim involved in arbitration. 16. In Vidya Drolia (supra), it has been further observed in relation to the aforesaid three categories in Boghara Polyfab Pvt. Ltd. (supra). The first category of issues, namely, whether the party has approached the appropriate High Court, whether there is an arbitration agreement and whether the party who has applied for reference is party to such agreement would be subject to a more thorough examination in comparison to the second and third categories/issues which are presumptively, save in exceptional cases, for the arbitrator to decide. In the first category, the question or issues are relating to whether the cause of action relates to action in person am or rem; whether the subject matter of the dispute affects third party righ....