TaxTMI 
TaxTMI 
2023 (6) TMI 1514
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....10-2016. The firm later designates the petitioner as partner and minor partner with a particular share in the firm. The firm owing to certain omissions and commissions on the part of the petitioner initiates inquiry by issuance of a charge sheet on 10-05-2022. Calling upon the said proceedings, the petitioner files a Commercial Arbitration Application in Com.AA.No.88 of 2021 invoking Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act' for short) in furtherance of an arbitration clause in the employment agreement before the Commercial Court on 13-05-2021. 4. During the pendency of the proceedings invoked by the petitioner under Section 9, the petitioner was terminated from service by the firm. At that stage, on 08-06-2021, the petitioner invokes arbitration under Section 21 of the Act and issues a notice to the firm. During the pendency of further proceedings under Section 21 of the Act, the application under Section 9 of the Act filed before the concerned Court comes to be dismissed. The petitioner then files a commercial appeal before this Court in Com.A.P.No.161 of 2021 which also comes to be dismissed by an order dated 22-10-2021 by a....
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....earned senior counsel appearing for the respondent/firm would vehemently refute the submissions to contend that the petitioner himself invoked Section 9 of the Act before the Commercial Court which came to be dismissed. Against the order passed by the Commercial Court, the petitioner files an appeal which also comes to be dismissed by a Division Bench of this Court. He does not choose to challenge the order passed by the Division Bench. But, when the same jurisdiction is invoked by the firm, challenging the interim order passed by the Commercial Court, the petitioner questions the jurisdiction of the Commercial Court. It is his submission that the petitioner cannot blow hot and cold and once having chosen to invoke the jurisdiction, he has acquiesced in the jurisdiction of the concerned Court. Therefore, the petition be dismissed and the concerned Court be directed to proceed further. 8. The learned counsel for the petitioner, in reply to the submissions would submit that any amount of consent or erroneous jurisdiction invoked by a particular party would not confer jurisdiction on a Court. If the Court has no jurisdiction it cannot entertain the petition. He would seek an ....
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....Section 17 of the Act. The Arbitral Tribunal in terms of its order dated 15-12-2022 issues certain directions to secure the amount so claimed by the petitioner. The conclusion of the order passed by the Arbitral Tribunal on 15-12-2022 reads as follows: "Conclusion 40) Thus, the requirements for issuing a direction to secure the amount in dispute in arbitration is made out. The application is therefore allowed in part and the following direction is issued by way of an interim measure to secure the amount in dispute in the arbitration: i) The First Respondent is prohibited from alienating or transferring its business/assests/contracts to any party till the disposal of this arbitration; ii) The said prohibition as per (i) above shall cease to operate, if the First Respondent furnishes security by way of a Bank Guarantee for a sum of Rs.9 Crores, to be in force for a period of one year (and to be extended till the expiry of a period of three months from the date of final award in this case. iii) Any finding recorded or observation made in this order, is for the limited purpose of considering whether any interim measures should be ordered und....
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....section (1) of Section 3; (c) "commercial dispute" means a dispute arising out of- (i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents; (ii) export or import of merchandise or services; (iii) issues relating to admiralty and maritime law; (iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same; (v) carriage of goods; (vi) construction and infrastructure contracts, including tenders; (vii) agreements relating to immovable property used exclusively in trade or commerce; (viii) franchising agreements; (ix) distribution and licensing agreements; (x) management and consultancy agreements; (xi) joint venture agreements; (xii) shareholders agreements; (xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services; (xiv) mercantile agency and mercantile usage; (xv)....
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....etween the parties to consider commercial nature of the agreement, if any. The contract is entered into between the petitioner and the respondent on 26-10-2016. The preamble to the contract is as follows: "Further to our recent discussions, we are pleased to confirm the terms of your long-term incentive plan (the "LTI Plan") as the Chief Executive Officer ("CEO") of Elior India Catering LLP ("Elior India"). The LTI Plan sets out a framework for the potential award of an exceptional bonus remuneration in recognition of your contribution to the value creation for Elior India. This letter-agreement sets forth the mechanics of the LTI Plan and the conditions under which you shall be entitled, subject to the terms and conditions set forth herein, to receive this exceptional bonus remuneration and constitutes a supplement to your employment contract effective as of 1st February 2017. (the "Employment Contract"). It supersedes any previous letter or document that you may have received or we may have agreed to, during the preparation of the LTI Plan or prior to the date hereof, and forms the basis of the award of the LTI Plan exceptional bonus remuneration. This ....
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....ill be allocated, subject to the terms and conditions set forth herein, an exceptional gross bonus remuneration in Indian Rupees (the "Base Bonus Amount") compared under the following mechanism (provided that such Base Bonus Amount is a positive amount). Base Bonus Amount (INR) = Equity Value x 0.04 ------------------------ 0.64465 For the purposes of this paragraph b), the Fair Market Value shall be calculated by the Expert within two months following the date on which the annual accounts of Elior India relating in the Financial Year ended on the Maturity Date have been certified by the statutory auditors of Elior India (and such determination of the Fair Market Value by the Expert shall be final and binding upon the Parties, save in the case of fraud). 1.2 Payment The Allocated Amount, if owed to you in accordance with paragraph 1.1 a) above, shall be paid in you in full by Elior India within one month following the date on which the Equity Value has been determined by the Expert. Alternatively, if the Allocated Amount is not due by Elior India, the Base Bonus Amount shall, as the case may be, be paid to you in fully by Elior India ....
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....onus Amount has the meaning set out in paragraph 1.1 Bonus Conditions means the two following conditions: a) continued employment with Elior India Mr.Sanjay Kumar's continued employment as CEO with Elior India from (1st February 2017) until the Maturity Date; and b) Achievement of the Performance Target The fulfillment of at least one of the two following performance conditions by Elior India (the "Performance Target"), calculated as of the Maturity Date. i) The annual Organic Growth for the Financial Year ended on the Maturity Date is at least equal to 7% and/or ii) the EBITDA Margin for the Financial Year ended on the Maturity Date is at least equal to 6.1%. Cash means, with respect to Elior India and its Subsidiaries, the sum of : i) any positive balances in any deposit, current or savings accounts: ii) any corporate income tax receivables; calculated on a consolidated basis in accordance with Indian GAAP." The percentage of amount for payment of incentive is also defined under the term bonus conditions. This is the term by and understood as an employment contract....
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....he afore-quoted provision. The provision relates to agreements of sale of goods or provision of services. They cannot be read in isolation. A pure and simple employment contract cannot be given a colour of a commercial dispute by dressing it to be a provision of services. 16. If every Employment Agreement of the kind that is the subject matter in the case at hand is brought within the ambit of commercial dispute, it would then be opening a pandoras' box or will be opening flood gates of litigation before the commercial Court/s that would clog the said Court. This in effect would defeat the very reason why the commercial Court was constituted. The view of mine, in this regard, is fortified by the judgment of the Apex Court in the case of AMBALAL SARABHAI ENTERPRISES LTD. V. K.S. INFRASPACE LLP [(2020) 15 SCC 585] where the Apex Court interprets what is and what could be a commercial dispute within several enumerations under Section 2(1)(c) of the Act. The Apex Court has held as follows: "6. At the outset, it is noticed that the consideration required in the instant case is as to whether the transaction between the parties herein which is the subject-matter of the s....
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....alt with in abstract. Instead the nature of the dispute and the jurisdiction to try the same is to be reflected in the suit itself since in a civil suit the pleadings, namely, averments in the plaint would at the outset be relevant to confer jurisdiction. Hence before adverting to the other aspects it would be necessary to carefully examine the plaint. The plaintiff has in detail referred to the nature of the transaction between the appellant and the respondents herein. In Para 5 thereof the detail of the land bearing R.S. No. 122 corresponding to City Survey Nos. 1101 and 1100/1 having land area of 9207 sq m at Mouje Subhanpura Reg. District, Vadodara is referred. Further the schedule of the property is indicated in Para 6 and reference is made to the Memorandum of Understanding where again the reference is made to the land. It is averred therein that it would be the total responsibility of Respondent 1 herein (Defendant 2 in the suit) to change the land use as well as to pay the amount that may be required for the permission. The amount to be paid as premium is referred and the right of the plaintiff to secure the mortgage deed in view of the terms of the MoU is stated. In the en....
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....rder since we notice that the High Court in fact has referred to various decisions while deciding the instant case and has thereafter arrived at its conclusion. The discussion as made by the High Court with reference to the various decisions is also justified. In that view, we would refer to the decision of a Division Bench in Jagmohan Behl v. State Bank of Indore [Jagmohan Behl v. State Bank of Indore, 2017 SCC OnLine Del 10706] relied on by the learned Senior Advocate for the appellant. In that regard, it is noticed that in the said case on taking note of the provision contained in Section 2(1)(c)(vii) of the CC Act, 2015 it is held that the dispute involved therein would constitute a commercial dispute and the expression "arising out of" and "in relation to immovable property" should not be given the narrow and restricted meaning and the expression would include all matters relating agreements in connection with the immovable properties. The said conclusion reached was in a circumstance where the immovable property in question was undoubtedly being used for a trade or commerce and it was held so when the claim in the suit is for recovery of rent or mesne profit, security d....
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....er getting the plots on lease from the GIDC, the same was required to be thereafter developed by the original Defendant 1 and after providing all infrastructural facilities and sub-plotting it, the same is required to be given to other persons like the original plaintiff. It is the case on behalf of the original plaintiff that as the original Defendant 1 has failed to provide any infrastructural facilities and develop the plots and therefore, a civil suit for specific performance of the agreement has been filed. There are other alternative prayers also. Therefore, it cannot be said that the agreement is as such relating to immovable property used exclusively in trade or commerce. It is the case on behalf of the original plaintiff that as in clause (vii) of Section 2(c), the phraseology used is not "actually used" or "being used" and therefore, even if at present the plot is not used and even if it is likely to be used even in future, in that case also, Section 2(c)(vii) shall be applicable and therefore, the Commercial Court would have jurisdiction. The aforesaid has no substance. As per the cardinal principle of law while interpreting a particular statute or the provision, the lit....
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....therefore, there has to be a finding as a fact that the land is in fact in praesenti in use for an industrial purpose. The same would apply to a commercial purpose or any other nonagricultural purpose. *** 9. We are in no doubt whatever, therefore, that it is only land which is actually in use for an industrial purpose as defined in the said Act that can be assessed to non-agricultural assessment at the rate specified for land used for industrial purposes. The wider meaning given to t he word "used" in the judgment under challenge is untenable. Having regard to the fact that the said Act is a taxing statute, no court is justified in imputing to the legislature an intention that it has not clearly expressed in the language it has employed." (emphasis supplied) 13. The learned Senior Advocate for the appellant would however, contend that a strict interpretation as in the case of taxing statutes would not be appropriate in the instant case where the issue relates to jurisdiction. In that regard, the learned Senior Advocate has referred to the Statement of Objects and Reasons with which the Commercial Courts Act, 2015 is enacted so as to pro....
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....e Guj 1926] impugned herein. The Commercial Court shall therefore return the plaint indicating a date for its presentation before the Court having jurisdiction." (Emphasis supplied) The Apex Court holds that issues which not relate to commercial disputes are filed before the commercial Courts merely because of high value and with the intention of seeking early disposal. Such issues brought before the commercial Court should not be entertained, as it is not intended to bring in every dispute before the commercial Court by the law makers. The Apex Court further holds that the excluded class of litigation will, in any event be entertained, in the ordinary civil Courts wherein the remedy always existed to add, does always exist. 17. It is also germane to notice what the petitioner understood of the employment contract. A legal notice is caused upon the firm by the petitioner making certain demand. The preamble to the notice reads as follows: "Under the instructions from my client Mr.Sanjay Kumar, S/o Mahesh Narayan Sahay, aged about 56 years, Residing at Nestates, Palladlum, No.547, 16th 'A' Main, 3rd Block, Koramangala, BENGALURU: 560 034, I issue this Legal Notice i....
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.... "51. THEREFORE, my client hereby invokes Clause-24 of the employment agreement and Clause 17 of the long-term incentive letter, call upon you to comply the demand made in previous paragraphs within 30 days from the date of receiving of Legal Notice. In the event of not making the payment of the aforesaid amount claimed above, my client hereby calls upon you to agree the appointment of anyone of the Arbitrator suggested above as Sole Arbitrator to adjudicate dispute between my client and M/s.Elior India. Therefore, my client hereby calls upon you forthwith to constitute the Arbitral Tribunal consisting of sole arbitrator to decide the above disputes. In the event of M/s.Elior India not agreeing for Sole Arbitrator to adjudicate the dispute between my client and M/s. Elior India, my client hereby nominates Hon'ble Justice Shivaraj.V.Patil as the Arbitrator on the side of my client and call upon you to nominate your Arbitrator enabling both Arbitrators to appoint the Presiding Arbitrator to constitute the Arbitral Tribunal between my client and M/s.Elior India. 53. My client reserves the liberty to modify or make additional claims if need be at a later stage." The....