Calcutta High Court
S.P. Minerals vs Zoom Developers Pvt. Ltd. & Anr on 26 April, 2011
Author: I. P. Mukerji
Bench: I. P. Mukerji
T No. 28 of 2011
AP NO.204 OF 2011
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
S.P. MINERALS
Versus
ZOOM DEVELOPERS PVT. LTD. & ANR.
BEFORE:
The Hon'ble JUSTICE I. P. MUKERJI
Date : 26th April, 2011.
Mr. P. Chatterjee, senior advocate,
Mr. S. Chowdhury, Ms. M. Bhutoria...for petitioner.
Mr. S.K. Kapoor, senior advocate,
Mr. D. Basak...for respondents.
The Court : This is another section 9 application. This application has been taken out by the respondents in the earlier application being AP No.204 of 2011 [Zoom Developers Pvt. Ltd. & Anr. vs. S. P. Minerals].
By an agreement made on 30th July, 2010 the petitioner was to acquire the sponge iron plant of the respondent no.2 for a consideration of Rs.150 crores.
Admittedly, the petitioner has paid a sum of Rs.10 crores. There are allegations made by each party against the other. The petitioner says that they are ready and willing to perform the contract. The respondents say that the petitioner are in utter breach and that the Rs.10 crores advanced by them should be forfeited. The petitioner further adds that along with Rs.10 crores they are also entitled to a further sum of Rs.15 crores on account of price for sale and delivery of goods.
Right at the moment there is a complete deadlock between the parties. By their letter dated 14th February, 2011 the respondents terminated the agreement. 2
However, as noted by me in my order dated 20th April, 2011, prima facie, it appears that the respondents are in possession of the sponge iron plant, which comprises of a factory with plant, machinery, stock and so on.
The respondents contend that they are, by reason of the above breach on the part of the petitioner entitled to substantial damage. Furthermore, they are entitled to forfeit this amount of advance.
But, I do note that arbitration has commenced. In this kind of a case, interim orders do not serve much purpose. The arbitral reference has to be concluded. Only then we will know whether the petitioner is entitled to specific performance of the agreement or the respondents are entitled to an adjustment of the sums paid to them by the petitioner and further sums as damage. However, be that as it may, as of now, prima facie, there is little dispute that Rs.10 crores was advanced by the petitioner to the respondents. The agreement did not progress at all. The relationship between the parties has broken down. The petitioner may or may not be entitled to refund of Rs.10 crores at the time of passing of the award. But, prima facie, I do not find that the respondents have been able to show me any material from where I can hold that they are entitled to forfeit this amount of Rs.10 crores paid by the petitioner.
Therefore, I dispose of this application by passing an order expediting the arbitration, including making of an award within a period of nine months from date. Till the award is made and published or until further orders of this Court, the respondents will not transfer the sponge iron plant mentioned in prayer [a] of the petition and the status quo regarding the shares of the respondent no.2 should not be altered without the leave of this Court. This will not prevent the respondents from renewing the existing facilities with the bank.
3
I also record the submission of the learned counsel for the parties that each of the parties is revoking the mandate of their nominee arbitrator. They, however, agree that a former Judge of this Court, Hon'ble Justice Dilip Kumar Seth be appointed as Arbitrator.
On the basis of such agreement, I appoint his Lordship as Arbitrator to adjudicate the disputes between the parties. Considering his stature he will be entitled to fix his remuneration and the fees and costs of his staff. He is very humbly requested by this Court to complete the reference and make and publish the award within a period of nine months from date.
This application is, accordingly, disposed of.
By consent of the parties, AP No.204 of 2011 is also treated on the day's list. Direction for filing of affidavits in the order dated 20th April, 2011 is recalled. The interim order dated 20th April, 2011 will continue till publication of the award or until further orders.
This application is also disposed of.
As affidavits have not been used the allegations made in the respective applications are not admitted.
All parties concerned are to act on a signed photocopy of this order on the usual undertakings.
(I. P. MUKERJI, J.) pkd. Asstt.Registrar[C.R.]