Gujarat High Court
Neeraj Kumarpal Shah vs Dinesh Shivanna & 5 on 4 May, 2017
Bench: M.R. Shah, B.N. Karia
C/FA/668/2017 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST APPEAL NO. 668 of 2017
With
CIVIL APPLICATION NO. 1906 of 2017
In
FIRST APPEAL NO. 668 of 2017
For Approval and Signature:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/
=============================================
1 Whether Reporters of Local Papers may be allowed to see No
the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
=============================================
NEERAJ KUMARPAL SHAH....Appellant(s)
Versus
DINESH SHIVANNA & 5....Defendant(s)
=============================================
Appearance:
MR MIHIR THKAORE, SR. ADVOCATE with MR AMAR N BHATT, ADVOCATE with
MS. PRIYADARSHINI, ADVOCATE for the Appellant(s) No. 1
MR KUNAL P VAISHNAV, ADVOCATE for the Appellant(s) No. 1
MR ADITYA C YAGNIK, CAVEATOR for the Defendant(s) No. 6
MR KIRAT NAGRA, ADVOCATE with MR PARTH CONTRACTOR, CAVEATOR for the
Defendant(s) No. 3
=============================================
CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 04/05/2017
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] Feeling aggrieved and dissatisfied with the impugned judgment and order dated 29.12.2016 passed by the learned Judge, Commercial Page 1 of 32 HC-NIC Page 1 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT Court, Ahmedabad City (hereinafter referred to as "learned Commercial Court") in Commercial Civil Misc. Application No.111/2016 by which the learned Commercial Court has rejected the said application submitted by the appellant, under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Arbitration Act"), the appellant herein - appellant (hereinafter referred to as "appellant") has preferred the present First Appeal.
[2.0] That the facts leading to the present First Appeal in nutshell are as under:
[2.1] That the appellant and the original opponent Nos.1 to 3 were the partners in the Limited Liability Partnership firm in the name and under style of C2R Projects Limited Liability Partnership (hereinafter referred to as "LLP"). That according to the appellant the respective partners were required to make their contribution as under:
Sr. Name of the Partner New Contribution
No.
1 Neeraj Kumarpal Shah 51%
(applicant)
2 Dinesh Shivanna (opponent No.1) 7%
3 Kamal Sewaram Jadhwani 3%
(Opponent No.2)
4 Manbhupinder Singh Atwal 37%
(Opponent No.3)
Total 100%
[2.2] According to the appellant, subsequently, on the basis of an addendum to the partnership deed as made on 27.02.2015 the original opponent No.3 was made an additional investor partner. That by an addendum agreement dated 18.05.2016, the share of the original Page 2 of 32 HC-NIC Page 2 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT opponent Nos.1 to 3 were reduced as detailed in the tabular form as shown hereunder.
Sr. Name of the Partner New Contribution
No.
1 Neeraj Kumarpal Shah 40%
(applicant)
2 Dinesh Shivanna (opponent No.1) 20%
3 Kamal Sewaram Jadhwani 20%
(Opponent No.2)
4 Manbhupinder Singh Atwal 20%
(Opponent No.3)
Total 100%
[2.3] It was the case on behalf of the appellant that, as per the mutual agreement between the parties, the appellant had agreed to contribute an additional amount of Rs.2.15 crores over and above an approximate amount of Rs.3 Crores previously contributed by the appellant and in fact, the appellant contributed an additional amount of Rs.85 lakh totalling Rs.3 Crores whereas the original opponent No.3 had agreed to contribute further amount of Rs.5.35 Crores over and above the amount previously contributed by original opponent No.3 and accordingly their respective shares were increased as above.
[2.4] It was further the case on behalf of the appellant that the appellant, vide resolution has been authorized rather described and represented as the promoter partner and original opponent No.3 as the designated partner, while confirming their agreement to invest their additional amount in LLP. However, despite the failure on the part of original opponent No.3 to contribute an additional amount as agreed by him in the letter dated 30.04.2016.Page 3 of 32
HC-NIC Page 3 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT [2.5] It was further the case of the appellant that, as per Clause35 of the LLP Agreement dated 10.02.2015, there exists an arbitration clause for referring all the disputes and differences between the parties to Arbitration; certain disputes and differences have arose between the parties as stated therein when the appellant received a letter dated 24.10.2016 couriered on 26.10.2016, informing the appellant that original opponent Nos.1 to 3 have decided under Clause22(e) of the LLP Agreement to issue expulsion notice to the appellant and expel him from the said partnership with immediate effect. According to the appellant no previous showcause notice, seeking any explanation from the appellant for the proposed action to expel the appellant, was served upon the appellant nor the appellant was, in any manner, informed about the meeting of the partners calling for the expulsion of the appellant from the LLP nor any agenda of the proposed meeting to expel the appellant was circulated and served upon the appellant nor any such resolution of the LLP has been passed nor any copy of such resolution of the meeting expelling the appellant is sent to the appellant whereby the appellant has been informed about the specific insistence or material fact or specific ground due to which such decision was taken by the remaining partners behind the back of the appellant. Therefore, it was the case on behalf of the appellant that without following the clauses of the LLP and without affording an opportunity or without serving a prior notice and in violation of the terms and conditions of the LLP, the appellant has been removed as a partner of the LLP.
Therefore, the appellant submitted the application before the learned Commercial Court under Section 9 of the Arbitration Act and prayed for the following reliefs against the original opponents.
1. The Hon'ble Court be pleased to stay the illegal decision of the original opponents Nos.1 to 3 of expelling the Applicant as a Page 4 of 32 HC-NIC Page 4 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT partner of the LLP and restrain them from enforcing and implementing the said decision till the arbitration proceedings are taken and concluded.
2. The original opponents Nos.1 to 3 be restrained from taking any further actions including entering into or taking any further actions as partners of the LLP or from entering into or enforcing any contracts entered into by them after 23.10.2016 till the arbitration proceedings are taken and concluded and direct them to maintain the status quo as on today and if any action is already taken by them, to restore the status quo ante as prevailing as on 23.10.2016.
3. Restrain the original opponents no.1 to 3 from selling, transferring or alienating the stake of the LLP in the Kinetic Solution Private Limited till the arbitration proceedings are taken and concluded.
4. Restrain original opponents nos.1 to 3 from acting as designated partners of the firm "C2R Projects LLP" and from taking any decision in respect of the said firm "C2R Projects LLP" without consulting or taking approval or consent of the applicant.
5. Restrain opponents from opening any bank account in the name of the "C2R Projects LLP" with original opponent No.4 or any other Bank, OR if any other Bank account is opened by original opponent Nos.1 to 3 in the name of the firm "C2R Projects LLP", restrain them from operating such account.
[2.6] It was submitted on behalf of the appellant that the LLP has taken over 45% of the stake in a company namely "Kinetix Solutions Private Page 5 of 32 HC-NIC Page 5 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT Limited" and its subsidiary by name Kinetix Engineering Private Limited by paying Rs.22 Crores for which necessary Share Purchase and Share Subscription Agreement as well as Shareholders' Agreement were entered into by the LLP wherein the LLP, as averred by the appellant, has advanced an amount of Rs.3 Crores to the said company and the appellant and original opponent No.3 were appointed as Directors of Kinetix Solutions Private Limited with effect from 30.06.2015 and 30.09.2015 respectively and for that purpose a resolution has been passed and signed by all the partners. Thus, as averred by the appellant, all the partners were aware about the said scenario. However, later on when original opponent No.3 proposed to dispose of the said stake of LLP to third party to which the appellant was not agreeable and therefore, to carry out the said wish of original opponent No.3, the appellant has been wrongly expelled as a partner of the LLP, as the so called rights, shares and investments made by the appellant has been put in jeopardy. Not only that, but, continuing the interest of the LLP in the said company is advantageous and may fetch a huge profit.
[2.7] It was further the case of the appellant that vide resolution dated 31.03.2015 signed by all the partners of the LLP, it was unanimously decided to purchase approximately 71 Acres of land at Delhi Mumbai Industrial Corridor (DMIC) at Dholera in Gujarat and the authority to negotiate with the landlords of the said land and to execute all necessary documents in that regard has been assigned to the appellant. It was further the case of the appellant that, however, the lands in question were possessed and retained by agriculturists, which was subject to conversion of N.A. land and therefore, to make it viable and appropriate to enter into an agreement with such agriculturists in the name of other trusted agriculturists, documents have been executed including the appellant, who in turn, after getting the land, converted into N.A. use, Page 6 of 32 HC-NIC Page 6 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT would enter into agreement with the LLP and for that all the partners of the LLP had given their approval. It was further the case on behalf of the appellant that vide resolution dated 31.03.2015, the designated partners of the LLP decided to purchase the brand "Urasattava" belonging to Rising Trade Link Limited to continue the business of ecohousing, economically weaker section housing under the same brand name and that the said purchase was also made with the knowledge and consent of the partners of the LLP.
That the appellant in support of his above case, produced several documents vide Exh.3 being the copy of the agreement of the LLP dated 10.02.2015, Addendum to the above agreement dated 27.02.2015, copy of several resolutions passed in the meeting of the LLP on different dates and minutes, copy of the email exchanges between the partners, letters written by the parties inter se and letter by the appellant to the Registrar of Companies, Certificate of Incorporation of LLP etc. [2.8] That the application under Section 9 of the Arbitration Act was vehemently opposed by the original opponent No.3 by a detailed reply at Exh.11. It was submitted on behalf of original opponent No.3 that the appellant has been expelled on the ground of large scale fraud and embezzlement committed upon C2R Project LLP and because of the said embezzlement, mismanagement and fraud, the details of which was given by a separate list, which amounts to siphoning off the LLP. It was submitted on behalf of the original opponent No.3 that the original opponent No.3 has invested amount of Rs.45 Crores as a Foreign Inward Remittance as a part of its capital contribution in the C2R Projects LLP from 18.03.2015 onwards whereas the rest of the partners invested cumulative sum of Rs.5 lakh only. It was submitted that because the partners of the LLP reposed goodwill and trust upon the appellant, they have authorized the appellant to enter into daytoday management of Page 7 of 32 HC-NIC Page 7 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT C2R Projects LLP so as to negotiate with the third parties for and on behalf of the LLP. However, the same was subject to the restrictions and safeguards contained in the LLP, which restricted the appellant or any other partners from making a cheque payment in the sum exceeding Rs.5 lakh in terms of Clause19(f)(8) of the LLP Agreement without the written consent of the other partners. It was the case on behalf of the original opponent No.3 that despite the above, the appellant, in breach of the trust reposed and other partners and in flagrant violation of the appellant's fiduciary duty to the C2R Projects LLP, systematically and in complete and blunt violation of the letter and spirit of the LLP, siphoned away large amount of money to the tune of approximately Rs.20 Crores to himself and related parties through cash transfers as also fund transfers. The original opponent No.3 produced the statement of the bank accounts of the LLP to prima facie shows that a large amount of money to the tune of approximately 20 Crores were paid to himself and related parties by the appellant, through cash transfer as also fund transfers. It was submitted that the aforesaid was subject to the outcome of the forensic audit being conducted by the other partners to find out the exact quantification of the fraud and siphoning off and embezzlement. The original opponent No.3 produced and relied upon the statement of accounts of the C2R Projects LLP with the Bank, supported by the authentic audit report of the Chartered Accountant appointed by the LLP. It was submitted that despite repeated demands, the appellant did not provide the details and the books of account.
Thus, it was the case on behalf of the original opponent No.3 that the acts of omission and commission on the part of the appellant had resulted in various breaches of the LLP Agreement in the nature of criminal breach of trust, misappropriation of property, fraud etc., which left the other partners with no option but to expel the appellant as per Clause22(E) of the LLP Agreement. It was submitted that original Page 8 of 32 HC-NIC Page 8 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT opponent Nos.1 to 3 have already invoked arbitration clause against the appellant under Clause35 of the LLP Agreement and the notice invoking arbitration dated 10.11.2016 has also been sent to the appellant. Therefore, it was requested to dismiss the application under Section 9 of the Arbitration Act by further submitting that the appellant has suppressed the fact as to the huge investment rather contribution made by original opponent No.3 to the tune of Rs.45 Crores.
[2.9] That after considering the material on record and after considering rival submissions made on behalf of the respective parties, by impugned judgment and order the learned Commercial Court has rejected the application under Section 9 of the Arbitration Act and has refused to grant the reliefs as prayed in the application under Section 9 of the Arbitration Act.
[2.10]Feeling aggrieved and dissatisfied with the impugned judgment passed by the learned Commercial Court, Ahmedabad City rejecting the application under Section 9 of the Arbitration Act, the appellant has preferred the present First Appeal.
[3.0] Shri Mihir Thakore, learned Senior Advocate has appeared on behalf of the appellant hrein. Shri Kirat Nagra, learned Advocate has appeared with Shri Parth Contractor, learned Advocate on behalf of original opponent Nos.1 and 3 herein and Shri Aditya Yagnik, learned Advocate has appeared on behalf of original opponent No.6 herein.
[4.0] Shri Thakore, learned Senior Advocate appearing on behalf of the appellant has vehemently submitted that in the facts and circumstances of the case the learned Commercial Court has materially erred in rejecting the application under Section 9 of the Arbitration Act and has Page 9 of 32 HC-NIC Page 9 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT materially erred in not granting the reliefs as prayed by way of interim measures.
[4.1] Shri Thakore, learned Senior Advocate appearing on behalf of the appellant has vehemently submitted that while rejecting the application under Section 9 of the Arbitration Act, the learned Commercial Court has not properly appreciated the fact that the expulsion of the appellant was not in good faith and was made malafide.
[4.2] It is further submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that the learned Commercial Court has materially erred in coming to the conclusion that the expulsion of the appellant as a partner of the LLP was justified. It is further submitted that the learned Commercial Court has not properly appreciated the fact that the decision to expel the appellant from the C2R Project LLP was taken in a meeting of the other partners of the LLP without issuing any notice to the appellant. It is submitted that as per clause 16 of the LLP Agreement, it was necessary to give notice of the meeting to the partners atleast 7 days prior to the time of holding meeting. It is further submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that the learned Commercial Court has not properly appreciated the fact that the socalled resolution expelling the appellant was dated 25.10.2016, however the expulsion was sought to be justified by the original opponents on the basis of the subsequent document particularly the certificate dated 10.11.2016 of M/s. G.K. Choksi & CO., Chartered Accountant. It is submitted that therefore, the learned Commercial Court has erred in relying upon the said certificate. It is vehemently submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that the learned Commercial Court has not properly appreciated the fact that the expulsion of the appellant Page 10 of 32 HC-NIC Page 10 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT was a premeditated conspiracy to oust the appellant from the LLP at any cost. In support of his above submission, learned Counsel appearing on behalf of the appellant has relied upon the following dates and events.
1. Upto 24.10.2016 4.00 PM, emails and WhatsApp messages were exchanged between the appellant and the original opponent No.3 regarding the business of the LLP giving no clue to the appellant that the original opponents are conspiring to expel the appellant.
2. The letters dated 24.10.2016 expelling the appellant has been purportedly signed by the original opponent Nos.1 to 3 at Bangalore.
3. The original opponent No.3 has suppressed material facts as to how the partners other than the appellant were informed about the purported meeting at Bangalore and its purported agenda.
4. In the meeting dated 25.10.2016, the original opponent Nos.4 and 5 were kept present and then inducted in the LLP. No explanation has been given with respect to their presence in the meeting held on 25.10.2016.
5. All past meetings of the partners of the LLP have been held at Ahmedabad after notice to all the partners atleast 7 days prior to the dates of meetings. That practice has been given a complete go bye by the original opponents.
[4.3] It is further submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that the learned Commercial Court has materially erred in observing that a large sum has been siphoned off by the appellant and were transferred by the appellant and his immediate family members.
[4.4] It is further submitted by Shri Thakore, learned Senior Advocate Page 11 of 32 HC-NIC Page 11 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT appearing on behalf of the appellant that the learned Commercial Court ought to have appreciated that whatever was done by the appellant was on the basis of the authority given by the company through its partners and the same was for the benefit of the partnership firm.
[4.5] It is further submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that expulsion of the appellant as a partner of C2R Projects LLP was not in good faith.
In support of his above submissions, Shri Thakore, learned Senior Advocate appearing on behalf of the appellant has relied upon and has taken us through various correspondences / emails exchanged between the appellant and the original opponent No.3; WhatsApp messages, minutes of meetings including the correspondences with Kinetix.
[4.6] It is submitted that as such the conspiracy between the Kinetix and original opponent was hatched after 19.10.2016 because letters dated 27.09.2016 and 19.10.2016 by one Shri Guraya, Projects Manager of C2R, appointed by original opponent No.3 on behalf of C2R to Kinetix, that they will issue legal notice to Kinetix.
[4.7] It is submitted that as such there was difference of opinion between Kinetix and LLP. Kinetix mortgaged the land without LLP's knowledge and raised Rs.16 Crores to purchase plant and machinery. From the said amount the Kinetix withdrew Rs.11 Crores as unsecured loan instead of utilizing it to purchase plant and machinery. It is submitted that Kinetix wanted C2R to sell its stake to Reliance Defence Limited and later to one Mr. Bhatia. It is submitted that the appellant was not agreeable for the same and therefore, a conspiracy between the Kinetixs and original opponent No.3 was hatched to remove / expel the appellant as a partner of LLP.
Page 12 of 32HC-NIC Page 12 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT [4.8] It is further submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that the learned Commercial Court has materially erred in not considering Clause 27 of the LLP Agreement and has erred in relying upon Clause 22(e) of the agreement only. Shri Thakore, learned Senior Advocate appearing on behalf of the appellant has relied upon the decision of the Delhi High Court in the case of Suresh Kumar Sanghi vs. Amrit Kumar Sanghi and Ors. reported in AIR 1982 Delhi 131 as well as the decision in the case of Blisset vs. Daniel reported in (1853) 10 Ha 493, 90 RR 454.
[4.9] It is further submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that the finding recorded by the learned Commercial Court regarding financial irregularities and misappropriation by the appellant is not correct and justified. In support of his above submission, he has made following submissions.
1. That the original opponent No.3 was planning to join C2R even prior to incorporation of LLP;
2. That the original opponent No.3 voluntarily invested Rs.45 Crores under the agreement. The liability of other partners was to the extent of Rs.2.25 lakh;
3. That by resolutions dated 31.03.2015, 01.05.2015, 18.07.2015 and 07.10.2015 the appellant was authorized to operate the bank account and enter into contracts etc. on behalf of the LLP;
4. That the Addendum dated 18.05.2016 entered into between appellant and original opponent No.3 where respective shares came to be increased;
5. That the DMIC transactions were within full knowledge of other partners and the same were rectified;
6. That until the date of expulsion i.e. 24.10.2016 no allegation of misappropriation are made;
Page 13 of 32HC-NIC Page 13 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT
7. That the appellant sent all accounts draft Balance Sheet on 06.10.2016;
8. That even all the cheques for payments were signed by the appellant and the original opponents also accepted the payment made to Kinetix by LLP for Rs.22 Crores which was also made by the appellant under the authority.
[4.10] It is further submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that while rejecting application under Section 9, the learned Commercial Court has failed to consider (1) minutes of meeting dated 31.03.2015 by which the appellant was authorized to execute all necessary documents; (2) email correspondences dated 10.12.2015 by which the appellant was told to go to Dholera area for detail survey; (3) emails of the son of original opponent No.3 circulating the current business portfolio of the LLP, presentation of Dholera (DMIC land), giving survey numbers etc. (4) Dholera Power Point Presentation with forwarding email dated 30.01.2016 of Angad Atwal, (son of original opponent No.3) referring to the land as C2R's land; (5) email dated 29.04.2016 of the original opponent No.3 to the appellant approving Dholera Project.
It is submitted that as such original opponent No.3 was having sufficient knowledge that the land will come to LLP only after NA is done. It is submitted that therefore the payments were made for purchase of DMIC land. It is submitted that the payments for DMIC land were ratified by all the partners including the original opponent No.3.
[4.11] It is further submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that the learned Commercial Court has materially erred in not believing the minutes of the meeting dated 18.07.2015. It is submitted that if these minutes of Page 14 of 32 HC-NIC Page 14 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT meeting dated 18.07.2015 are believed then the entire case of the original opponents about the financial irregularities and misappropriation will be destroyed. It is submitted that in the meeting held on 18.07.2015, the purchase of Dholera lands came to be approved. It is submitted that while not believing the minutes of meeting dated 18.07.2015, the learned Commercial Court has relied upon the report of the handwriting expert on the signatures on the minutes, however the same ought not to have been relied upon as the same is based upon the photocopy of the document and is not based on the original. It is submitted that if ultimately after the conclusion of the arbitration, the said minutes of meeting dated 18.07.2015 is believed, then by that grave injustice would be caused to the appellant. It is submitted that therefore at this stage to deny any relief to the appellant on the ground that the minutes of the meeting dated 18.07.2015 is not genuine would not be just and proper.
[4.12] It is further submitted by Shri Thakore, learned Senior Advocate appearing on behalf of the appellant that the learned Commercial Court, while rejecting the application under Section 9 of the Arbitration Act and in not granting the order of interim measures as prayed, has not properly appreciated the fact that if ultimately the appellant succeeds in the arbitration then unless interim measures as prayed for are granted, the situation will become irreversible. It is submitted that to balance the interest of all, during the pendency of the arbitration, appellant is prepared to furnish Bank Guarantee for Rs.15 Crores till the conclusion of the arbitration proceedings if the original opponents are restrained from selling the stake of LLP in Kinetix and are restrained from removing the appellant as a Nominee Director on the Board of the Kinetix and original opponent Nos.4 and 5 are restrained from working as the partners of LLP and the original opponents are Page 15 of 32 HC-NIC Page 15 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT directed to maintain status quo with respect to the creation of new liability.
Making above submissions it is requested to allow the present First Appeal and quash and set aside the impugned order passed by the learned Commercial Court rejecting the application under Section 9 of the Arbitration Act.
[5.0] Present First Appeal is vehemently opposed by learned Advocates appearing on behalf of original opponent Nos.1, 3 and 6.
[5.1] It is submitted by Shri Nagra, learned Advocate appearing on behalf of original opponent Nos.1 and 3 that in the facts and circumstances of the case and by giving cogent reasons and recording prima facie findings with respect to misappropriation and/or siphoning off the huge amount of the partnership firm by the appellant through himself and his family members, the learned Commercial Court has rightly rejected the section 9 application and his rightly refused to grant any relief as prayed for in the application under Section 9 of the Arbitration Act.
[5.2] It is vehemently submitted by learned Advocate appearing on behlaf of original opponent Nos.1 and 3 that while dealing with and deciding and rejecting the application under Section 9 of the Arbitration Act, the learned Commercial Court on the basis of the material on record has given the following findings.
1. Huge amount to the tune of Rs.3.89 crores has been withdrawn as cash by the Appellant from the Bank Account of the LLP under the purported authority of the LLP; and another amount of Rs.5.53 crores has been transferred to his personal bank account through bank transfer from the LLP's bank account without any consent Page 16 of 32 HC-NIC Page 16 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT from the other partners. Further, the Appellant has transferred approx. Rs.7 crores to his immediate family members though against such entries no such clue or particulars have been supplied by the Appellant
2. Purported amount of Rs.3 crores deposited by the Appellant with Karnataka Industrial Area Development Board (KIADB) on behalf of Kinetix Solutions Pvt. Ltd. when compared with the bank entries of the LLP's bank account reveal that the very amount has been withdrawn by the Appellant from the LLP's bank account and transferred to himself.
3. In the context of the MOUs it reflects that the Appellant has transferred huge amounts under the garb of such MOUs with purported agriculturists, however, no consideration has either been mentioned in the said MOU, some of which were produced by the Respondent No.3. The Appellant has not produced copies of these MOUs, who claims to have appropriated the huge amounts from the LLP's bank account for the said purpose. Therefore, under the circumstances, the Appellant is not in a position to establish and justify the act done in his capacity as a partner for the LLP in its true spirit and for the betterment and welfare of the LLP.
4. Insofar as the several other transactions and the amount so transferred in favour of Rising Tradelink Limited, for purchasing the 'Urasattava' brand to the tune of Rs.68 lakh, has been paid by the Appellant for which no sanction and concurrence seems to have been obtained from the other partners. Insofar as the amount as reflected from the statement of account to the tune of Rs.12,25,000/ transferred by the Appellant to Edall Systems from the bank account of the LLP is concerned, there also the Share Purchase Agreement is in the Appellant's personal name. Thus, the Page 17 of 32 HC-NIC Page 17 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT aforesaid transactions as surfaced and reflected from the statement of bank account of the LLP support and substantiate the stand taken by the Respondents that the appellant has usurped the various amounts either under the pretext of the investment or under the pretext of the amount passed on against the consideration of the MOU, for which, as discussed herein above, particularly the copies of the two MOUs produced by the Respondents, contain no specific term or consideration sought to have been paid by the Appellant for and on behalf of the LLP.
5. The submissions of the respondents that they have been put in dark by the appellant while assuring that he is doing well and making all efforts to aggregate the loss is, as discussed and sought to be claimed, appears to be one of the cryptic document executed by the appellant not only in favour of his family members and strangers but on one occasion the applicant himself represnted himself as an agriculturist executing a document for both parties including for and on behalf of the LLP and even for that purpose also no cogent and authentic document seems to have been produced by the Appellant.
6. Therefore, the resolution passed by the majority of the partners while considering the provisions of the LLP as per Clause 22(E), prima facie appears to be having a force. However, the sustainability of the same again rests on the outcome of the arbitration proceedings that might be initiated by the parties.
7. The appellant has sought to absolve himself from the terms of the LLP Agreement which is admittedly a document created by him and was originally signed between Appellant and the respondent Nos.1 and 2. It was only later that the respondent No.3 was inducted for a capital contribution of Rs.45 crores under the terms of the same LLP Agreement. Further, while interpreting the said Page 18 of 32 HC-NIC Page 18 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT clause that the appellant has been expelled without affording an opportunity even as per the said clause and the interpretation thereof, do not find much force as the whole case of the respondents rests on the allegation of siphoning off rather huge embezzlement of the LLP's funds which I not only detriment to the partners but to all concerned with the LLP.
8. It is an admitted fact that before the filing of the section 9 petition, the appellant had been expelled and he has been duly intimated and therefore, the question of staying the socalled illegal decision of the respondent Nos.1 to 3 of expelling the appellant is nothing but granting status quo ante in favour of the appellant, particularly when the same is not a subject matter of arbitral issue appears to be supported by the material placed for consideration.
9. In the facts and circumstances of the case, balance of convenience is not in favour of the appellant and the appellant has failed to establish the prima facie case in his favour. Further the appellant is guilty of suppression of documents which are admittedly in his possession and accordingly, as per best evidence rule, inference has to be drawn against the appellant.
10. As per the settled law, the appellant has failed to establish as to how the reliefs as prayed for in the section 9 petition fall within the ambit of section 9 of the Act. Further, in the present case, the appellant is no entitled to any relief since he is himself responsible for bringing about the state of things complained of.
11. Insofar as the relief sought for by the applicant seeking to restrain original opponent Nos.1 to 3 (now including original opponent Nos.4 to 6) from selling, transferring, alienating the stock of LLP of Kinetix Solutions Private Limited is concerned, the same, even otherwise as discussed hereinabove, is not entertainable nor Page 19 of 32 HC-NIC Page 19 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT deserves to be granted at this juncture as it tantamount to winding up rather closing the entire business and may affect not only the C2R Projects LLP but Kinetix Solutions Private Limited, which is not a party to this petition. Also, the Appellant has taken contrary stands regarding whether the investment by the LLP in Kinetix is in profit or loss and has further not produced any evidence to support its pleadings.
12. To show the bona fides on the part of the original opponents, despite huge amount being transferred and disposed of by the applicant, the original opponents by way of passing a resolution, tendered a request to the Bank concerned to freeze the account so as to verify the veracity of the transactions by Forensic Investigation mode to fix the liability of all concerned and that vey aspect cannot be given a gobye as, while granting or refusing to grant the relief, not only the pleadings and relief sought for by the parties, but the very conduct of the parties is also an unilateral factor requires to be considered by the court and the conduct of the original opponents appears to be one legitimate and according to the clauses of the LLP.
13. At this juncture, with regard to the prima facie issue, the submissions of the original opponents require consideration whereby the minutes of meeting, the resolutions passed on 31.03.2015, 01.05.2015 and 18.07.2015 wherein the minutes of the previous meeting of the designated partners appears to have been considered, confirmed and approved by the designated partners. However, the socalled meeting purported to have been held on 18.07.2015 and the minutes of the previous meeting have not been so considered and confirmed and therefore, the submission of the applicant that the socalled resolutions and the decisions taken on the same date within a short span, is nothing Page 20 of 32 HC-NIC Page 20 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT but a defence gotup so as to answer the reply filed by the original opponents as the very document has been produced only after the reply filed by the original opponents. Not only that, no mention even of minutes of meeting held on 18.07.2015 has ever been made by the applicant in its entire pleadings and therefore, the same deserves consideration and the aspect accordingly, as to the minutes of meeting of 18.07.2015, being fabricated and full of interpretations, are again required to be left for the appropriate forum to decide the same by leading substantial evidence.
[5.3] It is further submitted that the aforesaid findings are on prima facie considering the materials on record which can not be said to be either perverse and/or contrary to the evidence on record. It is further submitted that section 9 petition as filed by the appellant was not maintainable for the following reasons.
1. The appellant has effected a large scale and systematic fraud and embezzlement upon the respondents and particularly, the partnership firm namely, C2R Projects LLP. The appellant has acted in gross breach of his fiduciary duties towards the other partners and the LLP and has mismanaged the affairs of the LLP. The appellant has further indulged in various illegal activities which are contrary to the LLP Agreement dated 10.02.2015 along with the addendums dated 27.02.2015 and 18.05.2016 and the same are not capable of being remedied since the illegal conduct of the appellant also tantamount to criminal misconduct (for which he is being investigated by the Police Authorities in FIR No.248 of 2016 dated 21.12.2016). The appellant was, for such acts, expelled from the partnership of the LLP on 24.10.2016 vide a majority decision of the partners including respondent Nos.1 to 3 as per Clause 22(E) of the LLP Agreement read with Clauses Page 21 of 32 HC-NIC Page 21 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT 18(B) and 20 of the LLP Agreement. The said embezzlement, mismanagement and fraud as also siphoning off the funds is further detailed in the Short Reply filed by respondent Nos.1 and 3 to the section 9 petition before the learned Commercial Court.
2. The appellant had approached the Court with unclean hands. The appellant had purposely misstated the facts, filed interpolated documents, suppressed material documents and records, made incorrect statements, which were contrary to record. The respondent Nos.1 to 3 had vide their Short Reply placed on record the true facts and emails along with their corresponding attachments, etc. The appellant had only produced self serving portions of emails only to mislead the Court into passing the interim orders and in a manner contrary to law, and accordingly, no cognizance of such misstatements, interpolated documents ought to be taken by the Commercial Court. The appellant is guilty of suggestio falsi and suppressio very. Further, the appellant had not even filed any certificate / affidavit as per section 65B of the Information Technology Act and has sought to justify the lack of same in his AffidavitinRejoinder, however, the appellant has failed to certify that the electronic documents produced by him have not been modified / edited / altered in any manner. Accordingly, the electronic documents such as emails, etc. filed by the appellant cannot be considered to be credible by the Commercial Court.
3. The LLP Agreement is determinable in nature and cannot be specifically enforced; and accordingly, any injunctive relief cannot be granted to the appellant as per Section 41 of the Specific Relief Act, 1963. Further, even the conduct of the appellant disentitles him from any injunctive relief as per Section 41 of the Specific Relief Act, 1963 because the appellant's conduct as has been Page 22 of 32 HC-NIC Page 22 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT demonstrated by the respondent No.3 in its Short Reply is fraudulent, malicious, illegal and totally against his fiduciary duties towards the other partners and C2R Projects LLP.
4. The appellant had been expelled in accordance with the terms of the LLP Agreement, particularly, Clause 22(E) of the LLP Agreement. The breaches of the LLP Agreement as committed by the appellant are not capable of being remedied since the same are in the nature of systematic fraud and embezzlement of funds and the appellant has failed to produce any credible evidence regarding the written consent given by other partners of the LLP for such unauthorized transactions undertaken by the appellant. Under the Limited Liability Partnership Act, 2008, Section 24 provides for the supremacy of the terms of the LLP Agreement between the partners regarding expulsion and further, the Limited Liability Partnership Act, 2008 recognises under Section 24(5) thereof that the remedy of the expelled partner is only qua his share of capital contribution and share in accumulated profits, if any. Accordingly, the appellant herein cannot seek any injunctive relief(s) since even the statutory scheme being the Limited Liability Partnership Act, 2008 only provides for a claim for damages in case of an expulsion, at best and without prejudice to the rights and contentions of the respondent Nos.1 and 3. Further, it is to be noted that under the Limited Liability Partnership Act, 2008, the concept of capital contribution is different from remuneration of partners which are two different concepts as a partner may get higher remuneration for his added efforts, however, the same may not necessarily indicate that his capital contribution is also higher. As such on his cessation of being a partner, he is only entitled to a proportionate share of his capital contribution dehors of any remuneration entitlement.
Page 23 of 32HC-NIC Page 23 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT
5. The appellant had failed to demostrate as how the reliefs sought for in the Section 9 Petition fell within the purview of Section 9 of the Act when the appellant had himself perpetrated a fraud upon the respondent and C2R Projects LLP. The appellant had also failed to demonstrate as to how the reliefs prayed for in the Section 9 Petition are towards protecting the subject matter of dispute. Hence, the impugend Order has rightly held that the appellant is not entitled for any relief under Section 9 of the Act.
[5.4] It is further submitted by Shri Nagra, learned Advocate appearing on behalf of the original opponent Nos.1 and 3 that as such the original opponent No.3 invested Rs.45 Crores as a Foreign Inward Remittance as part of his capital contribution in the C2R Projects LLP from 18.03.2015 onwards, which has been totally suppressed by the appellant from the Court. That the remaining partners along with the appellant invested cumulative sum of Rs.5 lakh only into the said C2R Project LLP which admittedly had a capital of Rs.45.05 Crores as on the date of filing of section 9 petition. It is submitted that even the appellant deposited a sum of Rs.5 lakh towards his capital contribution after making cash withdrawals from the amounts transferred by original opponent No.3. It is submitted that despite repeated demands the appellant did not furnish the copies of the bank statements, accounts etc. It is submitted that from the statement of the bank account produced on record it is evident that a substantially large amount has been withdrawn by the appellant in cash or otherwise in himself and his family members and thus have siphoned off and/or misappropriated the sizable amount of C2R Projects LLP of which major contribution to the extent of Rs.45 Crores was of original opponent No.3 alone. It is submitted that therefore in the facts and circumstances of the case, the appellant has been rightly removed.
Page 24 of 32HC-NIC Page 24 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT [5.5] It is further submitted by Shri Nagra, learned Advocate appearing on behalf of the original opponent Nos.1 and 3 that as such the appellant had as an afterthought filed a copy of purported minutes of meeting of the partners dated 18.07.2015 which are infact forged and fabricated.
[5.6] It is further submitted by Shri Nagra, learned Advocate appearing on behalf of the original opponent Nos.1 and 3 that the learned Commercial Court has rightly rejected the application submitted by the appellant and has rightly refused to grant any interim order as prayed, as after having prima facie found siphoning off of the huge amount by the appellant to himself and his family members and he committed fraud and fabricated documents and has committed criminal breach of trust.
Making above submissions it is requested to dismiss the present First Appeal.
[6.0] Shri Aditya Yagnik, learned Advocate appearing on behalf of original opponent No.6 has also opposed the present First Appeal and has requested to dismiss the present First Appeal by supporting the case on behalf of the original opponent Nos.1 and 2.
[7.0] Heard learned Counsel appearing for respective parties at length.
At the outset it is required to be noted that vide impugned judgment and order the learned Commercial Court has rejected the application submitted by the appellant herein - original applicant which was submitted by the appellant under Section 9 of the Arbitration Act seeking reliefs for interim measures.
[7.1] At the outset it is required to be noted that the appellant has been Page 25 of 32 HC-NIC Page 25 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT expelled as a partner of the LLP and as such it can be the subject matter of arbitration and dispute before the learned Arbitrator, as and when the dispute is referred for arbitration considering the arbitration clause contained in the Agreement. One of the relief which is sought by the applicant in section 9 application is to stay the decision of the original opponent Nos.1 to 3 of expelling the appellant as partner of LLP and restrain them from enforcing and implementing the said decision till arbitration proceedings are taken and concluded. At the outset it is required to be noted that as such the learned Counsel appearing on behalf of the appellant has not pressed the said prayer very seroiusly. Even otherwise grant of such interim relief would tantamount to mandatory relief and even otherwise unless and until after fullfledged submissions and the objection in the arbitration proceedings, it is held that the expulsion of the appellant as a partner of the LLP was bad in law. Such a relief at this stage at the stage of section 9 application cannot be granted and the same is rightly not granted by the learned Commercial Court.
[7.2] Even otherwise it is required to be noted that the appellant has been removed or expelled as a partner of the LLP on the serious allegations of siphoning off the fund and financial irregularities and transfering the huge sum to himself and/or to his near family members which can be seen from the statements of bank account produced on record. It has come on record and does not seem to be in dispute that original opponent No.3 invested and/or brought the capital to the extent of Rs.45 Crores into the LLP, against which rest of the partners' contribution was to the extent of Rs.5 lakh only. From the statement of bank accounts produced on record it appears that the appellant has withdrawn for himself and/or his near family members the following sizable amounts from the bank accounts of C2R Projects LLP.
Page 26 of 32HC-NIC Page 26 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT
1. Cash withdrawals to the tune of Rs.3.89 Crores
2. Transfers from C2R Project LLP's bank account to the appellant's own bank account to the tune of Rs.5.53 Crores
3. Transfer from C2R Project LLP's bank account of Jainam Shah, the appellant's brother to the tune of Rs.3.95 Crores
4. Transfer from C2R Project LLP's bank account of Rupal Shah, the appellant's sister to the tune of Rs.3 Crores
5. Transfer from C2R Project LLP's bank account to the appellant's company namely Rising Tradelink to the tune of Rs.68 lakh [7.3] Learned Counsel appearing on behalf of the respective parties have relied upon number of documents / correspondences between the parties more particularly the learned Counsel appearing on behalf of the appellant to show that whatever decisions were taken, they were taken bonafidely and in the interest of LLP and that he was authorized to enter into the contract and/or transactions on behalf of LLP and that he was permitted to withdraw the amount from the bank accounts of the LLP. However, it is required to be noted that those documents / correspondences are required to be considered before the learned Arbitrator in the arbitration proceedings. At this stage it is required to be noted that one of the Clause and the resolution by which the appellant was permitted to operate the bank account was that he could not have withdrawn the amount of more than Rs.5 lakh without the prior permission. However, from the statement of bank accounts a large sum has been withdrawn either in cash and/or otherwise either for himself and/or his family members. All these entries and transactions are required to be considered in detail in the arbitration proceedings. At this stage what is required to be considered is prima facie case and whether in the facts and circumstances of the case, the appellant is entilted to the relief of interim measures as prayed in the application under Section 9 of Page 27 of 32 HC-NIC Page 27 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT the Arbitration Act or not.
[7.4] As noted hereinabove the original opponent No.3 had contributed a capital of Rs.45 Crores against the total capital of LLP being Rs.45.05 Crores. The aforesaid entries are required to be dealt with and considered in detail at the time of adjudication in the arbitration proceedings. Considering the aforesaid facts and circumstances, we are of the opinion that the learned Commercial Court has rightly not granted the relief in terms of para (A) i.e. has rightly refused to stay the decision of expelling the appellant as a partner of the LLP. We are in complete agreement with the view taken by the learned Commercial Court.
[7.5] Now, so far as the other reliefs which were sought by the appellant in the application under Section 9 of the Arbitration Act and which have been refused by the learned Commercial Court is concerned, it is required to be noted that as such the contribution of the appellant in the LLP is to the extent of approximately Rs.5 lakh only against the contribution of original opponent No.3 of Rs.45 Crores. The appellant has been removed / expelled as partner of the LLP. Therefore, the LLP is required to run their business through other remaining partners. They cannot be restrained from doing any other business and/or enter into any other transactions more particularly from selling, tranfering or alienating the stake of the LLP in Kinetix Solutions Pvt. Ltd. and/or they cannot be restrained from taking any decision in respect of the firm - C2R Projects LLP without consulting or taking approval of the Consultant. Once the appellant is expelled as a partner of the LLP and unless and until any final decision is taken on the expulsion of the appellant as a partner of the LLP by the learned Arbitrator in arbitration proceedings, there is no question of consulting the appellant and/or taking his approval or consent while taking any decision by the partners Page 28 of 32 HC-NIC Page 28 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT in respect of the firm - C2R Projects LLP. A person who has invested a huge sum of Rs.45 Crores against the total capital of C2R Projects LLP of Rs.45.05 Crores is the best person to protect his interest and the amount invested by him. He cannot be restrained from taking any decision in respect of the firm - C2R Projects LLP.
[7.6] Even otherwise it is required to be noted that while passing the impugned order the learned Commercial Court has passed a very well reasoned and detailed speaking order and has exercised the discretion judiciously while not granting any relief sought as interim measure in an application under Section 9 of the Arbitration Act. Each submissions made on behalf of the respective parties have been dealt with and considered by the learned Commercial Court in detail and on considering the prima facie case not in favour of the appellant, thereafter the learned Commercial Court has rejected the section 9 application, which in the facts and circumstances of the case is not required to be interfered with more particularly when the arbitration proceedings are yet to begun.
[7.7] From the impugned order it appears that while rejecting section 9 application and refusing to grant any relief as prayed in section 9 application what has been weighed with the learned Commercial Court is, (a) that the huge amount to the tune of Rs.3.89 crores has been withdrawn as cash by the Appellant from the Bank Account of the LLP under the purported authority of the LLP and another amount of Rs.5.53 crores has been transferred to his personal bank account through bank transfer from the LLP's bank account without any consent from the other partners. That the appellant has transferred approx. Rs.7 crores to his immediate family members though against such entries no such clue or particulars have been supplied by the Appellant; (b) That the purported Page 29 of 32 HC-NIC Page 29 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT amount of Rs.3 Crores deposited by the appellant with Karnataka Industrial Area Development Board (KIADB) on behalf of Kinetix Solutions Pvt. Ltd. when compared with the bank entries of the LLP's bank account reveal that the very amount has been withdrawn by the appellant from the LLP's bank account and transferred to himself; (c) That the appellant has transferred huge amounts under the garb of such MOUs with purported agriculturists with respect to the purchase of lands at Dholera, however, no consideration has been mentioned in the said MOU. That the MOUs have been by the original opponent No.3. The appellant has not produced copies of such MOUs, who claims to have appropriated the huge amounts from the LLP's bank account for the said purpose. Therefore, prima facie, the appellant is not in a position to establish and justify the act done in his capacity as a partner for the LLP;
(d) That the minutes of meeting alleged to have been held on 18.07.2015 is prima facie found to be fabricated and forged one. That for the aforesaid, there is a handwriting expert's report and even for which one criminal complaint is pending; (e) That despite repeated requests and demands the appellant did not furnish the copies of the statement of bank accounts and the audited account/s and that from the report of the Chartered Accountant, he was appointed by the LLP prima facie case is made out with respect to siphoning off of the huge amount either by cash or otherwise in favour of the appellant himself and/or in favour of his near family members. That the appellant has not come with clean hands before the Court as he did not disclose before the Court that original opponent No.3 has invested a huge sum of Rs.45 Crores which he brought as capital in C2R Projects and that they brought the capital of Rs.5 lakh only.
[7.8] Considering the aforesaid facts and circumstances and thereafter when the learned Commercial Court has rejected the application under Page 30 of 32 HC-NIC Page 30 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT Section 9 of the Arbitration Act and has refused to grant the reliefs as prayed, it cannot be said that the learned Commercial Court has committed any error which calls for interference of this Court in exercise of appellate jurisdiction. We refrain from passing further reasoned order as parties are yet to go for arbitration. Suffice it to say that there is no prima facie case in favour of the appellant and as observed hereinabove the remaining partners more particularly original opponent No.3, who has invested and/or brought Rs.45 Crores as capital against total capital of Rs.45.05 Crores and there is a prima facie case made out against the appellant for siphoning off huge amount for himself and his family members, the learned Commercial Court has rightly rejected the section 9 application and has rightly refused to grant reliefs prayed in section 9 application.
[7.9] Now, so far as the reliance placed upon the decision of the Delhi High Court in the case of Suresh Kumar Sanghi (Supra) by the learned Counsel appearing on behalf of the appllant is concerned, the same shall not be applicable to the facts of the case on hand more particularly at the stage of section 9 application. The aforesaid decision has been relied upon by the learned Counsel appearing on behalf of the appellant in support of his submission that expulsion has to be done in goodfaith. Considering the case on hand it does prima facie appear that the expulsion of the appellant in the facts and circumstances narrated hereinabove cannot be said to be not in goodfaith. Similarly the decision in the case of Blessit (Supra) also shall not be applicable to the facts of the case on hand more particularly considering the findings recorded hereinabove.
[8.0] In view of the above and for the reasons stated above, we see no reason to interfere with the impugned judgment and order passed by the Page 31 of 32 HC-NIC Page 31 of 32 Created On Sun Aug 13 04:19:49 IST 2017 C/FA/668/2017 CAV JUDGMENT learned Commercial Court rejecting section 9 application and refusing to grant any reliefs sought as interim measure in application under Section 9 of the Arbitration Act. We are in complete agreement with the view taken by the learned Commercial Court. Under the circumstances, present First Appeal deserves to be dismissed and is, accordingly, dismissed. In the facts and circumstances of the case, there shall be no order as to costs.
CIVIL APPLICATION NO.1906/2017 In view of dismissal of main First Appeal, Civil Application No.1906/2017 also stands dismissed.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) Ajay Page 32 of 32 HC-NIC Page 32 of 32 Created On Sun Aug 13 04:19:49 IST 2017