Bombay High Court
Companies Act vs Mr. Ashok Khurana on 10 January, 2014
Author: R.D. Dhanuka
Bench: R.D.Dhanuka
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hvn IN THE HIGH COURT OF JUDICATURE AT BOMBAY.
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION (L) NO. 1793 OF 2013
WELSPUN INFRATECH LIMITED, a )
company incorporated under the )
Companies Act, 1956, having its )
registered office at 9th Floor, Trade World )...PETITIONER/
B Wing, Kamala City, Lower Parel, ) ORIGINAL )
Mumbai - 400 013 CLAIMANT
igVERSUS
1. MR. ASHOK KHURANA, adult, )
Indian inhabitant, residing at 1, )
Vikram Society, Gotri Road, )
Vadodara )
2. MR. AMIT KHURANA, adult, )
Indian inhabitant, residing at 1, )
Vikram Society, Gotri Road, )
Vadodara )
3. MS. NEELAKSHI KHURANA, )
adult, Indian inhabitant, residing at )
1, Vikram Society, Gotri Road, )
Vadodara )
4. MS. MANJU KHURANA, adult, )
Indian inhabitant, residing at 1, )
Vikram Society, Gotri Road, )
Vadodara )
5. KPMG INDIA PRIVATE )
LIMITED, a company incorporated )
under the Companies Act, 1956 and )
having its office at Lodha Excelus, )
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1st Floor, Apollo Mills Compound, )
NM Joshi Marg, Mahalaxmi, )
Mumbai - 400 011 )
6. STANDARD CHARTERED )
BANK, a body corporate )
incorporated under the laws of )
England having its principle office at )
1 Aldermanbury Square, London, )
EC2V 7SB and its branch office at )
2nd Floor, 90 MG Road, Mumbai - )
400 001 )
7. M/S. MSK INFRASTRUCTURE )
PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 101, Gayatri Apartment, B Tower, )
74 Alkapuri, Society, Vadodara )
)
8. M/S. MADHAV POWER )
PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 101, Gayatri Apartment, B Tower, )
74 Alkapuri, Society, Vadodara )
)
9. M/S. WAA SOLAR PRIVATE )
LIMITED, a company incorporated )
under the Companies Act, 1956 )
having its registered office at 36-37 )
Damji Shamji Industiral Complex, )
Off Mahakali Caves, Andheri (E), )
Mumbai. )
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10 M/S. MADHAV (SEHORA )
. SILODI CORRIDOR) )
HIGHWAYS PRIVATE )
LIMITED, a company incorporated ) )
under the Companies Act, 1956 )
having its registered office at 101, )
Gayatri Apartment, B Tower, 74 )
Alkapuri, Society, Vadodara )
11 M/S. MADHAV (PHOOLSAGAR )
. NIWAS SHAHPURA )
CORRIDOR) HIGHWAYS )
PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 101, Gayatri Apartment, B Tower, )
74 Alkapuri, Society, Vadodara )
)
12 M/S. MADHAV SOLAR )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 101, Gayatri Apartment, B Tower, )
74 Alkapuri, Society, Vadodara )
)
13 M/S. MADHAV SOLAR )
. (KARNATAKA) PRIVATE )
LIMITED, a company incorporated )
under the Companies Act, 1956 )
having its registered office at 101, )
Gayatri Apartment, B Tower, 74 )
Alkapuri, Society, Vadodara )
14 M/S. MADHAV INFRACON (BK )
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. CORRIDOR) PRIVATE )
LIMITED, a company incorporated )
under the Companies Act, 1956 )
having its registered office at 101, )
Gayatri Apartment, B Tower, 74 )
Alkapuri, Society, Vadodara )
15 M/S. MSK FINANCE LIMITED, )
. a company incorporated under the )
Companies Act, 1956 having its )
registered office at 1 Vikram )
Society, Gotri Road, Vadodara
ig)
16 M/S. D.A. FINVEST LIMITED, a )
. company incorporated under the )
Companies Act, 1956 having its )
registered office at 65, Mahavir )
Centre, 4th Floor, Sector No. 17, )
DBC Vashi Navi Mumbai )
17 M/S. MANSHA TEXTILES )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 1 Vikram Society, Gotri Road, )
Vadodara )
18 M/S. SUPER )
. INFRASTRUCTURE TOLL )
BRIDGE PRIVATE LIMITED, a )
company incorporated under the )
Companies Act, 1956 having its )
registered office at 65, Mahavir )
Centre, 4th Floor, Sector No. 17, )
DBC Vashi Navi Mumbai )
19 M/S. MSK PROJECTS (INDIA) )
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. (JV) LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 101, Gayatri Apartment, B Tower, )
74 Alkapuri Society, Vadodara )
)
20 M/S. MADHAV INFRA )
. PROJECTS PRIVATE LIMITED, )
(formerly known as Classic Inns )
Private Limited) a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 101, Gayatri Apartment, B Tower, )
74 Alkapuri Society, Vadodara )
)
21 M/S. MADHAV INFRA )
. PROJECTS LIMITED (formerly )
known as Myraj Consultancy )
Limited), a company incorporated )
under the Companies Act, 1956 )
having its registered office at 24, )
Laxmi Chambers, Navjeevan Press )
Road, Ahmedabad )
22 M/S. MADHAV INFRACON )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 101, Gayatri Apartment, B Tower, )
74 Alkapuri Society, Vadodara )
)
23 M/S. MADHAV URJA PRIVATE )
. LIMITED, a company incorporated )
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under the Companies Act, 1956 )
having its registered office at 101, )
Gayatri Apartment, B Tower, 74 )
Alkapuri Society, Vadodara )
24 M/S. MADHAV VASHISTHA )
. ENERGY PRIVATE LIMITED, a )
company incorporated under the )
Companies Act, 1956 having its )
registered office at 101, Gayatri )
Apartment, B Tower, 74 Alkapuri )
Society, Vadodara ig )
25 M/S. MADHAV VASHISTHA )
. HYDRO POWER PRIVATE )
LIMITED, a company incorporated )
under the Companies Act, 1956 )
having its registered office at 5-52, )
Racherla Road, Prathipadu Village )
Pentapadyu Mandal, West Godavari, )
Andra Pradesh )
26 M/S. BARODA SLIM EASY )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 1 Vikram Society, Gotri Road, )
Vadodara )
27 M/S. INFINITY INFRA BUILD )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 101, Gayatri Apartment, B Tower, )
74 Alkapuri Society, Vadodara )
)
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28 M/S. MADHAV CONFRA )
. CONSULTANCY PRIVATE )
LIMITED, a company incorporated )
under the Companies Act, 1956 )
having its registered office at 1 )
Vikram Society, Gotri Road, )
Vadodara )
29 M/S. SAINERGY INDUSTRIAL )
. PRODUCTS PRIVATE )
LIMITED, a company incorporated )
under the Companies Act, 1956 )
having its registered office at BD/93, )
Pusti Prabha Society, Near Old )
Bapod Jakat Naka, Waghodia Road, )
Vadodara )
30 M/S. MSK PROJECTS (I) )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 101, Gayatri Apartment, B Tower, )
74 Alkapuri Society, Vadodara )
)
31 M/S. AAHELI )
. CONSTRUCTIONS PRIVATE )
LIMITED, a company incorporated )
under the Companies Act, 1956 )
having its registered office at 24, )
Laxmi Chambers, Navjeevan Press )
Road, Ahmedabad )
32 M/S. MADHAV INDUSTRIAL )
. PARK PRIVATE LIMITED, a )
company incorporated under the )
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Companies Act, 1956 having its )
registered office at 101, Gayatri )
Apartment, B Tower, 74 Alkapuri )
Society, Vadodara )
33 M/S. MSK REAL ESTATE )
PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered office )
at 707 - 708 Sterling Centre, R.C. )
Dutt Road, Alkapuri, Vadodara )
34 CORPORATION BANK, a body )
. corporate
Banking
constituted
Companies
under the )
(Acquisition )
and Transfer of Undertakings) Act, )
1970, having its main office at )
Mangaladevi Temple Road )
Pandeshwar, Mangalore - 575 001 )
Karnataka and having its branch )
office at 14-15 National Plaza, R C )
Dutt Road, Alkapuri, Vadodara - )
390005 )
35 ICICI BANK LTD., a banking )
. company having its address at 3I )
Infotech Ltd., Akruti Trade Centre, )
with its office at 3rd Floor, P.10, )
Road No.7, MIDC Marol, )
Bhimnagar, Andheri (E), Mumbai - )
400093 )
36 ANAND RATHI SHARE & )
. STOCKBROKERS LTD., a )
company incorporated under the )
Companies Act, 1956 and having its )
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office at 4th Floor, Silver Metropolis )
Building, Jai Coach Compound, )
Western Express Highway, Opp. )
Bimbisar Nagar, Goregoan (East), )
Mumbai - 400 065 )
37 UNION BANK OF INDIA, a body )
. corporate constituted under the )
Banking Companies (Acquisition )
and Transfer of Undertakings) Act, )
1970, having its head office at Union )
Bank Bhavan, 239, Vidhan Bhavan )
Marg, Nariman Point, Mumbai )
400021 and its branch office at )
66/80, Mumbai Samachar Marg, )
Mumbai- 400 013 )...RESPONDENTS
ALONGWITH
ARBITRATION PETITION NO. (L) 1796 OF 2013
WELSPUN INFRATECH LIMITED, )
a company incorporated under the )
Companies Act, 1956, having its )
registered office at 9th Floor, Trade )...PETITIONER/
World B Wing, Kamala City, Lower ) ORIGINAL )
Parel, Mumbai - 400 013 CLAIMANT
VERSUS
1. MR. ASHOK KHURANA, adult, )
Indian inhabitant, residing at 1, )
Vikram Society, Gotri Road, )
Vadodara )
2. MR. AMIT KHURANA, adult, )
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Indian inhabitant, residing at 1, )
Vikram Society, Gotri Road, )
Vadodara )
3. MS. NEELAKSHI KHURANA, )
adult, Indian inhabitant, residing at )
1, Vikram Society, Gotri Road, )
Vadodara )
4. MS. MANJU KHURANA, adult, )
Indian inhabitant, residing at 1, )
Vikram Society, Gotri Road, )
Vadodara )
5. KPMG
LIMITED,
INDIA
a
PRIVATE )
company )
incorporated under the Companies )
Act, 1956 and having its office at )
Lodha Excelus, 1st Floor, Apollo )
Mills Compound, NM Joshi Marg, )
Mahalaxmi, Mumbai - 400 011 )
6. STANDARD CHARTERED )
BANK, a body corporate )
incorporated under the laws of )
England having its principle office )
at 1 Aldermanbury Square, London, )
EC2V 7SB and its branch office at )
2nd Floor, 90 MG Road, Mumbai - )
400 001 )
7. M/S. MSK INFRASTRUCTURE )
PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri, Society, )
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Vadodara )
8. M/S. MADHAV POWER )
PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri, Society, )
Vadodara )
9. M/S. WAA SOLAR PRIVATE )
LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 36-37 Damji Shamji )
Industiral Complex, Off Mahakali )
Caves, Andheri (E), Mumbai. )
10 M/S. MADHAV (SEHORA )
. SILODI CORRIDOR) )
HIGHWAYS PRIVATE )
LIMITED, a company ) )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri, Society, )
Vadodara
11 M/S. MADHAV )
. (PHOOLSAGAR NIWAS )
SHAHPURA CORRIDOR) )
HIGHWAYS PRIVATE )
LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
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B Tower, 74 Alkapuri, Society, )
Vadodara
12 M/S. MADHAV SOLAR )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri, Society, )
Vadodara )
13 M/S. MADHAV SOLAR )
. (KARNATAKA) PRIVATE )
LIMITED, a
incorporated under the Companies )
company )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri, Society, )
Vadodara
14 M/S. MADHAV INFRACON (BK )
. CORRIDOR) PRIVATE )
LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri, Society, )
Vadodara
15 M/S. MSK FINANCE LIMITED, )
. a company incorporated under the )
Companies Act, 1956 having its )
registered office at 1 Vikram )
Society, Gotri Road, Vadodara )
16 M/S. D.A. FINVEST LIMITED, a )
. company incorporated under the )
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Companies Act, 1956 having its )
registered office at 65, Mahavir )
Centre, 4th Floor, Sector No. 17, )
DBC Vashi Navi Mumbai )
17 M/S. MANSHA TEXTILES )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 1 Vikram Society, Gotri )
Road, Vadodara )
18 M/S. SUPER )
. INFRASTRUCTURE
TOLL )
BRIDGE PRIVATE LIMITED, a )
company incorporated under the )
Companies Act, 1956 having its )
registered office at 65, Mahavir )
Centre, 4th Floor, Sector No. 17, )
DBC Vashi Navi Mumbai )
19 M/S. MSK PROJECTS (INDIA) )
. (JV) LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri Society, )
Vadodara )
20 M/S. MADHAV INFRA )
. PROJECTS PRIVATE )
LIMITED, (formerly known as )
Classic Inns Private Limited) a )
company incorporated under the )
Companies Act, 1956 having its )
registered office at 101, Gayatri )
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Apartments, B Tower, 74 Alkapuri )
Society, Vadodara )
21 M/S. MADHAV INFRA )
. PROJECTS LIMITED (formerly )
known as Myraj Consultancy )
Limited), a company incorporated )
under the Companies Act, 1956 )
having its registered office at 24, )
Laxmi Chambers, Navjeevan Press )
Road, Ahmedabad )
22 M/S. MADHAV INFRACON )
.
PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri Society, )
Vadodara )
23 M/S. MADHAV URJA PRIVATE )
. LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri Society, )
Vadodara
24 M/S. MADHAV VASHISTHA )
. ENERGY PRIVATE LIMITED, )
a company incorporated under the )
Companies Act, 1956 having its )
registered office at 101, Gayatri )
Apartments, B Tower, 74 Alkapuri )
Society, Vadodara )
25 M/S. MADHAV VASHISTHA )
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. HYDRO POWER PRIVATE )
LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 5-52, Racherla Road, )
Prathipadu Village Pentapadyu )
Mandal, West Godavari, Andra )
Pradesh
26 M/S. BARODA SLIM EASY )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 1 Vikram Society, Gotri )
Road, Vadodara )
27 M/S. INFINITY INFRA BUILD )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri Society, )
Vadodara )
28 M/S. MADHAV CONFRA )
. CONSULTANCY PRIVATE )
LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 1 Vikram Society, Gotri )
Road, Vadodara )
29 M/S. SAINERGY INDUSTRIAL )
. PRODUCTS PRIVATE )
LIMITED, a company )
incorporated under the Companies )
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Act, 1956 having its registered )
office at BD/93, Pusti Prabha )
Society, Near Old Bapod Jakat )
Naka, Waghodia Road, Vadodara )
30 M/S. MSK PROJECTS (I) )
. PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 101, Gayatri Apartments, )
B Tower, 74 Alkapuri Society, )
Vadodara ig )
31 M/S. AAHELI )
. CONSTRUCTIONS PRIVATE )
LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 24, Laxmi Chambers, )
Navjeevan Press Road, Ahmedabad )
32 M/S. MADHAV INDUSTRIAL )
. PARK PRIVATE LIMITED, a )
company incorporated under the )
Companies Act, 1956 having its )
registered office at 101, Gayatri )
Apartments, B Tower, 74 Alkapuri )
Society, Vadodara )
33 M/S. MSK REAL ESTATE )
PRIVATE LIMITED, a company )
incorporated under the Companies )
Act, 1956 having its registered )
office at 707 - 708 Sterling Centre, )
R.C. Dutt Road, Alkapuri, )
Vadodara
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34 CORPORATION BANK, a body )
. corporate constituted under the )
Banking Companies (Acquisition )
and Transfer of Undertakings) Act, )
1970, having its main office at )
Mangaladevi Temple Road )
Pandeshwar, Mangalore - 575 001 )
Karnataka and having its branch )
office at 14-15 National Plaza, R C )
Dutt Road, Alkapuri, Vadodara - )
35
390005 )
ICICI BANK LTD., a banking )
. company having its address at 3I )
Infotech Ltd., Akruti Trade Centre, )
with its office at 3rd Floor, P.10, )
Road No.7, MIDC Marol, )
Bhimnagar, Andheri (E), Mumbai - )
400093 )
36 ANAND RATHI SHARE & )
. STOCKBROKERS LTD., a )
company incorporated under the )
Companies Act, 1956 and having its )
office at 4th Floor, Silver )
Metropolis Building, Jai Coach )
Compound, Western Express )
Highway, Opp. Bimbisar Nagar, )
Goregoan (East), Mumbai - 400 )
065
37 UNION BANK OF INDIA, a body )
. corporate constituted under the )
Banking Companies (Acquisition )
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and Transfer of Undertakings) Act, )
1970, having its head office at )
Union Bank Bhavan, 239, Vidhan )
Bhavan Marg, Nariman Point, )
Mumbai 400021 and its branch )
office at 66/80, Mumbai Samachar )
Marg, Mumbai- 400 013 )...RESPONDENTS
Mr. Virag Tulzapurkar, Sr. Advocate along with Mr. Sameer Pandit alongwith Ms. Bindi
Dave, alongwith Ankita Godbole i/by Wadia Ghandy & Co. for petitioners both the
petitions.
Mr. Ravi Kadam, Sr. Advocate along with Mr. Chetan Kapadia along with Mr. S.K.
Srivastav along with Ms. Manorama Mohanty i/by S.K. Srivastav & Co. for respondent
nos. 1 to 4 in Arbitration Petition (L) No. 1793 of 2013.
Mr. Chetan Kapadia along with Mr. S.K. Srivastava alongwith Ms. Manorama Mohanty
i/by M/s. S.K. Srivastava & Co. for respondent nos. 1 to 4 in Arbitration Petition (L) No.
1796 of 2013.
Mr. Ashish Kamat i/by Simeen Shaikh for respondent nos. 15, 17, 21, 26 and 31.
CORAM : R.D.DHANUKA J.
RESSERVED ON: DECEMBER 12, 2013
PRONOUNCED ON: JANUARY 10, 2014
ORAL JUDGMENT :
By consent of parties both the petitions are heard together and are being disposed of by the common order. By these two petitions filed under section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as "Arbitration Act"), petitioner seeks appointment of Court receiver and injunction in respect of various properties of the respondents.
2. Some of the relevant facts which emerge from the pleadings and documents filed by the parties and which are relevant for the purpose of deciding these two petitions are as under :
(a) Respondent No. 1 to 4 are the erstwhile promoters and shareholders of the ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 19 APL-1796-1793.2013.sxw company Welspun Projects Ltd (Formerly known as MSK Projects (India) Limited), (hereinafter referred to as "said company"). Respondent nos. 1 to 4 were desirous of disposing of their entire share holding of the said company and petitioner agreed to purchase the same. On 18 th March, 2010, petitioner and respondent nos.1 to 4 entered into a share purchase agreement. By the said Purchase Agreement (for short "said SPA"), petitioner agreed to purchase 47,32,545 shares in the said company from respondent nos 1 to 4 for the total consideration of Rs.62,01,81,022.50. Petitioner and respondent nos. 1 to 4 also entered into share subscription Agreement on 18 th March, 2010 by which petitioner agreed and subscribed to 1,71,78,888/- shares of the said company from respondent nos. 1 to 4 for the consideration of Rs.211,30,03,224/- (for short "said SSA"). It is the case of the petitioner that both these agreements were entered into by the petitioner on the strength of the representations, warranties, covenants, disclosures made and indemnities given by respondent nos. 1 to 4 as set out in the said two agreements. Petitioner accordingly acquired total of 2,19,31,233 shares in the said company for the total consideration of Rs.2,73,31,84,246.50. Petitioner deposited first trench of the purchase price of Rs.52,01,81,022.50 into escrow account pursuant to clause 3.1 of the said SPA. It was agreed by and between the parties that the payment of the purchase price including escrow account shall be conditional upon respondent nos. 1 to 4 completing conditions precedent to share closing and the said amount in escrow account (I) was not to be released to respondent no. 1 to 4 unless condition precedent to the share closing were applied by these respondents to the satisfaction of the petitioner as described in clause 4.1 of the said SPA. It is the case of the petitioner that respondent nos.1 to 4 however, have procured release of escrow account I through misrepresentation. The second trench of price of Rs. 10 Crores was deposited by the petitioner into separate escrow account II vide escrow agreement II dated 18th March, 2010 which was entered into between petitioner, respondent nos. 1 to 4 and the escrow agent. It was agreed between the parties that unless respondent nos.
1 to 4 satisfy certain conditions described in the said escrow agreement II, the entire escrow amount II shall be released to the petitioner. Under clause 9.1 of the said SPA, the respondent nos. 1 to 4 agreed to indemnify the petitioner and other indemnified persons for all the losses suffered by them on account of any breach, misrepresentation etc. by those respondents and on account of any liability not disclosed in the disclosure letter and incurred by the said company for the period prior to the share sale ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 20 APL-1796-1793.2013.sxw closing date i.e. 16th August, 2010. Under the said SPA agreed value was worked out to approximately Rs.1,96,91,00,000/-. Under clause 7.16 of the said SPA, it was agreed that actual value would be determined by mutually appointed independent valuer (KPMG). Respondent No. 1 to 4 were required to deliver to the said independent valuer within reasonable period of time, consolidated trial balance of the said company along with all such information that the independent valuer may request for. The said valuation was to ascertain the actual value of the company in accordance with clause 7.16.6 of the said SPA. Parties agreed that if the deviation between the two values was more than Rs.5,00,00,000/-, the negative deviation would be subtracted from Escrow account II. According to the petitioner, since Escrow account II was no longer available due to be released to the petitioner, respondent nos. 1 to 4 were required to pay differential amount to the petitioner forthwith and in any event within seven days from the date of the report of the independent valuer.
(b) It is the case of the petitioner that respondent nos.1 to 4 by their various communications refused to allow independent valuer to carry out valuation for the purposes of determining the actual value and have committed breach of the said SPA and have instructed the independent valuer to not to issue valuation certificate.
According to the petitioner, the difference between the agreed value and actual value works out to Rs.41,29,00,000/-. It is alleged that the escrow account II is exhausted after accounting for the liability of the respondent nos. 1 to 4, thus respondents are liable to pay to the petitioner, entire amount of Rs.41,29,00,000/- being difference between the agreed value and actual value with interest.
(c) Under clause 7.13 of the SPA, respondent nos. 1 to 4 undertook to obtain completion certificate for the IOECLEPCL-12 Panipat Project without any liquidated damages and agreed to reimburse the said company in the event of such company incurring any liquidated damages for the same. It was recorded in the said SPA that before signing of the said agreement, the said company had received notices from the concerned authorities for payment of the labour cess of Rs. 86 lacs. Under clause 9.1 of the said SPA, respondent no. 1 to 4 had agreed to indemnify the petitioner from and against any and all losses actually incurred by any of the indemnified persons resulting from any matter inconsistent with or in breach or inaccuracy of any representation, ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 21 APL-1796-1793.2013.sxw covenant or agreement or failure to perform any obligation under the said agreement, any liability not disclosed in the disclosure letter by the promoter and incurred by the said company for the period prior to the share sale closing date. Respondent nos.1 to 4 had agreed to indemnify the indemnified persons in respect of the tax liability, indemnification for litigation, labour cess etc., as recorded in clause 9.1 to 9.2(b) of the said SPA. Clause 9.3C of the said SPA, which is relevant for the purpose of this petition is extracted as under :
"(c) Subject to the terms of this Agreement, the Promoters' obligation to indemnify pursuant to this Section shall arise immediately upon the Working Promoters, and/or the Indemnified person incurring any liability pursuant to a claim irrespective of any defence or right to appeal available to it. The failure of the indemnified person to notify the promoters of a claim shall not relieve the promoters of any indemnification responsibility under this Section unless such failure materially prejudices the Promoters' ability to defend such claim."
(d) It is the case of the petitioner that various undisclosed liabilities of respondent Nos. 1 to 4 were revealed by the Petitioner after the said company received notices for payment of labour cess, notices from income tax department, demand in respect of entry tax liability, service tax liability, ESIC dues etc. Several litigations also came to be filed against the said company by various parties pertaining to the breaches committed by respondent nos. 1 to 4. According to petitioner, as on 11 th October, 2012, respondent Nos 1 to 4 became liable to pay Rs.51,76,25,033/- to the petitioner with further interest thereon under the said SPA.
(e) In so far as the said SSA is concerned, according to petitioner, respondent nos.1 to 4 committed several breaches of the said agreement and as a result thereof, respondent nos. 1 to 4 became liable to pay to the petitioner sum of Rs.1,64,91,73,248/-
and Rs.2,62,50,39,273/- with interest thereon.
(f) It is the case of the petitioner that since respondent nos. 1 to 4 did not allow the independent valuer to submit report on the difference in value of the agreed value and actual value, petitioner obtained a report from an independent valuer and according to such report, there was difference of Rs.41,29,00,000/-.
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(g) Vide notice dated 31st October, 2011, petitioner alleged various breaches in
detail in the said notice on the part of respondent Nos. 1 to 4 and called upon
respondent nos. 1 to 4 to pay Rs.149 Crores by way of damages with interest making it clear that failing which the matter would be referred to arbitration as provided as provided in clause 10M(ii) and (iii) of the SSA and proposed name of a retired Judge of the Supreme Court as arbitrator. Petitioner issued similar notice in respect of the alleged breaches committed by respondent nos. 1 to 4 on the terms of the SPA and demanded various amounts from respondent nos. 1 to 4.
(h) On 20th December, 2010, respondent nos 1 to 4 filed an application under section 9 of the Arbitration & Conciliation Act, 1996 (Civil Misc. Application No. 1461 of 2010) in the court of the District Judge at Vadodara. The Petitioner and M/s. KPMG India Private Limited were impleaded as opponents in the said application. Respondent nos. 1 to 4 alleged in the said application that the learned District Judge at Vadodra had jurisdiction to entertain the said application being the court as defined under section 2(e) of the Arbitration & Conciliation Act, 1996 being the principal Civil Court of original jurisdiction in the district and the parties in the said SPA agreed to the jurisdiction of the Vadodara court. On 29th December, 2010, respondent nos. 1 to 4 filed an application in the said proceedings seeking withdrawal of the said application. In the said arbitration application filed under section 9, respondent nos. 1 to 4 had applied for injunction against the said KPMG from finalizing and issuing valuation certificate. In the said application for withdrawal filed by respondent nos. 1 to 4, it was stated that in view of the letter addressed by KPMG it was clear that the said KPMG would not issue valuation certificate and thus respondent nos. 1 to 4 were withdrawing the said application filed under section 9 before the learned District Judge, Vadodara. Pursuant to the said application filed by respondent nos. 1 to 4 the said application was allowed to be withdrawn.
(i) On 23rd December, 2010, respondent nos. 1 to 4 filed Arbitration Petition no. 47of 2011 before this court under section 9 of the Arbitration Act and impleaded petitioner and Standard Chartered Bank as respondents inter alia praying for an order and injunction restraining the Standard Chartered Bank from releasing the amount of Rs. 10 Crores lying in the escrow account II in pursuance of the escrow agreement dated 18 th March, 2010. Respondent nos. 1 to 4 ultimately withdrew the said arbitration petition which was filed in this court.
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(j) On 27th February, 2012 petitioner filed an application under section 11(5)
and (6) of the Arbitration Act before the High Court of Gujarat at Ahmedabad for
appointment of arbitral tribunal against respondent nos. 1 to 4 and Ashoka Khurana (HUF) under the said SSA. In Paragraph 15 of the said application, it was stated that High Court at Gujarat alone had jurisdiction to entertain, try and dispose of the said application as the respondents were residents of Vadodara Gujarat and principal civil court having jurisdiction to decide the dispute between the parties fell within the local limits of Gujarat High Court. The Gujarat High Court appointed Shri Justice D.A. Mehta, former Judge of Gujarat High Court as sole arbitrator. Respondent Nos. 1 to 4 filed special leave petition against the said order dated 6 th July, 2012 passed by Gujarat High Court nominating Shri Justice D.A. Mehta, retired Judge of Gujarat High Court. By an order dated 5th November, 2012, on the joint request of the parties, the Supreme Court appointed Shri Justice C.K. Thakkar, former Judge of the Supreme Court to act as sole arbitrator.
(k) Respondent nos. 1 to 4 have filed an application under section 16 of the Arbitration Act before the learned Arbitrator raising issue of jurisdiction that the claims made by the petitioner are not arbitrable. The learned arbitrator on such application has held that all the issues would be decided by the learned arbitrator together.
3. Mr. Tulzapurkar, learned senior counsel appearing on behalf of the petitioner submits that respondent nos. 1 to 4 have made false representation and have not disclosed all the liabilities of the said company. Though respondent nos. 1 to 4 have agreed to compensate and indemnify the petitioner for such losses suffered, as per provisions of the said SPA and SSA, respondent nos. 1 to 4 have not complied with any terms of the said agreements, did not allow independent valuer to submit report, did not obtain any NOC in respect of various projects. He submitted that several notices came to be received by the said company from various authorities raising demand of statutory dues and tax liabilities. Several litigations came to be filed against the said company in respect of the earlier transactions. It is submitted that during the pendency of the arbitration proceedings before the learned arbitrator, petitioner came to know in the month of September/October, 2013 that respondent nos. 1 to 4 had started disposing of their assets to various companies and with a view to defeat any award that may be ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 24 APL-1796-1793.2013.sxw passed against them in arbitration proceedings filed by the petitioner. It is submitted that out of the sum of Rs.62,01,81,022.50 received by way of consideration by respondent no. 1 to 4 under the SPA, respondent nos. 1 to 4 have invested sum of Rs.7.5 Crores and Rs. 7 Crores in respondent no. 7 company in which they had already significant investment. It is submitted that from the audited balance sheet of respondent no. 7 for financial year 2011-12, it is clear that the total investment made by respondent nos. 1, 2 and 4 with respondent no. 7 as on 31 st March, 2012 is approximately Rs.35,22,14,000. Respondent nos. 1, 2 and 4 held around 99% shares of the said company. It is submitted that investment of respondent nos. 1, 2 and 4 and respondent no. 7 company has transferred through several downstream investment directly of indirectly into various other companies i.e. respondent nos. 8 and 33.
33 and directly or indirectly Respondent Nos. 1 to 4 held sizable portion of equity shares held by respondent no. 8 to owns and control respondent nos. 8 to 33 companies. It is submitted that respondent nos. 1, 2 and 4 have also created three trust known as Madhav Trust, Madhav Ashok Trust, Armaan Amit Trust for the purposes of transferring the assets of respondent nos. 1, 2 and 4 or to part with their assets pending the arbitration proceedings in those trusts with a view to defeat the award that may be passed in favour of the petitioner and against them. The learned senior counsel submits that the members of the family of respondent nos. 1, 2 and 4 are beneficiaries of those trusts. It is submitted that though respondent nos. 1, 2 and 4 have alleged to have transfered their shares in respondent no. 7 company, It is clear that respondent nos. 1, 2 and 4 continues to be directors or have control of the respondent no. 7 company and other respondents. It is submitted that during the pendency of the arbitration proceedings all these clandestine transfers of assets are effected with a view to defraud the petitioner. The learned senior counsel invited my attention to various statements annexed to the petition to demonstrate that the control of respondent nos. 1 to 4 of respondent No. 8 to 33 in one or other way continues and transfer of their assets to these respondents are ex facie fraudulent. It is submitted that the petitioners are thus entitled to reliefs claimed in the petition and if no such reliefs are granted, petitioner would not be able to recover any amount from the respondents though petitioner has good chance of success in the arbitration proceedings. He submits that though the learned arbitrator has directed respondent nos. 1 to 4 to carry out the valuation process in accordance with clause 7.16 of the SPA by directing respondent No. ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 25 APL-1796-1793.2013.sxw 5, by order dated 30th October, 2013, respondent nos. 1 to 4 have not taken any steps so far. It is submitted that huge amount is deposited by the petitioner with respondent no. 6 in escrow account II which the petitioner is entitled to receive in view of respondent nos.
1 to 4 not complying with their obligations under the agreements. It is submitted that in any event, that amount which is lying deposited with respondent no. 6 in escrow account II, this court shall order and direct respondent no. 6 to transfer the escrow amount in interest bearing fixed deposit.
4. Mr. Tulzapurkar, learned senior counsel invited my attention to the affidavit in reply filed by respondent nos. 1 to 4 and submits that respondent nos. 1 to 4 have admitted share holdings of respondent nos. 1 to 4 in various companies who are parties to this petition. Respondent no. 1 to 4 have also admitted creation of various trusts which indicates that the trusts are created by respondent nos. 1 to 4 and/or their close relatives in which family members of respondent Nos. 1 to 4 are beneficiaries. The learned senior counsel submits that on perusal of the affidavit, it is clear that respondent nos. 1 to 4 have transferred almost every property in favour of their own companies in which they have control. Petitioners are thus entitled to seek orders also against those parties who have to pay substantial amount to respondent no. 1 to 4 admittedly. The learned senior counsel submits that it is not necessary that those parties need to be parties to arbitration agreement for the purpose of granting reliefs under section 9 of the Arbitration Act by this court. It is submitted that respondents have not completely disclosed all the assets though directed by this court.
5. Some of the properties are alleged to be the properties of HUF in the affidavits filed in this proceedings though no such disclosure was made when ad interim order was passed by this court recording the statement made by the respondent nos.1 to 4 through their learned counsel.
6. Mr. Tulzapurkar learned senior counsel placed reliance on the judgment of this court in the case of Marine Container Versus Rajesh Vora, 2002 Vol.104(1) Bom.L.R. 273 and in particular paragraph 6 in support of his submission that under order 38, Rule 5 of Code of Civil Procedure, 1908, the court has power to permit the plaintiff to make an application for attachment before judgment without specifying the property in ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 26 APL-1796-1793.2013.sxw relation to which attachment is sought by the plaintiff and has power to direct the defendant to disclose his property so that the court can pass order of attachment. Relevant part of Paragraph 6 of the said judgment reads thus :
"Insofar as the objection of the learned Counsel regarding the orders sought by the plaintiff for direction to the defendants to disclose their assets is concerned, it is clear from the provisions of Sub-rule 2 of Rule 5 that the Court under that Rule is required to make, on being satisfied, an order against the defendants for furnishing securities, and in case the defendant fails to furnish the security within the period specified by the Court, then the Court can direct the defendant to place at the disposal of the suit the property that may be necessary or adequate for securing the claim of the plaintiff. Perusal of the provisions of Sub-rule (2) of Rule 5 of Order 38 also indicates that there is power vested in the Court to permit the plaintiffs to make an application for attachment before judgment without specifying the property in relation to which attachment is sought by the plaintiffs. Thus, provisions of Sub-rule (2) of Rule 5 of Order 38 envisage the case where the plaintiff does not know as to in relation to which property of the defendant, attachment is to be sought. In such a case, therefore, it is the Court, which will have to direct the defendant to disclose his property so that the Court can order its attachment. In my opinion, therefore, there is sufficient power in the Court to direct the defendants to disclose the assets."
7. Learned senior counsel placed reliance on the judgment of this court in the case of Tata Capital Financial Services Limited and Ors. Versus Deccan Chronicle Holdings Limited and Ors. 2013 (3) Bom.C.R. 205 and submits that this court after adverting to the judgment of the Division Bench of this court in the case of Nimbus Communications Ltd. Vs. Board of Control for Cricket in India, 2012(5) Bom.C.R. 114 and has held that underlying basis of order 38 rule 5 has to be borne in mind by the court while passing order on an application under section 9(2)(b). Paragraph 40 and 41 of the said judgment read thus :
"40. The next issue raised by the respondents is that the petitioners have not made out any case for grant of reliefs as claimed in the petitions which are in the nature of attachment before judgment akin to the principles of Order 38 Rule 5 of the CPC of 1908 in the facts of this case. As the petitioners do not press for reliefs for enforcement of mortgaged properties, no reliefs as claimed in the petitions for appointment of Court Receiver and also injunction in respect of such properties, be granted under Section 9.
41.On reading of section 9 of the Arbitration & Conciliation Act, 1996, it is clear that the Court can grant interim measures under sub section 2(b), (d) ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 27 APL-1796-1793.2013.sxw and (e) even if the property or things are not subject matter of the dispute in arbitration. It is clear that for granting interim measures or protection, the Court would not have power to grant such interim measures, if it is for preservation, interim custody or sale of any goods, the detention, preservation or inspection of any property or thing or as to which any question may arise therein and authorizing for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried unless such goods or property are subject matter of arbitration. I am, thus, not inclined to accept the submission of the respondent that if the petitioner gives up its claim for enforcement of mortgaged properties, no interim measures can be granted under section 9 by this Court for recovery of money claim simpliciter."
8. Mr. Tulzapurkar, learned senior counsel placed reliance on the judgment of the Division Bench of this court in the case of Deccan Chronicle Vs. L & T Finance Ltd in Appeal (l) No. 130 of 2013 delivered on 8 th August, 2013 and in particular paragraph 10 in support of his submission that though underlying basis of order 38 rule 5 has to be born in mind while deciding application under section 9 by the court, rigours of every procedural provision of Code of Civil Procedural cannot be put into place to defeat grant of relief which would subserve the paramount interest of justice. The Court has discretion to mould the relief in appropriate cases to secure interest of justice to preserve sanctity of arbitral process. Paragraph 10 of the judgment of the Division Bench in the said matter reads thus :
"10. The principle is that when the Court decides a petition under Section 9, the principles which have been laid down in the Code of Civil Procedure, 1908 for the grant of interlocutory reliefs furnish a guide to the Court. Similarly in an application for attachment, the underlying basis of Order XXXVIII Rule 5 would have to be borne in mind. At the same time it needs to be noted that the rigors of every procedural provision of the CPC cannot be put into place to defeat the grant of relief which would subserve the paramount interests of the justice. The object of preserving the efficacy of arbitration as an effective form of dispute resolution must be duly fulfilled. This would necessarily mean that in deciding an application under Section 9, the Court would while bearing in mind the fundamental principles underlying the provisions of the CPC, at the same time, have the discretion to mould the relief in appropriate cases to secure the ends of justice and to preserve the sanctity of the arbitral process."
9. Mr. Ravi Kadam, appearing on behalf of respondent Nos. 1 and 4 in Arbitration Petition (L) No. 1793 of 2013 opposed this petition and submits that as against ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 28 APL-1796-1793.2013.sxw the consideration of Rs. 62 Crores, petitioner had paid Rs.52 Crores and had deposited sum of Rs. 10 Crores in the escrow account. It is submitted that due to breaches committed by petitioners, respondent nos.1 and 4 could not obtain completion certificate from various authorities for which petitioners are solely responsible. Learned senior counsel submits that as against payment of Rs. 52 Crores, petitioners have lodged false claim of Rs.1038.68 Crores against respondent nos. 1 to 4.
10. Learned senior counsel submits that this proceedings under section 9 of the Arbitration and Conciliation Act are not maintainable before this court, not having territorial jurisdiction. It is submitted that the petitioners had filed arbitration application under section 11 of the Arbitration & Conciliation Act before Gujarat High Court, much prior to the date of filing of this application under section 9 before this court. My attention is invited to para 15 of the arbitration application filed by the petitioners before Gujarat High Court in which petitioners have averred that Gujarat Court alone had jurisdiction to entertain, try and decide the said petition and as the respondents to that petition were residents of Vadodara, Gujarat which is Principal Civil Court having jurisdiction to decide the said dispute between the parties. It is submitted that considering such averments, Gujarat Court was pleased to appoint an arbitrator. Learned senior counsel submits that since it was petitioner's own case that application under section 11 would fall within jurisdiction of Gujarat High Court as the said court only having jurisdiction to decide the dispute between the parties, this petition under section 9 cannot be filed in this court. Learned senior counsel fairly admits that it is not the submission of respondent no. 1 to 4 that merely because application under section 11 is filed in prior point of time by the petitioner before the Gujarat High Court, in view of section 42 of the Arbitration and Conciliation Act, this petition also ought to have been filed before the Gujarat High Court. Submission of learned senior counsel is however that since even according to petitioner, only Gujarat High Court had jurisdiction to entertain the petition under section 11 in respect of the subject matter of the arbitration, this court has no jurisdiction to entertain the proceedings under section 9.
11. Mr. Kadam, the learned senior counsel then submits that in so far as arbitration petition filed by respondent no. 1 to 4 under section 9 before the District Judge, Gujarat is concerned, without any contest by any parties, respondent nos. 1 to 4 had withdrawn the said arbitration petition by filing pursis in view of KPMG stating that ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 29 APL-1796-1793.2013.sxw there was no question of submitting fresh valuation report. It is submitted that since there was adjudication in the said proceedings, Gujarat Court does not have any control over the arbitration proceedings, hence section 42 would not be attracted in so far as that proceedings is concerned, It is submitted that in so far as arbitration petition (47 of 2011) filed by respondent nos. 1 to 4 in this court is concerned, respondent Nos. 1 to 4 had basically claimed relief against Standard Chartered Bank who were escrow agents by invoking a separate arbitration agreement between the petitioner, respondent Nos. 1 to 4 and Standard Chartered Bank. It is submitted that the said arbitration petition has also been withdrawn by respondent nos. 1 to 4. Under the said arbitration agreement, dispute was subject to Bombay jurisdiction, However, in so far as the said SPA or SSA is concerned, it is not agreed by and between the parties that the dispute would be governed by Bombay jurisdiction and thus section 42 would not be attracted to the said petition (47 of 2011) filed by respondent nos. 1 to 4 in this court. It is submitted that in any event, since the said proceedings are also withdrawn, this court does not have any control over the arbitration proceedings.
12. Mr. Kadam, learned senior counsel and Mr. Kapadia, then submits that the claims made by the petitioner are in the nature of damages. In so far as indemnity sought to be invoked by the petitioner is concerned, it is submitted that unless the liabilities are crystalized and unless any payment is made by the company arising out of said notices issued by the authorities, the petitioner cannot invoke these indemnities and call upon the respondent to make any payment.
13. In so far as creation of various trusts and transfer of shares to various companies are concerned, it is submitted that respondent nos. 1 to 4 have received consideration from respondent nos. 1 to 4 for transfer of those shares and are free to invest those amounts in any of their companies. Such transfer is not fraudulent or is effected with a view to defeat any claims of the petitioner. It is submitted that in any event, since the claim of the petitioner is false and frivolous and in any event is for damages, no interim orders by way of garnishee orders can be issued by this court. Respondent nos. 5 to 33 are neither parties to the arbitration proceedings nor are even parties to the arbitration agreement and thus no orders can be passed against those parties in this proceedings. Learned senior counsel submits that all the transfers ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 30 APL-1796-1793.2013.sxw effected by respondent nos. 1 to 4 are by registered documents and no relief for setting aside of these transfers can be granted by this court in those proceedings or by the learned arbitrator against respondent nos. 5 to 33.
14. Mr. Kadam, learned senior counsel and Mr. Kapadia placed reliance on the judgment of this court in the case of Gajanan Moreshwar Parlekar Vs. Moreshwar Madan Mantri AIR 1942 Bombay 302 and would submit that unless a person indemnified has incurred a liability and that liability is absolute, he is not entitled to call upon the indemnifier to save him from that loss and to pay it off. Relevant paragraph of the said judgment read thus :
"It is true that under the English common law no action could be maintained until actual loss had been incurred. It was very soon realized that an indemnity might be worth very little indeed if the indemnified could not enforce his indemnity till he had actually paid the loss. If a suit was filed against him, he had actually to wait till a judgment was pronounced, and it was only after he had satisfied the judgment that he could sue on his indemnity. It is clear that this might under certain circumstances throw an intolerable burden upon the indemnity-holder. He might not be in a position to satisfy the judgment and yet he could not avail himself of his indemnity till he had done so. Therefore the Court of equity stepped in and mitigated the rigour of the common law. The Court of equity held that if his liability had become absolute then he was entitled either to get the indemnifier to pay off the claim or to pay into Court sufficient money which would constitute a fund for paying off the claim whenever it was made. As a matter of fact, it has been conceded at the bar by Mr. Tendolkar that in England the plaintiff could have maintained a suit of the nature which he has filed here; but, as I have pointed out, Mr. Tendolkar contends that the law in this country is different. I have already held that Sections 124 and 125 of the Indian Contract Act are not exhaustive of the law of indemnity and that the Courts here would apply the same equitable principles that the Courts in England do. Therefore, if the indemnified has incurred a liability and that liability is absolute, he is entitled to call upon the indemnifier to save him from that liability and to pay it off."
15. Mr. Kamat, learned counsel appearing for respondent nos. 17, 21, 26 and 31 submits that since these respondents are not parties to the arbitration agreement or any arbitration proceedings, no orders can be passed by this court under section 9. It is submitted that this court has no jurisdiction to pass any order against those parties.
16. Learned counsel placed reliance on the judgment of the Supreme Court in ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 31 APL-1796-1793.2013.sxw the case of Raman Tech & Process Engg. Co. and anotehr Vs. Solanki Traders, 2008(2) SCC 302, in support of his submission that the purpose of order 38 rule 5 is not to convert unsecured debt into secured debt. Before exercising power under Order 38 rule 5, the court has to be satisfied that there is a reasonable chance of decree being passed in the suit against the defendant.
Paragraph 4 and 5 of the said judgment, read thus :
"4. The object of supplemental proceedings (applications for arrest or attachment before judgment, grant of temporary injunctions and appointment of receivers) is to prevent the ends of justice being defeated. The object of Order 38 Rule 5 CPC in particular, is to prevent any defendant from defeating the realization of the decree that may ultimately be passed in favour of the plaintiff, either by attempting to dispose of, or remove from the jurisdiction of the court, his movables. The Scheme of Order 38 and the use of the words 'to obstruct or delay the execution of any decree that may be passed against him' in Rule 5 make it clear that before exercising the power under the said Rule, the court should be satisfied that there is a reasonable chance of a decree being passed in the suit against the defendant. This would mean that the court should be satisfied that the plaintiff has a prima facie case. If the averments in the plaint and the documents produced in support of it, do not satisfy the court about the existence of a prima facie case, the court will not go to the next stage of examining whether the interest of the plaintiff should be protected by exercising power under Order 38 Rule 5 CPC. It is well-settled that merely having a just or valid claim or a prima facie case, will not entitle the plaintiff to an order of attachment before judgment, unless he also establishes that the defendant is attempting to remove or dispose of his assets with the intention of defeating the decree that may be passed. Equally well settled is the position that even where the defendant is removing or disposing his assets, an attachment before judgment will not be issued, if the plaintiff is not able to satisfy that he has a prima facie case.
5. The power under Order 38 Rule 5 CPC is a drastic and extraordinary power. Such power should not be exercised mechanically or merely for the asking. It should be used sparingly and strictly in accordance with the Rule. The purpose of Order 38 Rule 5 is not to convert an unsecured debt into a secured debt. Any attempt by a plaintiff to utilize the provisions of Order 38 Rule 5 as a leverage for coercing the defendant to settle the suit claim should be discouraged. Instances are not wanting where bloated and doubtful claims are realised by unscrupulous plaintiffs, by obtaining orders of attachment before judgment and forcing the defendants for out of court settlements, under threat of attachment."
17. Learned counsel invited my attention to prayers at page 34 of the petition and submits that the prayers IV (e) and (f) are also claimed against respondent Nos. 15, ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 32 APL-1796-1793.2013.sxw 17, 21, 26 and 31 which cannot be considered by this court since no claim is made by the petitioner against these respondents in arbitration proceedings.
18. Mr. Tulzapurkar learned senior counsel for the petitioner in rejoinder submits that there was no application filed under section 11 by the petitioner before the Gujarat High Court in so far as SSA is concerned. Section 42 of the Arbitration Act thus in any event, would not apply in respect of the subject matter of the said SSA. In so far as issue of jurisdiction raised by respondent nos. 1 to 4 in respect of the arbitration petition filed by the petitioner arising out of the said SPA is concerned, the learned senior counsel submits that even if respondent nos. 1 to 4 had withdrawn the petition filed under section 9 before the District Judge, Vadodara, it was contended by respondent nos. 1 to 4 in the said proceedings that the District Judge had jurisdiction to entertain the said petition being court under section 2(e) of the Arbitration Act, being principal Civil Court of the original jurisdiction in the district and the parties in the said SPA had agreed to the jurisdiction before that court. Mr. Tulzapurkar then submits that in so far as arbitration petition filed in this court by respondent nos. 1 to 4 is concerned, respondent nos. 1 to 4 has referred to various provisions of SPA in the said petition entered into between the petitioner and respondent nos. 1 to 4. Standard Charted Bank was appointed as escrow agent pursuant to the SPA and KPMG India Limited was appointed as independent valuer. Learned senior counsel invited my attention to paragraph 15 of the said petition in which it is averred by respondent nos. 1 to 4 that clause 11(m) of the SPA provides for arbitration in case of dispute between the parties. In prayer clause (a), respondent nos. 1 to 4 have prayed that pending constitution of arbitral tribunal, arbitral proceedings adjudication and disposal of all disputes between the petitioner and respondent no. 1 by the arbitral tribunal by an award, Standard Chartered Bank should be restrained from releasing Rs.10 Crores. It is submitted that thus respondent nos. 1 to 4 cannot be allowed to urge that the said petition was filed by invoking arbitration agreement under escrow agreement and not under SPA. It is submitted that thus both the parties have agreed that not only Gujarat court had jurisdiction but also this court has jurisdiction to entertain the proceedings between the parties. This petition thus filed under section 9 before this court is maintainable.
19. Learned senior counsel placed reliance on the judgment of this court in the case of Ion Exchange (India) Ltd. Versus Paramount Ltd. 2006(4) B.C.R. 545 in support of his submission that the application under section 9 of the Act filed in prior point of time ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 33 APL-1796-1793.2013.sxw has to be bona fide application for applicability of section 42 of the Arbitration Act.
Paragraph 5 of the said judgment reads thus :
"5. The application made by the respondent before the Baroda Court is filed under Section 9 of the Act, in so far as that application is concerned, following can be taken as undisputed positions:-
(a) That the application has been filed by the respondent under Section 9 of the Act.
(b) That an application under Section 9 of the Act can be made to a 'Court' and that the Baroda Court to whom the application has been made is a 'Court' within the meaning of the Act.
(c) That the award was made on 31.3.2005 and was communicated on 6.4.2005.
(d) That the application before the Baroda Court was filed on 5.5.2005, under Section 9 of the Act for directing the petitioner to deposit the amount awarded to the respondent by the Award or in the alternative security.
(e) That present petition was filed in the Court on 29.6.2005.
(f) That till 29.6.2005 neither the respondent nor the Baroda Court informed the petitioner that on 5.5.2005 application under Section 9 of the Act has been filed.
(g) That the period of three months provided by Section 34 of the Act for filing petition under that provision expired on 7.7.2005.
(h) That the petitioner got knowledge that application under Section 9 of the Act has been filed by the respondent because he was served with the notice from the Baroda Court either on 14.7.2005 or on 20.7.2005. The submission of the petitioner is that the provisions of Section 42 of the Act should be so interpreted that they can not be used by the party in whose favour an award has been made to deny the party who is aggrieved by the Award, the remedy provided by the Act for challenging the Award. Reading of the provisions of Section 42 of the Act shows that in case where more than one Court has the jurisdiction over the subject matter of the arbitration, the Court which is moved first in point of time becomes entitled to exercise jurisdiction to the exclusion of all other courts in relation to that arbitration. In other words, when more than one Court has jurisdiction in relation to the subject matter of arbitration, the parties to the arbitration have choice of moving any of those Courts, but if one of the parties moves one of those Courts, because of the provisions of Section 42 of the Act, the other parties lose their entitlement to move the other Court or Courts who otherwise have the jurisdiction. Thus, the provisions of Section 42 of the Act have drastic consequences. Considering that the provisions have drastic consequences, it will have to be ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 34 APL-1796-1793.2013.sxw so construed that it is not misused by a party to deny the remedies created by the Act to the other party. The object for which the provision has been incorporated is that once an application is filed in a particular Court that Court and no other Court will entertain the subsequent applications. The provisions is enacted to avoid conflict and scramble."
20. Mr. Tulzapurkar, learned senior counsel also placed reliance on the judgment of the Supreme Court in the case of Petine Shipping Incorporation of Monrovia Versus Mineralas and Metals Trading Corproiatni of India Limited, 2009 (7) SCC 516 in support of his submission that this court has jurisdiction to entertain the petition filed under section 9. Mr. Tulzapurkar learned senior counsel also placed reliance on the judgment of the Division Bench of this court in the case of Vachaspati Sharma Vs. India Cements Capital and Finance Limited delivered on 26 th September, 2013 in Appeal (L) No. 210 of 2013 in support of his submission that section 42 would not be attracted to the arbitration application filed by the petitioners under section 11 before Gujarat High Court.
21. Mr. Tulzapurkar, learned senior counsel distinguished the judgment of this court . reported in AIR 1942 Bombay 302 on the ground that the facts of that case are totally different. The contract clause providing for indemnity in this case clearly provides that the liability of indemnifier is absolute irrespective of any defence or right of appeal available to the party. Learned senior counsel submits that for the purpose of invoking such indemnity clause, it does not require that the liability based on the notices of demand issued by various authorities or any parties in respect of its liability required to be indemnified are crystallized. Learned senior counsel also invited my attention to clause 5.6 of the agreement which provides that the obligations of the promoters with respect to the representations and warranties including relating indemnity would survive for the period of three years from the date of execution of the agreement. It is submitted that thus it cannot be urged by the respondents that unless the liabilities are crystallized and paid by the petitioners, respondent nos. 1 to 4 cannot be directed to indemnify in respect of such demand.
22. In so far as submission of Mr. Kadam and Mr.Kapadia that respondent nos.1 to 4 became active in business after selling of the shares in the said company to the petitioner is concerned, it is submitted that the respondent nos. 1 to 4 already held shares in respondent no. 7 company when the agreement were entered into with the petitioner.
::: Downloaded on - 27/01/2014 23:08:18 :::Hvn 35 APL-1796-1793.2013.sxw These transfers are affected within fifteen days from the date of order of Supreme Court appointing arbitrator which indicates that the same are clandestine transfers. It is submitted that this court has thus ample powers under section 9 to protect and secure claim of the petitioner in the ongoing arbitration proceedings. Shareholdings and directorship of respondent nos. 1 to 4 in the other companies in which shares of respondent no. 7 are transfered, still continues with respondent nos. 1 to 4.
23. In so far as submission of respondents that since respondent nos. 5 to 33 are not parties to the proceedings, no orders under section 9 can be passed against those parties is concerned, the learned senior counsel submits that those parties are impleaded since reliefs are sought against them by way of garnishee. Such parties cannot be allowed to oppose in these proceedings on merits of the dispute between the petitioner and respondent nos. 1 to 4. These parties have to pay substantial amount to respondent nos. 1 to 4 and are accordingly impleaded in this proceedings so as to secure the claim of the petitioner. He submits that respondent nos. 1 to 4 have disclosed some of the properties of HUF without disclosing the shares of respondent nos. 1 to 4 as co-parcenors in such HUF which can be attached by the petitioner. In so far as three trusts are concerned, it is submitted that respondent nos. 1 to 4 and/or their family member are beneficiaries of those trusts. Learned senior counsel relied upon the judgment of this court in the the case of Deccan Chronicle (supra) in support of the submission that rigours of every procedural provisions of Code of Civil Procedure can not be put into place to defeat the grant of relief which would subserve the paramount interests of justice. Learned senior counsel submits that reliefs can be claimed against garnishee. Limited relief is sought by the petitioner against the garnishee directing them not to pay any amount due to respondent nos.1 to 4 who are parties to arbitration agreement. The purpose of section 9 is to secure claim of the petitioner and for such process, the parties can be directed to provide security or appropriate directions against even third parties can be granted.
24. Learned counsel submits that the petitioners have thus made out case for grant of interim measures and the reliefs as prayed for may be granted with costs.
25. A question that arises for consideration of this court is whether this application filed under section 9 of the Arbitration & Conciliation Act, 1996, is ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 36 APL-1796-1793.2013.sxw maintainable before this court. It is not in dispute that the petitioner herein had filed an application under section 11 for appointment of arbitrator before Gujarat High Court much prior to the date of filing of this application under section 9 before this court. The learned senior counsel appearing for the respondent led emphasis on the averments made by the petitioner in that application filed under section 11 by which the petitioner herein had averred that the Gujarat Court alone had jurisdiction to entertain, try and decide the said application as the respondents to that petition were residents of Vadodara Gujarat. In my view since the said application filed by the petitioner under section 11 before the Chief Justice of Gujarat High Court was not before the court, section 42 of the Arbitration Act would not be attracted to this petition filed under section 9 on the basis of the earlier application filed under the said agreement before the Gujarat High Court. Mr. Tulzapurkar learned senior counsel rightly placed reliance on the judgment of the Division Bench of this court in the case of Vachaspati Sharma (supra) in support of his submission that section 42 would not be attracted to the arbitration application filed by the petitioner under section 11 before the Chief Justice of the Gujarat High Court. In my view since the said application was not before a court as defined under section 2(e) of the Arbitration & Conciliation Act, 1996, averments made by the petitioner in that application that only Gujarat High Court had jurisdiction to entertain the petition under section 11 would be of no significance.
26. It is not in dispute that even the respondent nos. 1 to 4 had filed arbitration petition under section 9 before the District Judge, Gujarat against the petitioner and M/s. KPMG. Even in the said proceedings it was averred by the respondent nos 1 to 4 that the District Judge, Gujarat had jurisdiction to entertain the said petition. The said petition was ultimately withdrawn by respondent nos. 1 to 4.
27. Respondent nos. 1 to 4 also had filed petition under section 9 of the Arbitration Act, before this court. Even in that petition it was averred that this court had jurisdiction to entertain that petition. The petitioner was a party respondent to the said petition. It was prayed in the said petition that pending constitution of arbitral tribunal, arbitral proceedings adjudication and disposal of all disputes between the petitioner and respondent no. 1 (petitioner herein) by the arbitral tribunal by an award, Standard Chartered Bank should be restrained from releasing Rs.10 Crores. It is thus clear that ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 37 APL-1796-1793.2013.sxw both the parties have proceeded on the premise that not only Gujarat Court had jurisdiction but this court also has jurisdiction to entertain the proceedings arising between the parties. I am not inclined to accept the submission of the respondents that the arbitration petition filed by respondent nos. 1 to 4 in this court was under separate arbitration agreement between the respondent and the escrow agent. I am therefore, of the view that this court had jurisdiction to entertain try and dispose of this petition.
28. In so far as submission of Mr. Kadam learned senior counsel for respondent and Mr. Kamat learned counsel appearing for respondent no. 17, 21, 26 and 31 that since some of the parties impleaded as respondents to this petition are not parties to arbitration agreement or arbitration proceedings, no order can be passed by this court under section 9 is concerned, In my view such third parties cannot be allowed to oppose the petition on merits of the dispute between the petitioner and respondent nos. 1 to 4. Since those parties have to pay substantial amount to respondent nos. 1 to 4, petitioner has impleaded those parties so as to secure the claim of the petitioner. Any parties who are likely to be affected by any reliefs claimed in petition under section 9 can be made parties to such petition even though such parties may not be party to he arbitration agreement. In my view, there is no merit in the submission of Mr. Kadam learned senior counsel and Mr. Kamat learned counsel appearing for some of the respondents that no orders can be passed against such parties in this petition under section 9.
29. In so far as submission of respondent nos. 1 to 4 that since claims made by the petitioner are for damages and part of it arising out of the notices issued by some of the authorities against the said company for recovery of their alleged dues, and such liabilities not having been crystallized and are not absolute petitioner could not have invoked the indemnity clause is concerned, a perusal of clause 9.3(c) of the said SPA in my prima facie view provides for obligation of the promoters to indemnify the petitioner which arises immediately upon the working promoters and/or the indemnified person incurring any liability pursuant to a claim irrespective of any defence or right to appeal available to it. Clause 5.6 of the said agreement, clearly provided that the obligations of the promoters with respect to the representations and warranties including relating indemnity would survive for the period of three years from the date of the execution of that agreement. On conjoint reading of clause 5.6 and clause 9.3(c) of the agreement ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 38 APL-1796-1793.2013.sxw makes it clear that the promoters have to indemnify the petitioners on receipt of any such demand and/or claim irrespective of any defence or right to appeal available to the petitioner. In view of these peculiar clauses of the agreement, law laid down by this court in the case of Gajanan Moreshwar Parlekar (supra), holding that unless a person indemnified has incurred a liability and that liability is absolute, he is not entitled to call upon the indemnifier to save him from that loss and to pay it of would not apply to the facts of this case. It is not in dispute that the said company has received various such claims/demand after execution of the said two agreements between the petitioner and respondent nos. 1 to 4. In my view to the extent the claims made by the petitioner, based on such notices/demand received from various authorities towards alleged liability of the said company after execution of the said agreements are prima facie maintainable under the indemnity clause referred to aforesaid.
30. It is not in dispute that there was no application filed by the petitioner under section 11 before Gujarat High Court in so far as the said "SSA" is concerned and thus question of applicability of section 42 of the Arbitration & Conciliation Act in respect thereof would thus not apply in respect of the subject matter of the said "SSA".
31. On perusal of the record, it is clear that under clause 7.16 of the SPA, it was agreed that the actual value would be determined by mutually appointed independent valuer KPMG. Respondent no. 1 to 4 were required to deliver to the said independent valuer consolidated trial balance of the said company along with all such information as the said independent valuer may request for. It is not in dispute that so far the said valuation report has not been furnished by the said KPMG. Petitioner had deposited sum of Rs.10 Crores in the escrow account which deposit was to be dealt with finally based on such valuation report which was required to be submitted by the said independent valuer KPMG. The said amount of Rs. 10 Crores is lying in escrow account with respondent no. 6 and is not fetching any interest.
32. On perusal of the record, I am of the prima facie view that the company had received notices from various authorities for payment of labour cess, income tax, entry tax liability, service tax liability, ESIS for the period subsequent to the date of the execution of the said two agreements. In my prima facie view on interpretation of the ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 39 APL-1796-1793.2013.sxw clause 9.3(c) and 5.6 I am of the view that the promoters are liable to indemnify the petitioner for such liability demanded by various authorities irrespective of the fact whether the petitioner would have any defence or right to challenge those notices of demand/claim. The demand from all such authorities is substantial amount as brought on record in the arbitration petition. Respondent Nos.1 to 4 have not disputed the factum of receipt of such notice/demand from various authorities by the said company.
33. Perusal of the record also indicates that since September/October, 2013, respondent nos. 1 to 4 have started disposing of their assets to various companies. Respondent nos. 1 to 4 have invested sum of Rs.7.5 Crores and Rs. 7 Crores in respect of the respondent company in which they had already secured investment. The audited balance sheet of respondent no. 7 for financial year 2011-12 would indicate that the total investment made by respondent nos. 1, 2 and 4 with respondent no. 7 i.e. on 31st March, 2012 is approximately Rs.35,22,14,000/-. Respondent Nos. 1, 2 and 4 held to the extent of 99% shares of the said company. The investments of respondent nos. 1, 2 and 4 and respondent no. 7 have been transferred through several account downstream investment directly or indirectly into various other companies such as respondent nos. 8 to 33. Respondent nos. 1 to 4 held sizable portion of the equity shares held by respondent nos. 8 to 33 directly or indirectly owns, control respondent nos. 8 to 33 companies. Respondent no. 1 to 4 have also created various trusts and have transferred assets of respondent nos. 1, 2 and 4 pending arbitration proceedings.
The shareholdings of respondent nos. 1 to 4 in various companies and their control is not disputed by respondent nos. 1 to 4 or by other respondents. Respondents have also not disputed that respondent nos. 1, 2 and 4 or their family members are beneficiaries of the trust and created by respondent nos. 1 to 4. The record would also indicate that respondent nos. 1 to 4 have transferred almost every property in favour of their own companies in which they have control. The transfer of shares by respondent no.1 to 4 has taken place within 15 days from the date of Supreme Court appointing an arbitrator.
34. This court in case of Tata Capital Service Ltd. Vs. Deccan Chronicle has held that the court can grant interim measures under sub section 2(b), (d) and (e) of the Arbitration & Conciliation Act, even if the property or things are not subject matter of the ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 40 APL-1796-1793.2013.sxw dispute in arbitration. The Division Bench of this court in the case of Deccan Chronicle Vs. L & T Finance has held that the rigours of every procedural provisions of the Code of Civil Procedure cannot be put into place to defeat grant of relief which would subserve the paramount interest of justice. While deciding the application under section 9, court has to bear in mind the fundamental principles underlying the provisions of Code of Civil Procedure and at the same time has discretion to mould the relief in the appropriate cases to secure ends of justice and to preserve sanctity of the arbitral process.
35. The Supreme Court in the case of Raman Tech (supra), relied upon by Mr. Kadam appearing for respondent no. 1 to 4 has held that before exercise of powers under Order 38 rule 5, the court should be satisfied that there is reasonable chance of decree being passed in the suit against the defendant and plaintiff has prima facie case.
It is held that merely because there is chance or valid claim or prima facie case, plaintiff would not be entitled to order of attachment before judgment unless he deposes that the defendant is attempting to alienate or dispose of his assets with an intention to defeat the decree that may be passed.
36. Even if some part of the claim made by the petitioner before the arbitral tribunal is for damages, other than claims made arising out of notice of demand/claim made by various parties, claim made by the petitioner arising out of such notice of demand for payment of statutory dues is also substantial. Having taken prima facie view that respondent nos. 1 to 4 would be liable to reimburse the petitioner in respect of the said claims, in my view the petitioner's claim is liable to be protected/secured at least in respect of the said demand made by the parties against the said company. The record indicates that the respondent nos. 1 to 4 have transferred the most of their assets after appointment of the arbitrator by the Supreme Court to their own companies in which respondent nos. 1 to 4 have control and/are part of the management. The properties are also transferred to the trusts in which respondent nos. 1 to 4 and/or their family members are the beneficiaries. Said transfers though may be by a registered document, prima facie indicates that all these transfers effected by respondent nos. 1 to 4 are with a view to alienate or dispose of their assets with an intention to defeat the decree that may be passed in the arbitration proceedings against respondent nos. 1 to 4 and are in the nature of clandestine transactions. This court in my view has ample power under ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 41 APL-1796-1793.2013.sxw section 9 of the Arbitration and Conciliation Act, 1996 to grant interim measures even in respect of the properties which are not subject matter of the dispute in arbitration. I am bound by the judgment of this court in the case of Tata Capital Financial Services Private Limited (supra) delivered by the learned Single Judge which judgment has been upheld by the Division Bench of this court. In my view, the principles laid down by this court in both the judgments referred to aforesaid are squarely applicable to the facts of this case.
Petitioners have made out a case for attachment before judgment by applying the principles of order 38 rule 5 of the Code of Civil Procedure. Balance of convenience is in favour of the petitioner.
37. I am not inclined to accept the submission of Mr. Kadam, learned senior counsel for defendant nos. 1 to 4 that the claim made by the petitioner cannot be disproportionate to the consideration paid by the petitioner to respondent nos. 1 to 4 for acquisition of shares of the said company. I am also not inclined to accept the submission of the learned senior counsel that the petitioners have no locus to file this petition on the ground that such application could have been filed, if any, by the said company whose control now vests with the petitioner. The petitioners had entered into two agreements with respondent nos. 1 to 4 for purchase of substantive shares on various terms and conditions. Respondent nos. 1 to 4 who alleged to have not complied with such obligations, the petitioners in their individual capacity are thus entitled to file this petition for interim measures. In my view, there is no merit in the submission of the learned senior counsel about the locus of the petitioners for filing this petition.
38. In my prima facie view, petitioners have good chance of succeeding in the arbitration proceedings and if the interim measures are not granted so as to secure the claim of the petitioner, even if the petitioner succeeds in arbitration proceedings, petitioner would not be able to recover any amount from respondent nos. 1 to 4. Learned counsel for the petitioner and respondent nos. 1 to 4 submits that the arbitral tribunal has already passed an order directing respondent no. 5 to carry out valuation process. It is the case of the petitioner that inspite of the said order passed by the arbitral tribunal, respondent nos.1 to 4 have not submitted documents to enable the respondent no. 5 to carry out valuation process in accordance with clause 7.16 of SPA and/or have not taken any steps to comply with the order passed by the arbitral tribunal. In my view, ::: Downloaded on - 27/01/2014 23:08:18 ::: Hvn 42 APL-1796-1793.2013.sxw petitioner has thus made out case for also issuance of direction to respondent no. 5 to carry out valuation process in accordance with clause 7.16 of the SPA.
39. In so far as the amount lying with respondent no. 6 in Escrow account II is concerned, this amount is not fetching any interest and thus it would be appropriate if the said amount is directed to be invested in the fixed deposit which would bear interest on the same terms as escrow agreement II dated 18 th March, 2010.
40. I, therefore, pass the following order :
(a) In so far as Arbitration Petition (L) No. 1796 of 2013 is concerned, the same is made absolute in terms of prayer clauses
(a),(c ), (i), (ii), (iii), (v), (d) and (g). Respondent no. 6 is directed to transfer escrow amount II into interest bearing fixed deposit on the same terms as escrow agreement II dated 18 th March, 2010 within two weeks from today.
(b) Respondent nos. 1 to 4 are directed to furnish all the
documents and details to respondent no. 6 to enable the
respondent no. 6 to submit valuation report/certification to the
arbitral tribunal. Respondent no. 5 shall submit such report before the arbitral tribunal within eight weeks from today.
(c) Affidavit disclosing list of properties in terms of prayer clause (a) and (d) shall be filed within four weeks from today.
(d) In so far as Arbitration Petition (L) No. 1793 of 2013 is concerned, in view of the reliefs granted in Arbitration Petition (L) No. 1796 of 2013, separate reliefs in this petition are not required.
(e) Both the petitioners are disposed of in the aforesaid
terms. There shall be no order as to costs.
(R.D. DHANUKA,J.)
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Hvn 43 APL-1796-1793.2013.sxw
41. Learned counsel for the respondent seeks stay of operation of this order which is opposed by the learned counsel for the petitioner. Application for stay is refused.
(R.D. DHANUKA,J.) ::: Downloaded on - 27/01/2014 23:08:18 :::