Delhi High Court - Orders
Dmi Finance Private Limited vs M/S Gagan Lifespace And Ors on 14 November, 2022
Author: Prateek Jalan
Bench: Prateek Jalan
$~21
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 247/2022 & I.As. 16061-62/2022
DMI FINANCE PRIVATE LIMITED ..... Petitioner
Through: Mr. Deepak Jain (Enrolment No.
P/773/2001), Mr. Pradeep K.B.,
Ms. Jaspreet Aulakh, Mr. Tanpreet
Gulati and Mr. Anoushka Singh,
Advocates (Mobile No.
9910505313).
versus
M/S GAGAN LIFESPACE AND ORS. ..... Respondents
Through: Mr. Sunil Fernandes, Mr. Shubham
Sharma, and Ms. Muskan Surana,
Advocates (Mobile No.
9811575884) for R Nos. 1 to 7, 10,
11, 13 and 14.
Mr. Divyansh Tiwari, Advocate
(Mobile No. 8400994444) for R8,
9 and 12.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 14.11.2022
1. The present petition under Section 9 of the Arbitration and Conciliation Act, 1996 ["the Act"] has been filed for interim measures of protection in anticipation of arbitration proceedings between the parties under a Term Loan Agreement dated 13.08.2017 ["the Agreement"] and other related documents. According to the petitioner, under the Signature Not Verified Digitally Signed By:SHITU NAGPAL O.M.P.(I) (COMM.) 247/2022 Page 1 of 5 Signing Date:16.11.2022 17:05:48 Agreement, various sums of money were lent and advanced by the petitioner to some of the respondents, which were guaranteed and secured by the other respondents.
2. By the order passed on 15.09.2022, it was recorded as follows:-
"2. On the first date of hearing i.e. 22.08.2022, this Court recorded as follows:-
"2. Mr. Sunil Fernandes, learned counsel, appears on an advance notice for the respondent Nos. 1 to 7, 10, 11, 13 and
14. He submits that the respondent Nos. 8, 9 and 12 have retired from the partnership firm and the petitioner has consented to the said retirement by a communication dated 10.08.2022. A copy of the said communication has also been handed up to the Court. Mr. Fernandes is directed to place the same on record within one week.
3. Mr. Fernandes points out that by the said communication, the petitioner has accorded its consent for the retirement of the three partners on condition of the payment of the sum of ₹59,81,451/- by 12.08.2022 and ₹1,15,37,157/- by 07.09.2022. He states that the first tranche ₹59,81,451/- was paid within the stipulated period, and the second tranche will also be paid by 07.09.2022. The understanding between the parties is that upon payment of the aforesaid amount, there will not be any overdue amount given by the petitioner at this stage.
4. Mr. Deepak Jain, leamed counsel for the petitioner, seeks time to take instructions on these aspects. In the event the petitioner wishes to place an affidavit in response to the aforesaid submission on record, it may do so within one week thereafter."
3. It is undisputed that the second tranche of ₹1,15,37,157/- has been paid by the respondent to the petitioner, albeit only on 12.09.2022.
4. According to Mr. Deepak Jain, learned counsel for the petitioner, however, various sums still remain overdue from the respondents to the petitioner. The petitioner has placed an affidavit in this regard on record. 5. I am also informed that the petitioner has invoked the arbitration clause against all the respondents by a legal notice dated 30.06.2022.
6. Mr. Sunil Fernandes, learned counsel for the respondent Nos. 1 to 7, 10, 11, 13 and 14, states that the said respondents also have contractual claims against the petitioner inter alia for grant of No Signature Not Verified Digitally Signed By:SHITU NAGPAL O.M.P.(I) (COMM.) 247/2022 Page 2 of 5 Signing Date:16.11.2022 17:05:48 Objection Certificates ["NOC"] for sale of the properties. As such, Mr. Fernandes also requests reference to arbitration.
7. Although, Mr. Jain and Mr. Fernandes are both agreeable to arbitration, orders of reference to arbitration cannot be passed in these proceedings, in the absence of respondent Nos. 8, 9 and 12. Although the said respondents have retired from the partnership firm, Mr. Jain contends that they are still liable for the petitioner's claims and the petitioner wishes to pursue arbitration against them also.
8. Mr. Fernandes suggests that in order to make an expeditious reference to arbitration, notice in the present petition may also be issued to respondent Nos. 8, 9 and 12 so that all parties can enter appearance. Mr. Jain is directed to serve a copy of the petition and the orders passed in these proceedings upon the said respondents by email, within a period of one week. As the non-appearing respondents are all former partners of the other respondent entities, Mr. Fernandes will also make an effort to forward the petition and the orders passed therein.
9. As far as the present petition is concerned, Mr. Fernandes states that until the constitution of the Arbitral Tribunal, and subject to any orders that the Arbitral Tribunal may pass in the parties' applications under Section 17 of the Act, the appearing respondents [respondent Nos. 1 to 7, 10, 11, 13 and 14] who are the continuing partners of the partnership firm will not sell any units in the subject project without the NOC from the petitioner.
10. List on 28.09.2022."
3. Further to the said order, Mr. Divyansh Tiwari, learned counsel, enters appearance on behalf of respondent Nos. 8, 9 and 12. All the respondents are thus, represented.
4. Learned counsel for all the parties submit that the disputes between them may be referred to arbitration in these proceedings, confirming the order dated 15.09.2022, and with liberty to the parties to seek further interim measures of protection before the arbitral tribunal.
5. The arbitration agreement is contained in Article 11 of the Agreement and is also incorporated in the other documents relating to the transactions between the parties. Clause 11.1 of the Agreement provides Signature Not Verified Digitally Signed By:SHITU NAGPAL O.M.P.(I) (COMM.) 247/2022 Page 3 of 5 Signing Date:16.11.2022 17:05:48 for adjudication of disputes by a sole arbitrator. Delhi has been designated as the place of arbitration.
6. In view of the aforesaid, the petition is disposed of with the consent of learned counsel for the parties with the following directions:-
a) Having regard to the Agreement between the parties, the disputes between them are referred to arbitration of Hon'ble Ms. Justice Indira Banerjee, former Judge, Supreme Court of India [Tel:-
09560808777].
b) The arbitration will be conducted under the aegis of the Delhi International Arbitration Centre, Delhi High Court, Shershah Road, New Delhi-110503 ["DIAC"] and will be governed by the Rules of the DIAC, including as to the remuneration of the learned arbitrator.
c) The learned arbitrator is requested to make a declaration in terms of Section 12 of the Act, prior to entering into the reference.
d) In the interim, the order dated 15.09.2022 will continue, subject to orders to be passed by the learned arbitrator under Section 17 of the Act.
e) The present petition may be placed before the learned arbitrator as an application under Section 17 of the Act. The respondents may also file counter claims and applications for interim measures of protection before the learned arbitrator.
f) It is made clear that the parties are at liberty to seek continuation/variation/modification/vacation of orders passed by this Court in the proceedings under Section 17 of the Act.Signature Not Verified Digitally Signed By:SHITU NAGPAL O.M.P.(I) (COMM.) 247/2022 Page 4 of 5 Signing Date:16.11.2022 17:05:48
7. The petition, alongwith the pending applications, is disposed of in the aforesaid terms.
PRATEEK JALAN, J NOVEMBER 14, 2022/'vp'/ Signature Not Verified Digitally Signed By:SHITU NAGPAL O.M.P.(I) (COMM.) 247/2022 Page 5 of 5 Signing Date:16.11.2022 17:05:48