Disposed

Thirdwave Constructions Pvt. Ltd. v. Sseth Damji Laxmichand Jain Dharma Sthanak (Trust) and 9 Ors.

Bombay HC17 Aug 2009ARBP/462/2009

Case brief

AI extract

What is this about?

Court disposed of an Arbitration Petition seeking interim relief. Noting a signed MOU appointing an arbitrator and a substantial deposit by the Respondent, the Court rejected the need for additional security under Section 9 CPC but directed the Respondent to maintain the Rs. 50 Crores as fixed deposits with interest until the award is passed.

What did the court decide?

Respondents directed to maintain Rs. 50 Crores as fixed deposits with accrued interest until the award is passed; Arbitration Petition disposed of.

Thirdwave Constructions Pvt. Ltd. Vs Sseth Damji Laxmichand Jain… — Arbitration | Bombay HC (2009)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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ARBITRATION PETITION NO. 462 OF 2009

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Thirdwave Constructions Pvt. Ltd.

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...Petitioner.

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Vs.

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Seth Damji Laxmichand Jain Dharma Sthanak (Trust) & Ors.

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...Respondents.

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Mr. N.H. Seervai, Sr. Counsel with Mr. Sanjay Jain with Ms. S. John with Mr. Prantik Majmudar i/by M/s. M.P. Savla & Co.for the Petitioner.

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Mr. Iqbal Chagla, Sr. Counsel with Mr. F.Divitre, Sr. Counsel with Mr. Gaurav Joshi i/by M/s. Federal & Rashmikant for Respondent Nos. 1 to 3 and 6 to 10.

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CORAM :- ANOOP V. MOHTA, J. DATED :- 17^th AUGUST, 2009.

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P.C.-

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1 The Petitioner has invoked Section 9 of the Arbitration and Conciliation Act, 1996 (for short, the Act) for interim relief before the commencement of the Arbitral Proceedings.

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2 During the course of the hearing, the parties have agreed to appoint a Sole Arbitrator as per the terms of Clause 33 of the (Memorandum of Understanding) MOU dated 8^th May, 2008 between the parties. The signed draft of minutes of the order is taken on record and marked “X” for

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identification. The same is as under:-

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“MINUTES OF ORDER

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1. The Petitioner and the Respondent Trust and its trustees agree that all disputes and differences between them be referred to Mr. Justice Srikrishna (Retd.), Former Judge of Supreme Court of India as the Sole Arbitrator in terms of Clause 33 of the MOU dated 8^th May, 2008 between the Petitioner and the Respondent No.1.

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_2. In view of the aforesaid, the Petitioners shall withdraw Arbitration Petition No.____of 2009 filed by them under Section 11 of the Arbitration and Conciliation Act, 1996.

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M/s.M.P.Savla & Co.	M/s. Federal & Rashmikant
Proprietor	Partner
Advocate for the Petitioners	Advocate for the Respondent
	Nos. 1 to 4 & 6 to 10”

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3 So far as Section 9 Petition is concerned, the issue is, whether the case is made out by the Petitioner for any protective and or interim reliefs.

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4 Admittedly, there is a signed MOU between the parties with an Arbitration Clauses. The amount, about Rs.50 Crores has been deposited and lying with the Respondents, pursuance to the clauses of the MOU since 2008; twice the applications filed before the Joint Charity Commissioner, pursuance to the said MOU, for sanction, were rejected. The parties have their respective views and interpretations of various clauses of the MOU.

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5 When Second time the application was rejected, the challenge was

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made in Writ Petition No. 4108 of 2009 before this court. By an order dated 5^th May, 2009, this Court observed as under:-

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“3. In my opinion, the order of the Charity Commissioner rejecting the application u/s 36(1)(a) for permission to sell the property to Respondent No.2 has rightly been passed since Respondent No.2 did not wish to go ahead with the sale. The consequences which the trust would have to face as a result could be redressed by the trust in appropriate proceedings. The Petitioner trust can always apply afresh u/s 36(1)(a) in case a new purchaser is found which the Charity Commissioner will consider after following the provisions of law.

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4. However, the direction of the Charity Commissioner to repay the amount of Rs.50 crores is unsustainable. Mr. Aney, learned counsel appearing for the Respondent No2, consents to have clause (2) of the operative part of the impugned order set aside subject to the rights of Respondent No.2 to proceed against the Trust for recovery of their monies in accordance with law.”

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6 The Apex Court, after hearing both the parties has disposed of the S.L.P. and passed the following order.

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“ORDER

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Heard both sides.

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We see no reason to interfere with the impugned order. Accordingly, the Special Leave Petition is dismissed. Learned counsel appearing for the Petitioner points out that the Petitioner is entitled to proceed in accordance with law for the enforcement of the contract without prejudice. Heard learned counsel for the respondents also. We make it clear that this impugned order will not stand in the way of the rights of the petitioner under law and also the rights, if any, to seek sanction.”

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7 By the above order the Supreme Court has permitted the Petitioner to proceed in accordance with law even for the enforcement of the contract without prejudice. It is also made clear that the impugned order would not stand in the way of the rights of the Petitioner to seek sanction.

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8 Having once observed above, as the disputes and the respective interpretation need detailed inquiry and trial, the Hon’ble Arbitral Tribunal will take note and pass appropriate order, on the merits of the case.

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9 The amount is admittedly lying with the Respondents. As observed and averred in the Affidavit dated 31^st July, 2009, shows that the said amount is already invested by the Respondent Trusts in fixed deposit scheme. The particulars of the fixed deposits are annexed to the affidavit. It is averred as under:-

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“6. The amount of the consideration received under the MOU has been kept separate by the Trust in fixed deposits. The brief particulars of the fixed deposits are set out in a Schedule annexed hereto and marked as Exhibit-”B” . Without prejudice to the rights of these Respondents, the Trust shall continue to keep the said amounts in fixed deposits and the further interest accruing until final adjudication in the arbitration. The Petitioner has made out no case for the grant of any relief whatsoever, let alone any interim reliefs as prayed for or otherwise. It is submitted that the petition is required to be dismissed.”

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10 In view of above, the submission with regard to the interim protection and or security as contemplated under Section 9 read with Section 38 Rule 5 of the Code of Civil Procedure, by referring the 2004(2)

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Mh.L.J. 696, National Shipping Company of Saudi Arabia Vs. Sentrans

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Industries Limited, Mumbai, in my view, is taken care of. The requirement of appropriate relief or security in the present case, and at this stage, is sufficient to protect the interest and the subject matter of the dispute itself.

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11 The relevancy of the allegations with regard to the past conduct of some of the trustees by referring to, 2008(4) Mh.L.J. 217, Oriental Bank of Commerce, Mumbai Vs. Sir Kikabhai Premchand Trust & Ors., need detailed inquiry and cannot be the reason to overlook the case of the Respondent Trusts along with other Trustees, at this stage of the proceedings.

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12 Now, the parties have consented and agreed for the following order, based upon the signed draft of minutes of the order which is taken on record and marked as “Y” for identification.

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“MINUTERS OF ORDER

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1. The Respondents shall continue to keep deposited the sum of Rs.50,00,00,000/- (Rupees Fifty Crores only) as set out in Exhibit ‘B to the Affidavit in Reply by way of fixed deposit receipts and shall renew the same from time to time with all accrued interest till the passing of Award and/or such Orders, as may be passed by the Sole Arbitrator and/or till disposal of any proceedings against such Order/Award by the Competent Court, which ever is later.

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2. The Respondents shall not:

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A) Encash any fixed deposit receipt comprising of the said sum of Rs.50,00,00,000/(Rupees Fifty Crores only) with accrued

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interest thereon.

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B) Withdraw any accrued interest thereon; C) Offer the said fixed deposits by way of security in any form.

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3. The Respondents Advocates shall give inspection of the said fixed deposit receipts or the renewed one to the Petitioners’ Advocate upon request being made in this behalf.

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4. All the Trustees of the Trust shall file an undertaking in the Court in terms of this Order.

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Dated this 17^th August, 2009.

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M/s.M.P.Savla & Co. M/s. Federal & Rashmikant Proprietor Partner Advocate for the Petitioners Advocate for the Respondent Nos. 1 to 3 & 6 to 10”

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13 The parties to take steps. The liberty is granted to the parties to raise their appropriate claims and counter claims based upon the said MOU.

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14 The Petition is accordingly disposed of. No order as to costs.

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(ANOOP V. MOHTA, J.)

Thirdwave Constructions Pvt. Ltd. v. Sseth Damji Laxmichand Jain Dharma Sthanak (Trust) and 9 Ors.

Case brief

What is this about?

What did the court decide?

Thirdwave Constructions Pvt. Ltd. v. Sseth Damji Laxmichand Jain Dharma Sthanak (Trust) and 9 Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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Coram

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