Disposed

IMl Mobile Europe Limited, v. TeIeDNA Communications Private Limited

Telangana HC8 Sept 2020ICOMAOA/3/2020

Case brief

AI extract

What is this about?

The High Court disposed of Section 9 application for interim injunction. Parties reached understanding; respondent deposited funds. Court directed maintenance of fixed deposits, renewal terms, and timeline for filing application before appointed arbitrator.

What did the court decide?

Maintain fixed deposits for interim security; renew beyond expiry if arbitration delayed; petitioner to apply for interim measures to arbitrator within four weeks.

IMl Mobile Europe Limited, Vs TeIeDNA Communications Private… — Arbitration | Telangana HC (2020)

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IN THE HIGH COURT FOR THE STATE OF TELANGANA

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AT HYDERABAD

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TUESDAY, THE EIGHTH DAY OF SEPTEIMBER TWO THOUSAND AND TWENTY

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PRESENT

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THE HON'BLE SRIJUSTICE P. NAVEEN RAO

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ICOM AOA NO: 3 OF 2020

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Between:

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lMl mobile Europe Limited, a Company incorporated under the laws of United Kingdom, having its registered office at Tempus Court, Belifield Road, High Wycombe, HP 13 sHA, United Kingdom

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Local Address:

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lMl mobile Europe Limited, Plot No. 770, Road No. 44 , Jubilee Hills, Hyderabad 500 033 Rep. by their Regional Controller ( Finance & .. Petitioner Accounts) Mr. Venugopal Rao Akkapeddi e-mail :venu [email protected]

AND

TeleDNA Communications Private Limited a Company incorporated under the companies Act, 1956, having its registered office at No.6 & 7, First Floor, SVR Privilege, Hosur Road, Madiwala, Bengaluru - 560068 ( Karnataka) Rep. by their Managing Director e-mail: a nand. iyer@te led na. com .. Respondent

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Petition under Section 9 of the Arbitration and Conciliation Act, 1996 praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to pass an order of injunction restraining the respondent, their shareholders, their affiliates, officers, and directors from alienating, selling leasing, hypothecating or othenvise conveying or parting with possessions of their tangible and intangible assets including intellectual properties pending disposal of the arbitral proceedings between the parties herein arising out of Partner Agreement dated 18-04-2017 in the interest of^justice.

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Counsel forthe Applicant: SRI B. NALIN KUMAR

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Counsel for the Respondent : SRI ARAVIND KAMATH

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The Court made the following: ORDER

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PNRJ ICO\I AOA I 1020

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HONOURABLE SRI JUSTICE P.NAVEEN RAO

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ICOM AOA No. 3 OF 2O2O

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ORDER:

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Heard learned counsel for petitioner Sri B Nalin Kumar and learned senior counsel Sri Aravind Kamath appearing for respondent.

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This application is filed under Section 9 of the Arbitration and Conciliation Act, 1996 seeking an order of injunction to restrain thc respondent, its shareholders, affiliates, officers and directors from alienating, selling, leasing, hypothecating or otherrvise conveying or parting u'ith possession oI tangibie and intangible assets including intellectual properties, pending disposal of the arbitral proceedings between the parties arising out of Partner Agreement daled 18.4.2O77 .

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From the facts on records, it appears that petitioner and respondent have disputes flowing out of partner agreement dated 18.4.2017. Petitioner alleges that on account of delay in supply of goods and services specified in the subject contract, huge loss is caused to the petitioner, therefore, petitioner is claiming damages in USA currency $ | ,47 O ,927 . Petitioner proposed the name of Sri Justice G.V. Seethapathy, lormer Judge, High court ol A.P., as an arbitrator to resolve the inter-se dispute. Respondent denied the claim and opposed appointment of Arbitrator. The petitioner filed Arbitration Pe tition (C) No. I 1 of 190 before the Hon'ble Supreme Court under Section i 1 of the Arbitration and Conciliation Act, 1996 praying to appoint Arbitrator and the same is pending consideration of the Hon'ble Supreme Court.

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PNIT.I tco\l^{,\o,</sup> I20:0}

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While so, contending that the respondent is trying to alienate entire assets including intellectual properties and has started negotiations with the prospective purchasers and if respondent is allowed to dispose of its assets, petitioner would not be in a position to realise the amounts due from the respondent even if he succeeds in the Arbitral proceedings, filed this application under Section 9 of the Act, 1996 praying to injuct the respondent, shareholders, affiliates, officers and directors from alienating, selling leasing, hypothecating or other'',t'ise convcying or parting u'ith possession of their tangible and intangible assets including intcllectual properties. This Court, havir-rg found prima facie case in favour of petitioner, by order dated 24.7.2020 restrained the respondent, its shareholders, alfiliates, officers and directors from alienating, selling, leasing, hypothecating or otheru,ise conveving or parting with possession of their tangible and intangible assets including intellectual properties pending disposal of the arbitral proceedings between the parties arising out of partner agreement dated 18.4.2077 and directed the matter to be listed for hearing on IO.8.2O2O.

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During the pendency of this application, petitioner and respondent have come to an understanding to resolve the present controversy, subject to the decision by the Hon'ble Supreme Court in the pending Arbitration Application. In evidence of the resolution of the dispute, on behalf of respondent a memo dated 28.8.2020 is filed by the counsel on record enciosing affidavit deposed by Sri S Subba Rao, who is authorised signatory and representative of TeleDNA Communications Private Lim itcd- re spondent herein.

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.,) PNRJ ICOM AOA 3,]O20

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Sri S Subba Rao, deposed that the purchase order dated 4.9.2017 placed by the petitioner on the respondent is for US $ 700,000. Therefore, even assuming that the respondent is liable to pay the whole of the said amount, it would not exceed US $ 700,000 as per clause 10.2.2 of the agreement. By this affidavit, respondent undertakes to maintain deposit of an amount equivalent to US $ 70O,O0O in Indian currency in its bank account for a period of 45 days from the date of constitution of the Arbitral Tribunal that may be appointed by the Hon'ble Supreme Court. Respondent also filed another affidavit deposed by Sri S Subba Rao, giving the details of the deposit receipts reflecting amounts maintained in fixed deposits by the respondent totalling a sum of {.5,23, 15,O48 / - in Canara Bank and copies of the deposit receipts are also enclosed to the affidavit. It is averred that this amount is equivalent to US $ 700,000 as per the prevailing exchange rate at the time of said deposits. He also undertakes to maintain and continue the lixed deposits and not to withdrau, or discharge them until a date as may be stipulated by this Court.

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On behalf of petitioner, counter affidavit is filed expressing apprehensions on maintaining continuously fixed deposit accounts referred to in the affidavit filed on behalf of the respondent till the arbitral proceedings are concluded and lack of claritv on encumbrances or liens that may have been created on the said fixed deposits. Apprehension is also expressed on maintaining the bank deposit for 45 days only stating that arbitral proceedings may not be concluded within

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PNRJ tco\l /\o,,\ -r l0t0

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45 days and in such an event grave plejudice u,ould be caused to the petltioner.

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In response to these apprehensions expressed by the petitioner and as directed b1, this Court, on behalf of respondent another affidavit is filed, deposed by Sri S.Subba Rao, stating that Canara Bank has issued letter dated 3.9.2O2O confirming that there are no encumbrances or liens on the afore stated deposits and enclosed to the affidavit a copy of the sa id lettcr.

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When the matter is taken up for consideration, learned counsel for petitioner Sri P. Nalin Kumar and learned senior counsel Sri Aravind Kamath appearing for respondent submit that issue has been resolved to the satisfaction of both parties and agreed for disposal of the main application accordingly by taking on record the respective affidavits.

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1O. While learned senior counsel for the respondent reiterated the averments in the affidavits filed in support of the respondent, referred to above, Sri P. Nalin Kumar representing petitioner submits that fixing time limit of 45 days to maintain fixed deposit amount would cause hardship to the petitioner, if for any reason, the arbitral proceedings are not concluded and he would therefore submit that till the disposal of the arbitral proceedings before the Arbitrator, that may be appointed by the Hon'ble Supreme Court, the fixed deposits may be directed to be maintained. Learned senior counsel lor the respondent fairlv submits that the respondcnt rvill abide bv the directions of thc Court.

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PNRJ tcoM AoA 3/2020

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Having heard both sides, the application is disposed of rvith the follorving directions:

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i) The respondent is directed to maintain the fixed deposits opened betrveen 2"d May to 1Od August, 2020 totalling an amount in Indian {.5,23,15,048/-till appropriate interlocutory application is considered and orders are passed Lry the Arbitral Tribunal granting interim measures, that ma1, be appointed by the Hon'ble Supreme Court in Arbitration Application (Civil) No. 11 of 190.

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ii) As seen from the letter of Canara Bank dated 3.9.2O2O on various dates commencing from 2"d May to l Oth August, 2O2O frxed deposits were made and they would mature on respective dates between 2nd May to 1Ofi August,2021. For any reason if there is delay in commencement of arbitral proceedings or even after commencement of the arbitral proceedings no decision is made b), the Arbitral Tribunal on the application that may be filed by the petitioner for granting interim measures before the expiry of term of the fixed deposits, the fixed deposits mentioned above should be reneu,ed for a further period of one year.

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iii) If an Arbitral Tribunal is appointed to resolve the inter-se dispute, within four weeks from the date of appointment of Arbitral Tribunal, an application shali be filed by the petitioner before the Arbitrator seeking appropriate interim measures.

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PN.RJ ICONf AOA 3/2020

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I I I

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iv) The respondent shall not create encumbrances or liens on the fixcd deposits, the details of which are furnished in the affidavit deposed by Sri S.Subba Rao on behalf of the respondent and shown in the letter of thc Canara Bank dated 3.9 .2O2O.

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v) If no application is filed by the petitioner before the Arbitral Tribunal, that may be appointed by the Hon'ble Supreme Court, within the time stipulated seeking interim measures, it is open to the respondent to deal with the fixed deposits, in issue, as deemed fit and proper by it.

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vi) The affidavits filed before this Court vide USR No.27 149 dated 28.8.2020; USR No.27486 dated 2.9.2020; and USR No. 28138 dated 7.9.2020 referred to above arc taken on record and made part of this case.

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Miscellaneous petitions, if any pending, stand closed.

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Sd/- M. SHANTHI VARDHANI, JOINT REGISTRAR

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//TRUE COPY'

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t) SECTION OFFICER

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To I Mr. Venugopal Rao Akkapeddi , Regional Controller⁽ Finance^&

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Accounts) ,lMl mobile Europe Limited, a company incorporation^under the laws of United Kingdom, having its registered office at Tempus

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Court, Belifield Road, High Wycombe, HP 13 SHA, United Kingdom

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Local Address:lMl mobile Europe Limited, Plot No. 770, Road No. 44 , Jubilee Hills, Hyderabad 500 033

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The Managing Director, TeleDNA Communications Private Limited^a Company incorporated under the companies Act, 1956, having its registered office at No. 6 & 7, First Floor, SVR Privilege,^{Hosur Road,} Madiwala, Bengaluru - 560068 ( Karnataka)

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Two CD Copies

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One CC to Sri B. Nalin Kumar, Advocate^(OPUC)

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One CC to Sri Aravind Kamath, r\dvocate^(OPUC) try

HIGH COURT

PNR J

DATED:0810912020

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: OR D ER I ICOM AOA.No.3 of 2020

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DI ING OF THE APPLICATION

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IMl Mobile Europe Limited, v. TeIeDNA Communications Private Limited

Case brief

What is this about?

What did the court decide?

IMl Mobile Europe Limited, v. TeIeDNA Communications Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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