9911796707
TMI Blog2007 (3) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... as. 411), dismissing the petition filed by the revision petitioner herein under section 8 of the Arbitration and Conciliation Act, 1996 ("the Arbitration Act") to refer to matter for arbitration. The Company Petition No. 55 of 2002 was filed before the Company Law Board by the respondent herein in their capacity as shareholder of the petitioner-company. The main grievance of the respondent is that the revision petitioner-company had conspired to take away the assets, business and benefits belonging to the company and parked them with the third parties and a gigantic fraud was played by Mr. V.R. Raghunathan and others who are parties to the main petition. So many allegations of fraud have been described by the respondent herein in the typed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was available got extinguished. Therefore, DLWL contended that the very existence of the subscription agreement dated February 16, 1996, will have to be decided by referring the matter to arbitration under the arbitration clause enumerated in article 11 of the subscription agreement dated February 16, 1996. Learned counsel for the revision petitioner argued that the basis for the petition before the Company Law Board is the subscription agreement dated February 16, 1996, which only gives right to CIPL as a shareholder of DLWL. However, the subsequent share sale agreement by CIPL extinguishes all its rights as a shareholder of DLWL, but this agreement was deliberately not filed by CIPL before the Company Law Board and it was only DLWL whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged that the very subscription agreement dated February 16, 1996, is no longer in existence there is no question of referring the matter to arbitration cannot stand in view of section 16(1)(a) of the Arbitration and Conciliation Act, 1996, which states that the arbitral tribunal may rule on its own jurisdiction including any objection with regard to the existence or validity of the arbitration agreement and for this purpose an arbitration clause which forms part of the contract shall be treated as an agreement independent of the terms of the contract. This is further strengthened by sub-section (1)(b) which states that even if the contract is held to be null and void, it will not invalidate the arbitration clause. Learned counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der. According to the respondent, if it is not a shareholder, the petitioner has to argue the matter in the main company petition questioning the locus standi of the petitioner and that cannot give a cause to invoke section 8 of the Arbitration Act. On the contrary, the petitioner disowned the subscription agreement dated February 16, 1996. The said V.R. Raghunathan himself has denied the validity of the subscription agreement as seen from page 19 of the second typed set of papers. It is further argued by learned counsel for the respondent that as seen from section 8 of the Arbitration Act, the judicial authority is concerned with : (a)the existence of the arbitration agreement, and (b)whether all the parties to the legal proceedings pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of this court in Gowri Spinning Mills Ltd. v. Adimoolam [2002] 2 CTC 164 and also the decision in Sporting Pastime India Ltd. v. Kasthuri and Sons Ltd. [2006] 4 CTC 377 ; [2008] 141 Comp. Cas. 111 (Mad.). In the above said cases this court only reiterated the legal position that scope of the petition filed under sections 397 and 398 is quite distinct from the scope of the arbitration clause contained in the agreement and reliefs claimed in the company petition cannot be granted by arbitrator and it can be granted by the Company Law Board alone by virtue of sections 397, 398, 402 and 403 of the Companies Act. It is also held in Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. [1999] 97 Comp. Cas. 683 ; [1999] 5 SCC 688, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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