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TMI Blog2015 (7) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... y shares of Rs. 10/- each, fully paid up. This company is carrying business of manufacturing Pre-Compressed electrical Insulation pressboards, laminated boards and its machine & moulded components, transformers parts etc. Tulsian Group has subscribed to 4,40,000 equity shares at a premium of Rs. 130/- per shares for a sum of Rs. 616 lakhs, resulting into an effective stake of 13.85%. 5. Before Tulsian group filing this CP, they filed CP No. 92/2011, wherein a settlement was arrived by an MoU dated 11.02.2012. On seeing the said MoU, CLB, on 01-03-2012 disposed CP 92/2011 in terms of the MoU dated 11.02.2012. That MoU says the principal promoter of the company is Dhanuka Group; the company has recently completed expansion plan with an increase of total capital outlay of approximately INR 38 crores. Tulsian group has come into the company as a strategic investor by investing INR 6.16 crores, for which requisite shares were allotted to the group on 15-08-2007. Owing to some differences between them, Tulsian group filed CP 92/2011. While the said CP was pending, both these rival groups entered into an amicable solution (MoU) with an intervention of Mr Suresh Gaggar agreeing to see it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Shareholders Agreement, Tuisian Group and Gaggar Group, each shall have the right to nominate and appoint one Director on the Board of the Company. Therefore, the constitution of the Board of Directors of the company will be, with four Directors from Dhanuka Group, one Director each from Tulsian Group and Gaggar Group. These three groups also agreed that Tuisian Group and Gaggar Group would acquire all the rights, title, interests, benefits of tangible and intangible nature, held by R1 Company, and to pursue its claims and rights as held by the company, They also agreed that the land of about 45 bighas, owned by the company, at Gram Bai Ka Bas, Khasra No. 243 & 244 Teh, Chomu, District Jaipur shall be used by the company for its expansion, details, and project matrix of which shall be mutually decided by all the three groups. It is agreed between Dhanuka Group and Tulsian Group that Jain Group would continue to remain as a minority shareholders/Group, without any Director on the Board, it is also said that Jain Group will be presented and protected by Tuisian Group. It is also agreed that all the strategic matters like, equity dilution by the company, expansion, shall be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d needs to be annulled. 7. R1 company also issued 83,695 equity shares on 08.10.2012, at Rs. 46 per share (premium of Rs. 36 per share) to the shareholders of Jain Group by unlawfully showing the loan given by the Jain Group as share application money in its audited annual accounts in the previous years. The petitioners state that Jain Group has not given money towards share application or consent letter or confirmation to make allotment to it; therefore, this allotment is invalid. 8. The petitioners submit that R1 on five occasions made allotment of shares at a premium of Rs. 50 per share between 30.01.2010 to 04.07.2011, to the Respondents and their family members, three shell companies of Respondents family; and to four benami/shell companies, now forming part of the Respondents, at issue price of Rs. 60 per share (premium of Rs. 50 per share) totalling to 11,14,996 shares for Rs. 699 lakhs. The petitioners say that two companies of Respondents No. 2 and 3, being Umang Business Venture Pvt. Ltd. and Umang Corporate Park Pvt. Ltd. have availed the funds from such multi layered shell/benami companies, involved in round tripping of the funds of over Rs. 12,000 crores. In addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of Buyers' Credit availed by R1 from four overseas banks, violations to FEMA provisions in the matter of import of raw material by R1 company, in the matter of credit facilities sanctioned by SBBJ to R1 Company and its periodical verification by SBBJ and the various irregularities (mentioned in the CP); (7) To order investigation into the beneficial ownership of 231 and 1,500 multilayered benami/shell/hawala companies; (8) To order investigation into the source of funds of the shareholders of Dhanuka Group; (9) To direct appointment one director of petitioners on the Board of R1 company; (10) To direct appointment of independent auditors for R1 company, for financial year 2013-14; (11) To direct appointment of two independent directors and one nominee director of SBBJ on the Board of R1 company; 10. R2 and R3 filed this CA submitting that Company Law Board did not pass any interim relief in CP 92/2011; the Company Petition was disposed of on the MoU entered between the parties. It has not mentioned anything in the order except holding that the CP is disposed of in terms of the MOU entered between the parties. The respondents submit that compliance of the MoU, the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that this Bench shall dismiss it at threshold. 14. Having the petitioners sought for an enforcement of MOU dated 11.02.2012 there being an arbitration clause in the said MOU, the respondents counsel submits that this petition, in the light of section 8 of Arbitration and Conciliation Act, shall be referred to arbitration. Though the company is not a party to the MOU, having 100% shareholder of the company being parties to the MOU, it makes no difference whether company is a party or not. The lis in the CP being covered by MoU embodied with Arbitration clause, this matter has to be referred to arbitration under section 8 of the Arbitration and Conciliation Act. In support of this proposition, the respondents counsel relied upon Vijay Sekhri v. Union of India [2011] 106 SCL 297 (Delhi) and Everest Holding Ltd. v. Shyam kumar Shrivastava [2008] 16 SCC 774 to say ratio in the cases supra covers the facts in the present case. 15. The respondents counsel also relied upon Pinaki Das Gupta v. Maadhyam Advertising (P.) Ltd. [2002] 38 SCL 170 (CLB - New Delhi) to say when Arbitrator could grant an appropriate relief which is sought before CLB, then such dispute could be referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other may cease. It survives for measuring the claims arising out of the breach, and the arbitration clause survives for determining the mode of their settlement. The purposes of the contract have failed, but the arbitration clause is not one of the purposes of the contract." 19. The respondents counsel also relied upon the judgment in between Today Homes and Infrastructure (P.) Ltd. v. Ludhiana Improvement Trust (2014) 5 SCC 68, Swiss Timing Ltd. v. Organising Committee, Commonwealth Games AIR 2014 SC 3723 to say when the subject matter and parties are covered by Arbitration Clause, this case has to be referred to Arbitration. 20. The petitioner counsel submits that parties settled the matter involved in CP 92/2011 in terms of MoU dated 11.02.2012, since the company petition being disposed of in terms of the said MoU, the issue present before this bench cannot be said as covered by Arbitration Clause. 21. The petitioner counsel submits that respondents unilaterally terminated MoU though there is no provision in the MoU for terminating the same unilaterally. For having this Bench disposed of earlier CP in terms of this MoU, such unilateral termination of MoU by the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unilaterally terminated this agreement saying it is not binding upon the parties. In a situation like this, had the Respondents implemented or enforced the MoU, it could be understood an occasion arose for invoking Arbitration Clause in the MoU. Here, Dhanuka group unilaterally terminated the agreement, thereafter made allotment to themselves. Having made allotment to themselves not covered under MoU, it cannot be said that the issue of allotment made to themselves has to be referred to Arbitration as conceived in the MoU just by seeing that there is an arbitration clause in an MoU that has not seen the light of the day. In cases supra, the agreement entered between the parties remained in force for some time, both the parties acted upon, here nothing happened except the respondents using this MoU as a device for the withdrawal of earlier CP. 29. This Doctrine of Severability will come into operation when the agreement has come into effect. Here the respondents filed this application saying though this agreement entered into has not been given effect, it has to be referred to arbitration for the reason that MoU has arbitration clause notwithstanding the fact whether it is given e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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