S. B. SINHA, C. J.

( 1 ) THIS writ petition is directed against the judgment and order dated 20-10-2000 passed by a learned Single Judge of this court whereby and whereunder a reference in relation to the disputes and difference between the parties had been referred for arbitration to a former Judge of this Court.

( 2 ) BEFORE adverting to the question involved in this writ petition, the facts of the case may be noticed. An agreement was entered into by and between the respondents 1 and 2 herein and in terms whereof they had agreed to subscribe and the first respondent agreed to allot certain number of shares for consideration on the terms and conditions laid down therein. The 1st respondent alleged that it forwarded a Demand Draft bearing No. 024343 for a sum of Rs. 25 lakhs together with a covering letter dated 28-4-1995 to the 2nd respondent herein towards the value of the 50,000 equity shares, but, contrary to the terms and conditions of the subscription agreement, it did not take any steps to bring out the public issue of equity shares nor did it get the share of the company listed on otcei. In the aforementioned situation, clause 7. 1 (a) of the Subscription Agreement was sought to be invoked. It stated that although the 2nd respondent agreed to refund the amount to the 1st respondent, in terms of clause 7. 1 (a), but such assurances had not been implemented.

( 3 ) THE said agreement contains an arbitration agreement, being Article IX therein, which reads thus: article IX: Disputes:9. 1. Any dispute or question arising under these presents (including existence or validity hereof) shall be referred to arbitration. The Sponsor/ co-investors and the Company shall appoint their own arbitrators and those two arbitrators so appointed shall appoint an umpire. The two arbitrators shall enter upon any reference unless the umpire has been so appointed. Such arbitrator proceedings will be held at hyderabad. 9. 2. The cost of arbitration shall be borne by the parties jointly. 9. 3. Only Courts in HYDERABAD shall have jurisdiction to entertain any matter arising under these presents".

( 4 ) THE writ petitioners herein are not parties to the agreement. They are merely sponsors/promoters to the respondents. So far as they are concerned, Subscription agreement provides:"7. 1. In case the said shares are not offered" to the Public due to the following reasons: xxxx (c) The company s shares are not listed on OTCEI before the end of three months from the date of application. Then the Sponsor and/or the coinvestors shall (which shall be binding on the Company s offer of the said shares in part or in full to the promoter or their friends and relatives) for buy back in one or more instalments as may be decided by the Sponsor. Upon being so offered, the promoters shall promptly repurchase/buy back the said shares at the price mutually agreed so as to ensure to the Sponsor/ co-investors a return of minimum of 24% on its investments".

( 5 ) THE learned Single Judge, by reason of the impugned judgment, referring to clause 7. 1 (c) aforementioned, held that the writ petitioners herein are also necessary parties to the petition.

( 6 ) THE learned Single Judge did not decide the question as to whether there exists any binding arbitration agreement between the appellants and the 1st respondent herein. The said agreement had been entered into by five companies viz. , itc Classic Finance Limited, Sanmac Motor finance limited, Nicholas Piramal India limited, Weizman Limited and Acrow india Limited. All the parties to the said agreement are juristic persons. As indicated herein before, the petitioners herein are mere promoters/sponsors. Clause 7. 1 upon which reliance has been placed does not bind the promoters.

( 7 ) THE question, which arises for consideration, is as to whether although the petitioners are not parties to the arbitration agreement, and without determining the question as to whether there existed any disputes and differences by and betwe

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