( 1 ) THIS order shall dispose of the main petition as well as the application under order 39 Rule 4 Civil Procedure Code. In this petition under Section 9 of the arbitration and Conciliation Act, 1996 (hereinafter referred to as act ) an ex parte order was passed on 5/4/2001 whereby status quo was to be maintained with regard to the functioning and management of the Atlas cycle s Malanpur Unit in view of the following:-

(I) Clause 1 of the Memorandum of Understanding dated 20/8/2000 executed between the parties to the effect that the petitioner will continue to look after the production. Tool Room, Corporate Law, Human Resources development, Industrial Relations and Security Department for Atlas Cycles Industries Sonepat Unit and also the entire functioning of Limrose Engineering Works Pvt. Ltd. and the Atlas Cycle Malanpur Unit as before; (ii) Terms of settlement of interim arrangement reached between the parties before the learned Sole arbitrator on 10/9/2000 to the effect that each of the family members shall continue to hold the post/designation that they are holding in the Company and shall continue to look after the work and exercise the powers within the framework of the office order which they have been looking after till now.

( 2 ) THROUGH application filed under Order 39 rule 4 Civil Procedure Code the respondents have sought setting aside the stay order firstly because it was obtained by making a false and misleading statement in relation to the material particulars by not disclosing the proceedings before the hon ble Arbitrator wherein identical prayer was made before the Hon ble Arbitrator which was declined and second attempt was also made by the petitioner in obtaining the injunction from the Hon ble Arbitrator and secondly the observations of the Auditors as well as the hon ble Arbitrator as to the conduct of the petitioner in siphoning off the funds of the company in clandestine manner from Maianpur Unit to Limrose and further transferring it into the accounts of 10 other shell companies owned by him, his wife and children.

( 3 ) THE relevant extracts of the order of the hon ble Arbitrator with regard to the application moved by the petitioner on 31/3/2001 seeking identical relief are as under:-

"i was taken through the directions issued by consent of parties on 10/9/2000. Detailed submissions were made in respect of the application by the learned counsel, Shri sundaram. As the application was faxed at about 2. 45 p. m. to the other parties (hard copy delivered later), counsel for the other parties did not have time to prepare a reply to the application. However, they were willing to come for the hearing and in fact did,make their submissions on the merit of the application. However, in the course of reply mr. Sundaram sought certain directions in regard to the auditing of the Sonepat Unit and stated that he would file an application in that behalf although there was a mention about the same in paragraph (g) of the present application and a prayer in regard to all the units. However, the reasons for seeking such a direction have not been brought out in detail in the application. He therefore stated that he would like to supplement this application by a detailed application giving reasons for seeking auditing of the Sonepat unit. "another relevant order passed on 4/4/2001 by the Hon ble Arbitrator pointed out by Dr. A. M. Singhvi. learned senior counsel appearing on behalf of the respondent is as under:

"in fairness I thought it appropriate to inform both Mr. Om Khaitan and Mr. Makkar about the above telephonic talk. Mr. Om Khaitan was not in town. My Secretary was told that he was in Hyderabad. I could speak to Mr. Makkar who, after speaking to his clients, informed me that there was no such matter on the agenda but there were complaints in regard to financial misdemeanour against Mr. Arun Kapur. I tried to impress upon Mr. Makkar that as far as possible family peace should be maintained in the spir