Sanjeev Narula, J.

The present petition under Section 9 of the Arbitration and Conciliation Act (hereinafter referred to as "the Act") seeks order of injunction restraining Respondents from encashing performance Bank Guarantee No. 003GT 011064008 dated 4th March 2016 of HDFC Bank (Respondent No. 2), furnished by the Petitioners in favour of Respondent No.1 for an amount of Rs. 10 crores.

Brief Background

2. Petitioner Nos. 1 to 3 are the share holders of Petitioner No. 4 Company (formally known as Saraswati House Pvt. Ltd). Respondent No. 1 is a publishing and educational service enterprise engaged in the business of printing books and other reading materials for primary as well as higher education. Sometime in 2014, the Petitioner and the Respondent no. 1 negotiated for the sale of the shareholding of New Saraswati House (India) Pvt. Ltd (hereinafter referred to as "NSHPL") culminating into the Business Transfer Agreement (BTA) dated 25th April 2014. The BTA was executed between Saraswati House Private Limited (hereinafter referred to as "SHPL"); Petitioner Nos. 1 to 4 (shareholders and stakeholders of SHPL) and another newly incorporated entity New Saraswati House (India) Private Limited. Under this agreement, for a consideration of Rs. 67,00,00,000/- (Rupees Sixty Seven Crores Only), SHPL acquired all rights and titles and interest in the assets (including the titles, brand names, and related goodwill of SHPL) and assumed the liabilities of the business of NSHPL as a going concern.

3. Thereafter, NSHPL executed the Share Subscription cum Purchase Agreement (SPA) dated 8th May 2014 between the Petitioner Nos. 1 to 4 i.e. the shareholders of NSHPL (hereinafter referred to as the "Original Shareholders"); Respondent No. 1 (hereinafter referred to as "SCCPL") and Vikas Publishing House Private Limited (hereinafter cumulatively to be referred as "New Shareholders").

4. Clause 15.3 of the said SPA contains following non-compete and non- Solicitation provision:

"15.3. The Original Shareholders shall not and shall ensure that SHPL does not, for a period of 60 (sixty) months from the Closing Date ("Non-Compete Period"), directly or indirectly/(including through their Relatives and Affiliates) whether as an owner, partner, stockholder, joint venture partner, corporate officer, director, employee, consultant, principal, trustee, lender or licensor, or in any other similar capacity whatsoever, of or for any person, firm, partnership, company or corporation (other than for the Company or any of its affiliates), undertake the following within the Non Compete Territory during the Non-Compete Period:

(a) engage in, own, manage, operate, sell, finance, control or participate in the engagement, ownership, management, operation, sales, finance or control of, or be connected in any manner with, any business which competes with the Competing Business;

(b) approach or solicit or attempt to approach or solicit in connection with a Competing Business or interfere with, take away or divert the patronage of any clients, authors, publishers, customers or suppliers of the Company or New Shareholders, which are presently existing or identified as prospective, or who have become the clients, authors, publishers, customers or suppliers of the Company (or any of its Affiliates) during the last 3 (three) months from the Subscription Closing Date. For avoidance of doubt, it is hereby clarified that the restriction stated herein shall not extend to dealing with anyclients, authors, publishers, customers or suppliers of the Company or New Shareholders in connection with a business which is not a Competing Business and/or falls under Permitted Activities; or

(c) recruit or solicit (i) the employees or any Person who is or was employed by the Company, at any time in the 12 (twelve) months immediately prior to the date of making such an offer to such employee and was drawing cumulative: salary of Rs.20,000/-(Indian Rupees Twenty Thousand only) per month or more