R. BANUMATHI,J.

1. Whether the single Judge was right in finding that the arbitration agreement has become inoperative and whether the single Judge was right in allowing the application - A.No.1236 of 2008 granting stay of arbitration proceedings are the points falling for consideration in O.S.A.Nos.2 to 5 of 2009, which arise out of the order dated 29.10.2008 made in O.A.No.277 of 2008 and Application Nos.1236, 2670 and 2671 of 2008 respectively in C.S.No.257 of 2008 on the file of this Court. The Order of the Company Law Board dated 3.8.2009 modifying its earlier order dated 13.8.2008 in C.P.Nos.65 and 76 of 2005 and issuing various directions in modification of its earlier order is under challenge in Company Appeal Nos.21, 25 to 27 and 29 of 2009.

2. The issues involved in these Original Side appeals and Company Appeals relate to the dispute pertaining to the Joint Venture Agreement dated 30.1.2004 in relation to the affairs of M/s.Cheran Enterprises Private Limited. Since common issues are involved in the Original Side Appeals and Company Appeals, all the appeals were heard together and shall stand disposed by this common judgment.

3. For convenience, the parties are referred by their names and also in short form and wherever necessary they shall be referred as per their array in C.S.No.257 of 2008.

4. Factual background of the matter:

The 10th defendant - K.C.Palanisamy (in short, "KCP"), an Industrialist from Coimbatore along with his family members had acquired controlling interest in M/s.Vasantha Mills Limited (in short, "VML") and promoted a Company in the name and style of Cherraan Properties Limited (in short, "CPL"). VML and CML owned extensive immovable properties, which are capable of being developed into valuable commercial and residential properties. The 1st plaintiff - Ramasamy Athappan is known to KCP even prior to incorporation of Cheran Enterprises Private Limited (in short, "CEPL"), being the Principal Officer of 1st Capital Insurance Company, which is a group company of Odyssey America Re-Insurance Corporation (OARC), a large multinational Company, forming part of "Fairfax Group" of Companies, having its registered office in Stamford, Connnecticut at U.S.A. In 2003, R.Athappan conveyed to KCP to arrange for funding through ORE Holdings incorporated in Mauritius under Mauritius Laws promoted byOARC as its wholly owned subsidiary under the Mauritius Laws for the purpose of developing the lands belonging to VML and CPL. For a consideration of Rs.4 Crores, KCP allotted/transferred 20 percent of equity shares in CPL and 15.6% of equity shares in VML to Nandakumar Athappan as per the understanding between KCP and Ramasamy Athappan. Cheran Enterprises Private Limited came to be incorporated in November 2003 by KCP and his wife Soundari Palaniswamy with an authorised capital of Rs.10,00,000/- consisting of 10,000 equity shares of Rs.100/- each. Subsequently, in 2004, the authorised capital of the Company was increased to Rs.18,00,00,000/-. By virtue of a share purchase agreement dated 13.1.2004 entered into between C.G.Holdings and CEPL, C.G.Holdings sold 1,00,00,000 equity shares of Rs.10/- each in CPL representing 80% equity shares in CPL and 12,41,969 equity shares of Rs.10/-each in VML to CEPL. In consideration of which, C.G.Holdings was allotted 45% of the issued, subscribed and paid up capital of CEPL. Similarly, Athappan has sold his share holding in CPL and VML to CEPL and in exchange of which he was allotted 10% of the issued, subscribed and paid up capital of CEPL.

5. A Joint Venture Agreement (JVA) was executed on 30.1.2004 between (i) C.G.Holdings Private Limited; (ii) ORE Holdings Limited; (iii) Nanthakumar Athappan; (iv) Ramaswamy Athappan, (v) K.C.Palanisamy, (vi) Vasantha Mills Limited (VML), (vii) Cherraan Properties Limited (CPL) and (viii) Cheran Enterprises Private Limited (CEPL). By Joint Venture Agreement:-

K.C.Palanisamybrought in investment by way of contribution of properties of V