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IN THE HIGH COURT OF JUDICATURE AT MADRAS
M.M. SUNDRESH, N. ANAND VENKATESH, JJ.
Prashant Hasmukh Manek & Ors. - Appellants
Vs.
Ramu Annamalai Ramasamy & Ors. - Respondents
O.S.A. Nos. 275 to 277 of 2018
Decided On : 24-01-2019
Code of Civil Procedure - Section 13 - Order 36 - Rule 9 - Indian Arbitration & Conciliation Act, 1996 - Claim petition before English Court – Shares - Claim petition before English Court - Imperative to place them on record - Appellants owned shares in Hermes I-Tickets Private Limited - First and second appellants owned and third appellant owned shares respectively - G.I. Retail Private Limited third respondent company was held by first and second respondents and their family members - To be precise they hold and remaining was with members of their family – Held, Single Judge in Court considered view was not correct in holding that cause of action arose within jurisdiction of this Court on premise Share Purchase Agreements were signed in Chennai flow of funds was at Chennai and Hermes shares were sold within territorial jurisdiction of this Court - These facts are not sufficient to institute a suit to inject defendant from proceeding in foreign Court on a different factual premise also involving third parties - A claim made in England is also not for breach of contract but a tortuous liability - Venue of arbitration is only in Mumbai - Real intentions is to prevent appellants to go on with their claim and thus not to facilitate arbitration proceeding - Perhaps that is reason why all three respondents jointly filed suit - In Court considered view Single Judge ought not to have gone into merits of case - Moot question sought to be raised in present proceeding by respondents itself involves a disputed question of facts - Court find that there is no specific finding given on English forum being vexatious or oppressive - As discussed above reliance upon legal notice issued also cannot be countenanced - In such view of matter Court are inclined to set aside orders passed by Single Judge - Any action done by Director on behalf of and for betterment of company should be attributed with company and it cannot be independently used against first and second respondents - Aforesaid contention has got no relevancy to case on hand - As discussed above Court cannot interdict a proceeding before English Court by giving a factual finding that first and the second respondents acted on behalf of third respondent by ignoring not only averments made but also documents filed coupled with existence of third parties – Appeal allowed
JUDGMENT :
M.M. SUNDRESH, J.
Prayer: Appeal under Order 36 Rule 9 of the O.S. Rule read with Clause 15 of the Letters Patent against the common judgment and decree dated 26.06.2018 made in O.A. No. 276 of 2018 in C.S. No. 192 of 2018 and A. No. 3470 of 2018 in O.S. No. 192 of 2018 respectively.
Prayer: Appeal under Order 36 Rule 9 of the O.S. Rule read with Clause 15 of the Letters Patent against the judgment and decree dated 26.06.2018 made in A. 3469 of 2018 in C.S. no. 192 of 2018.
Heard Mr. Arvind P. Datar, Mr. P.R. Raman, Mr. Aurup Das Gupta, Mr. P.S. Raman, Mr. Satish Parasaran, Mr. A.R.L. Sundaresan, Senior Counsel appearing on either side. Perused the documents and written submission.
FACTUAL MATRIX:
2. Facts form the core of an adjudicatory process. Thus, it is imperative to place them on record.
3.1. The appellants owned 6 per cent shares in M/s. Hermes i-Tickets Private Limited (hereinafter referred as ‘Hermes’). The first and the second appellants owned 5.2 per cent and the third appellant owned 0.8 per cent shares respectively. G.I. Retail Private Limited, the third respondent company was held by the first and the second respondents and their family members. To be precise, they hold 63.4 per cent and the remaining 36.6 per cent was with the members of their family.
3.2. There was series of communications between the appellants, through their representatives, and the first and the second respondents for the sale of shares. Incidentally, the first and the second respondents were at the helm of the third respondent company. It was accordingly agreed to transfer the shares held by the appellants and the respondents in Hermes in favour of M/s. Emerging Markets Investment Fund IA (hereinafter referred to as “EMIF”) incorporated in 2015. 5 per cent share held by the first and the second respondents was transferred to the third respondent on 05.09.2015 and on 9.9.2015, 6 per cent held by appellants 1 and 2 was transferred to the third respondent. Thus, the third respondent acquired 100 per cent shares in Hermes. Then, 99.9 per cent shares of Hermes was sold by the third respondent to EMIF on 18.09.2015.
3.3. M/s. G.I. Technology, a holding company of the third respondent, approved issue of 4% shares in G.I. Technology to EMIF on 25.09.2015 through capital increase and approved issue of 56 per cent of share in favour of Wire card AG on 25.09.2015 through capital increase. An agreement was made by Wirecard AG on 27.10.2015 to acquire 100 per cent of shares from G.I. Retail Group leading to a completion on 01.03.2016. M/s. Wirecard AG acquired 99.9 per cent in M/s. Hermes and 60 per cent in G.I. Technology Private Limited accordingly. The remaining one share was also acquired on 01.03.2016 from the third respondent.
3.4. There were communications between the appellants and the second respondent prior to the transfer of shares held in M/s. Hermes. Meetings were held at London. Mr. Amit Shah and his concern M/s. IIFL acted as go-between. According to him, he was having mutual acquaintance of the appellant’s representatives and EMIF. Mr. Amit Shah contacted the appellants pursuant to the mail dated 21.08.2015 sent by the first respondent stating that he had passed on the contact details of the appellants to EMIF.
3.5. The communication by the first and the second respondents were made through domain names “hermes-it.in” or “gitech.it.in”. The first domain name belongs to M/s. Hermes and the second belongs to M/s. G.I. Technology Private Limited. The appellants sold their shares vide agreement dated 09.09.2015. The share transfer agreements do contain the following arbitration clause:-
“3.2 Governing Law:
3.2.1 This Agreement shall be constured in accordance with, and goverened by the laws of Republic of India.
3.2.2 Any dispute arising out of or in connection with this Agreement including without limitation any question regarding its existence, interpretation, performance, validity, effectiveness or termination of the rights or obligations o
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