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CALCUTTA HIGH COURT
Shekhar B. Saraf, J.
Jagrati Trade Services Private
Limited – Petitioner
versus
Deepak Bhargava and Ors. – Respondents
APO 108 of 2022 and IA No. GA 1 of 2022
Decided on 31.1.2023
Arbitration and Conciliation Act, 1996 – Sections 9, 17 and 37 – Interim protection – Denial of – Principle of minimum judicial intervention is one of fundamental tenets of arbitration law – Tribunals passing interim measures under Section 17 would be bound to observe guiding principles governing grant of such reliefs under CPC – Section 9 and Section 17 are different provisions – However, threshold guiding eligibility of interim measures for both these provisions are identical and applicable – Views expressed by Arbitrators while deciding applications under Section 17 are interlocutory views – They are not final expressions of opinion on merits of case between parties – Several third-party rights have been created over property due to development agreement and more third parties would be added which would further complicate execution of award – Petitioner has already received injunctive relief from Arbitrator – Prima facie case, irreparable harm and irreparable loss, are not in favour of appellant – Applications dismissed. (Paras 17, 22, 25, 26, 31, 33, 38, 41, 42, 43 and 44)
Result: Applications dismissed.
JUDGMENT
Shekhar B. Saraf, J.—Jagrati Trade Services Private Limited being represented by one of its directors, Jagdish Sarda [hereinafter referred to as ‘the petitioner’], is a company incorporated under the Companies Act, 1956 having its registered office at premises No. 3A, Shakespeare Sarani, Kolkata – 700071.
2. The instant application [being A.P.O. No. 108 of 2022] is filed under section 37 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as ‘the Act’] by the petitioner against the order dated November 6, 2022 [hereinafter referred to as the ‘Impugned Order’], passed by the arbitrator in an application filed by the petitioner under section 17 of the Act.
3. Deepak Bhargava, Rajni Bhargava, Deepak Bhargava (HUF), Vaibhav Bhargava, Monisha Bhargava, Smriti Raina, Megha Saigal, Gayatri Bhargava along with:—
(a) Box and Carton Private Limited, a company incorporated under the Companies Act, 1956 having its registered office at 12/478, McRobertganj Kanpur – 208001, Uttar Pradesh,
(b) CSP Exim Private Limited, a company incorporated under the Companies Act, 1956 having its registered office at 7/48, Tilak Nagar, Kanpur – 208002, Uttar Pradesh,
(c) The Calcutta Phototype Company Limited, a company incorporated under the Companies Act, 1913 having its registered office at Unit-III, 1st Floor, Central Plaza, 41, B.B. Ganguly Street Kolkata 700012, and
(d) CSP Investment & Financial Services Private Limited, a company incorporated under the Companies Act, 1956 having its registered office at Unit-III, 1st Floor, Central Plaza, 41, B.B. Ganguly Street Kolkata 700012
are hereinafter collectively referred to as ‘respondent nos. 1-12’.
4. James Glendye & Company Private Limited [hereinafter referred to as respondent no. 13] is a company incorporated under the Companies Act, 1913 having its registered office at 6, Jawarahlal Nehru Road, Kolkata – 700013.
5. Orbit Towers Private Limited is a company incorporated under the Companies Act, 1956 having its registered office at 3B, Camac Street, Kolkata – 700106 and Damani Infracon Private Limited [hereinafter collectively referred to as ‘respondent nos. 14 and 15’] is a company incorporated under the Companies Act, 1956 having its registered office at P-32, Kasba Industrial Estate, Phase-I, Kolkata – 700107.
6. The petitioner has filed the current application praying for stay of the order and grant of interim reliefs, namely in the form of:—
(a) An order of injunction restraining the company from dealing with and/or alienating and/or creating any third-party rights over and in respect of the owners’ allocation in the premises being No. 6, Jawahar Lal Nehru Road.
(b) A fit and proper person be appointed as Receiver to visit and to make an inventory as to what third party liabilities have been prayed by the respondent no. 13 is the said premises.
(c) An order be passed directing the respondent no. 13 to disclose the particulars of the third-party rights created on the owner’s allocation in the premises being 6, Jawaharlal Nehru Road, Kolkata – 700013.
Relevant Facts
7. The petitioner and respondent nos. 14 and 15 entered into a Share Purchase Agreement [hereinafter referred to as ‘the SPA’] with respondent nos. 1-12 who had 100% shareholding of respondent no. 13 company [hereinafter referred to as ‘the company/respondent no.13’].
8. The SPA was complemented by an Escrow Agreement signed by the same parties and on the same day, laying down conditions to be fulfilled by the petitioner and respondent nos. 14 and 15 after which the designated Escrow Agent would transfer the shares to them.
9. In October 2016, shares of the company were transferred to respondent nos. 14 and 15 and no shares were transferred to the petitioner because of which the present arbitral proceedings were initiated.
10. The company is the owner of immovable properties in Kanpur and is the holder of leasehold rights in respect of premises No. 6, Jawahar Lal Nehru Road, measuring 2 Bighas 1
Principle of minimum judicial intervention is one of fundamental tenets of arbitration law.
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