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2015 (12) TMI 1378 - Board - Companies LawApplication u/s 8 of the Arbitration and Conciliation Act, 1996 - Whether the dispute raised in a properly filed petition under sections 397, 398, 402 and 403 of the Companies Act can be referred to arbitration in accordance with the agreement between the parties? - Held that:- The arguments look attractive at the first blush but when examined closely find that it lacks substance. A perusal of para 22 of the petition which contains prayer for various relict reliefs would show that the petitioners have prayer for restoration of the shareholding of the petitioner, reinstatement of the Petitioners as directors and staying diversion of business/clients of respondent No. 1 company to a related party Respondent No. 5- Ayushman Ropes & Tapes Pvt. Ltd. All such relief would fall within the jurisdiction of the Company Law Board and are founded on 'oppression and mismanagement'. It has flavor of public interest and the rights of parties are not right in personam. In any case the jurisdiction of Company Law Board cannot be excluded by a clause in an agreement between the parties including provision of arbitration. The other argument advanced by Mr. Nayyar equaily lacks merit. It emerges from para 27 of the judgment of Hon'ble Supreme Court rendered in the case of Everest Holding Ltd. (2008 (10) TMI 629 - Supreme Court Of India ) wherein observed that Arbitrator can find out and adjudicate as to whether or not a company is functional and if it was not functional then he could always find out the nature and status of its assets and can also issue directions and pass orders regarding dues and liabilities and also for taking recourse to appropriate remedy. The aforesaid observations were made in the teeth of the view taken by Hon'ble Supreme Court in the case of Haryana Telecom Ltd. (1999 (7) TMI 545 - SUPREME COURT OF INDIA ) that Arbitrator would have no power to order for winding up of a company for which a sole fora has been provided by the Companies Act. I do not think that para 27 of the judgment of the Supreme Court advances the case of applicant-petitioner. It cannot be concluded that arbitrator enjoys all those powers which are vested in a CLB under sections 397, 398, 402 and 403 of the Companies Act. I don't feel the necessity of refereeing to various other judgments of Company Law Board on which reliance has been placed by Mr. Nayyar. - the prayer for making reference to the arbitration stands rejected
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