TMI Blog2013 (11) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to a matter covered by an arbitration agreement referred to in Section 44 of the Act the judicial authority shall refer the dispute in question to arbitration provided – (a) a party or anyone claiming through or under him makes such request and (b) a judicial authority was satisfied that the agreement is not null and void or inoperative or incapable of being performed. Section 45 therefore empowers the judicial authority when seized of to a matter relating to an arbitration agreement to decide as to whether such agreement is null and void or inoperative or incapable of being performed prior to referring the parties to arbitration. Such power prevails over the provisions contained in Part I of the Act (which includes Section 5 of the Act) or the Civil Procedure Code due to the operation of the non-obstante clause contained in such provision. Whether an action as can be said to be covered u/s 45 of the Act Power to entertain an action or cause by a Civil Court was inherent in itself - the nature of action which may be entertained by the Court was not regulated by Section 45 of the Act - The provision merely lays down the procedure to be followed if the action so enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f before a court and invites the Court to adjudicate the same on merits and such court adjudicates the same on merits and arrives at a decision, the said party shall be deemed to have abandoned his right to seek arbitration in respect of such claim. In the instant case, the right of the Chatterjee Group to seek managerial control and majority status under the aforesaid agreement or otherwise had been finally decided by the Apex Court. It would be patently vexatious and the abuse of process of law to permit the appellant to reagitate the self-same issue before the arbitral tribunal. Remedy of arbitration and that before the CLB cannot be said to be complementary remedies constituting one remedy as a whole and one invoking arbitration on the issue of majority status and managerial control in HPL, after the Apex Court had returned a verdict on merits against the appellant on the self-same issue in the Company proceeding at the latter’s behest undoubtedly amounts to abandonment of its right to arbitration by choosing to agitate such issue before the other tribunal. - APO No. 13 of 2013, C.S. No. 152 of 2012 - - - Dated:- 4-6-2013 - Mr. Arun Mishra And Joymalya Bagchi,JJ. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of title 9including the original share certificates) for the Additional Pledged Shares (being the 38,775,000 shares in Haldia deposited in esorow by CPMC on 8 March, 2002). (iv) That WBIDC and GoWB and Haldia procure that the directors nominated by WBIDC vote with CPMC directors on all issues. (v) That upon the first General Meeting called subsequent to the transfer of The Shares in accordance with paragraph (X) of the award and at every subsequent General Meeting WBIDC and/or GoWB vote for any shareholder resolution proposed by CPMC reconstituting the board of Haldia or amending Haldia s Articles of Association, in each case such that CPMC is empowered to appoint a number of directors proportionate with shareholding. (vi) That WBIDC do and GoWB cause WBIDC to transfer to CPMC or its nominee CPIL such of WBIDC s or GoWB s shareholding (up to a maximum of Rupees 360 crores per transfer) as is from time to time required to ensure that CPMC/its nominees/affiliates have 51% of the total paid up equity of Haldia. (vii) Such other or further Awards as may be deemed appropriate in the circumstances. On receipt of such notice of request for arbitration, on 31st April, 2012, H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but latest by the end of February, 2013. In spite of our best efforts, the arguments in the matter were concluded by the respective parties as late as on 13.05.2013. Since the parties were unable to conclude arguments within the aforesaid time frame, we were informed by the learned senior counsel appearing for the appellant that an application had been preferred before the Apex Court for extension of time for disposal of this appeal but we have not been informed till date as to the fate of such application. Genesis of the case: HPL was incorporated in 1985 as an ambitious flagship project of the State of West Bengal to set up a petrochemical complex in Haldia. Initially, West Bengal Industrial Development Corporation (WBIDC) and Mr. R.P. Goenka, an industrialist were the promoters of the said project. In 1990 Mr. Goenka quit the project and thereafter the Tata Group was inducted. As much headway was not made towards the implementation of the project, in June, 1994, Dr. Purnendu Chatterjee, head of the Chatterjee Group of Companies, a non-resident Indian businessman, expressed interest in the project. A Memorandum of Understanding (MoU) was entered between the WBIDC, Chatt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id-up equity of HPL . Each such transfer. (b) The first such transfer of shares was to be effected within 10 days of the acceptance of the Letter of Comfort by GoWB. 3. Clause 5 provided that CPMC would discharge payment for the first transfer by: (a) Paying in cash 3% of the consideration on acceptance of the Letter of Comfort. (b) Paying in cash 2% of the consideration simultaneously with the transfer of shares. (c) An interest free loan from WBIDC to CPMC in respect of the remainder consideration, deemed to be made simultaneously with the transfer of the shares and for which a loan agreement would be issued (the Loan ). 4. It further provided for the terms of the Loan as follows: (a) The loan would be repaid by CPMC at the rate of 10 crore Rupees annually for the first five years, and 20 crore Rupees annually for the following 5 years with any balance paid at the end of the tenth year. (b) The Loan would be secured by the pledge to WBIDC of the shares being acquired and additional shares of face value of 25% of the value of shares being transferred. (c ) WBIDC would release a pro rata number of shares from the pledge upon receipt of each repayment installment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of Rupees 1,550,999,980 as consideration to bring its shareholding in Haldia to 51%. In order to expedite the process of reconstructing of HPL and to avoid delay due to pending approvals, it was agreed that the aforesaid 155,099,998 shares of HPL be transferred to Chatterjee Petrochem (India) Pvt. Ltd. (hereinafter referred to as CPIL ) instead of CPMC. It was also agreed that CPIL makes part payment of the sale consideration and the remainder of the consideration be paid by giving deemed loan to CPIL by WBIDC against pledge of the shares sold to CPIL and upon repayment of such loan in installments, the said pledged shares be released in a phased manner. CPMC agreed to secure such loan transaction as a guarantor and pledged its additional shares to the tune of 387750000 shares which would also be released in a phased manner as the loan was progressively repaid. Such agreement was recorded in a letter dated 8th March, 2002 written by CPMC to WBIDC. On the self-same date, an agreement was executed among CPIL, WBIDC and CPMC wherein it was recited that the transfer of the shares had been made to CPIL vide letter dated 8th March, 2002. It was also recited that the payment for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om amongst a panel of forms prepared by CPMC. Instead of taking steps to provide majority status and/or management control to CPMC, in the months of January and February, 2005, HPL approved the issuance and allotment of equity shares worth 150 crores at par to Indian Oil Corporation (IOC). Objecting to such proposed allotment of shares to IOC on the ground that such action on the part of WBIDC, Government of West Bengal would change the private equity bias of the Company and would put Chatterjee Group into minority, CPIL filed Company Petition being No. 58 of 2012 before the Company Law Board (CLB) for oppression and mismanagement, inter alia, prayed for the following reliefs: (a) An order be passed directing the company to take immediate steps for modifying and/or altering and/or amending the Articles of Association of the Company to incorporate therein the complete agreement by and between the joint venture partners and special rights of the petitioner in relation to the Company, as provided in the agreements dated 20th August, 1994, 12th January, 2002, 8th March, 2002 and 30th July, 2004; (b) Appropriate orders be passed directing the entire shareholding of the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out limitation by way of sale of shares of the company held by any of them to any third party except the petitioners; (j) .. (k) . (l) Direct the reconstitution of the Board of the Company to reflect the majority control and the special rights accorded under the agreements between the shareholders to the petitioners; In the course of the said proceeding, prayer was also made for a direction upon WBIDC/Government of West Bengal to complete the transfer of 155 million shares in favour of CPIL. The Company Petition was disposed of by CLB by upholding the decision of the Company to allot 150 million shares by IOC. Similarly, transfer of 155 million shares by WBIDC to CPIL at par was confirmed. Further direction was given to the Government of West Bengal and WBIDC to transfer 520 million shares held by them in HPL to Chatterjee Group. In an appeal preferred by the Government of West Bengal against the said order, the High Court set aside the order of the CLB on the ground that CPIL was not a member of HPL and the CLB could not have enforced its rights under private contract entered between CPIL and WBIDC for transfer of shares as the same could not be sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative or incapable of being performed and an injunction restraining the appellant to proceed with the said arbitration. It is the case of HPL in the plaint that the arbitration agreement dated 12th January, 2002 had been rendered void in respect of the claim for transfer of 155 million shares in favour of CPIL inasmuch as the parties had contracted out of the earlier agreement and the legal liability in respect thereof was redefined in the subsequent 8th March, 2002 agreement which provided for an exclusive jurisdiction to Courts in Calcutta to decide dispute arising out of said agreement. It was also contended that the self-same relief was canvassed before the CLB and the matter went up to the Apex Court wherein the Apex Court recorded certain findings of facts with regard to failure on the part of the Chatterjee Group of Companies to live upto its commitment to invest equity and/or funds as promised. It was pleaded that once a party to an arbitration agreement seeks to adjudicate dispute before another forum and such forum arrives at a conclusive finding of facts in relation to the dispute, the subsequent effort on the part of the self-same party to refer dispute for arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, 2002 (with alterations in Clause 5 and 9 thereof). He therefore submitted that the principal agreement dated 12th January, 2002 including the arbitration clause was subsisting and had not been substituted. He referred to share subscription agreement dated 30th July, 2004 which defined the word an affiliate . He also referred to a letter dated 17th December, 2004 by Government of West Bengal to HPL stating GoWB stands committed to the transfer of shares to CPMC as agreed with in agreements dated 12th January, 2002, 8th March 2002 and 30th July, 2004. He referred to prayers IV, V, and VI in request for arbitration (RFA), to stress that the disputes related to the 12th January, 2002 agreement which was valid binding by and between the parties. He further submitted that even if the agreement is terminated, the arbitration clause survived. According to Mr. Mitra the validity/existence of the arbitration agreement ought to be decided by the arbitral tribunal in terms of Article 6 of the ICC Rules, 1998 which is pari-materia to Section 16 of the Arbitration and Conciliation Act (hereinafter referred to as the Act ). Civil Court has no jurisdiction to decide such issue. He referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ICC Rules. On factual score, he submitted that the arbitration agreement had become inoperative and/or being incapable of being performed in the instant case as the parties had contracted out of the 12th January, 2002 agreement by entering into a subsequent agreement dated 8th March 2002 in respect of transfer of 155 million shares of HPL. Such agreement not only created new rights and liabilities by and between non parties to the arbitration agreement but also provided for a different dispute resolution mechanism, namely Courts in Calcutta for resolving disputes arising out of such agreement. He therefore submitted that any dispute arising over transfer of 155 million shares in favour of CPIL would be a dispute relating to the 8th March, 2002 agreement and amenable to the jurisdiction of the courts in Calcutta. He further submitted that although the consent and approval for transfer of 155 million shares had been granted by lenders on or about May 27, 2005, CPMC did not invoke the arbitration agreement till 2012. Such arbitration agreement was abandoned by the conduct of the parties as the prayer for transfer of such shares was made before the CLB in the Company petition and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermore, the relief claimed was barred by limitation. Hence, there was no live issue which could be referred to arbitration. He, therefore, prayed that the order of injunction be not interfered with. Our Findings: The question before us therefore is whether the learned Single Judge was justified in passing an order of injunction restraining an arbitration proceeding pending before ICC between the parties. It has been argued on behalf of the appellants that no injunction restraining arbitration could be passed by a Court in view of Section 5 of the Act which limits judicial intervention in arbitration. It has also been argued the Act is a complete Code and no judicial intervention beyond its provisions is permissible. It has also been argued that in view of Article 6 of ICC Rules which is pari-materia to Section 16 of the Act, the existence and validity of an arbitration agreement is to be decided by an arbitral tribunal. It has also been contended that Section 45 of the Act is a provision in favour of arbitration and an action as in the present suit is not contemplated under the section. The suit in the instant case was instituted after the respondent no. 1 received the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tence/ validity of the arbitration agreement is provided under the statute itself and is not whittled down by operation of section 5 of the Act. Next issue is whether an action as in the present suit can be said to be covered under Section 45 of the Act. Power to entertain an action or cause by a Civil Court is inherent in itself. It does not derive its source from the statute. Hence the nature of action which may be entertained by the Court is not regulated by Section 45 of the Act. The said provision merely lays down the procedure to be followed if the action so entertained by a Court relates to a matter covered by an arbitration agreement providing for foreign seated arbitration. Similar is the scope of section 8 of the Act in respect of domestic arbitration. Hence, neither Section 8 nor section 45 of the Act restricts the inherent power of a Court to entertain any action in a mater relating to arbitration agreements including an action challenging the validity, existence or scope thereof. In this regard one may profitably refer to Smt. Ganga Bai vs. Vijay Kumar and Ors. AIR 1974 SC 1126 as follows: There is an inherent right in every person to bring a suit of a civil nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is entertained by a Civil Court relating to such arbitration. Section 5 of the Act shall therefore not be treated as an express bar on the inherent power of the Civil Court to entertain a cause or action relating to a foreign seated arbitration agreement including one challenging the validity thereof. In Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd. (2011) 8 SCC 333 the Supreme Court held that the act is a complete Code and provision 37 of the Act (relating to appeals) shall override the right to appeal contained in clause 15 of the Letters Patent. We are of the opinion that the said judgement is of no help to the appellant as right to appeal is a statutory right and therefore is eclipsed by the special act. Right to entertain a cause/action is inherent in the court and therefore such inherent power subsists in the Court in it unless it is expressly taken away. It has also been contended that since the International Court of Arbitration (the Court) of ICC is empowered under Article 6 of the ICC Rules to decide on the validity or scope of the arbitration agreement the same should necessarily exclude the jurisdiction of the Civil Court to examine such matter. Article 6 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 8 and Section 11 of the said Act. While dealing with such issue, the Constitution Bench held as follows: 19. It is also not possible to accept the argument that there is an exclusive conferment of jurisdiction on the Arbitral Tribunal, to decide on the existence or validity of the arbitration agreement. Section 8 of the Act contemplates a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement, on the terms specified therein, to refer the dispute to arbitration. A judicial authority as such is not defined in the Act. It would certainly include the court as defined in Section 2(e) of the Act and would also, in our opinion, include other courts and may even include a special tribunal like the Consumer Forum (see Fair Air Engineers (P) Ltd. v. N.K. Modi). When the defendant to an action before a judicial authority raises the plea that there is an arbitration agreement and the subject-matter of the claim is covered by the agreement and the plaintiff or the person who has approached the judicial authority for relief, disputes the same, the judicial authority, in the absence of any restriction in the Act, has necessarily t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement is valid and binding as per Section 45 of the said Act. In Bharati Televentures Limited vs. DSS Enterprises Private Limited Ors. 123 (2005) Delhi Law Times 532 the Delhi High Court held as follows: 14. So far as Civil Courts are concerned it is not necessary for them to trace their powers to issue injunctions to a statute; in common law systems the reverse is oftentimes observed. To mention only a few examples, the principles laid down in Ryland v. Fletcher, Donoghue v. Stevenson, Central London Property Trust Ltd. v. High Trees House Ltd., 1947 K.B. 130 : [1956] I All ER 256 (now known simply as High Trees in which the principle of promissory estoppal was established) and Mareva v. International Bulk Carriers, (1980) 1 All ER 213 (thenceforward 'Mareva injunction' has become a term of art) have in fact acted as catalysts for statutory activity. Civil Courts in common-law countries have a duty, which cannot be deferred, postponed or procrastinated, to decide every dispute brought before it. If no legislation is in existence the lies must be decided on first principles. The Channel Tunnel case (supra) is significant for several reasons including the reiteration by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 16. In the event that the Arbitral Tribunal does not return a determination negating its own jurisdiction the statutory remedy is only by way of Objections under Section 34 of the A C Act. Yet, paradoxically, the Act mandates this adjudication under Section 8 and Section 45 of the A C Act as well as under Section 11(6) thereof. It appears to us wholly incongruous that when such a curial investigation is invited by the filing of a civil suit, it should be rendered nugatory by simply holding that a civil court has no jurisdiction. The matter has FAO(OS) 268/2011 Page 36 of 54 been discussed at great length and all its complexities have been laid bare before us. We, therefore, think it vexatious and idle to remand the matter back to the Single Bench for returning a specific finding as to the existence of an efficacious arbitration agreement as well as the parties bound by it. A situation, similar to the one at hand, had arisen in Pampa Hotels as well as Monnet Finance. Shree Krishna Vanaspati Industries (P) Ltd. vs. Virgoz Oils and Fats Pte. Ltd. and Anr., (2009) 6 RAJ 511 cannot be said to be any relevance in view of the aforesaid decision of the Division Bench of D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is patent may injunct the parties from proceeding with such vexatious arbitration. Now let us examine whether the respondent no. 1 has made out a case to restrain the foreign seated arbitration in the instant case. Clause 5 of the 12th January, 2002 agreement reads as follows: GoWB shall cause WBIDC to transfer to CP(M)C such of it existing shareholding in HPL upto a maximum of Rs. 360 crores from time o time so as to ensure that CP(M)C has 51% of the total paid-up equity of HPL subject to and upon CP(M)C providing the latter of comfort mentioned in the proceeding clause 2 within the time mentioned therein and the same being accepted by GoWB and such transfer shall be effected within 10 days of the acceptance of the said Letters of Comfort by GoWB and upon payment of Rs. 53.5 crores as per clause 3 above. The consideration for all such transfer shall be at par. On GoWB accepting the letter of comfort, CP(M)C will pay a sum of 3% of the consideration amount by way of earnest money as part payment for sale of such shares and a further sum of 2% of the consideration amount simultaneously with the transfer of such shares. The balance of the consideration shall be treated as pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... face value of the shares shall remain security for the said outstanding loan. The said agreement was executed by CPMC, HPL, WBIDC, and GoWB. This agreement contained an arbitration clause for referring disputes to the Court of Arbitration under the International Chamber of Commerce (ICC) Rules at Paris. In terms of the said agreement and in the light of the shareholding of the parties as on 12th January, 2002, WBIDC agreed to transfer 155 million shares to CPMC as par value to bring the latter s shareholding to 51% of the paid up equity of HPL. Subsequent to such decision and in order to expedite the restructuring process, a letter was written by CPMC on 8th March, 2002 to WBIDC stating that the transfer of the said shares be made to CPIL in order to comply with the January agreement. In the said letter it was stated that CPIL will enter into a loan agreement with WBIDC after making payment of Rs. 75500000 out of which Rs. 465300000 has already been paid by said CPIL. The shares so sold to CPIL would remain pledged with WBIDC till the loan is repaid by CPIL. CPMC on its turn agreed to stand as a guarantor by pleading 387750000 of its own shares in addition to the aforesaid s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tius) Co. e) Loan means the loan of the Borrower. ARTICLE II AGREEMENT AND TERMS OF THE LOAN. 2.1 The Corporation is hereby deemed to have granted to the Borrower a secured loan of Rupees 147,34,49,980 (Rupees one hundred and forty seven crores thirty four lakhs forty nine thousands nine hundred and eighty only) and the Borrower hereby acknowledges having taken such loan. 2.2 This loan is deemed to be given by the Corporation to the Borrower upon full and final discharge of the balance consideration money against sale of 15,50,99,998 (fifteen crores fifty lakhs ninety-nine thousand and nine hundred and ninety eight) shares in Haldia Petrochemicals Limited transferred by the Corporation to the Borrower for a sum of Rupees 155,09,99,980 (Rupees One hundred and fifty five crores nine lakhs ninety-nine thousand nine hundred and eighty only) and the balance consideration of Rupees 7,75,50,000 (Rupees Seven crores seventy five lakhs fifty thousand only) having already been paid by the Borrower to the Corporation. 2.3 This loan will be repaid as follows: Rs. 10,00,00,000 (Rupees Ten crores) on or before 7th March, 2003 Rs. 10,00,00,000 (Rupees Ten crores) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.6 It is hereby recorded that the Borrower and the Guarantor have lodged with the Corporation transfer deeds along with the certificates for the above mentioned shares hereby pledged and till such shares are released progressively by the Corporation to the Borrower and the Guarantor as per Clause 2.5 above, the Borrower and the Guarantor hereby grant to the Corporation irrevocable power to renew the said transferred deeds or to execute fresh transfer deeds on the Borrower s and/ or Guarantor s behalf as and when required after the original transfer deeds reach the expiry date as per Section 108 of the Companies Act,1956. As and when any of these shares are required to be lodged for transfer with Haldia Petrochemicals Ltd. for transfer including the transfer on sale of 15,50,99,998 shares by the Corporation to the Borrower in the name of the Borrower, the parties shall cause the shares require to be transferred to be dematerialised and give necessary instructions to the depository so as to effect the transfer. .. .. 7.5 Jurisdiction: Courts at Calcutta alone shall have jurisdiction in all matters relating to this agreement. The argument of HPL is that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The desire contained in the letter dated 8th March, 2002 that after necessary approvals the shares will be transferred to CPMC does not alter the nature of the transaction that CPIL had purchased the shares after making part payment and agreeing to repay the loan advanced against balance consideration thereof. The status of CPMC had substantially altered in the new arrangement from that of a buyer to a guarantor to the transaction. It had pledged some of its shares in addition to those pledged by CPIL as security in respect of such loan. Such subsequent agreement therefore cannot be said to be a mere nomination in favour of CPIL on behalf of the CPMC but created independent legal rights by and between the parties. The creation of such rights completely extinguished the rights existing under the January, 2002 agreement. Not only did it extinguish such rights under the principal agreement but also destroyed the arbitration clause in respect of the transaction by creating a new dispute resolution forum, namely, Courts of Calcutta with regard to any dispute with regard thereto. It was not a case where the principal agreement had been terminated but the arbitration clause had surviv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Co. Ltd. Anr (2013) 1 CLT 301 (HC), Gujarat NRE Coke Ltd. Vs. Gregarious Estates Incorporated and Ors. (Unreported decision of High Court at Calcutta in A.P.O. No. 381 of 2012), JSW Steel Ltd. Vs. JFE Shoji Trade Corporation (2010) 3 MHLJ 165; are of no assistance to the appellant since in all these decisions the Court refrained from judicial intervention after coming to a finding that a valid arbitration agreement subsisted in the case of a live dispute. In none of the aforesaid decisions the issue of substitution of the arbitration agreement by creation of a new agreement and discharge of the earlier one had fallen for decision. The said judgements are clearly distinguishable from the facts of the case. In Dresser Rand S.A. vs. Bindal Agro Chemical Ltd. Anr. (unreported decision of Supreme Court of India in Civil Appeal Nos. 1455 and 1456 of 1994) and Centrotrade Minerals and Metals INC Vs. Hindustan Copper Ltd. (unreported decision of Supreme Court of India in Civil Appeal No. 1124 of 2001), the orders are interim in nature and no law of binding effect has been declared by the Apex Court. Chloro Controls India (P) Ltd. vs. Severn Trent Water Purification INC Ors. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is therefore not to subject the non-signatory affiliate to the arbitration clause under the earlier agreement which stood substituted by the new one and created a forum for the adjudication of disputes under the later was also altered to Courts of Calcutta instead of arbitration as under the earlier agreement. This judgement is thereof of no assistance to the appellant. We are therefore of the opinion that the subsequent arrangement arrived at by and between the parties on 8th March, 2002 substituted the terms of the earlier agreement dated 12th January, 2002 with regard to the reliefs pertaining to the transfer of 155 million shares to CPIL. The subsequent arrangement also provided for a different forum for adjudication and thereby rendered the arbitration clause null and void, inoperative and incapable of being performed in relation to such dispute in the aforesaid case. We therefore do not find any reason to differ from the finding of the learned Single Judge in this regard. It appears from the impugned order as well as earlier orders passed at the ad interim stage the appellant has not advanced any argument with regard to other reliefs claimed by it in the request for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January, 2002 agreement to acquire any further share apart from 155 million shares already transferred in favour of CPIL. It accepted such transfer in fulfilment of all shares obligations under January, 2002 agreement, except the right of first refusal, as aforesaid. This was controverted by the appellant by referring to the letter dated 17th October, 2004 written by GoWB to WBIDC wherein it was stated that GoWB stood committed to the transfer of shares to CPMC as already agreed vide agreement dated 12th January, 2002, 8th March, 2002 and 30th July, 2004. We are unable to accept such proposition. If one reads clause 1 and clause 2 of 30th July, 2004 agreement it is amply clear that CPMC had agreed not to acquire any further share under clause 5 of the January, 2002 agreement except the transfer of 155 million shares already made to CPIL. It only reserved its right of first refusal in respect WBIDC/GoWB chose to dispose of any further share of HPL and nothing more. The letter of 17th October, 2004 merely records the commitment of the government to act in terms of the aforesaid agreement. It does not create any independent right of transfer of shares save and except what appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the Company Petition was filled that a prayer had been made therein for a direction upon WBIDC and IOC to immediately register the transferred 155 million shares in the name of CP(I)PL. The said issue as to whether the Chatterjee Group had been unlawfully denied managerial control and/or majority holding in HPL, as promised, was adjudicated by the Apex Court on merits and it was held as follows: 101. From the facts as revealed, it is clear that when Dr. Purnendu Chatterjee expressed his interest in setting up of the Haldia Petrochemicals Ltd., various incentives had been offered to him by the GoWB and WBIDC to invest in the Company and to make it a successful commercial enterprises. Such investments were, however, contingent upon Dr. Chatterjee s bringing in sufficient equity to set up and run the Company. As would be seen, at the very initial stage all the understanding between Dr. Chatterjee and GoWB and WBIDC, both WBIDC and the Chatterjee Group were to hold 433 million shares each, while Tata was to hold 144 million shares. The promise extended by WBIDC and GoWB to the Chatterjee Group to provide at least 60% of the shares held by WBIDC at Rs. 14/- per share to the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had stood by its commitment to bring in equity and had subscribed to the Rights Issue, which was a decision taken by the Company to infuse equity in the running of the Company, it would neither have been reduced to a minority nor would it perhaps have been necessary to induct IOC as a portfolio investor with the possibility of the same being converted into a strategic investment The Apex Court had come to a finding on merits that the denial of managerial control and/or majority status to Chatterjee Group was due to its own fault in failing to bring equity into the company and/or subscribing to the rights issue of HPL. Such finding of the Court was arrived at the behest of Chatterjee Group who had invoked the jurisdiction of the CLB under Section 397, 398, 420 of the Companies Act to adjudicate the same. Prayers (IV), (V) and (VI) of RFA substantially involve the same issue as to the managerial control and majority shareholding in HPL. The Chatterjee Group had sought the same relief in the Company Petition, inter alia, on the ground that it had legitimate expectation of attaining the managerial control and majority status in HPL in terms of the various agreements including the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aud is maintainable notwithstanding rejection of application for review. In the instant case, the Supreme Court in Company Petition had denied the plea of the Chatterjee Group that they were wrongfully denied to majority status in managerial control in HPL, as promised not on the ground that such prayer was beyond the scope of the petitioner but on merits that the Chatterjee Group had failed to live up to its commitment. Similarly, in Transcore Vs. Union of India (2008) 1 SCC 125 the Supreme Court held that the statutory remedy under Section 13 of the SARFESI Act, 2002 cannot be said to be an alternative remedy for realization of debt undue of DRT Act. The Apex Court held that the remedies under the said Statutes constituted one remedy as a whole complementing one another and therefore the doctrine of election did not apply. On the other hand, remedy of arbitration and that before the CLB cannot be said to be complementary remedies constituting one remedy as a whole and one invoking arbitration on the issue of majority status and managerial control in HPL, after the Apex Court had returned a verdict on merits against the appellant on the self-same issue in the Company proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed, it would still be in a position to pass appropriate orders under Section 402 of the Act. That, however, is not the case in the instant appeals. The decision of the Apex Court cannot operate as a legal bar upon CPIL to seek appropriate relief in accordance with law for completion of the transfer of the said shares. With regard to the issue of limitation it has been argued in support of cross-objection that the claim is patently barred as the agreement was terminated on 20th September, 2005 and the Request for Arbitration has been made on 21st March, 2012. It has been argued that the period of limitation under Article 54 of the Limitation Act is three years from the date when the plaintiff had notice that the performance of the agreement has been refused. It has also been argued that Section 14 of the Limitation Act has no manner of application in the instant case as the relief was denied not due to the defect of the jurisdiction, but as the party failed to make a case on merit. Reference was made to Nakul Chandra Ghose and Ors. Vs. Shyamapada Ghose, AIR 1945 Cal 381. In rebuttal the learned senior Counsel for the appellant argued that the letter dated 28th September, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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