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Venture Global Engineering LLC Versus Tech Mahindra Ltd & Anr Etc.

2017 (11) TMI 777 - SUPREME COURT OF INDIA

Arbitral Award - VENTURE seeks to have the AWARD set aside - failure to make disclosure would render the AWARD liable to be set aside - Held that:- Hon'ble Mr. Justice J. Chelameswar and Hon'ble Mr. Justice Abhay Manohar Sapre pronounced separate and dissenting judgments of the Bench comprising His Lordship and Hon'ble Mr. Justice Abhay Manohar Sapre, in these petitions. - Leave granted in the SLPs. In terms of common signed reportable order, the Registry is directed to place the papers befo .....

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dv., Mr. V.K. Misra,Adv., Mr. Rajat Taimni,Adv., Mr. Naval Sharma,Adv., Mr. Saket Satapathy,Adv., Mrs. Shriye Luke,Adv., Mr. Devendra Singh, AOR, Mr. Abhijit Sinha,Adv., Mr. Abhinav Mukerji, AOR JUDGMENT Chelameswar, J. 1. Leave granted in both the SLPs. I had the advantage of reading the opinion of my learned brother Justice Sapre. While I agree with the conclusion recorded by him that the High Court erred in its conclusion on the question whether the proceedings initiated by VENTURE in OP No. .....

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r the AWARD) came to be passed in an arbitration between VENTURE and SATYAM. The relevant portion of the AWARD reads as under: A. I order VGE to deliver to Satyam share certificates in form suitable for immediate transfer to Satyam or its designee evidencing all of VGE s ownership interest legal and/or beneficial in SVES. I further order it to do all that may otherwise be necessary to effect the transfer of such ownership to Satyam or its designee. 4. The dispute leading to the Arbitration and t .....

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areholder. (b) Subject to clause (c) and (d) below, such Shareholder breaches this Agreement in any material respect and fails to cure such breach within thirty (30) days after being notified in writing by the other Shareholder of such breach. (c) A Shareholder Transfers, or attempts to Transfer, any Shares in violation of the transfer restrictions set forth in Article VII of this Agreement. (d) Such Shareholder is subject to Change in Control Section 8.02 Rights Upon Events of Default Generally .....

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ptions must be exercised by the Non-Defaulting Shareholder by written notice to the Defaulting Shareholder within thirty (30) days after becoming aware of the subject Event of Default. Section 8.03 Rights Upon Bankruptcy Event Upon the occurrence of a Bankruptcy Event with respect to any Shareholder (the Bankrupt Shareholder ), such shareholder shall give immediate written notice to the other Shareholder (the Solvent Shareholder ). The Solvent Shareholder shall have the option of (a) purchasing .....

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ot exclusive of any other rights or remedies available at law or in equity. 6. The arbitrator inter alia opined that an Event of Default on the part of VENTURE occurred and therefore, VENTURE (the defaulting shareholder) is liable to transfer its interest i.e. 50 per cent of the shares in the JVC to SATYAM (non-defaulting shareholder). 7. SATYAM filed a petition in the Eastern District Court of Michigan, US seeking enforcement of the AWARD against VENTURE. Admittedly, the petition was allowed on .....

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y registered (incorporated) in India, transfer of shares therein will have to be effected in accordance with the relevant procedure established by law of India i.e. the Companies Act and other related enactments which obligate VENTURE to perform certain acts. If VENTURE declines to perform its obligations, the directions contained in the judgment of the American Court will have to be executed in India in accordance with the procedure prescribed under the Code of Civil Procedure, 1908 for the enf .....

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BALCO s case Bharat Aluminium Company vs. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 (CB), Part I of the ACT is applicable to the AWARD since the AWARD is anterior to the date of the judgment of this Court in BALCO s case (6th September 2012). Para 197. … Thus, in order to do complete justice, we hereby order, that the law now declared by this Court shall apply prospectively, to all the arbitration agreements executed hereafter. Therefore, the AWARD would be enforceable a .....

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ving the AWARD set aside either under Section 34 of the ACT or any other procedure applicable under any other applicable law in any other appropriate jurisdiction available to VENTURE under the principles of international law. We are not informed of any such proceeding either subsisting or successfully pursued by VENTURE in any jurisdiction. On the other hand, VENTURE initiated proceedings on 13th April, 2006 before the District Court for the Northern District of Illinois Eastern Division, USA f .....

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he Award. 12. This Court had an occasion to examine the maintainability of the said suit in an appeal arising out of certain interlocutory proceedings (detailed in the judgment of my learned brother) in Venture Global Engineering v. Satyam Computer Services Ltd. & Another, (2008) 4 SCC 190 (hereinafter called VENTURE-I). In substance, this Court held (subject to certain qualifications) that VENTURE is not disentitled to challenge the AWARD in India. 13. Consequent upon the judgment in VENTUR .....

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YAM made a statement in writing (Letter addressed to the Board of Directors of SATYAM) wherein he made certain admissions to the effect that the balance sheets of SATYAM had been manipulated to inflate profits to the tune of ₹ 7080 crores. 15. VENTURE filed an application (IA No. 1331 of 2009 dated 12.06.2009 in O.P. No. 390 of 2008) under Order VIII Rule 9 of the CPC seeking permission to plead additional facts by amending the pleadings in O.P. No. 390 of 2008. VENTURE contended that the .....

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nterests of justice. The Trial Court, by an order dated the 3rd of November, 2009 allowed the application. 16. SATYAM challenged the order dated 3rd November, 2009 in a revision petition before the High Court. By an order dated the 19th of February, 2010, the High Court allowed the revision petition and dismissed Venture s application. The High Court held (in substance) that under Section 34 of the ACT, an application for setting aside of an Award could only be filed within 3 months (extendable .....

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the contention of the learned counsel for the respondent that the expression fraud in the making of the award has to be narrowly construed. This Court cannot do so primarily because fraud being of infinite variety may take many forms, and secondly, the expression the making of the award' will have to be read in conjunction with whether the award was induced or affected by fraud . 40. On such conjoint reading, this Court is unable to accept the contentions of the learned counsel for the resp .....

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s and obtained an award, cannot rely on facts which have surfaced subsequently even if those facts have a bearing on the facts constituting the award. Concealed facts in the very nature of things surface subsequently. Such a construction would defeat the principle of due process and would be opposed to the concept of public policy incorporated in the explanation. 18. Thereafter, OP No. 390 of 2008 was heard and allowed by the trial Court by its Order dated 31.01.2012. The AWARD was set aside. 19 .....

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ed as not maintainable as contended by the respondents? (3) Whether the instant proceeding is barred by the law of limitation and is liable to be dismissed on that ground? (4) Whether the Bankruptcy of petitioner s affiliates does not constitute a bankruptcy event as per the terms and conditions agreed to between the parties? (5) Whether the award in so far as the order of transfer of petitioner s shares to the 1st respondent at the book value is violation of Foreign Exchange Management Act and .....

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link, and, if so, whether the award is vitiated by fraud on the part of the 1st respondent in the facts and circumstances urged by the petitioner? And, if so, whether the award is liable to be set aside? 8. Whether the petitioner had made out valid and sufficient grounds to set aside the impugned award, and if so, the award is liable to be set aside? 9. To what relief? 20. After an elaborate discussion of the said points, the trial court concluded at para 12 of the judgment. Before the last poi .....

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number 3 it is held that the instant proceeding i.e. Original Petition is not barred by Law of Limitation. Under point number 4 answered against the Petitioner it is held that bankruptcy of Petitioner s affiliates had constituted a bankruptcy event as per the terms and conditions agreed to between the parties. However, it is to be noted that when this finding was recorded by the Arbitral Tribunal the additional pleas now urged by the Petitioner before this court were not available to the Petiti .....

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ial facts and fraud have come to light even that finding of the Arbitral Tribunal cannot be sustained for the reasons already assigned under point numbers 6 and 7. Under point number 5, the award in so far as it ordered transfer of petitioner s share to the 1st Respondent @ book value is in violation to FEMA and Public Policy of India. Under points numbers 6 and 7, it is held that the award which is affected and induced by fraud is vitiated and cannot be enforced being opposed to Public Policy o .....

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t book value is in conflict with the requirements of The Foreign Exchange Management Act, 1999 (hereafter referred to as FEMA ) and therefore violation of public policy (f) In view of the discussion coupled with reasons the point is answered in favour of the petitioner and against the Respondents holding that the award in so far as it ordered for transfer of petitioner s shares to the 1st Respondent at book value is a violation of Foreign Exchange Management Act and violation of public policy., .....

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fraud committed by the 1st Respondent which had come to light after the passing of the award by the learned Tribunal and, therefore, such acts of fraud have causative link, and hence, the award which is affected and inducted by fraud is vitiated and cannot be enforced being opposed to Public Policy of India and is liable to set aside on the grounds of material suppression of facts, fraud, incapacity of the Petitioner and violation of Public Policy of India). In the opinion of the trial court, th .....

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of issue estoppel gets attracted in the facts of the case? 3) Whether it is competent for a party to arbitration to invoke Part-I as well as Part-II of the Arbitration Act in relation to a foreign award? 4) Whether the ground of fraud raised by the appellant has been pleaded and proved as required in law, and whether the finding recorded by the trial Court on that aspect can be sustained? 5) Whether the award can be said to be opposed to public policy, on the ground that the transfer of money f .....

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y the trial court for arriving at the conclusion that the AWARD is required to be set-aside. 24. The High Court opined that the findings recorded by the trial court are unsustainable. The relevant portion of the judgment under appeal insofar as it pertains to point No. 4 reads: In every alternative sentence, the word fraud has been used and it was proceeded as though fraud was proved. It is important to mention that the trial Court did not record any finding to the effect that fraud has been pro .....

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as to fraud was proved. For all practical purposes, it has rendered the trial before the concerned Courts, nugatory. We are, therefore, of the clear view that the finding of the trial Court on the question of fraud does not accord with law. Coming to point No. 5, the High Court held: It is also important to mention that I.A. No. 1331 of 2009 did not contain any plea as to public policy. It was only in relation to alleged fraud. The observation of the trial Court is erroneous and contrary to rec .....

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, it can be said that, it is only when the award exhorts a party to the proceedings to take steps, that has the effect of contravening law of the land, in which it is to be enforced, that the ground can be invoked. There is not even a semblance of finding by the trial Court in this behalf. It is trite that every step for enforcing the award must be in accordance with the relevant provisions of law. Therefore, we answer this point in favour of the appellant. 25. The net result of the litigation i .....

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urt insofar as it held that the trial court had the jurisdiction to examine the legality of the AWARD. 28. The crux of the entire litigation is that VENTURE seeks to have the AWARD set aside. It must be remembered that SATYAM has not initiated any proceeding so far in India for the enforcement of the AWARD. 29. As rightly pointed out by my learned brother, though various submissions were made both before the trial court and the High Court, before this Court VENTURE confined its attack on the AWA .....

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o a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if a. the party making the application furnishes proof that i. a party was under some incapacity, or ii. the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or iii. the .....

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ed, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or v. the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or b. the Court finds that i. the subject-matter of the dispute is not c .....

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in conflict with the most basic notions of morality or justice. Explanation 2.- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. (2A) An Arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provi .....

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was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other act .....

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e referred to in sub-section (5) is served upon the other party., if an application praying for such a relief is filed in accordance with the procedure stipulated therein. Section 34(2)(b)(ii) stipulates that an award which is in conflict with public policy of India is liable to be set aside. In the Explanation to Section 34(2) it is declared that … an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud … 31. Though the t .....

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my opinion, are not very elegant and logical. Therefore, I propose to examine the correctness of the conclusions of the trial court on Points No.5, 6 & 7 framed by it. PUBLIC POLICY: 33. The trial court recorded that the AWARD is required to be set aside on the ground that the AWARD is opposed to the public policy of India. In the opinion of the trial court, the AWARD contained directions which are in conflict with the FEMA Act and Regulations made thereunder. The trial court considered thi .....

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1st Respondent to acquire the Petitioner s shares in Respondent No. 2 at book value being less than its fair value. Such a direction was in express violation of the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000, which require such transfers to take place at fair value... 34. The submission of VENTURE appears to be: (i) The AWARD insofar as it directed VENTURE to transfer its shares in the JVC to SATYAM at book value is in violat .....

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uded; Thus the award to the extent it directed the transfer of Petitioner s shares to the 1st Respondent at the rate of book value is violation of Foreign Exchange Management Act and consequently the public policy. ***** ***** ***** ***** ***** In view of the discussion coupled with reasons the point is answered in favour of the petitioner and against the Respondents holding that the award in so far as it ordered for transfer of petitioner s shares to the 1st Respondent at book value is a violat .....

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of VENTURE. 37. Assuming for the sake of argument that there is some stipulation in the abovementioned regulation which forbids the transfer of shares in question except for a fair value , there is no discussion in the judgment of the trial court as to; (i) what is meant by fair value of the shares under FEMA; (ii) how that fair value is to be determined; (iii) whether the fair value of shares is the same as market value of shares; (iv) what exactly is the fair value of the shares in question; .....

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he context for determining the controversy between the parties, case law is dumped upon and examined by the courts. The result is an exercise like the one undertaken by the trial court. I am of the opinion that the conclusion recorded by the trial court on Point No.5 is without any basis in facts and without even identifying the provision of law with which the AWARD is in conflict with. Hence, in my opinion, the conclusion in this point cannot be sustained. 39. In the process of such uncharted d .....

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fudging of the accounts of SATYAM would in any way provide a ground for VENTURE to seek setting aside of the AWARD? 41. The content of the letter (Extracted in extenso by my learned brother) dated 7th January 2009 of Ramalinga Raju, if true undoubtedly would have legal consequences both civil and criminal for SATYAM, Ramalinga Raju and some more persons who are responsible for the fudging of the accounts of SATYAM. Various civil and criminal proceedings were in fact initiated and some consequen .....

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able proportions as the size of company operations grew significantly (annualized revenue run rate of ₹ 11,276 crore in the September quarter, 2008 and official reserves of ₹ 8,392 crore). The differential in the real profits and the one reflected in the books was further accentuated by the fact that the company had to carry additional resources and assets to justify higher lever of operations - thereby significantly increasing the costs). Ramalinga Raju s statement is not very clear .....

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ATYAM and the non-disclosure of those facts by SATYAM before the arbitrator would amount either (i) to inducing the making of the AWARD by fraud; or (ii) the AWARD made in ignorance of those facts by virtue of non-disclosure of those facts by SATYAM would be an award affected by fraud , - would be the questions relevant for deciding whether the AWARD is required to be set aside. 43. The expression Fraud has no definition in law which has universal application. In KERR on the Law of Fraud and Mis .....

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ute fraud. Fraud is infinite in variety … Courts have always declined to define it, … reserving to themselves the liberty to deal with it under whatever form it may present itself. Fraud … may be said to include properly all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust or confidence, justly reposed, and are injurious to another, or by which an undue or unconscientious advantage is taken of another. All surprise, trick, cunning, d .....

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if the consent to an agreement is caused by fraud, such agreement though a contract, is voidable at the option of the party whose consent was so caused. Section 19 Voidability of agreements without free consent.-When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. A party to a contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that t .....

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ot true, by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact; (3) a promise made without any intention of performing it; (4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent.) 44. But the fact remains, such a definition is valid only in the context of contracts. In my opinion, the definition under Section 17 of the Contract Act may not be of any great assistance, .....

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on-disclosure of the facts relating to the true financial status of SATYAM actually is an inducement for making of the AWARD. On the other hand, the trial court relied upon the observations made by this Court in VENTURE-II (Venture Global Engineering v. Satyam Computer Services Limited & Another, (2010) 8 SCC 660), that concealment of relevant and material facts which should have been disclosed before the Arbitrator is an act of fraud to support the conclusion that the AWARD is required to b .....

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root of the matter and suggest that they do have a causative link affecting the award. In view of the detailed discussions coupled with the reasons, the points 6 and 7 are thus answered in favour of the Petitioner and against the Respondent 1 and 2 holding that the Award is vitiated by irregularities in the financial statements of 1st Respondent as set out in additional pleadings and that the Petitioner was under an incapacity on account of the acts of fraud committed by the 1st Respondent which .....

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t on record by VENTURE borne by the disclosure statement of Ramalinga Raju dated 7th January, 2009 and the subsequent developments thereafter (I shall refer to them collectively as CONCEALED FACTS for the sake of convenience) are material facts which ought to have been disclosed before the Arbitrator and the failure to make such a disclosure would render the AWARD liable to be set aside is wholly untenable. No reference is made to the pleadings of VENTURE as to how VENTURE believed that the CONC .....

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concealment of the material facts before the arbitrator is an act of fraud, there is no discussion as to how the CONCEALED FACTS are material facts whose concealment resulted in inducing the making of the AWARD by fraud or affected by fraud. 46. It must be remembered here that this Court in VENTURE-II categorically declared: 44. This Court also holds that the facts concealed must have a causative link. And if the concealed facts, disclosed after the passing of the award, have a causative link w .....

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cerned only with the question whether by allowing the amendment, as prayed for by the appellant, the Court will allow material facts to be brought on record in the pending setting-aside proceeding. Judging the case from this angle, this Court is of the opinion that in the interest of justice and considering the fairness of procedure, the Court should allow the appellant to bring those materials on record as those materials are not wholly irrelevant or they may have a bearing on the appellant' .....

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. But this Court did not make any declaration that such facts would constitute material facts rendering the AWARD liable to be set aside on the ground that the non-disclosure of those facts before the arbitrator would amount to fraud, inducing the making of the AWARD or that the AWARD is affected by the fraud. At the same time, this Court categorically declared in para 61 that nothing said in the judgment will be construed as even remotely expressing any opinion on the legality of the award. 47. .....

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IVIL APPEAL No. OF 2017 (ARISING OUT OF SLP (C) No. 8298/2014) 49. If this Court agrees with the conclusion of the High Court that the AWARD is not liable to be set aside, the appeal of SATYAM would become purely academic. Even otherwise, a reading of the Special Leave Petition discloses, all that SATYAM is seeking is to reagitate the question of the applicability of Part-I of the ACT to an international commercial arbitration. In other words, it is a challenge to the correctness of the decision .....

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on the file of the 1st Additional Chief Judge, City Civil Court, Secunderabad. 2. Leave granted. 3. O.S. No.87 of 2012 was filed praying that an Arbitral Award dated 03.04.2006 (hereinafter referred to as the Award ) be set aside in exercise of the power under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the AAC Act ). O.S. No. 87 of 2012 was transferred to the Court of Chief Judge, City Civil Court, Hyderabad and re-numbered as O.P. No. 390 of 2008. 4. B .....

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-Tech Mahindra (formerly known as Satyam Computer Services Private Ltd. is hereinafter referred to as Satyam and defendant No.2-Satyam Venture Engineering Services is hereinafter referred to as JVC . 8. Plaintiff-Venture in O.S. No.87 of 2012 is a Company incorporated under the US laws. It is one of a group of companies. 9. Satyam is an Indian Company registered under the Companies Act, 1956 with its office at Hyderabad engaged in the business of computer software. 10. On 20.10.1999, the Venture .....

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VI which provide that both Venture and Satyam would not compete in any manner in the business of JVC and also would not compete inter se in their respective business directly or indirectly so long as both of them hold shares in JVC and also within two years after they cease to hold the shares in the JVC. (ii) Section 8.01 of Article VIII defines the expression event of default . It then sets out four events of default in clauses (a) to (d). One such event specified in Clause (a) is - A bankrupt .....

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areholder of such breach. (c) A Shareholder Transfers, or attempts to Transfer, any Shares in violation of the transfer restrictions set forth in Article VII of this Agreement. (d) Such Shareholder is subject to a Change in Control. (iii) Section 8.02 provides the consequences of the occurrence of any event of default . It reads as under: Section 8.02 Rights Upon Events of Default Generally Upon the occurrence of an Event of Default (other than a Bankruptcy Event) with respect to any Shareholder .....

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within thirty (30) days after becoming aware of the subject Event of Default. (iv) Sections 8.03 and 8.04 stipulate the rights and obligations flowing from the occurrence of the event of default . One of them is that the non-defaulting shareholder shall have an option within 30 days after becoming aware of the occurrence of the event of default to either purchase the defaulting shareholder's shares at book value or cause the immediate dissolution and liquidation of the JVC Company following .....

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ssolution of liquidation of the company in accordance with Article IX. Either of such options must be exercised by the Solvent Shareholder by written notice to the Bankrupt Shareholder within one hundred Twenty (120) days of receipt of notice of the Bankruptcy Event from the Bankrupt shareholder. Section 8.04 Remedies Not Exclusive - The rights granted in this Article are not exclusive of any other rights or remedies available at law or in equity. (v) Article XI, Section 11.05 (a) prescribes the .....

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resolution in such manner as they deem necessary or appropriate. Compliance with this Section 11.5 (a) shall be a condition precedent to the commencement of any judicial or other legal proceeding. (vi) Section 11.05 (b) stipulates the governing law of the agreement; (b) This Agreement shall be construed in accordance with and governed by the laws of the State Michigan, United States, without regard to the conflicts of law rules of such jurisdiction. Disputes between the parties that cannot be r .....

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twithstanding anything to the contrary in this agreement, the Shareholders shall at all times act in accordance with the Company s Act and other applicable Acts/Rules being in force, in India, at any time. 13. Pursuant to the aforementioned Agreement, Satyam, Venture and JVC entered into another Agreement dated 11.02.2000, Agreement-II called Non-Compete Agreement. Clause 5 of the Agreement provides that the Agreement shall be governed by and construed according to laws of the State of Michigan .....

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s, without regard to conflicts of law rules of such jurisdiction. Disputes between the parties which cannot be resolved via negotiations shall be submitted for final, binding arbitration to the London Court of Arbitration. In addition, a party may seek injunctive relief in a court of competent jurisdiction, restraining a violation of this agreement. 14. In September 2000, Satyam entered into an Agreement with another American Company called- TRW Automotive to provide information technology to TR .....

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arbitration on 25.07.2005 against Venture. 17. On 10.09.2005 the LCIA appointed Mr. Paul B. Hanon as sole Arbitrator to decide the disputes. Both the parties entered appearance before the Arbitrator and filed their respective claims against each other. 18. The Arbitrator delivered his reasoned Award on 03.04.2006. He rejected the claims of Venture and allowed the claims of Satyam. 19. The Arbitrator held that an "event of default (bankruptcy)" on the part of Venture had occurred entitl .....

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eficial) in SVES (SVES = JVC). I further order it to do all that may otherwise be necessary to effect the transfer of such ownership to Satyam or its designee. B. Concurrently with the transfer of ownership described in Section 6.1A above, I order Satyam to pay VGE US$622,656, such sum being the net difference between the amount payable by Satyam to VGE for the book value of the share of SVES (plus interest) and the amount payable by VGE to Satyam for the disgorgement of royalties paid to VGE by .....

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t to compete with SVES or VGE with respect to engineering services to the automotive industry. 21. Aggrieved by the Award, Venture filed a complaint against Satyam on 13.04.2006 before the United States District Court for the Northern District of Illinois, Eastern Division (USA) seeking a declaration that the Award was not enforceable in US. By an Order dated 25.04.2006, the said complaint was dismissed as withdrawn. 22. On 14.04.2006, Satyam filed a petition against Venture in Eastern District .....

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bad seeking (i) a declaration that the Award is illegal and without jurisdiction, (ii) a decree for grant of permanent injunction restraining Satyam from enforcing the Award which, inter alia, directed Venture to sell their 50% shares of JVC to Satyam at book value. 25. In the said suit, on 15.06.2006, an ex parte injunction order was passed restraining Satyam from enforcing the Award insofar as it directed transfer of shares by Venture to Satyam. 26. Aggrieved by the order dated 15.06.2006, Sat .....

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was rejected. 29. Challenging the said order, Venture filed appeal before the High Court. The High Court dismissed the appeal on 27.02.2007. 30. Aggrieved by the said order, Venture moved this Court. This Court allowed the appeal by a reported judgment in Venture Global Engineering vs. Satyam Computer Services Ltd. & Anr., (2008) 4 SCC 190 (hereinafter referred to as Venture-I ). This Court, inter alia, held that: (i) Venture was entitled to challenge the Award in Indian Courts as the provi .....

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Para 39); (iv) That Satyam violated the terms of Agreement-I when they sought transfer of shares of Indian company in US Courts (Paras 40/44); (v) That the appropriate remedy for a person, aggrieved by the Award, lies in filing application under Section 34 of the AAC Act in Indian Courts rather than filing a civil suit; (vi) Conversion of the suit into proceedings under Section 34 of the AAC Act is permissible in law and such proceedings can be transferred to the Court of competent jurisdiction, .....

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on merits of the claim of both the parties. This Court further observed that the Trial Court was at liberty to transfer the case to the competent Court to decide the case (if found necessary) on merits and directed parties to maintain status quo with respect to transfer of shares. 32. On 17.01.2008, the Eastern District of Michigan Southern Division, US Court passed an order observing therein that Venture violated the order of US Courts which directed the enforcement of the Award and called upo .....

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Chief Judge, City Civil Court, Secunderabad transferred O.S. No.80 of 2006 to the Court of 2nd Additional Chief Judge, City Civil Court of Hyderabad. The suit was then converted into an application under Section 34 of the Act and was renumbered as O.P. No. 390/2008. 35. On 07.01.2009, B. Ramalinga Raju-Chairman and founder of the Satyam made a disclosure and confessed in writing that the balance sheets of Satyam had been manipulated inflating the profits to the tune of ₹ 7080 crores. M/s .....

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cie constituted a fraud and misrepresentation committed by Satyam on all the stakeholders including Venture and, therefore, the Award is liable to be set aside on this ground in addition to those already taken. The Trial Court, by order dated 03.11.2009, allowed the application. 37. Challenging the order, Satyam filed a revision before the High Court. By order dated 19.02.2010, the revision was allowed. The application (IA No.1331/2009) filed by Venture stood dismissed. The High Court held that .....

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d the appeal and restored the order of the Trial Court. This Court held that the facts, which are sought to be brought on record by the Venture, are relevant for deciding the rights of the parties to O.P. No. 390 of 2008. It was also held that those facts have causative link with the facts, which constituted the lis of the Award or induced the making of the Award and, therefore, relevant and material for deciding the legality of the Award. 39. In substance, this Court permitted Venture to challe .....

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ay be set aside as affected or induced by fraud. The question in this case is therefore one of relevance of the materials which the appellant wants to bring on record by way of amendment in its plea for setting aside the award. 45. Whether the award will be set aside or not is a different question and that has to be decided by the appropriate court. In this appeal, this Court is concerned only with the question whether by allowing the amendment, as prayed for by the appellant, the Court will all .....

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opinion on the legality of the award. That question will be decided by the court where the setting-aside proceeding is pending. The proceeding for setting aside the award may be disposed of as early as possible, preferably within 4 months. 41. On 28.12.2010, Venture filed a complaint (suit) in U.S. District Court of Easter District of Michigan against Satyam alleging, inter alia, that the Award is vitiated by the fraudulent conduct of the former Chairman of Satyam, who suppressed the material f .....

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10.04.2012, Venture filed an application in the complaint seeking permission to amend the complaint/suit. The U.S. Court, by order dated 23.08.2012, dismissed the application. On 21.09.2012, Venture filed an appeal to U.S. Court of appeal against the order dated 30.03.2012 rejecting their complaint/suit. Venture also filed an appeal on 12.12.2012 to U.S. Court of appeal against the order dated 23.03.2012 by which their amended application was rejected. 43. On 13.09.2012, U.S. Court of appeal fo .....

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admissibility of the documents filed by Venture. The Trial Court heard the application filed by Venture under Section 34 of the AAC Act and by its final order dated 31.01.2012 allowed the application and set aside the Award. The Trial Court held: (i) civil suit filed by Venture could be converted to be an application under Section 34 of the AAC Act and, accordingly, converted; (ii) the application filed by Venture under Section 34 of the AAC Act is within the period of limitation; (iii) the Cour .....

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raud and mis-representation played by Satyam on various stakeholders in Satyam including Venture; (vii) it has causative link with the facts which formed the basis of the Award. 45. It is, therefore, held that the Award is not sustainable in law. Sustaining such Award would be against public policy and the grounds mentioned above would cumulatively constitute ground for setting aside the Award under Section 34 of the AAC Act. 46. Aggrieved by the said order, Satyam carried the matter in appeal t .....

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rder restraining Satyam and JVC not to take any major decision in the affairs of JVC. 48. By orders dated 27.04.2012 and 04.06.2012, both the applications were disposed of by the 1st Additional Chief Judge directing the parties to maintain status quo in relation to the subject matter of both the I.As. 49. Satyam preferred two appeals against the said two orders - CMAs 834 and 844 of 2012. The three appeals were clubbed together. 50. By interim order dated 22.08.2012, the High Court directed all .....

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t Balco ), (2012) 9 SCC 552 for the reason that the agreements in question were executed between the parties prior to BALCO regime whereas the decision rendered in BALCO has a prospective effect; (ii) proceedings in question are governed by part I of the AAC Act; (iii) Civil suits/application under Section 34 of the AAC Act filed by Venture in Indian Courts are hit by the principle of "issue estoppel" and are thus not maintainable in law; (iv) Venture had no right to invoke both Part I .....

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be reopened in Indian Courts by taking recourse to the provisions of the AAC Act; and (viii) since both the parties to the suit/application did not agree to treat the documents filed by them as proved and no evidence was adduced to prove them in accordance with law although the application under Section 34 of the AAC Act is required to be decided like a suit, the Trial Court did not follow the stipulated procedure while deciding the application. 52. Aggrieved by the said judgment, both Venture .....

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nsel for Venture Global Engineering LLCappellant in SLP(C) Nos.29747-49 of 2013 and respondent in S.L.P.(C) No.8298 of 2014, Mr. K.V. Vishwanathan, learned senior counsel for Tech Mahindra Ltd.-respondent No.1 in SLP(C) Nos.29747-49 of 2013 and appellant No.1 in S.L.P.(C) No.8298 of 2014 and Mr. Iqbal Chagla, learned senior counsel for Satyam Venture Engineering Services-respondent No.2 in SLP(C) Nos.29747-49 of 2013 and appellant No.2 in S.L.P.(C) No.8298 of 2014 and also perused the written su .....

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t and set aside the award deserves to be restored. 57. While elaborating his arguments, learned senior counsel submitted that firstly, the Award impugned in Section 34 proceedings out of which these appeals arise is vitiated on account of fraud, misrepresentation and suppression of material facts played by Mr. Raju in the affairs of Satyam. According to learned counsel, a ground of fraud which stands made out in this case squarely falls under Section 34 of the AAC Act and, therefore, the Award i .....

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raudulent and illegal acts of Mr. Raju once surfaced in the public domain had a direct bearing over the issues involved in the arbitral proceedings because these acts relate to the period prior to commencement of arbitral proceedings and continued during the pendency of arbitral proceedings but without any knowledge to Venture and learned Arbitrator and hence the entire arbitral proceedings, which eventually culminated in passing of the impugned award in ignorance of these material major events .....

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sel, the arbitral proceedings would not have then resulted in passing of the Award in question in favour of Satyam, had these facts been taken into consideration? 61. In the third place, learned senior counsel submitted that if the fraud/manipulation/ misrepresentation/suppression of material facts had been disclosed to all the stakeholders including Venture when actually committed and, in all fairness, it ought to have been disclosed by Mr. Raju then it would have enabled Venture to terminate A .....

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ination of Agreement-I and for claiming reliefs against Satyam as per Agreement-I. 63. In the fifth place, learned senior counsel submitted that the confessional statement of Mr. Raju was a "notorious fact" and known to the whole world and especially known to those in market and, therefore, judicial notice of such fact could be taken by the Court for relying upon the letter including its contents against Satyam without any further evidence to prove it. 64. In the sixth place, learned s .....

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al facts etc., if resorted to while prosecuting the judicial proceedings for obtaining the order/judgment/award, the same would result in vitiating such judicial proceedings. 65. This legal principle, according to learned senior counsel, applies to the facts of this case with full force and, therefore, the fraud played, manipulation done and suppression of material facts made by Mr. Raju as its creator was rightly held proved by the Trial Court and was, therefore, rightly made basis to quash the .....

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ords, according to learned senior counsel, there was a causative link between the acts of Mr. Raju, which he did in the affairs of Satyam and the issues which were subject matter of arbitral proceedings. It is for this reason, learned counsel urged that the acts of Mr. Raju constituted an "event of default" under Section 8.01 read with Sections 8.01(b) and 11.05(c). Venture, according to him, was, therefore, deprived of exercising their right against Satyam to claim reliefs in terms of .....

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person who indulged in such acts was not eligible for being nominated in the Board of JVC. 70. In the ninth place, learned senior counsel submitted that the scope and width of Sections 8.01(b) and 11.05 (c) is wide enough to include the acts of Mr. Raju which he did in affairs of Satyam and his acts were sufficient for terminating the Agreement-I and seek appropriate relief as provided in the Agreement-I. 71. In the tenth place, learned senior counsel, placing reliance on the doctrine of " .....

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dispute. Learned counsel, therefore, urged that keeping in view these submissions, the Award is against the public policy of India as explained and clarified in Section 34(2)(b)(ii) Explanation I(i)(ii) and (iii) read with Explanation 2 of the AAC Act and hence it deserves to be set aside on this ground also. 73. It is essentially these submissions and some more which are dealt with infra were elaborated by the learned counsel with the aid of relevant sections of Agreement-I and II together wit .....

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rejection for want of any factual foundation. 75. Learned counsel further contended that firstly, the appellant s submissions are based on sheer hypothesis with no factual foundation and hence cannot be made basis to set aside the arbitral proceedings and Award. It was urged that otherwise also they are totally irrelevant and have no causative link in any manner with the arbitral proceedings and nor they have any kind of impact on the arbitral proceedings much less adverse and lastly, the acts o .....

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record of the case and the written submissions, I find force in the submissions urged by Mr. K.K. Venugopal, learned senior counsel for the appellant (Venture). 77. In substance, the questions, which arise for consideration in these appeals, are essentially three. In other words, the fate of these appeals largely depends upon the answers to the following questions as, in my view, these questions are interlinked together. 78. First, whether the acts of Mr. Raju in the affairs of Satyam, as admitt .....

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and, if so, whether such acts constitute an event of default under Section 8.01(b) read with Section 11.05(c) thereby entitling the Venture to terminate the Agreement I and claim relief as contemplated in Sections 8.03 and 8.04 against Satyam; and third, if the aforesaid questions are answered in affirmative then whether they constitute a ground to enable the Court to set aside the Award under Section 34 of AAC Act. 79. Before I examine the facts of this case to answer the aforementioned questio .....

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nt to deceive another party thereto or his agent, or to induce him to enter into the contract:- (1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact; (3) a promise made without any intention of performing it; (4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent. Explanation.-Mere silence as to facts likely t .....

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as under: Section 34. Application for setting aside arbitral award- (1)………………………………………………………… (2) An arbitral award may be set aside by the Court only if- (a)………………………………………………………… (b) the Co .....

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75 or Section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice. Explanation 2.-For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. 82. The expression "fraud", what it means and once proved to have been committed by the party to the Lis against his adversary th .....

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tation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by willfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. An act of fraud on court .....

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h the expressions "fraud , misrepresentation , suppression of material facts with reference to various English cases also need to be taken note of. This is what the learned author - Kerr in his book Fraud and Mistake has said on these expressions. 84. While dealing with the question as to what constitutes fraud, the learned author said, What amounts to fraud has been settled by the decision of House of Lords in Derry vs. Peek (f) where lord Herscheel said fraud is proved when it is shown th .....

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ties so as to mislead the Arbitrator or if either party be guilty of fraudulent concealment of matters which he ought to have declared, or if he willfully mislead or deceive the Arbitrator, such Award may be set aside. (See - Kerr on Fraud and Mistake - Seventh Edition - pages 424, 425) 86. The author said that, if a man makes a representation in point of fact, whether by suppressing the truth or suggesting what is false, however innocent his motive may have been, he is equally responsible in a .....

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Mistake - Seventh Edition, page 99). 88. The author said that this principle is also not limited to cases where an express and distinct representation by words has been made, but it applies equally to cases where a man by his silence causes another to believe in the existence of a certain state of things, or so conducts himself as to induce a reasonable man to take the representation to be true, and to believe that it was meant that he should act upon it, and the other accordingly acts upon it .....

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ud and Mistake-Seventh Edition, page 110). 90. So far as expression "public policy of India" in the context of arbitration cases is concerned, this Court examined the meaning, scope and ambit of this expression for the first time in the case of Renusagar Power Co. Ltd. vs. General Electric Co., 1994 Suppl(1) SCC 644 in the context of Foreign Awards (Recognition & Enforcement) Act, 1961. It was then examined in the case of Oil & Natural Gas Corporation Ltd. vs. Saw Pipes Ltd., ( .....

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ion in detail in the light of all previous decisions referred above on the subject. R.F. Nariman, J. speaking for the Bench held that the law laid down in the cases ONGC (I) and ONGC (II) has been consistently followed by this Court till date. His Lordship further clarified the meaning of expression- public policy of India and what it includes therein and held that violation of the provisions of Foreign Exchange Act, disregarding orders of superior Courts in India and their binding effect, if di .....

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wed. It was held that if the Award is against justice or morality, it is against public policy. It was held that if there is a patent illegality noticed in the Award, it is also against public policy. 92. Keeping in view the aforementioned broad principle of law in mind, I examine the questions in the light of undisputed facts of the case on hand and in the context of the submissions urged. 93. It is apposite to take note of some more relevant sections of Agreement-I in addition to those quoted .....

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ection 4.06-Financial, Accounting and Tax Matters, (8) Section 5.06- Capital, (9) Section 5.07-Relationship between the Shareholders and the Company, (10) Section 5.08- Power of Board of Directors, (11) Section 6.03- Ownership of Proprietary Information; Public Disclosures; Non-use of Proprietary and Confidential information, (12) Section 6.07- Representation and Warranties, (13) Definitions of expressions - (a) Affiliate, (b) Company s Act, and (c) Shareholder or Shareholders. 95. Reading of Ag .....

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Venture and its affiliates" on the other part. In other words, Agreement I and Agreement II were between the "Satyam" and "Venture" as also it included along with them their respective "affiliates" (See-Recitals in Agreement I-which read -"hereinafter together with all its affiliates, referred to as "Satyam" and "Venture ). (ii) Second, Satyam and Venture were the only two shareholders of JVC each holding 50% equity share capital of JVC. (ii .....

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the Indian laws in their respective business activities jointly and severally, namely, Satyam, Satyam s affiliates, Venture and Venture s affiliates. (iv) Fourth, Satyam to begin with was to provide all infrastructural facilities to JVC to enable it to start its new business in India. (v) Fifth, the Chairman of JVC was to be nominated by Satyam, who would have a right to preside over all Board of Directors meetings of JVC. (vi) Sixth, it was obligatory on JVC to maintain "true and correct&q .....

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nting, Networking facilities and legal advice to JVC. It is also not in dispute that Satyam and Venture, on 20.10.1999, had prepared a financial plan pursuant thereto each one had contributed $US 300.000 and $US 60.000 per month to cover short falls in Bank loan of JVC. (page 176 of SLP paper book). It is also not in dispute that in terms of the Agreements (Section 4.01/5.03), Mr. Raju was nominated as Chairman of JVC and he presided over all the Board of Directors meetings of JVC from 2000 onwa .....

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Venture I and II, permitted the Venture to raise the additional plea in Section 34 proceedings to challenge the arbitral proceedings including the Award on the basis of Mr. Raju's confessional statement made on 07.01.2009. It was held by this Court that such being a material fact which came into existence as a subsequent event had a direct bearing over the issues arising in the case, the legality and correctness of arbitral proceedings including the Award could, therefore, be tested in the l .....

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e parties. This is the reason, why the issues arising in this case are being decided in these proceedings. 100. The letter dated 07.01.2009 reads as under: To the Board of Directors Satyam Computer Services Ltd. From B. Ramalinga Raju Chairman, Satyam Computer Services Ltd. January 7, 2009 Dear Board Members, It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice: 1. The Balance Sheet carries as of Septembe .....

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of ₹ 649 crore (24% of revenues) as against the actual revenues of ₹ 2,112 crore and an actual operating margin of ₹ 61 crore (3% of revenues). This has resulted in artificial cash and bank balances going up by ₹ 583 crore in Q2 alone. The gap in the balance Sheet has arisen purely on account of inflated profits over a period of last several years (limited only to Satyam stand alone, books of subsidiaries reflecting true performance). What started as a marginal gap betwe .....

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ts to justify higher level of operations - thereby significantly increasing the costs. Every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was that poor performance would result in a take-over, thereby exposing the gap. It was like riding a tiger, not knowing how to get off without being eaten. The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. Maytas investors were convinced that this .....

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77; 1,230 crore was arranged to Satyam (not reflected in the books of Satyam) to keep the operations going by resorting to pledging all the promoter shares and raising funds from known sources by giving all kinds of assurances (Statement enclosed, only to the members of the board). Significant dividend payments, acquisitions, capital expenditure to provide for growth did not help matters. Every attempt was made to keep the wheel moving and to ensure prompt payment of salaries to the associates. .....

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anda, Virender Agarwal, A.S. Murthy, Hari T, SV Krishnan, Vijay Prasad, Manish Mehta, Murali V, Sriram Papani, Kiran Kavale, Joe Lagioia, Ravindra Penumetsa, Jayaraman and Prabhakar Gupta are unaware of the real situation as against the books of accounts. None of my or Managing Director s immediate or extended family members has any idea about these issues. Having put these facts before you, I leave it to the wisdom of the board to take the matters forward. However, I am also taking the liberty .....

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onal matters on hand. Ram can also act as an interim CEO reporting to the board. 2. Merrill Lynch can be entrusted with the task of quickly exploring some Merger opportunities. 3. You may have a restatement of accounts prepared by the auditors in light of the facts that I have placed before you. I have promoted and have been associated with Satyam for well over twenty years now. I have seen it grow from few people to 53,000 people, with 185 Fortune 500 companies as customers and operations in 66 .....

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pe that members of the Task Force and the financial advisor, Merrill Lynch (now Bank of America) will stand by the company at this crucial hour, I am marking copies of this statement to them as well. Under the circumstances, I am tendering my resignation as the chairman of Satyam and shall continue in this position only till such time the current board is expanded. My continuance is just to ensure enhancement of the board over the next several days or as early as possible. I am now prepared to s .....

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at any point of time retracted from his confessional statement made therein or denied having written such letter. 102. In my opinion, therefore, the letter in question was rightly received in evidence without requiring any further formal proof to corroborate its existence and contents. That apart, it being a "notorious fact being in the knowledge of the whole World and especially those in the trade, the Courts could take judicial notice of such evidence as held by this Court in the case of .....

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of the Evidence Act provides that no fact of which the Court will take judicial notice need be proved. Section 57 enumerates facts of which the Court shall take judicial notice and states that on all matters of public history, literature, science or art the Court may resort for its aid to appropriate books or documents of reference. The list of facts mentioned in Section 57 of which the Court can take judicial notice is not exhaustive and indeed the purpose of the section is to provide that the .....

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odes, Vol. II, p. 887.) Shutting the judicial eye to the existence of such facts and matters is in a sense an insult to commonsense and would tend to reduce the judicial process to a meaningless and wasteful ritual. No court therefore insists on formal proof, by evidence, of notorious facts of history, past or present. The date of poll, the passing away of a man of eminence and events that have rocked the nation need no proof and are judicially noticed. Judicial notice, in such matters, takes th .....

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07.01.2006 of Mr. Raju did not require any more formal proof. 104. On reading its contents, I am of the view that the acts of Mr. Raju, in the affairs of Satyam, were essentially in the nature of manipulating and fabricating the accounts books/balance-sheets of Satyam. These acts were done by Mr. Raju without knowledge to all the stakeholders of Satyam including Venture. These acts were detrimental to the interest of all the stakeholders who were/are directly and indirectly dealing and involved .....

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9 of the Companies Act deals with Books of Account of the Company. Sub-section (3) thereof casts an obligation on the Company to keep "proper books of account" as are necessary to give a true and fair view of the state of affairs of the Company or its Branch office and explain its transactions. 108. Similarly, Section 211 of the Act deals with form and contents of balance-sheet and profit and loss account of the Company . This Section again casts an obligation on every Company that it .....

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red opinion that the acts of Mr. Raju, in the affairs of Satyam, were prima facie in breach of Sections 209 and 211 of 1956 Act and other Acts. It had adverse impact on the affairs of Satyam, its affiliates and on those who were dealing with Satyam at the relevant time. 110. These acts also constituted the acts of misrepresentation and suppression of material facts on the part of Mr. Raju which he himself candidly confessed to have done it by expressing his regrets only in his letter dated 07.01 .....

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n 8.01(b) and Section 11.05(c) of Agreement-I for the following reasons: 113. First, the acts satisfy the requirements of Section 8.01(b) read with Section 11.05 (c) of Agreement-I. 114. Second, Section 11.05(c) which gives overriding effect on all Sections of Agreement I casts an obligation on Shareholders to ensure compliance of all laws of India. The expressions Shareholder and Shareholders include Venture , Satyam , their affiliates and assigns. 115. A fortorari, non-compliance of any provis .....

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the affairs of JVC would defeat the very purpose of Joint Venture Agreement. It would also not be the true interpretation of Section 11.05(c) and nor was it intended by the parties. 117. In this view of the matter, in my view, breach on the part of Satyam, who was 50% shareholder of JVC, was clearly made out under Agreement-I thereby entitling Venture to take recourse to the remedies provided in Sections 8.03 and 8.04 against Satyam on happening of such events. 118. Fourth, the acts of Mr. Raju, .....

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o party to the Agreements with Venture and their affiliates; third, the entire capital including providing of the loan facilities to JVC were to be funded by Satyam and Venture as per Agreement dated 20.10.1999 whereas operative infrastructure was to be provided by Satyam; fourth, Mr. Raju was the Chairman of Satyam and JVC and, as such being in dual capacity, was in a position to control the affairs of both the Companies, i.e., Satyam and JVC; fifth and the most pertinently, the affairs of Saty .....

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deration these admitted facts including the findings of this Court rendered earlier in Venture-I and II, I am clearly of the view that there existed causative link inter se these companies. To hold otherwise would be nullifying the findings of this Court recorded earlier in Venture-I and II. 121. In the light of aforesaid reasons, any major event occurring in the affairs of Satyam could be made basis for determining the rights of the parties arising out Agreement I. 122. A fortiori, the acts of .....

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te reliefs against Satyam because, as held above, Satyam breach was prior in point of time. 123. In my opinion, Venture was, therefore, deprived of their legal and contractual rights to exercise against Satyam but for no fault of theirs. Venture also lost their right to defend Satyam s claim before the Arbitrator on these grounds, which were deliberately suppressed by Satyam from Venture. 124. Sixth, it is a well settled principle of law that commission of fraud, misrepresentation, suppression o .....

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to Award dated 03.04.2006 and thus renders both void ab initio. I accordingly hold so. 125. Seventh, the Award dated 03.04.2006 is also against the public policy of India in the light of law laid down by this Court in the case of Associate builder s case quoted supra, It is, therefore, liable to be set aside for the reasons that it is proved that the Award was obtained by Satyam against Venture by misrepresentation and suppression of material facts having bearing over the proceedings; second, t .....

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It also deprived Venture from exercising their contractual right for want of knowledge of these acts of Mr. Raju against Satyam at appropriate stage in court of law in terms of agreement. All this occurred obviously due to Satyam concealing these major events at all relevant time from Venture. 126. As taken note of above, once the fraud, misrepresentation or suppression of fact, if found to have been done by the party in any judicial proceedings is later discovered or disclosed then it would re .....

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ue as to whether any ground specified in Section 34 of AAC Act is made out or not. Once the ground under Section 34 of the AAC Act is made out, the Award then has to be set aside. In the case on hand, in my view, a ground under Section 34(2)(b)(ii) read with Explanation I (i)(ii) and (iii) is made out. I accordingly hold so. 128. In the light of foregoing discussion, I am of the opinion that the arbitral proceedings including the Award in question was passed in violation of public policy of Indi .....

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had the occasion to consider the question of applicability of principle of "issue-estoppel" to judicial proceedings. Their Lordships speaking through A. Alagiriswami, J. examined the facts of that case in the light of law laid down in several English and Indian cases and held that principle of "issue-estoppel" applies to criminal proceedings only and not to any other proceedings. This is what His Lordship held in para 4 and in concluding para: 4. But that apart, this matter c .....

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rs (Internment) Order for the purpose of deporting the petitioner out of India. It is not a criminal prosecution. The principle of issue-estoppel is simply this: that where an issue of fact has been tried by a competent court on a former occasion and a finding has been reached in favour of an accused, such a finding would constitute an estoppel or res judicata against the prosecution not as a bar to the trial and conviction of the accused for a different or distinct offence but as precluding the .....

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that the person acquitted cannot be tried again for the same offence. To that it must be added that the verdict is binding and conclusive in all subsequent proceedings between the parties to the adjudication. It should be kept clearly in mind that the proceeding referred to herein is a criminal prosecution. The plea of issue-estoppel is not the same as the plea of double jeopardy or autrefois acquit. In King v. Wilkes, 77 CLR 511, Dixon, J., referring to the question of issue-estoppel said: ...i .....

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r. The allegation of the Crown in the subsequent proceeding must itself be inconsistent with the acquittal of the prisoner in the previous proceeding. But if such a condition of affairs arises I see no reason why the ordinary rules of issue-estoppel should not apply.... Issue-estoppel is concerned with the judicial establishment of a proposition of law or fact between parties. It depends upon wellknown doctrines which control the relitigation of issues which are settled by prior litigation. The .....

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t is enough that an issue or issues have been distinctly raised or found. Once that is done, then, so long as the finding stands, if there be any subsequent litigation between the same parties, no allegations legally inconsistent with the finding, may be made by one of them against the other. Here again it is to be remembered that the principle applies to two criminal proceedings and the proceeding with which we are now concerned is not a criminal proceeding. We therefore hold that there is no s .....

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C Act. 132. In other words, the application filed by the appellant under Section 34 of the AAC Act could not be dismissed by applying the principle of "issueestoppel", which in the light of law laid down in the case of Masud Khan (supra) had no application to the civil proceedings. 133. Mr. Chagla and Mr. Vishwanathan, learned senior counsel for the respondents, apart from supporting the impugned judgment of the High Court made various submissions on the merits of the case as taken not .....

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quietus in third round of litigation in this Court and which I hereby give to the case. Moreover, when the grounds urged by the appellant (Venture) to attack the Award are made out on merits in these proceedings and which were also dealt with by the two Courts below then I do not find any justification to again send the case back to the Trial Court to decide the case on merits on some other ground. It is more so when such prayer was not made in the Courts below. 136. That apart, there is enough .....

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discussion, I do not consider it necessary to deal with any other grounds. 138. Learned counsel for the appellant cited several decisions in support of his submission. These decisions are: 2008(4) SCC 190, 2010(8) SCC 660, 2015(10) SCC 213, 2016(2) Scale 60, 2003(5) SCC 705, 1997(3) SCC 540, 1993(2) SCC 507,1996(4) SCC 622, 1972 Appeal Cases 153, 2015(4) SCC 609, 1995(2) SCC 513, 2010(8) SCC 665, 1994(1) SCC 1, 2000(3) SCC 581, 1964(4) SCR 19, 1974(1) SCC 242, 2003(8) SCC 673, 1955(2) SCR 271, .....

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7) SCC 1, 1977(2) SCC 611, 1977(8) SCC 683, 2003(11) SCC 405, 1996(6) SCC 665, 2005(4) SCC 530, 2006(6) SCC 94, 2009(17) SCC 796, 1951 SCR 548, 1998(4) SCC 577 and 1996(5) SCC 550. 140. I have carefully gone through these decisions cited at the bar by both the learned counsel appearing for the parties. In my view, there can be no quarrel to the legal principles laid down in these cases as they are laid down in the light of facts involved in them. However, in the light of what I have held supra, .....

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