JUDGMENT
Lokeshwar Prasad, J.
(1) The petitioner, named above, has filed the present petition under Section 9 of the Arbitration And Conciliation Ordinance, 1996 (hereinafter referred to as `the Ordinance’ ). The facts relevant for the disposal of the above mentioned petition, briefly stated are, that the petitioner who is a retired Colonel from the Army is in the aviation business and that in July, 1994 he was approached by the respondent with certain business proposals. It is alleged that though the business proposals did not materialise but the petitioner and the respondent developed a relationship and the petitioner starting trusting the respondent implicitly. The respondent, it is averred, represented to the petitioner that he was running a big airlines company by name `United India Airways’ and requested the petitioner to be a part of the company and guide and control the business as he needed experienced and financially sound persons for expanding the business. It is averred that the petitioner and the respondent signed a `Promoters Agreement’ which was executed on 7th September, 1994.
(1A) It is further alleged that pursuant to the said agreement the petitioner applied for 2,00,100 shares of the above said company, the payment of which was duly acknowledged by the company vide receipts dated 14.11.1994, 31.3.95, 3.4.95 and 15.3.95. The petitioner was appointed Director of the company on 5.12.1994 and thereafter the Chairman. It is alleged that the shares applied for the payment of which was duly acknowledged by the company, were not issued to the petitioner despite repeated requests. It is further alleged that though the petitioner never submitted his resignation but he came to know from the annual return of the said company that he caused to be the Director of the above company on 25.5.1995. It is the case of the petitioner that the above said company is liable to issue 2,00,100 shares to the petitioner, the subscription amount in respect of which has been fully received by the Company.
(1B) It is also averred that the petitioner has filed a suit for declaration and injunction seeking the following reliefs :-
(A)pass a decree for declaration that the plaintiff is a shareholder of 2,00,100 shares of the Company;
(B)Pass a decree for declaration that the plaintiff is entitled to hold 50% of the shares of defendant No.1 Company;
(C)Restrain defendants No. 1 & 2, their servants, representatives, heirs and assigns from allotting shares worth Rs.21 lacs which were subscribed to by the plaintiff to any other person;
(D)Restrain defendants Nos. 1 & 2, their servants, representatives, heirs and assigns from increasing the shares capital of defendant No.1 Company;
(E)Pass interim orders in terms of prayers (c) and (d) above.
(F)Pass any other or further orders as may be deemed fit & proper in the facts & circumstances of the case.
(1C) Vide order dated 9th May, 1996, on an application (IA No.4277/96) filed alongwith the above mentioned suit under Order 39 rule 1 and 2 read with Section 151 Civil Procedure Code brother N.G.Nandi, J. has restrained the above said company (defendant No.1 in the suit), from allotting shares worth Rs. 21 lacs which were subscribed to by the petitioner to any other person. It is alleged that no order was passed against the respondent due to the existence of an arbitration clause in the Promoters Agreement.
(1D) The petitioner in the present petition has made the following prayer :-
(I)that the respondent, his servants, heirs, representatives and assigns be restrained from increasing the share capital of the company, United India Airways Ltd,;
(II)that the respondent, his servants, heirs, representatives and assigns be restrained from allotting shares worth Rs. 21 lacs which were subscribed to by the petitioner to any other person; and
(III)that any other or further orders as may be deemed fit and proper in the facts and circumstances of the case be passed.
(2) The respondent to whom notice of the petition was given has filed a detailed reply duly supported by an affidavit of the respondent. In the reply, the respondent has taken a number of preliminary objections and on merits it has been stated that receipts and the agreement in question are forged documents and that the petition be dismissed with exemplary costs as envisaged under Section 35A of the Code of Civil Procedure.
(3) I have heard the learned counsel for the parties at length and have also carefully gone through the documents/material on record. The relief prayed for by the petitioner in the present petition cannot be granted due to the following reasons :-
(A)Before filing the present petition on 18th May, 1996 the petitioner on 8th May, 1996 filed a Civil Suit (S. No. 1120/96) for declaration and injunction on the basis of the same documents i.e. receipts dated the 14th November, 1994, 31st March, 1995, 3rd April, 1995 and 15th March, 1995 (annexed with the petition and marked as annexure C-colly) and the Promoters Agreement (copy annexed and marked as annexure B) inter alia with the same relief. In the above suit the above said Company was arrayed as defendant No.1 and the respondent in the present petition was arrayed as defendant No.2.
ALONGWITH the above suit, the petitioner filed two applications (IA No. 4277/96 and Ia 4278/96) both under Order 39 rule 1 and 2 read with Section 151 CPC. In Ia No: 4277/96, the petitioner made the prayer that defendants No.1 and 2 respondent in the present petition), their servants, representatives, heirs and assigns be restrained from allotting shares worth Rs. 21 lacs which were subscribed to by the petitioner to any other person. In the other Ia, bearing No. 4278/96 it was prayed by the plaintiff (petitioner in the present petition) that the defendants No.1 and 2 (respondent in the present petition) their servants, representatives, heirs and assigns be restrained from increasing the shares capital of defendant No.1 company. Thus, for all intent and purposes the prayer made by the petitioner in the present petition is, identical to the prayer made by him in the above mentioned two interlocutory applications filed by him in the above mentioned suit.
BOTH the above mentioned applications came up for hearing before brother N.G.Nandi, J. and an ex-parte injunction restraining defendant No.1 in terms of prayer clause(a) of Ia No. 4277/96 was granted against defendant No.1 only so as to protect the interest of the petitioner. However, no ex-parte order was passed in the second interlocutory application bearing Ia No. 4278/96 and it was directed that notice be issued to the defendants in respect of the above mentioned application for 11th July, 1996.
THE position which emerges out as a result of the narration of the above facts is that on the basis of the same facts, same documents the petitioner against the respondent and the above said company (United India Airways Ltd.) had earlier filed a suit with two interlocutory applications praying for the same relief which did not find favour with the brother N.G.Nandi, J.
(B)As already stated the present petition is under Section 9 of the Ordinance which deals with interim measures etc. by the court. The petitioner seeks interim directions without seeking any substantial relief such as appointment of arbitrator, reference of dispute to the arbitrator etc. under the above said Ordinance. In my opinion in the absence of any prayer for substantive relief the prayer for issuing any directions by way of interim measure cannot be entertained.
(C)In my opinion the contention of the petitioner that in the earlier suit (suit No.1120/96), filed by the petitioner no order was passed against the respondent due to the existence of an arbitration clause in the Promoters Agreement is also without substance because on record there is no material to substantiate the same either in the pleadings or in the order dated 9th May, 1996 passed by brother Nandi, J. in the above suit.
(D)Legally speaking the first relief sought by the petitioner whereby the petitioner has prayed for restraining the respondent from increasing the share capital of the company cannot be granted in the present proceedings. The respondent as per the contents of the Promoters Agreement (Annexure B) is a mere share holder of the company and as such has no right by himself to raise the share capital and to take a decision by himself regarding the increase or reduction in the share capital of the company (United India Airways Ltd.) which aspect is governed by a separate statutory provision of the Company’s Act, 1956 and the rules framed there under. Moreover the above said Company is not a party either to present proceedings or to the alleged Promoters Agreement.
(E)In the petition it has not been specifically stated as to which are the disputes between the parties which are referable to arbitration in terms of the provisions contained in clause(8) of the Promoters Agreement (Annexure B) read with the provisions of the Ordinance.
(4) In view of the above discussion, in my opinion, no relief in the present petition can be given to the petitioner. The petition is liable to be dismissed. Accordingly the same is dismissed. In the facts and circumstances of the case no order as to costs.