REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
ARBITRATION PETITION NO.14 OF 2008
Vanna Claire Kaura ....Applicant
Through Constituted Attorney
Mrs. Indeera Bawa
Versus
Gauri Anil Indulkar & Others .....Respondents
JUDGMENT
Dalveer Bhandari, J.
1. This application has been filed by the applicant under
section 11(5) read with section 11(9) and section 11(12) of the
Arbitration and Conciliation Act, 1996 for appointment of an
arbitrator for adjudicating and deciding the disputes which
have arisen between the applicant and the respondents in
respect of the implementation and working of agreements
entered into between the applicant and the respondent no.3
on the one hand and respondent nos.1 and 2 on the other
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hand on 29.1.2005 and the supplementary agreement between
the same parties on 2.2.2005.
2. The applicant is a citizen of the United States of America
and is a person of Indian origin.
3. Respondent no.3, Dr. Vinod Kaura is the husband of the
applicant, Vanna Claire Kaura.
4. Respondent no.2, Anil Indulkar was doing business in
Pharmaceuticals in USA and respondent no.1, Gauri Anil
Indulkar is his wife. Respondent no.2 came in contact with the
applicant and he represented to the applicant and respondent
no.3 that there was a good prospect of business for water and
amusement park in India and that if the applicant and
respondent no.3 invested in India, the applicant and
respondent no.3 would get good returns on their investments.
Consequently, the applicant and respondent no.3 remitted
$6,40,000 (US Dollars) to respondent nos.1 and 2. A
memorandum of understanding dated 7.6.2000 was entered
into between the applicant and respondent no.3 on the one
hand and respondent nos.1 and 2 on the other. On the basis
of the capital so provided by the applicant and respondent
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no.3, respondent nos.1 and 2 formed a company called, M/s
Splash Mountain Water Park Pvt. Ltd. with its registered office
at Pune, Maharashtra. According to the applicant, it was
agreed that 1,67,000 equity shares of Rs.100/- each in the
said company shall be allotted as fully paid-up shares to the
applicant and respondent no.3 by way of 40% equity shares to
be allotted to the applicant as per the earlier understanding.
It was also agreed that respondent nos.2 and 3 shall hold the
remaining 2,50,400 equity shares of Rs.100/- each
representing their 60% shares holdings in the company.
5. According to the applicant, it was agreed by an
agreement dated 29.1.2005 that respondent no.1 who owned
25 acres of land in Pune should transfer 10 acres out of the
said land along the eastern boarder thereof to the applicant in
lieu of the 40% contribution made by the applicant towards
the initial capital. There is a clause of arbitration in the said
agreement. In the supplementary agreement entered on
2.2.2005 a small modification was made that inasmuch as
respondent no.1 undertook to transfer and convey the entire
25 acres of land owned by her to the applicant instead of the
earlier agreed extent of 10 acres of land. Accordingly,
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respondent no.1 did not transfer the land, as agreed. It is
alleged that respondent nos.1 and 2 called a Board meeting of
the company hurriedly to ensure that the applicant and
respondent no.3 could not know about the meeting and there
was no possibility of their participation in the said meeting. In
the said meeting, respondent nos.1 and 2 maneuvered to get a
resolution passed to wind up the Water Park business of the
company and transferred the said business to another
company owned by the close relatives of respondent nos.1 and
2. The land on which the business of the company was being
run was also handed over to the said company owned by the
close relatives of respondent nos.1 and 2.
6. In these circumstances, the applicant had sent a legal
notice on 14.3.2006 to respondent nos.1 and 2 appointing one
Vilol Khaladkar as an arbitrator and also called upon
respondent nos.1 and 2 to appoint their arbitrator. Since
respondent nos.1 and 2 did not take any steps to appoint their
arbitrator, the applicant filed an arbitration petition in the
High Court of Bombay under section 11 of the Act. The
applicant submitted that the said arbitration petition filed by
the applicant in the High Court of Bombay was not
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maintainable for the reason that the agreement dated
29.1.2005 and the supplementary agreement dated 2.2.2005
are in the nature of international commercial arbitration
agreement as defined under the Act and, therefore, an
application for appointment of an arbitrator under section
11(5) read with section 11(9) and section 11(12) of the Act
would only lie before the Chief Justice of India.
7. Accordingly, the applicant withdrew the application filed
at the Bombay High Court. The applicant submits that the
following disputes have arisen between applicant and
respondent nos.1 and 2 and the same are required to be
referred to an Arbitrator and the Arbitrator is to be appointed
for the purpose of adjudicating and deciding the following
disputes:-
“a) Transfer & conveyance of 25 acres of land, as
mentioned in agreement dated 29.1.2005 and
dated 2.2.2005, standing in the name of Guari
Indulkar to the claimant Ms. Vanna Claire
Kaura and her husband Dr. Vinod Kaura.
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b) Being shareholders of 1,67,000 number of
equity shares of Rs.100/- each of Splash
Water Mountain Park Pvt.Ltd. in the name of
Vanna Clair Kaura and same number of equity
shares of Rs.100/- each in the name of Dr.
Vinod Kaura in terms of agreement dated
29.1.2005, action of Gauri Indulkar and Anil
Indulkar to hand over the leased land to
Lessor was illegal and consequently due to
illegal closure of business of Splash Water
Park Mountain Pvt. Ltd. they are liable to
compensate Vanna Clair Kaura for loss of
business and loss of profits approximately to
the tune of Rs.20,00,000/- (Rupees twenty
lacs) per month from September 2005, the
date of Resolution passed in the absence of
Vanna Clair Kaura and Dr. Vinod Kaura and
without giving them sufficient time to respond
and thereby illegally closing the business of
Splash Water Park Mountain Pvt.Ltd.
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c) A sum of Rs.7,00,000/- per month to be paid
to Vanna Clair Kaura by Gauri Indulkar and
Anil Indulkar in terms of compensation as
stipulated in clause 5 of supplementary
agreement dated 2.2.2005 from the date of
repayment of loans and payment of lease rent;
d) A sum of Rs.10,00,000/- towards
reimbursement of expenditure incurred on
travel and board, lodging etc., by the Vanna
Clair Kaura;
e) Vanna Clair Kaura to be compensated by way
of payment of damages by Gauri Indulkar and
Anil Indulkar due to non-performance of their
respective parts as stipulated in the
agreements dated 29.1.2005 and 2.2.2005;
f) Present, pendent lite and future interest @
24% on the amounts found due and payable to
Vanna Clair Kaura.”
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8. The applicant prays that an independent arbitrator be
appointed for adjudicating and deciding the disputes having
arisen between the parties out of the agreement dated
29.1.2005 and the supplementary agreement dated 2.2.2005
entered into for and between the parties.
9. In pursuance to the notice issued by this court, reply on
affidavit has been filed on behalf of respondent nos.1 and 2. In
the reply affidavit, a number of preliminary objections have
been taken. Respondent no.1 submitted that the application
filed by the applicant is not maintainable and is liable to be
dismissed because there is no live dispute pending between
the parties. It is also submitted by respondent no.1 that the
applicant has suppressed facts from this court and has been
indulging in forum shopping and the present application is
liable to be dismissed on this ground alone.
10. It is further mentioned in the reply that the applicant has
abandoned the arbitration clause. It is further mentioned that
the MOU dated 7.6.2000 and subsequent agreement dated
29.1.2005 and the supplementary agreement dated 2.2.2005
were entered into by respondent nos.1 and 2 due to coercion,
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threat and harassment on the part of the applicant and
respondent no.3.
11. The company by the name, Splash Mountain Water Park
Pvt. Ltd. came into existence on or about 3.7.1997. By Board
Resolution dated 24.6.2005, wherein the applicant herself was
present, the applicant proposed the closure of the Water Park
business of the company since the same was suffering losses.
She further stated that she and respondent no.3 would not
invest any further funds to keep the business going. As such,
by way of board resolution dated 24.6.2005, the proposal of
the applicant was discussed and thereafter it was
unanimously resolved that the activity of the Water Park
should be closed as of 30th June, 2005.
12. In the reply, respondent no.1 has mentioned that the
applicant is indulging in forum shopping and has filed multi-
pronged litigation before various forums including the Bombay
High Court, Civil Judge, Pune, Principal Bench of Company
Law Board and this court as well as the criminal proceedings
before the Judicial Magistrate, First Class.
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13. It is also mentioned that the applicant has invoked
arbitration by notice dated 14.3.2006 and the present
application is not based on the said invocation and the
applicant subsequently entered into arbitration on second
time on the same cause of action and as such the present
application is barred. It is also submitted that the applicant
having invoked arbitration by notice dated 14.3.2006 and
thereafter abandoning the same cannot seek arbitration for
the second time for the same cause of action. Respondent
no.1 also submitted that the present application is a clear
abuse of the process of law and is liable to be dismissed.
14. I have heard the learned counsel for the parties and
carefully perused the MOU dated 7.6.2000 and agreement
dated 29.1.2005 and the supplementary agreement dated
2.2.2005.
15. In my considered view, the dispute has arisen between
the parties and it needs to be adjudicated and decided by an
Arbitrator. Consequently, I request Hon’ble Mr. Justice S.N.
Variava, a former Judge of this court to accept this Arbitration
and adjudicate and decide the dispute which has arisen
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between the parties. The learned Arbitrator would be free to
decide about his fee.
16. This arbitration petition is accordingly disposed of with
the direction to the parties to appear before Hon’ble Mr.
Justice S.N. Variava, a former Judge of this court at 11 a.m.
on 27th July, 2009 at Mumbai.
17. The Registry is directed to immediately communicate this
order to the learned arbitrator to enable him to decide the
arbitration matter as expeditiously as practicable.
18. Consequently, this arbitration petition is allowed and
disposed of. In the peculiar facts and circumstances of this
case, I direct the parties to bear their own costs.
……………………………J.
(Dalveer Bhandari)
New Delhi;
July 22, 2009.