AJAY KIRTI KUMAR DALMIA Vs. COMPANY LAW BOARD

JUDGEMENT

(1.) IN these writ proceedings under Article 226 of the Constitution, directions are claimed for quashing of an order dated 15th June, 1998 in applications i. e. CA Nos. 29-31/1998, moved in Company Petition No. 55/1996. Those applications were moved before the Company Law Board (hereafter referred to as "clb") under Section 8 of the Arbitration and Conciliation Act, 1996 (hereafter "the Act" ).

(2.) THE petitioner alleges to have control over 40% of the share holding in respondent No. 26, through his holdings and those of respondent Nos. 27 to 34. It is claimed that another block of shares is held by second respondent, his family members and associates i. e. respondents 3 to 18. It is alleged that the parties had sometime in 1991 joined together with equal share holding in the respondent No. 26 Company. It is further averred that to resolve disputes, which had arisen sometime in 1995-96 between the two groups, an arbitration agreement had been entered into between both the parties. Apart from agreeing to refer disputes for settlement through arbitration, the parties further agreed that the respondent group would bid Rs. 78/- per share and that the said price was accepted by the petitioner group. According to the agreement, in the event of non-payment, the respondent group"s share holding was to be forfeited.

(3.) THE petition alleges that the respondent, disregarding the terms of the agreement, filed a suit before the Calcutta High Court being Suit No. 269/1996 in which the petitioners and respondents 26-34 (for the sake of convenience hereafter referred to as "the AKD Group") were impleaded as defendants. It is further alleged that on 19. 9. 1996, a single Judge of the Calcutta High Court directed that the shares, which had been by then referred for arbitration, belonging to the second respondent, ought to be deposited for safe custody with one Advocate receiver, Sh. Paresh Dev. The petitioner preferred an appeal against this order; on 1. 10. 1996, the Division Bench of the Calcutta High Court stayed operation of the order dated 19. 9. 1996, of the single Judge.