NATIONAL AGRICULTURAL CO-OPERATIVE MARKETING FEDERATION OF INDIA LTD. (NAFED) Vs. EARTHTECH ENTERPRISES LTD. AND ANR.

JUDGEMENT

(1.) IA No. 9245/2008

(2.) THIS application under Order 1 Rule 10 read with Section 151 CPC has been made by respondent No. 2 stating that respondent No. 2 was not a party to the arbitration agreement and it has been unnecessarily made as a party to the application under Section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the Act'). There is no dispute to the fact that respondent No. 2 M/s Firstcorp Petrochem Ltd. was not a party to the MoU/Agreement entered into between petitioner and respondent No. 1. The applicant/petitioner has made respondent No. 2 as a party to the application on the ground that respondent No. 2 was affiliated to respondent No. 1 in the manner that respondent No. 2 was a group company of respondent No. 1 and it was through respondent No. 2 that the respondent No. 1 fraudulently diverted the money advanced by the petitioner in respect of the transactions. Respondent No. 2 actively connived with respondent No. 1 in sale of the goods and diverting the money to its own account for further purchase of other goods on High Seas.

(3.) THE petitioner has made this application under Section 9 of the Arbitration & Conciliation Act, 1996 after the prayer of the petitioner made in an application under Section 17 of the Act before the Arbitrator asking respondent to provide adequate security to protect the interests of claimant to the dispute in the form of bank guarantee and other property security was dismissed observing that only the High Court has wider power to pass such an order under Section 9 of the Act and the power of the Arbitrator under Section 17 was limited.