C2R PROJECTS LLP Vs. KINETIX SOLUTIONS PRIVATE LIMITED

JUDGEMENT

(1.) Mr.Pranav Vyas, learned advocate submits that leave-note has been circulated by Mr.Parth Contractor, learned counsel appearing for the petitioner, yet he intends to go on with the matter. Hence, the leave-note stands rejected. Mr.Pranav Vyas, learned advocate seeks leave of the Court to file Vakalatnama for the petitioner within 3 days from today. He is permitted to do so.

(2.) Petitioner and respondent Nos.2 to 5 executed a Share Purchase and Share Subscription Agreement (for short "SPA") and a Shareholders Agreement (for short "SHA") on 3/6/2015 and in terms of the Share Purchase and Share Subscription Agreement, an amount of Rs.22,00,23,000.00 was paid by petitioner to the respondent. Subsequently, an additional sum of Rs.3.00 Crores was paid to respondent No.1 by petitioner at the request of respondent Nos.2 to 5 including an amount of Rs.9.17 Crores directly to Karnataka Industrial Area Development Board. As per the terms of SPA, in return for the amount paid or invested by the petitioner inter alia it was to be allotted 24,000 equity shares and 3,000 Compulsorily convertible Preference Shares of first respondent company. The said agreement executed by petitioner with the respondents contained various clauses which contemplated various obligations to be fulfilled by the respondents. The investment of petitioner in respondent No.1 was agreed to be utilized for the purchase of land and petitioner was to be allotted 45% equity shareholding in the first respondent company. Despite having paid an amount of Rs.25.00 Crores, according to the petitioner, respondents had failed to utilize the funds in the manner stipulated under the agreements and had also failed to fulfill the obligations qua allotment of agreed quantum of equity shares i.e. 45% of the equity shareholding in first respondent company. According to the petitioner, respondent Nos.1 to 5 are said to have committed various acts of omission and commission which not only led to total failure on the part of the respondents in fulfilling the contractual obligations but also respondent Nos.2 to 5 are alleged to have siphoned off and embezzled the monies received from the petitioner.

(3.) Hence, disputes having arisen between the parties. Petitioner filed a petition under Sec. 241 and 242 of the Companies Act, 2013, before the National Company Law Tribunal, Bangalore, Karnataka, in Company Petition No.26/BB of 2020 seeking for a direction to the respondent Nos.2 to 5 to render true and accurate accounts of the respondent No.1 company and for forensic audit of the accounts of the respondent company. In the said proceedings respondent Nos.2 to 5 filed an application under Sec. 8 of the Arbitration and Conciliation Act , 1996, contending inter alia that dispute has to be resolved through Arbitration as agreed under the agreements and sought for referring the dispute to the arbitration by invoking Clause 11.10 of the Agreement dtd. 3/6/2015. The said application came to be allowed by the National Company Law Tribunal by order dtd. 24/8/2020 (Annexure-O). Hence, petitioner got issued a notice dtd. 21/9/2020 (Annexure-P) whereunder petitioner nominated a mediator as contemplated under Clause 11.10 of the SPA and Clause 18.12 of the SHA and called upon the respondents to appoint their nominee mediator within 15 days in order to proceed with the mediation in respect of the disputes arising out of or in connection with the agreements. Under the very same notice, petitioner also nominated its nominee Arbitrator to act as the sole Arbitrator for adjudicating the dispute that has arisen between the parties and called upon the respondents to appoint their Co-arbitrator. In reply to the same, the respondents by reply notice dtd. 7/10/2020 though admitted to have entered into the agreements, denied the allegations made in the notice and specifically denied that petitioner cannot have any claim whatsoever which could be referred to the mediator or for the Arbitral Tribunal for being resolved or adjudicated. In other words, the respondents denied the demand made by the petitioner for referring the dispute to the arbitration. Hence, this petition.