MANAVENDRA CHITNIS Vs. LEELA CHITNIS STUDIOS P LTD

JUDGEMENT

(1.) THIS judge's summons dated October 21, 1983, has been taken out by the applicants for an order that further proceedings in Company Petition No. 577 of 1983 be stayed under the provision of s. 34 of the Indian Arbitration Act, 1940, and that costs of the summons be provided for and for such other and further reliefs as this court may deem fit. The summons by the respondents.

(2.) THE facts that give rise to this summons are that there are two groups in the first respondent company, one group known as "the Chitnis group" and the other group known as "the Srivastava group". Both these groups are at loggerheads. Certain disputes and differences having arisen between the two groups, the same were referred to the arbitration of one Bal Thackeray. THE Bal Thackeray made an award dated November 24, 1982, whereby he, inter alia, directed that the members of the Srivastava group do transfer their shareholding in the first respondent company to the Chitnis group, on the Chitnis group paying to the Srivastava group a sum of Rs. 11.68 lakhs. THE said award was filed in this court. Sudha Srivastava (i.e., the second respondent herein) (belonging to the Srivastava group) thereupon filed a petition, being Petition No. 68 of 1983 in this court, inter alia, challenging the said award. THE petition has been accepted and presently adjourned for recording of evidence. Pending these proceedings, one Kumar Amit being respondent No. 3 (in this judge's summons filed a petition on this court being Petition No. 269 of 1983 under ss. 397 and 398 of the Companies Act, inter alia, against the Chitnis and the Srivastava group. This petition was resisted principally by the Chitnis group and the locus of the said Kumar Amit to file the said petition was challenged. What seems to have transpired is that the said Kumar Amit had about 1,200 shares of the first respondent company in his name. However, at the hearing of the said petition, it turned out that out of the said 1,200 shares, 600 shares were transferred to the name of one or the other member belonging to the Chitnis group, and the other 600 shares were transferred to one or the other member belonging to the Srivastava group. THErefore, the record of the company did not show any shares standing in the name of Kumar Amit. Kumar Amit took up the position that a fraud had been practised on him and that he was still the owner of the said shares. Be that as it may, it appears that in view of the fact that the company's record did not reflect the name of Kumar Amit as a shareholder, it came to be held that Kumar Amit had no locus standi to file the said petition, and Kumar Amit came to be nonsuited.

(3.) WHEN this judge's summons reached hearing, Mr. Zaiwalla, the learned counsel for the applicants (i.e., "the Chitnis group "), moved an amendment to the effect that the proceedings in the company petition should be stayed not only in view of s. 34 of the Arbitration Act but should be stayed in view of the provisions of s. 10, read with ss. 141 and 151,, CPC 1908. The amendment has been allowed.