WELSPUN INFRATECH LIMITED Vs. ASHOK KHURANA

JUDGEMENT

(1.) By consent of parties both the petitions are heard together and are being disposed of by the common order. By these two petitions filed under section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as "Arbitration Act"), petitioner seeks appointment of Court receiver and injunction in respect of various properties of the respondents.

(2.) Some of the relevant facts which emerge from the pleadings and documents filed by the parties and which are relevant for the purpose of deciding these two petitions are as under :

(3.) Mr. Tulzapurkar, learned senior counsel appearing on behalf of the petitioner submits that respondent nos. 1 to 4 have made false representation and have not disclosed all the liabilities of the said company. Though respondent nos. 1 to 4 have agreed to compensate and indemnify the petitioner for such losses suffered, as per provisions of the said SPA and SSA, respondent nos. 1 to 4 have not complied with any terms of the said agreements, did not allow independent valuer to submit report, did not obtain any NOC in respect of various projects. He submitted that several notices came to be received by the said company from various authorities raising demand of statutory dues and tax liabilities. Several litigations came to be filed against the said company in respect of the earlier transactions. It is submitted that during the pendency of the arbitration proceedings before the learned arbitrator, petitioner came to know in the month of September/October, 2013 that respondent nos. 1 to 4 had started disposing of their assets to various companies and with a view to defeat any award that may be passed against them in arbitration proceedings filed by the petitioner. It is submitted that out of the sum of Rs.62,01,81,022.50 received by way of consideration by respondent no. 1 to 4 under the SPA, respondent nos. 1 to 4 have invested sum of Rs.7.5 Crores and Rs. 7 Crores in respondent no. 7 company in which they had already significant investment. It is submitted that from the audited balance sheet of respondent no. 7 for financial year 2011-12, it is clear that the total investment made by respondent nos. 1, 2 and 4 with respondent no. 7 as on 31st March, 2012 is approximately Rs.35,22,14,000. Respondent nos. 1, 2 and 4 held around 99% shares of the said company. It is submitted that investment of respondent nos. 1, 2 and 4 and respondent no. 7 company has transferred through several downstream investment directly of indirectly into various other companies i.e. respondent nos. 8 and 33. Respondent Nos. 1 to 4 held sizable portion of equity shares held by respondent no. 8 to 33 and directly or indirectly owns and control respondent nos. 8 to 33 companies. It is submitted that respondent nos. 1, 2 and 4 have also created three trust known as Madhav Trust, Madhav Ashok Trust, Armaan Amit Trust for the purposes of transferring the assets of respondent nos. 1, 2 and 4 or to part with their assets pending the arbitration proceedings in those trusts with a view to defeat the award that may be passed in favour of the petitioner and against them. The learned senior counsel submits that the members of the family of respondent nos. 1, 2 and 4 are beneficiaries of those trusts. It is submitted that though respondent nos. 1, 2 and 4 have alleged to have transfered their shares in respondent no. 7 company, It is clear that respondent nos. 1, 2 and 4 continues to be directors or have control of the respondent no. 7 company and other respondents. It is submitted that during the pendency of the arbitration proceedings all these clandestine transfers of assets are effected with a view to defraud the petitioner. The learned senior counsel invited my attention to various statements annexed to the petition to demonstrate that the control of respondent nos. 1 to 4 of respondent No. 8 to 33 in one or other way continues and transfer of their assets to these respondents are ex facie fraudulent. It is submitted that the petitioners are thus entitled to reliefs claimed in the petition and if no such reliefs are granted, petitioner would not be able to recover any amount from the respondents though petitioner has good chance of success in the arbitration proceedings. He submits that though the learned arbitrator has directed respondent nos. 1 to 4 to carry out the valuation process in accordance with clause 7.16 of the SPA by directing respondent No. 5, by order dated 30th October, 2013, respondent nos. 1 to 4 have not taken any steps so far. It is submitted that huge amount is deposited by the petitioner with respondent no. 6 in escrow account II which the petitioner is entitled to receive in view of respondent nos. 1 to 4 not complying with their obligations under the agreements. It is submitted that in any event, that amount which is lying deposited with respondent no. 6 in escrow account II, this court shall order and direct respondent no. 6 to transfer the escrow amount in interest bearing fixed deposit.