ARADHANA INVESTMENTS LTD. Vs. SAYAJI MILLS LTD.

JUDGEMENT

(1.) This appeal arises out of a judgment and order dated March 5, 1979 made by the court of first instance. By the said judgment and order, the court of first instance directed the filing of an arbitration agreement contained in a memorandum dated 22nd Dec., 1977 executed by the Chairman and Managing Director of one Punalur Paper Mills Ltd. and directed the reference of the disputes in regard of the agreement recorded in the said memorandum to be referred to the arbitration of the named arbitrator I.M. Nanavati.

(2.) The suit under section 20 of the Indian Arbitration Act, 1940 was instituted" in this Court not by any of the purported parties to the said memorandum, but by a nominee, of Punalur Paper Mills Ltd. described as the purchaser in the said memorandum, being the respondent Aradhana Investments Ltd.

(3.) The facts leading to the filing of the suit may be briefly stated. On 22nd Dec., 1977 the respective chairman and Managing Director of the appellant (defendant in the suit) Sayaji Mills Ltd. and one Punalur Paper Mills Ltd. signed a memorandum at Bombay. The said memorandum confirmed the discussions and recorded the broad terms of an agreement for the sale and purchase of Sayaji Mill No. 2, Bombay by and between the appellant referred to in the said memorandum as the vendor and Punalur Paper Mills Ltd. referred to in the said memorandum as the purchaser. Clause 1 of the said memorandum inter alia provided as follows : "The vendor agrees to sell, transfer and convey in favour of purchaser, its nominee or nominees, its block of Sayaji Mill No. 2 at Bombay free from all charges, encumbrances and lis pendens comprising of lands measuring 51176 .81 Sq. Meters, all factory and other building constructed therein, composite textile mills and goodwill and tenancy rights of the shops in Mulji Jet Ira Market and a rented flat on the 7th floor of Mount Unique building flat No. 51 for a sum of Rs. 1,53,00,000.00 (Rupees one crore fifty three lacs only)". The said memorandum appears at pages 12 to 18 of the Paper Book