Indu Malhotra, J. - (1.) Leave granted. The present Special Leave Petitions have been filed to challenge Order dated 16.09.2011 passed in W.P. (C) No. 560 of 1995, Order dated 21.10.2011 passed in C.M. No. 12230 of 2011, Order dated 05.07.2013 passed in C.M. No. 8100 of 2012, and Order dated 10.01.2014 passed in C.M. No. 324 and 325 of 2014 by the Delhi High Court.
(2.) The background facts of the case are as follows : 2.1. In 1992, MTNL floated 17% Non-Cumulative Secured Redeemable Bonds described as the VI Series (Private Placement) worth Rs. 425 crores. On 10.02.1992, MTNL placed bonds worth Rs.200 crores with Can Bank Financial Services Ltd. (hereinafter referred to as "CANFINA") under an MOU agreement. The bond amount of Rs. 200 cores was placed as fixed deposit by MTNL with CANFINA. CANFINA paid back Rs. 50 crores of the fixed deposit in 1992. The balance fixed deposit amount of Rs. 150 crores along with interest was not paid by CANFINA to MTNL. As a consequence, MTNL did not service the interest on bonds. MTNL was of the view that since it did not receive the entire bond amount of Rs. 200 crores, the entire deal did not go through. Against payment of Rs. 50 crores received from CANFINA, MTNL serviced the bonds of approximately Rs. 31 crores to the public. MTNL was of the view that only a sum of Rs.5.41 crores was payable to CANFINA, which was not accepted by CANFINA.2.2. As per Canara Bank, soon after the bonds were subscribed, there was an out-break of a security scam which led to a collapse of the secondary market in shares, security and bonds. There were very few buyers in the secondary market. Even such buyers were offering very low prices for these bonds. In these circumstances, CANFINA was faced with a severe liquidity crunch.2.3. In these circumstances, Respondent No. 1 - Canara Bank purchased the Bonds issued by MTNL, of the face value of Rs. 80 crores, from Respondent No. 2 - CANFINA which is its wholly owned subsidiary.2.4. Canara Bank requested for registration of these Bonds with MTNL, and lodged letters of allotment for purchase of the bonds from CANFINA.2.5. MTNL vide letter dated 14.10.1992 addressed to Canara Bank, refused to transfer the Bonds, on the various grounds mentioned in the letter.2.6. MTNL by a subsequent letter dated 16.02.1993, informed Canara Bank that it had registered a part of the face value of Rs. 40 crores, in favour of CANFINA. The bond instruments were however retained on the ground that CANFINA had failed to pay the deposit money of Rs. 150 crores, which was payable to MTNL with an accrued interest of 12% p.a.2.7. MTNL vide letter dated 20.10.1993, cancelled all the Bonds inter alia on the ground that letters of consideration remained with CANFINA.2.8. Canara Bank vide its reply dated 13.01.1994 contended that it is the holder in due course, and is entitled to have the shares registered in its name, and receive the interest as and when it fell due.2.9. MTNL sent a statement of accounts by adjusting the proceeds of the cancellation of bonds towards the dues of CANFINA. It was stated that the bonds and interest accrued thereon cannot be refunded. MTNL with its letter dated 13.01.1994, attached a cheque for Rs. 5,41,17,463 as the amount payable to Canara Bank.2.10. Canara Bank, however, returned the cheque vide letter dated 10.02.1994, demanding the restoration and registration of the bonds.2.11. Canara Bank filed W.P. (Civil) No. 560 of 1995 before the Delhi High Court to challenge the cancellation of the Bonds, and a direction to pay the Interest accrued.It is relevant to note that CANFINA was joined as a proforma party in the Writ Petition filed by Canara Bank.2.12. The Delhi High Court vide Order dated 09.09.1996 directed the Union of India to decide the issues between the parties in light of this Court's judgment in O.N.G.C. v. Commissioner of Central Excise, 1995 Supp4 SCC 541.The Writ Petition was dismissed on the ground of availability of an alternative and efficacious remedy before the Company Law Board under Section 111 of the Companies Act, 1956.2.13. The proceedings before the Company Law Board came to be dismissed vide Order dated 26.02.1998, since the remedy was no longer available, as per the amendment of Section 111 by the Depositories Act, 1996.2.14. Canara Bank filed an application for Restoration of the Writ Petition, which was restored vide Order dated 12.05.1999.2.15. Canara Bank made a representation to the Cabinet Secretary.On 27.03.2001, a meeting was convened by the Cabinet Secretariat, Litigation Cell which was presided by the Cabinet Secretary, and attended by the representatives of MTNL, Canara Bank, and CANFINA.The Committee directed Canara Bank, CANFINA and MTNL to settle the disputes through arbitration by making an appropriate reference to the Permanent Machinery of Arbitration, functioning in the Department of Public Enterprises. The Committee did not permit Canara Bank, CANFINA and MTNL to pursue the litigation in Court.2.16. The Delhi High Court vide Order dated 30.05.2008 referred the disputes between the parties to the Committee on Disputes. The Writ Petition was adjourned sine die. Canara Bank was granted liberty to revive the Petition in the event that the Committee on Disputes was unable to resolve the disputes between the parties.2.17. The Committee of Disputes held a meeting on 16.12.2008, which was attended by the representatives of MTNL, Canara Bank and CANFINA. The Committee, after hearing the parties, expressed the view that all the three parties should take recourse to arbitration in view of the different inter-linked transactions between them.The representatives of Canara Bank expressed the apprehension that arbitration by the Permanent Machinery of Arbitration would take much longer than judicial recourse.The Committee observed that to expedite arbitration, the parties should expeditiously enter into an arbitration agreement under the Arbitration and Conciliation Act, 1996.2.18. Pursuant to the meeting held on 16.12.2008, Canara Bank vide its letter dated 05.03.2009 sent a draft arbitration agreement to the Chairman and Managing Director of MTNL. The draft arbitration agreement sent by Canara Bank was between Canara Bank and CANFINA on the one side, with MTNL on the other.2.19. By letter dated 17.03.2010, Canara Bank requested the Deputy Secretary, Cabinet Secretariat to advise MTNL to execute the arbitration agreement in accordance with the direction of the Ministry of Law and Justice.2.20. The Delhi High Court vide Order dated 01.10.2010 disposed of the pending Writ Petition with the observation that the matter should be resolved by the Committee on Disputes expeditiously so that the arbitration agreement between the parties is signed as soon as possible.2.21. The decision in O.N.G.C. v. Commissioner of Central Excise (supra) came to be overruled by a Constitution Bench in Electronics Corporation of India Ltd. v. Union of India & Ors., 2011 3 SCC 404Accordingly, Canara Bank moved the Delhi High Court u/S. 151, CPC for restoration of the disposed of Writ Petition.2.22. The Delhi High Court restored the Writ Petition, and vide Order dated 16.09.2011 noted that the two principal issues which arise for consideration are:(i) Whether Canara Bank is liable for the acts or omissions of CANFINA; and(ii) Whether Canara Bank should take over the liabilities and admit them in the arbitration agreement itself.During the course of the proceedings, the parties before the Delhi High Court agreed that these issues may be referred to arbitration. The parties were requested to suggest the name of a sole arbitrator to be appointed on the next date of hearing.2.23. On 21.10.2011, the name of Mr. Justice A.P. Shah (Retd.) was suggested by the Counsel for Canara Bank, which was accepted by the Counsel for MTNL.Accordingly, Mr. Justice A.P. Shah (Retd.) came to be appointed as the Sole Arbitrator.2.24. On 05.01.2012, the Sole Arbitrator issued notice to all the three parties i.e. MTNL, Canara Bank, and CANFINA.2.25. Canara Bank raised an objection to joining CANFINA as a party to the arbitration. The Arbitrator heard the parties on 27.03.2012, on the issue whether CANFINA should be joined as a party to the proceedings.The learned Arbitrator passed an interim award holding that CANFINA had not appeared on 16.09.2011 before the High Court, when the disputes were referred to arbitration. CANFINA was not a party to the arbitration agreement, and cannot be joined as a party to proceedings.2.26. MTNL filed C.M. No. 8100 of 2012 before the Delhi High Court seeking clarification of Order dated 16.09.2011, as to whether CANFINA ought to be impleaded as a necessary party to the arbitration agreement.The Delhi Court vide order dated 05.07.2013 dismissed the application as "not pressed" on the statement made by the Counsel of MTNL.2.27. Canara Bank filed its Statement of Claim before the learned Sole Arbitrator on 06.12.2013.2.28. MTNL filed I.A. Nos. 324 - 325 of 2014 before the Delhi High Court for recall of the Orders dated 16.09.2011, 21.10.2011 and 05.07.2013 passed in W.P. (C) No. 560 of 1995.2.29. The Delhi High Court vide Order dated 10.01.2014, dismissed the Application for Recall on the ground that the application was identical to the application previously filed by MTNL being C.M. No. 8100 of 2012. Since MTNL had not pressed the earlier application, the subsequent application being identical in nature, could not be considered, and was dismissed.2.30. In May 2014, MTNL filed its reply to the Statement of Claim filed by Canara Bank, and also made a Counter-Claim against Canara Bank.
(3.) Aggrieved by the Orders dated 16.09.2011, 21.10.2011, 05.07.2013, and 10.01.2014 passed by the Delhi High Court in W.P. (C) No. 560 of 1995, C.M. No. 12230 of 2011, C.M. No. 8100 of 2012 and C.M. No. 324 and 325 of 2014 respectively, the Appellant - MTNL filed the present Special Leave Petition. This Court vide Order dated 08.05.2014 issued Notice to all the Respondents, including CANFINA which has been joined as Respondent No. 2.;