Dr. M.K.Sharma - (1.) This is a petition filed by the petitioner under Section 8 read with Section 20 of the Arbitration Act for filing of agreement dated 23.11.1989 and 16.3.1990 and also for referring the disputes arising between the parties to an independent Arbitrator for making an award in terms of the provisions of the Arbitration Act. On 23.11.1989 an agreement was executed between the petitioner and respondents 1 to 5 for sale of 41,51,890 equity shares of the Company of Rs. 10.00 each fully paid up at par as a spot delivery contract i.e. at the aggregate price of Rs. 4,15,18,900.00 . The aforesaid agreement was subject to the conditions that the permission for transfer of shares from financial institutions namely IDBI should be obtained and permission from Central Government under Section 30-C of Monopolies & Restrictive Trade Practices Act, 1969 is also obtained. The said agreement also provided for the payment schedule. It is stated that in pursuance of the said agreement payment of Rs. 20.75 lacs was made by the petitioner to the respondent. On 28.11.1989 respondent No.1 wrote a letter to the Industrial Development Bank of India seeking permission for transfer of the shares to the petitioner. The IDBI however, vide its letter dated 4.12.1989 expressed their inability to agree to the transfer of shares as above. The said letter dated 4.12.1989 is placed on record and is marked Annexure-2. Subsequent thereto a Supplemental Agreement was executed on 16.3.1990 between the petitioner and respondents 1 to 5 for transfer of same number of equity shares of the Company of Rs. 10.00 each fully paid up at par i.e. aggregate price of Rs. 4,15,18,900.00 . The Supplemental Agreement dated 16.3.1990 was signed by the petitioner and respondent No. 6 who was authorised to sign on behalf of respondents 1 to 5. On 16.3.1990 the respondent No.1 sent to IDBI the supplemental agreement for its approval. The IDBI however, vide its letter dated 4.12.1990 did not approve the transfer of shares to the petitioner. The respondent No. 6 thereafter wrote a letter to the petitioner on 25.8.1990 stating that the supplemental agreement has not been approved by IDBI. It was, however, stated that further negotiations between the parties were going on.
(2.) It is stated that the respondents assured the petitioner that the permission would be granted and that they would manage the permission from both IDBI and Central Government and asked the petitioner to part with a sum of Rs. 1,03,79,725 .00 towards payment of 41,51,890 equity shares of the Company calculated at Rs. 2.50 per share. It is further stated that the respondents further assured the petitioner that in case permission is not granted within a period of six months they would refund the entire amount with interest @ 18% per annum. On this assurance the petitioner, through M/s. Maxworth Techno Projects Limited, instructed M / s. Bhupendra Champak Lal Devi Das, Share and Stock Brokers to make payment of Rs. l,03,79,725.00 to respondent No. 1 representing part payment of towards 41,51,890 equity shares of the Company calculated at Rs. 2.50 per share. The aforesaid payment of an amount of Rs. l,03,79,725.00 was made to the respondent No. I by the aforesaid Share and Stock Brokers by cheque No. 049239 dated 21.1.1991, and the aforesaid amount was received by the respondent No.1 on its own behalf and also on behalf of respondents No. 2 to 5. It is stated that the aforesaid amount was received by respondents 1 to 5 in continuation of payment of Rs. 20,75.945.00 received by them earlier on 23.11.1989. The respondents however, have failed to refund the aforesaid total amount of Rs. l,24,55,615.00 received by them pursuant to agreement dated 23.11.1989 and 16.3.1990 and therefore, disputes have arisen between the parties under the agreement dated 16.3.1990 and 23.11.1989. The disputes arising between the parties have been set out in paragraph 15 of the petition and accordingly the petitioner has sought for filing of the aforesaid two agreements in this Court and for reference of the aforesaid disputes to an independent Arbitrator for making an award.
(3.) The respondents have filed their reply, contending inter alia that earlier agreement dated 23.11.1989 executed between the petitioner and respondents for the sale and transfer of the shares held by the respondents fell through as the permission sought from the financial institutions could not be obtained and accordingly the same stood terminated and lapsed automatically. It is further stated that subsequent thereto a draft agreement was prepared and initialed by petitioner and respondent No. 6 which was subsequently forwarded to financial institutions led by IDBI for their approval. It is stated that no formal agreement was ever executed between the parties. According to the respondents in that view of the matter the only agreement which was executed and which has been given effect to, so far as the rights of the respondents are concerned, is the agreement dated 23.11.1989 and as per the agreement it is the respondents who are entitled to receive huge amount from the petitioner. The respondents stated that the price of the share as per the agreement is Rs. 10.00 per share and at that rate the total sale consideration comes to Rs. 4,11,58,900.00 . The respondents further stated that the sum of Rs. I crore and odd which was paid by the petitioner was subsequent to the termination and/ or lapse of the agreement dated 23.11.1989 and the same in any case was an ad hoc and part amount.;