- (1.) Petitioner and M/s Arihant Financial Services Limited, a company registered under the Companies Act, 1956 entered into an agreement on February, 17th 1992 for promoting a new company namely Arihant Threads Limited for setting up of the project of spinning mill at Goindwal Sahib, District Amritsar with a capacity of 25000 Spindles per annum. It is admitted that the name of Arihant Financial Services Limited has since been changed to Arihant Corporation Limited. In terms of clause 19 of the agreement, the respondent has the option to buy at any time, the equity shareholding of the petitioner but only after commencement of the commercial production whereas the respondent is bound to purchase the equity shareholding of the petitioner after the expiry of period of ten years from the date of commencement of the commercial production.
(2.) As per the undisputed facts, the commercial production of the company promoted commenced on 2.12.1996 and thus right to buy-back the equity shareholding of the petitioner arose on 1.12.2006 after the expiry of ten years. Since, the shareholding was not purchased in the manner agreed, the petitioner served a notice dated 16.10.2009 (Annexure P-4) and nominated its arbitrator. Since, respondents have failed to nominate its arbitrator, petitioner invoked the jurisdiction of this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of the arbitrator.
(3.) Learned Counsel for respondents has argued that M/s Arihant Threads Limited has approached the Board of Industrial and Financial Reconstruction (in short the 'BIFR') constituted under the Sick Industrial Companies (Special Provisions) Act, 1985 and an operating agency has been appointed by the Board for consideration of the rehabilitation scheme of the Company promoted. It is contended that if the Scheme is sanctioned which may include the reduction of share capital then that Scheme will override all other agreements, which will supersede even the agreement dated 17.2.1992 in terms of Section 32 of the above said Statute and which may have the affect on the equity contribution of the petitioner as well, therefore, at this stage, the arbitrator need not be appointed.;