Mohammad Rafiq, J. - (1.) This application under Section 11 of the Arbitration and Conciliation Act, 1996, has been filed by three petitioners, namely, (1) M/s. Rajasthan Development Trust Pvt. Ltd. through its Director Mr. Rajiv Pandey, (2) Mr. Rajiv Pandey and (3) Mrs. Rohini Pandey, praying for appointment of sole Arbitrator to adjudicate the dispute arising between the petitioners and the respondents.
(2.) According to the averments made in the petition, the petitioner no.1 is a company incorporated under the provisions of the Companies Act, 1956 and the petitioners no.2 and 3 are the shareholders in the petitioner company. The petitioner company is a closely held company constituted by the family members of late Mr. S.D. Pandey, wherein Mr. S.D. Pandey held largest number of shares in his personal name and in the name of S.D. Pandey HUF being "karta" of the family. Mr. S.D. Pandey expired on 07.09.2000 and left behind many properties in and outside the Jaipur. It is averred in the petition that the respondents filed a company petition, which was mainly the effort of respondent no.2, who does not hold any share in the company, to settle the dispute regarding the properties left by late Mr. S.D. Pandey, so as to get major share in the properties left by him. The company petition was filed before the Company Law Board under Sections 397 and 398 of the Companies Act, 1956, claiming the relief against the oppression and mismanagement on the part of the petitioners on various grounds. The company petition was filed by the respondents primarily for rectification of the register of the member of the petitioner company, transfer of the shares and to regulate the affairs of the petitioner company. The petitioners herein filed an application bearing C.A. No.307/2007 under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the matter to Arbitration as the disputes raised by the respondents relate to the affairs of the company and Memorandum of Association and Articles of Association of the petitioner company. The application filed by the petitioners under Sections 8 and 45 of the Act of 1996 came to be dismissed by the Company Law Board vide order dated 31.01.2008. Aggrieved thereby, the petitioners filed Company Appeal No.1/2008 under the provisions of the Companies Act, 1956, in which interim order was granted staying the proceedings.
(3.) Mr. Gunjan Pathak, learned counsel for the petitioners, submits that as per Clause 53 of the Articles of Association of the Company, the present dispute is liable to be referred to Arbitration under the provisions of the Arbitration and Conciliation Act, 1996 (for short, "the Act of 1996"), which provides that where any difference arises between the company on the one hand, any of the members, executors, administrators, assignee being on the other hands, touching the true intent or construction or the incidence or the consequences of these presents or touching any breach or alleged breach of these presents, or otherwise relating to any of the affairs of the company, every such difference shall be referred to the arbitration under the provisions of Indian Arbitration Act. The Arbitration Clause in the Memorandum and Articles of Association not only mentions about the differences arising between the company and its members on the construction or the incidence or the consequences of the Articles but also talks about any breach or alleged breach of the Articles or anything relating to any affairs of the company being referred to arbitration. Learned counsel submitted that there are multiple disputes arising between same family members but requires redressal by way of Alternate Dispute Resolution Mechanism by the process of arbitration under the provisions of the Act of 1996. The petitioners sent a legal notice dated 02.03.2017 to the respondents invoking the arbitration jurisdiction and for appointment of Arbitrator to decide the dispute existing between the parties under Clause 53 of the Memorandum and Articles of Association. The respondents replied thereto and denied invocation of arbitration clause. Learned counsel submitted that if there is any breach of the Articles of Association or if there are any differences arising between the shareholders of the company, the matter has to be resolved in view of the arbitration clause mentioned in Clause XV, Article 53 of the Association of the Company.;