SPRAY ENGINEERING DEVICES LTD. Vs. SAIBABA SUGARS LTD.

JUDGEMENT

(1.) IN this order I am considering Company Application No. 366 of 2007 in Company Petition No. 13 of 2007 filed by Spray Engineering Device Ltd. under Sections 397 and 398 of the Companies Act, 1956 (hereinafter referred to as the "Act") against Shree Saibaba Sugars Ltd. and Anr. (R -1) alleging acts of oppression and mismanagement and praying that (i) to direct the respondents to buy back 3,00,000 equity shares of the petitioner or to cancel the allotment of 3,00,000 equity shares of Rs. 100 each made by the respondents in the name of the petitioner and to direct the respondents to refund the amount of Rs. 3 crores to the petitioner along with interest calculated @ 15% per annum from the date of deposit of this amount with the respondent company till the date of payment; (ii) to direct the respondents to file Form No. 32 in respect of the resignation of nominees of the petitioner namely Mr. Vivek Verma, Mr. Prateek Verma and Mr. Sanjay Gupta from the directorship of the respondent company with effect from the dates of their resignation letters; (iii) to direct the respondents that in case they are willing to avail the technical expertise and skills of the petitioner in the setting up and running of the sugar mill, they should hand over full operational and financial control of the sugar mill to the petitioner with representation on the Board of Directors of the respondent company as per the Agreement dated 24.11.2004, because it is only thereafter that the petitioner will be able to provide technical solution as well as management solution to the respondent company, and (iv) to terminate the Agreement dated 24.11.2004 in case the respondents are not willing to handover full operational and financial control of the sugar mill to the petitioner with representation on the Board of Directors of the respondent company.

(2.) THE undisputed facts of the case are Shree Saibaba Sugars Ltd. and Anr. (R -1) was incorporated on 9.3.2000 having its registered office at 17 -A. Asha Villa, 134, Garudia Nagar, Ghatkopar (E), Mumbai, 400077. The authorized share capital of the company is Rs. 16,00,000 equity shares of Rs. 100 each and issued, subscribed and paid up capital is Rs. 4,77,42,000 of Rs. 100 each. The main objects of the company are to (1) to manufacture Sugar and products from beet root, sugarcane, gur, molasses and any other substance on produce of chemicals, and (2) to produce, grow, raise, preserve, purify, refine, import, export, prepare, sell and deal in sugar, sugarcane, gur, molasses, syrups and all other by -products and food products, fertilizers things generally and to maintain refineries, foundries, works, distilleries, etc.

(3.) DR . R.R. Deshpande further contended that the verbal arguments advanced by the petitioner that, its petition contains the points which are outside the scope of the jurisdiction of the Arbitrator and being those are the points pertaining to the non compliance of the statutory provisions, petition need not be referred to the Arbitrator cannot be accepted because (i) Major part, more than 90% of the petition consist the dispute which fell within the jurisdiction of the arbitrator; (ii) Very little part, if any, it falls outside the scope of Arbitration agreement, then for this little clause, the jurisdiction of the agreement cannot be revoked or avoided by the party to the agreement; (iii) If some part of the dispute filed before the court deserves to be referred to the Arbitrator then not that part only but the entire case must be referred to the Arbitrator. Reliance was placed on para E(41)(46) of the judgment of the Hon'ble Apex Court from the case of Rashtriya Ispat Nigam Limited and Anr. v. Verma Transport Co. Reported in ; (iv) The concept of the half reference is highly unlawful as well as inconvenient as per the above laid ratio; (v) If there are two cause of actins and if one is falling within the ambit of Arbitration clause, the entire case has to be referred as half cannot be ought not to be referred as per ratio laid down as above. Further, it was argued that if the ratio laid down by the Hon'ble Apex Court in the case of Agrigold Exims Ltd. v. Sri Lakshmi Knife & Woven and Ors. Reported in is seen it is very specifically observed by their Lordships that