GODREJ INDUSTRIES LTD., vs. COLIN MARIO REBELLO AND 6 ORS.

Full Judgment Text

2012:BHC-OS:11392-DB
Mlns 1 Appeal 331/12 & connected matters.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL No. 331 of 2012
IN
ARBITRATION PETITION (L)  No. 398 of 2012
Godrej Industries Limited
having its office at Phirojsha
Nagar, Eastern Express Highway
Vikhroli, Mumbai 400 079       … Appellant.
   (Original
         Respondent no.6)
Versus
1. Colin Mario Rebello
501 and 502, Joanna Premises
Coop Hsg Society,
10, Manual Gonsalves Road,
Bandra, Mumbai 400 050.       … Original
Petitioner.
2. Jer Rutton Kavasmaneck
(alias Jer Jawahar
Thadani, residing at 193,
Jupiter Apartment,
Cuffe Parade, Mumbai 400 005.
3. Darius Rutton Kavasmaneck,
residing at 626, Parsi Colony,
Dadar, Mumbai 400 014.
4. Maharukh Murad Oomarigar,
residing at T/176, AA Palm Beach,
Juhu Tara Road,Juhu,
Mumbai 400 049.
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5.   Percy Rutton Kavasmaneck,
residing at C/o N.A. Pochee, Turel
Terrace 628, Parsi
Colony, Dadar Mumbai 400 014.
6.   Aban Percy Kavasmaneck,
residing at C/o N.A. Pochee,
Turel Terrace 628, Parsi
Colony, Dadar, Mumbai 400 014.
7. Conrad Anthony Rebello,
residing at Kostka House,
St Peters Cooperative Hsg.
Society, 31, Manual Gonsalves Road,
Bandra, Mumbai 400 050. … Respondents.
WITH
APPEAL No. 332 of 2012
IN
ARBITRATION PETITION No. 444 of 2012
Godrej Industries Limited
having its office at Phirojsha
Nagar, Eastern Express Highway
Vikhroli, Mumbai 400 079                  ... Appellant.
   (Original
        Respondent No.6)
Versus
1. Jer Rutton Kavasmaneck
(alias Jer Jawahar
Thadani, residing at 193,
Jupiter Apartment,
Cuffe Parade, Mumbai 400 005.
2. Darius Rutton Kavasmaneck,
residing at 626, Parsi Colony,
Dadar, Mumbai 400 014.       … Original
Petitioners.
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3. Maharukh Murad Oomarigar,
residing at T/176, AA Palm Beach,
Juhu Tara Road,Juhu,
Mumbai 400 049.
4. Percy Rutton Kavasmaneck,
residing at C/o N.A. Pochee,
Turel Terrace 628, Parsi
Colony, Dadar Mumbai 400 014.
5. Aban Percy Kavasmaneck,
residing at C/o N.A. Pochee,
Turel Terrace 62, Parsi
Colony, Dadar, Mumbai 400 014.
6. Colin Mario Rebello
501 and 502, Joanna Premises
Coop Hsg Society,
10, Manual Gonsalves Road,
Bandra, Mumbai 400 050.
7. Conrad Anthony Rebello,
residing at Kostka House,
St Peters Cooperative Hsg.
Society, 31, Manual Gonsalves Road,
Bandra, Mumbai 400 050. … Respondents.
WITH
  APPEAL (Lodging)  No. 497 of 2012.
IN
ARBITRATION PETITION No. 444 of 2012.
1. Percy Rutton Kavasmaneck,
residing at C/o N.A. Pochee,
Turel Terrace 628, Parsi
Colony, Dadar Mumbai 400 014.
2. Aban Percy Kavasmaneck, … Appellants.
residing at C/o N.A. Pochee,      (Original
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Turel Terrace 62, Parsi       Respondent
Colony, Dadar, Mumbai 400 014.       Nos. 2 and 3 )

Versus.
1. Jer Rutton Kavasmaneck
(alias Jer Jawahar
Thadani, residing at 193, Jupiter
Apartment,
Cuffe Parade, Mumbai 400 005.
2. Darius Rutton Kavasmaneck,    Respondents.
residing at 626, Parsi Colony, ..(Original
Dadar, Mumbai 400 014.   Petitioners).

3. Maharukh Murad Oomarigar,
residing at T/176, AA Palm Beach,
Juhu Tara Road,Juhu,
Mumbai 400 049.
4. Colin Mario Rebello
501 and 502, Joanna Premises
Coop Hsg Society,
10, Manual Gonsalves Road,
Bandra, Mumbai 400 050.
5. Conrad Anthony Rebello,
residing at Kostka House,
St Peters Cooperative Hsg.
Society, 31, Manual
Gonsalves Road,
Bandra, Mumbai 400 050.
6. Godrej Industries Limited
having its office at Phirojsha
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Nagar, Eastern Express Highway
Vikhroli, Mumbai 400 079    … Respondents.
WITH
APPEAL (LODGING) No.498/2012
IN
ARBITRATION PETITION (LODGING) No. 398 of 2012.
1. Percy Rutton Kavasmaneck,
residing at C/o N.A. Pochee,
Turel Terrace 628, Parsi
Colony, Dadar Mumbai 400 014.
2. Aban Percy Kavasmaneck,
residing at C/o N.A. Pochee, … Appellants.
Turel Terrace 62, Parsi     (Original Respondent
Colony, Dadar, Mumbai 400 014.       Nos. 4 and 5 )

Versus.
1. Colin Mario Rebello
501 and 502, Joanna Premises
Coop Hsg Society,
10, Manual Gonsalves Road,
Bandra, Mumbai 400 050. … Original
     Petitioner.
2. Jer Rutton Kavasmaneck
(alias Jer Jawahar
Thadani, residing at 193,
Jupiter Apartment,
Cuffe Parade, Mumbai 400 005.
3. Darius Rutton Kavasmaneck,
residing at 626, Parsi Colony,
Dadar, Mumbai 400 014.
4. Maharukh Murad Oomarigar,
residing at T/176, AA Palm Beach,
Juhu Tara Road,Juhu,
Mumbai 400 049.
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5. Godrej Industries Limited
having its office at Phirojsha
Nagar, Eastern Express Highway
Vikhroli, Mumbai 400 079
6. Conrad Anthony Rebello,
residing at Kostka House,
St Peters Cooperative Hsg.
Society, 31, Manual Gonsalves
Road, Bandra, Mumbai 400 050.           … Respondents.
WITH
ARBITRATION APPLICATION  No. 220 of 2012.
Colin Mario Rebello
residing at Flats 501 and 502
Joanna Premises C. H. S. Ltd.,
10, Manuel Gonsalves Marg
Bandra (West), Mumbai 400 050.               … Applicant
Versus
1. Jer Rutton Kavasmaneck
alias Jer Jawhar Thadani
residing at 193, Jupiter Apartment
Cuffe Parade, Mumbai 400 005.
2. Darius Rutton Kavasmaneck
residing at 626, Parsi Colony
Dadar, Mumbai 400 014.
3. Maharukh Murad Oomrigar
residing at T/176, AA Palm Beach
Juhu Tara Road, Juhu
Mumbai 400 049.
4. Percy Rutton Kavasmaneck,
residing at 134, Olivera Way,
Palm Beach Gardens, Florida 33418,
United States of America.
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5. Aban Rutton Kavasmaneck,
residing at 134, Olivera Way,
Palm Beach Gardens, Florida 33418,
United States of America.
6. Godrej Industries Limited
formerly [Godrej Soaps Ltd.,]
having its office at Firojshanagar,
Eastern Express Highway,
Vikhroli, Mumbai 400 079
7. Conrad Anthony Rebello,
residing at Kostka House,
St Peters C. H. S.
31, Manual Gonsalves Road,
Bandra, Mumbai 400 050. … Respondents.
WITH
ARBITRATION APPLICATION  No. 219 of 2012.
1. Jer Rutton Kavasmaneck
alias Jer Jawhar Thadani
residing at 193, Jupiter Apartment
Cuffe Parade, Mumbai 400 005.
2. Darius Rutton Kavasmaneck
residing at 626, Parsi Colony
Dadar, Mumbai 400 014. … Applicants
Versus
1. Maharukh Murad Oomrigar
residing at T/176, AA Palm Beach
Juhu Tara Road, Juhu
Mumbai 400 049.
2. Percy Rutton Kavasmaneck,
residing at 134, Olivera Way,
Palm Beach Gardens, Florida 33418,
United States of America.
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3. Aban Rutton Kavasmaneck,
residing at 134, Olivera Way,
Palm Beach Gardens, Florida 33418,
United States of America.
4. Colin Mario Rebello of Mumbai,
Indian Christian, residing at Flats 501
and 502, Joanna Premises Cooperative
Housing Society Ltd., 10,
Manuel Gonsalves Road,
Bandra, Mumbai 400 050.
5. Conrad Anthony Rebello,
residing at Kostka House,
St Peters Coop. Hsg. Society
31, Manuel Gonsalves Road,
Bandra, Mumbai 400 050.
6 Godrej Industries Limited
formerly [Godrej Soaps Ltd.,]
having its office at Pirojshanagar,
Eastern Express Highway,
Vikhroli, Mumbai 400 079 … Respondents
Mr.Anil Divan, Senior advocate, Mr. V. Dhond Senior advocate and
Mr. Anil Jamsandekar i/b. Little & Co., for appellant in Appeal
No.331 of 2012.
Mr.Rohit Kapadia, Senior advocate, Mr. Pravin Samdani, Senior
advocate with Mr. Snehal Shah, Mr. Shriraj Dhruv, Khyati Pandit
and Manish Acharya i/b. Dhru & Co., for respondent Nos. 2 and
3.
Mr. Simil Purohit i/b. Mustafa Kachwala for respondent No.1and
for respondent No.6 in Appeal No.331 of 2012.
Mr. R.M. Kadam, Senior Advocate with Ankita Singhania i/b. D.H.
Law Associates for respondent Nos.5 and 6 & appellants in Appeal
Lodging No.497 of 2012 and 498 of 2012.
Mr. Saurabh Gadkari with Mr. Ranjit Shetty i/b. Juris Corp. for
respondent No.3.
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Mr. Anil Divan, Senior advocate with Mr. V. Dhond, Senior
advocate and Mr. Anil Jamsandekar i/b. Little & Co., for
appellant in Appeal No.332 of 2012.
Mr.Rohit Kapadia, Senior advocate, Mr. Pravin Samdani, Senior
Advocate with Mr. Snehal Shah, Mr. Shriraj Dhruv, Khyati Pandit
and Manish Acharya i/b. Dhru & Co., for respondent Nos. 1 and
2.
Mr. R.M. Kadam, Senior Advocate with Ankita Singhania i/b. D.H.
Law Associates for respondent Nos.4 and 5 and appellants in
Appeal Lodging No.497 of 2012 and Appeal Lodging No.498 of
2012.
Mr. Saurabh Gadkari with Mr. Ranjit Shetty i/b. Juris Corp. for
respondent No.4.
Mr.Pravin Samdani, Senior advocate, Snehal Shah a/w Shriraj
Dhruv, Khyati Ghevaria and Manish Acharya i/by Dhru & Co. for
applicants in Arbitration Application Nos.220 and 219 of 212.
Shri Venkatesh Dhond, Senior advocate i/b Little & Co., for
respondent No.6 in Arbitration Application Nos.220 and 219 of
212.
CORAM :  MOHIT S. SHAH, C J
                AND N.M. JAMDAR, J.
RESERVED  ON : 17  August, 2012.
PRONOUNCED ON : 18  September, 2012
JUDGMENT : (Per: N.M. JAMDAR, J)
1. These four appeals arise from the orders passed in two
Arbitration Petitions, which were heard together by the learned
single Judge. By the impugned order dated 11 May 2012, the
learned single Judge has allowed the arbitration petitions and
has restrained the appellants from in any manner dealing with
certain shares of Gharda Chemicals Ltd. The issues raised in
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these appeals being common, they are heard together and
disposed of by this common judgment.
2. Arbitration Petition No.444 of 2012 was filed by Jer Rutton
Kavasmaneck and Darius Rutton Kavasmaneck. Arbitration
Petition (L) No.398 of 2012 was filed by Colin Rebello. Godrej
Industries and Aban and Percy Kavasmaneck were contesting
respondents  in the petitions.  These two sets of respondents in
the arbitration petitions have filed the present four appeals.
Along with the appeals we have also taken up two Arbitration
Applications filed by Jer and Darius Kavasmanecks, and Colin
Rebello under section 11 of the Arbitration & Conciliation Act,
1996 (the Act) for appointment of arbitrator.
3. Some of the parties are related. Jer is the mother of  Darius
and Percy.  Percy and Aban are husband and wife. Maharukh is
the sister of Darius and Percy. Colin and Conrad Rebello are not
part of the Kavasmaneck family and they are espousing their
cause alongside Jer and Darius. When five parties viz. Jer,
Darius, Percy, Aban and Maharukh are together they are referred
to as 'Kavasmanecks'. Colin and Conrad Rebellos together are
referred to as 'Rebellos'. When Kavasmaneks and Rebellos  were
together, they are referred to as 'minority shareholders'. The
parties who filed the arbitration petitions are referred to as
'petitioners'. Godrej Industries is referred to as 'Godrej'.  Gharda
Chemicals Ltd. is referred to as 'the Company'.
4. In the dispute before us, Godrej, Aban and Percy
Kavasmaneck are together on one side. Jer and Darius
Kavasmaneck, Colin and Conrad Rebello together on the other
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side.  Maharukh Oomarigar  has neither appeared nor filed a say,
in the petitions.
5. The shareholding pattern of the parties is of importance.
The following table will show the approximate shareholdings of
the parties.

Sr.No.	Name	Number of<br>shares	Percentage<br>(approx)
1<br>2<br>3	Jer and Darius Kavesmaneck<br>Percy, Aban Kavasmaneck and<br>Maharukh Oomarigar<br>Colin and Conrad Rebello	10516<br>8115<br>2640	17%<br>13%<br>4%

Total : - 34% (approx)
Minority shareholders together hold about 34% equity share
capital of the Company. Majority share holding is owned and
controlled by Dr.Keki Hormusji Gharda. Thus, Kavasmanecks and
Rebellos together constitute a sizable minority in the Company.
6. Gharda Chemicals Limited is a closely held Company
belonging to Gharda and Kavasmaneck families. The Company
was formed by taking over family partnership of M/s Gharda
Chemicals Industries. The Company was incorporated as a
Private Company, which later became a deemed public Company,
by virtue of its turnover, under Section 43A of the Companies
Act, 1956. On 24 August 1989, Dr. Gharda issued a circular,
informing the share holders that he has decided to transfer his
share in the Company to Gharda Research Foundation.  It was a
Company incorporated under Section 25, held and controlled by
Dr Gharda. The Circular requested other shareholders to donate
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their shares to the foundation. This move was opposed by the
Kavasmanecks. On 15 February 1990, Dr Gharda convened an
Extraordinary General Meeting proposing a special resolution for
deleting Article 57 of the Association of the Company which
provided for preemptive rights in respect of the shares. The
minority share holders filed Company Petition No.77 of 1990 in
this Court, and this Court by its order dated 14 February 1990
restrained the Company from implementing the resolution, if any,
passed in the Extraordinary General Meeting.
7. In view of these developments within the Company, the
minority shareholders sought financial assistance from Godrej
Industries, for purchase of shares to secure their position as
significant minority.  A memorandum of understanding (MoU) was
executed on 3 June 1992 between minority shareholders on one
hand and Godrej on the other hand. Under the MoU Godrej
agreed that it would advance loan to the minority shareholders for
purchase of shares of the Company which would be offered under
Article 57 of the Articles of Association, on a condition that for
every one share purchased, two equity shares of the Company
would be kept as security with Godrej. There were several other
complex covenants in the Agreement.  The MoU was to continue
till the Company became a Public Limited Company listed on
Stock Exchange. As per the MoU, Godrej advanced loan from
time to time and shares were offered as security by the minority
shareholders. On the same day that is 3 June 1992, minority
shareholders executed a separate MoU amongst themselves to
bind each other to work towards the common  goal.
8. In and around February 2005, Godrej lodged 3199 equity
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shares with the Company for transfer, without intimating the
minority shareholders. According to Godrej it was done  to perfect
their security. The Company refused to register the shares and
returned them back to Godrej. The refusal was been challenged
and the matter is pending. In view of the action of Godrej referred
to above, the company alleged that the Minority Shareholders
were acting against the interest of the Company, and the
Company filed Suit No.1170/2005 challenging the Godrej MoU.
The said Suit is pending.
9. In and around May, 2009, some TV Channels carried a
news report suggesting that Dr Gharda was offering to sell 75%
equity shares of the Company for a value of Rs.1600 Crores. Dr
Gharda denied the news. The Minority shareholders also
confirmed that they were not intending to sell their shares.
However, in view of these news reports, Godrej filed Arbitration
Petition No.346 of 2009 in this Court. By an order dated 12
March 2009, this Court restrained the minority shareholders from
selling, transferring and/or in any manner whatsoever dealing
with the shares owned by them in the Company. On  6 October
2009, Arbitration Petition No. 346 of 2009 was finally disposed of
and the injunction was continued till the constitution of the
Arbitral Tribunal and six weeks thereafter. By an order dated 12
March 2011, a sole Arbitrator came to be appointed and the
Godrej filed an application under Section 17 of the Arbitration Act
before the Arbitrator. The Arbitral Tribunal continued the
injunction granted against the minority shareholders restraining
them from dealing with the shares. Thus all the minority
shareholders were restrained  from selling the shares.  However,
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to the surprise of the petitioners, Godrej suddenly sought to
withdraw the Arbitral proceedings and prayed that the interim
injunction granted by Arbitral Tribunal should be vacated.  This
appeared to have been done since there was a split in the
minority shareholders with Percy and Aban Kavasmanecks
deciding to side with Godrej.  The learned Arbitrator reserved the
order on the application for withdrawal, till the next day i.e. 14
March 2012.
10. Alarmed by this sudden move by Godrej and split in the
minority shareholders, on the next day itself, i.e. 14 March 2012,
Conrad Rebello filed the present Arbitration Petition (Lodging)
No.390/2008 and sought urgent adinterim orders restraining
Godrej and Percy, Aban and Maharukh from disposing of the
shares in any manner.  Adinterim order was granted on 14 March
2012.  In the arbitration proceedings of Godrej, on 14 March 2012,
the learned Arbitrator pronounced the order which was reserved
and permitted Godrej to withdraw its proceedings, and ad
interim order was vacated.   However by that time Conrad Rebello
had obtained an order of injunction against all in respect of
transfer of shares. Thereafter, Jer and Darius also filed their
Arbitration petition i.e. No.444 of 2012.
11. In the meanwhile, in a parallel proceeding before the
Company Law Board, the Company Law Board by an order dated
14 May 2010 in Company Petition No.139 of 2009 held that the
Company has become a Public Limited Company and Article 57
was invalid. An appeal came to be filed by Jer and Darius
Kavasmaneck. The appeal was dismissed by an order dated 14
June 2011, but Dr.Gharda was restrained from dealing with
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shares in the Company. Thereafter, the decision of this Court was
challenged in Apex Court by way of S.L.P. No.1699/2011.  By an
order dated 22/27 July, 2011, the Apex Court continued the
interim injunction restraining Dr Gharda dealing with the shares
held by him in any manner, .
12. The present petitions were taken up for hearing by the
learned single Judge. All parties were duly represented by their
advocates. They produced documents in support of their
contentions and filed replies and rejoinders.  The petitioners i.e.
Jer, Darius and Conrad Rebello contended that Maharukh
Oomarigar, Percy and Aban have colluded with Godrej and Dr
Gharda to dislodge the petitioners from the company and have
committed breach of the MoU. They urged that as per the
negative covenant stipulated under the MoU, the parties agreed
not to sell or dispose of the shares till the shares of the Company
are listed on any recognized Stock Exchange. Since this dispute
arising under the MoU is sought to be referred for the Arbitration,
and since the shares are irreplacable and have a special value,
pending the Arbitration Proceedings, no party be permitted to
dispose of or deal with these shares. Godrej opposed the petition
contending that the petitioners have failed to repay the loan, and
have committed several breaches of the MoU. Godrej contended
that the MoU is being misinterpreted and the petitioners not
acting as per MoU.  On one hand petitioners are contending that
the shares should not be dealt with till the Company becomes
public while on the other hand are taking steps to oppose the
Company going public.  The negative covenant sought to be relied
upon does not bind Godrej.  In fact the covenant is incorporated
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to safeguard the interest of Godrej.  On behalf of Percy and Aban
it was contended that there is no arbitration agreement amongst
the Minority shareholders and, therefore, there is no question of
granting any relief under Section 9 of the Arbitration Act. They
urged that in fact the minority shareholders interse are governed
by a separate MoU and significantly that separate MoU does not
contain any Arbitration clause.
13. After hearing the arguments, the learned single Judge came
to the conclusion that the petitioners  were entitled to the relief of
injunction under section 9 of the Act. Learned Judge found that
the clauses of the MoU indicate that till the shares are listed on
the Stock Exchange, no signatory to the MoU can be permitted to
dispose of and/or deal with the shares.  Learned Judge held that
whether the MoU is breached or not will be subject matter of the
Arbitration Petition and in the meanwhile if the shares are allowed
to be sold, disposed of or dealt with in any manner, irreparable
loss would be caused to the petitioners, as these shares are not
ordinary articles of commerce. The learned Judge held that the
argument of Percy and Aban regarding the arbitration clause not
governing the minority shareholders interse will have to be
decided by the Arbitrator. The learned Judge took note of the
fact that in the arbitration petition filed by Godrej an injunction
was granted on 12 March 2009 by which shares could not be
disposed off. Learned Judge found that continuation of the same
position which prevailed from March 2009 till the disposal of
proposed arbitration, was in the interest of justice.  The learned
Single Judge accordingly by an order dated 11 May 2012 allowed
Arbitration Petitions in terms of prayer clause (a) which is as
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under
'(a) Pending the hearing and final disposal of the
proposed arbitration proceedings, the Respondents by
themselves and/or through their servants and/or
agents and/or in any manner whatsoever be restrained
by a temporary order of injunction from in any manner
directly or indirectly, dealing, selling, offering for sale,
transferring, parting with possession of, alienating,
encumbering, pledging or in any manner creating any
third party rights in respect of the shares of GCL
owned by the respondents or in which the respondents
have a beneficial interest.'
14. Godrej, Aban and Percy Kavasmaneck are thus in appeal
before us. We have heard learned counsel appearing for the
parties.   Since the High Court rules permit a matter that is to be
heard by single Judge, to be heard by a Division Bench,
considering the composition of this Bench, and since the facts
and argument will be common, we have taken up the Arbitration
applications filed under section 11 of the Act by the petitioners,
along with the present appeals, by consent of all the parties.
15. For appellants, Shri Anil B. Divan and Shri V.R.Dhond,
learned Senior advocates appeared on behalf of Godrej. Shri
R.M.Kadam, learned Senior advocate appeared on behalf of Percy
and Aban Kavasmaneck. For respondents, Shri Rohit Kapadia,
and Shri Pravin Samdani, learned Senior advocates appeared on
behalf of Jer and Darius Kavasmaneck. Shri Simil Purohit,
learned advocate appeared on behalf of the Rebellos. No
appearance was entered on behalf of Maharukh Oomarigar.
16. On behalf of Godrej, Shri Divan and Shri Dhond, learned
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Senior advocates submitted :
(a) While granting order under Section 9 of the Act,
principles which govern the grant of injunction have to be
kept in mind namely : prima facie case; balance of
convenience and conduct of the parties. On all these
counts the petitioners have failed to make out any case.
(b) Apart from the MoU, the Kavasmanecks have
executed loancumpledge agreement and power of attornies
which give absolute right to Godrej to deal with the shares.
(c) Petitioners Jer and Darius Kavasmaneck have
suppressed loan pledge agreement and power of attornies
and this conduct alone disentitles these petitioners from
any equitable relief. These documents have direct bearing
on the controversy as all the rights of the concerned
petitioners in respect of the shares vest in Godrej. Thus, this
is a clear suppression of material facts and documents.
(d) Jer and Darius Kavesmanecks have also suppressed
letter written by Darius Kavasmaneck  on 14 March 2005 in
which he accepted right of Godrej in respect of transfer of
shares by Godrej.
(e) In the decisions of the Apex Court in the case of
S.P.
Chengalvaraya Naidu (dead) by L.Rs. Vs. Jagannath
1
(dead) by L.Rs. And others , K.D.Sharma v. Steel
2
Authority of India Limited and others , Dalip Singh v.
3
State of Uttar Pradesh and others , it is laid down that
the party seeking an equitable relief has to approach the
court with clean hands.
(f) The loancumpledge agreements and power of attorneys
are irrevocable and all the rights of the concerned
petitioners are to be exercised by Godrej and in view of this
clear empowerment in favour of Godrej, no injunction can
be issued against Godrej from perfecting their security.
1  =(1994) 1 SCC 1.
2  =(2008) 12 SCC 481
3  =(2010) 2 SCC 114
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(g) Clause 16 of the Godrej Industries MoU which is sought
to be enforced as a negative covenant against Godrej, is only
for protection of Godrej and it is not meant to be enforced
against it. The embargo placed in respect of the transfer of
the shares is only against the minority shareholders and
not against Godrej.
(h) The shares which were lodged for transfer by Godrej
Industries were admittedly pledged to Godrej  Industries by
the minority shareholders and they cannot oppose the
perfecting of security by Godrej and as the minority
shareholders have failed to repay loan and have committed
breaches of the MoU.
(i) The petitioners are, on one hand seeking enforcement of
Clause 16 of the MoU on the other hand are acting
contrary to the other Clauses of the MoU. Clause 16 is to
operate till the Company was listed as Public Company and
the petitioners are under obligation to work towards this
goal but they are litigating and opposing the status of the
Company as a Public Limited Company.
(j) The petitioners are opposing registration, transfer of
shares in favour of Godrej. They are also not paying
dividends on the shares  as they are obliged to do under the
MoU, and thus are in breach of the MoU.  Once they are in
breach of the MoU they cannot seek any benefit from it as
held in the judgment of the House of Lords in the case of
4
Alghussein Establishment v Eton College
(k) The shares having been pledged, the loan having not
been repaid, the respondents committing breaches of the
MoU, Godrej Industries, was constrained to take steps to
perfect its security and no injunction can be granted
against the Godrej from doing so.
(l) Finding of the learned single Judge that since there
was an interim injunction operating between the parties in
the arbitration proceedings filed by Godrej  Industries same
should be continued in the present case also, is erroneous
as the rights of Godrej and minority shareholders stand on
different footing.
4 = [1991] 1 All ELR 267

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Mlns 20 Appeal 331/12 & connected matters.
(m) The grant of injunction by the learned Judge without
considering that the respondents are opposing the status of
the Company, as a public Company, has created a situation
whereby Godrej will not be able to recover its monies in
forseeable future.
(n) The MoU is impossible to be enforced since the
respondents are in minority and cannot convert the
Company into a Public Limited Company on the strength of
the shares they hold.
(o) Godrej Industries is also fully entitled to deal with the
shares as the MoU and agreement empowers them to do so.
Thus the Godrej have a right over the shares.
17. On behalf of Percy and Aban Kavasmaneck,  learned Senior
Counsel Shri R.M. Kadam contended :
(a) There is no arbitration agreement  between the minority
shareholders, and, therefore, there is no question of grant of
any injunction in a petition Section 9 of the Act against
these appellants.
(b) The recitals of the MoU indicate that the MoU was to
operate between Minority Shareholders on one side and
Godrej on the other. This MoU was not executed to govern
the rights and obligations of minority shareholders interse.
(c) The wording  of the arbitration clause in MoU does not
constitute any agreement between minority shareholders to
refer their interse disputes for Arbitration.
(d) In fact, on the same date, minority shareholders
executed another MoU in respect of their interse rights and
obligation, and in this MoU, an arbitration clause is
conspicuously missing.  This lends support to the argument
that there is no arbitration agreement amongst minority
shareholders.
(e) The learned single Judge has misconstrued the
argument regarding nonexistence of arbitration agreement
as challenge to the clauses of the agreement. What was
contended was complete lack of arbitration agreement. The
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Mlns 21 Appeal 331/12 & connected matters.
existence of an arbitration agreement goes to the root
while deciding petition under section 9 of the Arbitration
Act. The Apex Court in the case of
National Insurance
5
Company Limited vs Boghara Polyfab Private Limited
has made this position amply clear.
18. On behalf of Jer and Darius Kavasmaneck, Mr Kapadia,
and Mr Samdani, learned Senior advocates urged as under :
(a) The appeal arises from order passed in a Petition
under Section 9 of the Arbitration Act and a detailed
inquiry regarding interpretation of documents which is
within the jurisdiction of Arbitral Tribunal need not be
carried out at this stage. Only question in this appeal is
whether injunction, which is a discretionary relief, granted
by the learned single Judge should be continued till the
arbitration proceedings are concluded. The exercise of
thorough examination of documents in detail which the
Arbitrator is supposed to undertake need not be carried out
in this appeal.
(b) There is no suppression of any material facts and
documents.  Godrej in their earlier arbitration petition and
Company Petitions have referred to the documents alleged
to be concealed and, therefore, there is no question of any
suppression of any documents. Since the Godrej was fully
aware of these documents and the interim order was being
sought after notice to the Godrej, no benefit or advantage
was tried to be obtained, or was obtained by not annexing
these documents.
(c) The argument made on behalf of Godrej Industries
that it is entitled to deal with shares in their own right  is
completely contrary to the stand taken by them in the
pleadings whereby they have reiterated that the shares are
only pledged with them. There is a variance in the
argument of the Counsel appearing in two appeals, on this
aspect.
(d) Till date, Godrej has never demanded repayment of
loan and nor has it demanded payment of dividend. The
5 = (2009) 1 Supreme Court Cases 267
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Mlns 22 Appeal 331/12 & connected matters.
respondents are ready to repay the principal amount of loan
to the Godrej and since the shares are only pledged, Godrej
should return the shares back to them.  In a letter written
by Adi Godrej, dated 13 June 1992 which is suppressed by
Godrej, interest is specifically not claimed.
(e) The interpretation of the MoU clearly shows that the
MoU uses different expressions and proper construction
shows that negative covenant in Clause (16) is for the
benefit of all parties.
(f) There is no question of the petitioners, acting
contrary to the MoU and preventing listing of the Company
as Public Company, as in any case the Company is a
deemed Public Limited Company. What is contemplated by
the MoU is that the Company should be listed on the stock
exchange and shares become freely tradeable.
(g) The contention by Percy and Aban that the MoU does
not bind the minority shareholders interse is not correct as
the reference to parties in the MoU would indicate
otherwise. The Arbitration clause in the MoU refers to
“parties hereto” which mean the parties who have signed
the MoU in individual capacity also. Thus, there is no merit
in the contention that the petition under section 9 is not
maintainable against Percy and Aban.
19. On behalf of Rebellos, learned Advocate Shri Purohit,
contended:
(a) There is no allegation against Rebellos regarding
suppression of any documents nor there is any argument
that the Rebellos have committed any breach of the MoU.
(b) Rebellos have abided by all the clauses of the MoU
and they have not committed any breach thereof and,
therefore, there is no question of vacating any interim
protection that has been granted in their favour.
(c) Godrej filed and obtained relief in a Petition under
section 9 based on the same MoU and shares were to be
kept as they are till the disposal of the arbitration, there is
no reason why when the other party under the same MoU
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Mlns 23 Appeal 331/12 & connected matters.
seeks similar relief, it should not be granted.
(d) In the affidavitinreply filed in the present
Arbitration Petition,  Godrej  has reiterated that the MoU is
valid, subsisting and binding on all the parties.
20. Before we proceed to discuss the rival contentions we make
it clear that since the proceedings are under section 9 of the Act,
the findings recorded hereafter are prima facie. To avoid
repetition, we have not prefixed every finding with the phrase
'prima facie'.
21. Section 9 of the Act provides for an interim measure till the
parties approach  the Arbitrator. Grant of this interim measure is
governed by the same principles which apply when interim orders
are passed by the Courts.   These factors being; prima facie case,
balance of convenience and conduct of the parties.
22. The Apex Court in the case of Adhunik Steels Ltd v.
6
Orissa Manganese and Minerals Pvt Ltd . emphasized the above
position by observing as under.
“The grant of an interim prohibitory injunction
or an interim mandatory injunction are governed by
well known rules and it is difficult to imagine that the
legislature while enacting S.9 intended to make a
provision which was dehors the accepted principles
that governed the grant of an interim injunction.
Same is the position regarding the appointment of a
receiver since the section itself brings in, the concept
of 'just and convenient' while speaking of passing any
interim measure of protection. The concluding words
of the section, 'and the Court shall have the same
power for making orders as it has for the purpose
and in relation to any proceedings before it' also
suggest that the normal rules that govern the Court
6 =
AIR 2007 SC 2563
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Mlns 24 Appeal 331/12 & connected matters.
in the grant of interim orders is not sought to be
jettisoned by the provision. Moreover, when a party is
given a right to approach an ordinary Court of the
country without providing a special procedure or a
special set of rules in that behalf, the ordinary rules
followed by that Court would govern the exercise of
power conferred by the Act. On that basis also, it is
not possible to keep out the concept of balance of
convenience, prima facie case, irreparable injury and
the concept of just and convenient while passing
interim measures under S.9”.   (emphasis supplied)
23. Thus, what we need to consider is, whether the  petitioners
had proved prima facie case, whether balance of convenience is in
their favour, and whether they have disentitled themselves from
praying for an equitable relief.
24. For assessing prima facie case in the matter at hand,
examination of the clauses of MoU and other documents will be
required. This examination however, need not be and cannot be
as in depth as will be done at the time of main arbitration
proceedings. Mr. Samdani, learned Senior Counsel relied upon
the observations of the Apex Court in Mcdermott International
7
   where in the Apex
Inc v. Burn Standard Co.Ltd and others
Court has observed as under :
“112.   It is trite that the terms of the contract
can be express or implied. The conduct of the
parties would also be a relevant factor in the
matter of construction of a contract. The
construction of the contract agreement is within
the jurisdiction of the arbitrators having regard
to the wide nature, scope and ambit of the
arbitration agreement and they cannot be said to
have misdirected themselves in passing the
award by taking into consideration the conduct
7 =
(2006)11 SCC 181
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Mlns 25 Appeal 331/12 & connected matters.
of the parties. It is also trite that correspondence
exchanged by the parties are required to be
taken into consideration for the purpose of
construction of a contract. Interpretation of a
contract is a matter for the arbitrator to
determine, even if it gives rise to determination of
a question of law.” (see Pure Helium India (P) Ltd
v. ONGC and D.D.Sharma v. Union of India.)
Reliance is also placed on the decision of the Supreme
Court in M.P. Housing Board v. Progressive Writers &
8
wherein it is held as under
Publishers , :
“Interpretation of a contract, it is trite, is a matter
for the arbitrator to determine. Even in a case where
the award contained reasons, the interference
therewith would still be not available within the
jurisdiction of the court unless, of course, the
reasons are totally perverse or award is based on
wrong proposition of law. An error apparent on the
face of the records would not imply close scrutiny of
the merits of documents and materials on record.
“Once it is found that the view of the arbitrator is a
plausible one, the court will refrain itself from
interfering.” [see Sudarshan Trading Co. v. Govt. of
Kerala (1989) 2 SCC 38 and State of U.P. v. Allied
Constructions (2003) 7 SCC 396].
       In M/s Sudarshan Trading Co. vs. The Govt. of Kerala
9
Apex Court observed in paragraph 32 as follows
and another
“The High Court in the judgment under appeal referred to
the decision of the Division Bench of the Kerala High
Court in State of Kerala v. Poulose, (19871 Ker LT 781)
(supra). Our attention was also drawn to the said decision
by the counsel for the respondents that if an arbitrator or
the umpire travels beyond his jurisdiction and arrogates
8  = AIR 2009 SC 1585
9 =  AIR 1989 SC 890,
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Mlns 26 Appeal 331/12 & connected matters.
jurisdiction that does not vest in him, that would be a
ground to impeach the award. If an arbitrator, even in a
nonspeaking award decides contrary to the basic
features of the contract, that would vitiate the award, it
was held. It may be mentioned that in so far as the
decision given that it was possible for the court to
construe the terms of the contract to come to a
conclusion whether an award made by the arbitrator was
possible to be made or not, in our opinion, this is not a
correct proposition in law and the several decisions relied
by the learned Judge in support of that proposition do
not support this proposition. Once there is no dispute as
to the contract, what is the interpretation of that
contract, is a matter for the arbitrator and on which court
cannot substitute its own decision.”
25. It is no doubt true that these decisions refer to the scope of
scrutiny at the stage of challenge to an arbitration award. What
needs to be noticed however is that generally the courts have
regarded detailed scrutiny and interpretation of documents as a
matter within the domain of arbitrator.  The scrutiny at the stage
of Section 9 is to ascertain whether the petitioner has prima facie
case so as to consider granting protection till the parties
approach the Arbitrator.  The enquiry at the stage of Section 9 of
the Act is to ascertain whether the party approaching the Court
has a triable dispute and if so how best the subject matter of the
dispute is to be protected in the intervening period. An order
passed under Section 9 is not an end in itself but is only a
means to facilitate effective arbitration between the parties. The
inquiry under Section 9 of the Act, is not meant to be as
comprehensive as the main arbitral proceeding.
26. Keeping the above position in mind, we proceed to examine
the MoU. Before we consider the clauses of the MoU, the
background in which the MoU came to be executed needs to be
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Mlns 27 Appeal 331/12 & connected matters.
noticed.  According to the petitioners, minority shareholders were
victims of oppressive tactics adopted by Dr K.H.Gharda who holds
the majority shares in the Company. The minority shareholders
were in danger of being squeezed out.  To save their existence in
the Company, they   turned to Godrej for financial help so that
they could purchase shares of the Company and retain their
hold. Godrej accordingly, lent certain monies and by the
arrangement provided under the MoU certain shares were kept as
security. The parties had also agreed that this arrangement will
continue till the Company becomes a Public  Company listed on
the Stock Exchange. The possession of shares thus had two
meanings for the minority shareholders, one is in terms of money
and the other and more important, in terms of representation in
the Company.
27. The dispute appears to be about the nature of interest of
Godrej  Industries in these shares. According to the petitioners,
they have not given any cause to warrant appropriation of
security by Godrej. The contention of Godrej is that the
petitioners breached the MoU and thus the Godrej Industries is
entitled to perfect their security. Thus, we will have to consider
whether the interpretation of the MoU and the documents on
record show that the petitioners have committed the breach of the
MoU and have acted in such a manner that they are not entitled
to the protection granted by single Judge before the dispute is
adjudicated by the Arbitrator.
28. The MoU is a peculiarly complicated arrangement. The MoU
is executed between Kavasmanecks, Oomarigar and Rebellos
individually with Godrej, for finance. The MoU refers that the
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Mlns 28 Appeal 331/12 & connected matters.
Minority shareholders are entitled to preemption rights in
respect of the shares of the Company and they had requested
Godrej  Industries to finance the acquisition of shares. The MoU
records that Godrej Industries will make available finance
available to purchase the shares that may be offered to the
Minority shareholders. For that  purpose certain modalities were
laid down  as under :
( Party of the First Part = five shareholders in minority/ Party of
the Other part =Godrej )
“2. For the purpose of the purchase of shares
aforesaid, the following modalities will be followed:
(i) the party of the First Part shall give to the party of
the Other Part intimation of the shares available for
sale and the price as mentioned in the notice offering
the shares for sale.
(ii) the party of the Other part shall deposit with
M/s Federal & Rashmikant, Solicitors and Advocates
the amounts mentioned in the notice offering shares
for sale.
(iii) the party of the First part shall ensure that M/s
Federal & Rashmikant, Solicitors and Advocates get
issued Cheques/Pay orders/Bank Drafts drawn in
favour of the vendors of the shares as may be
required for payment of the purchase price of the
shares offered for sale to the party of the First Part
and the cost of the transfer stamps.
(iv) The party of the First Part will ensure that the
share certificates duly having endorsed thereon the
transfer of the said shares in their favour are
obtained expeditiously and delivered to the party of
the Other part within 7 days from the date of receipt
thereof by the party of the first part.
(v) The party of the First Part shall execute in favour
of the party of the Other Part such writings as may
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Mlns 29 Appeal 331/12 & connected matters.
be required by the Party of the Other Part for its
exercise of all rights, as may be exercisable in respect
of the shares purchased with the finance made
available by the party of the Other part including an
irrevocable Power of Attorney in a form acceptable to
the party of the Other part.
3(a). The party of the First Part shall pledge with the
party of the Other Part two shares for every share
purchased with the finance made available by the
party of the Other Part along with :
(i)  the share certificates;
(ii) Share Transfer Forms signed in blank;
(iii) Proxy Forms;
(iv) Irrevocable Power of Attorney in favour of the
party of the Other Part in a form acceptable to the
party of the Other Part.
The party of the Other Part agrees and confirm that
on the party of the First Part handing over to the
party of the Other Part the share certificates along
with :
(i) Share Transfer Forms signed in blank;
(ii) Proxy Forms;
(iii) Irrevocable Power of Attorney in favour of the
party of the Other Part in respect of the shares
purchased with the finance made available by the
party of the Other Part, the party of the Other Part
shall return to the party of the First Part equal
number of shares of the party of the First Part
pledged by them with the party of the Other Part in
the first instance along with
(i) Share Transfer Forms signed in blank;
(ii) Proxy Forms;
(iii) Irrevocable Power of Attorney in favour of the
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Mlns 30 Appeal 331/12 & connected matters.
party of the Other Part in respect thereof
(b) In the event of the party of the Other Part
requiring the party of the First Part to offer for sale
any of the share purchased with the finance made
available by the party of the Other Part, the party of
the Other Part shall hand over to the party of the
First Part such shares along with the documents
mentioned hereinabove and shall receive from the
party of the First Part in substitution of such shares
equal number of its shares along with all the
documents.  The shares received as aforesaid shall be
returned to the party of the First Part on receiving
the sale proceeds of the shares required to be sold or
on the party of the First Part executing the required
transfer forms in favour of the party of the Other Part
or its nominees on due compliance with the
provisions of Article 57 of the Articles of Association
of the Company.
(c) Further, on the party of the First Part duly
complying with all the provisions  of Articles 57 of the
Articles of Association of the Company in respect of
the shares purchased with the finance made
available by the party of the Other Part and the party
of the Other Part duly receiving the entire sale
proceeds of the shares sold pursuant to the
directions of the party of the First Part executing the
required transfer forms in favour of the party of the
Other Part or its nominees on due compliance with
the provisions of Article 57 of the Articles of
Association of the Company the party of the Other
Part shall return to the party of the First Part the
proportionate shares pledged along with the share
transfer form and the proxy forms signed in blank,
together with the irrevocable power of attorney as
aforesaid”.
29. The MoU also records  that the minority share holders  will
take all necessary steps in accordance with Articles of Association
and also that the parties agree and confirm that it is their
intention to convert the Company into a Public Limited Company
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Mlns 31 Appeal 331/12 & connected matters.
listed on recognized Stock Exchange. It was also agreed that both,
the Minority Shareholders and Godrej, would not directly or
indirectly deal with other shareholders of the Company or the
Company itself in respect of the shares. It was also provided that
the MoU will continue in force till shares of the Company are
listed on a recognized Stock Exchange.
30. As we have indicated earlier, a detailed interpretation of this
MoU will be the subject matter of the Arbitration and we would
leave the detailed scrutiny to the Arbitrator. Plain reading of the
MoU reveals following  broad features:
The agreement is between the Minority shareholders and
Godrej  for purchase of certain shares of the Company which the
Minority Shareholders, for lack of finance, could not purchase on
their own. The Minority Shareholders sought the shares so as to
retain their status as sizable Minority in the Company. Godrej was
to provide the finance and keep some shares, as indicated in the
MoU, as a pledge. This Agreement was to continue till the
Company was listed on Stock Exchange and the shares were freely
tradeable. No signatory to the MoU were to act in the manner
prejudicial to each other's interest. The parties agreed to work
towards making the Company into a Public Limited Company
listed a recognized Stock Exchange.
31. The petitioners filed the present petition under Section 9 of
the Arbitration Act because the Godrej unilaterally tried to lodge
shares of the petitioners with the Company and the Arbitration
petition filed by Godrej was sought to be withdrawn by them and
it came to light that Minority Shareholders were no longer
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Mlns 32 Appeal 331/12 & connected matters.
together, and the break away group was supporting Godrej. In the
Arbitration Petition, the Petitioners enumerated their
apprehension and the reason for moving an application under
Section 9, in the following words
“6. In the circumstances, it is submitted that there
is a valid and subsisting Memorandum of
Understanding dated June 3, 1992 between the
Petitioners and the Respondents. Under the Godrej
MOU the parties thereto have undertaken that they
shall not sell, alienate, dispose of or transfer the shares
held by any one or more of them until the shares of
GCL are listed on any recognised Stock Exchange.  The
Godrej MOU  has been acted upon and implemented by
the parties thereto and is binding on all parties and
the covenants  contained therein enure for the benefit
th
of all parties equally.  The 6 Respondent invoked the
Godrej MOU and sought an injunction against the
other parties from sellling, alienating, disposing of or
transferring the shares held by them in GCL. This
injunction  has been in force since May 12, 2009.  On
th
March 13, 2012 the volte face of the 6 Respondent in
seeking leave to withdraw the arbitral proceedings
initiated by it and seek vacation of the interim
protective order clearly reveals that a secret and
clandestine arrangement has been arrived at between
th st rd
the 6 Respondent in collusion with the 1 to 3
Respondents to deal with the shares of GCL in breach
of the Godrej MOU. If the other parties to the said
MOU are permitted to independently sell their shares,
the Petitioners shareholding will be rendered valueless.
Besides, such an action would be contrary to the
fundamental understanding between the parties which
required all of them to abide by the terms of the Godrej
MOU till the ultimate objective of having the shares of
GCL listed on the stock exchange is achieved.
th
Furthermore, the 6 Respondent is in possession of
valuable shares of the Petitioners accompanied with
powers of attorney. These shares were pledged with
th
the 6 Respondent.  The value of these shares which
th
are available with the 6 Respondent is far in excess of
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Mlns 33 Appeal 331/12 & connected matters.
th
the amounts financed by the 6 Respondent. The
th
Petitioners apprehend that the 6 Respondent will deal
th
with the Petitioners' shares that are lying with the 6
Respondent in a manner adverse to the Petitioners”
interests and in a manner contrary to the Godrej MOU.
st rd
7. As stated  above, the 1   to 3 Respondent, have
already evinced their desire to dishonour the Godrej
th
MOU and to sell their shares independently. The 6
Respondent, by its act of withdrawing the arbitral
proceedings, has clearly exposed its desire to act in a
manner contrary to the Godrej MOU and in a manner
adverse to the rights of the Petitioners.  The Petitioners
st rd
have reason to believe that the 1 to 3 Respondent
th
together with the 6 Respondent are trying to sell the
shares of GCL in collusion with one another and in
collusion with Dr.Gharda so as to cause valuable loss,
damage and injury to the Petitioners and in breach of
the terms and conditions of the Godrej MOU which is
valid, binding and subsisting. If the parties are
permitted to breach the terms of the Godrej MOU the
loss caused to the Petitioners would be immense in as
much as the value which the shareholding of the
Petitioners would fetch  in a listed company cannot be
compared to the value of an unlisted company.
Besides, the value of the Petitioners' shartes that are in
th
custody of the 6 Respondent is far in excess of the
th
amount financed by the 6 Respondent. It is
th
significant that the 6 Respondent in Godrej's Arbitral
Proceedings has stated that it has advanced an
amount of Rs.10.34 Crores to the minority
shareholders. It has, Godrej's Arbitral Proceedings
also stated that it is in possession of 6221 equity
th
shares.  As per the news report relied upon by the 6
Respondent the value of GCL is in the region of
Rs.2400 crores and consequently the value of the
th
shares that the 6 Respondent holding on will be in
the region of Rs.233 Crores. The Petitioners are
always ready and willing to abide by and comply with
and perform the Godrej MOU”.
32. First question is whether the parties are still bound by the
MoU. The petitioners have asserted that the MoU continues to
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Mlns 34 Appeal 331/12 & connected matters.
operate and is binding on all the parties. A reply has been filed on
behalf of Godrej in which it is acknowledged and asserted that the
MoU is subsisting and binding on all the parties. Thus we
proceed on the premise that  the MoU subsists and continues to
bind the parties.
33. The petitioners have based their case on the negative
covenant contained in Clause 16. It is the contention of Godrej
Industries that Clause 16 does not operate against Godrej
Industries, but it is for the benefit of Godrej. Clause 16 reads as
under
(16). “The parties hereto agree and undertake that
till the Company goes public and or its shares are
listed in any recognized stock exchange, the parties
shall not sell, alienate, dispose off or transfer or
create any interest or right in a third party rights in
any shares registered in their respective names or
in which they have a beneficial interest. It is
clarified that nothing herein will restrict the
transfer among the designated nominees/limited
nominees defined hereinabove”.
Both sides have advanced argument as to the interpretation of the
words “the Parties hereto” in the above clause. The “Parties
hereto” in its plain meaning will mean all the parties to the
agreement. The Agreement is signed by Godrej and the Minority
Shareholders individually. The MoU uses different terms, such as,
'Party', 'Parties hereto', ' Party of the First Part' and 'Party of the
Second Part'. Thus, different phrases are employed through the
MoU. In Clause 16 the only phrase employed is “Parties hereto”.
We have adverted to this aspect in detail later in the judgment
while construing clause 28 which also uses the same  phraseology
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Mlns 35 Appeal 331/12 & connected matters.
i.e. 'parties hereto'. At this place we only refer to our conclusion
on this aspect that 'parties hereto' means all parties, which
includes Godrej as well.  It cannot be said that Clause 16 is not
meant to operate against Godrej. This Clause is wide enough to
include the shares registered in the name of Godrej and the
shares in which they claim beneficial interest. Clause 16 will
operate as against all the signatories to the MoU including Godrej.
34. It was then contended on behalf of Godrej that even
assuming Clause 16 is applicable to Godrej, the Clause cannot be
read in isolation. Clause 16 need to be read with Clause 9 and
Clause 21. These  Clauses read as under :
Clause 9 :
“The party of the First Part hereby undertakes to
take all necessary steps in accordance with the
Articles of Association of the Company and to
assist the party of the Other part in every way to
have the transfer of the shares registered by the
Company in the name of the party of the Other
Part”.
Clause 21 :
“Both parties agree, confirm and declare that it is
their intention to convert the Company into a
public limited Company listed with a recognized
stock exchange as soon as possible.
35. It was contended that the petitioners have taken steps
contrary to Clauses 9 and 21. The original petitioners have taken
steps to ensure that the Company does not become public and
have opposed the declaration of the Company becoming public.  It
was, contended that the Petitioners have opposed registration and
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Mlns 36 Appeal 331/12 & connected matters.
transfer of 3199 shares and also obstructed transfer of 461
shares. Furthermore the petitioners have not been paying
dividends on the shares purchased from the loans advanced by
Godrej. Reliance is placed on the judgment of the learned
Company Judge of this Court in Company Appeal No.24/2010. In
this appeal, the original petitioners contended that the Company
is not a public Company. Thus, the original petitioners are
creating a situation whereby Clause 16 will never come to an end
and monies advanced by Godrej will continue to be locked up and
if injunction is granted against Godrej from perfecting the security
then the entire agreement will become unworkable. It was,
therefore, contended that the petitioners acting in breach of
obligation of the MoU are not entitled to protection under the
other clauses of the MoU. Reliance is placed by Mr.Divan, learned
Senior Counsel on the decision of the House of Lords in the case
4
of Alghussein Establishment , wherein the House of Lords
observed as under :
“The principle that in the absence of clear
express provisions in a contract to the contrary it
was not to be presumed that the parties intended
that a party should be entitled to take advantage of
his own breach as against the other party was not
limited to cases where a party was relying on his
own wrong to avoid his obligations under the
contract but applied also where a party sought to
obtain a benefit under a continuing contract on
account of his breach.”
On the other hand, it has been urged on behalf of the original
4(1991) 1 ALL ER 267
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Mlns 37 Appeal 331/12 & connected matters.
petitioners that they have not committed any breach of the MoU.
It is submitted that the contention of the petitioners was that
though the Company has become deemed Public Company, it was
entitled to retain Article 57. It was urged that in case of Public
Company, which is not yet listed on the Stock Exchange, articles
can provide for right of preemption.  Petitioners contended that
they never opposed listing of the Company on the stock market
and they are always willing to do so.
36. We have gone through the judgment of the learned
Company Judge referred to above. We do not find from the
judgment or the contentions of the petitioners reproduced in the
judgment that the petitioners were opposing the listing of the
Company on the Stock Exchange.  Reading of the MoU shows that
the arrangement contemplated under the MoU was to continue till
the shares of the Company are listed on the Stock Exchange and
become freely tradeable. The apprehension of the petitioners was
that Dr Gharda will dispense with the right of preemption
creating a situation whereby Minority Shareholders will not be
able to sell their shares in the open market and realize their
market value but will be forced to sell their shares to Dr.Gharda
at the price to be determined by him.  Consequently the Minority
Shareholders  will be squeezed out. This would not be possible if
the Company gets listed on registered Stock Exchange and shares
become freely tradable.   It is for this purpose, MoU was entered
into and free marketibility of shares is the end situation the
Minority Shareholders have been striving for. There is no question
of opposing the status of the Company becoming a public
company as the company any way by virtue of its turnover was
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Mlns 38 Appeal 331/12 & connected matters.
already a deemed public company. The MoU was not regarding
the Company becoming Public Company alone, but making it's
shares become fully tradable on the stock exchange.  We have not
been shown that the petitioners anytime opposed the listing of the
shares on a recognised stock exchange.  According to us therefore
the petitioners have not committed breach of Clause 21 of the
MoU. The attempt of the petitioners is only to ensure that the
petitioners are not deprived of their shareholding before the
shares become fully tradeable on the stock exchange.
37. The second breach of the MoU alleged was that the
petitioners were opposing registration and transfer of 3199 shares
and obstructing transfer of 461 shares. It is submitted on behalf
of petitioners that as far as 461 shares are concerned they have
never opposed are not opposing registration in the name of Godrej
Industries if Godrej Industries adhere to negative covenants
stipulated under the MoU. It has to be noted that before the
dispute arose between the Parties, Godrej had assured the
petitioners that shares were only being treated as pledge for the
loan. However, now the petitioners apprehend that Godrej is
trying to deal with the shares for the purpose of getting control of
the Company along with Dr Gharda. Godrej Industries is now
trying to deal with the shares so as to defeat the right of Minority
Shareholders. These 3199 shares constitute approximately 5%
shareholding of the Company. 5% becomes crucial when it is
pooled together with shareholding of Dr Gharda and Percy, Aban
Kavasmaneck and Oomrigar. This group will acquire special
majority. Once special majority is reached the significant minority
will be extinguished. We find merit in the contention that the
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Mlns 39 Appeal 331/12 & connected matters.
opposition by the petitioner in respect of 3199 shares being dealt
with by Godrej Industries is because Godrej Industries is no
longer trading the shares as means of recovering the loan but as
means of getting control of the Company. Such action would,
obviously, run against the spirit of MoU and frustrate the very
purpose for which it was entered into. We find that by opposing
the transfer of 3199 shares to Godrej, in these changed equations,
the petitioners did not commit any breach of Clause 9 of the MoU.
38. Third breach alleged to be committed by the petitioners is
that under the MoU, the petitioners were required to pay
dividends which they have failed to pay. It has been placed on
record by the petitioners that Godrej never demanded dividends
for the last 22 years. In fact, the nonpayment of dividend was not
even considered as a breach till 5 July, 2012 when Godrej  filed
further affidavit. It appears to us that in view of the change of
intention by Godrej, even the issues which were never considered
to be breaches are now sought to be raised against the petitioners.
If for the last 22 years there has never been a demand for
payment of dividend, it clearly means that Godrej never
considered nonpayment of dividend as a breach of the MoU. The
argument of nonpayment of dividend is advanced to some how
create a case to restrain the petitioners from invoking a negative
covenant stipulated under the MoU. Thus, three breaches of the
MoU, which according to the Godrej disentitle the petitioners from
relying on the MoU, do not constitute any breaches.
39. It was then urged on behalf of Godrej that the Clause 16 of
the MoU cannot be pressed into service as it is inoperative on
account of impossibility. It was urged that since the original
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Mlns 40 Appeal 331/12 & connected matters.
petitioners are in minority they do not have enough share holding
to ensure that the Company is listed on  a Stock Exchange. This
argument has been countered by the petitioners by pointing out
that Godrej Industries have taken contradictory stand in the
Arbitration Petition filed by them and also that the collective
share holding of the Minority Shareholders has, in fact, gone up
from 26% to 33%. We have been shown averments made on behalf
of the Godrej in the Arbitration Proceedings filed by Godrej. In
those proceedings Godrej had categorically asserted that parties
are bound by the MoU, which is valid and subsisting.  It was also
asserted that MoU is not impossible to be performed, and not void
for uncertainty.
40. The argument of Godrej based on impossibility is thus
contradictory to the stand taken on affidavit filed by it in the
earlier arbitration petition. Apart from this position, petitioners
have pointed out that when the MoU was entered into in the year
1992, the collective shareholding of the Minority Shareholders
was 27%. Thus, both Godrej and Minority Shareholders believed
that 27% share holding was sufficient to enable the parties to
work towards the Company being listed on the Stock Exchange. At
that time, no apprehension was raised by Godrej in respect of
lack of share holding of the minority shareholding to achieve this
object. If the parties found 27% shareholder was then sufficient to
achieve the object of MoU, one fails to understand how an
argument based on an impossibility can be advanced when the
shareholding has now increased from 27% to 34%(approx). We
thus do not find any substance in this argument.
41. Thus, the negative covenant binds Godrej as well and the
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Mlns 41 Appeal 331/12 & connected matters.
argument that the petitioners have committed breaches of the
MoU do not impress us. In any case, all these points will be gone
into in detail during the arbitration proceedings. Thus, we are in
agreement with the learned single Judge that the petitioners had
established that they had a prima facie case based on the MoU
and that there is enough prima facie material to show that the
negative covenant regarding dealing with the shares till the
Company is registered or the Company is listed on the Stock
Exchange is applicable to all the signatories to the MoU.
42. Now we consider the argument advanced by Godrej that the
petitioners are not entitled to any relief on the ground of
suppression of material facts. It was vehemently contended on
behalf of the Godrej Industries that Jer, Darius Kavasmaneck
suppressed the loancum pledge agreement and power of attorney
which were executed subsequently to the MoU dated 3 June 1992.
A letter written by Darius Kavasmaneck  on 14 March 2005 to the
Godrej Industries in which Darius Kavasmaneck accepted the
transfer and lodging of the shares was also alleged to have been
suppressed. It was contended that these two documents are of
vital importance and since Jer and Darius Kavasmaneck  did not
file them along with the Arbitration Petition, they cannot be
granted any relief.  Counsel for Godrej  relied upon the decision in
1
the case of S.P.Chengalvaraya Naidu   in particular the following
observations in paragraphs 5 and 6 of the decision
“5. ….....  One who comes to the court, must come with
clean hands. We are constrained to say that more often
than not, process of the court is being abused.  Property
1  = (1994) 1 SCC 1
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Mlns 42 Appeal 331/12 & connected matters.
grabbers, taxevaders, bankloandodgers and other
unscrupulous persons from all walks of life find the court
process a convenient lever to retain the illegalgains
indefinitely. We have no hesitation to say that a person,
who's case is based on falsehood, has no right to approach
the court.  He can be summarily thrown out at any stage of
the litigation.
6. …..... Nonproduction and even nonmentioning of
the release deed at the trial is tantamount to playing fraud
on the court. We do not agree with the  observations of the
High Court that the appellantsdefendants could have easily
produced the certified registered copy of Ex.B15 and non
suited the plaintiff.  A litigant, who approaches the court, is
bound to produce all the documents executed by him
which are relevant to the litigation.  If he withholds a vital
document in order to gain advantage on the other side then
he would be guilty of playing fraud on the court as well as
on the opposite party”.
2
In case (supra) in paragraph 27 the Apex Court
K.D.Sharma's
observed as under :
“The Court defined “fraud” as an act of deliberate
deception with the design of securing something by
taking unfair advantage of another. In fraud one
gains at the loss and cost of another. Even the most
solemn proceedings stand vitiated if they are
actuated by fraud. Fraud is thus an extrinsic
collateral act which vitiates all judicial acts, whether
in rem or in personam”.
3
In Dalip Singh (supra), the Apex Court in paragraph 2 observed
as under :
“2.  In the last 40 years, a new creed of litigants
has cropped up. Those who belong to this creed
do not have any respect for truth. They
2 = (2008) 12 SCC 481
3 = (2010) 2 SCC 114
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Mlns 43 Appeal 331/12 & connected matters.
shamelessly resort to falsehood and unethical
means for achieving their goals. In order to
material facts, his application is liable to be
dismissed. We accordingly dismiss the special
leave petitions.”
43. The position of law enunciated in the cases above is
unequivocal that the party who seeks equitable relief, must
approach the Court with clean hands and shall not suppress any
material documents to gain an unfair advantage. It is however
urged on behalf of the petitioners – Jer and Darius,  that they are
not guilty of any suppression. It was further urged that the
principles laid down in the above judgments would apply to cases
where the document favourable to the other side is concealed
from the Court and order is obtained without notice to the other
side. It is in such cases, where a litigant dishonestly tries to
obtain an exparte order from the Court by concealing crucial
material, he may be disentitled to any equitable relief. It was
urged that such is not the case in the present matter. The
documents are in full knowledge of the Godrej  Industries. In fact,
the Power of Attornees and  agreements have been referred to in
the Arbitration proceedings filed by Godrej  earlier.
44. Application for adinterim relief was moved by the
petitioners with notice to the Godrej Industries. There is reference
to the pledgecumloan agreement and power of attorney in the
arbitration petition. The impugned order came to be passed after
both the parties had full opportunity of producing documents on
record. The said MoU and power of attorney were available on the
record of the learned single Judge. It cannot be said that the
petitioners' conduct is of such a grave nature that the injunction
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Mlns 44 Appeal 331/12 & connected matters.
granted in their favour should be vacated on the ground of
suppression of documents when the MoU and the arbitration
petition itself refers to execution of loan cum pledge agreement
and power of attorney. It has been pointed out that Mr.Adi Godrej
had agreed by letter dated 13 June 1992 not to claim interest or
recall loans under these pledge agreements and power of
attorneys. These documents were thus not the principal
documents on which relief was being sought. These documents
were the part of defence of Godrej, which had full opportunity to
defend the application. Matter was fully heard by the learned
Judge and then impugned relief was granted. In view of these
circumstances, we do not find that the conduct of Jer, Darius
Kavasmaneck  was blameworthy, as alleged. On the other hand,
the conduct of Godrej  Industries in not placing on record letter
dated 13 June 1992 wherein Mr Adi Godrej reiterated that
notwithstanding the loancumpledge agreement, Godrej
Industries will not enforce loans or claim interest, needs to be
noticed. In any case, no such allegation can be made and has not
been made against Rebellos that they have suppressed any
documents.
45. We now turn to the principal argument on behalf of Percy
and Aban Kavasmanecks that the Clause 28 of the MoU does not
provide for arbitration between the minority shareholders.  Clause
28 reads as under :
“Any dispute or difference between the parties hereto
including in respect of any breach or alleged breach hereof,
shall be referred to the sole arbitration of a person to be
mutually agreed upon by the parties hereto. The sole
arbitrator shall have summary powers and the Arbitrator
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Mlns 45 Appeal 331/12 & connected matters.
shall not be required to give reasons for his award. The
place for arbitration shall be at Bombay”.
It was contended that the MoU is executed between 'party of the
First part' i.e. the Minority shareholders and 'party of the Second
Part' i.e Godrej. The  agreement is only between these two parties
and thus it was never contemplated that dispute between
minority members interse will be referred for Arbitration.
It was urged that 'Parties hereto' referred in clause 28 above
means only “party of First Part” and “party of Second Part”. It
was also urged that the Minority shareholders entered into a
separate MoU on the same day and that MoU does not contain
any clause for arbitration. Relying on the interpretation of the
various terms included in the MoU and the supplementary MoU
amongst the minority shareholders, it was contended that there
was no agreement for arbitration between the minority
shareholders and, therefore, a petition under Section 9 of the Act
was not maintainable. It was further contended that the absence
of arbitration agreement goes to the root of the matter and this
issue has to be considered in the proceedings under section 9 of
the Act. It was urged that learned single Judge misconstrued the
argument to mean that it was regarding nonarbitrability of the
dispute. Reliance was placed on the decision of the Apex Court in
5
National Insurance Co. vs. Boghara    (supra).
46. We have gone through the decision of the Apex Court in the
5
case of National Insurance Co. Ltd (supra). The decision was
5 = (2009) 1 SCC 267
5

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Mlns 46 Appeal 331/12 & connected matters.
rendered in the context of the inquiry under Section 11 of the Act
and not under Section 9 of the Act. Be that it as it may, we will
proceed to consider whether clause 28 excluded the other
signatories from its operation. Firstly, the MoU will have to be
read, as a whole, to understand the meaning and purport of the
phrases employed in it. In
Odgers' Construction of Deeds and
Statutes, Fifth Edition Chapter 13 Page237, the author refers
to general rule of construction of a document. The passage reads
as under :
“1. Generally same rule as in document.
It has been said that no further rules of construction
should be placed upon statutes than upon any other legal
document, and Bowen L.J. Said : “The rules for the construction
of statues are very like those which apply to the construction of
other documents, especially with regard to one crucial rule, viz.,
that, if possible, the words of an Act of Parliament must be
construed so as to give a sensible meaning to them. The words
ought to be construed ut res magis valeat quam pereat.” “ It is
said that the court draws no distinction between statues and
other written documents. I am not prepared to say that this is
true to the full extent.” 1. [Curtis v. Stovin (1989) 22 Q.B.D. 512 at
p.517: see also Conadian Pacific Steamships Ltd v. Bryers [1958]
A.C. 485 p. 501 per Viscount Kilmuir. 2. Camden (Marquis) v. I.R.C.
[1914] 1 K.B. 641 at p. 648 per CozensHardy M.R.]
47. There is no absolute bar in employing the rules relating to
interpretation of statutes, for the purpose of interpretation of
deeds and documents, in a given case. One of the settled
principles of interpretation of statutes is, when in relation to the
same subject matter different words are used in the same
instrument, presumption arises that they are used not in the
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Mlns 47 Appeal 331/12 & connected matters.
sense, but carry different meanings. This principle can be
borrowed for the construction of the present MoU. The MoU refers
to the parties in several ways. The parties are referred to as
'parties', ' parties of the first part' and 'parties hereto', 'both
parties'. It is significant to note that the expression 'parties
hereto' appears both in Clause 16 of the MoU and Clause 28 of
the MoU, which are the most material clauses in the present case.
In many paragraphs the reference is to 'party of the first part' and
'party of the second part'. In some paragraph, such as paragraph
15, there is reference to 'either of the parties'.  In paragraph 21
reference is made to 'both parties'. However, the two clauses i.e.
16 and 28 which are subjectmatter of the debate, have used the
phrase the “parties hereto”. What we find clinching is that
immediately after clause 28, which is the last clause which
employ the phrase 'parties hereto', concluding recitals and names
of all the signatories and their signatures appear. It reads as
under :
“Clause 28
Any dispute or difference between the parties hereto
including in respect of any breach or alleged breach hereof,
shall be referred to the sole arbitration of a person to be
mutually agreed upon by the parties hereto. The sole
arbitrator shall have summary powers and the Arbitrator
shall not be required to give reasons for his award. The
place for arbitration shall be at Bombay”.
“IN WITNESS WHEREOF, the parties hereto have signed
this agreement on the date and at the places set forth
below:
“Signed and delivered by the
within named
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Mlns 48 Appeal 331/12 & connected matters.
Jer Rutton Kavasmaneck            ) Sd/
Darius Rutton Kavasmaneck             ) Sd/
Maharukh Murad Oomrigar            ) Sd/
Percy Rutton Kavasmaneck            ) Sd/
Aban Percy Kavasmaneck             ) Sd/
Colin Mario Rebello           ) Sd/
Conrad Anthony Rebello           ) Sd/
In the presence of
Sd/
Sam Nariman Polishwala
Victoria Building, S.A.Brelvi Road
Bombay – 400 001.
Signed and delivered )
by the withinnamed Godrej Soaps   )
Limited, by the hands of Mr A.B. )
Godrej, Managing Director )
of Godrej Soaps Limited. )Sd/
In the presence of
Sd/” (emphasis supplied)
48. The concluding recitals throw light on the meaning of the
phrase “parties hereto” employed in the MoU. The phrase ' parties
hereto ' employed in clause 28 is followed by use of the same
phrase in the concluding recital which immediately followed by
names of all the minority shareholders individually and Godrej
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Mlns 49 Appeal 331/12 & connected matters.
Industries indicates that 'parties hereto' means all the signatories
to the MoU. If this is the position then on the plain reading of
Clause 28, it cannot be said that the Arbitration Agreement
provided therein, applies only to Minority Shareholders on one
side and Godrej Industries on the other side. As noted earlier
this reasoning will apply to interpretation of Clause 16 wherein
also the phrase 'parties hereto' applies, to conclude that the
negative covenant therein applies to Godrej also.
49. Apart from the language of this Clause, the surrounding
circumstances indicate that the arbitration clause is to cover all
the signatories to the MoU. The MoU came to be executed when
minority shareholders were struggling against Dr.Gharda
employing oppressive tactics to squeeze Minority Shareholders
out of existence.  It was crucial for the minority shareholders to
stay together to remain as a significant minority. Individual
holding of each of the Minority Shareholders had to be pooled
together as it was vital for their collective shareholding. The
position of the minority shareholding was so precarious that even
if some of the Minority Shareholders were to part with their
shares, minority shareholders together would cease to be a
significant minority. It was, thus, absolutely essential that the
minority shareholders stayed together and acted in one unit.
Thus, the parties at the time of executing the MoU were aware
that if any dispute arises, even between the Minority
Shareholders, in respect of the  shares, the object of all Minority
Shareholders remaining together as the significant minority and
getting the Company listed on a registered stock exchange would
be lost. Thus, it cannot be said that dispute amongst the Minority
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Mlns 50 Appeal 331/12 & connected matters.
Shareholders was not contemplated when the MoU was executed
with Clause 28 herein. The interpretation of Clause 28 and
circumstances in which it was executed do, therefore, indicate
that it was intended to cover all the signatories to the MoU. We,
therefore, do not agree with the submission made on behalf of
Percy and Darius Kavasmaneck that there is no arbitration
agreement between them and the other parties.
50. The next ingredient for grant of injunction is balance of
convenience.  To put this balance in perspective, a brief repetition
of the background is necessary. The MoU is in respect of the
shares of the Company. There is dispute between the Minority
Shareholders and Dr Gharda, the majority shareholder. It is
alleged that Dr Gharda is trying to break up the minority
shareholders. Minority Shareholders were struggling to retain
their existence in the Company when they turned to Godrej
Industries for financial assistance to purchase the shares.  Godrej
in their pleadings and in the correspondence has maintained that
the shares were held by them as pledge for the loans advanced.
These shares are not common commodities which can be just
bought and sold, with no other value attached to it. It is clear that
these shares are not to be computed merely in terms of money.
They also denote tools for the control of the Company. The shares
were not acquired for the purpose of investment or gaining
dividends alone but to retain the status of the minority
shareholders as a significant minority. If the shares are
transferred or sold, not only there will be trading in terms of
money but will tilt the precarious balance of shareholding in the
Company. These shares are not to be treated as mere pledge, but
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Mlns 51 Appeal 331/12 & connected matters.
a device to gain control of the Company. The injunction sought is
that the shares should remain as they are till the parties go for
arbitration. The importance of this status quo till the dispute is
resolved by the Arbitrator, is immense for the petitioners, as
otherwise they will lose their toehold in the Company. With
Godrej allegedly siding with Dr Gharda and two Kavasmanecks
going along with them, the petitioners will be reduced to a non
significant minority. Once this takes place before the Company is
listed on registered Stock Exchange, position of the petitioners will
be gravely prejudiced. The position will become irreparable once a
significant majority is reached in favour of Dr.Gharda taking his
shareholding closer to 75%. Important decisions in the Company
will be taken swiftly and any opposition of the petitioners will be
crushed.  If that happens, the whole purpose of the MoU will be
defeated.
51. Inspite of the detailed arguments made on behalf of the
Godrej, no special reason why shares cannot remain in the same
position till the arbitration proceedings is shown except the
argument that Godrej cannot be stopped from perfecting their
security. As noted above, the Godrej  had in their letter dated  13
June 1992, immediately after execution of the MoU on 3 June
1992, had indicated that they will not enforce loans or claim
interest notwithstanding the agreement.  The tussle is not for the
monetary value of the shares, but what the shares represent. The
dispute is no longer for money but for the control of the Company.
Once this fact is established before us, it will be too naïve to
assume that Godrej is only looking at the shares as a monetary
investment. This was evident during the course of the hearing
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Mlns 52 Appeal 331/12 & connected matters.
when an offer was made on behalf of the petitioners to return the
amount of loan in return of shares from Godrej, there was no
response of that offer from Godrej. The petitioners while making
the offer of payment of principal amount drew our attention to the
letter of Mr Adi Godrej dated 13 June 1992, wherein it was stated
that Godrej is not claiming any interest on the loan amount.
Though on record Godrej keeps asserting that the shares are
merely pledged, it's actions, the surrounding circumstances and
the arguments advanced show that Godrej is trying to deal with
the shares, prima facie, in furtherance of its intention to side with
Dr Gharda and to extinguish the opposition of Minority
Shareholders. This being the postion, the balance of convenience
clearly lies in favour of the petitioners. The shares in question
need to be kept as they are till the parties approach the
Arbitrator. The true purport of the negative covenant can be
decided by the Arbitrator.
52. Therefore, we find that the petitioners have made out a
strong prima facie case and balance of convenience is in their
favour. The submissions of the appellants that the petitioners do
not deserve any equitable relief and that there was no arbitration
clause between the Minority Shareholders interse is without any
substance. The learned single Judge has considered all the
aspects of the case and has found that the Arbitration Petition
requires to be made absolute. There is no reason to take a
different view in the matter. Accordingly, all the appeals are
dismissed.
In view of our finding recorded above, we will also have to
allow the arbitration applications filed by the petitioners under
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Mlns 53 Appeal 331/12 & connected matters.
Section 11 of the Act for appointment of Arbitrator.
Arbitration Application Nos.219 and 220 of 2012 are
accordingly allowed, with name of the Arbitrator indicated in a
separate order passed in these applications.
CHIEF JUSTICE
N.M.JAMDAR, J.
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