Claire Kaura Tr. Cont. ATR. Vs. Gauri Anil Indulkar & Ors.  INSC 1268
(22 July 2009)
SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION ARBITRATION PETITION NO.14
OF 2008 Vanna Claire Kaura ....Applicant Through Constituted Attorney Mrs.
Indeera Bawa Versus Gauri Anil Indulkar & Others .....Respondents
This application has been filed by the applicant under section
11(5) read with section 11(9) and section 11(12) of the Arbitration and
Conciliation Act, 1996 for appointment of an
arbitrator for adjudicating and deciding the disputes which have arisen between
the applicant and the respondents in respect of the implementation and working
of agreements entered into between the applicant and the respondent no.3 on the
one hand and respondent nos.1 and 2 on the other 2 hand on 29.1.2005 and the
supplementary agreement between the same parties on 2.2.2005.
The applicant is a citizen of the United States of America and is
a person of Indian origin.
Respondent no.3, Dr. Vinod Kaura is the husband of the applicant,
Vanna Claire Kaura.
Respondent no.2, Anil Indulkar was doing business in
Pharmaceuticals in USA and respondent no.1, Gauri Anil Indulkar is his wife.
Respondent no.2 came in contact with the applicant and he represented to the applicant
and respondent no.3 that there was a good prospect of business for water and
amusement park in India and that if the applicant and respondent no.3 invested
in India, the applicant and respondent no.3 would get good returns on their
the applicant and respondent no.3 remitted $6,40,000 (US Dollars) to respondent
nos.1 and 2. A memorandum of understanding dated 7.6.2000 was entered into
between the applicant and respondent no.3 on the one hand and respondent nos.1
and 2 on the other. On the basis of the capital so provided by the applicant
and respondent 3 no.3, respondent nos.1 and 2 formed a company called, M/s
Splash Mountain Water Park Pvt. Ltd. with its registered office at Pune,
Maharashtra. According to the applicant, it was agreed that 1,67,000 equity
shares of Rs.100/- each in the said company shall be allotted as fully paid-up
shares to the applicant and respondent no.3 by way of 40% equity shares to be
allotted to the applicant as per the earlier understanding.
also agreed that respondent nos.2 and 3 shall hold the remaining 2,50,400
equity shares of Rs.100/- each representing their 60% shares holdings in the
According to the applicant, it was agreed by an agreement dated
29.1.2005 that respondent no.1 who owned 25 acres of land in Pune should
transfer 10 acres out of the said land along the eastern boarder thereof to the
applicant in lieu of the 40% contribution made by the applicant towards the
initial capital. There is a clause of arbitration in the said agreement. In the
supplementary agreement entered on 2.2.2005 a small modification was made that
inasmuch as respondent no.1 undertook to transfer and convey the entire 25
acres of land owned by her to the applicant instead of the earlier agreed
extent of 10 acres of land. Accordingly, 4 respondent no.1 did not transfer the
land, as agreed. It is alleged that respondent nos.1 and 2 called a Board
meeting of the company hurriedly to ensure that the applicant and respondent
no.3 could not know about the meeting and there was no possibility of their
participation in the said meeting. In the said meeting, respondent nos.1 and 2
maneuvered to get a resolution passed to wind up the Water Park business of the
company and transferred the said business to another company owned by the close
relatives of respondent nos.1 and
land on which the business of the company was being run was also handed over to
the said company owned by the close relatives of respondent nos.1 and 2.
In these circumstances, the applicant had sent a legal notice on
14.3.2006 to respondent nos.1 and 2 appointing one Vilol Khaladkar as an
arbitrator and also called upon respondent nos.1 and 2 to appoint their
arbitrator. Since respondent nos.1 and 2 did not take any steps to appoint
their arbitrator, the applicant filed an arbitration petition in the High Court
of Bombay under section 11 of the Act. The applicant submitted that the said
arbitration petition filed by the applicant in the High Court of Bombay was not
5 maintainable for the reason that the agreement dated 29.1.2005 and the
supplementary agreement dated 2.2.2005 are in the nature of international
commercial arbitration agreement as defined under the Act and, therefore, an
application for appointment of an arbitrator under section 11(5) read with
section 11(9) and section 11(12) of the Act would only lie before the Chief
Justice of India.
Accordingly, the applicant withdrew the application filed at the
Bombay High Court. The applicant submits that the following disputes have
arisen between applicant and respondent nos.1 and 2 and the same are required
to be referred to an Arbitrator and the Arbitrator is to be appointed for the
purpose of adjudicating and deciding the following disputes:- "a) Transfer
& conveyance of 25 acres of land, as mentioned in agreement dated 29.1.2005
and dated 2.2.2005, standing in the name of Guari Indulkar to the claimant Ms.
Vanna Claire Kaura and her husband Dr. Vinod Kaura.
Being shareholders of 1,67,000 number of equity shares of Rs.100/- each of
Splash Water Mountain Park Pvt.Ltd. in the name of Vanna Clair Kaura and same
number of equity shares of Rs.100/- each in the name of Dr. Vinod Kaura in
terms of agreement dated 29.1.2005, action of Gauri Indulkar and Anil Indulkar
to hand over the leased land to Lessor was illegal and consequently due to
illegal closure of business of Splash Water Park Mountain Pvt. Ltd. they are
liable to compensate Vanna Clair Kaura for loss of business and loss of profits
approximately to the tune of Rs.20,00,000/- (Rupees twenty lacs) per month from
September 2005, the date of Resolution passed in the absence of Vanna Clair
Kaura and Dr. Vinod Kaura and without giving them sufficient time to respond
and thereby illegally closing the business of Splash Water Park Mountain
7 c) A
sum of Rs.7,00,000/- per month to be paid to Vanna Clair Kaura by Gauri
Indulkar and Anil Indulkar in terms of compensation as stipulated in clause 5
of supplementary agreement dated 2.2.2005 from the date of repayment of loans
and payment of lease rent;
d) A sum
of Rs.10,00,000/- towards reimbursement of expenditure incurred on travel and
board, lodging etc., by the Vanna Clair Kaura;
Clair Kaura to be compensated by way of payment of damages by Gauri Indulkar
and Anil Indulkar due to non-performance of their respective parts as
stipulated in the agreements dated 29.1.2005 and 2.2.2005;
Present, pendent lite and future interest @ 24% on the amounts found due and
payable to Vanna Clair Kaura."
The applicant prays that an independent arbitrator be appointed
for adjudicating and deciding the disputes having arisen between the parties
out of the agreement dated 29.1.2005 and the supplementary agreement dated
2.2.2005 entered into for and between the parties.
In pursuance to the notice issued by this court, reply on
affidavit has been filed on behalf of respondent nos.1 and 2. In the reply
affidavit, a number of preliminary objections have been taken. Respondent no.1
submitted that the application filed by the applicant is not maintainable and
is liable to be dismissed because there is no live dispute pending between the
parties. It is also submitted by respondent no.1 that the applicant has
suppressed facts from this court and has been indulging in forum shopping and
the present application is liable to be dismissed on this ground alone.
It is further mentioned in the reply that the applicant has
abandoned the arbitration clause. It is further mentioned that the MOU dated
7.6.2000 and subsequent agreement dated 29.1.2005 and the supplementary
agreement dated 2.2.2005 were entered into by respondent nos.1 and 2 due to
coercion, 9 threat and harassment on the part of the applicant and respondent
The company by the name, Splash Mountain Water Park Pvt. Ltd. came
into existence on or about 3.7.1997. By Board Resolution dated 24.6.2005,
wherein the applicant herself was present, the applicant proposed the closure
of the Water Park business of the company since the same was suffering losses.
further stated that she and respondent no.3 would not invest any further funds
to keep the business going. As such, by way of board resolution dated
24.6.2005, the proposal of the applicant was discussed and thereafter it was
unanimously resolved that the activity of the Water Park should be closed as of
30th June, 2005.
In the reply, respondent no.1 has mentioned that the applicant is
indulging in forum shopping and has filed multi- pronged litigation before
various forums including the Bombay High Court, Civil Judge, Pune, Principal
Bench of Company Law Board and this court as well as the criminal proceedings
before the Judicial Magistrate, First Class.
It is also mentioned that the applicant has invoked arbitration by
notice dated 14.3.2006 and the present application is not based on the said
invocation and the applicant subsequently entered into arbitration on second
time on the same cause of action and as such the present application is barred.
It is also submitted that the applicant having invoked arbitration by notice
dated 14.3.2006 and thereafter abandoning the same cannot seek arbitration for
the second time for the same cause of action. Respondent no.1 also submitted
that the present application is a clear abuse of the process of law and is
liable to be dismissed.
I have heard the learned counsel for the parties and carefully
perused the MOU dated 7.6.2000 and agreement dated 29.1.2005 and the
supplementary agreement dated 2.2.2005.
In my considered view, the dispute has arisen between the parties
and it needs to be adjudicated and decided by an Arbitrator. Consequently, I
request Hon'ble Mr. Justice S.N. Variava, a former Judge of this court to
accept this Arbitration and adjudicate and decide the dispute which has arisen
11 between the parties. The learned Arbitrator would be free to decide about
This arbitration petition is accordingly disposed of with the
direction to the parties to appear before Hon'ble Mr. Justice S.N. Variava, a
former Judge of this court at 11 a.m. on 27th July, 2009 at Mumbai.
The Registry is directed to immediately communicate this order to
the learned arbitrator to enable him to decide the arbitration matter as
expeditiously as practicable.
Consequently, this arbitration petition is allowed and disposed
of. In the peculiar facts and circumstances of this case, I direct the parties
to bear their own costs.
.................................J. (Dalveer Bhandari)
July 22, 2009.
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