The plea of the petitioner with regard to the minutes dated 22nd November 2003 has also been disputed.
Aggrieved by order dated 6th February 2007, respondent No.4 in this petition, filed a Special Leave Petition C No.5493 of 2007.
My client accordingly exercises his rights to purchase the said 26 shares held by the BSN Group directly in his own name.
The said agreement was signed on behalf of AKA by Anil Kumar, the petitioner herein and a resident of great Britain, Mr. B.S. Neelkanta Respondent No.1 and Mrs. B. Renuka Respondent No.2 .
The supplemental lease deed recorded the shareholding pattern of Varsha as on that date as Anil Kumar Associates holding 74 equity shares and Mr. B.S. Neelkanta holding 26 of the equity share capital of Varsha.
Vide order dated 6th February 2007, rejecting the objections raised by the respondents, the learned Single Judge of the High Court allowed the petition and appointed a former Judge of this Court as the sole Arbitrator.
As per the said agreement BSN Group agreed to acquire 74 of equity in Varsha whilst Goldstone agreed to retain 26 of equity in the said Company.
In furtherance of the said Resolution, Varsha requested the Corporation to accord permission for change in the shareholding pattern in favour of M s Anil Kumar Associates hereinafter referred to as AKA .
The petitioner was also informed that he was numberlonger representing Varsha as its director.
The respondents as also the Corporation having failed to appoint an Arbitrator, the petitioner filed a petition under Section 11 6 of the Act before Honble the Chief Justice of High Court of Andhra Pradesh for appointment of an Arbitrator.
On 8th November 1999, Goldstone entered into an agreement with respondents No.1, 2 and 3 hereinafter referred to as the BSN Group by which they agreed to execute the said project through a new companypany known as M s Varsha Hill Fort Resorts Pvt.
On 22nd January 2008, the petitioner filed the present petition under Sections 11 5 and 11 6 of the Act seeking appointment of an Arbitrator in terms of the Arbitration Agreement dated 19th January 2004.
The Corporation withdrew its order cancelling lease deed and signed a supplemental lease deed dated 21st February 2004 with Varsha.
The lease provided in extenso the rights and obligations of the parties with respect to the project.
The Corporation felt that agreements dated 8th November 1999 and 29th November 2002 were in breach of the terms of the lease deed dated 17th May 2001 as numberwritten companysent of the Corporation had been sought prior to the purported change of shareholding in Varsha, on 4th August 2003, a numberice for termination of the lease deed was issued to Varsha.
A companymon affidavit has been filed on behalf of the respondents resisting the petition.
the Progressive Group has been seriously companytested by the petitioner, which matters can be resolved only through the medium of arbitration, as stipulated in Arbitration Agreement dated 19th January 2004.
On 29th November 2002, Goldstone and BSN Group entered into yet another agreement whereby the latter agreed to take over the entire stake of Goldstone in Varsha.
The Corporation granted the permission vide their letter dated 10th December 2003.
Since numberreply to the said numberice was received, vide his letter dated 30th January 2006, the petitioner approached the Corporation requesting them to numberinate an Arbitral Tribunal as per the arbitration agreement dated 19th January 2004.
the BSN group, was forced to mobilize the requisite resources in the form of debt and equity.
As a result of the aforesaid two agreements, AKA became entitled to acquire 74 equity stake in Varsha whilst the equity shareholding of BSN Group stood reduced to 26.
It was also resolved that the proposal approved by the Board shall be subject to the approval by the Corporation and the execution of the relevant documents.
The numberice of cancellation was withdrawn and a Supplemental Lease executed in favour of the Company pursuant to the request and representations made by any client.
The stand of the said respondent was that the dispute, if any, involved International Commercial Arbitration and, therefore, the jurisdiction to appoint an Arbitrator vested in the Chief Justice of India alone.
On 1st October 2005, the petitioner received a letter from the Corporation seeking certain clarifications of documents attached with the letter on the change in shareholding pattern of Varsha.
Minutes of the meeting were duly drawn wherein it was recorded that the petitioner shall be investing funds to the tune of Rs.15 to 18 crores in the form of equity in Varsha.
Ltd. for short Varsha , respondent No.4 in this petition.
On 17th May 2001, the Corporation executed a lease deed for the said site in favour of Varsha.
According to the petitioner, in order to prevent the Corporation from resuming possession of the hotel site, on 22nd November 2003 the shareholders of Varsha, i.e. Goldstone and BSN Group, invited the petitioner to take over shareholding of Varsha, subject to the prior approval of the Corporation.
The said agreement was followed up by another agreement dated 23rd January 2004 between AKA represented by Mr. Anil Kumar, Goldstone, BSN Group represented by Mr. B.S. Neelkanta, respondent No.1 in this petition, and Varsha, represented again by Mr. S. Neelkanta, as its Director.
The said Supplementary Lease is signed by my client as the Director of the Company.
A meeting of the Board of Directors of Varsha was held on 22nd November 2003, where, according to the petitioner, three Directors, namely, B.S. Neelkanta respondent No.1 , Mr. P. Rameshbabu and Mrs. B. Renuka respondent No.2 were present.
At this juncture, it may be relevant to numbere that since in the Special Leave Petitions, filed against the orders passed by the Andhra Pradesh High Court including the order appointing the Arbitrator, leave had been granted by this Court vide order dated 23rd November 2007, the hearing in the present petition on 25th August 2008 was deferred with a view to await the decision in those appeals Civil Appeal Nos.5645 5647 of 2007 and 5642 5644 of 2007 , which were disposed of on 22nd May 2009 as the withdrawal of the original application under Section 11 6 of the Act filed by the petitioner before the High Court was allowed.
As you are fully aware the Andhra Pradesh Tourism Development Corporation Ltd. was holding the Company in breach of the Lease Agreement and had issued a numberice terminating the Lease Deed.
Under the said agreement, AKA agreed to purchase 1,00,000 equity shares of Varsha held by Goldstone for a companysideration of Rs.10 lacs.
Pursuant to Corporations approval, an agreement dated 19th January 2004 was entered into between AKA, BSN Group companyprising Mr. B.S. Neelkanta, Mrs. B. Renuka, Amogh Hotels Ltd. and Varsha respectively as parties of the first, second and third part, whereunder BSN Group agreed to transfer 19,68,300 shares in Varsha to AKA under the terms and companyditions of the said agreement.
Further the Corporation has approved my client holding 74 of the Capital and my client has the first preemptive right and option to purchase the 26 shares held by the BSN Group as defined in the Agreement of 19th January, 2004.
On 23rd November 2007, leave to appeal was granted to the respondents.
By way of preliminary submissions, it is pleaded that a the petitioner has numberlocus standi to file the present petition inasmuch as the Arbitration Agreement dated 19th January 2004 was between the BSN Group, Varsha and a business companycern known as M s Anil Kumar Associates.
As expected, vide his advocates letter dated 23rd September 2005, the petitioner objected to the termination of his association with Varsha, as companyveyed to him vide respondent No.1s letter dated 22 nd August 2005 and asserted that he, through his numberinee and associate IICL is a stake holder of 74 equity in Varsha and would take steps to seek registration of the said shareholding in his own name.
The agreement companytained the following arbitration clause Any dispute, difference or companytroversy of whatever nature howsoever arising under, out of or in relation to this agreement between the parties and so numberified in writing by either party to the other the Dispute in the first instance shall be attempted to be resolved amicably by them.
My client is the approved investor in the Company and pursuant to his assurances given to the Andhra Pradesh Tourism Development Corporation Ltd., that Corporation signed the Supplementary Lease Deed dated 21st February, 2004.
The effect of the said order is that the order passed by the High Court on petitioners application under Section 11 6 has been set at naught.
I have heard learned companynsel for the parties.
Thereafter, some companyrespondence ensued between the Corporation and the petitioner with which I am number directly companycerned.
The BSN Group is obliged to first offer the sale of those shares to my client and is further obliged number to sell those shares to any other party.
A separate email dated 5th September 2005 addressed by Mr. B.S. Neelkanta respondent No.1 , purportedly on behalf of Varsha, was sent to Le Meridien, informing them that their agreement with Varsha regarding the hotel project had been terminated.
Varsha, without the prior companysent of the Corporation and clause 21 thereof the number assignability clause, provided that neither of the parties to the lease deed shall directly or indirectly sell, transfer, assign or otherwise part with the whole or part of their respective interest and or benefits or obligations under the lease deed in any manner whatsoever to any other person or party without obtaining the prior written companysent of the Corporation.
In the event the parties are unable to agree on an Arbitrator with 15 days, then the arbitrator shall be numberinated by Managing Director of APTDCL on the request of any party.
Clause 12 u of the lease deed provided that there would be numberchange in the companystitution of the Lessee viz.
The relevant portion of the reply is extracted below My client has fully honored his obligations under the Agreement and has through his numberinee made substantial investments into the Company.
Eventually, on 17th December 2005, the petitioner through his Advocate sent a letter to Varsha and the BSN Group calling upon them to companyfirm the appointment of an Arbitrator within 15 days of the said letter, in terms of the arbitration agreement.
Therefore, the petitioner in his individual capacity has numberlocus standi to file the present petition without specific plea that it was being filed for and on behalf of Anil Kumar Associates, allegedly a distinct entity and claiming shareholding in his individual capacity b the shares in Varsha were to be acquired by M s Anil Kumar Associates under agreements dated 19th January 2004 and 23rd January 2004 which were actually subscribed by yet another companypany known as IICL, in the assumed name of the Progressive Group an undertaking of AKA and some others, who have number invoked the arbitration clause and, therefore, the present petition is liable to be dismissed as the petitioner has number brought any documentary record to show that he was authorised by IICL to file the present petition and c in the absence of IICL and other associate companypanies of IICL, holding shares in Varsha, in the arbitration proceedings numberdeclaration can be made by the Arbitral Tribunal to the effect that the petitioner is entitled to 74 shareholding in Varsha.
According to the petitioner, it was only on receipt of this letter from the Corporation that he came to know that BSN Group and Varsha were trying to create rights in the so called progressive group, the said group having acquired shares in Varsha.
If the parties are unable to do so, such dispute shall be referred to arbitration by a sole Arbitrator mutually agreed by the parties to the dispute.
The said supplemental agreement was signed by the petitioner on behalf of Varsha as its director.
Any decision or award resulting from arbitration shall be final and binding upon the parties.
The arbitration shall be governed by the provisions of Arbitration and Conciliation Act, 1996 and the venue of arbitration shall be at Hyderabad, and shall be companyducted in English Language.
On 22nd November 2005, the petitioner filed a petition under Section 9 of the Act before the City Civil Court at Hyderabad seeking certain interim reliefs including a direction to Varsha to maintain status quo in companynection with the terms and companyditions of lease agreement dated 17th May 2001, as amended by supplemental lease deed dated 21st February 2004.
The stand of the petitioner is that in furtherance of the said arrangement, he engaged the services of an architect in London to prepare the plans for companystruction of the Ritz hotel and on 14th March 2004, executed two companytracts, being a management agreement and a technical services agreement with Meridien S.A. It appears that as per the understanding between AKA, Varsha and Goldstone, the shares of Varsha, which were to be acquired by AKA under agreements dated 19th January 2004 and 23rd January 2004 were actually subscribed by a Company known as M s India International Construction Private Ltd. for short IICL , purportedly belonging to a group called the Progressive Group.
It was alleged that the petitioner had number invested a single rupee in the project, thus hampering the progress of the hotel project and that the promoter group viz.
Since the case has had a chequered history, it would be appropriate to narrate the background facts, giving rise to this petition, in detail On 13th April 1998, the Andhra Pradesh Tourism Development Corporation Ltd. hereinafter referred to as the Corporation , a statutory body owned and companytrolled by the State of Andhra Pradesh, awarded a lease in favour of one M s Goldstone Engineering Ltd., presently known as Goldstone Teleservices Ltd. hereinafter referred to as the Goldstone for a piece of land for development of the existing Hotel Ritz as a Heritage Grand category hotel, as numberified by the Department of Tourism, Government of India.
On 31st August 2005, the petitioner received an email from one Mr. Ashish Kumar attaching a companyy of letter dated 22nd August 2005 addressed by Varsha to the petitioner, advising the petitioner that Varsha was companytemplating to issue a public numberice for the information of the general public that petitioners association with the hotel project had been terminated and that promoter group, including the BSN Group did number require petitioners support and association with the hotel project.
K. JAIN, J. This is a petition under Sections 11 5 and 11 6 of the Arbitration and Conciliation Act, 1996 for short the Act for appointment of an Arbitrator for adjudication of the disputes which are stated to have arisen between the parties to this petition.
It was, thus, submitted that either the Arbitrator appointed by the High Court may be permitted to re enter the reference or a new Arbitrator be appointed to adjudicate upon the disputes between the parties.
This Special Leave Petition was subsequently amended with the permission of this Court, incorporating the objection of the respondent with regard to the jurisdiction of the High Court to entertain the petition under Section 11 6 for appointment of an Arbitrator.
