Actis Consumer Grooming Products ... vs Rakesh Malhotra And 9 Ors
2021 Latest Caselaw 15078 Bom

               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                    ORDINARY ORIGINAL CIVIL JURISDICTION
                                [ COMMERCIAL DIVISION ]

              INTERIM APPLICATION (LODGING) NO.19689 OF 2021
                                            IN
        COMMERCIAL ARBITRATION PETITION (LODGING) NO.306 OF 2020

Actis Consumer Grooming Products Ltd.                    ] .. Applicant-Petitioner
              Vs.
 1. Rakesh Malhotra                                      ]
 2. Super-Max Mauritius                                  ]
 3. Arvee Family Foundation                              ]
 4. Tigaksha Metallics Pvt. Ltd.                         ]
 5. Subhash Chaudhuri                                    ]
 6. Sameer Khan                                          ]
 7. Chanchal Sharma                                      ]
 8. RKRM International Pvt. Ltd.                         ]
 9. Super-Max Offshore Holdings                          ]
10. Supermax Personal Care Pvt. Ltd.                     ] .. Respondents


Mr. Ashish Kamat, with Mr. Rajendra Barot, Ms. Anusha Jacob, Ms. Trisha
Sarkar, Mr. Vedant Jalan and Mr. Mitansh Shah, i/by AZB & Partners, for the
Applicant-Petitioner.

Mr. Waseem Pangarkar, with Ms. Aakanksha Luhach, i/by MZM Legal, for
Respondent Nos.1 to 3 and 8.

Mr. Vipul Dharmani, with Mr. Mohit J. and Mr. Sagar Wagle, i/by Ms. Riddhi
A. Pandit, for Respondent Nos.4 to 7.

Mrs. Rekha Rane, 2nd Assistant to Court Receiver, is present.


                                              CORAM : A. K. MENON, J.

                                              DATE    : 20TH OCTOBER, 2021.




2-IAL-19689-2021-Order dt. 20-10-2021.doc
Dixit
 P.C. :

1. In this post-award Section 9 petition and an interim application filed

therein, the petitioner seeks urgent ad-interim reliefs. In the Section 9

petition, the petitioner seeks an order directing respondents 1 to 8 to disclose

on oath all particulars of acts done and agreements executed from February

2018 till date in relation to purchase of raw materials and manufacture and

sale by respondent no.4 of products impugned bearing the trademark "RK".

The petitioner also seeks location of unsold stock, financial statements of

respondent no.4 from February 2018 till date including the provisional

Balance Sheets, Profit & Loss Accounts, bank statements, statutory filings, EPF

filings. The petitioner also seeks appointment of a firm of Chartered

Accountants to conduct a forensic audit of the books of accounts of the 4 th

respondent.

2. Vide an order dated 5 th March 2020, the Court Receiver, High Court,

Bombay has already been appointed as Receiver in terms of prayer clauses (d)

(i) to (d)(iv), both inclusive. There is also an ad-interim injunction granted in

terms of prayer clause (e), which restrains respondents 1 to 3 and 5 to 7 from

parting with possession, alienating or creating third party rights in assets and

properties of respondents 4 to 10, except in the ordinary course of business.

The order noted that the 4 th respondent's plants were at two locations in

Himachal Pradesh; one at Gagret, Dist. Una, Himachal Pradesh and the other

at Shoghi, District 7, Shimla, Himachal Pradesh. The order further recorded

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit that the machinery lying at these locations were already subject matter of

previous orders dated 16th February 2018, 21st February 2018, 5th March

2018, 27th March 2018 and 16th May 2018. The Court Receiver was then to

fix his seals on the machines of respondent no.10 lying at these locations.

3. When the order was passed, the respondents 1, 4, 5 and 7 were

represented and the counsel assured the court that there would be no

obstructions whatsoever to the Receiver performing his duty. Superintendents

of Police at Gagret and Shoghi were requested to render assistance, if so

required. The order also records the manner in which the Receiver is to take

photographs, retain the original digital files and make a video recording

bearing a date and time stamp of the Receiver's visit. The representatives of

the respondents present at site were directed to sign without protest the

Receiver's site visit report. It was clarified that signatures affixed will not

convey acceptance of contents of the site visit report. In the meantime, an

injunction was granted in terms of prayer clause (e).

4. The visit of the Court Receiver came to be postponed on account of

pandemic. On 12th August, 2021 the applicant-petitioner moved an urgent

application in the arbitration petition ex-parte. While relying on an affidavit

sworn by an employee, the learned counsel pointed out that employees and

ex-employees had addressed correspondence to the Chief Executive Officer of

the company indicating that certain working parts of the machinery were

being removed and were being replaced with faulty parts. No notice was

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit given of the application on that date since the petitioner believed that service

of notice was likely to speed up the process of tampering with sealed

machines. One representative each of the petitioner was permitted to

accompany the Receiver and the Receiver was to allow two of his

representatives to visit the plants simultaneously in two different locations.

The visit was accordingly made. On 14 th September 2021, the petitioner

sought leave to amend the Interim Application (Lodging) No.19689 of 2021

to incorporate paragraph 5.20 and prayer 12(f), essentially to bring on record

the findings of the Court Receiver upon the visit carried out pursuant to the

order passed on 12th August 2021. The amendment having been allowed, the

respondents were duly served with the amendments and on 20 th September

2021, respondents 1, 2, 3 and 8 and respondents 4, 5 and 7 were represented

by different counsel. They undertook to enter appearance on or before 30 th

September 2021 and file a reply. Time was accordingly granted. The matter

was then listed on 5th October, 2021 when it was adjourned to the following

day. The applicant-petitioner pressed for further reliefs in terms of the

interim application that was then filed.

5. It would be appropriate to consider the reliefs that were sought in the

interim application. In the interim application, the applicant-petitioner

sought urgent reliefs in terms of prayer clauses (a)-(i), (a)-(iii), (a)-(iv) and

(a)-(v) requiring the Court Receiver to forthwith reseal the machines of

respondent no.10 lying at the Gagret plant of respondent no.4, to take charge

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit and custody of all the factory records of the 4 th respondent from February

2018 onwards and copies thereof and secure the original record. The

applicant-petitioner also seeks a direction for the Receiver to make regular

visits, along with the police authorities, to the factory premises of respondent

no.4 at Gagret and Shoghi to observe the activities at the factory and take

copies of production, GST and other factory records and to ensure that the

machines are safe and secured and not being tampered with. Court Receiver

is then expected to file a report. The applicant-petitioner also seeks affixation

of seal of this court on the notice at Exhibit-F to the IA and to maintain such

notice along with the seal of this court at appropriate locations of the factory

premises at Shoghi. Mr. Kamat restricts his relief in terms of prayer clause (c)

to the plant at Shoghi. The applicant-petitioner also seeks to restrain and

prohibit respondents 1 to 7 from threatening or coercing the 4 th respondent's

current employees and personnel and from interfering with and obstructing

the entry of the Court Receiver and petitioner's representatives at the factory

premises at Gagret and Shoghi. In support of these reliefs, Mr. Kamat relies

upon the fact that the report of the Court Receiver, after his visit post the ex-

parte order of 12th August 2021, reveals that despite an order passed under

Section 9 petition in 2018, to which the order dated 5 th March 2020 makes

specific reference, the respondent no.4 has tampered with the seals on the

machines of respondent no.10. It is alleged that the seals affixed by the Court

Receiver of this court have been broken and tampered with. Some of these

machines of respondent no.10 have been subjected to alterations, parts have

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit been removed and replaced. Machines are apparently being utilized by

respondent no.4 for manufacture of safety razor blades for brands that

compete with the Super-Max Group.

6. This conduct, Mr. Kamat submits, is in violation of the orders of this

court. It seeks to alter the status-quo as on date, i.e. the Receiver affixed his

seals on the machines, and amounts to willful disobedience with the orders of

the court. He submits that the conduct of the 4 th respondent is defined and

obstructive. The entire factory premises at Gagret, along with machinery,

fixtures & fittings and assets, be locked and sealed and be placed under the

custody of the Receiver till final disposal of the Arbitration Petition No.423 of

2021 seeking enforcement of the Foreign Award. This alone will have an

effect of ruining the respondent no.4. Mr. Kamat submits that such orders, as

are now sought, are necessary in order to ensure that the machines of

respondent no.10 lying and being at the respondent no.4's factory premises at

Gagret ought not to be tampered with and are retained in its original

condition when the Court Receiver sealed these machines. My attention is

invited to Exhibit-C to the interim application, which is a Site Report of the

Court Receiver prepared on 17 th and 18th August 2021 pursuant to the order

passed on 12th August 2021. It reveals that when the visit was made, the

respondents were represented by one Rakesh Sharma, Head Development and

Mr. Chanchal Sharma, Plant Head of the respondent no.10 and Mr. Mohit

Jaitak, Advocate for respondent no.10. The report indicates that plant and

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit machinery were found to be in running condition. The Court Receiver, upon

inspection, when found that the seals on the machines, which had been

affixed as per the earlier inventory upon comparison, were found to have

been tampered with, a Site Report providing details of the aforesaid inspection

was prepared. Photographs were also taken and the entire visit was

videographed. Court Receiver's report is signed by the representative of the

Receiver, the said Mr. Chanchal Sharma and Mr. Mohit Jaitak, learned

Advocate, for the respondent no.10.

7. Mr. Kamat submitted that the report reveals that in many of the

machines, the boards affixed by the Court Receiver were not found to be

intact. The Receiver's representative called upon the 10 th respondent's

representatives to furnish a copy of the Fixed Assets Register as per the order

passed by this court, but the same was not forthcoming. It was contended then

that the list of fixed assets was not having a signature or a title to it, since this

was submitted by the 10th respondent and the Court Receiver has accepted the

same. After completion of the visit, a formal report has been filed. Mr. Kamat

then invited my attention to Annexure-A to the Court Receiver's report,

which contains the handwritten entries of the inventory of the plant and

machinery at Gagret. Mr. Kamat submitted that scrutiny of these would reveal

that many of these machines had been tampered with, seals were not intact.

Annexed to the site report is what is described as "Compared List" of items of

plant and machinery, quantity, unit and remarks. My attention was invited to

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit several of the items in this tabulated form in support of the application that

several of the seals had been tampered with. My attention was also invited to

an affidavit of one Kenny Abraham, Chief Executive Officer in India of the

Super-Max Group of Companies and duly employed by respondent no.10

since July, 2015. Mr. Kamat urged before me to consider the contentions of

this affidavit, which clearly reveals the dishonest intentions of the respondent

no.4. Mr. Kamat has relied upon the following decisions in support of his

case:-

(i) Trammo DMCC (Formerly known as Transammonia DMCC) Vs.

Nagarjuna Fertilizers and Chemicals Ltd.1

(ii) Atul D. Sohni and Anr. Vs. B.M. Choksey and Ors.2

8. Today, in the interim application and in support of the reliefs prayed

for in Section 9 petition, Mr. Kamat has taken me through the averments in

the IA, the description of the parties and also the fact that respondents 5, 6

and 7 have held themselves out to be directors of respondent no.4. The

respondent no.5 is, in fact, not a director although an affidavit is being filed

on behalf of respondent no.4, as if representing, to this court that he is a

director of respondent no.4 and therefore authorized to file the affidavit. Mr.

Kamat submitted that respondent no.5 has made false statements on oath

pretending to be a director, but, in fact, respondent no.5 was never appointed

lawfully as a director of respondent no.4. It is pointed out that respondent

1 2017 SCC OnLine Bom 8676 2 1998 (3) Mh.L.J. 258

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit no.5 has, in fact, been disqualified under Section 164(2)(a) of the Companies

Act, 2013 from being appointed as a director in any company from 1st

November 2016 till October 2021. This has been concealed from this court

and therefore the submission is that the court is being misled by the deponent

of this affidavit. In the opening paragraph no.1, he states that he is one of the

directors of Tigaksha Metallics Pvt. Ltd. (TMPL) and that he is filing the

affidavit on behalf of the 4 th respondent-company. He has adverted to the

merits of the case inter alia making a grievance that final copy of Court

Receiver's report regarding sealing of the machinery at a unit of TMPL was

not available. He denies the contentions in the interim application. He admits

to none of the statements in the interim application made by the petitioner,

although there is no denial of the fact that the tribunal constituted under the

London Court of International Arbitration (LCIA) has passed the Partial

Award. It is inter alia contended that the petitioner has already submitted

itself to the jurisdiction of the High Court of Himachal Pradesh having filed a

Section 9 petition and that having so opted, cannot now file the present

petition in this court. It is contended that the petitioner has concealed and

misstated various facts and has obtained orders in 2018, as listed above. It is

his contention that there was a separate agreement, viz. Job-Work Agreement,

executed between Supermax Personal Care Ltd. and Tigaksha Metallics Pvt.

Ltd., which has led to the filing of a separate arbitration petition and this is an

aspect that Mr. Vipul Dharmani, the learned counsel for respondent no.4 has

canvassed.

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit

9. It is contended by Mr. Dharmani in support of his client's case that

pursuant to an order dated 15 th June, 2018, a Sole Arbitrator Shri Justice S.J.

Vazifdar, Former Chief Justice (Retd.) was appointed and upon consent of the

parties, certain modifications were agreed upon and Notice of Motion filed in

that arbitration petition was treated as an application under Section 17 of the

Arbitration and Conciliation Act, 1996. This order dated 15 th June 2018 was

passed by a Division Bench of this court in Commercial Appeal (Lodging)

No.245 of 2018. A reference is made to the order and to the fact that the

petitioner's endeavor in the present case is to somehow stop functioning of

the respondent no.4 and render its employees jobless. A copy of the Job-Work

Agreement dated 1st April 2015 (JWA) between Supermax Personal Care

Private Limited (SPCPL) and Tigaksha Metallics Private Limited (TMPL) has

been annexed, to the affidavit-in-reply filed on behalf of the 4 th respondent

by one Mr. Anil Patial dated 2nd October 2021, in support of his contention

that the arbitration between the aforesaid two entities has nothing to do with

the present disputes. Reliance is also placed on an order dated 17 th October

2018 passed by the Sole Arbitrator in that reference. The attempt of Mr.

Dharmani is to separate the disputes and to attempt to demonstrate that the

Receiver appointed pertaining to that dispute has nothing to do with the

present petition under Section 9 and the Interim Application filed therein.

However, in view of the obvious fact that the respondent no.5 was not and is

not a director of the 4th respondent, it is a clear case of attempting to mislead

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit this court. The petitioner, in my view, has established in no uncertain terms

that the respondent no.5 was not a director and is not a director of the 4 th

respondent and hence all submissions made on the basis of the affidavit of

respondent no.5 cannot be taken into account. My attention has been invited

to an additional affidavit filed by Suresh Rajaram Suryavanshi, who has

annexed copies of the extract from the website of the Ministry of Corporate

Affairs pertaining to TMPL and that clearly shows that the disqualification of

Mr. Subhash Datta Chaudhari, deponent of the affidavit dated 28 th September

2021, is a fact. The name of Mr. Chaudhari does not appear in the list of

directors, as seen in the extract, and indeed cannot in view of the

disqualification that is operative at-least till end of October 2021.

10. Mr. Dharmani has also placed reliance on the affidavit of one Anil

Patial dated 2nd October 2021, who is said to be the authorized signatory and

Senior Executive - HR and Admin of TMPL. In this affidavit, the 4 th respondent

has assailed contention of the petitioner to seek interim relief. Mr. Dharmani

has placed reliance on the fact that the petitioner has concealed and misstated

various facts. In support, he states that in paragraph 3.4, 3.5 and 3.6 of the

petition, wrong statements have been made. In particular, my attention is

invited to paragraph 5.20 of the amended IA, which according to Mr.

Dharmani is an incorrect statement, but I must bear in mind here that despite

time being granted to the respondents, including respondent no.4, to file an

affidavit-in-reply in the petition, no affidavit is forthcoming. The request for

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit time to file reply was made on 20 th September 2021 and replies were to be

filed by 28th September 2021. However, even on 5 th October, 2021, no reply

was forthcoming. The court adjourned the matter to 6 th October 2021, when

the matter was heard. Once again, time to file reply was extended upto 8 th

October 2021, at the request of respondent no.4; yet no affidavit-in-reply has

been filed. Thus, the contents of the petition under Section 9 today stand

uncontroverted.

11. What is relied upon in opposition to the petition and the IA are the

statements made in the affidavit-in-reply of respondent no.5 and the said Anil

Patial, once again on behalf of respondent no.4. This affidavit of Mr. Anil

Patial was obviously necessitated in view of the petitioner having asserted the

fact that Mr. Subhash Datta Chaudhari is not a director of respondent no.4.

The fact that Mr. Chaudhari was not a director was highlighted and

established by the additional affidavit of Mr. Suresh Rajaram Suryavanshi

dated 29th September 2021 and soon thereafter, the additional affidavit of Mr.

Anil Patial is seen to be affirmed on 2 nd October 2021. The affidavit states

that the petitioner's attempt to seek relief on the basis of the Partial Arbitral

Award dated 12th February 2020 is not sustainable. It is contended that the

Subscription and Shareholder's Deed dated 4 th November 2010 (SSD) includes

the present petitioner, but had impliedly excluded applicability of Indian Law.

Mr. Dharmani has therefore objected to this court exercising jurisdiction.

Furthermore, the deponent states that in view of the provisions of English Law

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit being applicable, this court has no jurisdiction and no court in India has

jurisdiction. This however runs contrary to the other contention of the 4 th

respondent that once having moved the court in Himachal Pradesh, this court

cannot be moved, reference being had to Section 42 of the Arbitration and

Conciliation Act, 1996.

12. Inviting my attention to Section 2(2) of the Arbitration and Conciliation

Act, 1996, Mr. Dharmani has invited me to hold that there is an implied

exclusion by virtue of the said definition and the proviso thereto and hence

this court has no jurisdiction to pass any order. The order appointing the

Receiver is therefore invalid and hence there is no question of granting any

further relief since the petition itself is not maintainable. Without prejudice,

Mr. Dharmani has contended that the court in Himachal Pradesh has already

been moved and hence this court need not entertain the petition. But the fact

remains that several orders have already been passed in February, March and

May 2018 and those orders found the basis of the Receiver's report. The

attempt of the learned counsel for the respondent no.4 is to identify the Job-

Work Agreement between SPCPL and TMPL (JWA) as an independent one

with an independent arbitration clause as against the Subscription and

Shareholder's Deed (SSD). It is contended that SPCPL is not a party to the SSD

and the Partial Award and TMPL is carrying on business pursuant to aforesaid

JWA. That JWA is subject to a separate arbitration clause and several reliefs

granted by this court under Section 9 were thereafter subject matter of an

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit application under Section 17 under the Arbitration and Conciliation Act,

1996 before a Sole Arbitrator, which had passed an order on merits. The

present attempt to get the Receiver to reseal machinery is a dishonest attempt

on the part of the applicant-petitioner to stop manufacturing activities of

respondent no.4 and render its employees jobless. The contentions of the

petitioner, as canvassed by Mr. Dharmani, not entitle the petitioner to any

relief. Mr. Dharmani has relied upon the deposition in the affidavit of Mr.

Anil Patial to contend that several employees of TMPL were misled and coxed

into signing affidavits in support of the petitioner's case that these were false

affidavits and procured at the instance of one Kenny Abraham. The

respondent no.4 holds cogent evidence and documents to support its

contention that the applicant-petitioner is seeking to create unrest amongst

the employees, procuring false affidavits by using undue influence and illegal

gratification, the intention being to shut-down the factory. Allegations have

been made against Kenny Abraham, Uday Desai and Anindo Mukherjee and

other senior management people of respondent no.10, who are allegedly

misleading and using undue influence over employees of the respondent no.4.

It is stated that several of these employees were called for a meeting at a resort

in Himachal Pradesh, whereat the employees were offered liquor and under

the influence of liquor, these employees were made to sign blank papers

containing allegations against the 4th respondent-company.

13. My attention has been invited to the contents of paragraph 11 of the

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit affidavit of Mr. Patial, on which Mr. Dharmani places reliance in support of

the contentions that none of the seals affixed by the Court Receiver in the year

2018 have been broken, nor have any such machines been put into operation

by the respondent no.4-TMPL. It is reiterated that TMPL is obliged to follow

the directions of the Hon'ble Court and further orders passed by the Sole

Arbitrator. As a supporting argument, it is submitted that the Court Receiver's

report of 2018 is not correct. It was not signed by the representatives of

respondent no.4-TMPL and the report of sealing was also not accurate.

Complete copies of the reports are allegedly still awaited and the applicant-

petitioner is now making false statements. Mr. Dharmani submitted that at the

time of sealing the machines, the machines were not sealed upon any

identification made by the parties, but only at the instance of the respondent

no.10. There were various machines that were not sealed and this fact is

evident from the photographs and the video footage.

14. Pausing here for a moment, I have not been able to appreciate the

contentions of the respondent no.4 that the Receiver's report in its complete

form has not been received till now. It was always open for the respondent

no.4 to apply and obtain a copy of the Receiver's reports and that argument

can hardly be countenanced today. What we have here is an admitted

position that some machines had indeed been sealed and that the respondent

no.4 has honoured the orders of this court and that of the Sole Arbitrator and

has not indulged in any acts causing the seals to be damaged or removed or

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit the machines to be altered or cannibalized, as suggested by the applicant-

petitioner. Mr. Dharmani has also taken serious objection to the use of the

word "cannibalized" and denied all allegations as contained in the affidavits.

Thus, what we have here is a Court Receiver's report, which is self-

explanatory.

15. Prima facie, I am of the view that the contents of the Receiver's report,

read with the depositions in the affidavits now made, does establish attempts

to tamper with the seals and use some machines. No doubt, the respondent

no.4-TMPL has, in support of its contentions, annexed to the affidavit of Mr.

Anil Patial certain affidavits of the persons claiming to be employees, who

were misled into giving supporting affidavits at the instance of the said Kenny

Abraham. There is also correspondence between TMPL and such employees,

who have been subjected to show cause notices for dereliction of duty etc., but

what is also material to note is that in an Exhibit-M to the affidavit of Mr. Anil

Patial dated 2nd October 2021, there is a comparison chart of machinery.

16. Perusal of this Exhibit-M and the comparison chart of machinery

shows that in some of these items, including the Punch Press at item (b-1), out

of the total quantity of 4 presses, 3 presses were sealed as per the Court

Receiver's report dated 24th May 2018. Subsequently, this aspect has been

reiterated in the Machine Status Comparison but as of 19 th August, 2021, he

has contended that there are total quantity of 6 machines, of which 4 were

sealed and 2 were not sealed. This indicates an increase in the number of

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit machines sealed. When, in fact, only 3 machines were sealed in 2018, it is not

understood on what basis 4 machines are found to be sealed now. This could

only mean that either the Receiver made a mistake in May 2018 or seals have

been attempted to be affixed on an additional machine prior to 19 th August

2021. My attention has also been invited to certain photographs. A certain

amount of emphasis is laid on item L-13 to show that the cooling tower was

exposed to the elements and that the Court Receiver's board was stuck on the

external surface and would have probably deteriorated and fallen away. This,

no doubt, cannot be discounted and it is quite possible that being exposed to

the elements, the so called "board", being a printed piece of paper, may have

fallen away.

17. The Receiver in such cases should ensure that his possession and

custody should be identified by using appropriate means including, if

necessary, by affixing a painted notice, by affixing appropriate methods,

including by using permanent markers or paints, such that it is unaffected by

the external elements. The sealing techniques used also appear to be very

basic and rudimentary, but that cannot justify the tampering with the seals by

the respondent no.4-TMPL. The appointment of the Receiver has rendered the

machinery custodia legis and once the property is custodia legis, it is the duty

of the parties, respondents and the petitioners included, to ensure that the

custody of the court is not altered or in any manner changed. The respondent

no.4-TMPL, being in use and occupation of the factory, is enjoined to ensure

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit that the Receiver's possession, as reflected by the seals, is not deteriorating. If

the seals were deteriorating, it was a duty of the 4 th respondent to have

informed the Court Receiver or the applicant-petitioner's Advocate of the

same so that the seals would be maintained. After all, it is in the custody of the

court and parties are bound to ensure that the custody of the court is not

disturbed without leave of the court.

18. In my view, a prima facie case is made out of an attempt to alter the

condition of the sealed machines and do not deal with the factual aspects set

out in paragraph 5.20 of the IA. The affidavit of respondent no.5 ought not to

be considered as a deposition on behalf of the TMPL, since he has held out to

be a director, when in fact he was not and is not. The contention of the

respondent no.4-TMPL and as canvassed by Mr. Dharmani that the report of

sealing was not signed by representative of TMPL is not believable. The copies

of the Site Report would always have been signed as otherwise an appropriate

remark would have been made. What is material to note is that the grievance

that a copy of the Receiver's report has not been made available, is coming for

the first time in October, 2021, when all along the 4 th respondent-TMPL has

asserted that it has not handled the seals or caused the seals to be damaged or

altered in any way. Thus, the deposition of Mr. Anil Patial to the effect that the

final report of the Court Receiver was never made available, cannot be

believed. It was always open for the 4 th respondent-TMPL to seek copies of

the final report, if it so desired.

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit

19. Mr. Dharmani had invited my attention to examine the report on

sealing in respect of items I-3, I-4 and L-13 in support of his contention that

there are contrary findings. Adverting to the affidavit of respondent no.5-

Subhash Chaudhari, the learned counsel submitted that the 4 th respondent has

joined Mr. Chaudhari only for the sake of convenience, but that is no reason

for Mr. Chaudhari having filed an affidavit incorrectly declaring himself to be

a director of the 4th respondent-TMPL. According to Mr. Dharmani, the

prayers are not directed against TMPL and TMPL is nowhere in the picture as

regards the disputes and the award that the petitioner has secured. The

Receiver is also present and has pointed out that in several of the items, such

as item (b-1) - the Punch Press, the seal was found to be broken from the

control panel and certain parts seem to be missing or replaced from the press.

The item (b-3) - the Punch Press was found to be in running condition. In

item (b-4) - Four Tube Heat Treatment Furnace, seals have been broken. In

item (b-7) - Coil Joining, the seals were found to be missing and in item (b-9)

- Hot Chamber, the seals were found to be broken. As far as QC Lab-1 and

QC Lab-2 are concerned, no seals were found on Micro Hardness Tester and

Coating Micro Scope and some paper-tape was found affixed. So also in QC

Lab-3, the projector did not have a seal. The Coating Adhesion Tester, Gonio

Meter and Chop Tester as also the Visco Meter, all of which are said to be

installed in QC Labs 4 to 10 also did not bear any seals. Likewise, several other

items, the Receiver has found that no seals were noticed, despite these having

been sealed by the Receiver in 2018.

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit

20. I see no reason why the report of the Receiver should be disbelieved.

The Receiver is an officer of this court. Nothing has been shown to me to

contradict the report of the Receiver. In the course of submissions, Mr.

Dharmani has placed reliance on a note showing the differences between a

comparative chart of the SSD and the JWA. He has relied upon these to show

the array of parties under the SSD and the JWA highlighting the fact that

under the SSD of 2010, the petitioner was a party whereas under the JWA, the

petitioner was not a party. Analysis of this shows that TMPL was indeed a

party to the SSD and is therefore arrayed as respondent no.4 in the present

petition. The attempt on behalf of Mr. Dharmani was to show that the Section

9 petition is filed pursuant to the Partial Award dated 12 th February 2020

passed by the LCIA, but SPCPL is not a party to the Partial Award but has been

made a party-respondent no.10 in the present petition. Ad-interim reliefs are

being sought in relation to machinery which was sealed pursuant to an order

in an application under Section 9 filed in 2018 by SPCPL arising out of the

Job-Work Agreement and that led to the application under Section 9 being

converted to one under Section 17, which was then heard and decided by the

Sole Arbitrator. Whereas, the Job-Work Agreement is between TMPL and

SPCPL and is an independent contract. The machines in question were sealed

pursuant to orders passed in 2018, when the Court Receiver was appointed

and the tribunal constituted under the order dated 15 th June 2018 has since

heard and disposed the application under Section 17. No doubt, the

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit application of TMPL requesting for permission to use the machines was

rejected. Furthermore, the claimant's application for permission to use the

machinery was also rejected. After passing of the Partial Award by the LCIA,

SPCPL has filed an application before the tribunal seeking to place on record

the award and to adjourn the proceedings sine die till the award is set aside.

The said application was also disposed vide order dated 20 th February 2020

holding that it is not open for the tribunal to adjourn the proceedings sine die

since the LCIA Arbitral Award does not result in the arbitration proceedings

before the tribunal being terminated. The attempt is to show that the

applicant-petitioner under the guise of the LCIA Award is seeking to further

implement an order passed under Section 9 which culminated in an order

under Section 17 by alleging that the status of the machinery sealed and lying

there at the factory premises of TMPL was being altered and that the

petitioner is therefore entitled to reliefs in the present Section 9 petition.

Subject matter of this petition, Mr. Dharmani suggested, is materially different

under two different contracts and hence cannot be the subject matter of any

further orders of this court. The learned counsel for the respondent no.4-

TMPL also sought to impress upon this court the fact that there is no occasion

to seek any further order in the facts of the case. On behalf of TMPL, he has

suggested that the Receiver's observations, after the last visit of August, 2021,

are not accurate. Alluding to such inaccuracies, he submits that there is no

occasion to now pass a further order, as sought.

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit

21. I have heard learned counsel for the parties at length to the extent it

concerns the ad-interim application. The enforcement petition is still pending

and in the circumstances, the court has to consider a prima facie case in the

background of the Partial Award dated 12 th February 2020 passed in the LCIA

arbitration. Copy of that award is at Exhibit-A to the Section 9 petition. The

averments in Section 9 petition have not been denied. Absent a denial, I

proceed on the basis of statements in the petition, which are uncontroverted

today. The case of the respondent no.4-TMPL will have to be considered on

the basis of the affidavits filed in the interim application. The Partial Award,

in paragraph 545, contains all operative directions. They are comprehensive,

holds the 1st respondent in breach and liable for a tort of inducement, all of

which directions and obligations are prima facie required to be complied and

all that remains was the LCIA is to pass final orders on the aspect of

quantification. There are directions which have been issued alluding to

unlawful takeover of respondent no.4-TMPL, making appointments to

director's posts in breach and excluding the petitioner's nominees and the

Super-Max Group Senior Management's people from effective management

and control of TMPL. They have caused TMPL, prima facie, to undertake

competing business activities and also initiate insolvency proceedings against

respondent no.10. All of these are subject matter of the Partial Award. The

respondents 1 to 3 in the Section 9 petition have been adjudged to be in

violation of contractual obligations. The respondent no.1 is said to have

exercised control over respondent no.4-TMPL unlawfully, despite restraint on

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit competition. The Court Receiver's reports indicate that there have been

attempts at altering the custody of the court as far as some of the machines

are concerned and notwithstanding the attempts of the respondent no.4-

TMPL to demonstrate that the operations at the plants are subject matter of a

Job-Work Agreement.

22. I am not persuaded to hold that the Receiver's custody has not been

tampered with or interfered with. TMPL was earlier said to be functioning

under the Super Max Group and employees of TMPL were directly reporting

to members of that group management. In view of the fact that the Partial

Award has dealt with all these aspects and is now up for enforcement, the

question is whether pending such enforcement, the reliefs prayed for in

Section 9 petition and the Interim Application are required to be granted. At

the cost of repetition, I may state that no reply has been filed to the Section 9

petition, despite ample opportunities having been provided. The only

affidavits that have come forth are in the interim application. The first of such

affidavits filed by one Subhash Chaudhari - respondent no.5, is found to be

unacceptable as being in support of the case of respondent no.4-TMPL for

want of authority. The second affidavit is that of Mr. Anil Patial, to which I

have made reference and that affidavit concentrates on the alleged attempt to

interfere with the employees of respondent no.4-TMPL, alluding to affidavits

in support of the applicant-petitioner's case being "procured" at the instance

of one Kenny Abraham - the India Chief Executive Officer of the Super Max

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit Group of Companies. Mr. Abraham has also filed an affidavit in support of the

petition and that affidavit is dated 1 st September 2021. I am of the view that a

prima facie case has been made out for grant of reliefs. The attempt in the

second affidavit of Anil Patial is all indicative of alleged attempts to interfere

with the employees' conduct and to procure evidence in support of the

applicant-petitioner and the actions taken by respondent no.4-TMPL against

those employees. Mr. Patial's affidavit is filed in his capacity as Senior

Executive - Human Resources and Administration of TMPL. Thus, his

knowledge would be restricted to the aspects concerning his areas of work. I

do not find any justification in the contentions raised on that affidavit

pertaining to the alleged acts of sabotage and indeed the Court Receiver's

report and the comparative analysis. However, as an authorized signatory, the

deponent-Anil Patial has deposed to various aspects in paragraph 11 of his

affidavit, but I am not persuaded to hold that the Receiver's reports are

incorrect. The property in question and forming subject matter of the

Receiver's report is custodia legis and enjoins upon the Receiver with certain

duties. Nothing has been shown to me that would lead me to believe that the

Receiver has not done his / her duties in pursuance of the appointment as

Receiver. Once the Receiver is appointed, the subject matter of appointment is

under the control of the court. Upon appointment of the Receiver, his nature

of duties and tasks to be undertaken are subject to the orders of this court and

these orders are presently being complied by the Receiver. Although Mr.

Dharmani has alluded to contradictions in the Receiver's reports, these are

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit matters that will be ultimately taken up for consideration at the final hearing

stage. The question now is whether a prima facie case is made out for grant of

reliefs and in material terms, the only arguments that I have heard are on

behalf of the respondents in opposition to the grant of reliefs is on the basis of

a distinction between the SSD and Job-Work Agreement i.e. the existence of

separate arbitration clauses; one leading to a Partial Award under the LCIA

and the other of a tribunal appointed by this court in Commercial Appeal

(Lodging) No.245 of 2018. The contention being that the parties are different,

the scope of the references are different and therefore the Receiver having

been appointed in the dispute between TMPL and Supermax Personal Care

Pvt. Ltd. cannot be subjected to an order under Section 9 in support of the

Partial Award.

23. The fact remains that these are but oral submissions across the bar.

Nothing is stated on oath to contradict the contentions in the petition. I do not

find that there is a case for refusing ad-interim reliefs sought, that has been

made out by the respondents. The allegations of having manipulated

employees and having interfered with the employees is a matter that can be

considered at the appropriate stage. The other aspect which has been pressed

into service is the aspect of jurisdiction, where Mr. Dharmani has placed

reliance on the decision of the Supreme Court in Harmony Innovation

Shipping Ltd. Vs. Gupta Coal India Ltd. and Anr. 3, wherein Mr. Dharmani has

invited my attention to the fact that Part-1 of the Arbitration and Conciliation 3 (2015) 9 SCC 172

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit Act, 1996 would not apply to international commercial arbitrations and

therefore cannot apply in the facts of the present case since the award is one

passed by the LCIA. The submission overlooks the fact that the judgment in

Harmony (Supra) is clearly pre 2015 amendment and post amendment, the

legal position is fairly clear. This court has also taken a view on the

applicability of Part-I, including Section 9 in the case of Trammo DMCC Vs.

Nagarjuna Fertilizers and Chemicals Ltd 4. Therefore, there is no occasion to

hold differently in the facts of the present case. The allegations in the present

case are that, on the instructions of the 1 st respondent in the arbitration

petition, respondents 5 and 6 gained entry into the facilities of respondent

no.4 at Gagret and Shoghi and took forcible control of these facilities and in

the year 2018, that led to the appointment of Court Receiver on 16 th February

2018. The resulting reference to arbitration has led to the arbitral tribunal

consisting of a Sole Arbitrator declining to permit unsealing / de-sealing of

the machines. Thus, the machines continues to be sealed. In view of the

applicability of Section 42 of the Arbitration and Conciliation Act, 1996 and

the prior petition having filed at the Himachal Pradesh High Court, I am not

inclined to hold in favour of the respondents, especially given the fact that the

LCIA tribunal is constituted post that order. The present petition is filed on

28th February 2020 to seek enforcement of the Partial Award dated 12 th

February 2020. The reference made to the jurisdiction clause by Mr.

Dharmani inviting me to hold that this court has no jurisdiction, do not

4 2017 SCC OnLine Bom 8676

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit commend itself to me. In any event, these are not aspects that can be decided

at the ad-interim stage. The affidavit of Kenny Abraham dated 1 st September

2021 and the additional affidavit of Ravindranath Santosh Kumar

Hazareesing filed in support of the application, read with the Court Receiver's

report of his visit of 2008, the LCIA has found that the takeover of TMPL in

February 2018 and in particular the 1st respondent's appointment before the

tribunal, who is also the 1st respondent in the present petition under Section 9,

of new directors to TMPL on 6 th and 7th February 2018 constituted a breach of

Reserved Matters under clause 5.1 of the SSD's Schedule-2 and thus of

respondent's obligations under the SSD. 1 st respondent's right to remove and

appoint directors on TMPL's board was held to be a "Reserved Matter" and he

was found to have failed to comply with his obligations under clause 16.1 of

the SSD.

24. The affairs of TMPL were therefore clearly a subject matter of the

arbitration and was an aspect that was before the tribunal and up for

consideration. The principal plea on behalf of respondents 4 to 7 before me

and as canvassed by Mr. Dharmani that the two contracts are separate with

two separate arbitration clauses, one being the Job-Work Agreement and one

being the SSD, do not persuade me to hold in favour of the respondents and in

that view of the matter and being conscious of the fact that the Receiver has

found several instances of tampering of seal of its pattern and as recorded in

the tabulated statement.

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit

25. I am of the view that prima facie case is made out for grant of ad-

interim reliefs, as prayed for. Once the equipment and machinery are

custodia legis, under the control of the Court Receiver, there is no occasion for

the same to be tampered with without leave of the court and considering the

nature of reliefs sought, it is appropriate that the Court Receiver is directed to

take steps to ascertain whether continuous monitoring is feasible within the

premises and therefore it may be necessary to install video equipment to

record the activities thereat. Although this is not a specific prayer that has

been sought in the interim application, I am of the view that once the Court

Receiver is appointed, the property and the subject matter being custodia

legis, the Receiver being under the supervision of the court, the court can

exercise a suitable discretion in a fit case for extra-ordinary measures that

may have to be taken to ensure that the orders of the court are not violated

and to act as a deterrent to prevent violation. Prima facie, having been

satisfied that there have been attempts to tamper and, in fact, alter the state of

the machinery after possession was taken and when the Receiver has put its

seals, I am of the view that suitable directions will be justified and

accordingly, I pass the following order :-

(i) There will be an ad-interim order in terms of prayer

clauses (a)-(i) to (a)-(iv), both inclusive, of the IA.

(ii) Receiver shall make a report in compliance within a

period of four weeks from today.

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit

(iii) The Receiver is entitled to appoint such technical

expert, as may be necessary, including an agency for

installation of cameras and video recording equipment,

duly connected to the internet, to enable remote

monitoring of the site by the Receiver and by the parties.

(iv) Additionally, there will be an ad-interim order in terms

of prayer clause (c) of the IA, by affixing a notice in

terms of Exhibit-F to the IA on the notice board of the

4th respondent-TMPL at its entrance.

(v) Contents of the notice shall also be communicated to all

the employees of respondent no.4-TMPL by SMS and

WhatsApp so that all are made aware of this notice.

(vi) There will also be an ad-interim relief in terms of

prayer clause (d)-(ii) of the IA.

(vii) The Receiver shall obtain suitable quotations for

installation of video monitoring equipment at site

within a period of two weeks from today and place the

same before the court.

(viii) In addition to the above, considering the developments

and the conduct of the contesting respondents, there

will be an ad-interim order in terms of prayer clauses

(b)-(i) to (b)-(iii) and prayer clause (e) of the petition

under Section 9.

2-IAL-19689-2021-Order dt. 20-10-2021.doc Dixit

(ix) Time to file affidavit-in-reply to the Section 9 petition

stands extended till 10th November 2021.

(x) Affidavit-in-rejoinder, if any, to be filed on or before

15th November 2021.

(xi) Liberty to apply after the Receiver prepares his first

report.

26. At this stage, Mr. Dharmani seeks stay of this order. Request for stay is

declined.

27. List the IA on 17th November 2021.

(A.K. MENON, J.)

Digitally signed

SNEHA by SNEHA

ABHAY ABHAY DIXIT Date: 2-IAL-19689-2021-Order dt. 20-10-2021.doc 2021.10.21 DIXIT 18:01:05 +0530 Dixit