The State Trading Corporation Of ... vs Masumi Overseas Pvt. Ltd. And 2 Ors
2022 Latest Caselaw 3740 Bom

                                                                 19-1-NMS1899-2018.DOC

                                                                                   Santosh
                             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                 ORDINARY ORIGINAL CIVIL JURISDICTION
                                       IN ITS COMMERCIAL DIVISION


                                   NOTICE OF MOTION NO. 1899 OF 2018
                                                  IN
                                   COMM SUMMARY SUIT NO. 49 OF 2011

                      Masumi Overseas Pvt. Ltd & ors.                    ...Applicants
                      In the matter between
                      The State Trading Corporation of India Ltd.             ...Plaintiff
                                           Versus
                      Masumi Overseas Pvt. Ltd & ors.                   ...Defendants


                      Ms. Laxmi Maria Jenkins, i/b LMJ Law Practice, for the
SANTOSH
SUBHASH                    Plaintiff.
KULKARNI              Mr. Dhairyasheel Sutar, a/w Sanjeev Rawat, Kruti Garg and
                           Kavita Vijapure, for defendant nos.1 and 3.
Digitally signed by
SANTOSH
SUBHASH
KULKARNI
Date: 2022.04.08
11:10:47 +0530




                                                CORAM:      N. J. JAMADAR, J.

                                                DATED :     6th APRIL, 2022
                      PC:-

1. Heard the learned Counsel for the applicants - defendant

nos.2 and 3.

2. This notice of motion is taken out seeking reference of the

dispute to the Arbitral Tribunal under Section 8 of the

Arbitration and Conciliation Act, 1996 ("the Act, 1996"). The

learned Counsel for the applicants - defendant nos.2 and 3

invited the attention of the Court to the personal guarantee

executed by defendant nos.2 and 3 on 7 th August, 2010,

19-1-NMS1899-2018.DOC

particularly, the reference therein to the Agreement dated 15 th

December, 2006, entered into between defendant no.1 Company

and the plaintiff. Since the said Agreement dated 15 th

December, 2006, contains an arbitration clause, the applicants

- defendants nos.2 and 3 contend that the dispute is required to

be referred to arbitration by resorting to the provisions

contained in Section 8 of the Act, 1996.

3. The learned Counsel for the applicants - defendant nos.2

and 3 fairly submitted that defendant no.1 had made an

application for reference of the dispute to arbitration by taking

out Notice of Motion No.1697 of 2012 and Notice of Motion

No.1698 of 2012. Those Notices of Motion were dismissed by the

learned Single Judge of this Court by an order dated 13 th

January, 2014. A special leave petition preferred by defendant

no.1 there-against was also dismissed by the Supreme Court.

The learned Counsel however submits that the decision of this

Court was based on the judgment of the Supreme Court in the

case of Sukanya Holdings (P) Ltd. vs. Jayesh H. Pandya and

another1. However, since a legislative change has been brought

about by the Amendment Act 3 of 2016 with effect from 23 rd

October, 2015, the applicants - defendants are, according to the

learned Counsel for the applicants, within their rights in

1 AIR 2003 SC 2252.

19-1-NMS1899-2018.DOC

seeking the reference of the dispute to arbitration as all the

requisites stipulated under Section 8 of the Act are satisfied.

4. The learned Counsel for the applicants, on the other hand,

invited the attention of the Court to the order passed by this

Court on 25th June, 2019, whereby this Court had noted that

the defendants had invoked arbitration despite the application

on defendant no.1 under Section 8 having been rejected by the

Court and the defendants were seeking time to proceed with the

Summons for Judgment. The Court was, thus, persuaded to

direct that the ongoing arbitration proceedings be kept in

abeyance till the Summons for Judgment is heard.

5. The learned Counsel for the applicants - defendants

submits that the defendants have challenged the said order and

even the subsequent order dated 7 th August, 2019, whereby the

prayer to modify the order dated 25 th June, 2019 was also

rejected.

6. The situation, which, thus obtains is that the defendants

had invoked the arbitration despite the rejection of the

application under Section 8 of the Act, 1996, preferred by

defendant no.1. Having noted the said development, this Court

was persuaded to direct that the arbitration proceedings be kept

in abeyance. In this view of the matter, the applicants do not

19-1-NMS1899-2018.DOC

deserve a hearing on the instant Notice of Motion. Since the

defendants have taken the said order in appeal, the decision in

appeal would take care of the concern of the applicants -

defendants in as much as, if the said order is varied or set

aside, the arbitration can continue. In the circumstances, the

Notice of Motion does not deserve to be entertained.

7. Hence, the Notice of Motion stands dismissed.

[N. J. JAMADAR, J.]