[Cites 5, Cited by 0]
Calcutta High Court
Naturals Dairy Private Limited And ... vs Aawkins Tracom Private Limited And ... on 5 February, 2026
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OCD - 7
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
AP-COM/999/2025
IA NO: GA-COM/1/2026
NATURALS DAIRY PRIVATE LIMITED AND OTHERS
VS
AAWKINS TRACOM PRIVATE LIMITED AND ANOTHER
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 5th February 2026
Appearance:-
Mr. Kumarjit Banerjee, Advocate (VC)
Ms. Sanchari Chakraborty, Advocate
Ms. Avishikta Biswas, Advocate
... for the petitioners.
Ms. Noelle Banerjee, Advocate
Ms. Joyshree Ghosh, Advocate
Ms. Priyashi Jajoo, Advocate
... for respondent no.1.
Mr. Altamash Alim, Advocate
Mr. Akash Agarwal, Advocate
... for respondent No. 2.
1. AP-COM/999/2025 is an application for appointment of an arbitrator for
resolution of disputes between the parties, which arose out of the
agreement dated September 5, 2024.
2. The respondent No.2 has filed an application being GA-COM/1/2026,
challenging the maintainability of AP-COM/999/2025, on the ground that
the said respondent is neither necessary nor a proper party in the
disputes involved between the petitioners and the respondent No.1. A
prayer has been made to expunge the respondent No. 2. It is the specific
case of Mr. Alim, learned advocate for the respondent No.2, that no notice
under Section 21 of the Arbitration and Conciliation Act, 1996 was issued
to the respondent No.2 and there are no allegations against the
respondent No.2. Mr. Alim submits that for this Court to refer a dispute
to arbitration, there must be a subsisting dispute between the parties.
Admittedly, neither the notice invoking arbitration nor the pleadings in
AP-COM/999/2025, indicate that the petitioner has any kind of allegation
whatsoever against the respondent No.2. In the absence of any such
averments and in the absence of any direct allegation against the
respondent No.2, the respondent No.2 should not be unnecessarily
saddled with a litigation.
3. Learned advocate for the respondent No.1 also supports the case of Mr.
Alim to the extent that the respondent No.2 did not have any role to play
in the transaction between the parties and as such, the respondent No.2
was neither a necessary nor a proper party. The allegations which were
subsisting with regard to change of composition of the shareholding and
non-transfer of shares to the respondent No.2, are already subject matter
of another reference and this Court has already appointed a learned
arbitrator. Thus, the scope of the reference in this matter is limited to the
dispute between the petitioner and the respondent No.1 with regard to the
breach of covenants of the said agreement dated September 5, 2024 and
non-payment of the money which was lent by the respondent No.1 to the
respondent No.2 along with the interest thereon. A further dispute is with
regard to recall of the loan amount which was agreed to be advanced to
the petitioner. Ms. Banerjee, further submits that a prior proceeding
against the petitioner is already continuing before the National Company
Law Tribunal, Kolkata and as such, the said application should be heard
prior to reference of the instant dispute.
4. Admittedly, the petitioner and the respondents entered into the agreement
dated September 5, 2024. The representative of the respondent No.2
(which is a company) signed the agreement. The covenants,
representations and warrantees by the borrowers i.e. the petitioners under
clause 4.4 are as under:-
"4.4. The Borrower and the Shareholders further warrants and
undertakes not to issue any shares of the Borrower to any person
whatsoever and not to change the composition of shareholding of the
Borrower without prior written consent of the Lender."
5. Clause 5 of the said agreement dated September 5, 2024 deals with the
events of default. Sub-clause (c) thereof is quoted below:-
"c. The Borrower is in breach or default of performance of any
covenant, undertaking, conditions or any representation of
warranty contained in the Agreement."
6. Clause 5.2 of the said agreement provides an option available to the lender
in case of an event of default, which is quoted below:-
"5.2. On the occurrence of an Event of Default, the Lender shall by
written notice to the Borrower and/or the Shareholders demanding
repayment of the Inter Corporate Deposit along with interest that may
have accrued and is due, payable and outstanding by the Borrower to
the Lender within 30 (Thirty) days from the date of issuance of the
written notice."
7. The expression "parties"has been defined in the said agreement, as
follows:-
"The Borrower, individual Shareholders, Corporate Shareholder and
Lender are hereinafter individually referred to as "Party" and jointly as
"Parties". The individual Shareholders and the Corporate Shareholder
are hereinafter collectively referred to as the "Shareholders"."
8. Clause A at page 3 of the said agreement provides that the shareholders
hold 68.28% of the paid-up share capital of the Borrower and they are in
the management and control of the day-to-day affairs of the Borrower.
The details of the shareholding of the shareholders in the borrower, have
been provided in a Schedule to the said agreement, which is quoted
below:-
SL.NO. NAME OF SHAREHOLDER NO. OF SHARES % SHAREHOLDING
1 Hemant Kumar Das 1,06,620 15.23%
2 Ayush Raj 20,305 2.90%
3 AishraTechnofab Engineers 78,052 11.15%
4 Responce Renewable Energy Ltd 2,73,000 39.00%
68.28%
9. Even if the issue of shareholding and non-transfer of shares and change
in the composition of the shareholders are matters in dispute in another
proceeding, insofar as, respondent No.2 is concerned, I find from the
covenants in the said agreement that the shareholding of respondent No.2,
Responce Renewable Energy Limited [for short, 'Responce'], is also
recognized in the subject agreement. Secondly, Response is also a
signatory. Thirdly, the respondent No.1 while issuing the notices of
demand for immediate payment,also alleged breach of the covenants of the
agreement, apart from demanding payment with interest. In the letter
dated March 21, 2025, the respondent No.1 through learned advocate had
called upon the petitioner No.1 to remedy the breach and pay up the
money by invoking clause 5(1)(c) which states that if the borrower is in
breach or default of performance of any covenant, undertaking, condition
or representation or warranty contained in the agreement, then such
breach shall constitute an event of default, thereby entitling the
respondent No.1 to invoke the rights under the agreement.
10. Although, the respondent No.1 submits that the breach which has been
alleged has nothing to do with the respondent No.2, for the referral court
to go into the details of the issue with regard to the rights and liabilities of
the petitioner vis-à-vis the respondent No.2, is beyond the scope of this
application. The decisions cited by Mr. Alim namely Bharat Sanchar
Nigam Limited and Another v. Nortel Networks India Private Limited
reported at (2021) 5 SCC 738 and M/s. Kotak Mahindra Prime Limited
v. ManavSethi& Anotherpassed by the Delhi High Court on
15.07.2024 in ARBITRATION AND CONCILIATION ACT, 1996.P.
946/2024 and I.A. No.32486/2024 are on the question of compliance of
Section 21 of the Arbitration and Conciliation Act, 1996. In this case, the
notice invoking arbitration was issued. If there are more than one
signatory and a party seeks to invoke arbitration against all, the notice is
not required to be issued to all. Moreover, whether there are disputes
against the respondent No.2, whether the respondent No.2 has been
unnecessarily dragged into the litigation etc, are matters which must be
decided by the learned arbitrator. These issues touch the question of
jurisdiction of the learned arbitrator and can be raised by the respondents
before the learned arbitrator under Section 16 of the Arbitration and
Conciliation Act, 1996.
11. The law is well settled that, the issue of misjoinder is a matter to be
decided by the learned arbitrator. The arbitrator can either add a party or
delete a party. The prime consideration for this Court is to give utmost
importance to the agreement between the parties to refer their disputes to
arbitration. The expression "parties" in the agreement includes Response,
who is also a signatory. Thus, even if there are no subsisting disputes as
against the respondent No.2, as yet, the scope of reference can never be
restricted, by limiting the claim at this point to allegations in the notice
invoking arbitration. In the statement of claim, further allegations and
claims may be made. Thus, at this stage, to hold that the respondent
No.2 is not a proper party will be premature. Moreover, even if the
respondent No.2 is not a necessary party, whether the arbitral proceeding
can be properly adjudicated, in the absence of the respondent No.2 is also
an issue which should be decided by the learned arbitrator. Under such
circumstances, this point is kept open, to be raised at the appropriate
stage as already discussed hereinabove. The arbitrator can also expunge
the respondent No. 2, upon imposition of cost upon the petitioner, if he
finds that the respondent No. 2 has been unnecessarily dragged into the
proceeding.
12. The application is allowed. Both the parties agree to Mr. Aniruddha Mitra,
Senior Advocate, Bar Library Club being appointed [9810209315] as the
learned arbitrator to resolve the disputes between the parties. This
appointment is subject to compliance of Section 12 of the Arbitration and
Conciliation Act, 1996. The learned Arbitrator shall fix his remuneration,
in terms of the Schedule of the Act. All questions with regard to
arbitrability of the dispute, admissibility of the claim, limitation etc. are
kept open to be decided by the learned arbitrator, if raised.
13. The proceeding before the National Company Law Tribunal, Kolkata is a
separate and independent proceeding and will proceed accordance with
law.
14. AP-COM/999/2025 and GA-COM/1/2026 stand disposed of.
(SHAMPA SARKAR, J.)
S. Kumar
