Delhi High Court
Fun Choice & Ors. vs Terrestrial Foods Private ... on 22 February, 2023
NEUTRAL CITATION NO. 2023/DHC/001423
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Order: 22nd February, 2023
+ O.M.P.(I) (COMM.) 208/2020
FUN CHOICE & ORS. ..... Petitioners
Through: Mr. Jayant K. Mehta, Sr. Advocate
with Ms. Charanya Lakshmikumaran,
Mr. Yogendra Aldak, Ms. Bhavya
Shukla and Mr. Pranav Mundra,
Advocates
versus
TERRESTRIAL FOODS PRIVATE LIMITED & ORS...Respondents
Through: Counsel for respondents (Appearance
not given)
CORAM:
HON'BLE MR. JUSTICE CHANDRA DHARI SINGH
ORDER
CHANDRA DHARI SINGH, J (Oral)
I.A. 3513/2023 (For recalling and setting aside of order dated 28 th July,
2020)
1. The instant application under Section 151 of the Code of Civil
Procedure, 1908 has been filed on behalf of respondent no. 1 seeking the
following reliefs:-
"A. Recall and set aside the order dated 28.07.2020 passed by this
Hon'ble Court, and dismiss the Section 9 petition; and
Signature Not Verified
Digitally Signed
By:DAMINI YADAV
Signing Date:27.02.2023
19:16:24
NEUTRAL CITATION NO. 2023/DHC/001423
B. Pass an Order directing that all the consequential proceedings
(including but not limited to the entire Arbitration proceedings) be
declared non-est, null and void and having no binding value; and
C. Impose exemplary costs on the Petitioners for playing a fraud
on this Hon'ble Court or take any other action against the
Petitioners as this Hon'ble Court may deem fit and proper; and
D. Pass any other order or further order(s) as this Hon'ble Court
may deem fit and proper in the facts and circumstances of the
case."
2. Learned counsel appearing on behalf of applicant/respondent no. 1
submitted that the order dated 28th July, 2020 passed by this Court, whereby
this Court was pleased to appoint Mr. N.P. Kaushik, Retd ADJ as sole
arbitrator for adjudication of the disputes and differences between the
parties, be recalled and set aside.
3. It is submitted that it is a settled position of law that a Court of law
possesses an inherent power to recall and set aside its own order or
judgment if it is found that the said order or judgment has been obtained by
playing a fraud on the Court.
4. It is submitted that 'Fun Choice', renamed as 'M/s JBK Industries',
ceased to exist as on 5th June, 2020, thus the petitioners act of representing
themselves to be 'Fun Choice', a Partnership Firm of Mr. Prabhat
Aggarwala and Mr. Anil Agarwalla, is nothing but a fraud on this Court. It
is reiterated that even the affidavit filed in support of the petition describes
the petitioner no.1 as 'Fun Choice' and Mr. Prabhat Aggarwala as a partner
in 'Fun Choice'.
Signature Not Verified
Digitally Signed
By:DAMINI YADAV
Signing Date:27.02.2023
19:16:24
NEUTRAL CITATION NO. 2023/DHC/001423
5. It is submitted that the instant petition was heard by this Court on 28th
July, 2020, on which date the learned counsel for the respondents orally
submitted that he had no objection if a sole arbitrator is appointed by this
Court as suggested by the learned counsel for the petitioners.
6. It is further submitted that the parties in the present case had already
vide Clause 18.6 of the MAPA dated 19th December, 2018 agreed upon a
procedure for the appointment of a three-member Arbitral Tribunal. Thus, it
was not open to the learned counsel for the respondent no.1 to give oral
consent for arbitration before a sole arbitrator.
7. In view of the aforesaid, it is stated that the said order dated 28 th July,
2020 appointing a sole arbitrator merits to be recalled and set aside by this
Court.
8. Per contra, learned counsel for the non-applicant vehemently
opposed the instant application and stated the instant application is nothing
but an abuse of process of law and merits to be dismissed with costs.
9. Learned counsel for the non-applicant submitted that the instant
application has been filed after a period of three years after the order was
passed. Therefore, the application in the instant case is barred by limitation.
10. It is also stated that the proceedings before the learned sole arbitrator
are still ongoing and the applicant, in an attempt to delay the arbitral
proceedings, has mischievously filed this application.
11. It is thus submitted that the instant petition being devoid of merits
deserves to be dismissed.
Signature Not Verified
Digitally Signed
By:DAMINI YADAV
Signing Date:27.02.2023
19:16:24
NEUTRAL CITATION NO. 2023/DHC/001423
12. Heard learned counsels for the parties and perused the record.
13. The relevant portion of the order being under review and sought to be
recalled by the applicant is reproduced hereunder:
"4. After some arguments, learned counsel for the petitioner, on
instructions, submits that the petitioners would be satisfied if the
respondent preserves the plant and machinery purchased from the
petitioner as per the terms of the Master Asset Purchase
Agreement dated 19.12.2018, till the petitioner's application for
interim relief which it proposes to file before the learned
Arbitrator is taken up for consideration. He further prays that,
keeping in view the petitioner's eagerness to have the dispute
arbitrated, this Court appoint a sole Arbitrator instead of a three
member arbitral tribunal, as stipulated under the contract, to
adjudicate the disputes between the parties.
5. Mr. Rajashekhar Rao, Advocate who appears on advance notice
on behalf of the respondents has no objection to any of the
aforesaid prayers made by the petitioner and, therefore, prays that
an independent sole arbitrator by appointed by this Court. He
further submits that, as per the petitioner's own case, it is entitled
to receive only a sum of Rs.2 crores from the respondents, which
claim is vehemently disputed by the respondents; thus, there is no
reason for the petitioner to seek a restraint order with respect to
the entire plant & machinery, which is valued at Rs. 35 crores,
purchased by the respondents from the petitioners under the
Master Asset Purchase Agreement dated 19.12.2018. Without
prejudice to his aforesaid submissions, he submits, on instructions,
that in order to facilitate early resolution of the disputes between
the parties, the respondents are agreeable to undertake not to
create any third party rights in the entire plant and machinery in
question, till the petitioner's application seeking interim reliefs
under Section 17 of the Act is taken up for consideration by the
learned Arbitrator.
Signature Not Verified
Digitally Signed
By:DAMINI YADAV
Signing Date:27.02.2023
19:16:24
NEUTRAL CITATION NO. 2023/DHC/001423
6. In view of the aforesaid stand taken by the parties and with
their consent Mr. N.P. Kaushik, Retd ADJ (Mobile No.
9910384663) is appointed as the sole Arbitrator for adjudication
of the disputes and differences which have arisen between the
parties in relation to the Master Asset Purchase Agreement dated
19.12.2018."
14. As per paragraph 4 of the said Order, it is evident that learned counsel
for the petitioner prayed before this Court that keeping in view the
petitioner's eagerness to have the dispute arbitrated, this Court might appoint
a sole arbitrator instead of a three-member arbitral tribunal, as stipulated
under the contract, to adjudicate the disputes between the parties.
15. Furthermore, paragraph 5 of the Order clearly records that learned
counsel for the respondents had no objection to any of the aforesaid prayers
made by the petitioner and, even it was prayed on behalf of the respondent
that an independent sole arbitrator be appointed by this Court.
16. Therefore, it is not a disputed fact that this Court appointed the sole
arbitrator on the basis of the stand taken by the parties and with their
consent, appointed the sole arbitrator. It is also not in question whether the
said statement was made by the learned counsel by the parties. In the instant
case, the applicant has been unable to specifically show how the acts of the
non-applicant amount to commission of fraud before this Court.
17. In any case, the instant application has been filed after a passage of
three years since the said order was passed by this Court. Moreover, the
issue as to the competence to arbitrate on the lis in question has also not
been agitated before the arbitral tribunal.
Signature Not Verified
Digitally Signed
By:DAMINI YADAV
Signing Date:27.02.2023
19:16:24
NEUTRAL CITATION NO. 2023/DHC/001423
18. It is also stated by the parties that the arbitral proceedings, as per the
statements made by the counsels and as per the contents of the application,
qua the dispute between parties are still ongoing before the arbitrator.
19. Therefore, the instant application prima facie seems to be nothing but
a gross abuse of process of law and appears to be solely intended to delay
and derail the arbitral proceedings. In the opinion of this Court, there is no
merit whatsoever in the instant application and accordingly the same merits
dismissal.
20. In view of the aforesaid, the instant petition stands dismissed.
21. Pending applications viz. I.A. 3514/2023, I.A. 3515/2023 and I.A.
3516/2023 also stand dismissed.
22. The order be uploaded on the website forthwith.
CHANDRA DHARI SINGH, J
FEBRUARY 22, 2023
Dy/@k
Click here to check corrigendum, if any
Signature Not Verified
Digitally Signed
By:DAMINI YADAV
Signing Date:27.02.2023
19:16:24
