IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.04.2011 CORAM THE HON'BLE MRS. JUSTICE R.BANUMATHI and THE HON'BLE MR. JUSTICE V.PERIYA KARUPPIAH O.S.A.NO.413 OF 2008 ISG Novasoft Technologies Limited, rep. By its Chief Executive Officer, Krishnakumar Srinivasan G3, Ground Floor, Elnet Software City, TS 140, Block No.2&9, Rajive Gandhi Salai, Taramani, Chennai-113. ... Appellant vs. Gayatri Balasamy ... Respondent Original Side Appeal is filed under Order XXXVI Rule 1 of the Original Side Rules read with Clause 15 of the Letters Patent against the order dated 14.11.2008 made in A.No.1793 of 2008 by this Court. For Appellant : Mr.S.K.Chandrakumar For Respondent : Mr.G.Ravikumar for M/s.HLC Associates JUDGMENT R.BANUMATHI,J This appeal arises out of the order dated 14.11.2008 in A.No.1793 of 2008 whereby the learned single Judge directed the Appellant to give bank guarantee for the sum offered as a settlement to the tune of Rs.74,94,564/- out of Rs.1,13,53,680/- less applicable taxes. 2. Appellant company-ISG Novasoft Technologies Limited is engaged in the business of dealing with various products relating to Information Technology. Respondent-Gayatri Balasamy joined the Appellant company on 10.03.1996. Appellant company and Respondent entered into an agreement which came into force on 27.04.2006. Respondent was appointed as Appellant Company's Vice President for Mergers and Acquisition on a salary of Rs.54 lakhs per month. Before https://hcservices.ecourts.gov.in/hcservices/ taking up the assignment, Respondent has entered into an application for employment. Respondent has been working in the Appellant company. In the month of December 2007, Appellant company decided to terminate the services of the Respondent. By the letter dated 20.12.2007, Appellant company terminated the services of the Respondent. A cheque for Rs.14,85,225/- was sent towards salary for four months, net of taxes, in lieu of notice was sent to the Respondent. 3. Alleging that Chief Executive Officer of the Appellant company viz., Krishnakumar Srinivasan was misbehaving with her, Respondent is said to have lodged criminal complaints (i) Crime No.824/2007 of R4-Pondy Bazaar Police Station; (ii) Crime No.172/2008 of Cyber Crime Central Crime Branch; (iii) Private complaint before XVII Metropolitan Magistrate, Chennai. 4. According to Respondent, she is entitled to 120 days notice in writing to show cause as to her termination if it was intended by the Appellant company. Further case of Respondent is that she is entitled to increase of salary, emoluments and perks in terms of Employment agreement and she is also entitled for bonus after completion of the first year. In terms of Article 8, all dispute and differences, claims or proceedings between the parties relating to the validity, construction or performance of the employment agreement shall be referred to the sole Arbitrator and the proceedings shall be governed by the provisions of the Arbitration and Conciliation Act, 1996. Respondent has also filed Petition in O.P.No.251 of 2008 under Section 11(6) of the Arbitration and Conciliation Act for appointment of an Arbitrator. In the mean while, Respondent has also filed application under Order XIV, Rule 8 of O.S. Rules read with Sec.9(e) of the Arbitration and Conciliation Act directing the Respondent to remit the sum of Rs.1,71,68,000/- as an interim measure pending disposal of the Arbitration proceedings. 5. Appellant company resisted the application contending that the very entry of the Respondent under the employment agreement is with fraud, since the Respondent had concealed her employment with one M/s.Covansys India Private Limited as Senior Business Analyst and for the irregularities committed by her. Appellant alleges that Respondent had misrepresented the facts at the time of her seeking employment and Appellant company had also issued notice of recovery of money under various heads. Further case of Appellant is that Respondent has maliciously filed criminal complaints against the Chief Executive Officer and other persons who were not on Board of the Appellant company. 6. By the impugned order dated 14.11.2008, Justice Chitra Venkataraman has directed the Appellant company to give bank guarantee for a sum of Rs.74,94,564/- out of Rs.1,13,53,680/- less applicable taxes. Being aggrieved by the said order dated https://hcservices.ecourts.gov.in/hcservices/ 14.11.2008, Appellant has preferred this Appeal. 7. As against the order passed in Crl.R.C.No.856 of 2008, Krishna Srinivasan, Chief Executive Officer has preferred SLP before the Supreme Court in SLP.(Crl) Nos.6135 of 2009 and 8272 of 2009. In the Supreme Court, the parties have arrived at out of Court settlement to the effect agreeing that they would go before the Arbitrator. In pursuance to the out of Court settlement arrived at between the parties, on 18.03.2011, the Supreme Court has passed the following order:- "During the pendency of these petitions the parties to all the petitions have arrived at out of Court Settlement. The terms of settlement have been incorporated in the Memorandum of Settlement dated 8th March, 2011. Learned counsel for the parties pray that the Memorandum of Settlement be taken on record and all these cases be disposed of in terms thereof. Learned counsel also submit that parties to the said Memorandum are present in Court in person and they re-affirm the terms of settlement. A certified copy of the resolution passed by the Board of Directors of M/s ISG Novasoft Technologies Limited has also been annexed with the Memorandum of Settlement. Having perused the terms of settlement, we feel that there is no impediment in accepting the same. Accordingly, the Memorandum of Settlement is taken on record. Parties to the settlement shall remain bound by the terms of memorandum of settlement. With the consent of learned counsel for the parties, Mr. Justice T.N.C. Rangarajan, a former Judge of the Andhra Pradesh High Court, is appointed as the sole Arbitrator to adjudicate upon the disputes between the parties. In case Justice T.N.C.Rangarajan has any reservation in accepting the assignment, Mr. Justice K.Sampath, a former Judge of Madras High Court will act as the sole Arbitrator. The learned Arbitrator shall fix his own fees and other incidental expenses in consultation with learned counsel for the parties. As prayed, all the criminal proceedings as detailed in Paragraph 8 read with Annexure 'A' to the Memorandum of Settlement, except T.P. (Crl.) Nos. 101 and 126 of 2010, pending before this Court are hereby quashed. Learned counsel appearing for Ms. Gayatri Balaswamy submits that the said transfer petitions as also the appeal and other proceedings in the Madras High Court shall be withdrawn by his client. https://hcservices.ecourts.gov.in/hcservices/ The special leave petitions stand disposed of accordingly." As per the above order of the Supreme Court, now the Appellant and the Respondent have filed Memo stating that parties have accepted to withdraw all the proceedings between them. 8. This appeal was listed today under the caption "for reporting settlement". The authorised signatory of the Appellant company Mr.Sridhar Kannan, who is also the Vice President-Corporate Services and the Respondent-Ms.Gayatri Balasamy are present in Court. Appellant is represented by learned counsel Mr.S.K.Chandrakumar. Respondent is represented by learned counsel Mr.G.Ravikumar. 9. In the Memo filed by the Appellant, it has been stated as under:- "It is submitted that since the Honourable Supreme Court was pleased to pass an order in SLP No.8272 of 2009 based on the MOU signed by both the parties. Further both parties have accepted to withdraw all the pending cases between the parties. His Lordship Mr.Justice T.N.C.Rangarajan appointed as the sole arbitrator to adjudicate the dispute between the parties. The copy of the order is also produced herewith for the perusal. Therefore this Honourable Court may be pleased to set aside the Judgment and Decree in A.No.1793 of 2008 dated 14.11.2008 on the file of this Honourable court and permit the appellant to withdraw the OSA No.413 of 2008 and thus render justice." 10. In the Memo filed by the Respondent, it has been stated as follows:- "The respondent submit that both the Appellant and respondent have arrived at out of Court settlement and the same was incorporated in the order passed by the Hon'ble Supreme Court of India in Special leave to appeal (Crl) No.6135 of 2009 dated 18.3.2011. In view this, the respondent herein bringing this fact to knowledge of this Hon'ble court. Therefore the OSA No.413 of 2008 on the file of this Hon'ble court filed by the Appellant may be pleased to dismiss as "not pressed". Under these circumstances the respondent filing this memo and praying this Hon'ble Court to accept this memo and pass an appropriate order or orders and thus render justice." Memo filed by both the Appellant and the Respondent is recorded. 11. Having regard to the settlement arrived at between the parties and in view of the memo filed by both Appellant and the https://hcservices.ecourts.gov.in/hcservices/ Respondent, this appeal is dismissed as not pressed. Petition filed under Section 9(e) of Arbitration and Conciliation Act in A.No.1793 of 2008 shall stand disposed of in terms of the settlement reached before the Supreme Court in S.L.P. (Crl) Nos.6135 of 2009 and 8272 of 2009 and the issues arising between the parties are left open to be raised in the arbitration proceedings. Consequently, connected M.Ps. are closed. There is no order as to costs in this appeal. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar bbr To The Sub Assistant Registrar, Original Side, High Court, Madras. 1 cc To Mr.S.K.Chandrakumar, Advocate, SR.28762. 2 cc To M/s.HLC Associates, Advocate, SR.28758. O.S.A.No.413 of 2008 SK(CO) RVL 02.05.2011 https://hcservices.ecourts.gov.in/hcservices/