1 arbp812-10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.812 OF 2010 Savita Oil Technologies Ltd. ....Petitioner (formerly known as Savita Chemicals Ltd.) V/s. M/s.Destimoney India Services Pvt. Ltd. (formerly, Dawnay Day AV Financial Services Pvt. Ltd.) ....Respondent Mr.S.U. Kamdar, Senior Counsel with Ms.Pooja Patil, Mr.D.V. Deokar and Ms.Pinakin Modi i/b M/s.Parimal K.Shroff & Co. for the Petitioner. Mr.Vikram Nankani with Mr.Madhur Baya with Mr.Alok Jain i/b Mr.Naresh S. Thacker for the Respondent. CORAM : S.J. VAZIFDAR, J. DATE : 29TH OCTOBER, 2010. P.C. :- 1. The petition has been filed under section 9 of the Arbitration and Conciliation Act, 1996. 2. The parties had entered into an agreement dated 8.4.2009 under which the respondent has agreed to sell to the petitioner the membership right in commercial premises admeasuring about 4180 sq.ft. together with two open car parking places. A cheque in the sum of Rs.1.00 crore was placed with the escrow agent by the petitioner. 3. The agreement is not denied. Under clause 4 of the agreement, the respondent prior to the completion of the sale, is required to comply with various aspects including obtaining the consent in writing of the bank 2 arbp812-10 and the society permitting the sale of the said premises. The respondent was also required to produce a no dues/arrears certificate from the society and a certificate under section 281 of the Income Tax Act. Clause 6 required the sale to be completed on or before 7.5.2009 or the extended period, subject to the respondent having made out a clear and marketable title to the said premises. 4. The time for completion was admittedly extended on three occasions. Considering all the terms and conditions of the agreement and even clause 6 itself, it is clear that the time was not the essence of the contract and if it was, it ceased to be so, by the conduct of the parties. It is not the respondent’s case that subsequently time was made of the essence of the contract. Even if it was, it would make no difference for admittedly the respondent has not complied with all its obligations under the contract. On the other hand, the petitioner has pursuant to the interim order passed by this court dated 3.5.2010, deposited a sum of Rs. 1,01,00,000/-. Strictly speaking this was not necessary in view of the fact that the petitioner has not committed any default and it is only the respondent that has committed a default. 5. In the facts of this case, the mere grant of an injunction would serve no purpose. It is essential that the Court Receiver be appointed. 6. It is contended on behalf of the respondent that there is a sharing agreement in respect of the premises between itself land another company Dawnay Day India Land Private Limited (DDILPL) and that pursuant thereto DDILPL is in possession of about 2590 sq.ft. of the same. 3 arbp812-10 7. It is however, important to note that the respondent by a letter dated 5.6.2009 informed the petitioner that DDILPL had agreed to withdraw its claim/obligation in respect of the premises and had accordingly instructed the respondent’s advocate to put the same on record to the petitioner’s advocate. The respondent further requested the petitioner to extend the M.O.U. to enable to it to perform its obligations. Therefore, the contention that DDILPL continues to remain in possession of 2590 sq.ft. is curious. DDILPL and the respondent were at one stage wholly of subsidiaries of a foreign company. It was stated on behalf of the respondent that DDILPL is now a subsidiary of another company. 8. The respondent claims to be unable to perform its obligation only due to the alleged claim of DDILPL of possession. Thus the respondent can have no objection to the appointment of a Court Receiver. 9. It is imperative therefore that the petitioner’s rights are fully protected which can be done only by appointing the Court Receiver. Moreover, leaving the property or even the admittedly unencumbered part thereof vacant would not enure to the benefit of either party that ultimately succeeds in the arbitration. It may as well be put to use pending the arbitration. 10. In the circumstances, the following order is passed :- i). The Court Receiver is appointed as a Court Receiver of the premises described in prayers (a) and (b) with all powers under Order XL Rule 1 of the Code of Civil Procedure. ii). If the Court Receiver finds any third party in possession of any 4 arbp812-10 portion of the said premises, he shall at this stage, appoint such third party as an agent but without security or royalty. The petitioner is at liberty to apply for further reliefs by a separate application after the Court Receiver takes possession and makes a report. iii) The Court Receiver shall give out on leave and licence basis the said premises or such part thereof as is found to be available for the same in the usual manner and on usual terms and conditions including as to security and royalty. The parties are at liberty to bid for the agency of the Court Receiver. In the event of the parties being appointed as an agent of the Court Receiver, they shall not be required to furnish security but shall only required to pay the royalty. iv). Till the Court Receiver takes possession, order in terms of prayer (a). The arbitration petition is accordingly disposed of. The costs of the petition shall be costs in the arbitration.