Arbp411.09 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO. 411 OF 2009 SMC Global Securities Ltd., Having their registered office at 11/6, Shanti Chambers, Pusa Road, New Delhi-110 005, And their previous address: 17, Netaji Subhash Marg, Daryaganj, New Delhi-110 002. ...Petitioner. Vs. 1 M/s. Sunchan Securities Ltd. having registered office 201, Haren, Industrial Estate, Mogul Lane, Mahim (W), Mumbai 400 016. 2 Shri Sunil Bherumal Mansinghani, of Mumbai Indian Inhabitant, Director of 1st Respondent, Residing at 18/14, Navjivan Society, Mori Road, Mahim (W), Mumbai-400 016. 3 Smt. Kanchan Sunil Mansinghani, of Mumbai Indian inhabitant, Director of 1st Respondent, Residing at 18/14, Navjivan Society, Arbp411.09 2 Mori Road, Mahim (W), Mumbai-400 016. 4 Mr. Ajay Janardhan Kotwal, of Mumbai Indian Inhabitant, also Director of 1st Respondent, Office at 201, Haren Industrial Estate, Mugul Lane, Mahim (W), Mumbai. 5 Shri Ashok Tolaram Daswani, of Mumbai Indian Inhabitant, 11, Kabir Society, Mogul Lane, Mahim, Mumbai 400 016. 6 Shri Surendra Gama Yadav, of Mumbai Indian Inhabitant, A-204, Patel Complex, Sidharth Nagar, Sopara, 401 203 (Maharashtra) ...Respondents. Mr. Percy Modi i/by M/s. Thakordas & Madgavkar for the Petitioner. Mr. Chirag Balsara i/by M/s. Divya Shah & Associates for Respondent Nos. 1,3 and 5. Mr. Yashodhan Divekar i/by M/s. Divekar & Co. for Respondent No. 4. CORAM :- ANOOP V. MOHTA, J. DATE OF RESERVING THE JUDGMENT :- 8TH JANUARY, 2010. DATE OF PRONOUNCING THE JUDGMENT :- 3RD FEBRUARY, 2010. Arbp411.09 3 JUDGMENT- 1 The Petitioners have invoked Section 9 of the Arbitration and Conciliation Act, 1996 (for short, The Arbitration Act) with a view to secure the amount of Rs.11 crores, and interest thereon, in the matter of Trading Member Agreement dated 14th March, 2008 between the Petitioner and Respondent No.1. 2 The learned counsel appearing for the Petitioners, on instructions, not pressing any relief against Respondent No.4. 3 There is no serious dispute about the existence of agreement in the Contract between the parties. The main Arbitration Proceeding is pending with regard to the claim of Rs.11 crores, as referred above. Both the concerned parties are participating in the same. However, pending the same, and in view of the various orders passed by the Competent Authority, and further various 18 cheques covering about Rs. 50 lacs each were bounced in the month of November, 2008 and as the huge outstanding balance, the SEBI on 30th January, 2009 was also passed order against the Respondents, apart from notice by the National Stock Exchange of India, Ltd. (for short, “NSEIL”) dated 18/05/2008 expelling the Respondents from the membership of the NSEIL. 4 In the above background, the averments made in paragraph 13 which is as under, were evasively denied by the affidavit and the counter Arbp411.09 4 affidavit:- “13 The Petitioner states and submits on reliable information and belief that the 1st Respondents net worth and credit worthiness is completely eroded and it is unable to meet his liabilities. As far as the Petitioner can ascertain, Respondent No.1 has rights and interests in the moveable and immoveable properties as enlisted in Exhibit V hereto, which also shows the approximate/ estimated value of the same. The Respondents are in the process of dealing with the disposing off the 1st Respondents rights and interest in its properties, including the properties set out in Exhibit V hereto, with the wrongful intention of defeating the rights of the Petitioner under any award that may be passed in favour of the Petitioner in the Arbitration Proceedings.” 5 Therefore, as the Respondents did not co-operate, ultimately new Arbitral Tribunal came to be constituted. The various issues so raised in claim and the counter-claim, based upon the agreement and alleged understanding, need to be agitated before the Arbitral Tribunal. In this Petition, the claim of the Petitioner, is not much in dispute. The defence of counter claim, even if any, also no reason to overlook the apprehension so raised, in view of the present facts and circumstances of the case. 6 All ingredients as contemplated for interim protection/ injunction are available including the conduct of the contesting Respondents. 7 In view of above, I am inclined to grant prayer clauses (b) and (d). If Respondents furnish the security in terms of prayer clause (b), subject to satisfaction of the Petitioner then, the interim injunction in terms of prayer clause (d) stands vacated automatically. It is made clear that it is only Arbp411.09 5 against Respondent Nos. 1 to 3. 8 The liberty is granted to the Petitioner to take appropriate plea or application in reference to other prayers, before the Arbitral Tribunal. 9 The learned counsel appearing for the Respondents requested to stay the effect and the operation of the present order. Considering the above facts, it is rejected. (ANOOP V. MOHTA, J.)