Company Law Board Machino Plastics Ltd. And Machno ... vs Caparo Maruti Ltd., Caparo India Ltd., ... on 10 November, 2003 Equivalent citations: [2004]50SCL620(CLB) ORDER K.C. Ganjwal, Member 1. The above mentioned petitioners have filed company petition 17/2002 against M/s Caparo Maruti Ltd. and others under Section 397/398 and 399 read with Section 402 and 403 of the Companies Act, 1956. The main reliefs sought in the petition are as under: a) Declare Respondent No. 2 to 6 disqualified of being directors of the company and remove the Respondent Nos. 2 to 6 from the directorship of the Respondent Company as they are acting contrary to their fiduciary relationship of the Respondent Company. b) Direct the Respondent No. 2 to 6 to give all details of monetary transaction between the respondent company and the companies/firms owned and controlled by their and bring back the money and make good the loss caused to Respondent No. 1 company. c) Direct the Respondent No. 2 to 6 to render all accounts of the respondent company and bring back the money siphoned off, into the Respondent company, and payoff the loans of the Petitioner Companies. d) Declare Mr. M.D. Jindal, the representative of the Petitioner Companies, as permanent Chairman of the Respondent Company as would be in the best interest of the Respondent No. 1 company. e) Direct an independent enquiry into the affairs of the Respondent company. 2. The respondent Nos. 1 and 2 companies namely, M/s Caparo Maruti Ltd., M/s Caparo India Ltd; have filed present application No. 67/2003 under Section 8(1) read with Section 45 of the Arbitration and Conciliation Act 1996. The case is covered under the provisions of Section 45 of Arbitration and Conciliation Act, 1996. The respondents have stated in their application that the allegations made in the petition arise out of the Joint Venture Agreement (hereinafter referred to as JVA) dated January, 7, 1994 between the petitioner and the respondent, wherein under Article 11, the parties have agreed to refer and determine all claims, disputes, controversies, disagreements, all differences between the parties arising out of or in connection with the agreement by arbitration. The said Article 11 of JVA dated 7.1.1994 reads as under: "Article 11 Arbitration Any and all claims, disputes, controversies, disagreements or differences between the parties arising out of or in relation to or in connection with this agreement, or with a breach thereof, which cannot be satisfactorily settled by correspondence or mutual conference between the parties hereto, shall be determined by arbitration in accordance with the then prevailing rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the such Rules upon written request of any party hereto. The site of such arbitration shall be London, United Kingdom. The decision of such Arbitrator or Arbitrators shall be final and binding upon the parties hereto and judgment thereon may be entered in any court having jurisdiction thereon; application may be made to such court for judicial acceptance of the award and/or for order of enforcement, as the case may be. For the purpose of any such arbitration, all Jindal companies and Jindal shall be considered as a single party and also Caparo Group of Companies shall be considered as a single party and they shall receive and serve all notices and pleadings and make all designations in respect of such arbitration acting for themselves and any or all of their companies." 3. Pursuant to the aforesaid agreement, M/s. Caparo Maruti Ltd. was incorporated in 4th April, 1994 for the manufacture and supply of components and assemblies for Maruti Udyog Ltd. in particular. With regard to the appointment of Chairman of the Board of M/s Caparo Maruti Ltd., Article 150 of the Article of Association provides that the directors shall from time to time elect from amongst them such a director as recommended and nominated by Caparo Group Ltd. to be the Chairman for the Board and determine the period for which he is to hold office. Further, in accordance with the aforesaid agreement, the shareholding of the company was to be in the following ratio; a. Caparo Group 60% b. Maruti Udyog Ltd. 20% c. Jindal Group 20% 4. The respondent company namely, M/s Caparo Maruti Ltd. has ratified and has adopted the JVA by way of resolution of Board of Directors dated 22.7.2003. On 27th Feb 2003, the Caparo Maruti Ltd. in accordance with Article 6.04 of the JVA and also Article 150 of the Articles of association nominated Mr. Angadh Pal as the Chairman of Board of Directors of M/s Caparo Maruti Ltd. 5. The respondents have submitted that the various allegations made in the petition and the substance of the disputes alleged in the petition are in respect of matters covered in the JVA. The foundation of the main petition is nothing but certain issu