REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

ARBITRATION PETITION NO.14 OF 2008

Vanna Claire Kaura                                         ….Applicant Through Constituted Attorney  Mrs. Indeera Bawa

 Versus

Gauri Anil Indulkar & Others                          …..Respondents

J U D G M E N T

Dalveer Bhandari, J.

1. This application has been filed by the applicant  under  

section 11(5) read with section 11(9) and section 11(12) of the  

Arbitration and Conciliation Act, 1996 for appointment of an  

arbitrator  for  adjudicating  and deciding  the  disputes  which  

have  arisen  between  the  applicant  and  the  respondents  in  

respect  of  the  implementation  and  working  of  agreements  

entered into between the applicant and the respondent no.3  

on the one hand and respondent nos.1 and 2 on the other

hand on 29.1.2005 and the supplementary agreement between  

the same parties on 2.2.2005.

2. The applicant is a citizen of the United States of America  

and is a person of Indian origin.  

3. Respondent no.3, Dr. Vinod Kaura is the husband of the  

applicant, Vanna Claire Kaura.

4. Respondent  no.2,  Anil  Indulkar  was doing business in  

Pharmaceuticals  in  USA  and  respondent  no.1,  Gauri  Anil  

Indulkar is his wife. Respondent no.2 came in contact with the  

applicant and he represented to the applicant and respondent  

no.3 that there was a good prospect of business for water and  

amusement  park  in  India  and  that  if  the  applicant  and  

respondent  no.3  invested  in  India,  the  applicant  and  

respondent no.3 would get good returns on their investments.  

Consequently,  the  applicant  and  respondent  no.3  remitted  

$6,40,000  (US  Dollars)  to  respondent  nos.1  and  2.   A  

memorandum of  understanding dated 7.6.2000 was entered  

into between the applicant and respondent no.3 on the one  

hand and respondent nos.1 and 2 on the other. On the basis  

of  the  capital  so  provided  by  the  applicant  and respondent  

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no.3, respondent nos.1 and 2 formed a company called, M/s  

Splash Mountain Water Park Pvt. Ltd. with its registered office  

at  Pune,  Maharashtra.   According  to  the  applicant,  it  was  

agreed that 1,67,000 equity shares of Rs.100/- each in the  

said company shall be allotted as fully paid-up shares to the  

applicant and respondent no.3 by way of 40% equity shares to  

be allotted to the applicant as per the earlier understanding.  

It was also agreed that respondent nos.2 and 3 shall hold the  

remaining  2,50,400  equity  shares  of  Rs.100/-  each  

representing their 60% shares holdings in the company.

5. According  to  the  applicant,  it  was  agreed  by  an  

agreement dated 29.1.2005 that respondent no.1 who owned  

25 acres of land in Pune should transfer 10 acres out of the  

said land along the eastern  boarder thereof to the applicant in  

lieu of the 40% contribution made by the applicant towards  

the initial capital.  There is a clause of arbitration in the said  

agreement.  In  the  supplementary  agreement  entered  on  

2.2.2005 a  small  modification  was  made  that  inasmuch as  

respondent no.1 undertook to transfer and convey the entire  

25 acres of land owned by her to the applicant instead of the  

earlier  agreed  extent  of  10  acres  of  land.   Accordingly,  

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respondent no.1 did not transfer the land, as agreed.  It  is  

alleged that respondent nos.1 and 2 called a Board meeting of  

the  company  hurriedly  to  ensure  that  the  applicant  and  

respondent no.3 could not know about the meeting and there  

was no possibility of their participation in the said meeting.  In  

the said meeting, respondent nos.1 and 2 maneuvered to get a  

resolution passed to wind up the Water Park business of the  

company  and  transferred  the  said  business  to  another  

company owned by the close relatives of respondent nos.1 and  

2.  The land on which the business of the company was being  

run was also handed over to the said company owned by the  

close relatives of respondent nos.1 and 2.

6. In these circumstances,  the applicant had sent a legal  

notice on 14.3.2006 to respondent nos.1 and 2 appointing one  

Vilol  Khaladkar  as  an  arbitrator  and  also  called  upon  

respondent  nos.1  and  2  to  appoint  their  arbitrator.   Since  

respondent nos.1 and 2 did not take any steps to appoint their  

arbitrator,  the  applicant  filed  an  arbitration  petition  in  the  

High  Court  of  Bombay  under  section  11  of  the  Act.   The  

applicant submitted that the said arbitration petition filed by  

the  applicant  in  the  High  Court  of  Bombay  was  not  

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maintainable  for  the  reason  that  the  agreement  dated  

29.1.2005 and the supplementary agreement dated 2.2.2005  

are  in  the  nature  of  international  commercial  arbitration  

agreement   as  defined  under  the  Act  and,  therefore,  an  

application  for  appointment  of  an  arbitrator  under  section  

11(5)  read with section 11(9)  and section 11(12)  of  the  Act  

would only lie before the Chief Justice of India.

7. Accordingly, the applicant withdrew the application filed  

at the Bombay High Court.  The applicant submits that the  

following  disputes  have  arisen  between  applicant  and  

respondent  nos.1  and  2  and  the  same  are  required  to  be  

referred to an Arbitrator and the Arbitrator is to be appointed  

for  the  purpose  of  adjudicating  and  deciding  the  following  

disputes:-

“a) Transfer & conveyance of 25 acres of land, as  

mentioned in agreement dated 29.1.2005 and  

dated 2.2.2005, standing in the name of Guari  

Indulkar  to  the  claimant  Ms.  Vanna  Claire  

Kaura and her husband Dr. Vinod Kaura.

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b) Being  shareholders  of  1,67,000  number  of  

equity  shares  of  Rs.100/-  each  of  Splash  

Water Mountain Park Pvt.Ltd. in the name of  

Vanna Clair Kaura and same number of equity  

shares  of  Rs.100/-  each in  the  name of  Dr.  

Vinod  Kaura  in  terms  of  agreement  dated  

29.1.2005, action of Gauri Indulkar and Anil  

Indulkar  to  hand  over  the  leased  land  to  

Lessor  was  illegal  and  consequently  due  to  

illegal  closure  of  business  of  Splash  Water  

Park  Mountain  Pvt.  Ltd.  they  are  liable  to  

compensate  Vanna  Clair  Kaura  for  loss  of  

business and loss of profits approximately to  

the  tune  of  Rs.20,00,000/-  (Rupees  twenty  

lacs)  per  month  from  September  2005,  the  

date  of  Resolution  passed  in  the  absence  of  

Vanna Clair Kaura and Dr. Vinod Kaura and  

without giving them sufficient time to respond  

and  thereby  illegally  closing  the  business  of  

Splash Water Park Mountain Pvt.Ltd.

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c) A sum of Rs.7,00,000/- per month to be paid  

to Vanna Clair Kaura by Gauri Indulkar and  

Anil  Indulkar  in  terms  of  compensation  as  

stipulated  in  clause  5  of  supplementary  

agreement  dated  2.2.2005  from  the  date  of  

repayment of loans and payment of lease rent;

d) A  sum  of  Rs.10,00,000/-  towards  

reimbursement  of  expenditure  incurred  on  

travel  and board,  lodging etc.,  by the Vanna  

Clair Kaura;

e) Vanna Clair Kaura to be compensated by way  

of payment of damages by Gauri Indulkar and  

Anil Indulkar due to non-performance of their  

respective  parts  as  stipulated  in  the  

agreements dated 29.1.2005 and 2.2.2005;

f) Present,  pendent  lite  and  future  interest  @  

24% on the amounts found due and payable to  

Vanna Clair Kaura.”

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8. The applicant  prays  that  an independent  arbitrator  be  

appointed for adjudicating and deciding the disputes having  

arisen  between  the  parties  out  of  the  agreement  dated  

29.1.2005 and the supplementary agreement dated 2.2.2005  

entered into for and between the parties.

9. In pursuance to the notice issued by this court, reply on  

affidavit has been filed on behalf of respondent nos.1 and 2. In  

the reply  affidavit,  a  number of  preliminary  objections have  

been taken.  Respondent no.1 submitted that the application  

filed by the applicant is not maintainable and is liable to be  

dismissed because there is no live dispute pending between  

the parties.  It is also submitted by respondent no.1 that the  

applicant has suppressed facts from this court and has been  

indulging in forum shopping and the present  application is  

liable to be dismissed on this ground alone.

10. It is further mentioned in the reply that the applicant has  

abandoned the arbitration clause.  It is further mentioned that  

the  MOU dated  7.6.2000  and  subsequent  agreement  dated  

29.1.2005 and the supplementary agreement dated 2.2.2005  

were entered into by respondent nos.1 and 2 due to coercion,  

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threat  and  harassment  on  the  part  of  the  applicant  and  

respondent no.3.

11. The company by the name, Splash Mountain Water Park  

Pvt. Ltd. came into existence on or about 3.7.1997.  By Board  

Resolution dated 24.6.2005, wherein the applicant herself was  

present, the applicant proposed the closure of the Water Park  

business of the company since the same was suffering losses.  

She further stated that she and respondent no.3 would not  

invest any further funds to keep the business going.  As such,  

by way of board resolution dated 24.6.2005, the proposal of  

the  applicant  was  discussed  and  thereafter  it  was  

unanimously  resolved  that  the  activity  of  the  Water  Park  

should be closed as of 30th June, 2005.

12. In  the  reply,  respondent  no.1  has  mentioned  that  the  

applicant is indulging in forum shopping and has filed multi-

pronged litigation before various forums including the Bombay  

High Court, Civil  Judge, Pune, Principal  Bench of Company  

Law Board and this court as well as the criminal proceedings  

before the Judicial Magistrate, First Class.

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13. It  is  also  mentioned  that  the  applicant  has  invoked  

arbitration  by  notice  dated  14.3.2006  and  the  present  

application  is  not  based  on  the  said  invocation  and  the  

applicant  subsequently  entered  into  arbitration  on  second  

time on the same cause of  action and as such the present  

application is barred.  It is also submitted that the applicant  

having  invoked  arbitration  by  notice  dated  14.3.2006  and  

thereafter  abandoning the  same cannot  seek arbitration  for  

the second time for  the same cause of  action.   Respondent  

no.1  also  submitted  that  the  present  application  is  a  clear  

abuse of the process of law and is liable to be dismissed.

14. I  have  heard  the  learned  counsel  for  the  parties  and  

carefully  perused  the  MOU  dated  7.6.2000  and  agreement  

dated  29.1.2005  and  the  supplementary  agreement  dated  

2.2.2005.   

15. In my considered view, the dispute has arisen between  

the parties and it needs to be adjudicated and decided by an  

Arbitrator.  Consequently, I request Hon’ble Mr. Justice S.N.  

Variava, a former Judge of this court to accept this Arbitration  

and  adjudicate  and  decide  the  dispute  which  has  arisen  

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between the parties.  The learned Arbitrator would be free to  

decide about his fee.   

16. This arbitration petition is accordingly disposed of with  

the  direction  to  the  parties  to  appear  before  Hon’ble  Mr.  

Justice S.N. Variava, a former Judge of this court at 11 a.m.  

on 27th July, 2009 at Mumbai.

17. The Registry is directed to immediately communicate this  

order  to  the  learned  arbitrator  to  enable  him to  decide the  

arbitration matter as expeditiously as practicable.

18. Consequently,  this  arbitration  petition  is  allowed  and  

disposed of.  In the peculiar facts and circumstances of this  

case, I direct the parties to bear their own costs.

…….……………………..J.      (Dalveer Bhandari)

New Delhi; July 22, 2009.      

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