Rajasthan High Court Nav Bharat Construction vs State Of Rajasthan on 7 May, 1984

ARBITRATION

Facts
Filed under Section 39 of the Arbitration Act Directed against the order passed by the District and Sessions Judge, Jhalawar on an application submitted by the appellant under Section 20 of the Arbitration Act. The facts of the case, briefly stated, are that the appellant entered into a contract with the Irrigation Department of the Government of Rajasthan, for construction woikat Bhim Sagar Dam. In connection with the aforesaid construction work, certain disputes arose between the appellant and the State Government. The contract contains an arbitration clause. The appellant moved an application under Section 20 of the Act for referring the following disputes for arbitration in accordance with the arbitration agreement contained in clause 41 of the contract:
(1) Extra payment for Chisal Dressed Face Stones which was used for the construction. (2) Additional payment on account of the increase in the minimum wages of the workers under the orders of the State Government passed after the contract had been entered into. (3) Additional payment in respect of the increase in the rate of royalty on the material used for the construction purposes under order passed by the State Government. (4) Additional payment doe with the Contractor on account of increase in transport charges as a result of the increase in the cost of diesel oil.

Arbitration
Section 20 Place of arbitration Section 39 Lien on arbitral award and deposits as to costs

Judgement
The District & Sessions Judge by his order dated 11-11-1982 held that claim relating to item No. (I) was covered by the arbitration agreement, and he therefore, directed that the aforesaid claim may be referred to arbitration in accordance with the Clause 41 of the contract. As regards the other claims raised by the appellant, the District & Sessions Judge held that there was no legal basis for the same and they cannot be referred to arbitration. Learned Counsel for the appellant has submitted that the District Judge has committed an error in not referring for arbitration the disputes relating to item Nos. (ii), (iii) & (iv) on the ground that there was, no merit in the said claims and they were without any legal foundation Once the disoute is found to be within the scope of the arbitration clause, it is not part of the province of the Court to enter into merits of the dispute. Order passed by the District and Sossions Judge, (sic)Jhlawar dated 11-11-1982 in so fir as it relates to refusal to refer to arbitration the disputes referred to in item Nos. (ii) (iii) & (iv) is set-aside and the aforesaid disputes are also referred to arbitration under Section 20 of the Arbitration Act.

Harsha Nitin Kokate Vs. The Saraswat Co-op. Bank Limited & Others
Company Law

Facts
The deceased Mr. Nitin Kokate had executed a nomination in respect of certain shares held by him in dematerialized form. The nomination was made in the prescribed form, set out by the Saraswat Co-op. Bank Limited (Defendant 1), in favour of his nephew. The said nomination was executed prior to his death and well after his marriage with Mrs. Harsha Nitin Kokate (Plaintiff). The Plaintiff claims an interest in the said shares of the deceased being his heir and legal representative. Whereas the nephew (Defendant 2) of the deceased claimed that as the nomination was executed as prescribed manner and as the same has been registered with the Defendant 1, Defendant 2 assumes the right, title and interest in the shares pursuant to the nomination executed in his favour and under Section 109A of the Companies Act and Section 9.11 of the Depositories Act, 1996.
Company Law, Section 109A Nomination of shares.(1) Every holder of shares in, or holder of debentures of, a company may, at any time, nominate, in the prescribed manner, a person to whom his shares in, or debentures of, the company shall vest in the event of his death. Insurance Act, Section 39 Section 39 of the Insurance Act deals with nomination by a policy holder whereby the nomination entails payment by the insurance company to the nominee to obtain a complete discharge

Judgement
Plaintiff contended that the nomination only makes a nominee a trustee for the shares and the nominee holds the shares in trust for the estate of the deceased. In reference to the present case, Plaintiff argued that as the deceased died intestate Plaintiff argued that as the deceased died intestate Plaintiff as the widow would be entitled to the shares to the exclusion of the nominee. Plaintiff placed reliance on the provisions of Section 39 of the Insurance Act in respect to an Life Insurance Policy Honble Judge held that Section 109A of the Companies Act is completely different from the Section 39 of the Insurance Act Therefore, such nominee would be made the owner thereof and all the rights incidental to ownership of shares would follow. This would include the right to transfer, pledge or hold the shares.

Denel (Proprietary) Limited (Petitioner) v. Bharat Electronics Ltd & Anr (Respondent)
ARBITRATION

Facts
Respondent placed certain purchase orders with the Petitioner Purchase orders contained an arbitration clause providing for the Managing Director, or his nominee, to act as an arbitrator in case a dispute arising between the Petitioner and the Respondent pursuant to the purchase orders Petitioner by way of a notice dated May 30, 2009, requested the Respondent to refer the dispute to arbitration in accordance with the arbitration clause under the purchase order. It was stated in the notice that since the arbitration clause provided only for the appointment of the Managing Director of the Respondent or his nominee as the arbitrator, it was an invalid clause and further requested the Respondent for appointment of mutually agreed independent arbitrator Petitioner contented that the Managing Director was appointed by the Central Government itself, he could not go against the order of the Ministry of Defense of Government of India. Hence the Petitioner genuinely apprehended that it may not get justice in the hands of the said Managing Director.

Arbitration, Section 11(6) Allows the parties to an arbitration agreement to apply to the Chief Justice of India for appointment of an arbitrator in case they fail to appoint an arbitrator as envisaged under the arbitration agreement

Judgement
Supreme Court observed that the validity of the arbitration clause was not under dispute Supreme Court observed that it was settled law that courts cannot interpose and interdict the appointment of an arbitrator whom the parties have chosen under the terms of the contract except on grounds like legal misconduct of the arbitrator, fraud, disqualification Managing Director may not be in a position to independently decide the dispute referred to him. Acknowledging the peculiar facts of the case and in the interests of both the parties and to do complete justice, the Supreme Court appointed an independent arbitrator to adjudicate the dispute between the Petitioner and the Respondent

Iridium India Telecom Limited (Appellant) Vs- Motorola Incorporated (Respondent no.1) & Others
Company Law

Facts
Respondent no.1 was the primary contractor for Iridium System/Project which was Respondent no.1s proprietary space-based satellite communication system. The entire Iridium System/Project comprised of five segments (Contracts). Contracts were awarded by Iridium Inc. to Respondent no.1 and were allegedly so structured to ensure that although Iridium Inc. paid all development costs, Respondent no.1 would still own the most valuable assets of the Iridium System/ Project. Incidentally, all the initial capital raised by Iridium Inc. was used to make payment to Respondent no.1. Alleged by the Appellant that Iridium Inc. was an instrumentality of Respondent no.1 and that Respondent no.1 conceived, orchestrated, directed and controlled Iridium Inc. and was at all material times Iridiums dominant shareholder, supplier and financier Alleged by the Appellant, that most of the persons on the Board of Iridium were either former or current employees of Respondent no.1

Section 420 Cheating and dishonestly inducing delivery of property.-- Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine. Of fraudulent deeds and dispositions of property Section 415 Cheating.-- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to" cheat".

Judgements
Mens rea is Latin for "guilty mind" The Bombay High Court quashed the criminal complaint and hence the present appeal by way of special leave was filed before the Supreme Court of India Supreme Court held that the corporations can no longer claim immunity from criminal prosecution on the ground that they are incapable of possessing the necessary mens rea for the commission of criminal offences corporation is virtually in the same position as any individual and may be convicted of common law as well as statutory offences including those requiring mens rea Appellants were entitled to establish that they have been deliberately induced into making huge investments on the basis of representations made by Respondent I and its representatives, which representations subsequently turned out to be completely false and fraudulent Honble Supreme Court allowed the appeal and set aside the impugned judgment of the Bombay High Court and held that there should be no order as to costs