RAKESH S KATHOTIA Vs. MILTON GLOBAL LTD
LAWS(BOM)-2014-9-255
HIGH COURT OF BOMBAY
Decided on September 22,2014

Rakesh S Kathotia Appellant
VERSUS
Milton Global Ltd Respondents




JUDGEMENT

- (1.)WITH the consent of learned counsel for the parties, this appeal is taken up for final disposal.
(2.)THIS appeal is directed against the judgment and order dated 2 July 2014 made by the learned Single Judge of this Court in Arbitration Petition No.66 of 2014, dismissing the appellants' application under Section 9 of the Arbitration and Conciliation Act, 1996 ("Act") mainly on the ground that there is no identity of the parties to the arbitration agreement, as contained in the Joint Venture Agreement dated 14 July 2001 (JVA) and the parties to the application.
(3.)IN pursuance of JVA, the appellants representing 'Subhkam Group' and some of the respondents, representing the 'Vaghani Group' constituted 'Milton Global Limited' (respondent No.1), as a Joint Venture Company (JVC). The 'Vaghani Group' owned and controlled 'Milton Plastic Limited' (respondent No.4)), which was engaged in manufacture and marketing consumer durables and kitchen appliances under the brand name 'Milton'.
The stated purpose of JVA was to infuse capital and expand manufacture and marketing activities under the brand name 'Milton'. The Management of JVC was vested in a Board of Directors to be appointed by the 'Subhkam Group' and 'Vaghani Group', holding 49.99% and 50.01% of the total issued and paid up capital of the JVC respectively.

The appellants contended that the terms of JVA contemplated that the entire distribution and marketing network of Milton Plastic Limited was to be exclusively undertaken by the JVC. However, in breach of the terms of JVA, the 'Vaghani Group' set up a competitive business through Hamilton Housewares Private Limited (respondent No.2). The involvement of the 'Vaghani Group' in siphoning of JVC business, is apparent from the circumstance that Ajay D. Vaghani, the authorised representative of the 'Vaghani Group', is the Managing Director of respondent No.2, to whom the JVC's business was being diverted. The appellants placed reliance upon statistics covering period 2003 -2004 to 2010 -2011 to indicate the manner in which the losses of the JVC mounted considerably, whereas the turn over and profits of respondent No.2, increased manifold. In such circumstances, pending the resolution of disputes by arbitration, the appellants, representing 'Subhkam Group', invoked the provisions of Section 9 of the Act to seek the following interim measures: (a) restraint upon respondent No.2, manufacturing and marketing 'goods' as defined under JVA ;

(b) in alternative to (a), directions to the respondents to maintain separate records of manufacturing and marketing of goods as aforesaid;

(c) directions to respondent No.2 to make complete disclosure and render accounts of all profits and incomes earned by them in relation to the aforesaid goods, since its inception;

(d) for a direction to respondent Nos.2 to 15 to make available books of account pertaining to respondent No.2 since its inception to the petitioners or its auditors for inspection;

(e) for a direction to respondent Nos.1 and 2 to make complete disclosure and produce all manufacturing distribution and marketing agreements entered into with third party in respect of the aforesaid goods;

(f) for a restraint upon respondent Nos.2 to 15 from manufacturing, logistics distribution or marketing of aforesaid goods;

(g) for a restraint upon respondent Nos.2 to 15 from setting up any other entity or subsidiary for manufacturing logistic, marketing and distribution of the aforesaid goods;

(h) for a restraint upon respondent Nos.2 to 15 from disposing of acquiring or creating a charge upon immovable properties of respondent Nos.1 and 2 and from committing any other breach of the terms of JVA;

(i) for a restraint upon respondent Nos.3 to 15 from alienating, disposing of or creating any charge upon immovable property or otherwise committing any breach of terms of JVA;



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