IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF MARCH 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE C.M.P.No.221 OF 2015 BETWEEN:
M/S PEARSON INDIA EDUCATION SERVICES PRIVATE LIMITED (FORMERLY KNOWN AS TUTOR VISTA GLOBAL PVT. LTD.) A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS OFFICE AT NO.10 3RD MAIN, ASHWINI LAYOUT, INTERMEDIATE RING ROAD, EJIPURA KORAMANGALA, BENGALURU AND REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE MR.SIVA SUBRAMANIAN G.
(By Mr.B.N.PRAKASH, ADV.) AND:
RAYAT INTERNATIONAL SCHOOL VPO- RAIL MAJRA ROPAR SHAHEED BHAGAT SINGH NAGAR PUNJAB 201014 AND REPRESENTED BY ITS SECRETARY.
(By Mr.NAGAPRASANNA SR. ADV.) - - -
… PETITIONER … RESPONDENT THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11(5) OF THE ARBITRATION AND CONCILIATION ACT, 1996 WITH A PRAYER TO APPOINT AN ARBITRATOR IN TERMS OF THE ARBITRATION AGREEMENT CONTAINED IN THE AGREEMENT DATED 08.07.2011 TO RESOLVE THE DISPUTE BETWEEN THE PETITIONER AND THE RESPONDENT BY APPOINTING MR.YESHWANTH KUMAR, CIVIL JUDGE (RETIRED), BNEGALURU AS SOLE ARBITRATOR.
THIS CIVIL MISC. PETITION COMING ON FOR FURTHER HEARING THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER Mr.B.N.Prakash, learned counsel for the petitioner.
Mr.M.Nagaprasanna, learned Senior counsel for the respondent.
2. The writ petition is admitted for hearing.
With consent of the parties, the same is heard finally.
3. In this petition under Section 11(6) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’ for short) the petitioner inter alia seeks appointment of an Arbitrator to adjudicate the dispute between the parties.
4. Facts giving rise to filing of this petition briefly stated are that the respondent had entered into an agreement with Pearson India Educational Services Private Limited on 08.07.2011. The aforesaid agreement contains an arbitration clause. The petitioner on 26.12.2014 sent a notice and invoked the arbitration clause contained in the agreement, by which one Mr.Yeshwanth Kumar, Retired Civil Judge was appointed as an Arbitrator. Inspite of receipt of the aforesaid notice, the respondent did not respondent to the aforesaid notice. Thereupon, the petitioner has approached this court seeking appointment of sole Arbitrator.
5. When the matter was taken up today, learned counsel for the petitioner submitted that even though the petitioner is not a party to the arbitration agreement, yet the petitioner is entitled to invoke the arbitration clause under the scheme of amalgamation, which is produced before this Court, the entire business including the assets and liabilities, the signatory to the agreement viz., Pearson India Educational Services Private Limited have been taken offer by the petitioner company from the erstwhile company. Therefore, the petitioner has virtually stepped into the shoe of the company, which was party to the arbitration agreement and therefore, the petitioner is entitled to invoke the arbitration clause. In support of the aforesaid submission, learned counsel for the petitioner has placed reliance on the order dated 03.10.2018 passed by a Bench of this Court in CMP NO.155/16. On the other hand, learned counsel for the respondent submitted that since the petitioner is not a party to the arbitration agreement, therefore, the petitioner cannot be permitted to invoke the arbitration clause. In support of the aforesaid submission, reliance has been placed on the decision of Supreme Court in ‘INDOWIND ENERGY LTD. V. WESCARE (I) LTD. & ANR.’ 2010 AIR SCW 2884.
6. I have considered the submissions made by the learned counsel for the parties and have perused the record. Admittedly, the scheme of amalgamation which has been produced by the petitioner has been approved by the Madras High Court. The petitioner is a successor company which had entered into an agreement with the respondent. It is not in dispute that the entire business of the company, which was signatory to the agreement including its assets and liabilities have been taken over by the petitioner under the scheme of amalgamation, which has been approved by the Madras High Court. Thus, the petitioner has stepped into the shoes of the company, which was signatory to the arbitration agreement. Therefore, the petitioner is entitled to invoke the arbitration clause and seek reference to the arbitration. So far as reliance placed by learned counsel for the respondent in the decision of INDOWIND ENERGY LTD. supra is concerned, the Supreme Court dealt with an issue whether or not a person who is not a signatory to the agreement can invoke the arbitration clause. While referring to Section 7 of the Act, it was held that while dealing with the proceedings under Section 11(6) of the act, a signatory of the Court cannot extend to examine the agreement to ascertain the rights and obligations regarding performance of such contract under the Act. It was further held that while dealing with the application under Section 11 of the Act, the Court dealing with an application has to deal with the issue whether or not party making an application has approached the appropriate court and whether there is an arbitration agreement and whether a person who has complied under Section 11 of the Act is a party to the arbitration agreement. The aforesaid decision is of no assistance to the respondent in the fact situation of the case. It is pertinent to note that a Bench of this Court in CMP No.155/16 dated 03.10.2018, the case of the petitioner itself is held that since the petitioner is a successor to the rights, liabilities and obligations of the company, which was a signatory to the agreement, therefore, the petitioner is entitled to invoke the arbitration clause.
7. In view of the preceding analysis, it is held that since the petitioner is a successor to the rights, liabilities and the obligations of the company, which is a signatory to the agreement with the respondent and for the purposes of dispute under the agreement in question, the petitioner is entitled to invoke the arbitration clause. Accordingly, I deem it appropriate to appoint Mr.I.S.Antin, Retired District and Sessions Judge as a sole Arbitrator to adjudicate the dispute between the parties.
8. A copy of this order be dispatched to the Arbitration Centre, Khanija Bhavan, Bengaluru for necessary action in that regard. Learned counsel for the petitioner to also approach the Arbitration Centre with the relevant papers to be filed therein. The learned Arbitrator appointed herein shall thereupon enter reference and proceed with the matter in accordance with law and the Rules governing the Arbitration Centre.
Accordingly, petition is disposed of.
Sd/- JUDGE ss