# Ajay Madhusudan Patel & Ors v. Jyotrindra S. Patel & Ors

- **Citation:** 2024 INSC 710
- **Court:** Supreme Court of India
- **Decided:** 2024-09-20
- **Case number:** Arbitration Petition No. 19 of 2024
- **Bench:** Dr Dhananjaya Y Chandrachud
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ajay-madhusudan-patel-ors-v-jyotrindra-s-patel-ors-37961
- **Pages:** 53

## Headnote

What is the scope of jurisdiction of the referral court under
Section 11(6) of the Arbitration and Conciliation Act, 1996; Whether
in the instant case, on a prima facie view, the SRG Group being
a non-signatory to the Family Arrangement Agreement (FAA), can
be referred to arbitration.
Headnotes†
Arbitration and Conciliation Act, 1996 - s.11(6) - Appointment
of arbitrators - Scope of jurisdiction of the referral Court:
Held: SBP & Co. case expanded the scope of the Court's power
under Section 11 while empowering the referral courts to decide
several preliminary issues - Boghara Polyfab case went to the
extent of identifying three categories of preliminary issues that
may arise for consideration in an application under Section 11 -
However, the insertion of Section 11(6A) through the 2015
Amendment to the Act, 1996 stipulated that the Courts under
Section 11 shall confine their examination to the 'existence' of
an arbitration agreement - It legislatively overruled the decisions
in SBP & Co. and Boghara Polyfab by virtue of its non-obstante
clause - Duro Felguera case, in clear terms, clarified the effect
of the change brought in by Section 11(6A) and stated that all
that the Courts need to see is whether an arbitration agreement
exists - nothing more, nothing less - Vidya Drolia case endorsed
the prima facie test in examining the existence and validity of an
arbitration agreement both under Sections 8 and 11 respectively -
However, it was clarified that in cases of debatable and disputable
facts and reasonably good arguable case, etc. the Court may
refer the parties to arbitration since the arbitral tribunal has the
* Author
[2024] 9 S.C.R.
895
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
authority to decide disputes including the question of jurisdiction -
It was further stated that jurisdictional issues concerning whether
certain parties are bound by a particular arbitration under the
group-company doctrine etc. in a multi-party arbitration raise
complicated questions of fact which are best left to the tribunal to
decide - In Re: Interplay Between Arbitration Agreements under
Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, the
position taken in Vidya Drolia case was clarified to state that the
scope of examination under Section 11(6) should be confined to
the "existence of the arbitration agreement" under Section 7 of
the Act, 1996 and the "validity of an arbitration agreement" must
be restricted to the requirement of formal validity such as the
requirement that the agreement be in writing - Krish Spinning
case cautioned that the Courts delving into the domain of the
arbitral tribunal at the Section 11 stage run the risk of leaving the
claimant remediless if the Section 11 application is rejected - The
Cox and Kings case specifically dealt with the scope of inquiry
under Section 11 when it comes to impleading the non-signatories
in the arbitration proceedings - While saying that the referral
court would be required to prima facie rule on the existence of
the arbitration agreement and whether the non-signatory party is
a veritable party to the arbitration agreement, it also said that in
view of the complexity in such a determination, the arbitral tribunal
would be the proper forum. [Para 65]
Arbitration and Conciliation Act, 1996 - Whether in the instant
case, on a prima facie view, the SRG Group being a nonsignatory to the Family Arrangement Agreement (FAA), can
be referred to arbitration:
Held: An important factor to be considered by the Courts
and Tribunals is the participation of the non-signatory in the
performance of the underlying contract - The intention of the
parties to be bound by an arbitration agreement can be gauged
from the circumstances that surround the participation of the nonsignatory party in the negotiation, performance, and termination of
the underlying contract containing such an agreement - Further,
when the conduct of the non-signatory is in harmony with the
conduct of the oth

## Text

_Characters 0–39,929 of 110,493. This is a partial read: ask again with offset=39929 for what follows._

[2024] 9 S.C.R. 894 : 2024 INSC 710
Ajay Madhusudan Patel & Ors.
v.
Jyotrindra S. Patel & Ors.
(Arbitration Petition No. 19 of 2024)
20 September 2024
[Dr Dhananjaya Y Chandrachud, CJI,
J.B. Pardiwala* and Manoj Misra, JJ.]
Issue for Consideration
What is the scope of jurisdiction of the referral court under
Section 11(6) of the Arbitration and Conciliation Act, 1996; Whether
in the instant case, on a prima facie view, the SRG Group being
a non-signatory to the Family Arrangement Agreement (FAA), can
be referred to arbitration.
Headnotes†
Arbitration and Conciliation Act, 1996 - s.11(6) - Appointment
of arbitrators - Scope of jurisdiction of the referral Court:
Held: SBP & Co. case expanded the scope of the Court's power
under Section 11 while empowering the referral courts to decide
several preliminary issues - Boghara Polyfab case went to the
extent of identifying three categories of preliminary issues that
may arise for consideration in an application under Section 11 -
However, the insertion of Section 11(6A) through the 2015
Amendment to the Act, 1996 stipulated that the Courts under
Section 11 shall confine their examination to the 'existence' of
an arbitration agreement - It legislatively overruled the decisions
in SBP & Co. and Boghara Polyfab by virtue of its non-obstante
clause - Duro Felguera case, in clear terms, clarified the effect
of the change brought in by Section 11(6A) and stated that all
that the Courts need to see is whether an arbitration agreement
exists - nothing more, nothing less - Vidya Drolia case endorsed
the prima facie test in examining the existence and validity of an
arbitration agreement both under Sections 8 and 11 respectively -
However, it was clarified that in cases of debatable and disputable
facts and reasonably good arguable case, etc. the Court may
refer the parties to arbitration since the arbitral tribunal has the
* Author
[2024] 9 S.C.R.
895
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
authority to decide disputes including the question of jurisdiction -
It was further stated that jurisdictional issues concerning whether
certain parties are bound by a particular arbitration under the
group-company doctrine etc. in a multi-party arbitration raise
complicated questions of fact which are best left to the tribunal to
decide - In Re: Interplay Between Arbitration Agreements under
Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, the
position taken in Vidya Drolia case was clarified to state that the
scope of examination under Section 11(6) should be confined to
the "existence of the arbitration agreement" under Section 7 of
the Act, 1996 and the "validity of an arbitration agreement" must
be restricted to the requirement of formal validity such as the
requirement that the agreement be in writing - Krish Spinning
case cautioned that the Courts delving into the domain of the
arbitral tribunal at the Section 11 stage run the risk of leaving the
claimant remediless if the Section 11 application is rejected - The
Cox and Kings case specifically dealt with the scope of inquiry
under Section 11 when it comes to impleading the non-signatories
in the arbitration proceedings - While saying that the referral
court would be required to prima facie rule on the existence of
the arbitration agreement and whether the non-signatory party is
a veritable party to the arbitration agreement, it also said that in
view of the complexity in such a determination, the arbitral tribunal
would be the proper forum. [Para 65]
Arbitration and Conciliation Act, 1996 - Whether in the instant
case, on a prima facie view, the SRG Group being a nonsignatory to the Family Arrangement Agreement (FAA), can
be referred to arbitration:
Held: An important factor to be considered by the Courts
and Tribunals is the participation of the non-signatory in the
performance of the underlying contract - The intention of the
parties to be bound by an arbitration agreement can be gauged
from the circumstances that surround the participation of the nonsignatory party in the negotiation, performance, and termination of
the underlying contract containing such an agreement - Further,
when the conduct of the non-signatory is in harmony with the
conduct of the others, it might lead the other party or parties to
legitimately believe that the non-signatory was a veritable party
to the contract containing the arbitration agreement - However, in
order to infer consent of the non-signatory party, their involvement
896
[2024] 9 S.C.R.
Digital Supreme Court Reports
in the negotiation or performance of the contract must be positive,
direct and substantial and not be merely incidental - Thus, the
conduct of the non-signatory party along with the other attending
circumstances may lead the referral court to draw a legitimate
inference that it is a veritable party to the arbitration agreement -
In the instant case, the clauses of FAA such as clause 2.1.4 read
with Schedule 7, clause 2.1.6 read with Schedule 8, clause 2.1.7,
gives an impression, though prima facie, that the SRG Group
may be connected to the FAA and forms part of the settlement
contemplated therein - However, this aspect needs to be looked
into more closely by the Arbitral Tribunal - On bare perusal of the
email exchanges produced by the petitioner, it appears prima facie
that several contested questions of fact need to be first resolved -
A detailed examination of numerous disputed questions of fact are
imperative in deciding whether the SRG Group participated in the
negotiation and performance of the underlying contract and can be
bound by the arbitration agreement - There is a limited jurisdiction
afforded under Section 11(6) of the Act, 1996 - This Court cannot
conduct a mini trial and delve into contested or disputed questions
of fact - Therefore, considering the complexity involved in the
determination of the question whether the SRG Group is a veritable
party to the arbitration agreement or not, it would be appropriate
for the arbitral tribunal to take a call on the question after taking
into consideration the evidence that may be adduced by the parties
before it and the application of the legal doctrine as elaborated in
the decision in Cox and Kings case. [Paras 70, 71, 77, 78, 79, 80]
Case Law Cited
In Re: Interplay Between Arbitration Agreements under Arbitration
and Conciliation Act, 1996 and Stamp Act, 1899 [2023] 15 SCR
1081 : (2024) 6 SCC 1; Cox and Kings Ltd. v. SAP India Pvt. Ltd
[2024] 9 SCR 199 : (2024) 4 SCC 1 - followed.
Duro Felguera S.A. v. Gangavaram Port Limited [2017] 10 SCR
285 : (2017) 9 SCC 729; Garware Wall Ropes Ltd. v. Coastal
Marine Constructions & Engineering Ltd. [2019] 5 SCR 579 :
(2019) 9 SCC 209; Vidya Drolia and Ors. v. Durga Trading
Corporation [2020] 11 SCR 1001 : (2021) 2 SCC 1; SBI General
Insurance Co. Ltd. v. Krish Spinning [2024] 7 SCR 840 : (2024)
SCC OnLine SC 1754 - relied on.
SBP & Co. v. Patel Engg. Ltd. [2005] Supp. 4 SCR 688 : (2005) 8
SCC 618; National Insurance Company Limited v. Boghara Polyfab
[2024] 9 S.C.R.
897
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
Private Ltd [2008] 13 SCR 638 : (2009) 1 SCC 267; Sasan Power
Ltd. v. North American Coal Corporation (India) Private Ltd [2016]
6 SCR 809 : (2016) 10 SCC 813 - referred to.
LF Ltd. v. PNB Housing Finance Ltd. (2024) SCC OnLine Del
2165; Moneywise Financial Services (P) Ltd. v. Dilip Jain (2024)
SCC OnLine Del 1896; Cardinal Energy and Infra Structure Pvt.
Ltd. v. Subramanya Construction & Development Co. Ltd. (2024)
SCC OnLine Bom 964 - referred to.
Books and Periodicals Cited
246th Report of the Law Commission of India.
List of Acts
Arbitration and Conciliation Act, 1996; Contract Act, 1872.
List of Keywords
Section 11(6) of Arbitration and Conciliation Act, 1996; Appointment
of arbitrators; Non-signatory to the Family Arrangement Agreement;
Scope of Court's power u/s.11 of Arbitration and Conciliation
Act, 1996; 2015 Amendment to the Act, 1996; Existence of
Arbitration agreement; Validity of Arbitration agreement; Veritable
party; Non-signatory party; Disputed questions of fact; Legislatively
overruled.
Case Arising From
CIVIL ORIGINAL JURISDICTION: Arbitration Petition No. 19 of 2024
(Under Section 11(6) read with Section 11(9) of the Arbitration and
Conciliation Act, 1996)
Appearances for Parties
Darius Khambhata, Sr. Adv., Keyur Gandhi, Shamik Shirishbhai
Sanjanwala, Kunal Vyas, Anmolgandhi, Prabhakar Yadav,
Ms. Shubhangi Agarwal, Abhishek Jamalpur, Advs. for the
Petitioners.
Huzefa Ahmadi, Sr. Adv., Anuj K. Trivedi, Ms. Anushree Prashit
Kapadia, Ms. Ekta Kundu, Ms. Ruby Singh Ahuja, Ms. Aakriti Vohra,
Ms. Simran Jeet, Vasu Singh, Rohan Sharma, M/s. Karanjawala
& Co., Advs. for the Respondents.
898
[2024] 9 S.C.R.
Digital Supreme Court Reports
Judgment / Order of the Supreme Court
Judgment
J.B. Pardiwala, J.
For the convenience of exposition, this judgment is divided in the
following parts:
INDEX*
A.
FACTUAL MATRIX..........................................................
3
B.
SUBMISSIONS ON BEHALF OF THE PETITIONER
(AMP GROUP)...............................................................
25
C.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
(JRS GROUP)..................................................................
31
D.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
(SRG GROUP)................................................................
32
E.
ANALYSIS.......................................................................
38
i.
Scope of jurisdiction of the referral court under
Section 11(6) of the Act, 1996...............................
38
ii.
Whether on a prima facie view, the SRG Group
being a non-signatory to the FAA, can be referred
to arbitration?........................................................
55
F.
CONCLUSION.................................................................
66
1.
The present petition has been filed under Section 11(6) read with
Section 11(9) of the Arbitration and Conciliation Act, 1996 (hereinafter,
"the Act, 1996") seeking appointment of a Sole Arbitrator to adjudicate
the disputes between the Petitioners and the Respondents in terms
of Clauses 7.2 and 7.3 respectively of the Family Arrangement
Agreement dated 28.02.2020 (hereinafter, "the FAA") read with the
Amendment Agreement dated 15.05.2020 (hereinafter, "Amendment
to the FAA") entered into between the petitioner AMP Group and
respondent JRS Group.
* Ed. Note: Pagination as per the original Judgment.
[2024] 9 S.C.R.
899
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
2.
Since the Petitioner No. 13 i.e., Silvercity Management Ltd. is a
company incorporated outside India having its office at 17, Bond
Street, St. Helier, Jersey, JE2, 3NP, an island in the English Channel,
northwest of France and the Petitioner No. 14 i.e., Hiral Ashit Patel
is an individual, who is a citizen and resident of Canada, the dispute
between the Parties falls within the definition of an international
commercial arbitration under Section 2(1)(f) of the Act, 1996.
A.
FACTUAL MATRIX
3.
For convenience, the Parties involved in the present petition and the
respective groups of which they form a part of are tabulated below:
S.
NO.
NAME
PETITIONER/
RESPONDENT
GROUP
1.
Ajay Madhusudan Patel
Petitioner No. 1
AMP
2.
Apoorva Madhusudan Patel
Petitioner No. 2
AMP
3.
Meeta Ajay Patel
Petitioner No. 3
AMP
4.
Sonal Apoorva Patel
Petitioner No. 4
AMP
5.
Bhavik Ajay Patel
Petitioner No. 5
AMP
6.
Jinal Ajay Patel
Petitioner No. 6
AMP
7.
Kaushal Apoorva Patel
Petitioner No. 7
AMP
8.
Nishkal Apoorva Patel
Petitioner No. 8
AMP
9.
Apoorva M. Patel (HUF)
Petitioner No. 9
AMP
10.
Spectrum Ingredients Pvt. Ltd.
Rep. by its Director
Petitioner No. 10
AMP
11.
Sai Fragrances & Flavours
Pvt. Ltd. Rep. by its Director
Petitioner No. 11
AMP
12.
Zest Aromas Pvt. Ltd.
Rep. by its Director
Petitioner No. 12
AMP
13.
Silvercity Management Ltd.
Rep. by its Chairman
Petitioner No. 13
AMP
14.
Hiral Ashit Patel
Petitioner No. 14
AMP
15.
Jyotrindra S. Patel
Respondent No. 1
JRS
16.
Rajesh C. Patel HUF
Respondent No. 2
JRS
17.
Sanjay S. Patel
Respondent No. 3
JRS
18.
Finhelp Investments and
Consultants (Mumbai) Pvt. Ltd.
Rep. by its Director
Respondent No. 4
JRS
900
[2024] 9 S.C.R.
Digital Supreme Court Reports
19.
Greenbiz Holdings and
Consultants Pvt. Ltd. Rep. by
its Director
Respondent No. 5
JRS
20.
Jyotrindra S. Patel and Sanjay
S. Patel (Holding for and on
behalf of J&S Associate -
AOP) Rep. by its Member
Respondent No. 6
JRS
21.
Millenium Estates Pvt. Ltd.
Rep. by its Director
Respondent No. 7
SRG
22.
Deegee Software Pvt. Ltd.
Rep. by its Director
Respondent No. 8
SRG
23.
Samarjitsinh R. Gaekwad
(Shareholder & Director of
Millenium Estates Pvt. Ltd. and
Deegee Software Pvt. Ltd.)
Respondent No. 9
SRG
24.
Radhikaraje S. Gaekwad
(Shareholder of Deegee
Software Pvt. Ltd.)
Respondent No. 10
SRG
25.
Subhanginiraje R. Gaekwad
(Shareholder of Deegee
Software Pvt. Ltd.)
Respondent No. 11
SRG
26.
Gaekwad Services Ltd.
now known as Gaekwad
Enterprise Pvt. Ltd. Rep.
by its Managing Director
(Shareholder of Deegee
Software Pvt. Ltd.)
Respondent No. 12
SRG
27.
Samarjitsinh Gaekwad HUF
(Shareholder of Deegee
Software Pvt. Ltd.)
Respondent No. 13
SRG
28.
Rajesh C. Patel (Shareholder
of Deegee Software Pvt. Ltd.)
Respondent No. 14
JRS
29.
Shilpa R. Patel (Shareholder
of Deegee Software Pvt. Ltd.)
Respondent No. 15
JRS
30.
Aditya Patel (Director of
Deegee Software Pvt. Ltd.)
Respondent No. 16
SRG
31.
Nitin Shripadbhai Pujari
(Director of Deegee Software
Pvt. Ltd.)
Respondent No. 17
SRG
[2024] 9 S.C.R.
901
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
4.
The Petitioners herein are collectively referred to as the "AMP
Group". The Petitioner Nos. 1 to 9 & 14 respectively are individuals
and family members of Mr. Ashit Patel, who are a part of the AMP
Group in the FAA. The Petitioner Nos. 10 to 13 respectively are
companies described as a part of the AMP Group in the FAA. The
Petitioner No. 13 is a company incorporated outside India and the
Petitioner No. 14 is a resident of a foreign country.
5.
The Respondents are divided into two groups i.e., "JRS Group"
consisting of Respondents 1 to 6, 14 & 15 and "SRG Group"
consisting of Respondents 7 to 13, 16 & 17. The Millenium Estates
Pvt. Ltd. (hereinafter, "Millenium") and Deegee Software Pvt.
Ltd. (hereinafter, "Deegee") are Respondent 7 and 8 companies
respectively. The Respondents 9 to 17 are all either Directors or
Shareholders of Respondent 7 and 8 companies. Therefore, the
Respondents comprise of individuals, Companies and Shareholders
and Directors of the respective companies dealt with under the FAA.
6.
Apart from the Petitioners and Respondents aforementioned, a few
other individuals find a repeated mention in the facts of the present
petition. First, Mr. Ashit M. Patel who is the Power of Attorney Holder of
Petitioner Nos. 1 to 9 and 14 of the AMP Group. He is the co-brother
of Respondent No.1. Secondly, Mr. Kalpesh Parmar, a Chartered
Accountant who represented the interests of the JRS Group during
the negotiations leading up to the FAA, the implementation of the
FAA and the first round of mediation. He is alleged to have also
represented the interests of the SRG Group during the same. In the
last, Mr. Pankaj Agarwal, an employee of Deegee.
7.
Mr. Ashit Patel representing the AMP Group and Mr. Jyotrindra S.
Patel (Respondent No.1) of the JRS Group are co-brothers and
married in the same family. The two groups were jointly engaged in
various businesses and co-owned several entities. Subsequently, the
SRG Group had joined hands with the AMP Group and JRS Group in
two entities i.e. Millenium and Deegee. SRG Group presently holds
40% equity shares in Millenium.
8.
It is the case of the Petitioners that between 2013 & 2019, various
disputes arose between the AMP Group on one side and the JRS and
SRG Groups on the other which led to the filing of several proceedings
before various forums including the National Company Law Tribunal
(hereinafter, "NCLT") at New Delhi, Mumbai and Ahmedabad by
902
[2024] 9 S.C.R.
Digital Supreme Court Reports
the AMP Group. The same are still pending before the respective
forums. It is pertinent to note that, of the aforesaid disputes, the
respondent No.9 of the SRG Group is one of the respondents in
CP/383/2017 pertaining to Deegee, filed by the AMP Group before
the NCLT at Mumbai.
9.
The Best Value Chem. Ltd. (hereinafter, "BVC") is an entity involved
in the business of manufacturing aroma chemicals co-owned by the
AMP and JRS Groups. The Premji Group had initiated a proposal
to buyout BVC and indicated that the deal could only go through
if the litigations filed against BVC were withdrawn. Therefore, the
parties thought it fit to resolve all the issues between them once and
for all with the understanding that the AMP Group would completely
takeover various entities and that the JRS and SRG Groups would
co-own other entities.
10. During negotiations that preceded the execution of the FAA, the
following events/communications took place;
 •
Vide emails dated 12.12.2019 and 02.01.2020, several internal
documents required for the valuation of Millenium and Deegee
were shared by Mr. Pankaj Agarwal with the AMP Group wherein
a copy was marked to Mr. Kalpesh Parmar.
 •
Vide email dated 14.01.2020 sent to the AMP Group, Mr. Kalpesh
Parmar confirmed that the matters pertaining to Millenium and
Deegee even after its valuation may have to be discussed with
Mr. Samarjitsinh (hereinafter, "Respondent No. 9") of the SRG
Group before finalisation. The said excerpt from the contents
of the email are reproduced hereinbelow:
"...The pending details from Pankaj, if I correctly
understand then it is related to documents of Millenium
and Deegee, Even if we consider both of it to be
treated separately, it can be done because even
after valuation, the matter needs to be discussed
out with Samarjitsinh before finalising. Therefore, in
the binding agreement you can put necessary points
covering both the properties and till it is not resolved
we can work out some alternate solution so that both
the groups are covered properly...."
(Emphasis supplied)
[2024] 9 S.C.R.
903
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
 •
A joint meeting was arranged by Mr. Kalpesh Parmar and
attended by Mr. Ashit Patel of the AMP Group and Respondent
No.9 of the SRG Group.
 •
Vide email dated 25.01.2020 sent to the AMP Group, Mr.
Kalpesh Parmar suggested that the valuation of Millenium be
finalized in consultation with the Respondent No.9 of the SRG
Group. The said excerpt from the contents of the email are
reproduced hereinbelow:
"...In view of releasing above deadlock situation,
I am suggesting that we include in FAA binding
methodology to resolve it. For Chandan Sanjaybhai,
Jagdishbhai & AMP can sit and decide the value
within __ days from execution of FAA, Similarly for
Millenium Sanjaybhai, Samarjitsinh & AMP can sit
and close it along with issue of residential flats. This
can also be done within __ days from execution of
FAA. In the meantime, whatever valuation/s so far
JRS has given on Chandan & Millenium will stand
withdrawn, so nothing is there on table from JRS side
on the value of Chandan & Millenium. Therefore, we
can proceed to close on FAA & Escrow agreement
on Monday. If you can flip this suggestion with AMP,
I can try to convince Sanjaybhai too..."
(Emphasis supplied)
11. Subsequently, the FAA dated 28.02.2020 was entered into between
the AMP Group and JRS Group. The terms of the FAA impose
several obligations on the AMP and JRS Groups in pursuance of
the settlement contemplated therein.
12. It is pertinent to observe that the present petition relates primarily to
the dispute arising from specific clauses wherein the SRG Group is
also required to undertake certain steps and actions specified viz,
(a) Clause 2.1.4 read with Schedule 7 on Millenium Exit (presently
AMP Group holds 36% while SRG Group holds 40%) where AMP
Group is required to exit and SRG Group is required to purchase
additional shares; (b) Clause 2.1.5 requiring Amendment of Lease
Deed executed between Millenium, the Lessor and Aurosagar
Estates Pvt. Ltd. (hereinafter, "Aurosagar"), the Lessee and;
904
[2024] 9 S.C.R.
Digital Supreme Court Reports
(c) Clause 2.1.6 read with Schedule 8 on Deegee Exit where JRS
and SRG Groups are required to completely exit and AMP Group
would purchase the shares. The relevant clauses of the FAA are
reproduced hereinbelow:
"2.1.4 Exit of AMP Group from Millenium
(a) Within 30 (thirty) days from the Trigger
Date("Millenium Transfer Date"), Parties shall execute
duly stamped agreement(s) with SRG to record and
finalize their understanding with respect to exit of AMP
Group from Millenium by way of transfer/ buy back
of all Class A equity shares in Millenium ("Millenium
Exit") in the manner set out in Schedule 7. The Parties
agree that the valuation of Millenium for the purposes
of the Millenium Exit shall be INR 130,00,00,000
(Rupees One Hundred Thirty Crores). It is hereby
clarified that AMP Group will continue to hold Class
B equity shares in Millenium in accordance with the
provisions set out in the articles of association of
Millenium.
(b) Notwithstanding anything contained herein, Parties
shall endeavour to simultaneously undertake the
Millenium Exit and Deegee Exit on the same day
in accordance with Clause 2.1.4 and Clause 2.1.6,
respectively.
(c) Parties shall co-operate with each other for any
actions required to be undertaken or documents
required to be executed in order to give effect to the
actions contemplated under this Clause, including
but not limited to passing exercising their voting
rights to provide necessary board or shareholders'
approval, execution and stamping of share transfer
forms, endorsement of share certificates, filing forms
with the registrar of companies, making entries in
statutory registers, providing all necessary information
and documents necessary for preparing necessary
documents, etc required to be complied by Millenium
under Applicable Law.
[2024] 9 S.C.R.
905
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
2.1.5 Amendment of Aurosagar Lease Deed
(a) On the Millenium Transfer Date, Aurosagar and
Millenium shall execute a duly stamped amendment
deed to the Aurosagar Lease Deed in the format set
out in Annexure 1.
(b) Parties shall co-operate with each other for any
and all such actions required to be undertaken and
execute all such documents as may be necessary
in order to give effect to this Clause (Including
registration of the amendment deed), including but
not limited to exercising their voting rights to provide
necessary board or shareholders' approval, attending
office of registrar of assurance for admitting the
amendment deed, providing all necessary information
and documents necessary for preparing necessary
documents, etc.
(c) All costs and expenses for amendment of the
Aurosagar Lease Deed in accordance herewith,
including without limitation, fee charged by attorneys
and other advisors/consultants, stamp duty and
registration charges shall be borne by AMP Group.
2.1.6 Exit of JRS Group and SRG from Deegee
Software
(a)Within 30 (thirty) days from the Trigger Date
("Deegee Transfer Date"), Parties shall and
shall ensure that SRG executes duly stamped
agreement(s) to record their understanding with
regards to exit of JRS Group and SRG from Deegee
Software, including (i) transfer of all shares held by
JRS Group and SRG in Deegee Software ("AMP
Deegee Transfer"); (ii) resignation of directors
appointed by JRS Group/SRG from the board of
directors of Deegee Software; and (iii) repayment
of loan by Deegee Software to its lenders including
the interest accrued thereon in the manner set out in
Schedule 8 ((i), (ii) and (iii) are collectively referred
as "Deegee Exit")
906
[2024] 9 S.C.R.
Digital Supreme Court Reports
(b) AMP Group shall complete due diligence of
Deegee Software within 20 (twenty) Business Days
from the Execution Date, in the event, there are any
findings requiring indemnity by AMP Group from JRS
Group and/or SRG the same will be mutually agreed
between the parties.
(c) Parties shall co-operate with each other for any
actions required to be undertaken or documents
required to be executed for giving effect to the actions
contemplated under this Clause, including but not
limited to exercising their voting rights to provide
necessary board or shareholders' approval, execution
and stamping of share transfer forms, endorsement
of share certificates, filing forms with the registrar of
companies and the Reserve Bank of India, making
entries in statutory registers, providing all necessary
information and documents necessary for preparing
necessary documents, etc required to be complied by
Deegee Software under Applicable law. AMP Group
shall be responsible for all compliances/filings under
foreign exchange laws of India in relation to the AMP
Deegee Transfer.
xxx
xxx
xxx
SCHEDULE 7
MILLENIUM EXIT
In connection with Millenium Exit, the Parties have
agreed the following:
1. AMP Group will exit from Millenium. The total value
of Millenium has been fixed at INR 130,00,00,000
and AMP Group's share of 36% out of total value of
Millenium will be INR 46,80,00,000.
2. Phase-1 - SRG will purchase approx. 11% shares
of AMP Group post receipt of Balance JRS Purchase
Price in the JRS Designated Bank Account. JRS Group
proposes to provide necessary funding to SRG for
purchasing shares held by AMP Group in Millenium.
[2024] 9 S.C.R.
907
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
3. Phase 2 - Millenium will buy back the balance
shares of AMP Group i.e., approx. 25% from the funds
to be received from Deegee Software. Any tax in
relation to such buyback to be borne by AMP Group.
4. Phase 3 - within 12 months from execution of
relevant documents in respect of Millenium Exit,
Millenium will separate out the Class "B" shares being
residential flat owners in a separate co-operative
society.
5. Until co-operative society is not formed, Millenium
will provide no objection letter to AMP Group for
transfer of their flats.
SCHEDULE 8
DEEGEE EXIT
In connection with Deegee Exit, the Parties have
agreed the following:
1. JRS Group and SRG will exit from Deegee
Software. AMP Group will discuss with Jabalpur
Group and finalise on their exit. The total value of
the property owned by Deegee Software is fixed at
INR 141,00,00,000, which shall be used to pay off
loans with proportionate interest to all lenders of
Deegee Software.
2. The sale proceeds received by AMP Group from
sale of shares as per Phase 1 of Millenium Exit, will
be brought in Deegee Software by AMP Group.
3. AMP Group will bring further funds in Deegee
Software to pay off entire loan provided by Millenium
to Deegee Software along with interest at the rate of
14.50% p.a. compounded annually.
4. Simultaneously, with repayment of loans to
Millenium as per paragraph 3 above, (i) Deegee
Software to pay off entire loan provided by JRS
Group and SRG along with interest at the rate of
14.50% p.a. compounded annually; and (ii) shares
908
[2024] 9 S.C.R.
Digital Supreme Court Reports
of Deegee Software held by JRS Group and SRG
shall also be transferred to AMP Group.
5. The above exercise to be completed within
12 months from the execution of relevant documents
in this regard."
(Emphasis supplied)
13. Post the execution of the FAA and in pursuance of the implementation
thereof, the following communications were exchanged:
 •
Vide emails dated 12.03.2020 and 13.03.2020 sent to the AMP
Group, Mr. Pankaj Agarwal shared documents required for the
due diligence of Deegee which were marked to Mr. Kalpesh
Parmar and the latter email was additionally marked to the
respondent No.9 of SRG Group.
 •
Vide emails dated 24.04.2020 and 04.05.2020 sent to the AMP
Group, the JRS Group lawyers shared the FAA Closing Tracker
reflecting the status of implementation of the FAA which included
the pending transfer of Deegee and Millenium. The same were
marked to Mr. Kalpesh Parmar.
 •
Vide email dated 08.05.2020 sent to a shareholder of BVC, Mr.
Kalpesh Parmar acted as the representative of the SRG Group
on discussions pertaining to the amendment of the Aurosagar
lease deed. The said excerpt from the contents of the email
are reproduced hereinbelow:
"....On Aurosagar point, this email I am sending to
put forward views of Samarjitsinh (SRG) and not
JRS. SRG is clear that Millenium can give POA to
AMP and his immediate family and as agreed in FAA
draft, PL can work on language without disturbing
the construct / concept. SRG is not going to honour
any POA which is beyond what is stated in the draft
of POA shared with him even though you find any
logical point in AMP's arguments. As per him AMP
is neither trustworthy nor a reliable person, so he
is not interested in dealing any further with him. He
already had a very bad experience of similar nature
when he had sealed a deal with TATAs, that time also
[2024] 9 S.C.R.
909
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
after signing the minutes, AMP took extreme U-turn
just for SRG to become a laughing stock not only
in front of all partners and HDFC Realty but also in
front of TATAs. That's enough for him.
Please appreciate, though SRG is not a signatory to
FAA, he is ready to honour what was agreed with him
over phone call but on other side there is a person
though has signed a document is now not ready to
stick to it. Real mockery.
I would suggest that seriously you should take this
with Sanjaybhai & Shaju before approaching PI. My
hands are tied on this since I have to safeguard
interest of SRG...."
(Emphasis supplied)
 •
Vide email dated 11.05.2020 sent to the AMP Group on
discussions pertaining to the Aurosagar Lease deed, Mr.
Kalpesh Parmar indicated that Respondent No.9 is the only
decision maker in Millenium and JRS is at best the facilitator
if needed. The said excerpt from the contents of the email are
reproduced hereinbelow:
".....The newly inserted points mentioned in the lease
deed vide clause nos. 2.8, 2.9 (including 2.9.1 to
2.9.4), 2.10 and 2.11 cannot be considered as part
of the draft of lease deed for following reasons:.....
...4. While your newly inserted points suggest that
they are having a futuristic impact so this can very
well be taken up in due course with Millenium when
Samarjitsinh is the only decision maker and JRS is
at best the facilitator if needed..."
(Emphasis supplied)
14. An Amendment to the FAA was executed between the AMP Group
and JRS Group on 15.05.2020. The clauses relevant to the present
dispute are reproduced hereinbelow:
"5. Clause 2.1.5(a) stands deleted in its entirety and
is substituted with the following:
910
[2024] 9 S.C.R.
Digital Supreme Court Reports
On the Millenium Transfer Date, Aurosagar and
Millenium shall simultaneously execute the following:
(i) duly stamped amendment deed to the Aurosagar
Lease Deed in the format set out in Annexure 1; (ii)
duly stamped irrevocable special power of attorney in
favour of Aurosagar in the format set out in Annexure
1A; and (iii) duly stamped deed of indemnity in the
format set out in Annexure 1B.
6. Clause 2.1.6(b) stands deleted in its entirety and
is substituted with the following:
AMP Group shall complete due diligence of Deegee
Software on or before June 30, 2020. In the event,
there are any findings requiring indemnity by AMP
Group from JRS Group and/or SRG the same will
be mutually agreed between the parties in writing.
xxx
xxx
xxx
12. Paragraph 27 in Schedule 4 stands deleted in its
entirety and is substituted with the following:
"Transaction Documents" means this Agreement,
the Settlement Escrow Agreement and any and
every document executed in connection with the
transaction contemplated under or in connection with
this Agreement."
(Emphasis supplied)
15. In continuation of the implementation of the FAA, the following
communications were exchanged;
 •
Emails dated 01.07.2020, 10.04.2021 and 15.04.2021 were
exchanged between the AMP Group and Mr. Kalpesh Parmar
pertaining to the due diligence of Deegee.
 •
Vide email dated 09.10.2020 sent to the AMP Group, the JRS
lawyers shared drafts of the Share Purchase Agreements
(hereinafter, "SPAs") pertaining to Millenium and Deegee and
a copy was marked to Mr. Kalpesh Parmar.
 •
Vide email dated 27.11.2020 and a reminder email dated
03.04.2021, Mr. Kalpesh Parmar sent the drafts of these SPAs
[2024] 9 S.C.R.
911
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
(with AMP Group comments) to the SRG lawyers with a copy
marked to Respondent No.9 in order to seek their comments.
 •
Vide email dated 26.03.2021 sent to the AMP Group with a copy
marked to the Respondent No.9, Mr. Kalpesh Parmar clarified
that though the SPAs related to Deegee was stuck up with a
non-JRS Group, yet the JRS Group was ready to hand over
the affairs of Deegee w.e.f. 01.04.2021 and requested the AMP
Group to withdraw all litigations before the concerned forums.
 •
Vide email dated 03.04.2021 sent to the JRS Group with a copy
marked to the Respondent No.9, the AMP Group requested
the JRS Group to undertake steps for restoring the original
shareholding of the AMP Group in Deegee.
16. Several items under the FAA were pending implementation
including the finalisation and execution of SPAs for Millenium and
Deegee at the end of the SRG Group. Therefore, vide email dated
20.12.2021 sent to the JRS Group, the AMP Group nominated Mr.
Upen Shah as the AMP Group's representative in compliance with
clause 7.1.2 of the FAA for amicable resolution of the issues arising
out of the FAA between the AMP and JRS Groups. Vide reply email
dated 26.12.2021, the JRS Group named Mr. Sanket Jain and/or
Mr. Kalpesh Parmar as their representative. Clause 7.1.2 is
reproduced hereinbelow:
"7.1.1 The Parties agree to use all reasonable efforts to
resolve any dispute, controversy, claim or disagreement
of any kind whatsoever between or amongst any of the
Parties in connection with or arising out of this Agreement
or the Transaction Document/s executed in connection
with the transaction contemplated under or in connection
with this Agreement, including any question regarding its
existence, validity or termination ("Dispute"), expediently
and amicably to achieve timely and full performance of the
terms of this Agreement or the Transaction Document/s.
7.1.2 Any Party which claims that a Dispute has arisen
must give notice thereof to the other Parties as soon
as practicable after the occurrence of the event, matter
or thing which is the subject of such Dispute and in
such notice, such Party shall provide particulars of the
912
[2024] 9 S.C.R.
Digital Supreme Court Reports
circumstances and nature of such Dispute and of its
claim(s) in relation thereto and shall designate a Person
as its representative for negotiations relating to the
Dispute, which Person shall have authority to settle the
Dispute. The other Parties shall, within 7 (seven) days of
such notice, each specify in writing its position in relation
to the Dispute and designate as their representative in
negotiations relating to the Dispute, a Person with similar
authority."
17. The first round of mediation was held between the representatives of
the AMP and JRS Groups on 19.01.2022. However, the discussions
on the issues did not lead to any conclusion. While the minutes of the
same were shared with Mr. Kalpesh Parmar, he denied its contents
and stated that the draft minutes do not correctly record the events
which occurred at the meeting.
18. For the purpose of initiating the second round of mediation, an email
dated 06.05.2022 was sent by the JRS Group to the AMP Group
invoking Clause 7.1.2 and they nominated Mr. Anuj Trivedi or Mr.
Kalpesh Parmar to act as their representatives. In response to the
same, on 23.05.2022, the AMP Group nominated Mr. Keyur Gandhi
and/or Mr. Upen Shah and/or Mr. Nihar Mehta as their representatives.
The first mediation meeting was convened on 13.06.2022. The second
mediation meeting was convened on 23.07.2022 wherein it was stated
by the petitioners that the AMP and JRS Groups were agreeable to
hold a joint meeting with SRG for the purpose of resolving the major
issues pertaining to Millenium and Deegee.
19. In the midst of mediation, on 17.10.2022, the JRS Group sent a
WhatsApp message to the AMP Group stating that (a) the JRS
Group had a meeting with the SRG Group, (b) SRG and Millenium
were ready to purchase the stake of AMP Group in Millenium at the
price agreed in the FAA, (c) SRG would exit from Deegee subject
to a payment of Rs. 25 crore as compensation considering its
contribution to the growth of Deegee. The contents of the message
are reproduced hereinbelow:
"Dear Keyurbhai.
My clients had a meeting with SRG and the following
points have been suggested by SRG:
[2024] 9 S.C.R.
913
Ajay Madhusudan Patel & Ors. v. Jyotrindra S. Patel & Ors.
(1) Millennium:
(a) SRG and Millennium would be ready to purchase the
stake of AMP in Millennium at the price already agreed
AMP and JRS.
(b) The said purchase would be made from the
compensation that SRG receives from AMP for handling,
taking care of and making Deegee prosperous over the
last 20 years. The said compensation would be used for
purchasing 11% of the 36% stake of AMP in Millennium.
(c) The balance 25% would be "buy back" by Millennium of
AMP shares. This would be subject to the receipt of loan
and interest by Millennium & SRG from Degee
(2) Amendment to AoA: Millennium and SRG are of the
opinion that AoA does not need to be amended
(3) Aurosagar Lease Deed: the lease of Millennium
and Aurosagar is as per the plans sanctioned by the
Municipal Corporation. The draft lease deed provided is
in contradiction to the said sanctioned plans.
(4) Aurosagar Special Power of Attorney: Millennium and
SRG are of the opinion that there is no required of a
Special Power of Attorney.
(5) Deegee
(a) SRG will exit from Deegee, however, the same has
been formed and promoted by SRG, SRG has also given
its name in order to avoid the conflict of interest of AMP
with Firmenich. SRG has taken care of the company for
the last 20 years and has provided services without any
renumeration. In view thereof, for exiting Deegee, SRG
is expecting compensation of Rs.25 crores
(b) Millennium and SRG are also expecting interest 14.50%
till repayment of the amount lent to AMP
JRS Group has suggested that we may have another
meeting and try to take it forward".
(Emphasis supplied)
914
[2024] 9 S.C.R.
Digital Supreme Court Reports
20. Further on 21.11.2022, the JRS Group sent another WhatsApp
message to the AMP Group stating that it had spoken to the SRG
Group and that if the AMP Group was not ready to recognise SRG's
contribution in the growth of Deegee, it would be difficult for them
to agree with the AMP Group on any point. The contents of the
message are reproduced hereinbelow:
"Talked with SRG and here is the responseAs he understands from me that AMP group is looking
forward for meeting with SRG to discuss the points
forwarded by SRG, however AMP Grp would not like to
give any compensation for Deegee to SRG. As per SRG,
if AMP Grp is not even ready to recognize his contribution
in growth of Deegee, then it would be difficult for him to
meet AMP Grp for any point and thereby the points sent
by SRG shall be considered as non existent and should
not be referred any time in future."
(Emphasis supplied)
21. Vide email dated 16.05.2023 sent to the AMP Group, Mr. Kalpesh
Parmar conveyed that he would discuss with SRG and try to
resolve all matters pertaining to Deegee and would also intimate the
outcome of his discussion. It was also conveyed that Millenium can
be simultaneously worked out once Deegee is settled. The contents
of the email are reproduced hereinbelow:
"Dear Nihar,
Based on my discussions with JRSG, following are the
comments:
[...]
4.