Rng 1
app.463.15.903
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION APPEAL (L) NO.463 OF 2015
in
ARBITRATION PETITION NO.342 OF 2014 with NOTICE
OF MOTION NO.1073 OF 2015
Suryachakra Power Corporation Ltd .. Appellant(Original Respondent)
vs JBF Industries Ltd .. Respondent (Original Petitioner) Mr.Tejas Deshpande i/b Raju R.Gupta for Appellant Mr.Aditya Mehta a/w Ms.Aditi Bhansali i/b Bharucha & Partners for Respondents CORAM: ANOOP V.MOHTA AND DATE:
ORAL JUDGMENT (Per Anoop V.Mohta, J) G.S.KULKARNI, JJ 24th FEBRUARY 2016 Rule. Returnable forthwith. By consent of the parties heard finally.
1. This Appeal is filed by the original Respondents under section 37 of the Arbitration and Conciliation Act, 1996 (for short' the 'Act') against order dated 3 December 2014 whereby the learned Judge after hearing both the parties, recorded the conduct of the Appellants,merits of the rival submissions and in view of the apprehensions so raised and as a case is made out for an interim protection order, as contemplated under section 9 on the principle of ::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 ::: Rng 2 app.463.15.903 the grant of injunction/protective reliefs/security as provided under the provisions of the Code of Civil Procedure, 1908 (C.P.C.) has passed the order.
"I have considered the submissions advanced by the Advocates for the parties and have perused all the documents relied upon by the Petitioner as well as the Respondent. I am satisfied that the Respondent is in the habit of making statements/submission which are false and incorrect to its knowledge. In fact, the facts set out hereinabove, clearly establish that the Respondent has not only failed and neglected to pay the amounts due to the Petitioner under the loan agreement but even the cheques issued by the Respondent to the Petitioner which were deposited for encashment after forewarning the Respondent, have been dishonoured and returned with the remarks "payment stopped by drawer". When the Petitioner issued a statutory notice under Section 138 of the Negotiable Instruments Act to the Respondent, the Respondent has again taken a dishonest stand in its Advocates' letter dated 7th August, 2013, by alleging that the Respondents had requested for rescheduling the loan and had forwarded the post dated cheques in lieu of earlier cheques with a request to return the previous cheques and this fact has been confirmed by the Petitioner by an email. No such email has been produced by the Respondent before this Court.
23. In view of the aforestated facts, nothing stated by the Respondent can be trusted either by this Court or by the Petitioner. The repeated submission made on behalf of the Respondent that the Petitioner has been fully secured is in my view a completely false and incorrect statement. I am prima facie satisfied that the amount of Rs. 6,66,27,686/- is due and payable to the Petitioner as of date. The said dues are not secured as is alleged by the Respondent. In fact, the Respondent has failed to pledge the further shares aggregating to Rs. 50 lakhs in favour of the Petitioner and has now taken a stand that even the mortgaged properties are owned by Mr. M.Seshavatharam and Mrs Manepalli Sunitha (HUF) whereas no mention is made either in the loan agreement or in the Memorandum of Deposit of title deeds that the said property belongs to Mr. M. Seshavatharam and Mrs Manepalli Sunitha (HUF).The Respondent admittedly has no asset which is unencumbered. The Respondent has relied on an order passed by the Joint Electricity Regulatory Commission to contend that it is entitled to recover about 84.188 crores from the State ::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 ::: Rng 3 app.463.15.903 of Andaman and Nicobar Islands Administration Secretariat which order too is impugned before the Appellate Authority for Electricity. The correctness therefore of the order passed by the Joint Electricity Regulatory Commission for the State of Goa and Union Territories Gurgaon is yet to be established. In view of the aforestated dishonest conduct of the Respondent, if the Respondent is not directed to secure the claim of the Petitioner by depositing in this Court a sum of Rs. 6,66,27,686/- or to furnish a Bank Guarantee in the like amount, grave and irreparable harm loss damage and injury would be caused to the Petitioner. The balance of convenience is also in favour of the Petitioner.
23. In the circumstances, pending the hearing and final disposal of the arbitration proceedings and until the execution of the Arbitral Award, the respondent is ordered and directed to secure the claim of the petitioner by depositing with the Prothonotary and Senior Master of this Court a sum of Rs.6,66,27,686/- (Rupees Six crores sixty lakhs twenty seven thousand six hundred and eighty six only) or by furnishing a bank guarantee of a nationalised bank in the sum of Rs.6,66,27,686/- to the satisfaction of the Prothonotary and senior Master of this court or before 30th April 2015."
2. Heard learned counsel appearing for the parties. This Court has granted sufficient time to the Appellants to show their bonafides as there was non-compliance of the order impugned at the relevant time within the prescribed period and till this date. The matter was adjourned from time to time even for the Appellants to show bonafides to deposit the money and/or to secure the amount.
This Court also recorded reasons for granting an opportunity on 1 February 2016, 8 February 2016 and 15 February 2016 and directed the parties to file a short Synopsis and written notes of submissions ::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 ::: Rng 4 app.463.15.903 so that the matter can be disposed of and heard finally. Accordingly the matter is listed today for Final disposal.
3. The Appellants has filed this Appeal on 21 May 2015 along with a Notice of motion for condonation of delay of 66 days.
4. Considering the averments so made and as specifically in the Appeal and the Notice of motion and in the interest of justice, to give opportunity to the Appellants, we are inclined to condone the delay. However, that will be subject to costs of Rs.10,000/- to be deposited within 7 days.
5. The learned counsel appearing for the Appellants has placed on record written arguments in Appeal. We have heard learned counsel for the parties even on merits of the Appeal. The grant of injunction and/or appropriate reliefs under section 9 of the Act is a matter which the learned Judge has taken a note of by exercising discretionary power based on the admitted facts on the ::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 ::: Rng 5 app.463.15.903 record including the agreements between the parties. The ground even so raised is in no way sufficient to accept the case of the Appellants specifically when the learned Judge has recorded various reasons including the conduct of the parties; the fact of liability and the due unpaid amount pursuant to the commercial agreements between the parties. There is no denial to the liability of the amounts due and payable. The only defence so raised was that they have no capacity and further that the certain amount is outstanding from the Union Territory of Andaman and Nicobar Islands Administration and therefore, they are unable to make the payments and/or unable to furnish bank guarantee and/or deposit the amounts so ordered by this Court. The learned counsel for the Respondents has pointed out the Balance-Sheet which reproduced a different position.
6. Even otherwise, as there is non-compliance of the order passed by this Court which is very clear and specifically when this Court has already granted sufficient time to the Appellants to show their bonafides and make payments and as there is non-
::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 ::: Rng 6app.463.15.903 compliance of the order from the day the learned Judge passed the order and specifically as there is non- compliance within the prescribed period, we see that no case is made out to interfere with the reasoned order passed by the learned Single Judge based upon the admitted position of liability and conduct of the Appellants.
7. The balance of convenience, equity and apprehensions so referred further confirms in view of the Affidavit so placed on record by the Appellants in this Court including the conduct so recorded. Therefore, submissions so raised through this Appeal and/or written arguments in our view, are not sufficient to disturb the order passed by the learned Judge as the same is well within the framework of law and the record.
8. Therefore, present Appeal is dismissed. As the Appeal is dismissed, Notice of motion is disposed of accordingly.
G.S.KULKARNI, J ANOOP V.MOHTA J ::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 ::: Rng 7 app.463.15.903 ::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 ::: Rng 8 app.463.15.903 ::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 ::: Rng 9 app.463.15.903 ::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 ::: Rng 10 app.463.15.903 ::: Uploaded on - 04/03/2016 ::: Downloaded on - 31/07/2016 06:26:56 :::