Bombay High Court
The Maharashtra Small Scale ... vs Companies Act on 22 October, 2010
Bench: S.J. Vazifdar
1 chs553-10
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO.553 OF 2010
IN
ARBITRATION PETITION NO.499 OF 2003
The Maharashtra Small Scale Industries
Development Corporation Limited, having
its registered office at registered office at
Krupanidhi, 9, Walchand Hirachand Marg,
Ballard Estate, Mumbai 400 001. ....Petitioner
V/s.
Snehadeep Structures Pvt. Ltd.
A Company incorporated under the
Companies Act, 1956 having its
Registered Office at 123, Pushpakunj
Commercial Complex, 3rd floor, Ramdaspeth,
Central Bazaar Road, Nagpur-440 010. ....Respondent
Dr.Virendra Tulzapurkar, Senior Counsel i/b Mr.Chandana Salgaoncar-
Radia for the Applicant in support of the Chamber Summons for the
Respondent.
Mr.M.P. Rao, Senior Counsel i/b Mr.A.C. Mahimkar for the Petitioner.
CORAM : S.J. VAZIFDAR, J.
DATE : 22ND OCTOBER, 2010.
ORAL JUDGMENT :-
1. This is the respondent's Chamber Summons for a dismissal of
the above petition under section 34 of the Arbitration and Conciliation Act,
1996 (hereinafter referred to as the "1996 Act").
2. The petition is to set aside an award dated 30.6.2003. The
above petition was filed on 29.9.2003. It was dismissed on 23.8.2005 on
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the ground that the petitioner had failed to comply with the provisions of
section 7 of The Interest on Delayed Payments to Small Scale and
Ancillary Industrial Undertakings Act, 1993 (hereinafter referred to as the
"1993 Act").
The petitioner's appeal being Appeal No.855 of 2005 against
the order and judgment dated 23.8.2005 was disposed of by an order of
the Division Bench dated 17.11.2005. The Division Bench set aside the
order and judgment dated 23.8.2005 and restored the arbitration petition to
file for fresh consideration by the learned single Judge.
The learned Judge by an order dated 25.1.2006, dismissed the
petition again on the ground that section 7 of 1993 Act had not been
complied with. The learned Judge held that a petition under section 34 of
the 1996 Act falls within the ambit of the expression "appeal" in section 7 of
1993 Act.
The petitioner's appeal being Appeal No.485 of 2005 was
allowed by an order and judgment of the Division Bench dated 5.2.2008.
The order and judgment dated 25.1.2006 was set aside and the petition
was ordered to be disposed of by the appropriate bench.
3. The respondents filed a petition for special leave to appeal in
the Supreme Court being SLP (C) No.7076 of 2008. The Supreme Court
allowed the respondents' appeal. The judgment is reported in (2010) 3
SCC 34. Paragraph 65 thereof reads as under :-
"65. Keeping in mind the language of Section 7,
object of the legislation and the contextual meaning of the
term appeal, we are, therefore, of the view that the term
"appeal" appearing in Section 7 of the Interest Act should
include an application under Section 34 as well. The
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judgment and order of the High Court shall, therefore,
stand set aside and the appeal is allowed to the extent
indicated above. The respondent Corporation shall make a
deposit of 75% of the amount awarded by the learned
arbitrator by his award dated 30.6.2003 in court where the
application for setting aside the award is now pending
decision. Such deposit shall be made within three months
from this date. In the event, such deposit is made the court
shall decide the application for setting aside the award
filed under Section 34 of the Arbitration Act as
expeditiously as possible preferably within six months from
the date of deposit by the Corporation."
4. The judgment of the Supreme Court is dated 25.1.2010. The
three months period therefore expired on 25.4.2010. Before the expiry of
this period, the petitioner deposited only a sum of Rs.58,64,656/- i.e.
seventy five per cent of the principal sum awarded.
5. The operative part of the award reads as under :-
"(1) The Respondent shall pay to the Claimant a
sum of Rs.78,19,540.73 (Rupees seventy-eight lacs
nineteen thousand five hundred forty and paise seventy-
three only) as per the claim in Annexure "L" to the
Statement of Claim.
(2) The Respondent shall pay to the Claimant
simple interest on the said amount at the rate of 10% per
annum from the date of the Statement of Claim till the date
of Award and future interest at the same rate from the date
of the Award till payment and/or realisation.
(3) In case the Respondent fails to pay the
amount awarded within three months from today, the
Respondent would be liable to pay to the Claimant
compounded interest with monthly rests at 1 ½ times of
Prime Lending Rate charged by the State Bank of India
from the date of the claim until payment and/or realisation.
(4) Parties to bear their own costs.
6. The petitioner deposited the said amount on the basis that only
the principal amount awarded can be taken into consideration while
computing the amount to be deposited under section 7 of 1993 Act.
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7. The submission is not well founded. Section 7 of 1993 Act
reads as under :-
"7. Appeal. - No appeal against any decree,
award or other order shall be entertained by any Court or
other authority unless the appellant (not being a supplier)
has deposited with it seventy-five per cent of the amount in
terms of the decree, award or, as the case may be, other
order in the manner directed by such Court or, as the case
may be, such authority".
There is nothing in section 7 of 1993 Act which limits the
computation of the amount to be deposited only on the principal sum
awarded. The words "amount in terms of the decree, award or, as the case
may be, other order" are wider. They include all the amounts that are
awarded. The deposit of seventy-five per cent must be computed on the
basis of all the amounts awarded under an award. In the present case this
would include the amounts under clauses (1), (2) and (3) of the operative
part of the award.
8. The petitioner admittedly has not deposited the amount as per
the award read with section 7 of 1993 Act.
9. It is not possible for me to consider the application for
extension of time to deposit the balance amount in view of the fact that the
time was granted by the Supreme Court. This Court cannot extend the time
granted by the Supreme Court.
10. In the circumstances, the chamber summons is made absolute
in terms of prayer (a). There shall be no order as to costs.
