Bombay High Court
Suryachakra Power Corporation ... vs Jbf Industries Ltd on 24 February, 2016
Bench: Anoop V. Mohta
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
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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
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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
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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
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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-
app.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
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