Bombay High Court
Ganage Pressings Private Limited ... vs Tata Motors Limited on 23 May, 2016
Bench: B.R. Gavai
vks
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (L) NO.203 OF 2016
IN
ARBITRATION PETITION (L) NO.620 OF 2016
WITH
NOTICE OF MOTION (L) NO.1640 OF 2016
IN
APPEAL (L) NO.203 OF 2016
1. Ganage Pressing Private Limited ]
a Company incorporated under the Companies ]
Act, 1956 and having its registered office at ]
third floor, "Symphony" A Building Range ]
hills Corner, Bhosle Nagar, Pune 411 0201
ig ]
]
2. Rojee Tasha Stampings Private Limited ] ..Appellants
A company incorporated under the Companies ] Original
Act, 1956 and having its registered office at ] Respondents
third Floor, "Symphyny" A building Range ]
hills Corner, Bhosle Nagar, Pune 411 020. ]
]
3. Poona Tools Private Limited ]
A company incorporated under the Companies ]
Act, 1956 and having its registered office at ]
third Floor, "Symphyny" A building Range ]
hills Corner, Bhosle Nagar, Pune 411 020. ]
]
4. Automotive Metal Stampings Private Limited]
A company incorporated under the Companies ]
Act, 1956 and having its registered office at ]
third Floor, "Symphyny" A building Range ]
hills Corner, Bhosle Nagar, Pune 411 020. ]
V/s.
Tata Motors Limited. ]
A company incorporated under the Companies ] Respondent
Act, 1913 and having its registered office at ] Original
Bombay House 24, Homi Mody Street, Mumbai ] pettiioner
400 001, Maharashtra ]
....
1/12
APPEAL-L 203 OF 2016.doc
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Mr. S. U. Kamdar, Senior Advocate a/w Mr. Mustafa Doctor, Senior
Advocate a/w Mr. Dharam Jumani a/w Ms. Manik Joshi a/w Mr. Pranav
Arora I/by M/s Crawford Bayley & Co. for the Appellants.
Mr. Pravin Samdani, Senior Advocate a/w Mr. Rahul Narichania, Senior
Advocate a/w Mr. Gaurav Kothari a/w Mr. Vivek Shetty a/w Mr. Kumar
Katariya I/by AZB & Partners, for respondent.
Ms. Pooja Bhaidkar, 2nd Assistant to Court Receiver present.
CORAM : B. R. GAVAI &
DR. SHALINI PHANSALKAR-JOSHI, JJ.
(VACATION BENCH)
DATE : 23rd MAY, 2016.
Oral Judgment : [PER: B. R. GAVAI, J.]
1. The appellants in this appeal, challenge the order dated 16th
May, 2016 passed by learned Single, in Arbitration Petition (L) No.620 of
2016.
2. The petition was filed by the respondent herein, which has
been referred to in the order passed by the learned Single Judge as, "Tata
Motors", under Section 9 of the Arbitration and Conciliation Act, 1996,
seeking certain interim reliefs against the present appellants who are
referred by the learned Single Judge as "Ganage Pressings Pvt. Ltd.", in
relation to certain tools belonging to Tata Motors which were handed
over by it to M/s Ganage Pressings for manufacturing certain components
for Tata Motors under Supply Agreement dated 28th August, 2015.
3. The factual position which is not in dispute is that Tata Motors
APPEAL-L 203 OF 2016.doc
has engaged the services of M/s Ganage Pressings for manufacturing
certain components for its vehicles for a period of almost last 30 years.
However, it appears that there were certain difficulties in the functioning of
M/s Ganage Pressings, which led to shortfall in the manufacturing of
components. It is also not in dispute that the tools for manufacturing the
said components are owned by M/s Tata Motors which were handed over
to M/s Ganage Pressings, initially without there being any agreement and
subsequently under agreement of 2015.
4.
It is the contention of M/s Tata Motors that on account of
shortfall of supply of components, its production got substantially affected
thereby leading to losses. It had made certain communications with M/s
Ganage Pressings for improving its functioning. It is also the contention of
M/s Tata Motors that inspite of rendering financial assistance as well as
the other assistance to M/s Ganage Pressings, on account of rivalries
between two groups, the functioning of M/s Ganage Pressing did not
improve.
5. It is further their contention that ultimately the situation went
to such an extent that electricity supply to the plant owned by M/s Ganage
Pressing was disconnected thereby seriously disrupting the manufacturing
of components having direct adverse effect on manufacturing of the
vehicles. In this background, the aforesaid petition under Section 9 of the
Arbitration & Conciliation Act, came to be filed before the learned Single
APPEAL-L 203 OF 2016.doc
Judge of this Court.
6. Initially the learned Single Judge, vide order dated 4 th May,
2016 had appointed Court Receiver to take possession of the tools which
were given by M/s Tata Motors to M/s Ganage Pressings. By the
impugned order the learned Single Judge issued various directions inter
alia directing Receiver to hand over the possession of tools which were
taken by him in his possession, to M/s Tata Motors, so also to take
possession of remaining tools and hand over the same to M/s Tata
Motors. Certain other directions are contained in the operative part of the
order passed by the learned Single Judge, therefore, we do not wish to
reproduce the same again in the present order.
7. Being aggrieved by the said order, M/s Ganage Pressing has
approached this Court by filing present appeal.
8. Shri. Kamdar, learned Senior Advocate, appearing on behalf
of the present appellants submits that the learned Single Judge has
grossly erred in passing the impugned order. Learned Senior Advocate
submits that while considering application for injunction, the Court is
required to take into consideration prima facie case, irreparable injury and
the balance of convenience. It is submitted that the learned Single Judge
has only taken into consideration the injury that would be caused to M/s
Tata Motors, but has not at all taken into consideration irreparable loss
that would be caused to the appellants on account of impugned interim
APPEAL-L 203 OF 2016.doc
order. Learned Senior Advocate submits that the learned Single Judge in
any case has utterly failed to weigh the balance of convenience between
the parties. It is submitted that on account of impugned order, the total
functioning of M/s Ganage Pressing has come to standstill. Learned
Senior Advocate submits that the entire functioning of the appellants is
dependent upon the supply of the goods to M/s Tata Motors. It is
submitted that if the impugned order is permitted to exist, it would result in
totally disrupting the functioning of M/s Ganage Pressing thereby causing
huge financial losses to the appellants and taking away livelihood of
number of employees employed by the appellants.
9. Shri. Kamdar, learned Senior Advocate, further submits that
the learned Single Judge has also taken into consideration various e-
mails which are not forming part of the record and as such has taken into
consideration extraneous material. It is submitted that on this ground
also, the impugned order is liable to be set aside.
10. Shri. Samdani, learned Senior Advocate, appearing on behalf
of respondent, on the contrary submits that the learned Single Judge has
given sound and cogent reasoning while passing the impugned order.
Learned Senior Advocate submits that in so far as e-mails are concerned,
though the e-mails were produced before the learned Single Judge at the
time of hearing of the application, he is willing to argue the appeal dehors
the said material. Learned Senior Advocate further submits that even if
APPEAL-L 203 OF 2016.doc
those e-mails are ignored, it would reveal that M/s Tata Motors had made
out a prima facie case and a case of causing irreparable injury. It is
further submitted that the balance of convenience tilts heavily in favour of
grant of relief as prayed by M/s Tata Motors before the learned Single
Judge.
11. Learned Senior Advocate submits that inspite of giving
assistance to the appellants so as to improve its functioning, on account
of rivalry between two groups, the functioning of the appellants had come
to standstill. He submits that on account of discontinuation of supply of
electricity, plants had come to standstill and thereby stopped total
production of the components. He submits that due to non supply of
components, there was direct adverse effect on the manufacturing activity
carried out by Tata Motors, resulting into losses to it. Learned Senior
Advocate submits that in any case, the ownership of the tools lies fully
and solely with Tata Motors and clause No.26.16 of the agreement
empowers Tata Motors to take away tools at any point without notice and
without intimation.
12. The present appeal is in the nature of appeal against the
order as provided under Order 43 Rule (1) (r) of the Code of Civil
Procedure. The scope of such an appeal has been explained by the
Hon'ble Supreme Court in Wander Ltd and another -vs- Antox India P.
Ltd, 1990 (Supp) Supreme Court Cases 727. It would be appropriate to
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refer to paragraph No.14, which reads thus :-
"14. The appeals before the Division bench were against
the exercise of discretion by the Single Judge. In such
appeals, the appellate court will not interfere with the
exercise of discretion of the court of first instance and
substitute its own discretion except where the discretion
has been shown to have been exercised arbitrarily, or
capriciously or perversely or where the court had ignored
the settled principles of law regulating grant or refusal of
interlocutory injunctions. An appeal against exercise of
discretion is said to be an appeal on principle. Appellate
court will not reassess the material and seek to reach a
conclusion different from the one reached by the court
below if the one reached by that court was reasonably
possible on the material. The appellate court would
normally not be justified in interfering with the exercise of
discretion under appeal solely on the ground that if it had
considered the matter at the trial stage, it would have come
to a contrary conclusion. If the discretion has been
exercised by the trial court reasonably and in a judicial
manner the fact that the appellate court would have taken
a different view may not justify interference with the trial
court's exercise of discretion. After referring to these
principles Gajendragadkar, J. in Printers (Mysore) Private
Ltd. v. Pothan Joseph (SCR 721).
".........These principles are well established, but as
has been observed by Viscount Simon in Charles
Osenton & Co. v. Jhanaton... the law as to the
APPEAL-L 203 OF 2016.doc
reversal by a court of appeal of an order made by a
judge below in the exercise of his discretion is well
established, and any difficulty that arises is due only
to the application of well settled principles in an
individual case."
The appellate judgment does not seem to defer to this
principle.
13. In the light of law laid down by Apex Court, we will examine
the correctness of the order, passed by the learned Single Judge.
14. As already held by the Apex Court, an interference would be
warranted by us only if the view taken by the learned Single Judge is
either perverse or impossible and not merely because we find that the
other view is more probable.
15. We may state that in view of objection raised by learned
Senior Counsel for appellants, we would not be referring to e-mails which
were not part of record for consideration before the learned Single Judge.
16. The perusal of the e-mail dated 29th April, 2016 sent by Mr. R.
D. Ganage to the other group and which is forming part of the record
would reveal that the Axis Bank has blocked account operations of the
company until the revised resolution with joint signatories is submitted to
them with the consent of both the families.
17. The perusal of the said communication would also reveal that
there was demand by the other group for release of unsecured loans and
APPEAL-L 203 OF 2016.doc
personal properties. However, Mr. Ganage informed the other group that
considering such a request when the company was going through critical
situation, was totally unfair. Not only that, but the said communication
would clearly reveal that Tata Motors management has supported Ganage
Pressings in its difficulty by releasing funds
18. The communication would further reveal that the accounts
department exploited by the group of S. B. Ganage.
19. The material placed on record would also reveal that since
there was difficulty in continuity in operation of Ganage group company, a
meeting was held between the representatives of the group and the Tata
Motors. The Minutes of said meeting are placed on record at page No.595
of the paper Book. The said minutes would clearly show that M/s Ganage
has expressed difficulties for continuity in operation as Ganage group from
26th April, 2016. The said group also requested for trade advance of
Rs.4.50 crores from the Tata Motors. Accordingly Tata Motors had also
agreed to give it advance of Rs.2.50 crores.
20. The perusal of the affidavit filed on behalf of appellants,
before the learned Single Judge would also reveal that the appellants
themselves have admitted that the electricity supply of the factory at
Chakan and Pimpri was disconnected from 6th May, 2016 till 12.5.2016. It
is also admitted that the electricity supply of the factory at Uttaranchal was
disconnected on 6.5.2016. However, it is stated in the affidavit that the
APPEAL-L 203 OF 2016.doc
appellants (respondents therein ) were in position to start operation by
releasing the balance payment towards electricity bills and other service
provider at any point, if dedicated tools are returned to the appellants
(respondents therein).
21. The perusal of the e-mail dated 30.4.2016 addressed by Shri.
Shivaji Ganage to the Tata Motors would reveal that he has attempted to
put entire blame on Tata Motors regarding the internal disputes between
two groups. The tenor of the language used in the said communication
would reveal that, sort of threats are given to the Tata Motors by the
sender of the said communication.
22. It further appears that with intimation addressed to the
Ganage Pressing on 30th April, 20916, Tata Motors had sent truck to the
plant of Ganage Pressing to take back its dedicated tools. The said
communication would reveal that inpsite of giving an amount of Rs.2.5
crores to the Ganage Group, electricity, transport, contractor payment and
employees salaries were not paid resulting into stoppage of TML PVBU &
CVBU B/W lines. It appears that though the trucks were sent to the plant,
the appellants refused to permit them to enter into their factory premises.
It appears that this was done by Tata Motors in view of clause No.26.5 of
the agreement between the parties. Instead of responding to request of
Tata Motors who are undisputedly the owner of dedicated tools, M/s
Ganage Pressing has given a letter of threats to Tata Motors.
APPEAL-L 203 OF 2016.doc
23. The learned Single Judge in his order from paragraph No.21
onwards has given elaborate reasons as to why he finds it necessary to
grant relief as claimed in the application. It has been observed by the
learned Single that M/s Ganage Pressing owed nearly Rs. 430 crores to
various banks, financial institutions and IDBI Bank Limited. It has been
further observed that M/s Ganage Pressing has been serially defaulting in
paying their statutory taxes to the tune of Rs. 51 crores. It has been
further found that electricity supply to the Ganage Pressing factory has
been disconnected by Maharashtra State Electricity Board and the
Uttarakhand Power Corporation Limited. Though it is sought to be
contended by learned Senior Advocate Shri. Kamdar, that outstanding
amounts of financial institutions and disruption of electricity are common
to the manufacturing activities, we find that the same cannot be said to be
irrelevant consideration while considering application for interim relief.
24. The learned Single Judge has also found that on account of
appellants not functioning properly, the functioning of the manufacturing
plant of Tata Motors was adversely affected thereby causing huge losses.
The learned Single Judge, has further found that if tools are permitted to
be kept in open place, the possibility of these tools being damaged
/deteriorated cannot be ruled out.
25. The learned Single Judge on the contrary has found that if the
Tata Motors is permitted to use those tools and make alternate
APPEAL-L 203 OF 2016.doc
arrangement for production of components, it will help in augmenting the
manufacturing activities. In so far as the balance of convenience is
concerned, the learned Single Judge has found that the loss, if any, to the
appellants was of such a nature which always can be compensated in
terms of money.
26 The reasoning given by the learned Single Judge cannot be
said to be perverse. The reasons given by the learned Single Judge are
well founded and based on material placed on record.
27.
In that view of the matter, we do not find that there is any
merit in the appeal. The appeal, therefore, stands dismissed.
28. In view of dismissal of appeal, Notice of Motion (L) No.1640
of 2016 does not survive and the same is disposed of accordingly.
29. At this stage, learned Senior Counsel appearing for the
appellants seeks stay to the order passed by the learned Single Judge for
a period of two weeks. In the background of the view taken by the
learned Single Judge and affirmed by us, we are not inclined to grant the
prayer made by learned Senior Counsel for the appellant. The oral prayer
is rejected.
[DR. SHALINI PHANSALKAR-JOSHI, J.] [ B.R.GAVAI, J.]
APPEAL-L 203 OF 2016.doc
