Hdfc Bank Ltd vs A.F. Enterprise & Anr
2021 Latest Caselaw 458 Cal/2

OD-3

                              IA NO. GA/2/2019
                               IN EC/725/2015
                      IN THE HIGH COURT AT CALCUTTA
                       Ordinary Original Civil Jurisdiction
                                ORIGINAL SIDE


                                HDFC BANK LTD.
                                    Versus
                            A.F. ENTERPRISE & ANR.


 BEFORE:
 The Hon'ble JUSTICE MOUSHUMI BHATTACHARYA
 Date 12th July, 2021.
 [Via Video Conference]


                                                                           Appearance:
                                                              Mr. Sukrit Mukherjee, Adv.
                                                                  Mr. Joydeep Roy, Adv.

                                                               Mr. Priyankar Saha, Adv.
                                                                   Mr. L.R. Mondal, Adv.


        The Court: This is an application for execution of an award dated 27th

 January, 2015. The award-holder prays for appointment of a Receiver over the

 assets of the respondents/award debtors and for a direction on the award

debtors to file an affidavit disclosing their assets.

According to learned counsel appearing for the petitioner, several

orders have been passed in the execution proceedings which have not been

complied with by the respondents. It is also submitted that the order directing

the petitioner to make over a certain sum of money which was passed on the

present application has also not been complied with. Learned counsel for the

petitioner submits that dues are outstanding from the respondents from 2016

onwards and that the respondents have not obtained any order of stay of the

impugned award till date.

Learned counsel appearing for the award debtors/respondents submits

that an application under Section 34 of The Arbitration and Conciliation Act,

1996 has been filed and was recently mentioned for inclusion in the list.

Counsel submits that the primary challenge in the Section 34 application is on

the ground of notice i.e. Section 21 of the Act. Counsel prays that Section 34

should be taken up first for hearing.

Upon hearing learned counsel appearing for the parties, there are

certain admitted facts which should be taken note of. First, there is no stay of

the impugned award on an application for such by the award debtors. Second,

there has also not been any progress in the Section 34 application except a

direction for affidavits. Third, the respondents have continued to flout the

directions passed by the Court from 2015 onwards. The conduct of the

respondents has been mentioned in an order passed by a learned Single Judge

on 10th September, 2015 in the execution application. By the said order, the

judgment debtor no.2 was directed to ensure that the assets are handed over

to the Receiver failing which there shall be a warrant of arrest against the

judgment debtor no.2. The next order passed on 1st October, 2015 noted that

there was no stay in the execution of the award and directed the judgment

debtors to hand over possession of the asset in question to the Receiver within

a week from the date of the order. Significantly, the order records the prima

facie satisfaction of the Court that the award was sent to the address of the

judgment debtors mentioned in the cause title of the execution proceedings.

The position of an award debtor obtaining an automatic stay of an

award was clarified in the decision of BCCI vs Kochi Cricket: (2018) 6 SCC 287

wherein it was held that there would not be any automatic stay of the award

upon filing of a Section 34 of the 1996 Act. Hence, the award debtors cannot

take advantage of the Section 34 application being filed for any stay of the

impugned award. The postal endorsement to a letter written on behalf of the

petitioner on 25th October, 2018 was apparently returned by reason of the

death of the Receiver appointed by the Court by its order dated 23rd July,

2015.

The above facts show that the award-holder should be given a measure

of protection. It should also be mentioned that by an order dated 13th March,

2020 passed in the present application, a learned Single Judge of this Court

had also directed the award-debtors to produce a demand draft of Rs.25 lakhs

drawn in favour of the Registrar, Original Side of this Court for investing the

said amount in a fixed deposit account. The said amount was a part of the

principal amount awarded to the petitioner which is Rs.45 lakhs which along

with interest. This amount has also not been deposited by the award-debtors.

The award-debtors, by their conduct, have thus disentitled themselves from

any further indulgence from this Court. It should also be noted although the

Section 34 application was allegedly mentioned by the award-debtors, no

notice of such was received by the award-holder.

The award-debtors are therefore directed to comply with the direction of

the learned Single Judge dated 13th March, 2020 within a week from date. The

award-debtors shall be at liberty to take steps for listing of Section 34

application.

List this matter after two weeks.

If no progress is made in the Section 34 application, the execution will

continue without any further impediment.

Since the admitted position is that prayer ( c ) of the application which

relates to the whereabouts of the assets mentioned in Schedule F belonging to

the award-holder, the award-debtors are directed to file an affidavit disclosing

the whereabouts of the said assets within two weeks from date.

The affidavit should be made over to the Court on the next date of

hearing and a copy of such affidavit should also be served on the petitioner.

(MOUSHUMI BHATTACHARYA, J.)

Sp/kc