Calcutta High Court
Marg Ltd vs Srei Equipment Finance Ltd on 27 September, 2021
IA No. GA 1 of 2021
APO No. 102 of 2021
with
AP No. 299 of 2021
IN THE HIGH COURT AT CALCUTTA
In appeal from its
ORDINARY ORIGINAL CIVIL JURISDICTION
CIVIL APPELLATE JURISDICTION
(Commercial Division)
Marg Ltd.
Versus
Srei Equipment Finance Ltd.
Before:
The Hon'ble Justice I. P. MUKERJI
And
The Hon'ble Justice ANIRUDDHA ROY
Date: 27th September 2021
(via Video Conference)
Appearance:
Mr. Rohit Das, Advocate
Mr. Kishwar Rahaman, Advocate
Mr. Indradip Das, Advocate
for the appellant
Mr. Swatarup Banerjee, Advocate
Mr. Saubhik Chowdhury, Advocate
Mr. Dripto Majumdar, Advocate
Mr. Ayushmita Sinha, Advocate
for the respondent
The Court: Order in terms of prayer (a) of the stay petition. At the
same time we dispense with all the undertakings and propose to hear
out the appeal.
It is an appeal from a judgment and order dated 26th July 2021
made by a learned single judge of this Court in an application under
section 9 of the Arbitration and Conciliation Act, 1996. The application
was made by the respondent/award-holder.
The arbitration award was made and published on 31st August
2020.
After the prescribed period for filing an application under section
34 of the said Act had elapsed, the respondent/award-holder made an
execution application to enforce the award.
We are told that, before the executing court, the appellant/award-
debtor took the point that the Covid-19 pandemic was continuing and
that the Supreme Court order with regard to extension of the period of
limitation in this period was in force. Therefore, time to file the section
34 application was still running.
Appreciating this submission the executing court disposed of that
application without levying execution.
Thereafter, this application under section 9 of the said Act, was
taken out by the respondent/award-holder. In this application an
objection was taken by the appellant/award-debtor that the application
was not maintainable on the ground that it sought sale of the
appellant/award-debtor's shares in a company/companies to satisfy
the award or part of it and that the scheme of section 9 did not permit
this kind of an order. The specific objection seemed to be that an order
under section 9 protected only property or goods which were the
subject matter of the arbitration agreement. Since shares were not,
they could not be sold.
The learned single judge got around this difficulty by relying on
section 9(1)(e) of the said Act which laid down that "such other interim
measure or protection as may appear to the Court to be just and
convenient" could be made. The learned single judge opined that the
Court had "discretion to make an order as it deems fit under the
particular circumstances of the case before it".
We agree with the learned single judge. The opening words of
section 9(1) make it explicit that a section 9 application is maintainable
even after making of the award. Section 34 puts an embargo on the
award-holder from enforcing the award till the entire period provided to
the award-debtor to challenge the award elapses.
What would happen if in this intervening period the property out
of which the award-holder contemplated realisation of the awarded sum
was disposed of or encumbered or would undergo depreciation in
value?
It is here, in our opinion, that section 9 application(1)(e) could step
in to provide protection to the award-holder.
Therefore, the application under section 9 was maintainable.
However, appreciating the submission made by Mr. Das that the
shares were not the subject matter of the arbitration and that they
should be spared from sale by the Receiver, by our interim orders dated
31st August 2021, 7th September 2021 and 20th September 2021 we
had given opportunities to the appellant/award-debtor to convince us
that the existing security provided by them with the respondent/award-
holder would be sufficient to satisfy the award debt. Furthermore, we
gave them an opportunity to provide some kind of an alternative
security to secure the debt. Unfortunately, Mr. Das, learned advocate is
unable to satisfy us.
On the basis of our observations above, the impugned judgment
and order directing sale of the subject shares cannot be faulted. We see
no reason to interfere with it.
In those circumstances, we affirm the same.
The appeal (APO 102 of 2021) and the connected stay application
(IA No. GA 1 of 2021) are dismissed.
This order will not in any way affect the rights of either of the
parties before the trial court.
No order as to costs.
(I. P. MUKERJI, J.)
(ANIRUDDHA ROY, J.)
R. Bose
