Calcutta High Court
Fair Deal Supplies Limited vs R. Piyarelall Iron And Steel Pvt. ... on 14 March, 2022
ORDER SHEET
OD-2
APOT/46/2022
WITH
EC/176/2021
IA NO:GA/1/2022
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
IN THE MATTER OF:
FAIR DEAL SUPPLIES LIMITED
VS.
R. PIYARELALL IRON AND STEEL PVT. LTD. AND 5 OTHERS
[PROFORMA RESPONDENTS]
..........
BEFORE:
The Hon'ble JUSTICE I. P. MUKERJI
The Hon'ble JUSTICE ANIRUDDHA ROY
Date : 14th March, 2022
Mr. Joy Saha, Mr. Dhrubo Ghosh, Sr. Advs.,
Mr. Debdut Mukherjee, Ms. Nilanjana Adhya, Mr. Koushik Banerjee,
Ms. Sudipta Paul, Advs...for appellant.
Mr. Ratnanko Banerjee, Mr. Anirban Roy, Sr. Advs.,
Mr. D. N. Sharma, Mr. Ratnesh Rai, Mr. Ankan Rai,
Mr.S. N. Pandey, Ms. Kirti Dadheech, Advs...for respondent.
The Court : This is a judgment debtor's appeal. It arises from arbitral
proceedings.
In an application under section 9 of the Arbitration and Conciliation Act,
1996, in 2013 the appellant/judgment debtor was directed to secure the claim of
the respondent/award holder. Accordingly, Rs.4,84,55,424/- was secured by them
by making a term deposit of that amount with Punjab & Sind Bank, IBD Kolkata
branch.
Thereafter, the arbitral proceedings continued and resulted in an award
made and published by the arbitral tribunal on 15th December, 2019 in favour of
the respondent. The principal amount awarded was Rs.36,54,82,007/-.
In an application under section 36 of the said Act, on 7th December, 2021
this court directed the appellant to deposit the remaining amount of
Rs.31,70,26,583/- obtained after deducting the term deposit amount of
Rs.4,84,55,424/- from the principal amount of Rs.36,54,82,007/-, together with
interest by way of a bank guarantee within four weeks from the date of the order
with the learned Registrar, Original Side as a condition precedent to obtaining stay
of execution of the award. With those directions the application was disposed of.
On 28th February, 2022, the execution application [EC/176/2021] came up
for consideration before the court. The court noted the failure on the part of the
appellant to deposit any part of the said amount. It directed the Branch Manager of
Punjab & Sind Bank, IBD, Kolkata to encash the said term deposit with it and
make over the proceeds to the respondent/award holder.
We are told now that the principal amount of the term deposit has been paid
by the bank to the respondent. The interest accrued remains in the account.
The judgment debtor appeals from this order. Mr. Joy Saha, learned senior
advocate appearing for the appellant submits that since the amount representing
the term deposit was the security furnished by the appellant in 2013 and is
continuing as security it should continue to remain as such till the disposal of the
application for his client to set aside the award.
In that connection he showed us another order of the court made on 28th
February, 2022 fixing the section 34 application [AP/156/2020] for hearing on 16 th
March, 2022.
In law, the appellant/judgment debtor has got no case whatsoever to resist
the impugned order. Section 36 very plainly provides that preferment of a section
34 application does not automatically result in stay of the award or its execution. It
has to be obtained separately from the court. Stay of the award or its execution can
only be obtained upon securing the awarded sum on the principles laid down for
securing the disputed amount in appeal vide Order 41 Rule 5(2) of the Code of Civil
Procedure. The appellant/judgment debtor was directed to secure the awarded
amount but has failed to do so. That part of the awarded amount is lying as
security in the form of a term deposit with Punjab & Sind Bank cannot absolve the
judgment debtor of their obligation to secure the whole amount.
This court takes into account the fact that the section 34 application is
posted for hearing tomorrow.
Fully conscious of the legal rights of the respondent/award holder but at the
same time moulding the reliefs that they are entitled to, equitably, we order that
the Punjab & Sind Bank, IBD, Kolkata branch will make a term deposit in the
name of the respondent for the interest part of that term deposit lying to the credit
of the appellant with the bank. The respondent shall comply with all formalities.
This term deposit shall not be for a period exceeding one year at the applicable rate
of interest. This term deposit shall not be encashed by the respondent for a period
of two months from date. After that period, the respondent shall be free to encash
the term deposit, subject to any order that may be passed in this behalf by any
court of law.
We make it clear that we do not interfere with any other part of the impugned
judgment and order or the execution proceedings save and except to the extent
mentioned above.
The appeal and the connected application are disposed of accordingly.
(I. P. MUKERJI, J)
(ANIRUDDHA ROY , J)
pkd.
