Calcutta High Court
Terai Tea Company Ltd vs The President on 8 December, 2023
Author: Moushumi Bhattacharya
Bench: Moushumi Bhattacharya
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
Original Side
(Commercial Division)
Present :-
The Hon'ble Justice MOUSHUMI BHATTACHARYA
AP/815/2023
TERAI TEA COMPANY LTD.
VS
THE PRESIDENT, INSTITUTE FOR INDIAN LABOUR
WITH
EC/315/2023
IA NO.GA/1/2023
THE PRESIDENT, INSTITUTE FOR INDIAN LABOUR
Vs.
TERAI TEA COMPANY LTD.
For the petitioners : Mr. K. R. Thaker, Adv.
Mr. Chayan Gupta, Adv.
Mr. Ratul Das, Adv.
Mr. Niladri Banerjee, Adv.
Mr. Soumyajyoti Nandy, Adv.
Mr. Deepankar Thakur, Adv.
For the respondent : Mr. Anuj Singh, Adv.
Mr. Anil Dhar, Adv.
Mr. Debabrata Das, Adv.
Mr. Aman Agarwal, Adv.
2
Last Heard on : 07.12.2023.
Delivered on : 08.12.2023.
Moushumi Bhattacharya, J.
1. This is an application for stay of an Award dated 27th February,
2023. By the impugned Award, the respondent/claimant was held to be
entitled to recover a sum of Rs.12,24,520/- on account of occupation charges
for wrongful use and occupation of the subject premises by the petitioner
(respondent in the arbitration) from July, 2020 to March, 2023. The petitioner
(respondent in the arbitration and award-debtor) was also held liable to pay
interest on this amount at the rate of 8% per annum. The claimant
(respondent herein) was further entitled to recover mesne profits from the
petitioner at the rate of Rs.53,240/- per month from April, 2023 till recovery of
possession.
2. Learned counsel appearing for the respondent/award-holder prays
that the award-debtor should be directed to pay occupational charges from the
date of the Award at the prevailing market rate. Counsel submits that the
petitioner/award-debtor has failed to vacate the subject premises from 30th
April, 2023 contrary to the undertaking given by the petitioner. The
respondent was hence constrained to file an application under Section 9 of The
1996 Act for securing the unpaid rent and the mesne profits. The said
application was disposed of by the Court on 23rd June, 2023 directing the
award-debtor to secure the sum of Rs.42,23,910/- being the awarded amount
by way of a bank guarantee. The respondent/award-holder was directed to
accept this sum without prejudice to its rights and contentions.
3. Learned counsel appearing for the petitioner/award-debtor
submits that the petitioner is ready to pay occupational charges at the rate of
Rs.53,240/- per month which the petitioner, has in any event, paid till
September, 2023. The respondent/award-holder apparently did not accept this
amount from October, 2023 onwards. Counsel submits that any order
directing occupational charges at the prevalent market rate would, in effect,
modify the Award which cannot be done under the 1996 Act. It is also
submitted that the Tabular Statement in the respondent's execution
application mentions the sum of Rs.53,240/- and the respondent should hence
be bound to it.
4. The undisputed fact in this case is that the impugned Award dated
27th February, 2023 held the petitioner liable in terms of monetary payments
under various heads to the respondent. The respondent was accordingly held
to be entitled to recover sums under these heads. The petitioner was found to
have wrongfully occupied the subject premises from July, 2020 till March,
2023. The Award proceeds on the basis that the petitioner would vacate the
subject premises on 31st March, 2023 and would pay the respondent
Rs.53,240/- per month from April, 2023 onwards on this basis.
5. The petitioner, admittedly, did not hand over possession of the
subject premises from 1st May, 2023 and has remained in occupation of the
premises till date. The petitioner/award-debtor also failed to pay Rs.36 lakhs
as directed by the Court on 23rd June 2023.
6. The petitioner now seeks stay of the Award by contending that the
petitioner is indebted to the respondent to the extent of Rs.53,240/- per month
on account of the awarded amount under the head of 'Mesne Profits'.
7. The law with regard to stay of a Decree or an Award is clear.
Order XXI Rule 26(3) of The Code of Civil Procedure, 1908, reinforces the power
of the Court to require security or impose such conditions as the Court may
deem fit on the judgment-debtor before making an order to stay execution. A
similar effect can be found in Order XLI Rule 5(5) giving sufficient leeway to the
court.
8. Section 36(1) in relation to Enforcement of Arbitral Awards under
Part-I of The Arbitration and Conciliation Act, 1996, makes it evident that the
Award shall be enforced in accordance with the provisions of The Code of Civil
Procedure, 1908 in the same manner as if it were a decree of the Court.
Section 36 (3) gives the Court unfettered discretionary powers to impose
conditions as the Court may deem fit on the award-debtor for stay of the
Award. The only caveat is that the Court must indicate its reasons in writing
for grant of stay.
9. The provisions under the CPC as well as the 1996 Act make it clear
that once the parties are before the Court for stay of the Award, the domain of
decision shifts from that of the Arbitrator to the Court. The Court has
complete powers to decide on the conditions for stay of the Award. The
discretion is a consequence of the preceding sub-sections of Section 36 from
where the intention of the framers appears to be that enforcement of an Award
is the rule and stay is the exception.
10. The argument of the petitioner/award-debtor that any further
imposition of terms over and above that directed by the Tribunal is hence
found to be unacceptable. In any event, the issue of modification of an Award
is relevant at the stage of Section 34 of The 1996 Act, namely, when the Court
is considering setting aside of an Award. If the Court is of the view that the
Award may be set aside, the Court may not modify or execute the Award at that
stage.
11. Since the impugned Award is essentially concerned with an order
of eviction of the petitioner/award-debtor, the Supreme Court decision in Atma
Ram Properties (P) Ltd. vs. Federal Motors (P) Ltd., (2005)1 SCC 705 becomes
relevant. The relevance is on several heads: namely, (i) that the tenancy is
terminated after a decree of eviction; (ii) that the Appellate Court under Order
XLI Rule 5 has the power to put the appellant on terms for staying of execution
of a decree; (iii) that the Appellate Court exercises equitable discretionary
jurisdiction at the stage of grant of stay of a decree on terms; (iv) that depriving
a landlord of the fruits of the decree of eviction and postponing execution of
such a decree calls for suitable compensation to the landlord and last, (v) that
the landlord/decree-holder should accordingly be suitably compensated.
12. Paragraph 18 of Atma Ram relied on Marshall Sons & Co.(I) Ltd.
vs. Sahi Oretrans (P) Ltd., (1999)2 SCC 325 to hold that since the decree for
possession and execution thereof is delayed and the judgment-creditor is
deprived of the fruits of the decree, it is necessary for the Court to pass
appropriate orders so that reasonable mesne profits can be directed to be paid
to the decree-holder which may be equivalent to the market rent paid by a
person who is holding the property.
13. In any event, the petitioner/award-debtor was to hand over
vacant and khas possession of the subject property to the respondent/award-
holder. The petitioner has failed to comply with this direction. The award
debtor has also failed to furnish security as directed by the Court. Stay of this
part of the Award would hence result in the Court sanctioning that the
petitioner/award-debtor continues to remain in occupation of the subject
property until the petitioner is successful in having the impugned Award set
aside. If this be the consequence of an order of stay, the petitioner, despite
having suffered the Award, cannot circumvent the law on the decree-
holder/landlord being deprived of the fruits of the Award.
14. The petitioner must hence pay the occupational charges from 1st
May, 2023 (the Award is dated 27th February, 2023) till the award-holder
recovers the said property or till the petitioner is successful in having the
impugned Award set aside, whichever is earlier.
15. The occupational charges at the prevailing market rate is
presently Rs.200/- per sq.ft.. The petitioner will hence pay an amount of
Rs.7,68,000/- per month to the award-holder from 1st May, 2023 till further
orders in the Section 34 application for setting aside of the Award or till the
respondent recovers the property from the petitioner. The petitioner shall
adjust the amount already paid by the petitioner with the amount which has
been directed to be paid today within seven days from today and pay the
revised amount from 1st October, 2023 onwards.
16. Learned counsel appearing for the petitioner/award-debtor seeks
to secure the amount of Rs.36,38,270/- which was allowed by the order dated
23rd June, 2023. This amount was, however, to be secured within three weeks
from the date of the order which would be in the middle of July, 2023. The
award-debtor has not secured this amount in the manner directed by the
order.
17. AP/815/2023 is accordingly disposed of by directing the award-
debtor to deposit the amount of Rs.36,38,270/- with the Registrar, Original
Side, by way of a bank guarantee, by 4.30 pm on 11th December, 2023. The
award-debtor will put in the interest amount at 8% per annum calculated from
15th July, 2023 till 11th December, 2023 by way of a cash deposit with the
Registrar, Original Side, as suggested by learned counsel appearing for the
award-debtor.
18. The operation of the impugned Award dated 27th February, 2023
shall remain stayed on and from 11th December, 2023 subject to the award-
debtor complying with these directions. In the event of default, the
respondent/award-holder shall be at liberty to proceed with the execution and
mention to the Court for urgent listing of the matter.
Urgent certified website copies of this order, if applied for, be
supplied to the parties upon compliance with all requisite formalities.
(MOUSHUMI BHATTACHARYA, J.)
sg./bp.
