Calcutta High Court
The West Bengal Power Development ... vs Ujaas Energy Ltd on 2 September, 2024
Author: I. P. Mukerji
Bench: I. P. Mukerji
IA No: GA-Com 1 of 2024
APOT No. 312 of 2024
with
AP-Com No. 532 of 2024
IN THE HIGH COURT AT CALCUTTA
In appeal from its
ORDINARY ORIGINAL CIVIL JURISDICTION
CIVIL APPELLATE JURISDICTION
(Commercial Division)
The West Bengal Power Development Corporation Ltd.
Versus
Ujaas Energy Ltd.
Before:
The Hon'ble Justice I. P. MUKERJI
And
The Hon'ble Justice PARTHA SARATHI SEN
Date: 2nd September 2024
Appearance:
Mr. Jishnu Chowdhury, Advocate
Mr. Chayan Gupta, Advocate
Mr. Rittick Ghowdhury, Advocate
Mr. Aviroop Mitra, Advocate
for the appellant
Mr. Abhrajit Mitra, Sr. Advocate
Ms. Rajshree Kajaria, Advocate
Mr. Satadeep Bhattacharyya, Advocate
Mr. Uttam Sharma, Advocate
for the respondent
The Court: Order in terms of prayer (a) of the stay petition.
After hearing learned counsel for the parties and considering
the urgency of the matter, we are in a position to dispose of this
appeal today itself dispensing with all formalities.
This is a most interesting case.
An interim award dated 3rd April 2024 has been challenged
by the appellant which was the respondent in the arbitral
proceedings. By this interim award the counter-claim made by the
appellant has been held to be not sustainable.
This award was challenged under section 34 of the
Arbitration & Conciliation Act, 1996 before the learned single judge of
this court. By a judgment and order dated 21st August 2024 the court
dismissed the application.
Hence this appeal.
We find from the impugned award which has been upheld by
the learned single judge that by a detailed reasoning process the said
counter-claim of the appellant has been held to be not maintainable.
Very shortly put, the reason is that as a result of the Corporate
Insolvency Resolution Process before the National Company Law
Tribunal the alleged claim of the appellant stood extinguished.
Now the question is this.
A lis is pending before the arbitral tribunal. There is a claim
and a counter-claim. A counter-claim has to be taken as a cross suit.
It is true that the detailed procedure of the Civil Procedure Code may
not be followed by the arbitral tribunal. It was possible to dispose of
the claim and the counter claim independently.
But in doing so, in our view, a rational procedure had to be
followed. It could be under the procedure prescribed in Order VII Rule
11 of the Civil Procedure Code, going strictly by the statement of
claim or counter statement with counter-claim to ascertain whether
the counter-claim was barred by law. Otherwise, the full procedure of
exchange of pleadings, discovery of documents, receiving evidence
had to be followed before an award could be made.
The application of the respondent on which the impugned
interim award was passed may have been styled as an application
under Order VII Rule 11 of the Civil Procedure Code. But the ruling of
the learned arbitrator was like a full-fledged judgment and decree
with elaborate discussion on facts and evidence. This could only have
been made on full trial, considering both the claim and the counter-
claim.
In the circumstances, we are not staying the arbitral
proceedings. The arbitral proceedings may continue. The appellant
will have the liberty to adduce whatever evidence they wish to
produce and make arguments.
At the close of the proceedings it will be open for the learned
arbitrator to decide while passing the final award whether to affirm
his earlier interim award with regard to the counter-claim or to make
a different ruling after taking the claim and the counter-claim into
account.
The appeal (APOT 312 of 2024) and the connected stay
application (IA No: GA 1 of 2024) are disposed of by modifying the
impugned judgment and order, as above.
As no affidavits were invited, the allegations contained in the
stay application are deemed to have been not admitted.
(I. P. MUKERJI, J.)
(PARTHA SARATHI SEN, J.)
R. Bose
