Delhi High Court
Apex Tannery Ltd vs Crew B.O.S. Products Ltd on 19 February, 2013
Author: Manmohan Singh
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: February 19, 2013
+ OMP No.1078/2012
APEX TANNERY LTD ..... Petitioner
Through Mr.N.K.Kaul, Sr.Adv. with
Mr.Manu Seshadri & Mr.Shiv
Kumar, Advs.
versus
CREW B.O.S PRODUCTS LTD ..... Respondent
Through Mr.Samir Malik, Adv.
CORAM:
HON'BLE MR. JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J. (ORAL)
1. The petitioner has filed the abovementioned petition under the
provisions of Section 9 of the Arbitration and Conciliation Act, 1996
seeking the following reliefs:-
"(a) direct the respondent to furnish security to the
extent of USD 1,683,293.76 (equivalent to
Rs.9,25,81,115.00) failing which order attachment of the
immovable properties more fully described in Annexure-
P10 and attachment of the bank accounts more fully
described in Annexure-P11 pending disposal of the
proceedings;
(b) in the alternative restrain the respondent from
alienating or disposing of its immovable properties listed
in Annexure-P10 and withdrawing or utilizing an amount
of USD 1,683,293.76 (equivalent to Rs.9,25,81,115.00)
from its bank accounts more fully described in
Annexure-P11 pending disposal of the proceedings;
(c) grant ad interim reliefs in terms of prayers (a) and
(b) above; and
(d) pass such further or other orders as it may deem fit
and proper in the facts and circumstances of the case."
2. The said petition was listed before Court on 21st November, 2012
when the interim order was passed restraining the respondent from
alienating or disposing of its immovable properties listed in Annexure-P10
to the petition and withdrawing or utilizing an amount of USD 1,683,293.76
(equivalent to `9,25,81,115.00) from its bank accounts described in
Annexure-P11 to the petition.
3. The respondent upon receipt of the notice filed an application, being
I.A. No.22055/2012 for vacation of stay. The said application was listed
before Court on 10th December, 2012 when in the presence of the parties, the
following orders were passed:-
"1. Notice.
2. Mr. Manu Sheshadri, learned counsel for the
Petitioner/Non-Applicant accepts notice.
3. Mr. Vibhu Bakhru, learned Senior counsel
appearing for the Applicant/Respondent points out that as
far as the immovable properties of the Respondent are
concerned, there are six properties listed out in Annexure
R-3 to the application which belong to the Respondent
and rest of the properties as mentioned in Annexure P-10
are taken on rent. He states that there is no question of
the Respondent alienating, disposing of or creating any
third party interest in relation to the properties belonging
to Respondent as of now or even in the near future.
4. As far as the order passed by this Court directing
the Respondent to ensure a balance of Rs.9,25,81,115 is
concerned, he refers to the financial position of the
Respondent as at present which shows that it has run up
huge losses and even the income tax liabilities are in
excess of Rs.15 crores. He states that on account of the
interim order passed by this Court on 21st November
2012, the Respondent is unable to even carry out its day-
to-day transactions and pay salary of staff employees.
5. This Court takes on record the statement of the
Respondent that as far as its immovable properties are
concerned, they will not be alienated till further orders of
the Court. The direction to the Respondent not to
withdraw a sum of Rs.9,25,81,115 is modified by
permitting the Respondent to operate its accounts subject
to the Respondent, within a period of two weeks
from today, submitting a proposal to the Petitioner
indicating how it proposes to repay the outstanding
amount and further subject to the Respondent operating
its accounts to make payments only to suppliers,
repayment of any loan to banks, salaries of staff and
statutory and electricity dues. Proof of all the payments
be placed on record along with an affidavit by the next
date. The Respondent will also enclose the statements of
its accounts for the last six months with the said affidavit.
6. List on 22nd January 2013."
4. In compliance of the order dated 10th December, 2012, the respondent
filed an affidavit along with the supporting documents. It was also alleged
by the respondent that the respondent is in the process of arriving at a
settlement with Canara Bank and Bank of Baroda which entails the sale of
properties mortgaged to them. The details of the said properties are
mentioned as item Nos.4 & 5 of the schedule. Since the learned counsel for
the petitioner was not available, the matter was adjourned to 31 st January,
2013. In the meanwhile, the respondent filed another application being I.A.
No.1532/2013 seeking permission from the Court to sell the immovable
property being 71/3B & 70/2, Manthangal Village, Walaju Taluk, Vellore
District, Tamil Nadu. The reason given by the respondent is that after
consent of Bank of Baroda and after approval of the buyer by the said Bank,
the entire consideration shall be utilized for the repayment of the outstanding
due to the Bank of Baroda. The said application was also strongly opposed
by the petitioner.
5. Mr.N.K.Kaul, learned Senior counsel appearing on behalf of the
petitioner has argued that even after the concession given by the petitioner
on 10th December, 2012 at the time of modification of the earlier order dated
21st November, 2012 (by which this Court permitted the respondent to
operate its accounts subject to the respondent, within a period of two weeks
from that day, submitting a proposal to the petitioner indicating how it
proposes to repay the outstanding amount and further subject to the
respondent operating its accounts to make payments only to suppliers), but
no proposal to the petitioner was given by the respondent indicating how to
repay the outstanding amount which is more than `9 crores.
6. After some submissions, it is agreed by the parties that in view of
Arbitral Tribunal being constituted, the present petition be disposed of with
the directions that the interim orders granted on 21st November, 2012 and
10th December, 2012 shall continue till the time, the same is modified or
vacated by the Arbitral Tribunal. Mr.Kaul has also stressed that while
considering any such application either for modification or vacation, if any,
made by the respondent, the condition recorded in the order to repay the
outstanding be also kept in mind by the learned Arbitral Tribunal, as the
respondent has failed to give any proposal about the outstanding of admitted
dues. Ordered accordingly.
7. The present petition is disposed of. No costs.
8. Copies of this order be given dasti to the learned counsels for the
parties. A copy of the order be also communicated to the learned Arbitral
Tribunal.
(MANMOHAN SINGH)
JUDGE
FEBRUARY 19, 2013/ka
