The Metal Scrap Trading Corpn. vs Sunnaren Seaways Inc.,Monrovia
2015 Latest Caselaw 7720 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                     Decided on: 08.10.2015
+      FAO(OS) 9/2007

       THE METAL SCRAP TRADING CORPN.                      ..... Appellant

                          Through:     Mr. Rakesh Tiku, Sr. Advocate with
                                       Mr. Rajinder Panigrahi and Mr.
                                       Sandeep Kumar, Advocates.

                          versus

          SUNNAREN SEAWAYS INC.,MONROVIA                  ..... Respondent

Through: Mr. N. Ganpathy, Advocate.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA

MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) % CM No. 12649/2014 & CM No. 12648/2014

1. In CM No.12649/2014, the appellant (hereinafter referred to as MSTC) seeks condonation of delay in approaching this Court for seeking restoration of its appeal; in CM No. 12648/2014, it seeks restoration of the appeal.

2. I have heard the learned counsel for the parties. Pursuant to a Charter Party Agreement entered into by the parties in 1989, the MSTC‟s consignments were taken on board the vessel, „MV Progressive‟. Disputes apparently arose which led the respondent to invoke the inbuilt mode of resolution i.e. through arbitration where each party nominated one Arbitrator. This arbitration was governed by the old law being the Indian

FAO No. 9/2007 Page 1 Arbitration Act, 1940. As the two arbitrators differed on 2 out of 3 claims, the matter was referred to an umpire. By his award dated 15.04.1995, the umpire agreed with the opinion of arbitrator M.S. Anchan and allowed all the claims of the respondent. The appellant MSTC object to the award dated 15.04.1995 in proceedings under Section 30 of the Act before the learned Single Judge. The latter by the impugned order dated 20.09.2006, rejected the objections on merits but reduced the rate of interest to 6% per annum on the decretal amount. MSTC Ltd. has therefore appealed to this Court in the present proceedings.

3. During the pendency of this appeal, it appears to have been dismissed for non-prosecution on 09.07.2009. It was subsequently restored without any condition on 02.09.2009. Then again on 12.04.2012, the appeal was dismissed a second time. This time when the MSTC approached the Court by filing CM No. 9165/2012 on 10.07.2012, the Division Bench restored the appeal subject to the certain conditions. The said order reads as follows:-

"The present application is preferred for recall of the order dated 12.04.2012 dismissing the appeal for non prosecution. The application is accompanied by copy of the pay order stated to be deposited in this Court towards costs in pursuance of the pre-emptory conditions imposed vide order dated 12.04.2012 before such an application could be entertained. The careless manner in which the appeal has been pursued is apparent from the facts set out in the order dated 12.04.2012. We have also noted that the appellant obtained interim order subject to deposit of 75% of the awarded amount, but failed to deposit the amount resulting in dismissal of the said application. The execution proceedings initiated by the respondent, are stated to be pending, where also no payment is stated to have been deposited.

FAO No. 9/2007 Page 2 We, thus, are inclined to entertain the application for restoration and allow the same only subject to the following terms and conditions:

i) the costs of Rs. 25,000/- be released to the respondent by the registry;

ii) the appellant deposits the full decretal amount in the execution proceedings within a period of two weeks from today. It is only if the aforesaid two conditions are satisfied, the appeal will be restored. The application stands disposed of in the aforesaid terms.

List for directions on 07.09.2012."

4. When the appeal alongwith the application was taken up for consideration on 07.09.2012, the Division Bench noticed that the appellant MSTC have not complied with the previous conditions and consequently dismissed the appeal. The Division Bench observed as follows:-

"The application for restoration of the appeal dismissed for non-prosecution on 12.04.2012 was entertained on the terms and conditions set out in the order dated 10.07.2012. The appellant has failed to comply with the terms and conditions. Thus the order for restoration naturally does not take effect default as per the order dated 12.04.2012".

5. The applicant states that there was some doubt as to the entitlement of the respondent-claimant because, it had been dissolved under its domiciles laws and it was no longer in existence. Consequently, before the Executing Court i.e. the learned Single Judge in Ex.51/2009, during the course of the proceedings, the MSTC appears to have objected to the maintainability of the proceedings itself. Apparently, its pleas did not succeed and eventually it deposited the decretal amount together with interest on April 2013. It however continued to resist the execution proceedings urging that the decree

FAO No. 9/2007 Page 3 holder/claimant was not entitled to maintain the proceedings itself. Significantly, however it never pressed for seeking extension of time of condonation of delay in depositing the amounts or in compliance with the Court‟s order. Much later i.e. on 28.07.2014, it approached this Court by filing two applications which are now under consideration.

6. It is submitted by Mr. Rakesh Tiku, learned Senior Counsel that MSTC could not comply with the Court‟s order and deposited the amounts decreed-firstly on account of financial constraints and secondly on account of bonafide doubts as to the maintainability of execution proceedings as well as the feasibility of executing the decree at the behest of an entity which was no longer in existence. Learned Senior Counsel submitted that while MSTC undoubtedly owed a duty to approach this Court at the earliest point in time, he stressed that mistaken legal advice led to the proceedings being resisted in execution rather than by way of approaching the Division Bench in appeal. In support of the submission that the facts constituted "sufficient cause" to persuade this Court to restore the appeal, learned counsel relied upon the Judgment of the Supreme Court in Esha Bhattacharjee vs. Managing Committee of Raghunathpur Nafar Acadaemy & Ors. (2013) 12 SCC 649. It was submitted that the Court had communicated broad guidelines inter alia to the effect that such applications should be considered in a liberal, pragmatic and justice oriented manner and that so viewed, the appellant‟s reasons for approaching this Court after almost two years‟ delay, should weigh with this Court. It is submitted that in the larger interest of justice, the appeal ought to be rejected.

7. Mr. N. Ganpathi, learned counsel for the claimant highlighted that the arbitration proceedings in this case are on account of a dispute which took

FAO No. 9/2007 Page 4 place in 1989. Almost 6 years later, the award was made. Mr. N. Ganpathi, learned counsel for the claimant submits that the process of ensuring that the award translated into a decree itself took more than a decade with the dismissal of MSTC‟s objections by Single Judge on 20.09.2006. He stressed upon the conduct of MSTC and highlighted that the present instance is not solitary with regard to prosecution of the appeal and rather this only shows that the MSTC is inclined to prolong the matter and compound delay. In this, again he highlighted the fact that the appeal was dismissed earlier on 09.07.2009 and that the present instance is a dismissal for default for the second time. Instead of ensuring that MSTC complied with the conditions in the order of 10.07.2012, objections as to the maintainability of the execution proceedings were frivolously pressed. It was therefore stated that the application does not disclose any, much less sufficient, cause to impel this Court to restore the appeal. It is submitted that MSTC‟s contentions with regard to financial constrains are also untenable in this regard. He highlights that the Central Government Public Sector Undertaking recently paid 300% dividend to the Union of India as is evident from the extract of its financial statement for the year 2012-2013. This is based upon material placed on the record by way of affidavit filed by the claimant in these proceedings.

8. The factual narration shows firstly that the appeal pertains to a dispute which arose in 1989. The award was finalised in 1995. MSTC‟s objections were rejected on 20.09.2006. Its previous record does not inspire confidence inasmuch as the appeal was dismissed earlier on 09.07.2009. It was however reinstated unconditionally on 02.09.2009. The second time however MSTC was not so lucky when the appeal was dismissed on 12.04.2012 and the order restoring the appeal was based on two conditions

FAO No. 9/2007 Page 5 i.e. payment of costs and deposit of the decretal amount with the executing Court. MSTC does not dispute that the decretal amount was not deposited within time but the appellant instead had chosen to shift the focus in the execution proceedings to say that the decree could not be executed and therefore it was not liable to pay any amount. Even that objection apparently had no effect as is evident from the fact that in April 2013, they deposited the amount in the executing Court. Atleast at that point of the time, if the appellant had approached the Court with a belated application seeking condonation of delay, one could perhaps have entertained it. However, it filed application for restoration alongwith the application for condonation of delay much later on 28.07.2014.

9. There is no dispute that Esha Bhattacharjee (supra) case has communicated that the Courts should be pragmatic as regards the approach to be adopted in dealing with applications seeking restoration. The Court had noted previous decisions particularly in the case of Collector, Land Acquisition Anantnag & Anr vs. Mst. Katiji & Ors (1987) 2 SCC 107. We notice that the Court had also indicated its guidelines inter alia after referring to B. Madhuri Goud Vs. B. Damodar Reddy (2012) 12 SCC 649 -

"21.9 The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach."

10. In this case, the Court is mindful of the fact that the dispute arose out of the agreement dating back to 1989. The arbitration was invoked in 1993 and the tribunal rendered its award in 1995. MSTC‟s objections were

FAO No. 9/2007 Page 6 pending on the file of this Court for 11 years and the Single Judge finally rejected them on 20.09.2006. Having regard to these facts, the subsequent conduct of the appellant/MSTC in its casual prosecution of the appeal, cannot be loss sight of. When the appeal was dismissed for the second time on 12.04.2012 and the order was passed on 10.07.2012, MSTC ought to have approached this Court within reasonable time if it had genuinely faced any difficulty. Instead, it chose to act more than two years after the dismissal of the appeal, more explicitly on 07.09.2012. Taken together, the materials on record also do not inspire confidence about the submissions with regard to circumstances being beyond the MSTC control. There must be a quietus to this long pending litigation.

11. For the above reasons, we do not find any ground to condone the delay and restore the appeal. CM No. 12649/2014 & CM No. 12648/2014 are dismissed.

S. RAVINDRA BHAT (JUDGE)

DEEPA SHARMA (JUDGE) SEPTEMBER 08, 2015 sapna

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