Delhi High Court
Sunair Hotel Ltd. vs Vls Finance Ltd. on 12 April, 2017
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 15th February, 2017
Pronounced on: 12th April, 2017
+ O.M.P. (COMM) 16/2016 & IA Nos. 1085/2016, 3294/2016 &
6798/2016
SUNAIR HOTEL LTD. ..... Petitioner
Through: Mr. Jayant Bhushan, Senior Advocate with Mr.
Sachin Puri, Mr. Atul Sharma, Mr. Nitesh Jain, Mr. Amit
Dhaka, Advocates
versus
VLS FINANCE LTD. ..... Respondent
Through: Mr. Dayan Krishnan, Senior Advocate with Mr.
Jayant K. Mehta, Ms. Bina Gupta, Mr. Ashok K Sharma,
Advocates
WITH
+ O.M.P. (COMM) 17/2016 & IA Nos. 1087/2016, 3308/2016 &
6797/2016
S. P. GUPTA & ORS .... Petitioners
Through: Mr. Jayant Bhushan, Senior Advocate with Mr.
Sachin Puri, Mr. Atul Sharma, Mr. Nitesh Jain, Mr. Amit
Dhaka, Advocates
versus
VLS FINANCE LTD. ..... Respondent
Through: Mr. Dayan Krishnan, Senior Advocate with Mr.
Jayant K. Mehta, Ms. Bina Gupta, Mr. Ashok K Sharma,
Advocates
CORAM: JUSTICE S.MURALIDHAR
OMP (COMM.) 16 & 17 of 2016 Page 1 of 23
ORDER
12.04.2017
1. The present order proposes to deal with the preliminary objections raised
by the Respondent in these two petitions - OMP (Comm.) Nos. 16 and 17 of
2016 - that being fundamentally defective and time-barred, they ought to be
dismissed in limine.
2. These two petitions, under Section 34 of the Arbitration and Conciliation
Act 1996 ('Act'), challenge the impugned Award dated 18th July, 2015
passed by the Sole Arbitrator. OMP (Comm.) No. 16/2016 has been filed by
Sunair Hotel Ltd. („SHL‟) whereas OMP (Comm.) No. 17/2016 has been
filed by Mr S.P. Gupta (Petitioner No.1) and his two sons Mr Kaveen Gupta
and Mr Vipul Gupta (Petitioner Nos. 2 and 3 respectively) (hereafter
collectively referred to, where the context requires, as 'Guptas'). The
Respondent in both these petitions is VLS Finance Ltd. („VLS‟).
Background facts
3. The background facts (according to SHL) are that SHL was allotted land
by NDMC in 1982 for the construction of a hotel. A supplemental licence
deed was executed between SHL and NDMC in 1988. On 10th July 1990
NDMC cancelled the licence. SHL filed a writ petition challenging the
cancellation. By an interim order dated 30th March 1992 in the said petition,
possession of the land was restored to SHL. Meanwhile in 1993 Aeroflot
approached 'SHL' to develop the Hotel, through a joint-venture company
and for which a 100% subsidiary company i.e. Sunaero Ltd. (hereafter
'Sunaero') was incorporated. A Memorandum of Understanding (MoU)
dated 17th June 1993 was executed by SHL and Aeroflot. As per the said
MOU, Aeroflot was to arrange entire finance for the hotel project. The
contribution by SHL and its promoters, the Guptas, was the land i.e. equity
against land. Equity shared would be in the ratio 51:49.
4. SHL states in August 1993 that it applied to NDMC for transfer of the
hotel development rights to Sunaero. Meanwhile in March 1994 Aeroflot
withdrew from the project. On 29th August 1994 a new MoU was entered
into by Sunaero with a new collaborator ACCOR in terms of which ACCOR
agreed to bring the 3 million US dollars (USD) in the equity, besides
arranging loan for a sum of 16.58 million USD. On 7th October 1994 the
High Court aside NDMC's order cancelling the licence granted to SHL. In
November 1994 ACCOR introduced VLS to SHL. Being satisfied with the
viability and profitability of the project, VLS approached SHL and advised
it and the Guptas to structure the transactions in accordance with their
directions as a prelude to taking out a public issue of equity shares.
5. SHL states that since NDMC was neither agreeing to nor refusing the
transfer of development rights to Sunaero, SHL decided to take back the said
rights for which it agreed to pay Rs. 21 crores to Sunaero. SHL alleges that
in the knowledge of the above developments VLS approached the Tourist
Finance Corporation of India („TFCI‟) for grant of a loan for the proposed
hotel project.
6. An MoU was entered into by VLS with SHL and the Guptas in terms of
which (again according to SHL), VLS undertook to inter alia arrange for the
full mobilization of funds to the extent of Rs. 85 crores for the project,
ensure that the hotel project should not get delayed due to lack of funds, in
case of shortfall or delay to arrange for temporary loans even by providing
personal corporate guarantees, make a public offer of Rs. 10 crores of
capital at not less than Rs. 100/- per share, provide interest bearing security
deposit of Rs. 10 Cr on or before 15th May 1995 and not to sell the shares of
SHL allotted to it.
7. At this time the shares of SHL were held by the Guptas. It is stated that
M/s Chirag Tanner and Exports Pvt. Ltd., a company owned and controlled
by Mr S.P. Gupta, renounced 70 lakh equity shares of SHL in rights issue in
favour of VLS pursuant to the aforementioned MoU. According to SHL,
aware of all the above facts, VLS‟s promoters brought in Rs.21 crores, on
18th March, 1995. VLS wrote to ACCOR giving two options which
according to SHL were in violation of the MoU dated 11th March, 1995.
8. The project got approved by TFCI which in its report dated 24th March,
1995 valued the net worth of the Guptas to be Rs. 3 crores. It was expected
that Guptas would bring in their cash contribution towards the equity by
selling their properties. According to SHL out of the share capital
requirements, a sum of Rs. 1 crore had already come to SHL till then.
9. The case of SHL is that in contravention of the MoU, VLS sold shares of
SHL worth Rs.70 lacs and booked a profit of Rs.14 crores. This was
reflected in the balance sheets of VLS. SHL alleges that VLS failed to fulfil
its obligations under the MOU. While it made the payment of Rs. 8 crores
after a considerable delay, it failed to make the entire payment of Rs. 10
crores as stipulated in the MoU. VLS offered, according to its letter dated
22nd April, 1996 to SHL that the balance amount be adjusted against future
interest. On 18th November, 1996 VLS wrote to IDBI stating therein that the
value of the land contribution was Rs. 60 to 70 crores as on 19th November
1996. It also stated that SHL acquired the rights of Rs.21 crores from the
subsidiary companies and projected it as the promoters‟ contribution. The
case of SHL is that VSL acted malafide in writing to IDBI on 17th
December, 1996 refusing to furnish guarantee/security.
10. VLS denies almost all of the above assertions of SHL and the Guptas.
VLS states that it was not made aware of the alleged liability owed to
Sunaero. VLS states that the Guptas siphoned off the monies brought in by
VLS for the project even before the project could take off. With further
funds not forthcoming from VLS, SHL declined to pay interest to VLS by
31st October 1997.
Arbitration proceedings
11. On 26th October, 1998 SHL sent a notice for appointment of an
Arbitrator for adjudication of disputes. This was objected to VLS. On 3rd
April, 2000, SHL again sent a notice to VLS seeking reference of the
disputes to an Arbitrator. This was declined by VLS by its reply dated 19 th
April, 2000.
12. SHL filed Arbitration Application No. 298 of 2000 in this Court under
Section 11 of the Act seeking the appointment of an arbitrator. The Guptas
also filed Arbitration Application No. 309 of 2000 under Section 11 of the
Act for appointment of an Arbitrator. In the meanwhile, on 22nd August,
2003, this Court appointed a former Judge of the Court to adjudicate the
disputes between the parties.
13. Sometime in November/December 2003, both SHL as well as Guptas
filed a joint Statement of Claim („SOC‟) before the learned Arbitrator. VLS
filed its counter claim in February, 2004. By the impugned Award dated 18th
July, 2015, the Sole Arbitrator dismissed the claims of SHL and the Guptas
and allowed the counterclaim No.1 of VLS.
14. VLS filed an application before the Arbitrator under Section 33 of the
Act seeking corrections/modifications of the Award dated 18th July, 2015.
Independently, SHL filed another application under Section 33 of the Act
before the Sole Arbitrator seeking clarification as to how the arbitrator
proceeded to give finding on the counterclaims of VLS when in fact VLS
had given up all its counterclaims in the course of arguments before the
learned Arbitrator. Both the applications were dismissed by the learned
Arbitrator on 3rd October, 2015.
Present petitions
15. Admittedly, these petitions were filed first on 23 rd December, 2015.
After removal of defects, they were re-filed on 19th January 2016. It is the
contention of the Respondent that the petitions are barred by limitation since
they were not filed within a period of three months after the date of receipt
by the Petitioners of the Award in terms of Section 34 (3) of the Act. There
is a separate contention that there is an inordinate delay in re-filing which in
any event, ought not to be condoned.
16. 23rd December, 2015 was the last working day as per the calendar for
2015. The Court was to reopen in the next year on 2nd January, 2016. Out of
an abundant caution, an application - IA No. 3294/2016 in OMP (Comm.)
No.16/2016 and IA No.3308/2016 in OMP (Comm.) No. 17/2016 - has been
filed by the Petitioners seeking condonation of delay in filing the petitions.
This was occasioned by the stand of the Respondents that both petitions
filed on 23rd December, 2015 were in fact so defective that they could not to
be treated as filings at all.
Contention of VLS
17. It is contended that the objective of filing the two petitions after 2 pm on
23rd December 2015 was "only to somehow take the Diary Number and
later on substantially changing the petitions at the time of re-filing and use
the Diary Number taken on 23rd December, 2015." In order to demonstrate
that both the petitions were fundamentally flawed or to use the words of
VLS, they suffered from "fundamental, structural and egregious defects",
VLS seeks to juxtapose the petitions that were filed on 23 rd December, 2015
with those re-filed on 19th January 2016. It is stated that additions were
made in the grounds. There were new paragraphs, new tables and new
pleadings. It is stated that even the re-filed petitions suffered from their own
independent infirmities which were in the nature of fundamental and
structural defects.
18. It is further sought to be pointed out that the above changes were made
in both sets of petitions i.e. one filed by SHL and the other filed by the
Guptas. It is pointed out that the earlier petition by SHL was filed
purportedly with an affidavit of Mr S.P. Gupta himself whereas the re-filed
petition is through one Umesh Kumar Aggarwal, after removal of defects.
As far as the petition by the Guptas is concerned, the earlier petition was
supported by the affidavit of Mr Vipul Gupta, Petitioner No.3, the Power of
Attorney („PoA‟) holder of Petitioner Nos. 1 and 2. The petition, however,
did not enclose the POAs purportedly issued by Mr S.P. Gupta and Mr
Kaveen Gupta to Mr Vipul Gupta. It is further pointed out that in the main
body of both the petitions; there is a positive averment that "the present
application/ petition is within limitation." Whereas subsequently in both
petitions, there is an application for condonation of 16 days' delay, if any, in
filing of the petitions.
19. It is stated on behalf of VLS that the additional affidavit filed of 9th
November 2016 filed by Mr Kaveen Gupta in OMP No.17/2016, had
defective, misleading, incorrect, and false and invalid facts. In short, the
case of VLS is that the petitions re-filed on 19th January, 2016 were
"materially and significantly different" from the petitions filed initially on
23rd December 2015. These changes were effected without liberty being
sought from the Court. Even if the infirmities in the petitions filed on 19th
January, 2016 were to be overlooked, the delay would not be just 17 days as
wrongly stated but substantially more, and beyond the period of 3 months
under section 34(3) of the Act. It is stated that there was no sufficient cause
demonstrated by the Petitioners to warrant condonation of such delay.
Reliance is placed on the decision in Sravanthi Infratech Private Limited v
Greens Power Equipment (China) Co. Ltd. 234 (2016) DLT 509 where it
was held that the presence of fatal and fundamental defect renders the filing
and re-filing unsustainable in law.
20. It is submitted for VLS that the petitions, though manifestly defective,
became the property of the Court and could not have been altered without
prior permission of the Court. It is stated that these petitions were received
in trust and only those changes as were specifically pointed out by the
Registry would have been carried. Such conduct, it is pointed out, has been
deprecated by the Court in Inx News Pvt. Ltd. v. Pier One Construction
Pvt. Ltd. (2014) 1 Arb LR 27 (Del) and Ahluwalia Construction Company
(India) Ltd. v. Housing Urban Development Corporation 2016 (157) DRJ
51.
21. Additionally attention is drawn to the reply dated 28th March 2016 filed
by the Respondent in response to the additional affidavit dated 9th March,
2016 filed by Mr S.P. Gupta in both the petitions where the Respondents
have placed on record the Special Power of Attorney („SPA‟) dated 27 June,
2012 executed by Mr S.P. Gupta declaring himself to be a „senile‟. It is
submitted that the existence of the said SPA and the fact that it was executed
by Mr S.P. Gupta has not been denied by the Petitioners.
22. VLS also refers to the statements made in the application for
condonation of delay characterising the delay has not been intentional and
being largely procedural in nature. It is submitted that since these were the
material changes, these statements are false and incorrect and even
contradictory to the earlier statements made in the main body of the petitions
filed on 23rd December, 2015. It is submitted that there is a restricted
timeline under the Act and this has been emphasised in Union of India v.
Popular Construction Co. AIR 2001 SC 4010 and by this Court in Delhi
Development Authority v Durga Construction Company 2013 (13)9 DRJ
133 (DB). As regards falsehood in the pleadings, a long line of decisions is
relied upon including SP Chengalvaraya Naidu v. Jagannath (1994) 1 SCC
1, Dalip Singh v. State of UP (2010) 2 SCC 114, Pundlik Jalam Patel v.
Executive Engineer, Jalgaon Media Project (2008) 17 SCC 448 and
Sanjeev Kumar Mittal v. State 2010 (174) DLT 214.
23. A further point that has been made that these applications were filed on
9th March 2016 i.e. way beyond the filing of the petition on 19th January,
2016 and beyond a period of 3 months and 30 days from 3rd October, 2015,
the presumptive date for starting of the limitation under Section 34 (3) of the
Act. An analogy is drawn with Order XLI Rule 3A (1) of the Code of Civil
Procedure, 1908 („CPC‟) and Section 33 of the Limitation Act, 1963 („LA‟)
wherein a time barred appeal without a formal application for condonation
of delay cannot be taken on record. Reliance is placed on the observations in
P.K. Ramachandran v. State of Kerala (1997) 7 SCC 556.
Contentions of SHL and the Guptas
24. The response of the Petitioners to the above submissions is that what
was filed on 23rd December, 2015 was a petition running into 85 pages of
pleadings with grounds A to BB and 44 documents running into 921 pages.
The petition by SHL was supported by the affidavit of Mr S.P. Gupta with
the attested affidavit and vakalatnama. According to the Petitioners that is
the petition in the eye of law and not fundamentally defective as alleged by
the Respondent. It was filed on the 80th day of the disposal of their
application under Section 33 of the Act and, therefore, was well within the
three months limitation period. The last date of expiry of the three months'
limitation period was 3rd January, 2016. Both 2nd and 3rd January were
working days. Therefore, the contention of the Respondent that the filing
was done on 23rd December, 2015 only for obtaining a diary number is
denied as being 'unfounded, false and frivolous‟.
25. It is sought to be explained by the Petitioners by pointing out that the
petition by the Guptas could not be signed by Petitioner Nos. 2 and 3 for the
reasons that Petitioner No. 2 was unwell and the Petitioner No.3 was out of
town. The Commercial Courts Act, 2015 was notified on 31st December,
2015 and the format of filing got changed. Now under the new format every
page of the pleading required to be signed. The documents index was also
totally different format. A statement of truth had to be filed and so on. When
defects were pointed out by the Registry on 2nd January, 2016 it was pointed
out that a new format had to be adopted.
26. It is pointed out that at the time of re-filing, Mr S.P. Gupta was unwell
and therefore, the petition, affidavit and vakalatnama was signed by the
Petitioner No.3 who was authorized by the Petitioner No.1 and also
Petitioner No.2 to do so. It is, therefore, pointed out that the structural
changes therefore are due to change of filing format.
27. A detailed explanation was given for why the format changed and even
the page numbering changed. A tabular column is set out show why the
grounds in the new petition that was re-filed had to be renumbered, edited or
deleted. Reliance is placed on the decision of the division bench of the
Bombay High Court in Kajiva Construction Company Private Limited v.
Shyam Narayan & Bros. 2016 SCC Online (Bom) 5028 which held that if
new grounds taken in the refiled petitions were not pressed the Single Judge
could decide the original petition on merits. Reliance is also placed on the
decision of the Supreme Court in Banwari Lal v. Balbir Singh (2016) 1
SCC 607 and Lakshmi Narayan v. Kamal Garg (2016) SCC Online Del
4640, Alka Kasana v. Indian Institute of Technology (2015) 222 DLT 473
It is urged the non-signing of the vakalatnama/PoA is a curable defect.
28. It is pointed out by the Petitioners that the High Court's Circular dated
26th October, 2009, it is submitted, does not state that a defect in the
vakalatnama would render the petition fundamentally defective. It is stated
that the said circular only directs the Registry to mark defects in the
vakalatnama as well. It is submitted that if the re-filing date is also taken to
be the filing date i.e. 19th January, 2016, the delay would be 16 days. If the
defects were cured during the defect curing period, the petition is deemed to
have been filed on the date of original filing. It is pointed out that the
application seeking condonation of delay was filed only due to abandon
caution.
29. In addition, it was sought to be urged that the Petitioners have a very
good case on merits and that a premature rejection of the petition "would be
gravely prejudicial and grossly unfair apart from allowing the Respondent to
unjustly enrich itself". However, this Court does not propose to deal with the
merits of the Award at all.
Analysis and reasons
30. The first and foremost is the question whether the period of limitation
began to run from the date of receipt of the Award by either of the parties or
the date of disposal of the applications filed by them under Section 33 of the
Act.
31. The answer to the above question is, according to the Court,
straightforward. The proviso to Section 34 (3) of the Act states that if the
Court is satisfied that the applicant was prevented by sufficient cause from
making the application within the said period of 3 months, it may entertain
the application within a further period of 30 days but not thereafter. Section
34 (3) envisages the starting point of limitation getting postponed to a date
when the application filed by either party under Section 33 has been
disposed of by the Arbitral Tribunal.
32. Section 33 (1) (a) permits, "either of the party to approach the Arbitral
Tribunal with an application for correction of any computation error or
clerical error or any typographical error or other errors of a similar nature
occurring in the Award." Under section 33 (1) (b), if both the parties agree
then one of them with notice to the other would request the AT "to give an
interpretation of a specific point or part of the Award."
33. The applications filed in this case, both by SHL and VLS after
pronouncement of the Award on 15th July, 2015 were under Section 33 (1)
(a) of the Act. The applications were rejected by the learned Arbitrator on 3rd
October, 2015. Therefore, the period of three months would begin to run
from 3rd October, 2015. It cannot, therefore, be said that on the date of filing
of the petitions i.e. 23rd December, 2015, they were barred by limitation. The
last date for filing petition in terms of Section 34 (3) was 3rd January, 2016.
While 23rd December, 2015 was the last working day of the Court, there is
no merit in the contention that the filing of the petition on that day was to
somehow get the diary number, since in fact, that was not the last date of
limitation as far as the two petitions were concerned.
34. Since both the petitions were e-filed, the Court by an order dated 2nd
November, 2016 required the Registry to place before it the petition as
originally filed by the e-filing process on 23rd December, 2015. The petitions
re-filed on 19th January, 2016 were already available before the Court.
Copies of the petitions e-filed on 23rd December, 2016 were provided to
both parties. It now transpires that when the petitions were e-filed on 23rd
December, 2015, they were accompanied by the attested affidavit and
vakalatnama. As far as OMP (Comm.) No. 16/2015 is concerned, it was
supported by the affidavit of Mr S.P. Gupta. The vakalatnama was also
signed by him. As far as OMP (Comm.) No.17/2015 is concerned, that
petition too was signed by Mr S.P. Gupta.
35. There is an explanation now offered that at that stage OMP(Comm.) No.
17 of 2016 could not be signed by the Petitioner No. 2 because he was
unwell and the Petitioner No.3 because he was out of Delhi. These
assertions have not been shown to be false. An affidavit has been filed on 9th
January, 2016 by Mr S.P. Gupta offering the said explanation. There is no
reason for the Court to disbelieve it.
36. What has also been not in dispute that after the initial filing of the
petitions on 23rd December 2015, the Commercial Courts Act was notified
on 31st December 2015. It brought about significant changes in the filing
format. The manner of preparing the index of documents, and filing in
certain other documents like statement of truth did not exist previously.
37. The Court at this stage would like to refer to the defects pointed out by
the Registry in both petitions on 2nd January, 2016. The Petitioners were
advised that the petitions had to be filed in the new format and that each
page should have the nomenclature "OMP commercial number ___ 2016".
This meant that the petition had to be retyped. The index pages also had to
be retyped and changed/ replaced.
38. It is pointed out that at the time of re-filing, Mr S.P. Gupta was unwell
and, therefore, the petitions, affidavits and vakalatnama as far as OMP
(Comm.) No. 17/2016 was concerned, was signed by the Petitioner No. 3
who was authorised by the Petitioner No. 1 and the Petitioner No. 2. As far
as OMP (Comm.) No. 16/2016 was concerned, there was an authorised
representative of the company, viz., Mr Umesh Kumar Aggarwal, who
signed the petition and, therefore the affidavit and vakalatnama had to also
be changed.
39. What emerges from the above discussion is that there was in fact no
delay in the original filing of the petitions on 23rd December, 2015. The
original petitions as they were filed did have some defects but these defects
were not so fundamental as to render those petitions as not having been filed
'at all‟.
40. There have been instances where petitions have been filed without any
affidavit or vakalatnama just to somehow beat the deadline of limitation.
Some of these instances were pointed out by this Court in Sravanthi
Infratech Private Limited v Greens Power Equipment (China) Co. Ltd.
(supra). The present petitions filed on 23rd December 2015 did not fall in
that category. The applications for condonation of delay in their filing were
not necessary. They were filed out of caution in light of the stand taken by
VLS. Consequently, the point that they were not filed along with the main
petitions but only subsequently i.e. on 9th March, 2016 pales into
insignificance.
41. Now coming to the re-filing there is serious contestation by VLS. The
question that arises is whether the petitions re-filed were so different from
those originally filed so as to render the original filings non est.
42. At the outset, it may be noticed that even if one were to assume that the
filing on 19th January, 2016 was in fact a fresh filing, in that event there
would be a delay of 16/17 days. This is within the outer limit of 30 days in
terms of the proviso to Section 34 (3) of the Act. For condonation of this
delay, the Court has to only consider whether there is a reasonable
explanation offered. Considering the timing of the notification of the
Commercial Courts Act, 2015, which required the change in the format, this
delay can be said to have been reasonably explained.
43. The Court has examined the petitions originally filed on 23rd 2015 and
those re-filed on 19th January, 2016. There are certainly changes in the
numbering of the paragraphs. Some of the grounds have been deleted, some
re-numbered and maybe some added. However, this has been sought to be
reasonably explained by the Petitioners in the form of detailed charts, 2 of
which alone need to be referred to for the present purposes.
44. The comparative chart as far as OMP (Comm.) No.16/2016 is
concerned, reads as under:
S.No. GROUNDS IN PETITION GROUNDS IN PETITION
RE-FILED ON 19.01.16 RE-FILED ON 19.01.16
1. WW W
2. W UU
3. UU TT
4. TT SS
5. SS RR
6. RR QQ
7. QQ PP
8. PP OO
9. OO NN
10. NN MM
11. MM LL
12. KK JJ
13. KK JJ
14. JJ II
15. II HH
16. HH GG
17. GG FF
18. FF EE
19. EE DD
20. DD CC
21. CC BB
22. BB AA
23. AA Z
24. Z Y
25. Y X
26. X W
27. W V
28. V U
29. U T
30. T S
31. S R
32. R Q
33. P O
34. P O
35. O N
36. N M
37. M L
38. L Para 10 (M) Pg. 30
39. K K [Edited]
40. J J (Judgment deleted]
41. I I [judgment deleted]
42. H E (edited)
43. G D
44. F C
45. E A
46. D PP (Edited)
47. C [added)
48. B F&B [Edited]
49. A G [Edited]
45. As far as OMP (Comm.) No. 17/2016 is concerned, the comparative
chart reads as under:
S.No. GROUNDS IN PETITION GROUNDS IN PETITION
RE-FILED ON 19.01.16 RE-FILED ON 19.01.16
1. WW W
2. W UU
3. UU TT
4. TT SS
5. SS RR
6. RR QQ
7. QQ PP
8. PP OO
9. OO NN
10. NN MM
11. MM LL
12. KK JJ
13. KK JJ
14. JJ II
15. II HH
16. HH GG
17. GG FF
18. FF EE
19. EE DD
20. DD CC
21. CC BB
22. BB AA
23. AA Z
24. Z Y
25. Y X
26. X W
27. W V
28. V U
29. U T
30. T S
31. S R
32. R Q
33. P O
34. P O
35. O N
36. N M
37. M L
38. L Para 10 (M) Pg. 30
39. K K [Edited]
40. J J (Judgment deleted]
41. I I [judgment deleted]
42. H E (edited)
43. G D
44. F C
45. E A
46. D PP (Edited)
47. C [added)
48. B F&B [Edited]
49. A G [Edited]
46. The Court finds that when carefully examined, it cannot be said that the
re-filed petitions have been fundamentally altered so as to treat the filing of
the original petitions as non est.
47. The Court is, therefore, unable to agree with the Respondent that the
Petitioners have contradicted themselves in making false statements by first
asserting that the original petitions were filed within time and then filed with
applications for condonation of delay. As already noticed, the applications
can be treated either way i.e. vis-a-vis the original filing on 23rd December
2015 filed by way of abundant caution since those petitions were on time or,
if the re-filing is to be treated as the original filing on 19th January, 2016,
then the delay is only 17 days which has been reasonably explained. Either
way, the Court is unable to be persuaded to hold that false statements have
been made by the Petitioners warranting any inference to be drawn about
suppression of material facts or abuse of process of court.
48. There is a point made about the change of the authorized representative
of the company. As far as SHL‟s petition is concerned, it was supported by
the affidavit of Mr S.P. Gupta and later that of Mr Umesh Kumar Aggarwal.
In United Bank of India v. Naresh Kumar (1996) 6 SCC 660, it was
explained by the Supreme Court as under:
"A person may be expressly authorised to sign the pleadings on behalf
of the company, for example by the Board of Directors passing a
resolution to that effect or by a power of attorney being executed in
favour of any individual. In absence thereof and in cases where
pleadings have been signed by one of its officers a Corporation can
ratify the said action of its officer in signing the pleadings. Such
ratification can be express or implied."
49. It is possible, therefore, that SHL has authorised Mr Umesh Kumar
Aggarwal to sign pleadings on its behalf. This is a curable defect and need
not result in invalidation of the entire petition itself.
50. The Court is unable to agree that the present cases are governed by the
decisions in Inx News Pvt. Ltd. v. Pier One Construction Pvt. Ltd (supra)
or Ahluwalia Contracts India Ltd. v. Housing and Urban Development
Corporation (supra) both of which are distinguishable on facts. In the
former case, the entire framework of the petition was changed. Here, as
pointed out, that change took place as a result of the notification of the
Commercial Courts Act, 2015, which was an important intervening factor.
In Ahluwalia Contracts India Ltd v. Housing and Urban Development
Corporation (supra), there was a delay of 55 days which was beyond the
period of limitation under Section 34 (3) whereas here even if it is assumed
there is any delay, it is only 17 days. In Sravanthi Infratech Private Limited
v. Greens Power Equipment (China) Co. Ltd. (supra), the petition had been
filed without any resolution/authority of the Petitioner. The application for
condonation of delay was without any signature of any party. In the present
case, the original petition filed on 23rd December, 2015 was duly signed and
supported by an affidavit and vakalatnama and satisfied requirements of
proper petition. In Pundlik Jalam Patel v. Executive Engineer, Jalgaon
Media Project (supra) it was found on facts that false statements have been
made in the application seeking condonation of delay. The same cannot be
said to exist as far as the present case is concerned.
51. The decision of the DB of this Court in Delhi Development Authority v
Durga Construction Company (supra) does require a strict scrutiny of the
reasons offered for the delay in re-filing. The present petitions pass the
above test. Even taking into account the actual date of filing to be 19th
January, 2016, the total delay is within the acceptable parameters in terms of
the proviso to Section 34 (3) of the Act.
52. Consequently, the Court holds that there is no warrant to draw an
inference as was done in SP Chengalvaraya Naidu v. Jagannath (supra);
Dilip Singh v. State of UP (supra), and Sanjeev Kumar Mittal v State
(supra). In P.K. Ramachandran v. State of Kerala (supra), the delay in
filing was 565 days and, therefore, can have no application to the facts of the
present petitions.
53. The filing of an affidavit by Mr S.P. Gupta in some earlier case about his
being senile cannot again come to the assistance of the Respondent herein. It
would be a kind of conundrum if a person who is senile were to give an
affidavit or make statement that he was in fact a senile. Would such a
statement in fact hold? The Court does not wish to go into that conundrum
in the present case, since the petitions that had been filed on 19th January,
2016, in the considered view of the Court, do not suffer from the defect of
not being signed by a duly authorised person on behalf of the Petitioners.
54. For the aforementioned reasons, the Court while rejecting the above
preliminary objections of the Respondent, disposes of IA Nos. 3294/2016,
6798/2016, 3308/2016 & 6797/2016 in the above terms.
55. O.M.P. (Comm) 16 and 17 of 2016 are now set down for further hearing
before the roster Bench on 24th April, 2017. It is clarified that this Court has
not expressed any view whatsoever on any of the other contentions that the
parties may have in regard to the merits of the petitions.
S.MURALIDHAR, J
APRIL 12, 2017
rd
