Delhi High Court
Sks Power Generation ... vs Aquatech Systems (Asia) Private ... on 22 December, 2020
$~5 & 6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 22nd December, 2020
+ EFA(OS) (COMM) 6/2020
SKS POWER GENERATION (CHHATTISGARH) LTD
..... Appellant
Through: Mr.Mukul Gupta, Sr. Advocate
with Mr. Atul Shanker Mathur,
Ms. Priya Singh, Mr. Vivek
Mathur and Mr. Umang Katariya,
Advocates
versus
AQUATECH SYSTEMS (ASIA) LIMITED ..... Respondent
Through: Mr. Hiroo Advani with Mr.
Navdeep Dahiya and Mr. Tariq
Khan, Advocates
+ FAO (OS) (COMM) 144/2020
SKS POWER GENERATION (CHHATTISGARH) LTD
..... Appellant
Through: Mr.Mukul Gupta, Sr. Advocate
with Mr. Atul Shanker Mathur,
Ms. Priya Singh, Mr. Vivek
Mathur and Mr. Umang Katariya,
Advocates
versus
AQUATECH SYSTEMS (ASIA) LIMITED ..... Respondent
Through: Mr. Hiroo Advani with Mr.
Navdeep Dahiya and Mr. Tariq
Khan, Advocates
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
HON'BLE MS. JUSTICE ASHA MENON
EFA(OS) (COMM) 6/2020 & FAO (OS) (COMM) 144/2020 Page 1 of 6
[VIA VIDEO CONFERENCING]
JUSTICE RAJIV SAHAI ENDLAW
CM APPLN. No.28711/2020 (for exemption from filing certified
copies of annexures, lengthy list of dates, legible copies of annexures
and true copies of orders) in FAO (OS) (COMM) 144/2020
1. Allowed, subject to just exceptions and as per extant rules.
2. The application is disposed of.
EFA(OS) (COMM) 6/2020, C.M. Appln. Nos.28204/2020 (of the
appellant for stay), FAO (OS) (COMM) 144/2020, CM APPL.
No.28710/2020 (of the appellant for stay)
3. FAO(OS) (COMM) 144/2020 impugns the order dated 24th
September, 2020, in I.A. No. 5928/2020 in O.M.P. (COMM) 122/2018
under Section 34 of the Arbitration and Conciliation Act, 1996 preferred
by the appellant with respect to the Arbitral Award dated 21st November,
2017 in favour of the respondent and against the appellant, for recovery
of money.
4. It appears that vide earlier orders in IA No. 3632/2018 in the
O.M.P aforesaid, the execution by the respondent of the subject Arbitral
Award as a decree was stayed subject to the appellant depositing Rs.11
Crores in the Registry of this Court. I.A. No. 5928/2020 aforesaid was
filed by the appellant before the Commercial Division of this court
pleading that, (i) the appellant had paid a sum of Rs.12,05,21,864/- to the
respondent by way of advance, under the contract between the parties,
and the appellant had admittedly not received any goods from the
respondent; (ii) though the appellant, in the arbitration, had claimed
EFA(OS) (COMM) 6/2020 & FAO (OS) (COMM) 144/2020 Page 2 of 6
refund of the said amount, but the same had been denied by the Arbitral
Tribunal and on which aspect inter-alia the petition under Section 34 of
the Arbitration Act had been filed. The appellant thus, sought stay of
execution proceedings, without the condition of deposit.
5. The said I.A. No. 5928/2020 was dismissed by the Commercial
Division vide the impugned order, reasoning that the Arbitral Award
rejected the counter claim of the appellant for refund of the advance
amount of Rs.12,05,21,864/- and once the claim of the appellant for the
said amount stood rejected by the Arbitral Tribunal, at that stage, on the
basis thereof, the earlier direction for deposit of the awarded amount in
the court, could not be changed. It was further reasoned that the Arbitral
Tribunal had recorded that the appellant, in support of its claim for refund
of Rs. 12,05,21,864/-, had not even addressed any arguments and thus
the execution of the awarded amount in favour of the respondent could
not be stayed on the basis of the claim of the appellant which had been
rejected by the Arbitral Tribunal. Axiomatically, the order earlier granted
for stay of execution proceedings was also vacated since the appellant
had not deposited the amount, subject to which stay of execution was
granted.
6. EFA (OS) (COMM) 6/2020 has been filed, impugning the order
dated 24th September, 2020 of the Commercial Division, of dismissal of
objections in the form of E.A. No. 748/2020, filed by the appellant to the
execution of the Arbitral Award preferred by the respondent by filing
O.M.P. (ENF.) (COMM) 56/2019. The appellant, in E.A. No. 748/2020
aforesaid raised objections to the execution on the same grounds on
which modification of the earlier order granting stay of execution subject
EFA(OS) (COMM) 6/2020 & FAO (OS) (COMM) 144/2020 Page 3 of 6
to deposit was sought and which order is subject matter of FAO (OS)
(COMM) 144/2020. The Commercial Division has again held that the
monetary claim of the appellant against the respondent which had not
been allowed by the Arbitral Tribunal, could not be a basis of objections
to execution.
7. We have heard the senior counsel for the appellant in both appeals.
8. No error can be found in the reasoning of the Commercial
Division in either of the orders. Under the new arbitration regime brought
into force by the 1996 Act, amended from time to time, the Arbitral
Award is executable as a decree, immediately and if a petition under
Section 34 of the Act is pending with respect to the Award, the same is
not an automatic bar to execution, as was the position prior to the
amendment of the 1996 Act with effect from the year 2016. It was for this
reason only, that the need for the appellant to approach the Commercial
Division for stay of execution of the Arbitral Award during the pendency
of Section 34 petition, arose and which stay was granted, as in the case of
appeals against money decree, subject to deposit. The appellant however
did not deposit the amount in the court, taking the plea that if its Section
34 petition was allowed, it would be entitled to Rs. 12,05,21,864/- from
the respondent and which was rightly declined.
9. The senior counsel for the appellant has argued that if the appellant
is made to deposit the amount or the awarded amount is recovered from
the appellant, the petition under Section 34 of the Act filed by the
appellant will become infructuous. It is further argued that the appellant is
being made to pay/deposit the amount for which its claim against the
respondent is still alive in the petition under Section 34 of the Act.
EFA(OS) (COMM) 6/2020 & FAO (OS) (COMM) 144/2020 Page 4 of 6
10. It is for this reason only that the Commercial Division earlier had
granted stay of execution subject to deposit by the appellant in the court.
Had the appellant made such deposit, further orders would have been
passed with respect to disbursement, even if allowed to the respondent
and on terms imposed on the respondent. However the appellant chose
not to comply with the order of deposit, leaving the Commercial Division
with no choice but to vacate the conditional stay of execution earlier
granted and in pursuance to which the Arbitral Award having force of
decree is being enforced.
11. As far as the reasons, on which unconditional stay during the
pendency of the Section 34 petition has been declined and objections to
the execution have been dismissed by the Commercial Division, it is a
well settled principle of law that a claim which has been dismissed by the
first court/forum, cannot be the basis for deferring the claim of the
opposite party. We may refer to plethora of judgments in the context of
suits, wherein it has been held that if the plaintiff is entitled to a decree on
admissions, merely because the defendant has preferred a counter claim,
is no reason to defer the passing of the decree on admissions in favour of
the plaintiff. Illustratively, reference in this regard may be made to
Kalyan Mills Ltd. Vs. Union of India (1987) 1 SCC 27, Numero Uno
International Ltd. Vs. Prasar Bharti (2008) 150 DLT 688 (DB), Rane
Prakash Vs. N.R. Buildcon Private Ltd. 2008 SCC OnLine Del 84,
Gajender Kumar Loond Vs. Samant Barara (2012) 187 DLT 403,
Veena Tuli Vs. Krishan Kumar Tuli 2015 SCC OnLine Del 11961,
Nimbus Communications Ltd. Vs. Prasar Bharti 2015 SCC OnLine Del
858 and Rameshwar Dayal Gupta Vs Mange Ram Gupta
EFA(OS) (COMM) 6/2020 & FAO (OS) (COMM) 144/2020 Page 5 of 6
MANU/DE/2111/2019. Till the claim of the appellant for recovery of Rs.
12,05,21,864/- crystallizes and attains finality, the same cannot be a basis
for denying monies already found due from the appellant to the
respondent.
12. We may clarify that in view of the limited question involved and
the legal question being unambiguous, we have not deemed it appropriate
to go into the question of maintainability of the appeals and thus this
order may not be treated as a precedent on appeals against such orders
being maintainable.
13. There is no merit in either of the appeals.
14. Dismissed.
RAJIV SAHAI ENDLAW, J.
ASHA MENON, J.
DECEMBER 22, 2020
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