Karnataka High Court
Godolphine India Private Limited vs Um Projects Llp on 1 July, 2022
Bench: Sachin Shankar Magadum
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF JULY, 2022
BEFORE
THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO. 10281 OF 2022(GM-CPC)
BETWEEN:
GODOLPHINE INDIA PRIVATE LIMITED
(FORMERLY KNOWN AS DARVESH INDSUTRIES
INDIA PRIVATE LIMITED)
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
SURVEY NO.1256 AND 1261, RAJPUR ZULASAN ROAD,
RAJPUR TALUKA, KADI MAHESANA,
GUJARAT-382715,
HAVING ITS REGIONAL OFFICE AT
SUITE NO.1011, FIRST FLOOR,
PRESTIGE DEJA VU TOWERS,
PROMENADE ROAD, FRAZER TOWN,
BENGALURU-560005
REPRESENTED BY ITS DIRECTOR,
SRI ABDUL RASHEED.
...PETITIONER
(BY SRI.SHRAVANTH ARYA TANDRA, ADVOCATE FOR
SRI.IRFANA NAZEER, ADVOCATE)
AND:
UM PROJECTS LLP
A LIMITED LIABILITY PARTNERSHIP INCORPORATED
2
UNDER THE LIMITED LIABILITY PARTNERSHIP ACT, 2008,
HAVING ITS REGISTERED OFFICE AT NO.39,
UNITED MANSIONS, FIRST FLOOR, M.G.ROAD,
BENGALURU-560001
REPRESENTED BY ITS DESIGNATED PARTNER
SRI P.S. KIRAN KUMAR.
...RESPONDENT
(BY SRI.SRINIVASA.D.C, ADVOCATE FOR
SRI.PRADEEP NAYAK, ADVOCATE FOR C/R)
THIS PETITION IS FILED UNDER ARTICLE 227 OF
THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE
THE ORDER DTD. 22.04.2022 PASSED BY THE LXXXIII
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE,
BANGALORE, COMMERCIAL COURT, BANGALORE IN
COMM. EX.NO. 192/2022 (AT ANNX-J).
THIS PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 17.06.2022, COMING ON FOR
PRONOUNCEMENT OF ORDERS THIS DAY, THE COURT
MADE THE FOLLOWING:
3
ORDER
The captioned writ petition is filed by the
judgment debtor feeling aggrieved by order dated
22.4.2022 passed by Executing Court thereby
attaching the Bank Account of the petitioner to an
extent of Rs.97,58,580/-.
2. The respondent-decree holder filed an
application under Section 9 of Arbitration and
conciliation Act, 1996 (for short "Act, 1996") before
the Commercial Court seeking a direction against the
present petitioner to pay outstanding rent and
maintenance charges amounting to Rs.1,93,41,675/-.
The said application was contested by the petitioner
herein and the Commercial Court by order dated
4.3.2022 allowed the application.
3. Feeling aggrieved by the said order, the
petitioner herein preferred a Commercial Appeal in
Commercial Appeal No.140/2022. The Division Bench
of this Court declined to entertain the grounds urged
in the appeal and consequently, dismissed the appeal
and confirmed the order passed by the Commercial
Court passed under Section 9 of the Act, 1996. The
Division Bench of this Court has also observed in its
order that the liability of the petitioner to pay
admitted rent in terms of the lease deed dated
10.6.2020 has no nexus or connection whatsoever to
the permission granted by the Commercial Court to
the present petitioner to deposit 40% of the monthly
sums pending adjudication in AA.127/2021.
4. Based on the order of the Commercial
Court passed under Section 9 and the order passed in
Commercial Appeal, the respondent-decree holder has
filed the present execution proceedings. The executing
Court on an application filed by the respondent-decree
holder has passed the impugned order thereby
attaching the account of the petitioner herein.
5. Sri. Srivasta, learned Senior Counsel
appearing for the petitioner reiterating the grounds
urged in the writ petition would vehemently argue and
contend that the impugned order under challenge is
passed in gross violation of principles of natural
justice. Referring to the provisions of Order XXI Rule
22 of CPC, the learned counsel contended that a
show-cause should be issued where an application for
execution is levied more than two years after the date
of decree. Referring to Order 21 Rule 22 (3) of CPC,
he would point out that the show-cause notice has to
be issued if the material on record indicated that there
is substantial injury sustained by the judgment
debtor.
The second limb of argument canvassed by the
learned counsel is that, the remedy of the parties lies
before the Arbitration Tribunal and therefore, the
respondent-decree holder cannot file an execution to
recover the amount which is the subject matter of
arbitration before the commencement of the arbitral
proceedings.
6. After the matter was heard for some time,
the learned Senior Counsel for the petitioner sought
for short accommodation and at his request, the
matter was adjourned and in the interregnum the
petitioner sought for amendment to raise additional
grounds. By way of proposed amendment, the
petitioner has raised additional grounds inter alia
contending that there is an amendment to Section 9
of the Act, 1996, wherein two further sub-Sections
have been introduced. Referring to this amended
sections, it is submitted by the learned counsel that
the Executing Court has virtually misinterpreted the
provisions of Section 9 prior to amendment which was
inapplicable to the present case on hand. He would
sum up his arguments by contending that failure to
issue notice violates the principal tenet of natural
justice.
7. Per contra, the learned counsel appearing
for the respondents repelling the contentions
canvassed by learned Senior Counsel appearing for
the petitioner would however contend that the issue in
regard to whether an order passed under Section 9
assumes the status of a decree is dealt by the Apex
Court in catena of judgments and the said issue is no
more res integra. Placing reliance on the judgment
rendered by this Apex Court in the case of State of
Karantaka .vs. Vishwabharathi House Building
Co-Operative Society1 as well as the judgment
rendered in the case of Mysuru Mangnese
Company(P) Limited .vs. Prakash Natural
2000(3) SCC 412
Resources Limited2, would contend that the order
passed under Section 9 of 1996 Act are executable
under the provisions of Order XXI of CPC as well as
Section 36 of CPC. He would also further point that
order under Section 9 of the Act, 1996 assumes a
status of decree where the rights of the parties are
adjudicated. Therefore, by placing reliance on the
aforesaid judgments he would contend that the order
under challenge does not contravenes any of the
provisions of Civil Procedure Code and would further
contend that the conduct of the petitioner is grossly
unfair and therefore, would not warrant any
interference.
8. Heard the learned Senior counsel appearing
for the petitioner and the learned counsel appearing
for respondent. I have given my anxious
consideration to the material on record. I have also
2016 SCC Onlike Kar 385.
meticulously examined the judgments cited by the
counsel appearing for respondent.
9. The respondent filed an application under
Section 9 of the Act, 1996 before the Commercial
Court. The Commercial Court has allowed the
application thereby directing the present petitioner to
pay the sum towards occupation of the leased
premises including amount towards, maintenance
along with applicable GST from December 2021. The
said order is confirmed by the Division Bench of this
Court in Commercial Appeal No.140/2022.
The order of the Commercial Court on an
application filed under Section 9 is dated 4.3.2022.
The Execution is filed in the year 2022. Therefore, I
am unable to understand as to how the impugned
order contravenes the amended provisions of Rule
22(1) of Order XXI of CPC. Under Rule 22(1) provides
that where an application for execution is made within
two years from the date of last order, no notice is
required. Therefore the grounds urged by the
petitioner that it contravenes the provisions of Order
XXI Rule 22 of CPC, cannot be acceded to.
10. The second limb of argument that once an
arbitral Tribunal is constituted, the Court cannot
entertain an application in view of restriction under
Section 9(3) of the Act, 1996 is also misconceived.
The Co-ordinate Bench of this Court allowed petition
filed under Section 11(5) of 1996 Act and by order
dated 24.3.2022 appointed a sole arbitrator. Section
9 application was dealt by the Commercial Court in a
Commercial A.A. bearing No.247/2021 and the
application filed under Section 9 was allowed by order
dated 4.3.2022. These significant details have to be
examined in the light of the ratio laid down by the
Apex Court in the case of Arcelor Mittal Nippon
Steel India Ltd. Vs. Essar Bulk Terminal Limited3.
The Apex Court in the above said judgment has held
that once an application for interim relief has been
"entertained" i.e. taken up for consideration by the
Court and if the Court has applied its mind, it can
proceed to adjudicate the same even after constitution
of Arbitral Tribunal. Therefore, the vacuum that was
created in the Act, 1996 dealing with pending
application under Section 9, once an Arbitral Tribunal
is constituted, is dealt by the Apex Court in the
judgment cited supra.
11. The Apex Court in the above cited
judgment while considering the scope of the term
"entertain" under Section 9(3) of the Act, 1996 had an
occasion to interpret the expression "entertain" The
Apex Court was of the view that the Court entertains a
matter when it takes it up for consideration and such
(2022) 1 SCC 712.
process of consideration may continue till
pronouncement of judgment.
12. Therefore, what emerges from the dictum
laid down by the Apex Court in the above said
judgment is restriction under Section 9(3) of the Act,
1996 would not apply once an application under
Section 9(1) has been "entertained", like in the
present case, before a sole arbitrator was appointed
by a Co-ordinate Bench of this Court, the Commercial
Court had dealt with Section 9 application and by
order dated 4.3.2022 directed the petitioner to pay
the sum of Rs.97,58,580/- towards leased premises.
13. Therefore, this Court is of the view that in
the present case, the question of examining efficacy of
remedy under Section 17 of the Act, 1996 would not
arise since application under Section 9(1) of the
Act, 1996 is already entertained and considered by
Commercial Court. The Apex Court has adopted a
practical approach in the case of Arcelor Mittal
Nippon Steel India Limited therefore, the bar
enshrined in Section 9(3) of the Act does not apply to
the present case on hand. Therefore, the second limb
of argument canvassed by the petitioner before this
Court is also not tenable.
14. In that view of the matter, the present
petitioner cannot resist execution proceedings and
respondent-decree holder is entitled to execute the
order passed by the Commercial Court on an
application filed under Section 9(1) of Act, 1996.
15. For the reasons stated supra, I pass the
following:
ORDER
The writ petition is dismissed.
Sd/-
JUDGE
*alb/-
