M/S. Mcees Trading vs Johnson Stephen
2021 Latest Caselaw 10502 Ker

            IN THE HIGH COURT OF KERALA AT ERNAKULAM

                            PRESENT

            THE HONOURABLE MRS. JUSTICE MARY JOSEPH

    MONDAY, THE 29TH DAY OF MARCH 2021 / 8TH CHAITHRA, 1943

          Con.Case(C).No.629 OF 2021 IN Arb.A. 54/2020

  AGAINST THE ORDER/JUDGMENT IN Arb.A 54/2020 OF HIGH COURT OF
                             KERALA


PETITIONERS/respondents 1 to 3:

      1      M/S. MCEES TRADING
             DOOR NO.34/767 A, GESIMA, KRRA-78, KANNANTHODATH
             ROAD, EDAPALLY P.O., KOCHI-682 024.

      2      ANOOP UNNIKRISHNAN,
             THE PARTNER, M/S.MCEES TRADING, DOOR NO.34/767 A,
             GESIMA, KRRA-78, KANNANTHODATH ROAD, EDAPALLY P.O.,
             KOCHI-682 024.

      3      SUNIL KUMAR T.K.,
             THE PARTNER, M/S.MCESS TRADING, DOOR NO.34/767 A,
             GESIMA, KRRA-78, KANNANTHODATH ROAD, EDAPALLY P.O.,
             KOCHI-682 024.

             BY ADVS.
             SRI.VIZZY GEORGE KOKKAT
             SRI.C.HARIKUMAR
             SRI.RENJITH RAJAPPAN
             SMT.SRUTI RAVINDRANATHAN
             SHRI.ABHIRAM T.K.

RESPONDENTS/APPELLANT AND 4TH RESPONDENT:

      1      JOHNSON STEPHEN
             AGED 50 YEARS
             S/O.STEPHEN, PALLICKA HOUSE, KOTTAMAM,
             KALABATAPURAM ROAD, KALADY, ERNAKULAM-683 574.

      2      SEEMA YADAV, AGED 42 YEARS
             D/O.UMA SHANKAR YADAV, SENIOR MANAGER AND BRANCH
             HEAD, THE AXIS BANK, EDAPPALLY BRANCH, VITHAYATHIL
             BUILDING, NELSON MANDELA ROAD, EDAPALLY,
             ERNAKULAM-682 024.


      THIS CONTEMPT OF COURT CASE (CIVIL) HAVING BEEN FINALLY
 HEARD ON 23-03-2021, THE COURT ON 29-03-2021 DELIVERED THE
 FOLLOWING:
 Con.Case(C).No.629 OF 2021

                                  2



                          JUDGMENT

Dated this the 29th day of March, 2021

Petitioners are respondents 1 to 3 and the

respondents are the appellant and 4th respondent in Arb.

Appeal No.54 of 2020. This Court by judgment dated

05.03.2021 partly allowed the Arbitration Appeal and issued

an ad-interim injunction restraining the 1 st respondent, its

partners and agents or persons acting under them from

alienating, encumbering and dealing with the assets of it in

any manner prejudicial to the interest of the appellant till

the arbitration proceedings are initiated before an

Arbitrator, who may be appointed in an application filed

under Section 11 of the Act, pending consideration of this

Court as Arbitration Request No.111 of 2020. This Court

has granted the above relief only.

2. Even after passing of the final judgment as above,

the 2nd respondent, who is the Branch Manager of Axis

Bank, Edappally Branch in collusion with the 1 st respondent Con.Case(C).No.629 OF 2021

refused to transact with loan Over Draft Account No.

919030046197357 of the firm under the guise that the

order freezing it is in force as specific mention is not made

in judgment dated 05.03.2021 that the reliefs other than

injunction are declined. She is still performing as if the

order freezing the account was maintained, by a wrong

interpretation of the judgment passed by this Court on

05.03.2021 in Arb. Appeal No.54 of 2020. In the above

circumstances that this Contempt Case is filed by the

petitioners.

3. It is contended by the respondent that on the

strength of the interim orders passed by this Court on

29.12.2020 and 22.01.2021, they are performing as

averred. It is also contended that contempt will not lie,

since this Court has mentioned in the impugned judgment

that the appeal as well as C.M.A.(Arb) No.766 of 2020 are

allowed. The learned counsel has pointed out that at the

time of admission of the appeal, a Single Bench of this

Court has issued a direction to respondents 4,5 and 6 by

order passed on 29.12.2020 to maintain status quo in all Con.Case(C).No.629 OF 2021

respects in respect of the accounts maintained by the 1st

respondent in their respective Banks for a period of four

weeks.

4. Attention is also invited to an interim order passed

by another Single Bench of this Court on 22.01.2021 in I.A.

No.2 of 2020 in Arb. Appeal No.54 of 2020, permitting the

4th respondent bank to receive/permit credits from the 1st

respondent firm by maintaining the status quo order

issued on the basis of an undertaking made before it by the

4th respondent that they will not transfer or disburse any

amount from the aforesaid account unless and until

directed by this Court. It is further directed that the said

order is equally applicable to respondents 1 to 3 and they

are at liberty to make payment by maintaining status quo.

It was clarified that there shall not be any disbursement of

the amount unless and until the interim order is decided on

merits. Since the original order directing to maintain status

quo was passed for four weeks from 29.12.2020, the order

modified on 22.01.2021 will also be in force for four weeks.

Whatever it may be, the orders passed on 29.12.2020 and Con.Case(C).No.629 OF 2021

22.01.2021 are only interim orders passed in Arb. Appeal

No.54 of 2020 and those would have effect only till the

said appeal is disposed of by a final judgment. Arb. Appeal

is disposed of by this court by judgment passed on

05.03.2021.

5. Vide judgment dated 05.03.2021, this Court has

granted only an ad-interim order of injunction which was

the third relief sought in C.M.A.(Arb) No.766 of 2020 and

from the discussion made in paragraphs 26, 27 and the last

portion of the judgment, what is intended by this Court is

clear. But, due to oversight, the Arbitration Appeal was

mentioned in the judgment as allowed and the impugned

order as set aside. CMA(Arb.) No.766/2020 was also

mentioned as allowed. When only one relief among several

sought by the appellant was allowed, the reference in the

judgment ought to have been "Arbitration Appeal is allowed

in part", "the impugned order to the extent it disallowed the

third relief is set aside" and "CMA(Arb.) No.766/2020

stands allowed in part". The decretal portion of the

judgment is extracted hereunder :

Con.Case(C).No.629 OF 2021

"In the result, Arbitration Appeal stands allowed. The impugned order is set aside. CMA(Arb.) No.766/2020 stands allowed and an ad-interim order of injunction is passed under Section 9(1)(III)(b) of the Act restraining the 1st respondent, it's partners and agents from alienating, encumbering and from dealing with the assets of it in any manner prejudicial to the interest of the appellant till the arbitration proceedings are initiated before an Arbitrator to be appointed by this Court in an application filed under Section 11 of the Act as Arbitration Request No.111 of 2020 and pending consideration."

6. It is clear from the above that what was intended

to be granted and was granted is only the third relief

sought by the appellant. Though it was not mentioned that

the other reliefs are declined, specific mention being made

to the effect that only an ad-interim injunction is granted,

there cannot be any scope to entertain a doubt about the

relief granted. True that, this Court has omitted to state in

the impugned judgment that reliefs other than the one

granted were declined. But a reading of the judgment in its

entirety gives a clear indication on what was actually granted.

Any relief if not granted is only declined. However, to have

more clarity and to avoid further controversial interpretations

in the matter, this Court is inclined to correct the error Con.Case(C).No.629 OF 2021

apparent on the face of the record that has crept in the

judgment, by adding the words 'in part' in the last portion of

the judgment after, "Appeal is allowed" and "CMA(Arb.)

No.766/2020 is allowed". The sentence, "the impugned order

is set aside", shall also be substituted with "the impugned

order to the extent it declined to grant relief No.3 is set

aside."

7. It is clarified in the interim order passed on

22.01.2021, in modification of the original interim order

passed on 29.12.2020 that the said order will be effective

until the case is decided on merits. Therefore, there is

scope for the modified order to remain in force only till Arb.

Appeal No.54 of 2020 is decided finally on merits. A

judgment having been passed by this Court in Arb. Appeal

No.54 of 2020 on 05.03.2021, the interim order will stand

vacated automatically with effect from that date.

8. The contention of the petitioners was that under

the guise of the status quo order passed by this Court, 4 th

respondent is refusing to lift the order freezing the loan

Over draft account No.919030046197357 of the firm and Con.Case(C).No.629 OF 2021

thereby they are prejudiced. It is pertinent also to note that

vide order passed on 29.12.2020 this Court has directed to

maintain status quo in all respect of the accounts

maintained by the 1st respondent in their respective banks

for a period of four weeks. The commercial court though

has passed an interim order directing to freeze the

accounts, at the time of passing of the final order in C.M.A.

(Arb.) No.766 of 2020 and filing of Arb. Appeal No.54 of

2020, that was vacated. Therefore, at the time of admission

of the appeal, an order freezing the loan account was not

there. Above being the context, the impact of the order of

status quo passed by this Court while admitting the appeal

is only to maintain the situation that was existing at the

time of filing of C.M.A. (Arb.) No.766 of 2020.

9. Therefore, this Court is in darkness as to how the

respondents had performed on the impression that the

order freezing the accounts is maintained by the status quo

order passed by this Court on 29.12.2020. This Court finds

that the respondents had misconceived and misinterpreted

the order to act accordingly.

Con.Case(C).No.629 OF 2021

10. In the above circumstances, this Court is inclined

to clarify that the order of status quo and order of

modification of it vide interim orders passed will no longer

exist, as lives of those last only till the final order is passed

on merits vide judgment dated 05.03.2021 in Arb. Appeal

No.54 of 2020. Therefore, the respondents are bound only

to act in terms of the direction issued by this Court in

judgment dated 05.03.2021.

11. In the above context, absolutely no reason is

found to proceed against the respondents under the

provisions of Contempt of Court Act, 1971 and to punish

them. In B.S.N. Joshi and Sons Limited v. Ajoy Mehta

and another [(2009) 3 SCC 458], in a context of

non-compliance of the final order by misconstruing it with

interim order, the Apex Court has held that after passing of

final order/judgment, interim order could not have been

considered and found to be continuing.

In the result, the Contempt Case stands disposed of

issuing directions to correct the last portion of the Con.Case(C).No.629 OF 2021

judgment which has created all confusions about judgment

dated 05.03.2021 accordingly.

Sd/-

MARY JOSEPH, JUDGE

ttb Con.Case(C).No.629 OF 2021

APPENDIX PETITIONERS' EXHIBITS:

ANNEXURE A1 THE CERTIFIED COPY OF JUDGMENT IN ARB.A.NO.54 OF 2020 OF THIS HON'BLE COURT DATED 05.03.2021.

ANNEXURE A2 THE TRUE COPY OF THE LEGAL NOTICE DATED 12.03.2021 ISSUED BY THE PETITIONERS COUNSEL TO THE 2ND RESPONDENT.

//TRUE COPY//

P.S. TO JUDGE