Punjab-Haryana High Court
Apollo International Limited vs Man Structurals Pvt Ltd on 20 November, 2024
Author: Suvir Sehgal
Bench: Suvir Sehgal
Neutral Citation No:=2024:PHHC:151442
CR-5996-2024
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124
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CR-5996-2024
Reserved on:-21.10.2024
Date of Pronouncement:-20.11.2024
Apollo International Limited
...Petitioner
Versus
Man Structurals Private Limited
...Respondent
CORAM : HON'BLE MR. JUSTICE SUVIR SEHGAL
Present: Mr.Akshay Bhan, Senior Advocate with
Mr.Shantanu Bansal, Advocate and
Mr.Rohit Nagpal, Advocate
for the petitioner.
Mr.Pancham Surana, Advocate and
Mr.Himanshu Setia, Advocate
for the respondent.
****
SUVIR SEHGAL, J.(ORAL)
1. Instant revision has been filed under Article 227 of the
Constitution of India assailing order dated 06.09.2024, Annexure P1,
passed by the Commercial Court, Gurugram whereby while partly
accepting an application under Section 36 (3) of the Arbitration and
Conciliation Act, 1996 (for short "the Arbitration Act"), it was directed
that the petitioner will deposit the entire decretal amount with the
Registrar General of the High Court of Delhi with a request that the
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CR-5996-2024
amount be not disbursed till the final decision of the main petition under
Section 34 of the Arbitration Act.
2. Learned Senior Counsel for the petitioner has argued that a
memorandum of understanding dated 11.04.2019 was executed between
the petitioner and the respondent. They submitted a tender for an award
of a contract by the U.P. Power Transmission Corporation. An LOI
dated 22.02.2020 was awarded in favour of the parties, which was
cancelled without executing a contract. A dispute arose between the
parties, which was referred to arbitration and by award dated
10.10.2023, Annexure P2, an amount of Rs.14,44,70,000/- besides
interest and cost of arbitration, was passed in favour of the respondent.
The petitioner then filed a petition under Section 34 of the Arbitration
Act along with an application under Section 36 (3) ibid for stay of the
enforcement of the arbitral award. The respondent filed an execution
petition before the High Court of Delhi and by order dated 23.01.2024,
Annexure P4, the High Court directed the petitioner to maintain status
quo in respect of its immovable properties and by subsequent order
dated 15.07.2024, Annexure P8, petitioner was directed to deposit the
decretal amount with the Registrar General of the High Court within
eight weeks. Learned Senior Counsel states that the application for stay
of enforcement of award was contested by the respondent and vide
impugned order, Annexure P1, it has been partly allowed, as noticed
above. He asserts that while partly accepting the application, learned
Commercial Court has erred in directing the petitioner to deposit the
decretal amount with the High Court. Placing reliance upon the
judgment of the Hon'ble Supreme Court in M/s Unibros Versus All
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CR-5996-2024
India Radio, 2023 AIR (Supreme Court) 5231, learned Senior Counsel
has argued that the learned Arbitrator has accepted the claim relating to
loss of profit in the absence of any evidence to substantiate the claim.
Contending that the award is contrary to the public policy of India, he
urges that it is likely to be set aside under Section 34 of the Arbitration
Act. A reference has also been made by him to the judgment of the
Bombay High Court in CFM Asset Reconstruction Private Limited and
others M/s SAR Parivahan Private Limited and others, 2024 SCC On
Line Bom 1659. He asserts that as depositing such a huge decretal
amount would result in a blockade of funds, impugned order be
modified and the petitioner be permitted to furnish an insurance bond or
bank guarantee in lieu of the deposit of the decretal amount.
3. On the basis of the advance copy, respondent is represented
through a counsel, who has opposed the prayer. He has pointed out that
the petitioner had made a similar prayer by filing an application,
Annexure P10, before the High Court of Delhi, which stood rejected
vide order dated 23.09.2024, Annexure P9. After having failed before
the Delhi High Court, petitioner has chosen to challenge the order,
Annexure P1, by filing the instant petition by not disclosing the
developments, which took place before the High Court of Delhi. He has
argued that the award passed under the Arbitration Act has to be
executed like a money decree and there is no error in the impugned
order passed by the Commercial Court, Gurugram. Reference has been
made by him to B.L. Kashyap and Sons Ltd. Versus Emaar India Ltd.,
Law Finder Doc Id # 2280385.
4. I have heard counsel for the parties and considered their
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CR-5996-2024
respective submissions.
5. An examination of the impugned order shows that
Commercial Court, Gurugram directed the petitioner to deposit the
awarded decretal amount with the Executing Court i.e. the High Court of
Delhi and requested the Registrar General of Delhi High Court not to
disburse the amount till the decision of the pending objections filed
under Section 34 of the Arbitration Act. It cannot be disputed that an
award passed under Section 36 of the Arbitration Act has to be executed like a
money decree. This Court is of the view that with the imposition of the above
condition, the interest of the petitioner stands safeguarded. The amount has to
be retained by the Executing Court and is not to be released to the
respondent till the time the objections are adjudicated on merits.
6. Arbitration proceedings are primarily meant for a quick
resolution of disputes. In case an award passed by the Arbitrator is
allowed to be automatically stayed or the judgment debtor is granted
permission to furnish an indemnity bond or is given liberty of not
depositing the amount, the very purpose of quick resolution of disputes
through arbitration would stand defeated. Holding that argument of the
judgment debtor qua liquidity crunch equally applies to the decree
holder, High Court of Delhi in B.L. Kashyap's case (supra) held that
business cannot be run on mere bank guarantees and liquid cash is
required to run any enterprise. For deciding an application under
Section 36 (3) of the Arbitration Act, whereby stay has been sought by
the judgment debtor, the merit of the objections filed under Section 34
of the Arbitration Act are not to be considered. Therefore, the
judgments relied upon by the counsel for the petitioner are not
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CR-5996-2024
applicable for the decision of the instant revision petition. This Court,
therefore does not find substance in the arguments raised by counsel for
the petitioner.
7. At this stage, the Court deems it necessary to revert to the
application, Annexure P10, filed by the petitioner before the High Court
of Delhi. The relevant extract of the application (Para 05) is reproduced
hereunder:-
"5. That for the reasons aforesaid, the judgment debtor also
submits that the Hon'ble may further extend the said period of
eight weeks granted vide order dated 15.07.2014 for a further
period of eight weeks in the interest of justice to enable the
judgment debtor to comply with the directions or such modified
directions as would henceforth be issued by this Hon'ble Court on
consideration of the instant application."
8. As is apparent from the above, the stand taken by the
petitioner before the High Court of Delhi was that it is prepared to
deposit the amount in terms of orders dated 15.07.2024, Annexure P8,
but sought more time to comply with the said direction or any other
modified direction. Despite having taken a stand that the petitioner is
willing to deposit the amount and upon failing to secure a favourable
order, petitioner chose to challenge the order, Annexure P1 passed by
the Commercial Court by way of an instant revision petition. This
amounts to approbation and reprobation and the petitioner cannot be
permitted to take a different stand before the Courts. This Court does not
find any illegality in the impugned order passed by the Commercial
Court, Gurugram.
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9. For the aforegoing reasons, petition is devoid of any merit
and is dismissed with no order as to costs.
(SUVIR SEHGAL)
20.11.2024 JUDGE
Brij
Whether reasoned/speaking : Yes/No
Whether reportable : Yes/No
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