Bombay High Court
Reliance Securities Limited vs Akansha Commodities Pvt. Ltd. And 4 Ors on 11 November, 2019
Author: G. S. Patel
Bench: G.S. Patel
20-CPCDL167-19+.DOC Atul IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION IN ITS COMMERCIAL DIVISION CONTEMPT PETITION (L) NO. 167 OF 2019 IN COMM ARBITRATION PETITION NO. 1247 OF 2019 WITH ARBITRATION APPLICATION NO. 383 OF 2019 Reliance Securities Ltd ...Petitioner Versus Akansha Commodities Pvt Ltd & Ors ...Respondents Mr PN Modi, Senior Advocate, with Nihar Mody, Zerick Dastur, Khushil Shah & Kunal Kothary, i/b ANB Legal, for the Petitioner. Mr RV Dholakia, for Respondents Nos. 1 to 3. Mr Sahil Mahajan, for Respondents Nos. 4 and 6. Mr Kaizer Kharawalla, i/b Lex Juris, for Respondent No. 5. CORAM: G.S. PATEL, J.
DATED: 11th November 2019 PC:-
1. Prima facie the respondents are clearly in contempt of the detail order dated 19th July 2019 of GS Kulkarni J in the commercial arbitration petition. A copy of that order is from pages 26 to 44. For Page 1 of 5 11th November 2019 ::: Uploaded on - 13/11/2019 ::: Downloaded on - 13/11/2019 21:01:59 ::: 20-CPCDL167-19+.DOC clarity and to avoid ambiguity going forward, I will reproduce the operative portion of the said order:
"21. In the above circumstances, petitioner has made out a prima facie case for grant of interim protection in the present proceedings. The balance of convenience is certainly in favour of the petitioner. The reliefs as prayed for if are not granted to the petitioner, certainly a prejudice would be caused to the petitioner and it is likely that the substance of arbitration itself will stand frustrated. It is thus in the interest of justice that following interim reliefs are granted, pending the arbitral proceedings:
(i) There shall be interim reliefs in terms of prayer clauses (a), (b), (c) and (h) of the Petition;
(ii) There shall be also interim relief in terms of prayer clause (d) as modifed to the following extent:
"Pending the hearing and fnal disposal of the arbitral proceedings, and until the execution of the arbitral award, the respondents, their directors, employees, servants, and/ or agents be restrained by an order and injunction of this Hon'ble Court, from in any manner whatsoever dealing with selling, transferring, disposing of, alienating, encumbering, mortgaging, hypothecating, charging or parting with possession of or transferring or inducting any third party into or creating any right, title or interest whatsoever in favour of any third party in respect of any or all of their respective assets, properties, demat accounts and bank accounts.
(iii) The Court Receiver, High Court, Mumbai is appointed as a receiver in respect of the three shops of respondent no. 6 situated at 4, Puran Chand Nahar Avenue, Kolkata described by communication dated 21st June 2018 Page 2 of 5 11th November 2019 ::: Uploaded on - 13/11/2019 ::: Downloaded on - 13/11/2019 21:01:59 ::: 20-CPCDL167-19+.DOC of respondent No. 6 (Exhibit D) read with resolution of the Board of Directors dated 21st June 2018 with direction to take symbolic possession of the mortgaged property and appointing respondent No. 6 as its agent on usual terms and conditions and payment of royalty as may be fxed by the Court Receiver;
(iv) In the event respondent no. 6 failing to accept the agency within two weeks from the date of such ofer by the Court Receiver, it will be open to the petitioner to apply to the Court for further order;
(v) Ordered accordingly.
22. Petition is accordingly disposed of in above terms.
No costs.
23. At this stage, learned counsel for respondent no. 5 prays for stay of this order for a period of four weeks. Considering the facts and circumstances of the case, the prayer for stay of the entire order cannot be considered, hence it is rejected. The Court Receiver however shall take steps after a period of two weeks from today."
2. Prayer clauses (a), (b), (c) and (h) of the petition read thus:
"a) Pending the hearing and fnal disposal of the arbitral proceedings, and until the execution of the arbitral award, Respondent Nos. 1 to 5 be ordered and directed to secure the amount in dispute by depositing in this Hon'ble Court, a sum of Rs. 18,54,00,000/- or such other amount as this Hon'ble Court deems just and ft;
(b) In the alternative to prayer (a) above, pending the hearing and fnal disposal of the arbitral proceedings, and until the execution of the arbitral award, Respondent Nos. 1 to 5 be ordered and directed to secure the said sum of Rs.Page 3 of 5
11th November 2019 ::: Uploaded on - 13/11/2019 ::: Downloaded on - 13/11/2019 21:01:59 ::: 20-CPCDL167-19+.DOC 18,54,00,000/-; being the amount in dispute; in such manner as this Hon'ble Court deems just and ft;
(c) Pending the hearing and fnal disposal of the arbitral proceedings, this Hon'ble Court be pleased to order and direct all the Respondents to disclose on afdavit all their respective movable and immovable assets, properties, demat accounts and bank accounts etc. which are owned by them or in which they have any rights or interests;
(h) Pending the hearing and fnal disposal of the arbitral proceedings, and until the execution of the arbitral award, Respondent No. 6 be restrained by an order and injunction of this Hon'ble Court from in any manner whatsoever selling, transferring, alienating, encumbering, mortgaging, hypothecating, charging, parting with possession of, inducting any third party into or in any other manner dealing with or disposing of the said security properties;"
3. There was an initial controversy about whether respondent No. 5 was served in the contempt petition. It is now represented. Respondents Nos. 1 to 5 are thus all before The Court. Respondent No. 6 is separately represented by Mr Mahajan.
4. There is no manner of doubt that there has been no compliance with clause (i) of Kulkarni J's order reproduced above.
5. As regards clause (iii), Mr Modi for the petitioners informs me that the Court Receiver visited Calcutta and found that the property in question consisted only of three small shops, and tenants were found in occupation.
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6. Since prayer clauses (a) and (b) of the main arbitration petition are the relevant ones and these are directed against respondents Nos. 1 to 5, for the present issue notice to respondents Nos. 1 to 5 under Rule 9(1) of the Bombay High Court (Contempt of Court) Rules, returnable on 10th December 2019 to show cause as to why an order should not be made against them in contempt for having committing default willingly and contumaciously disobeying and disregarding the order of 19th July 2019.
7. I note that by the order dated 14th October 2019 in the contempt petition, Kulkarni J directed the fling of Afdavits in Reply by today. There are no Afdavits in Reply. This is an additional reason to issue the show-cause notice.
8. List the Arbitration Application on 10th December 2019.
(G. S. PATEL, J) Page 5 of 5 11th November 2019 ::: Uploaded on - 13/11/2019 ::: Downloaded on - 13/11/2019 21:01:59 :::