Calcutta High Court
Russian Federation (Rosemushestvo) vs Saraf Agencies Pvt. Ltd on 5 February, 2018
Author: Ashis Kumar Chakraborty
Bench: Ashis Kumar Chakraborty
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
Original Side
Present : Hon'ble Justice Ashis Kumar Chakraborty
A.P No. 1072 of 2017
The Federal Agency For State Property Management of the
Russian Federation (Rosemushestvo)
Vs.
Saraf Agencies Pvt. Ltd.
For the petitioner : Mr. Ratnanko Banerji, Sr. Adv.
Ms. Ritu Bhalla, Adv.
Ms. Prapa Ganguly, Adv.
For the respondent no. 1 : Mr. Ranjan Deb,Sr. Adv.
Mr. Jishnu Saha, Sr. Adv.
Mr. S.K. Singhi, Adv.
Ms. Riti Basu, Adv.
For the respondent no. 2 : Mr. Abhrajit Mitra, Sr. Adv.
Mr. Jishnu Chowdhury, Adv.
Mr. Soumabha Ghose, Adv.
Mr. Ankur Singhi, Adv.
Mr. Subhodeep Basak, Adv.
Judgment on : 05.02.2018
Ashis Kumar Chakraborty, J.
This is a post-interim award application under Section 9 of the Arbitration and Conciliation Act, 1996 (in short "the Act of 1996"), at the instance of The Federal Agency for State Property Management of The Russian Federation (Rosemushestvo), the respondent no. 1 in the arbitral proceeding.
The brief facts relevant for the decision in this application are that the disputes having arisen between the respondent nos. 1 and 2 in this application on the one hand and the petitioner and the proforma respondent on the other hand, relating to a joint venture agreement dated January 29, 2008 the same were referred to an Arbitral Tribunal comprising three retired Judges of the Supreme Court. In the arbitral proceeding the respondent nos. 1 and 2 herein, as the claimants raised various claims against the petitioner and the proforma respondent. The petitioner has been contesting the claims of the respondent nos. 1 and 2 in the arbitral proceeding. In its counter statement filed in the arbitral proceeding the petitioner also raised various counter-claims against the respondent nos 1 and 2. In its fifth counter-claim the petitioner claimed for refund of an amount of Rs. 135.13 crores by the present respondent no. 1, to the account of Titainium Products Pvt. Ltd. (hereinafter to referred to as "TPPL"), the joint venture company formed under the joint venture agreement. Before the learned Arbitral Tribunal, the petitioner also filed an application under sub- Section (5) of Section 31 of the Act of 1996 for an interim award in support of its said fifth counter- claim, which was contested by the respondent no. 1. On October 14, 2016 the learned Arbitral Tribunal allowed the said application of the petitioner and passed an interim award directing the respondent no. 1 claimant to pay Rs. 135.16 crores to the account of TPPL within one month, failing which the same shall bear interest at the rate of 24%, per annum.
Since the respondent no. 1 did not make any payment in terms of the said interim award dated October 14, 2016 and when the statutory period under Section 34 of the Act of 1996 for challenging the said interim award had not expired, the petitioner filed an application A.P. No. 1013 of 2016, under Section 9 of the Act of 1996, before this Court for various reliefs against the respondent no. 1. In the said application, on November 29, 2016 a learned Single Judge of this Court passed an interim order directing the respondent no. 1 not to alienate, encumber and/or create any third party interest over its fixed assets and properties. By an order dated February 22, 2017 the said interim order was directed to continue till vacated. In the meantime, the respondent nos. 1 and 2 filed an application, A.P. No. 1038 of 2016, under Section 34 of the Act of 1996 for setting aside of the said interim award dated October 14, 2016. By an order dated March 24, 2017 a learned Single Judge of this Court admitted the said application of the respondents and held that since in the present case, the arbitral proceeding had commenced before October 23, 2015 in order to obtain stay of operation of the said interim award dated October 14, 2016 the respondent nos. 1 and 2 are not required to file any separate application or furnish any security. During the pendency of the first application, A.P. No. 1013 of 2016 the petitioners have filed this second application, under Section 9 of the Act of 1996 for an order directing the respondent no. 1 to deposit Rs. 135,16,92,947.73/- in cash before this Court to be put in an interest bearing account held by the Registrar, Original Side of this Court.
In this application it is the case of the petitioner that in disregard of the subsisting order passed in the said A.P. No. 1013 of 2016 directing the respondent no. 1 not to alienate/encumber and/or create any third party interest over its fixed assets and properties, the latter has created encumbrances of its various fixed assets and properties. According to the petitioner, on February 07, 2017 the respondent no. 1 executed a term loan agreement (against hypothecation of movables) in favour of the Allahabad Bank recording that the said bank having sanctioned the term loan facility of Rs. 140.30 crores, it has hypothecated and charged to the said bank all machinery, plant, capital goods and assets purchased or to be purchased out of the said loan and all existing and future machinery, plant, vehicles, capital goods, assets. By the said agreement, the respondent no. 1 further created exclusive charges in favour of Allahabad Bank on its 39 acres of its land related to Titanium Slag plant, together with all movable and immovable assets relating to the said slag plant on pari passu basis and also on a further 57.30 acres of land and movable and immovable assets related to the captive plant. The said term loan agreement dated February 07, 2017 further provides that Allahabad Bank shall also have exclusive charge on the corporate office land and building on the respondent no. 1 at No. 4, 4/1, Red Cross place, Kolkata, as well as on all bank accounts of the respondent no. 1 into which all the operative cash flows, other incomes, revenues/receivables would be deposited. Under the said agreement dated February 07, 2017 the Allahabad Bank also has the exclusive charge over the FDR of the respondent no. 1 of Rs. 6.32 crores, together with its general lien and set off on other accounts of the respondent no. 1. The petitioner further alleged that on February 07, 2017 the respondent no. 1 entered into a further agreement cum letter of hypothecation/pledge towards obtaining Packing Credit advances for Rs. 55 crores from the said Allahabad Bank and thereby, created a charge in favour of the said bank on its project assets including, but not limited to tangible movable machinery/plant, machinery fixture, fees, other installations, etc. Further, on February 21, 2017 the respondent no. 1 has also executed a supplemental letter confirming deposit of title deeds through constructive delivery of its properties situated at Chatarpur, District-Ganjum, Odisha as a security for repayment of Rs. 195.39 crores of credit facilities obtained from the said Allahabad Bank. According to the petitioner, from the said supplemental letter of confirmation dated February 21, 2017 it is clear that in addition to the mortgage created by the respondent no. 1 by way of deposit of title deed on June 06, 2014 for the term loan facility of Rs. 234.21 crores, the Allahabad Bank granted the aforesaid term loan and packing credit facility to the petitioner to the tune of Rs. 195.39 crores and consequent upon the restructuring of credit facilities and for the purpose of having the restructuring of limits covered, the respondent no. 1 mortgaged its landed property described to the schedule "B" to the said agreement and it deposited the title deeds of the property mentioned in the schedule "A" to the said agreement with a sole intention to create a mortgage security. The petitioner further alleged that as per the Master Data of the respondent no. 1 available at the website of the Ministry of Company Affairs (in short "MCA"), on June 14, 2017 the respondent no. 1 has created a floating charge worth of Rs. 70 crores in favour of Union Bank of India towards repayment of the loan by its Group company namely, Forum Projects Pvt. Ltd. The petitioner has disclosed the copies of all the said agreements dated February 07, 2017, a copy of the said supplementary letter confirming deposit of title deeds dated February 21, 2017 and the deed of corporate guarantee dated June 14, 2017 all downloaded from the website of MCA. The copies of the relevant Form CHG-1 filed by the respondent no. 1 for registering the aforementioned charges created on its assets and properties in favour of the banks downloaded from the MCA website, the copies of the registration of charge certificates downloaded from the website of MCA substantiating the creation of the aforementioned charges in respect of various movable and immovable assets and properties of the respondent no. 1 in favour of the said Allahabad Bank and Union Bank of India have also been disclosed. It is the case of the petitioner that as per the Index of Charges of the respondent no. 1 available from the website of the MCA and the Forms CHG-1 of 2017 filed by the respondent with the Registrar of Companies, disclosed in the application clearly show that the aforementioned charges created by the petitioner in respect of its various assets and properties in the year, 2017 are in addition to the charges created in the year 2014.
According to the petitioner, from the aforementioned acts of the respondent no. 1 it is clear that it has encumbered its various assets and properties in disregard of the subsisting order of injunction passed in application, A.P. No. 1013 of 2016 with the sole object to make its assets and properties inaccessible to its creditors and reduce the said interim award dated October 14, 2016 passed by the learned Arbitral Tribunal into a paper decree by the time it is ripe for enforcement. The petitioner has alleged that although by virtue of the unamended provisions of the Act of 1996 with the admission of A.P. No. 1038 of 2016, the application under Section 34 of the Act of 1996 the respondent no. 1 is enjoying stay of operation of the said interim award without furnishing any security but, in view of its conduct as mentioned above, it a fit case for passing an order in this application requiring the respondent no. 1 to deposit at least the principal amount of the said interim award in cash before this Court.
On December 18, 2017 this Court directed the respondent no. 1 to file its affidavit in opposition to the application of the petitioner. The respondent no. 1 was directed to disclose in its affidavit-in-opposition, the particulars of its assets and properties. An opportunity was also granted to the petitioner to file its affidavit in reply. Since, in this application the petitioner has claimed no relief against the respondent no. 2, the latter was not required to file any affidavit in this application. The respondent no. 1 filed an affidavit in opposition to the petitioner's application. In the said affidavit in opposition, the respondent no. 1 alleged that all its assets and properties were already charged and/or mortgaged in favour of the banks and financial institutions long before passing of the said order of injunction dated November 29, 2016 in A.P. No. 1013 of 2016 and the creation of charges on its assets and properties and mortgage of the immovable properties as appearing in the documents disclosed by the petitioner are not creation of any new encumbrances of any of its assets and properties. The respondent no. 1 has alleged that its limits has stood reduced from Rs. 234.21 crore to Rs. 195.39 crore and in fact, the encumbrances on its assets also stands reduced in the year 2017. These are evident, according to the respondent no. 1, from the documents disclosed by the petitioner in its application. The respondent no. 1 has disclosed its balance-sheet as on March 21, 2017 and alleged that it does not have the funds to comply with any order sought in the petition, even in the event of such an order be made. It further alleged that its only liquid assets are its working capital which, in terms of the agreement with its banks, can be used as working capital only and for nothing else. In its affidavit in reply, by referring to the documents disclosed in the petition, the petitioner asserted that after passing of the said order dated November 29, 2016 in A.P. No. 1013 of 2016 the respondent no. 1 has created fresh charges on its various assets and properties and the same have been done with the sole object to defeat the decree to be passed in terms of the said interim award dated November 14, 2016.
In support of the present application Mr. Ratnako Banerjee, learned Senior Advocate appearing for the petitioner submitted that in the instant case admittedly the order of injunction passed by a learned Single Judge on November 29, 2016 in the application A.P. No. 1013 of 2016 is still subsisting. He submitted that both the respondent nos. 1 and 2 are contesting the said application, A.P. No. 1013 of 2016 but they never prayed for any opportunity to file the affidavit in opposition in the said application which is still pending. It was submitted that from the documents disclosed by the petitioner in the application it is evident that during substance of the said order of injunction dated November 29, 2016 the respondent no. 1 has further encumbered its assets and properties in favour of the Allhabad Bank and Union Bank of India. He further submitted that the relevant agreements entered into by the respondent no. 1, certificates of registration of charges with the Registrar of Companies, the documents of MCA and other documents disclosed in the said petition evidently show the floating charge for the value of Rs. 70 crores created by the respondent no. 1 on June 14, 2017 in favour of the Union Bank of India on account of corporate guarantee for repayment of the dues Forum Projects Pvt. Ltd., its sister company as well as the charges created for Rs. 195.39 crores by the respondent no. 1 on the assets and properties in favour of the Allahabad Bank for Rs. 195.39 crores and mortgage of its assets have all been created during the substance of the order of injunction dated November 29, 2016. Therefore, according to Mr. Banerjee the allegation made by the respondent no. 1 in its affidavit in opposition that it has not encumbered any of its assets and properties during subsistence of the order dated November 29, 2016 is patently misleading and devoid of any merit. He further contended that in spite of direction passed by this Court, the respondent no. 1 in its affidavit in opposition has not disclosed the particulars of its assets and properties and it has alleged that it has no money to deposit any amount before this Court as prayed for by the petitioner. By referring to the balance-sheet of the respondent no. 1 as at March 31, 2017 as disclosed by the latter in its affidavit in opposition, the petitioner submitted that with the avowed object to frustrate the enforcement of the decree in terms of the said interim arbitral award by the learned Arbitral Tribunal in favour of the petitioner, the respondent has wrongfully sought to knock off the entire amount of Rs. 131,34,38,855/- received by it as an advance amount from TTPL, the joint venture company by debiting the said amount on account of alleged legal and incidental expenses relating to the arbitral proceeding before the learned Arbitral Tribunal. In these facts, according to Mr. Banerjee, it is evident that the respondent no. 1 has become desperate in its aim to defeat said interim award dated November 14, 2016 passed by the learned Arbitral Tribunal and in pursuit thereof, it has encumbered all its assets and properties even during the subsistence of the said order of injunction dated November 29, 2016. It was strongly urged on behalf of the petitioner that in the facts of the instant case, it is fit and proper that this Court would pass an order directing the respondent no. 1 to deposit the entire awarded amount of Rs. 135,16,92,947/- with the Registrar, Original Side of this Court.
However, Mr. Jishnu Saha, learned Senior Advocate appearing for the respondent no. 1 raised strong objection to the maintainability of this application. Relying on the Division Bench decision of this Court in the case of Tufan Chatterjee vs. Rangan Dhar reported in AIR 2016 Cal 213, he submitted that since the arbitral proceeding is still pending before the learned Arbitral Tribunal in view of the amendment to Section 17 of the Act of 1996 by the Amendment Act of 2016, the remedy of the petitioner to obtain any interim order of protection/relief lies in filing an appliction under Section 17 of the Act of 1996 before the learned Arbitral Tribunal and the present application under Section 9 of the Act of 1996 before this Court is not maintainable. Without prejudice to the said contention with regard to the maintainability of this application, Mr. Saha submitted that from the documents disclosed by the petitioner in its application it is evident that after passing of the said order dated November 29, 2016 in A.P. No. 1013 of 2016 the respondent no. 1 has not created any fresh encumbrance in respect of any of its assets and properties. The documents disclosed by the petitioner were all executed by the respondent no. 1 consequent upon restructuring and renewal of its credit facilities by the banks prior to the confirmation of the interim order passed in the said A.P. No. 1013 of 2016. Further, some of the new plants and machineries which were not in existence at the time of passing of the earlier interim order and were required to be acquired and under the restructuring arrangements the same have been hypothecated as a part of the conditions of sanction. The said documents disclosed restructuring of the existing credit facilities obtained by the respondent no. 1 from Allahabad Bank and consequential reduction of the limits of the from 234.21 crores to Rs. 195.39 crores. It was contended that when in its affidavit in opposition the respondent no. 1 has disclosed its balance sheet as at March 31, 2017 it has complied with the direction passed by this Court on December 8, 2017 for disclosure of the particulars of its assets and properties. Mr. Saha strenuously argued that there is no merit in this application filed by the petitioner and the same is liable to be rejected.
In his reply, Mr. Banerjee first contended that admittedly the arbitral proceeding between the parties before the learned Arbitral Tribunal commenced long before the Amending Act 3 of 2016 amending the provisions of the Act of 1996 came into force. He submitted that in the order dated March 24, 2017 passed in A.P. No. 1038 of 2016 it was held by the learned Single Judge that in the present case, the arbitral proceeding and all Court proceedings shall be covered by the provisions of the unamended Act of 1996 and, as such, with the admission of the said application under Section 34 of the Act of 1996 the respondent no. 1 is enjoying stay of operation of the interim award dated November 14, 2016 without any requirement of deposit of the said awarded amount. While passing the said order dated March 24, 2017 the learned Single Judge has held that the Division Bench decision of this Court in the case of Tufan Chatterjee (supra) has no application and such finding is binding upon the parties at all stages. It was, therefore, argued for the petitioner that the Division Bench decision of this Court in the case of Tufan Chatterjee (supra) has no application in this case and the present application of the petitioner as framed is well maintainable. Mr. Banerjee submitted that from the documents disclosed, in the present application it is ex-facie clear that the respondent no. 1 has encumbered its assets and properties during subsistence of the orders passed in A.P. No. 1013 of 2016 and there is no free asset of the respondent no. 1 against which the petitioner can enforce the interim arbitral award when the same results in a decree. Urging all these grounds learned counsel for the petitioner reiterated that the orders be passed as prayed for in this application.
At this stage, Mr. Deb, learned Senior Advocate for the respondent no. 1 raised a new contention with regard to the maintainability of this application of the petitioner. He submitted that the arbitral proceeding pending before the learned Arbitral Tribunal, as well as al Court proceedings between the parties in the present case are governed by the unamended provisions of the Act of 1996 and, as such, the amended provisions of Section 17 of the Act of 1996 are not applicable in this case. He submitted that the respondent no. 1 is not relying on the decision of the Division Bench of this Court in the case of Tufan Chatterjee (supra). It was, however, strongly contended that in the present case, when the amended provisions of Section 36 requiring a party challenging an arbitral award to secure the awarded amount in Court is not applicable and with the admission of the application of the respondent no. 1 under Section 34 of the Act of 1996 the enforcement of the interim award passed by the learned Arbitral Tribunal against the respondent no. 1 stands unconditionally stayed, the petitioner's present application for a direction upon the respondent no. 1 to deposit the entire amount awarded by the learned Arbitral Tribunal is not maintainable. It was argued that although Section 9 of the Act of 1996 as applicable in this case permits a party to an arbitration agreement to file an application for interim measures even at any time after making of the arbitral award and before it has become enforceable but, Section 9(ii) (a) to (e) of the Act do not confer any power of the Court to pass any order to direct the person against whom the arbitral award is passed to secure the amount covered by the arbitral award. It was submitted that as per the provisions in Section 9(ii)(b) of the unamended Act of 1996, the Court can pass an order directing a party in the arbitral proceeding to secure the amount in dispute in the arbitration but the said provision cannot be construed to confer jurisdiction on the Court to direct a party against whom the arbitral award is passed to secure the amount of the arbitral award. It was strenuously urged that the provisions contained in Section 9 of the Act of 1996 confers power on the Court to pass any interim order in favour of a party to arbitration agreement in aid of the award claimed in the arbitral proceeding or in aid of the enforcement of an arbitral award but in the present case, during pendency of the application of the respondent no. 1 under Section 34 of the Act of 1996, the interim award of the learned Arbitral Tribunal cannot be enforced and the petitioner cannot maintain this application in its present form. In support of such contention, reliance was placed by the respondent no. 1 on the decision of the Supreme Court in the case of National Aluminium Co. Ltd. vs. Presteel and Fabrications Pvt. Ltd. reported in (2004) 1 SCC 540.
According to Mr. Banerjee, the contention raised on behalf of the respondent no. 1 that the present application of the petitioner under Section 9 of the Act of 1996 after admission of the application for setting aside of the interim arbitral award is not maintainable is misconceived and devoid of any merit. He argued that the language of Section 9 of the Act of 1996 in clear and unambiguous term confers right on a party for obtaining any order from the Court for an interim measure of protection in respect of the matters mentioned under clauses (i) and (ii) thereof not only before or during the arbitral proceeding, but also at any time after making of the arbitral award by the Arbitral Tribunal before the same becomes enforceable under Section 36 of the Act. He further submitted that it is true that in the present case since the arbitral proceeding between the parties are governed by the unamended provisions of the Act of 1996 and during the pendency of the said application under Section 34 of the Act of 1996 filed by the respondent no. 1, the interim award passed by the learned Arbitral Tribunal remains unenforceable but, in view of the clear and unambiguous language used in Section 9 of the Act of 1996, clause (ii) of the said section would remain to be applicable in the present case and the petitioner's present application is well maintainable. In this regard, reliance was placed by the petitioner, upon a Single Bench decision of the Bombay High Court in the case of Delta Construction Systems Ltd. vs. M/s. Narmada Cement Company Ltd. reported in 2002 (Supp) Bom CR 318,as well as a Division Bench decision of the Bombay High Court in the case of National Shipping Company vs. Sentrans Industries Ltd. reported in AIR 2004 Bom 136. In the case of Delta Construction Systems Ltd. (supra) a learned Single Judge of the Bombay High Court held that in view of the scheme laid down in different provisions of the Act of 1996, the power under Section 9 of the Act in all its force must be available to the extent applicable till the award becomes enforceable. The said decision was approved by the Division Bench of the same High Court in the case of National Shipping Corporation of Saudi Arabia (supra). With regard to the decision of the Supreme Court in the case of Pressteel and Fabrications Pvt. Ltd. (supra) it was submitted that in the said case the prayer was made by the respondent during hearing of an application under Section 34 of the Act of 1996, before the Amending Act of 2016 came into force, to direct the applicant challenging the award to deposit the awarded amount and such prayer was not under Section 9 of the Act of 1996. Therefore, according to Mr. Banerjee, the said decision of the Supreme Court in the case of Pressteel and Fabrications Pvt. Ltd. (supra) has no application in this application under Section 9 of the Act of 1996.
It was argued for the respondent no. 1 that in decisions of the Single Bench and the Division Bench of the Bombay High Court in the case of Delta Construction Systems Ltd. (supra) and National Shipping Company of Soudi Arabia (supra), respectively decided that while making an application under Section 9(ii)(b) of the Act of 1996 the procedural requirement under Order 38 Rule 5 of the Code of Civil Procedure, 1908 need not be complied with. According to the respondent no.1 the said decisions are of no assistance to the petitioner.
I have considered the materials on record and the arguments advanced by the learned senior counsel of the respective parties. In the instant case, neither any affidavit has been filed nor any argument was advanced on behalf of the respondent no. 2. This is because in the present petition, no relief is claimed against the respondent no. 2.
In view of the contention seriously urged by the respondent no. 1 with regard to the maintainability of this application, it is necessary to decide the said issue first. The present application has been filed by the petitioner under the unamended provisions of Section 9 of the Act of 1996. Since the decision in this application largely depends upon the scope and effect of Section 9 of the Act of 1996, before the Amending Act 3 of 2016 came into force the said Section is extracted below:
"9. Interim measures etc. by Court- A party may, before , or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36, apply to a Court-
(i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters, namely-
(a) the preservation, interim custody or sale of any goods which are the subject-
matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is
the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the Court to be
just and convenient,
and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it."
The opening words of Section 9 of 1996, as quoted above, in clear and unambiguous terms confers a right on a party, before or during the arbitral proceeding or at any time after making of the arbitral award but, before it is enforced in accordance with Section 36 to file an application before the Court for various orders of interim protection including an order for securing the amount in dispute in the arbitration. Apart from the specific relief mentioned in sub-clauses (a) to (d) of the said Section 9 of the Act of 1996, sub-clause (e) thereof confers very wide power on the Court to pass any order of interim measure of protection as may appear to it to be just and convenient. When the clear and unambiguous language of Section 9 confers power on the Court to pass various orders of interim protection even after making of the arbitral award but before it is enforced in accordance with Section 36 of the Act, a harmonious construction of the provisions contained Section 9(ii)(a) to (e) makes it abundantly clear that Section 9(ii)(b) confers power on the Court to pass an order in an appropriate case, to direct the party against whom the arbitral award is passed to secure the amount of the arbitral award. When as per sub-clauses (a) and (c) under clause (ii) of Section 9 of the Act of 1996 confers power on the Court to pass any interim order of protection in respect of any movable and immovable property even after passing of the arbitral award but before the same becomes enforceable, it would lead to an incongruity to accept the contention of the respondent no. 1 that only in case of a money award passed by the Arbitral Tribunal, the Court does not have the power to pass any order directing the party against such award has been passed to deposit the awarded amount in Court under Section 9(ii)(b) of the Act. For all these reasons, I am in respectful agreement with the view of Single Bench decision of the Bombay High Court in the case of Delta Construction Systems Ltd. (supra). Further, even it be accepted for the sake of argument that the provisions of Section 9(ii)(b) of the Act of 1996 cannot be applied by the Court to direct a person to secure the amount which it has been directed to pay by the Arbitral Tribunal, the residuary provision provided under Section 9(ii)(e) of the Act confers wide power of Court to pass any other interim measure of protection as may appear to the Court to be just and convenient, during the pendency of an application under Section 34 of the Act 1996, including a direction requiring the party against whom the arbitral award has been made to deposit the entire awarded amount in Court. So far as the decisions of the Supreme Court in the case of Pressteel and Fabrication Pvt. Ltd. (supra), I find that the petitioner is correct in its contention that in the said case the Supreme Court considered the prayer of the respondent in an application under Section 34 of the Act of 1996 to direct the applicant in the said application to deposit the entire awarded amount in Court and the finding of the Supreme Court in the said decision cannot be read in the context of the provisions of Section 9 of the Act of 1996 when the award debtor taking advantage of the pendency of the Section 34 of the Act commits various acts to defeat or frustrate the award when it becomes enforceable under Section 36. For all these reasons, I find that there is no merit in the contention raised on behalf of the respondent no. 1 that in view of the unamended provisions of the Act of 1996 during the pendency of the application under Section 34 of the Act of 1996, the present application is not maintainable. The present application filed by the petitioner is well maintainable under Section 9 of the Act of 1996.
Now, with regard to the merit of the prayer of the petitioner I find, that in this case from the documents disclosed by the petitioner in the application namely, the Term Loan Agreement dated February 07, 2017, the Packing Credit Agreement dated February 07, 2017, the Supplemental Letter of Confirmation dated February 21, 2017, the deed of corporate guarantee dated June 14, 2017 and the Master Data of the respondent no. 1 available at the website of the MCA and the copies of the relevant forms CHG-1 filed by the respondent no. 1 with the Registrar of Companies, it is evidently clear that the respondent no. 1 has created various charges on all its assets and properties in favour of its bankers in defiance of the order of the subsisting injunction dated November 29, 2016, passed in A.P. No. 1013 of 2016. The respondent no. 1 has even charged all its bank accounts in favour of its bankers. In its affidavit in opposition the respondent no. 1 has claimed that it has no money to deposit in Court even it is directed to do so. All these facts, substantiate the apprehension expressed by the petitioner that in the present the sole object of the respondent no. 1 to make its assets and properties inaccessible to its creditors and reduce the award dated October 14, 2016 passed by the learned Arbitral Tribunal into a paper decree by the time it is ripe for enforcement.
Considering the facts of the case as discussed above, I find that the petitioner has made out by the prima facie case and the balance of convenience wholly lies in favour of the petitioner to obtain an order as prayed for in this application and if the orders, as prayed for are not passed, the petitioner shall suffer irreparable loss and prejudice.
For all the foregoing reasons, the application of the petitioners succeeds. The respondent no. 1 is directed to furnish a bank guarantee for Rs. 135.16 crores though any nationalised bank in favour of the Registrar, Original Side of this Court, within February 12, 2018 and keep the said bank guarantee renewed till disposal of its application under Section 34 of the Act of 1996.
The respondent shall furnish the above bank guarantee to the Registrar, Original Side of this Court and keep the same renewed upon notice to the petitioner.
There shall, however, be no order as to costs.
Urgent certified website copies of this order, if applied for, be made available to the parties subject to compliance with all requisite formalities.
[ ASHIS KUMAR CHAKRABORTY, J.]