Calcutta High Court
Everest Infra Energy Limited vs Transmission (India) Engineers on 5 March, 2021
Author: Moushumi Bhattacharya
Bench: Moushumi Bhattacharya
ODC-2
ORDER SHEET
AP/354/2020
IA NO: GA/2/2020
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
EVEREST INFRA ENERGY LIMITED
Versus
TRANSMISSION (INDIA) ENGINEERS
BEFORE:
The Hon'ble JUSTICE MOUSHUMI BHATTACHARYA
Date : 5th March, 2021.
[Via video conference]
Appearance:
Mr. Sakya Sen, Adv.
Mr. Sukrit Mukherjee, Adv.
Ms. Sormi Dutt, Adv.
Mr. Anirban Pramanick, Adv.
... for the petitioner/award-debtor
Mr. Shuvasish Sengupta, Adv.
Mr. Ritesh Kr. Ganguly, Adv.
Ms. Susrea Mitra, Adv.
... for the respondent/award-holder
The Court: The applicant/award-debtor prays for stay of execution of the impugned Award dated 31st January, 2020 in this application. The application has been made under Section 36(3) of The Arbitration and Conciliation Act, 1996 (the Act).
2
According to learned counsel appearing for the applicant, the prima facie case for staying the Award would be made out from the impugned Award itself. Learned counsel places two paragraphs of the Award to indicate that contrary to the view expressed by the Arbitrator that quantification of the liability of the respondent (respondent before this Court as well) was not possible for the stated project, the Arbitrator however, proceeded to award a sum of Rs.1,30,51,678/- on the basis of a tabulation in Exhibit-J which was marked as subject to objection. Counsel submits that Exhibit-J which has also been annexed to this application, is an unsigned document and that the applicant was not given an opportunity to make its arguments in respect of the said document and raised its objection with regard to it being marked Exhibit. It is also submitted that the bank account of the applicant has been attached in execution proceedings relating to the Award by way of an order passed by a Co-ordinate Bench. Counsel submits that the Exhibit had been marked with "subject to objection" at the relevant point of time.
Learned counsel appearing for the respondent/award-holder takes two preliminary objections with regard to the application; the first being that the applicant has been described as having an address at Howrah in the cause title. The second objection is that the application has been verified by an "Office Assistant" of the applicant Company. On merits, it is submitted that there was an unequivocal admission on the part of the applicant that Rs.1,30,17,681/- appeared in the books of the applicant as on 31.01.2012, which would be evident from a letter written by the applicant to the respondent 3 on 13th March, 2012. Counsel relies on Section 36 of the Act to submit that the applicant must satisfy the requirement of that Section in order to seek stay of the impugned Award.
Upon hearing learned counsel for the parties, the dispute appears to centre around the extent and manner of depositing the security. The applicant does not dispute that it is required to put in amount by way of security. The only issue is the quantum of such amount and whether the applicant can be permitted to secure the said amount by way of a bank guarantee. However, the preliminary points should be considered first. It is an admitted fact that the respondent filed a suit in this Court in 2013 claiming reliefs against the applicant. The fact of the said suit being filed in this Court settles the first preliminary point in favour of the applicant. Second, it has been clarified by counsel that an affidavit of competency together with the Board Resolution has been filed by the applicant in the department with regard to the competence of the person verifying the application. Hence, the second issue of maintainability raised in respect of the present application is also not accepted.
With regard to the quantum of the security which the applicant is required to put in, the letter dated 13th March, 2012 can be taken into consideration to the extent of the stand taken by the applicant which will, of course, be subject to the final adjudication in the application for setting aside of the Award. As to the inconsistent views expressed by the learned Arbitrator, this Court cannot agree with the contentions of the applicant that the amount of Rs.1,30,51,678/-, which closely approximates the figure in the letter dated 4 13th March, 2012, are vague or are not buttressed by documents which were available before the Arbitrator.
Section 36(3) of the Act makes it clear that operation of an arbitral award can only be stayed by a Court provided the applicant who seeks stay of the Award is put to certain conditions for granting the relief prayed. The only onus put on the Court is that the Award can only be stayed upon reasons which are recorded in writing. The Proviso to the sub-section makes it clear that in considering the grant for stay of an award, the Court may be guided by the provisions for stay of a money decree as provided under The Code of Civil Procedure, 1908. The decision of the Supreme Court in Pam Developments vs. State of West Bengal : 2019 (8) SCC 112 clarifies this issue in paragraphs 19 and 20 of the said decision. The said decision has been cited by the respondent for the proposition that even the Government is not exempt from furnishing security under the provisions of the CPC. Subject to a recent Notification of November, 2020 in this respect, there cannot be any doubt that an Award can only be stayed upon security being put in by the entity who asks for it. The deciding Court is also given sufficient discretion in this regard, as the wording of Section 36(3) suggests.
Upon considering the documents which have been shown to this Court, GA No. 2 of 2020 is allowed in terms of prayer (a). There shall be stay of the impugned Award dated 31st January, 2020 upon the applicant putting in an amount of Rs.1,30,51,678.00 in an interest bearing Fixed Deposits and furnish the details of the same to the Registrar, Original Side of this Court who 5 shall monitor the same. The amount should be put in within a fortnight from date. It is understood that till the amount is put in, there shall be no further steps taken in respect of the impugned Award against the applicant. If the applicant fails to put in the amount as directed, this order of stay shall automatically stand vacated.
The applicant will be at liberty to approach the learned Judge who passed the order of injunction for necessary orders in relation to the concerned bank account for compliance with the directions passed by this Court.
The main arbitration petition will appear after four weeks.
(MOUSHUMI BHATTACHARYA, J.) RS