Bombay High Court
Marie Gold Realtors Private Limited vs Regus South Mumbai Business Centre ... on 17 January, 2020
Author: G. S. Patel
Bench: G.S. Patel
911-CARBPL6-20.DOC
Ashwini
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION (L) NO. 6 OF 2020
Marie Gold Realtors Private Limited ...Petitioner
Versus
Regus South Mumbai Business Centre Private ...Respondents
Ltd & Ors
Dr Veerendra Tulzapurkar, Senior Advocate, with Pranav
Sampat, Zacarias Joseph & Ms Tanvi Goenka i/b Khaitan &
Co., for the Petitioner.
Mr Rahul Narichania, Senior Advocate, with Santosh Mishra, N
Goyal i/b Khaitan & Co., for the Respondent No.1.
CORAM: G.S. PATEL, J.
DATED: 17th January 2020 PC:-
1. The Petitioner obtained an arbitral award dated 18th October 2019 against the 1st Respondent. That award was in the amount of Rs 10,10,01,000/- as on 1st November 2019. It is true that the Award is relatively recent, and that the 1st Respondent yet has time to fle its challenge petition under Section 34, which Mr Narichania states is in the process of being done. However, it seems to me that it is no answer at all to say that there is no urgency requiring that an award holder should be secured. Should the Section 34 Petition fail Page 1 of 5 17th January 2020 ::: Uploaded on - 20/01/2020 ::: Downloaded on - 09/06/2020 22:17:01 ::: 911-CARBPL6-20.DOC for any reason, the award holder should not then be driven to a long- drawn process in enforcement or execution, nor left with just a paper award. On the other hand, if the Section 34 Petition succeeds, then the award debtor is in no way prejudiced by an order requiring security. Any amount deposited or secured can be returned with all accrued interest. This is the balance of convenience and the award itself provides an ample prima facie case for the grant of reliefs under Section 9 post-award. The considerations for grant of relief post- Award must, ex facie, be reckoned qualitatively diferently from those sought in a Section 9 petition pending Arbitration. In the latter type of case, liability is yet to be determined and adjudicated. In the former, post-Award, the emphasis must be on bringing to the award-holder the fruits of the successful arbitration. It is simply no answer to say there is no urgency, and that the award-holder should, having got an award, then have to go through the laborious grind of formal enforcement/execution proceedings.
2. The prayers in the Petition reads thus:
"a) pending the hearing and disposal of the enforcement proceedings of the Arbitral Award dated 18 October 2019, that this Hon'ble Court be pleased to pass a mandatory order of injunction against the Respondents directing them to secure in favour of the Petitioner a sum of Rs.10,10,01,000/- as on 1 November 2019 together with interest at the rate of 12% per annum till payment and/or realization as more particularly stated in the particulars of claim annexed and marked as Exhibit- 'D' by depositing in this Hon'ble Court the said amount or giving a bank guarantee of a nationalized bank to secure the payment of the said amount.Page 2 of 5
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b) pending the hearing and disposal of the enforcement proceedings of the Arbitral Award dated 18 October 2019, this Hon'ble Court be pleased to direct the Respondents to disclose on oath, a detailed list of their respective movable and immovable, un-encumbered and encumbered assets/properties; and
c) pending the hearing and disposal of the enforcement proceedings of the Arbitral Award dated 18 October 2019, this Hon'ble court be pleased to direct the Respondent Nos. 4 and 5 to disclose on oath, its shareholding in Respondent No.2;and
d) pending the hearing and disposal of the enforcement proceedings of the Arbitral Award dated 18 October 2019, this Hon'ble Court be pleased to direct the Respondent Nos.6 disclose on oath, their shareholding in Respondent Nos. 4 and 5; and
e) pending the hearing and disposal of the enforcement proceedings of the Arbitral Award dated 18 October 2019, this Hon'ble Court be pleased to pass an order of injunction, restraining the Respondents its agents, servants or anyone else claiming through or under them from any manner selling, transferring, disposing of, and/or alienating or encumbering or mortgaging or hypothecating or charging or parting with possession of or transferring, or inducting anyone else into or creating any right, title or interest or license in favour of anyone else in respect of its assets/properties."
3. I am inclined to make a modifed order covering prayer clauses (a) and (e) in the following terms. The 1st Respondent is directed within three weeks from today to either, at its option, deposit an amount of Rs. 10 crores in this Court or to provide a bank Page 3 of 5 17th January 2020 ::: Uploaded on - 20/01/2020 ::: Downloaded on - 09/06/2020 22:17:01 ::: 911-CARBPL6-20.DOC guarantee of any nationalized bank in that amount. Until such time as that deposit is made or security is furnished in the form of a bank guarantee, there will be an injunction in terms of prayer clause (e) set out above, i.e. from disposing of, alienating, encumbering, transferring, parting with possession or creating any third party rights in the 1st Respondent's assets except in the ordinary and usual course of business.
4. These orders will run only as against Respondent No 1. The reliefs in terms of prayer clauses (c) and (d) are kept pending. In the event that the deposit is not made or the bank guarantee is not furnished within the time indicated above, the 1st Respondent will be required, within a period of two weeks thereafter, to fle an affidavit disclosing assets in terms of prayer clause (b). There will automatically follow an injunction in respect of the disclosed assets upon that disclosure being made.
5. Liberty to the Petitioner to apply for a further or fuller disclosure thereafter.
6. If the Respondents wish, they may fle an Affidavit in Reply to this petition on or before 7th February 2020.
7. Should the 1st Respondent fle a Section 36 proceeding, it will be entitled to argue that such a deposit having been made, a stay should be granted without further conditions. The Respondents may even argue that this order requiring a deposit/security should Page 4 of 5 17th January 2020 ::: Uploaded on - 20/01/2020 ::: Downloaded on - 09/06/2020 22:17:01 ::: 911-CARBPL6-20.DOC be recalled or vacated on the grounds set out in the Section 34 petition. Those contentions are expressly kept open.
8. List the Commercial Arbitration Petition on 11th February 2020.
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