Delhi High Court - Orders
Rccivl Rkipl Llp vs Rcc Infraventures Ltd & Ors on 1 June, 2021
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
$~7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB. A. (COMM.) 25/2021
RCCIVL RKIPL LLP ..... Petitioner
Through Mr Dayan Krishnan, Senior Advocate
with Mr Siddharth Khattar, Mr Akash
Jain and Mr Divij Andley, Advocates.
versus
RCC INFRAVENTURES LTD & ORS. ..... Respondents
Through Ms Amrita Panda and Ms Mansa
Shukla, Advocates for R-1 to R-4
with Mr Luv Jain and Mr Ravi Jain,
Authorized Representatives.
Mr Kinshuk Chatterjee, Mr Kushal
Bansal, Mr Shubham Saxena and
Ms Srishti Gupta, Advocates for
Respondent No. 5.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 01.06.2021 [Hearing Held Through Videoconferencing] I.A. 7033/2021
1. Exemption allowed, subject to all just exceptions.
I.A. 7035/20212. For the reasons stated in the application, the delay of 31 days in filing the present appeal is hereby condoned.
3. The application is disposed of accordingly.
I.A. 7036/2021 (for extension of time for filing court fees and process Signature Not Verified Digitally signed by:DUSHYANT RAWAL fees)
4. For the reasons stated in the application, the same is allowed.
5. The application stands disposed of accordingly. ARB. A. (COMM.) 25/2021 & I.A.7034/2021 (stay)
6. The appellant has filed the present appeal under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996 (hereafter the „A&C Act‟) impugning orders dated 25.01.2021 and 08.04.2021 passed by the learned Arbitral Tribunal.
7. By the order dated 25.01.2021, passed under section 17 of the A&C Act, the learned Arbitral Tribunal had directed the appellant to disburse an amount of ₹7.5 Crores to certain Vendors broadly in the proportion of 50% of their stated outstanding dues. The appellant filed an application seeking review of the order dated 25.01.2021, which was dismissed by the Arbitral Tribunal by order dated 08.04.2021.
8. Mr Krishnan, learned Senior Counsel appearing for the appellant has essentially assailed the order dated 25.01.2021 on three grounds. First, he stated that the impugned order is not in aid of the final relief that is sought by respondent no.1 to 4 (hereafter Claimants) in their Statement of Claims. He stated that the said Statement of Claims was filed one day after the Arbitral Tribunal had delivered the order dated 25.01.2021. A plain reading of the reliefs sought in the Statement of Claims indicate that the Claimants seek to challenge the MoU as invalid on the ground of undue influence and coercion. It is submitted that on one hand Claimants seek to assail the MoU and on the other hand have secured an order of interim protection under Section 17 of the A&C Act, by relying on the terms of the said MoU.
Signature Not Verified Digitally signed by:DUSHYANT RAWAL9. He also submits that an application for review of the order was filed, inter alia, on the above mentioned ground. The said application was dismissed as the Arbitral Tribunal was of the view that it did not have any powers to review its order. He drew the attention of this court to paragraphs 22 and 23 of the impugned order dated 08.04.2021 which is set out below:
"22. As contended by the Applicants in all the proceedings, the claimants were only seeking implementation of the MoU dated 05.01.2020. Contrarily, in the Statement of Claim now filed by the Claimants on 26.01.2021, Claimants have taken a U-turn and seeking for a declaration that the MoU dated 05.01.2020 and Reconstitution Deed dated 05.01.2020 vitiated by coercion and undue influence and for a declaration that Claimants could not have been divested as partners in the LLP. In the Statement of Claim, the Claimants have averred that the MoU and Reconstitution Deed both dated 05.01.2020 are the outcome of undue influence, coercion and duress and is non-est including without limitation a declaration that Claimants could not have been divested as partner in the Respondent No.2. As rightly contended by the Applicants-Respondents, the Claimants have now seemingly taken completely a different stand. But the question falling for consideration is whether such a subsequent conduct of the Claimants taking a different stand can be a ground to seek for review of the order dated 25.01.2021 passed by this Tribunal in the application filed under Section 17 of the Act.
23. A Court or Tribunal has no inherent power of review. It must be conferred by law specifically or by implication. Power of review is a creature of statute. Unless a statute clearly provides for power of review, there is no inherent power vested in any judicial or quasi judicial body or Tribunal to review the order passed by it."
10. Second, Mr Krishnan submitted that the order dated 25.01.2021 of the Signature Not Verified Digitally signed by:DUSHYANT RAWAL learned Arbitral Tribunal is inconsistent with some of the findings as recorded by the Arbitral Tribunal. The Arbitral Tribunal had found that the amounts due to the Vendors were not verified and a joint verification as required to be conducted, was not done. Notwithstanding the same, the Arbitral Tribunal has directed disbursal of ₹7.5 crores to the said Vendors.
11. Third, he submitted that the Arbitral Tribunal had concluded that no amount could be paid to the Claimants at that stage. Having so concluded, the application under Section 17 of the A&C Act was liable to be rejected as no prayers were made to disburse any amount to any vendors.
12. Ms Panda, the learned counsel appearing for respondent no.1 to 4 (Claimants before the Arbitral Tribunal) countered the aforesaid submission. She stated that the Claimants have not challenged the MoU dated 05.01.2020 in its entirety; their challenge is limited to a few clauses of the MoU. She states that some of the clauses of the MoU are invalid as the Claimants were compelled to agree to the same under undue influence and coercion. She submitted that by applying the Doctrine of Blue Pencil, the said clauses are required to be deleted from the MoU.
13. Next, she submitted that although no prayer was made in the application under Section 17 of the A&C Act for disbursal of any amount to the Vendors, the Claimants had founded their relief on the ground that funds were required for such disbursal. Next, she submitted that the Claimants were willing for a joint verification in terms of the MoU for effecting disbursement.
14. Clearly, the contentions raised by Mr Krishnan, learned Senior Counsel are substantial and require consideration. A plain reading of the Statement of Claim - which was filed after the order dated 25.01.2021 was Signature Not Verified Digitally signed by:DUSHYANT RAWAL passed - indicates that the Claimants are seeking to challenge the MoU. It is also apparent that their contention that funds are required to be disbursed to Vendors is founded on the terms of the MoU. It does not appear that there is any agreement between the parties, other than the MoU, regarding payment of any amount to the Vendors. This court is prima facie of the view that since the Claimants have challenged the MoU, an order directing disbursement of any amounts in aid of the terms thereof, at the instance of Claimants, may not be apposite. The observations made by the Arbitral Tribunal in paragraph 22 of the impugned order dated 08.04.2021, also indicates that the Arbitral Tribunal was of the view that the Claimants had changed their stand but it did not revisit the order dated 25.01.2021 on the ground that it did not have jurisdiction to review its order. Therefore, it is necessary to examine whether the order dated 25.01.2021 is in aid of the arbitral proceedings.
15. For the aforesaid reasons, the impugned order is stayed till the next date of hearing.
16. List for further hearing on 09.07.2021.
VIBHU BAKHRU, J JUNE 01, 2021 nn Signature Not Verified Digitally signed by:DUSHYANT RAWAL