Bombay High Court
India Infrastructure Fund And Anr vs Gmr Energy Limited And 5 Ors on 2 February, 2021
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
31.carbpl.1869.2021.docx
dik
Digitally
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
signed by
Dhanappa
Dhanappa I. Koshti
I. Koshti Date:
2021.02.04
18:42:23
+0530
IN ITS COMMERCIAL DIVISION
COMM. ARBITRATION PETITION (L) NO. 1869 OF 2021
India Infrastructure Fund, acting through
its Investment Manager Global Infrastructure
Partners India LLP & Anr. ... Petitioners
Vs
GMR Energy Limited & Ors. ...Respondents
Mr. Virag Tulzapurkar sr. counsel a/w Ms. Bindi Dave, Mr. Raghav Gupta
& Ms. Jyoti Pardeshi i/b Wadia Ghandy and Co. for the Petitioners.
Ms Fereshte D. Sethna i/b DMD Advocates for Respondent Nos 1 and 2.
Mr. Darius Khambata, Sr. counsel a/w Abhishek Tilak i/b DMD Advocates
for respondent Nos. 3 to 5.
Mr. Navroz Seervai, sr. counsel for respondent No.6.
CORAM : B. P. COLABAWALLA, J.
DATE : 2nd FEBRUARY, 2021 P.C. :
1. The present petition is filed under Section 9 of the Arbitration and Conciliation Act, 1996 (for short "the Act") seeking Page 1 of 7
31.carbpl.1869.2021.docx certain reliefs after the passing of the award by the Arbitral Tribunal dated 30th November, 2020. Under the award, respondent No.1 was directed to pay a sum of Rs.288,17,66,250/- in accordance with Article 11.10 of the Share Subscription and Shareholders Agreement (for short "SSHA") dated 29th September, 2009.
2. Ms Sethna, the learned advocate appearing on behalf of respondent Nos.1 and 2, vehemently opposed grant of any ad-interim reliefs and submitted that respondent Nos.1 and 2 be given an opportunity to file an affidavit-in-reply. She submitted that as on today, the time to challenge the award under Section 34 of the Act has not expired and hence it is not enforceable as a decree. Considering that it is not enforceable as a decree, the petitioners are not entitled to any relief, especially considering that no case is made out in the petition that respondent Nos.1 and 2 are disposing of their assets with an intent to defeat and/or delay the execution of the award that is passed in favour of the petitioners. She submitted that on a harmonious construction of sections 9 and 34 of the Act it is clear that unless the time to challenge the award has lapsed, no petition can be filed under section 9. This is more so when there is no allegation that the award debtor (in the present case being Page 2 of 7
31.carbpl.1869.2021.docx respondent No.1) is disposing off its assets, was the submission.
3. I have heard Ms. Sethna for respondent Nos.1 and 2 at great length. I find absolutely no merit in these contentions. Section 9 of the Act reads as under:-
"9. Interim measures, etc. by Court-- (1) 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 a 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.
(2) Where, before the commencement of the arbitral proceedings, a court passes an order for any interim measure of protection under sub-section Page 3 of 7
31.carbpl.1869.2021.docx (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the court may determine.
(3) Once the arbitral tribunal has been constituted, the court shall not entertain an application under sub-section (1), unless the court finds that circumstances exist which may not render the remedy provided under Section 17 efficacious."
(emphasis supplied)
4. From an ex-facie reading of the above section it is clear that it gives a party a right to approach the Court any time (i) before or during the arbitral proceedings or (ii) after making of the arbitral award but before it is enforced in accordance with Section 36 of the Act for seeking appropriate reliefs as set out therein. The intent of the legislature for allowing a party to approach the Court under section 9 even after the award is passed but before it is enforced under section 36, is clear. It is to protect the person who has succeeded before the Arbitral Tribunal so that till the award is enforced as a decree of the Court, the assets of the award debtor are not allowed to be frittered away. This being the clear intention of the Legislature, it would then be ridiculous to suggest that merely because the time to challenge the award has not expired, no relief can be granted under Section 9 of the Act. In fact, such an interpretation would run contrary to the specific Page 4 of 7
31.carbpl.1869.2021.docx wording of the section which clearly gives a right to a party to approach the Court and seek appropriate reliefs after the passing of the award and till it is enforced under section 36 of the Act. I therefore find no merit in the contentions raised by Ms. Sethna.
5. Even otherwise, I find that the averments contained in paragraphs 3.4, 3.5 and 3.6 of the petition clearly make out a case for granting ad-interim reliefs. In fact, in the most recent credit rating by ICRA of respondent No.1 (i.e. as on December, 2019) mentions "Issuer not co-operating". This, at-least prima facie, goes to show that there are serious doubts about the financial well-being of respondent No.1. In these circumstances, at the ad-interim stage, I am clearly of the view that some protective orders are required.
6. In view of the foregoing discussion, and taking an overall view of the matter, I am satisfied that a case is made out for granting ad-interim reliefs in terms of prayer clause (c) which relates to disclosure and prayer clause (b) which is to restrain the respondents from disposing off any of its assets. In these circumstances, there shall be ad-interim reliefs in terms of prayer clauses (b) [except the bracketed portion] and (c) which reads thus :-
Page 5 of 7
31.carbpl.1869.2021.docx "(b) That pending enforcement and/or execution of the Arbitral Award (Exhibit "B" hereto), this Hon'ble Court be pleased to pass an order and injunction against the respondents restraining them from disposing of any of its assets whatsoever without permission from this Hon'ble Court and only upon deposit with this Hon'ble Court of the sale proceeds in respect thereof [with liberty to the petitioners to withdraw the same].
(c) That pending enforcement and/or execution of the Arbitral Award (Exhibit "B" hereto), this Hon'ble Court be pleased to order and direct the respondents forthwith to disclose on affidavit full particulars of all their assets whether movable, immovable, tangible or intangible, owned by them/standing in their name including bank accounts, properties, investments and valuables, with particulars of encumbrances thereon, if any."
7. It is clarified that at this stage, the aforesaid two prayers are granted only against respondent No.1 and not against respondent Nos. 2 to 6. All the respondents are granted liberty to file their affidavit-in-reply to the above section 9 petition within a period of two weeks from today and serve a copy of the same on the advocates for the petitioners. If the petitioners seek to file any affidavit-in- rejoinder, the same shall be filed within a period of one week thereafter and a copy of the same shall be served on the advocates for the respondents.
Page 6 of 7
31.carbpl.1869.2021.docx
8. Place the above section 9 petition for further reliefs on 3rd March, 2021.
9. It is clarified that this order shall not in any way prejudice the right of respondent No.1 to challenge the award dated 30th November, 2020 read with the order passed by the Tribunal under section 33 of the Act, and which is dated 18th January, 2021.
10. This order shall be digitally signed by the Private Secretory /Personal Assistant of this Court. All concerned shall act on production by fax or e-mail of a digitally signed copy of this order.
(B. P. COLABAWALLA, J. ) Page 7 of 7