Delhi High Court
General Electric Canada Inc & Anr. vs National Hydroelectric Power ... on 30 April, 2012
Author: S. Muralidhar
Bench: S. Muralidhar
IN THE HIGH COURT OF DELHI AT NEW DELHI
CS (OS) 1480/2003
Reserved on: April 17, 2012
Decision on: April 30, 2012
GENERAL ELECTRIC CANADA INC & ANR.
..... Plaintiffs
Through: Mr. Abhinav Vasisht, Senior
Advocate with
Ms. Prachi V. Sharma, Advocate.
Versus
NATIONAL HYDROELECTRIC POWER
CORPORATION LIMITED ..... Defendant
Through: Mr. Sachin Datta with
Mr. Abhimanyu Kumar, Advocates.
CORAM: JUSTICE S. MURALIDHAR
JUDGMEN T
30.04.2012
IA Nos. 20003 of 2011 & 20004 of 2011
1. IA No. 20003 of 2011 has been filed by Alstom Power & Transport
Canada Inc. ('Alstom') under Order XXII Rule 10 read with Section 151
CPC for taking on record "the current name of the Claimant/Petitioner
No. 2, i.e., Alstom Power & Transport Canada Inc." and to take on
record "the amended memo of parties filed with the application."
2. IA No. 20004 of 2011 is by General Electric Canada Inc./General
Electrique DU Canada ('GE Canada') under Order XXII Rule 10 read
with Section 151 CPC bringing on record the current name of "Claimant
No. 1/Petitioner No. 1, i.e. General Electric Canada/Generale Electrique
Du Canada" and to bring on record 'the amended memo of parties filed
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 1 of 17
with the application."
Background to the applications
3. The background to the applications is that on 3rd August 1984 a
contract was entered into between the Defendant National Hydroelectric
Power Corporation Limited ('NHPCL'), a Government of India
undertaking, and three Canadian entities. One entity was SNC/ACRES, a
joint venture composed of SNC Inc. and Acres International Limited,
both incorporated in Canada and neither a party to the arbitral
proceedings. The second Canadian entity was Marine Industries Ltd.
('MIL') incorporated under the laws of Canada having its registered
office at Montreal, Quebec, Canada. The third Canadian entity was the
Canadian General Electric Company Limited ('CGECL'), also
incorporated under the laws of Canada.
4. The contract related to the Chamera Hydroelectric Project ('the
project in question') on the Ravi River in the State of Himachal Pradesh.
The project which commenced in 1983 involved the construction of a
dam, an underground power house complex containing three hydro
turbine generator units, tunnels, switchyards and a transmission line. The
disputes that arose between the parties were referred to the International
Court of Arbitration ('Tribunal') of the International Chamber of
Commerce ('ICC') Paris.
5. A three-Member Tribunal by an Award dated 7th May 1996 awarded
MIL Canadian Dollars 759,758.52 with interest @ 6% per annum from
18th February 1994 until the date of the Award and post Award interest at
10% per annum. The counter claims of NHPCL were rejected. A
certified copy of the Award was sent to the Registrar of this Court by the
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 2 of 17
ICC Secretariat by a letter dated 30th June 2003.
6. Pursuant to the notices issued to the parties, objections were filed on
22nd April 2004 by NHPCL in IA No. 4860 of 2004 under Sections 30
and 33 of the Arbitration Act, 1940. The said objections were disposed
of by a learned Single Judge on 10th May 2010. The Award dated 7th
May 1996 was made Rule of the Court subject to modification of the rate
of interest to 4% pendente lite and 6% post Award interest.
7. NHPCL filed an appeal, FAO (OS) No. 554 of 2010, against the
decision dated 10th May 2010 of the learned Single Judge. On 16th
November 2010 NHPCL sought and was granted by the Division Bench
of this Court one week's time to deposit the awarded amount subject to
payment of Rs. 5,000 as costs.
8. Thereafter, the present two applications were filed before this Court
by Alstom and GE Canada under Order XXII Rule 10 CPC. Notices on
the applications were directed to be issued by this Court on 13th
December 2011. Replies were filed by NHPCL in both applications on
13th February 2012. Rejoinders were filed by the applicants on 17th
March 2012.
9. Meanwhile, on 19th December 2011, while admitting FAO (OS) No.
554 of 2011 filed by NHPCL, the Division Bench of this Court directed
the decretal amount deposited with the Court to be released to the
Respondents subject to it furnishing a solvent security to the satisfaction
of the Registrar of this Court. The present applicants, Alstom and GE
Canada, filed two separate applications being CM Nos. 22983 of 2010
and 107 of 2011 under Order XXII Rule 10 CPC in the aforesaid FAO
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 3 of 17
(OS) No. 554 of 2010. The Division Bench in its order dated 19th
December 2011 took note of the fact that identical applications were
pending consideration in this Court and therefore, "would like to have
the benefit of the order of the learned Single Judge before we proceed
with the applications." The applications pending before the Single Judge
were directed to be listed for directions on 27th March 2012. NHPCL's
Review Petition No. 114 of 2012 in FAO (OS) No. 554 of 2010 seeking
recall of the order dated 19th December 2011 was dismissed by the
Division Bench on 21st February 2012.
10. The present applications were heard on 26th March 2012 when the
following order was passed:
"1. After hearing the submissions for some time, it
appears to the Court that the Applicants in both these
applications should produce complete documents in
support of their respective applications.
2. In relation to IA 20004 of 2011 filed by the General
Electric Canada, the correct copy of Schedule A titled
'Excluded Assets' appended to the Partnership
Contribution Agreement dated 28th March 2004, without
any redaction, be submitted to the Court, within two
weeks from today, with an advance copy to the counsel
for the non-applicants.
3. In relation to IA No. 20003 of 2011 by Alstom Power
and Transport Canada Inc., the copy of Schedule 2.1 (f)
referred to in the Sale and Purchase Agreement dated 19th
July 1991 should be filed, within two weeks from today,
with an advance copy to the counsel for the non-applicant.
4. List on 17th April 2012."
11. This Court has heard the submissions of Mr. Abhinav Vasisht,
learned Senior counsel for the applicants and Mr. Sachin Datta, learned
counsel for NHPCL.
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 4 of 17
Relevant Facts
12. Before dealing with the respective submissions of the parties it is
necessary to advert to certain facts relevant to both applications. The
parties that entered into the contract with NHPCL on 3rd August 1984
were MIL and CGECL. Both entities were incorporated under the
Canadian Laws.
13. On 1st July 1987 CGECL changed its name to General Electric
Canada Inc. ('GEC Inc.'). The certificate of amendment dated 1st July
1987 has been placed on record. On 27th April 1988 MIL changed its
name to MIL Group Inc. ('MGI'). The certificate of amendment dated
27th April 1988 has been enclosed with Alstom's application. On 19th
July 1991 by a Sales and Purchase Agreement ('SPA'), the company in
the name of GEC Alstom Electromecanique ('GAE') purchased and
acquired the business of MGI. A copy of the SPA dated 19th July 1991
has been placed on record. What is important in this SPA is that under
Article 2.1 (f) the assets purchased by GAE from MGI included "the
rights and interests in the on-going contracts and orders and bids
submitted or being prepared relating to the design, manufacturing,
assembly, supply and marketing of products or services relating to the
Business, the list of which is set forth in Schedule 2.1 (f) (the
'Contracts')."
14. Article 2.1 (m) of the SPA reads as under:
"all other contracts of any nature whatsoever relating to
the operation of the Business (hereinafter referred to as
the 'other contracts') including without limiting the
generality of the foregoing, any agreement entered into in
connection with the performance of the contracts and the
service, safety, leasing, acquisition and other similar
contracts; the list of the most important ones and those not
in the normal course of business is set forth in Schedule
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 5 of 17
2.1 (m)."
15. Articles 2.2 and 2.3 of the SPA are also relevant and read as under:
"2.2 Excluded Assets: It is understood that the assets
identified under the heading 'Repartition de i'actif net/Le
Groupe MIL Inc." (breakdown of net assets/Le Groupe
MIL Inc.) on the closing balance sheet and those listed in
Schedule 2.2 hereof (such assets being collectively
referred to as the 'Excluded Assets') do not form part of
the Purchased Assets.
2.3 Assignment of Contracts: Nothing herein shall be
construed as an attempt to assign the rights and
obligations of the Vendor stemming from a contract,
agreement, act, licence, permit, undertaking or warranty
(including the contracts) which may not be assigned in
law without the consent of the other party to such
instrument and without such consent having been given."
16. The Schedule 2.1 (f) clearly included the project in question which
was entered into with NHPCL. Schedule 2.1 (m), under the heading
'other contracts', included the other contracts. It is clear, therefore, that
the project in question was in fact part of the assets acquired by GAE
from MGI. In other words even prior to the disputes arising between the
parties from the contract dated 3rd August 1984, MIL was no longer in
the picture with its assets, including the project in question involving
NHPCL, being acquired by GAE. Strangely, however, it was MGI which
on 5th December 1994 made a reference of the disputes to the ICC, Paris
jointly with GEC Inc. Both MGI and GEC Inc filed their respective
statements of claim before the ICC, Paris on 10th February 1995.
Consequently, at the very inception of the arbitral proceedings, the fact
that MGI's assets including the project in question had been acquired by
GAE was not disclosed. That MGI lacked the locus standi to maintain
the reference was therefore not known either to the Tribunal or NHPCL.
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 6 of 17
This position continued when on 7th May 1996 the Tribunal passed an
Award in favour of GEC Inc and MGI.
17. On 30th May 1996 GAE changed its name to GEC Alsthom Energies
Inc. ('GAEI'). This fact was not known to the NHPCL at that time.
18. On 19th June 1996 NHPCL filed a suit being CS (OS) No. 1475-A
of 1996 in this Court for declaring the Award dated 7th May 1996 a
nullity under Sections 14 (2) and 17 of the Arbitration Act, 1940. MGI
filed OMP No. 150 of 1996 under Section 49 of the Arbitration and
Conciliation Act, 1996 ('1996 Act') for making the Award a Rule of the
Court.
19. On or about 1st January 1998, GAEI along with another entity
amalgamated into GEC Alsthom Canada Inc. (`GACI'). On 7th July
1998 GACI changed its name to Alstom Canada Inc. (`ACI').
20. Without any of the above developments being brought on record,
this court by its decision dated 14th November 2000 held that the Award
dated 7th May 1996 had to be treated and enforced under the Arbitration
Act, 1940. The original Award dated 7th May 1996 was accordingly
summoned from the ICC, Paris. After the original Award dated 7th May
1996 was received, a separate CS (OS) No. 1480 of 2003 was registered.
NHPCL then filed its objections to the said Award in IA No. 4860 of
2004 under Sections 30 and 33 of the Arbitration Act, 1940.
21. On 12th March 2004 GEC Inc exported out of the Canadian Business
Corporation Act, and imported into the Companies Act (Nova Scotia).
On 28th March 2004 by a Partnership Contribution Agreement ('PCA')
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 7 of 17
and conveyance deed, GEC Inc contributed its assets to GE Canada, the
applicant in I.A. No. 20004 of 2011.
22. On 1st April 2006 by an Activity Purchase Agreement ('APA') dated
1st April 2006 the assets of the hydro power activities of ACI were
purchased by Alstom Hydro Canada Inc. ('AHCI'). On 31st March 2010
AHCI amalgamated into Alstom, the applicant in I.A. 20003 of 2011.
Pleadings
23. It is contended by both the applicants that by virtue of the above
changed events the rights, titles and interest of the original entities who
were parties to the Award dated 7th May 1996, have been assigned to
and/or have been devolved upon each of them and finally, as on date,
stand vested in Alstom and GE Canada the present successors-in-
interest. It is claimed that the rights of their respective predecessors-in-
interest to sue and/or defend have been assigned to each of the applicants
and, therefore, their names should be brought on record.
24. In reply to IA No. 20003 of 2011 it is pointed out by NHPCL that
inasmuch as the purported assignment and devolution of interest took
place even before the commencement of the arbitral proceedings, and the
said facts were not disclosed at any point in time till the filing of the
appeal by NHPCL, the applications under Order XXII Rule 10 CPC
were misconceived and an abuse of the process of law. No steps were
taken by either applicant or their respective predecessors-in-interest to
inform the Tribunal of the above developments and therefore, the Award
dated 7th May 1996 involving non-existent entities stood vitiated in law.
It is pointed out that under Clause 10.1 of the contract it is not open to
either MIL or CGECL to have assigned their respective rights or
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 8 of 17
interests in the contract without first obtaining the consent in writing
from NHPCL. With no such consent taken from NHPCL, the assignment
of rights to either applicant through a long winding route of takeovers
and change of name, had no validity.
25. In the rejoinder filed by Alstom, it is stated that Clause 10.5 of the
contract was not relevant since there was no assignment of any duties or
obligations of MIL in favour of MGI. It was only by the SPA dated 19th
July 1991 that GAE purchased and acquired the business of MGI. It is
denied that there was any deliberate omission to bring the changes as
noticed in the arbitration proceedings and that NHPCL ought not to take
advantage of this development to wriggle out of its liability under the
Award.
26. In its reply to GE Canada's application being I.A. No. 20004 of
2011 it is pointed by NHPCL that the entity with which the contract was
entered into, i.e. CGECL changed its name to GEC Inc on 1st July 1987.
Despite a number of takeovers and amalgamations taking place during
the arbitration proceedings and during the suit, no application to bring on
record the transferee entities was filed. It is contended that the
application by GE Canada, apart from being not maintainable, is belated,
an abuse of the process of court and liable to be dismissed.
27. In its reply GE Canada referred to the PCA and conveyance deed
dated 28th March 2004 whereunder GE Canada is recognised as the
successor-in-interest of GEC Inc. It denied that GE Canada did not
disclose the changes at the relevant time. It is submitted that the mere
change of the name of CGECL to GEC Inc. was inconsequential. It was
reiterated that Clause 10.5 of the contract was irrelevant since there was
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 9 of 17
no assignment of any duties in favour of the applicant GE Canada during
the arbitral proceedings. That happened only in 2004.
Decision on the issues
28. The first issue that arises for consideration is whether the present
applications are maintainable as such under Order XXII Rule 10 CPC.
Order XXII Rule 10 CPC deals with the procedure to be adopted by a
civil court where one of the parties to the proceedings before it dies. It
deals with the issue whether the right to sue survives the death of a party.
Order XXII Rule 3 provides that where one of the parties dies, and that
party's right to sue does not devolve on the surviving party, the Court, on
an application made in that behalf, shall cause the legal representatives
(`LRs') of the deceased party to be impleaded and proceed with the suit.
However, under Rule 3 (2) if the application is not made within the time
prescribed by law then the suit shall abate. The period prescribed under
Article 120 of the Schedule to the Limitation Act, 1963 for bringing on
record the LRs of the deceased party is 90 days from the date of the
death of the party.
29. Order XXII Rule 10 talks of the procedure "in case of assignment
before final order in suit". It reads as under:
"(1) In other cases of an assignment, creation or
devolution of any interest during the pendency of a
suit, the suit may, by leave of the Court, be continued
by or against the person to or upon whom such interest
has come or devolved.
(2) The attachment of a decree pending an appeal
therefrom shall be deemed to be an interest entitling the
person who procured such attachment to the benefit of
sub-rule (1)."
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 10 of 17
30. Order XXII Rule 10 CPC is premised on the pendency of the suit.
In other words, if the suit already stands abated, there is no question of
entertaining an application under Order XXII Rule 10 CPC for the suit.
31. In the present case, the two entities who were claimants before the
Tribunal can be said to be in the position of plaintiffs in a suit. As
regards MIL, the original party to the contract dated 3rd August 1984, it
merely changed its name to MGI on 27th April 1988. This would not
affect the right and interest of MIL which stands now in the name of
MGI. However, on 19th July 1991 when by the SPA GAE purchased the
business of MGI, the change was a significant and substantial one. As
already noticed, among the assets acquired by GAE was the Chamera
Project with NHPCL. Therefore, on the date of reference of the disputes
to the ICC, MGI had no right or interest in the disputes arising out of the
contract dated 3rd August 1984. The reference of the disputes to
arbitration could have been made properly only by GAE. The SPA dated
19th July 1991 did constitute the assignment of rights and interest of MGI
in the project in question in favour of GAE. Further such assignment
could not have been made without the consent of NHPCL and was for
the purposes of Order XXII Rule 10 CPC, not a valid assignment. As far
as the contract dated 3rd August 1984 was concerned, MGI had nothing
to do with the Chamera project at the time of commencement of
arbitration. MGI could not have filed a suit against NHPCL after 19th
July 1991. The position was no different from that of the death of a
plaintiff in a suit which, in the absence of substitution of LRs during the
pendency of the suit, abates.
32. There is no explanation whatsoever either in the application or in the
rejoinder for this monumental lapse on the part of GAE to bring the
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 11 of 17
above changes to the notice of the learned Tribunal. This is too glaring
an omission to be excused. These facts did not surface till 2010 when
applications were filed both before this court as well as the Division
Bench by the two applicants Alstom and GE Canada. The procedure
under Order XXII Rule 10 CPC is available only during the pendency of
the suit. On this short ground the applications by Alstom and GE Canada
are held to be misconceived and deserve to be dismissed as such.
33. As regards GE Canada, while GEC Inc may not have lacked the
locus standi to seek reference of the disputes to ICC arbitration when it
filed a statement of claim, on 14th November 2000 when this Court
decided that the Award dated 7th May 1996 had to be treated and
enforced under the Arbitration Act, 1940, it could not be excused for not
bringing the changes to the notice of the court before which the suit and
later the objections were pending.
34. The proceedings concerning the Award under the Arbitration Act,
1940 cannot be said to have concluded till Award was made Rule of the
Court. In other words the remedy under Order XXII Rule 10 CPC can be
invoked till such time the Award is made Rule of the Court i.e., 10th May
2010. After that date, the suit could not be said to be 'pending' within
the meaning of Order XXII Rule 10 CPC. By then CGECL changed its
name to GEC Inc. On 28th March 2004 the original party GEC Inc 'died'
legally when by means of the PCA its assets were taken over by GE
Canada. In the arbitral proceedings which were in a technical sense still
pending as on that date GEC Inc had to be necessarily substituted by its
successor-in-interest GE Canada within 90 days of 28th March 2004 in
terms of Order XXII Rule 3 CPC read with Article 120 of the Limitation
Act, 1963. This was however not done. On the expiry of the said period
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 12 of 17
of limitation, the 'suit' or claim in the arbitration, abated. As far as
Order XXII Rule 10 CPC was concerned, the said provision could be
invoked only as long as the suit remained pending. The present
application was filed after the claim/suit had abated and after the
objections under Sections 30 and 33 of the Arbitration Act 1940 were
rejected and the Award was made rule of the court. The applicant GE
Canada therefore missed the bus as far as Order XXII Rule 3 and Rule
10 are concerned. Even till date there has been no application for
substitution. Consequently, the application on behalf of GE Canada is
also misconceived and not maintainable as such.
35. In Saraswati Industrial Syndicate Ltd. v. C.I.T., Haryana,
Himachal Pradesh, Delhi AIR 1991 SC 70 the question that arose as to
whether the tax liability under Section 41 (1) of the Income Tax Act,
1961 stood transferred to the assessee in its changed entity after
amalgamation. In other words the question was whether on the
amalgamation of the India Sugar Company (ISC) with Saraswati
Industrial Syndicate (SIS), ISC continued to retain its identity for the
purposes of Section 41 (1) of the Income Tax Act, 1961. It was held that
"when two companies amalgamate and merge into one, the transferor
company loses its entity as it ceases to have its business." In Singer
India Ltd. v. Chander Mohan Chadha (2004) 7 SCC 1 it was held that
"their respective rights or liabilities are determined under the scheme of
amalgamation but the corporate identity of the transferor company
ceases to exist with effect from the date the amalgamation is made
effective."
36. As regards the legal position vis-a-vis Order XXII Rule 10 CPC
reference may be made to the decision of the Supreme Court in
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 13 of 17
Dhurandhar Prasad Singh v. Jai Prakash University (2001) 6 SCC
534. In para 26 it was held:
"26. The plain language of Rule 10 referred to above does not
suggest that leave can be sought by that person alone upon
whom the interest has devolved. It simply says that the suit
may be continued by the person upon whom such an interest
has devolved and this applies in a case where the interest of
the plaintiff has devolved. Likewise, in a case where interest
of the defendant has devolved, the suit may be continued
against such a person upon whom interest has devolved, but
in either eventuality, for continuance of the suit against the
persons upon whom the interest has devolved during the
pendency of the suit, leave of the court has to be obtained. If
it is laid down that leave can be obtained by that person alone
upon whom interest of a party to the suit has devolved during
its pendency, then there may be preposterous results as such a
party might not be knowing about the litigation and
consequently not feasible for him to apply for leave and if a
duty is cast upon him then in such an eventuality he would be
bound by the decree even in cases of failure to apply for
leave. As a rule of prudence, initial duty lies upon the plaintiff
to apply for leave in case the factum of devolution was within
his knowledge or with due diligence could have been known
by him. The person upon whom the interest has devolved may
also apply for such a leave so that his interest may be
properly represented as the original party, if it ceased to have
an interest in the subject-matter of dispute by virtue of
devolution of interest upon another person, may not take
interest therein, in ordinary course, which is but natural, or by
colluding with the other side. ....Thus, we do not find any
substance in this submission of learned counsel appearing on
behalf of the appellant and hold that prayer for leave can be
made not only by the person upon whom interest has
devolved, but also by the plaintiff or any other party or person
interested."
37. The position that emerges is that where interest of the Plaintiff or
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 14 of 17
the Defendant has devolved on their respective LRs, then for
continuance of the suit, leave of the Court has to be obtained for bringing
the LRs on record. Leave has to be obtained by the party upon whom the
interest devolves or even by a person interested but during the pendency
of the suit. Certainly, such party cannot seek to be brought on record
once the suit itself has abated. In Amit Kumar Shaw v. Farida Khatoon
(2005) 11 SCC 403 it was explained in para 11 that an application under
Order XXII Rule 10 CPC can be made to the Appellate Court "even
though the devolution of interest occurred when the case was pending in
the trial court." Further it was explained in para 16 as under:
"16. The doctrine of lis pendens applies only where the lis is
pending before a Court. Further pending the suit, the
transferee is not entitled as of right to be made a party to the
suit, though the Court has a discretion to make him a party.
But the transferee pendente lite can be added as a proper party
if his interest in the subject matter of the suit is substantial
and not just peripheral. A transferee pendente lite to the
extent he has acquired interest from the defendant is vitally
interested in the litigation, where the transfer is of the entire
interest of the defendant, the latter having no more interest in
the property may not properly defend the suit. He may
collude with the plaintiff. Hence, though the plaintiff is under
no obligation to make a lis pendens transferee a party; under
Order XXII Rule 10 an alienee pendente lite may be joined as
party. As already noticed, the Court has discretion in the
matter which must be judicially exercised and an alienee
would ordinarily be joined as a party to enable him to protect
his interests. The Court has held that a transferee pendente lite
of an interest in immovable property is a representative-in-
interest of the party from whom he has acquired that interest.
He is entitled to be impleaded in the suit or other proceedings
where his predecessor-in-interest is made a party to the
litigation; he is entitled to be heard in the matter on the merits
of the case."
38. The issue was considered by this Court in M/s. Bank Kreiss AG v.
Mr. Ashok K. Chauhan [decision dated 23rd October 2007 in CS (OS)
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 15 of 17
No. 675 of 1999]. It was held, in a case that involved the takeover of one
corporate entity by another that an application under Order XXII Rule 10
CPC was not maintainable where suit itself has abated. It was pointed
out that it was a contradiction that the person on whom the interest has
devolved is given leave to continue the suit after the suit has ceased to
exist. The only option available to such party is to apply for setting aside
the abatement under Order XXII Rule 9(2) CPC accompanied by an
application for condonation of delay.
39. In the present case as far as Alstom's application is concerned, its
predecessor-in-interest was GAE which was never a party to the arbitral
proceedings. Through the entire arbitral proceedings it was MGI which
participated although it had no locus standi to do so even at the
commencement. Nothing possibly can now be done to correct this.
40. As regards the application by GE Canada, there was no application
under Order XXII Rule 3 filed by it in the first place to be brought on
record in place of GEC Inc. during the pendency of the objections to the
Award. This had to be done within 90 days of 28th March 2004 but was
not. The proceedings concerning GEC Inc therefore 'abated' at the end
of that period. No application under Order XXII Rule 9 to set aside the
abatement was filed. In any event, after the objections were rejected and
the Award, with a slight modification as regards interest, was made rule
of the court on 10th May 2010, the suit itself ceased. Even when the suit
was pending, unless the abatement vis-a-vis GEC Inc was set aside, no
application by its successor-in-interest GE Canada under Order XXII
Rule 10 CPC could have been entertained.
41. Neither applicant has any explanation to offer for their abject failure,
I.A Nos. 20003 and 2004 of 2011 in CS (OS) No. 1480 of 2003 Page 16 of 17
over several years, to bring to the notice of the Tribunal, and later the
court, the fundamental changes in the constitution of the original parties
to the contract. It is not possible to condone such a serious lapse and
overlook the irreversible legal consequences that have resulted.
42. For the aforesaid reasons, both applications are dismissed but, in the
circumstances of the case, with no order as to costs.
S. MURALIDHAR, J.
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