Calcutta High Court
Apl Metals Limited vs Mountview Tracom Llp And Ors on 7 February, 2022
Author: Ravi Krishan Kapur
Bench: Ravi Krishan Kapur
ODC-56
IA NO. GA/1/2022
In AP/4/2020
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
[COMMERCIAL DIVISION]
APL METALS LIMITED
Vs
MOUNTVIEW TRACOM LLP AND ORS.
BEFORE:
The Hon'ble JUSTICE RAVI KRISHAN KAPUR
Date : 7th February, 2022.
Appearance:
Mr. Ahin Chowdhuri, Adv.
Mr. Gopal Pahari, Sr. Adv.
Ms. Mandeep Kur, Adv.
Mr. Jishnu Chowdhury, Adv.
Ms. Radhika Singh, Adv.
Mr. Chayan Gupta, Adv.
The Court : This is an application under Section 36(2) of the Arbitration
and Conciliation Act, 1996 (the Act).
The petitioner prays for stay of operation of an award dated 1st October,
2019 as modified on 3rd December, 2019. By the impugned award, the Sole
Arbitrator has directed the petitioner to pay to the respondent a sum, which, as
on date, aggregates to approximately Rs.7.93 crores.
The award has been passed in respect of disputes and differences, which had arisen out of a Development Agreement dated 19th March, 2013. By the award dated 1st October, 2019 the Sole Arbitrator had inter-alia directed as follows;
"The Respondent is thus directed to pay to the Claimant the aforesaid sum of Rs. 2,75,96,644/- together with interest @ 12% p.a. on 2 and from 1st April, 2018 till the date of payment thereof, within 31st December, 2019. In default of such payment within the time as mentioned above, the claimant is entitled to realise the aforesaid awarded amount from the Respondent through the process of execution in accordance with law."
Thereafter, in an application under Section 33 of the Act, by an order dated 3rd December, 2019, the Sole Arbitrator had directed that the award dated 1st October, 2019 stand corrected to the following extent ;
"Accordingly the Claimant's prayer for correction of the award is allowed. The Respondent is thus directed to pay a sum of Rs.2,27,71,539/- being interest on the security deposit from the date of its deposit till the date of filing of the claim petition i.e. 31st March, 2018 in addition to the awarded amount as mentioned in the operative part of the award by which the claimant's claim petition was disposed of. Thus the awarded amount which was mentioned in the Award being a sum of Rs.2,75,96,644/- stands substituted by the figure being Rs.5,03,68,183/- (i.e. Rs.2,75,96,644+Rs.2,27,71,539= Rs.5,03,68,183/-)."
Being aggrieved by the award, the petitioner has filed an application under Section 34 of the Act, being AP No. 4 of 2020.
In this application, the petitioner prays for stay of operation of the impugned award dated 1st October, 2019 as corrected by an order dated 3rd December, 2019 security by furnishing a piece of land approximately 7.06 acres at Panskura, which, according to the petitioner is valued at Rs. 10crores. It is contended on behalf of the petitioner that the petitioner has no other mode for securing the award. The said property is the only form of security which the petitioner can offer.
3
On behalf of the award holder, it is submitted that, the original transaction by and between the parties, arose out of moneys which had been advanced by the award holder to the petitioner in the form of security deposit. The said money is still lying with the petitioner. This also appears from the Balance Sheet of the petitioner. It is further submitted that the petitioner continues to enjoy interest on the said amount. Insofar as the security offered by the petitioner is concerned, it is submitted that the land is jal zameen as would appear from the Records of Title relied on by the award holder. It is further submitted that the subject land offered by the petitioner is also classified as marshy land in the land records. It is further submitted that the land is situated within the factory premises of the petitioner. The land is landlocked and there is no egress and ingress from the subject land. Moreover, the land has also not also mutated in favour of the petitioner.
I have considered the submission made on behalf of the parties. I am of the view that the security contemplated under 36(2) of the Act should be real and not fanciful nor illusory. The purpose of securing the award holder at this stage is to ensure and facilitate that the decree if ultimately executed is not rendered nugatory nor infructuous. In brief, the object of the security must be that the award holder has a realistic chance of enjoying the fruits of the decree.
I am of the view, that the offer of the award holder insofar as the subject land is concerned, is the most inappropriate form of security. In fact, enforcing the security offered by the petitioner would be a spring board for further 4 litigation. Such security is also not commercially viable and most inappropriate to satisfy a money decree in favour of the award-holder. I have also given due weight to the Affidavit of Assets filed by the petitioner in the connected execution application and am of the view that the petitioner has virtually mortgaged and/or hypothecated all its assets and properties.
In view of the aforesaid, the prayer of the petitioner to furnish the subject immovable property as security for stay of the impugned award is rejected. The petitioner is directed to furnish security by way of bank guarantee for the entire aggregate awarded amount of Rs.7.93 crores to the satisfaction of the Registrar, Original Side.
The aforesaid security is to be provided by the petitioner within a period of two weeks from date. In default, liberty is granted to the award holder to execute the decree. In case of furnishing the aforesaid security, there shall be an unconditional stay of the award till the disposal of AP 4 of 2020.
In view of the aforesaid, GA 1 of 2022 in AP 4 of 2020 stands disposed of.
RE: AP 4 OF 2020 Heard the parties. An accommodation is prayed for on behalf of the petitioner to file their Written Notes of Submissions. The Written Notes of Submissions filed on behalf of the respondent be kept with the records.
Let this matter appear on 17 February, 2022.
In the meantime, the petitioner is granted liberty to file their Written Notes of Submissions.
(RAVI KRISHAN KAPUR, J.) SK.