Madhya Pradesh High Court
National Insurance Co. Ltd. Thr. vs M/S Sambhav Industries (A Unit Of M/S ... on 21 March, 2018
THE HIGH COURT OF MADHYA PRADESH
Review Petition No.155/2018
(National Insurance Co.Ltd. Vs. M/s Sambhav Industries)
Gwalior
21.3.2018
Shri Alok Kumar Sharma, learned counsel for the
applicant.
Shri K.N. Gupta, learned Senior Advocate with Shri
R.S. Dhakad, learned counsel for the respondent.
Review of order dated 15.1.2018 passed in Misc. Petition No.121/2018 has been sought by the present petition. The writ petition was directed against the orders dated 21.12.2017 and 25.10.2017 passed by the Trial Court in Arbitration Application No.15/2017, whereby the Trial Court directed the appellant to deposit the security by way of Bank Guarantee in lieu of the stay of arbitration award qua principal sum in purported exercise of powers under sub-section (3) of section 36 of the Arbitration and Conciliation Act, 1996.
In writ petition while dwelling upon the aspect that the award includes the interest also, the appellant i.e. the present petitioner was directed to deposit the Bank Guarantee covering the entire amount of award i.e. Rs.11,70,18,676/-.
Review of the said order is being sought on the THE HIGH COURT OF MADHYA PRADESH Review Petition No.155/2018 (National Insurance Co.Ltd. Vs. M/s Sambhav Industries) ground that as per provisions contained under Order 27 Rule 8-A of the Code of Civil Procedure 1908 as also stipulation contained in Order 41 Rule 1 (3) and Order 41 Rule 5 of the Code of Civil Procedure, 1908 to impress upon that the petitioner being a statutory company controlled by the Central Government, the petitioner cannot be called upon to deposit the bank guarantee towards the security. Reliance is also placed on the decision of the Supreme Court in the case of Trident India Ltd. Vs. Cham Ice and Cold Storage and others, (2011) 14 SCC 586 and order passed by Calcutta High Court in the case of Union of India (UOI) Vs. Burma Construction and others, AIR 2004 Cal 174. The petitioner besides seeking modification of the order also seeks extension of time to deposit the bank guarantee to recover the amount of Rs.11,70,18,676/-.
Learned Senior counsel appearing for the respondent though has no objection for extension of time in depositing the bank guarantee, however, has objection for modification of the order. It is urged that petitioner company neither covered under Order 27 Rule 8-A of the Code of Civil THE HIGH COURT OF MADHYA PRADESH Review Petition No.155/2018 (National Insurance Co.Ltd. Vs. M/s Sambhav Industries) Procedure, 1908 nor is benefited by the stipulation contained under Order 41 Rule 1 (3) and Rule 5 of the Code of Civil Procedure, 1908 that it can be exempted from tendering the security. It is urged that there is no illegality for directing the petitioner-company to furnish security in the form of Bank Guarantee. Reliance is placed on the decision of the Supreme Court in Kanpur Jal Sansthan and another Vs. Bapu Constructions, (2015) 5 SCC 267, wherein it is held:
"31. The learned counsel for the appellants, as stated earlier, has commended us to the decision in State of Kerala Vs. T.K. Kuruvilla, AIR 2004 Ker 233 of the High Court of Kerala wherein the Division Bench placing reliance on the decision in Collector Vs. Padma Charan Mohanty, (1980) 50 Cut Lt 191 has basically dealt with the applicability of Order 27 Rule 8-A and grant of stay under Order 41 Rule 5 when the State is the appellant. We do not intend to express any opinion on the correctness of the said decisions as the controversy does not arise in the present case because it is neither the Central Government nor the State Government in that sense in appeal before us. It is the "Jal Sansthan" which claims to be an extended wing or agency of the State that has preferred the appeal. We have clearly ruled that Order 27 Rules 8-A and 8-B are applicable only to the Government and not to instrumentality or agency of the State. That is the specific and THE HIGH COURT OF MADHYA PRADESH Review Petition No.155/2018 (National Insurance Co.Ltd. Vs. M/s Sambhav Industries) definite language employed by the legislature and for that purpose we have drawn a distinction between the concept of "State" under Article 12 and "Government" as used in Order 27 Rules 8-A and 8-B."
In view of the principle of law laid down in Kanpur Jal Sansthan (supra), this Court is not impressed with the submissions made on behalf of the petitioner based on the provisions contained under Order 27 Rule 8-A read with Order 41 Rule 1 (3) and Order 44 Rule 5 of the Code of Civil Procedure, 1908. Therefore, the first contention qua the modification of the order dated 15.1.2018 is negatived.
As regard to extension of time since learned senior counsel appearing for respondent has no objection for extension of time to deposit the Bank Guarantee towards security of the amount of Rs.11,70,18,676, the time is extended till 30.4.2018.
Review petition stands disposed of finally in above terms.
(Sanjay Yadav) Judge pawar/-
Digitally signed by ASHISH PAWAR Date: 2018.03.27 12:57:26 +05'30'