Bombay High Court
Sara Chemicals And Consultants vs Ogene Systems (I) Pvt. Ltd on 11 February, 2020
Author: G.S. Kulkarni
Bench: G.S. Kulkarni
pvr 1 80chs909-18
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL CHAMBER SUMMONS NO.909 OF 2018
IN
COMMERCIAL EXECUTION APPLICATION (L) NO.2051 OF 2018
IN
ARBITRAL AWARD DT.13th July 2016
read with Order dt.4th May 2018
Sara Chemicals & Consultants. ...Applicant(Orig.Claimant)
In the matter between
Sara Chemicals & Consultants. ...Claimant
vs.
Ogene Systems (I) Pvt.Ltd. ...Respondent
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Mr.Rohaan Cama with Mr.Pratik Parmar i/b. India Law LLP, for the Applicant.
Mr.Shyam Kapadia with Mr.Darshan Mehta, Mr.Dhruva Gandhi, Ms.Srushti
Dalal i/b. Dhruv Liladhar & co., for the Respondents.
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CORAM : G.S. KULKARNI, J.
DATE : 11 February 2020 P.C.:
Heard Mr.Cama, learned Counsel for the applicant/award creditor and Mr.Kapadia, learned Counsel for the respondent/award debtor.
2. This Chamber summons has been filed by the applicant/award creditor praying for several reliefs which are in aid of execution of the award which the award creditor has obtained against the award debtor. The arbitral award is dated 13 July 2016 whereby the award debtor was directed to pay an amount of Rs.2,25,00,000/- interalia with interest at the rate of 9% per annum from 15 September 2012 till realization and further amount of Rs.10 crores with interest at the rate of 9% per annum from the date of the award till its realization. Admittedly, the arbitral proceedings were held at Mumbai, the award is also declared at Mumbai. Hence, on the ground that it would be this Court which would entertain the execution application, the above execution pvr 2 80chs909-18 application as well as chamber summons praying for the reliefs in aid of execution is filed. It appears to be not in dispute that the award has not been stayed by any competent Court nor there is any embargo for this Court to proceed to execute the award.
3. Mr.Kapadia, learned Counsel for the award debtor, however, has objected to the maintainability of the execution application as also opposed the reliefs as prayed for in the chamber summons principally on the ground that this Court does not have territorial jurisdiction to entertain the execution application and the proceedings thereunder. This for the reason that according to Mr.Kapadia, there are no movable and/or immovable properties of the award debtor within the jurisdiction of this Court and in the absence of any such properties being available within the jurisdiction of this Court, this Court cannot try and entertain this execution application. In support of his contention, Mr.Kapadia placed reliance on the decision of the Supreme Court in "Sundaram Finance Ltd. Vs. Abdul Samad & Ors."1 , a decision of the learned Single Judge of the Calcutta High Court in "MSTC Ltd. Vs. Krishna Coke (India) Pvt.Ltd."2 and a decision of the learned Single Judge of Allahabad High Court in "Adil Pervai Vs. Sajid Pervaiz & Ors."3.
4. Referring to the decision of the Supreme Court in Sunderam Finance"
(supra) Mr.Kapadia would contend that the Supreme Court has considered that the Award itself would be a decree which can be executed. It is held that enforcement of an award through its execution can be filed anywhere in the Country where such decree can be executed and there is no requirement for obtaining a transfer of the decree from the Court which would have jurisdiction over the arbitral proceedings.
5. In the decision of the Calcutta High Court in "MSTC Ltd. Vs. Krishna Coke (India) Pvt.Ltd."(supra), the learned Single Judge has clearly held that it 1 AIR 2018 SC 965 2 GA No.1205 2019 & EC no.59718 Order dt.3/12/2019 3 2019 SCC OnLine ALL 3617 pvr 3 80chs909-18 would be open to the Court even in a case where the objection is raised to the territorial jurisdiction of the Court, to first consider by examining the judgment debtor under an order passed under Order 21 Rule 41 sub rule (1) and only after such examination of the judgment debtor and on being satisfied that none of the properties are available within the jurisdiction of the executing court only in that situation the Court can come to a considered conclusion that the execution application would not be maintainable before the executing Court. The Court accordingly passing such orders till such disclosure was placed on record from the judgment debtor would retain jurisdiction for further appropriate orders to be passed. In that regard the observations made by the Court in paragraphs 6 and 7 are required to be noted, which read thus:-
"6. Sundaram Finance Limited (supra) has held that, execution can be filed anywhere in the country where the decree can be executed and that, there is no requirement for obtaining a transfer of the decree from the Court, which would have jurisdiction over the Tribunal procedings. The proposition laid down in Sundaram Finance Limited (supra) does not help the award-debtor. The arbitral award can be executed as a decree of a Court in any Court in India without the requirement of obtaining a transfer of the decree from the Court which would have jurisdiction over the arbitral proceedings. In the present case, the award-holder is seeking to execute the arbitral award on the basis that, there are assets and properties of the award-debtor lying within the territorial jurisdiction of this Hon'ble Court. It has to be conclusively established that, the award-debtor does not have any asset within the territorial jurisdiction of this Hon'ble Court for this Hon'ble Court to denude itself of jurisdiction over the execution proceeding. Such stage is yet to arrive in the facts of the present case. There is an order for examination of the award- debtor. On examination of the award-debtor, there is a possibility that, the award holder may discover assets and properties of the award debtor lying within the jurisdiction of this Hon'ble Court. In such an eventuality, it cannot be said that, this Court does not have jurisdiction to proceed with the execution proceedings. As held in Shew Kumar Nopany (supra) an application for execution of the award-debtor is not an application for execution but an application in aid of the execution.
7. In such circumstances, the prayer of the award-debtor that, the execution case be dismissed cannot be granted at this stage. On completion of the examination of the award holder on oath, if it transpires that, the award-debtor does not have any asset or property within the jurisdiction of this Hon'ble Court, then obviously, the execution petition will be required to be dismissed. Such a situation is yet to arrive. At this stage it would pvr 4 80chs909-18 be appropriate to post pone the adjudication of the issue of jurisdiction over the execution petition till after the completion of the examination of the award-debtor."
6. In my opinion, in the facts of the case, the decision of Allahabad High Court in Adil Pervai Vs. Sajid Pervaiz & Ors. (supra) as relied on by Mr.Kapadia would not assist the judgment debtor for two reasons, firstly the facts are totally different. In that case an objection was raised to the jurisdiction of Muradabad Court where an application came to be filed on the ground that it was not a Court of appropriate jurisdiction even considering the arbitral proceedings and the award which came to be declared in the arbitral proceedings. It is in this context, the learned Single Judge of Allahabad High Court returned the execution application being presented before the Court of competent jurisdiction. It needs to be noted that the Supreme Court in "Sundaram Finance"(supra) has clearly observed that there is no requirement of obtaining transfer of decree from one court to the Court which would have jurisdiction to arbitral proceedings.
7. Be that as it may, the position today in the present proceedings is akin to the position in my opinion which prevailed before the Calcutta High Court in "MSTC Ltd." (supra) . In the reply affidavit which has been filed on behalf of the Award debtors, today it is not clear on record that there are no movable and/or immovable properties of the judgment debtor available within the jurisdiction of this Court. Mr.Cama would be thus correct in his submission that at this stage of the proceedings it can not be said that the Court has no jurisdiction. In my opinion, it would be appropriate to follow the course of action as followed by the Calcutta High Court in MSTC Ltd. (supra) that is to direct the award debtor to make an affidavit of disclosure and point out their movable and immovable properties and on such disclosure if it is evident that there are no properties, movable or immovable, available within the jurisdiction of this Court, then certainly what Mr.Kapadia argued, would be required to be accepted and the applicant can be relegated to the Court of pvr 5 80chs909-18 appropriate jurisdiction. The parties would be heard on this issue on the adjourned date of hearing, after the appropriate disclosure affidavit is made.
8. In the above circumstances, at this stage of the proceedings and without in any manner foreclosing the entitlement and right of the award debtor to contend that this Court has no jurisdiction, in my opinion, it would be appropriate to direct the award debtor to file an affidavit of disclosure disclosing its movables and immovable assets.
9. In the meantime, the decreetal interest of the applicant is also required to be protected. The respondent shall not in any manner deal with their movable and immovable assets, till the adjourned date of hearing.
10 Ordered accordingly.
11. Needless to observe that all contentions of the parties on merits are expressly kept open.
12. Let the disclosure affidavit be filed within two weeks from today. Award debtors are also permitted to file any other additional affidavit, if they so desire.
13. Stand over to 25 February 2020.
Digitally [G.S. KULKARNI, J.] signed by Prashant Prashant V. Rane V. Rane Date:
2020.02.14 19:02:23 +0530