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Gail (India) Limited vs M/S Jewel Overseas Private Limited & Ors on 7 September, 2021

Author: Sanjeev Narula

Bench: Sanjeev Narula

$~24
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+      O.M.P.(I) (COMM.) 7/2021 & I.A. 6641/2021
       GAIL (INDIA) LIMITED                                            ..... Petitioner
                            Through:       Mr. Kapil Sankhla, Advocate with
                                           Ms. Meghna Sankhla and Mr.
                                           Rishabh Goswami, Advocates.
                                           Mr. Ramesh Kumar, Senior Officer
                                           (Law).
                            versus

       M/S JEWEL OVERSEAS PRIVATE LIMITED & ORS.
                                             ..... Respondents
                            Through:       Mr. Rajat Srivastava and Mr. Amit
                                           Dhall, Advocates.

       CORAM:
       HON'BLE MR. JUSTICE SANJEEV NARULA
               ORDER

% 07.09.2021

1. The present petition under Section 9 of the Arbitration and Conciliation Act, 1996 [hereinafter, 'the Act'] has been filed seeking the following prayers:-

(i) Pass an order directing Respondent No. 1 to deposit an amount of Rs.

3,35,45,534.52/- (Rupees Three Crore Thirty-Five Lakhs Forty-Five Thousand Five Hundred Thirty-Four & Fifty-Two Paise Only) with this Hon'ble Court being total outstanding alongwith interest pendente lite against the accounts of the Respondent No. 1 with the Petitioner; and/or.

(ii) Pass an order directing the Respondent no. 2 and 3 to secure the amount of Rs. 3,35,45,534.52/- (Rupees Three Crore Thirty-Five Lakhs Fort y-Five Thousand Five Hundred Thirty-Four & Fifty Two Paise Only) from their own assets with this Hon'ble Court being total outstanding amount so due alongwith interest pendente lite against the accounts of the Respondent No.1.

2. On 9th February, 2021, this Court passed an interim order in favour of the Petitioner to the following effect:-

"In the meantime, till the next date of hearing, the respondents are restrained from selling/transferring or creating any third-party interest in any moveable/ immovable assets and they are only allowed to pay statutory dues and salaries etc. or to make day-to-day payments in the regular course of their business."

3. The aforesaid order is still continuing. During the course of the arguments, Mr. Rajat Srivastava, counsel for Respondents, on instructions, states that he is agreeable to go for arbitration and he has no objection in case the Court were to appoint an Arbitrator for adjudication of the disputes.

4. Mr. Kapil Sankhla, counsel for the Petitioner has taken instructions and is also agreeable for appointment of an Arbitrator.

5. Since, the existence of the arbitration agreement is not in dispute, thus, the Court has no hesitation in referring the parties to arbitration.

6. Accordingly, Hon'ble Mr. Justice S.P. Garg, (Retd.) Former Judge of this Court [Contact No.: +91 9910384627] is appointed as the Sole Arbitrator to adjudicate the disputes between the Petitioner and Respondent No. 1 arising from the Agreement dated 10th February, 2016.

7. The parties are directed to appear before the learned Arbitrator, as and when notified. This is subject to the learned Arbitrator making the necessary disclosure under Section 12(1) of the Act and not being ineligible under Section 12(5) of the Act.

8. With the consent of the parties, the Arbitrator shall conduct the proceedings under the aegis of Delhi International Arbitration Centre [hereinafter, 'DIAC'].

9. The learned Arbitrator will be entitled to charge their fees in terms of O.M.P.(I) (COMM.) 7/2021 Page 2 of 4 the DIAC Rules.

10. Now that the Arbitral Tribunal has been constituted, the Court considers it appropriate that for further reliefs, the Petitioner should approach the Arbitral Tribunal. Thus, the present petition shall now be considered by the Arbitral Tribunal as one under Section 17 of the Act. The order dated 9th February, 2021, shall to continue till such time, the Arbitral Tribunal enters upon reference and decides the petition under Section 17 of the Act.

11. The observations made by the Court in the order dated 9th February, 2021, as confirmed by the Order passed today, is only a prima facie view of the matter. The learned Arbitrator shall decide the disputes and the application uninfluenced by the observations made by this Court.

12. In addition to the above, it is noticed that the Respondent had been directed to file and affidavit of assets vide order dated 24th May, 2021. The directions for the affidavit were in terms of the judgment in Bhandari Engineers & Builders Pvt. Ltd. v. Maharia Raj Joint Ventures 1 , which stands overruled by the Division Bench of this Court in Delhi Chemical and Pharmaceutical Works Pvt. Ltd. and Ors. v. Himgiri Realtors Pvt. Ltd. and Ors. 2 . Therefore, it is now directed that the Respondents shall file an affidavit disclosing its assets in Form 16A, Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure, 1908. The said affidavit shall be filed within a period of two weeks from today and would be placed before the learned Arbitrator. In the said affidavit, the Respondents shall also disclose the details of their bank accounts.

MANU/DE/4601/2019.

MANU/DE/1185/2021.

13. It is clarified that the Court has not examined any claims of the parties and all the rights and contentions of the parties on merits are left open. Both the parties shall be free to raise their claims/ counter claims before the learned Arbitrator in accordance with law.

14. In view of the above, the present petition is allowed and stands disposed of. Pending application also stands disposed of.

SANJEEV NARULA, J SEPTEMBER 7, 2021 nd O.M.P.(I) (COMM.) 7/2021 Page 4 of 4