Bombay High Court
Nirmal Lifestyle Limited And 2 Ors vs Urban Infrastructure Rea Estate Fund on 27 May, 2022
Author: Madhav J. Jamdar
Bench: Madhav J. Jamdar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION PETITION NO.55 OF 2019
WITH
INTERIM APPLICATION NO.1024 OF 2020
IN
COMMERCIAL ARBITRATION PETITION NO.55 OF 2019
Nirmal Lifestyle Ltd & Ors. ... Petitioners/Applicants.
V/s.
Urban Infrastructure Real Estate Fund ... Respondent.
Mr. Ashok Paranjpe with Rishabh Jain i/b MDP & Parners for the
Petitioners/Applicants.
Mr. Abhay Patki, Additional Government Pleader for the Respondent-State.
Mr. Dhiraj Mehtre i/b M/s. Khaitan Legal Associates for the Respondent
Mr. Dhiraj Raut, API from Azad Maidan police station present.
CORAM : MADHAV J. JAMDAR, J.
(VACATION COURT) DATE : 27TH MAY 2022.
P.C:-
1. Heard Mr. Ashok Paranjpe, learned counsel for the Applicants, Mr. Dhiraj Mehtre, learned Counsel for the Respondent and Mr. Abhay Patki, learned Additional Government Pleader for the Respondent-State.
2. Petitioner No.3 - Mr.Dharmesh S. Jain along with Petitioner No.1 -
Nirmal Lifestyle Ltd and Petitioner No.2 - Nirmal Infrastructure Pvt. Ltd. filed Commercial Arbitration Petition No.55 of 2019 in this Court challenging the legality and validity of the award dated 30th August 2018.
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3. Operative part of said award dated 30th August 2018 passed by Justice (Retd.) R.C. Lahoti (sole arbitrator) read as follows :-
"8.1 In the light of the findings arrived at as above, the following order is passed:
(a) The Claimant is entitled to recover an amount of Rs.78,33,37,500/- from the Respondent Nos.1 & 3 with interest calculated @ 18% per annum w.e.f. 20.12.2014 till realization.
(b) On receipt of the above amount, the shares in the Company Respondent No.2 issued to the Claimant shall be transferred in favour of the Respondent No.1 in accordance with the terms of SPA.
(c) The Respondent Nos.1 & 3 shall pay an amount of Rs.50,00,000/- by way of costs incurred in these arbitral proceedings to the Claimant.
(d) The Respondents shall bear the costs as incurred by them."
4. The said Award is challenged in this Court by filing the above Commercial Arbitration Petition. The learned Single Judge of this Court (R.D. Dhanuka, J.) vide order dated 8th August 2019 passed in Notice of Motion No.960 of 2019 in Commercial Arbitration Petition No.55 of 2019 granted stay as prayed in prayer clause (a) on the condition that the Applicants shall deposit 50% of the awarded sum within 12 weeks and further made it clear that if such deposit is not made within the time ::: Uploaded on - 27/05/2022 ::: Downloaded on - 28/05/2022 07:46:31 ::: hcs 3/11
1.carbp55.19.doc prescribed, the interim stay granted to stand vacated without further reference to the Court. The said order dated 8/8/2019 of the learned Single Judge is quoted hereinbelow for ready reference :
"1. The applicants seek stay of the impugned award dated 30th August, 2018 passed by the learned arbitrator. By a separate order passed today by this Court in Commercial Arbitration Petition No.55 of 2019, the said petition is already admitted by this Court.
2. Heard learned counsel for the parties.
3. Learned arbitrator has awarded specific performance of the Share Purchase Agreement and held that the respondent (original claimant) is entitled to recover an amount of Rs.78,33,37,500/- with interest at the rate of 18% p.a. with effect from 20 th December, 2014 till realization and also awarded Rs.50,00,000/- against the petitioner no.1.
4. The arbitration petition filed by the petitioners requires detailed scrutiny and is thus admitted by this Court.
5. The notice of motion is made absolute in terms of prayer clause (a) on the condition that the applicants deposit 50% of the awarded sum within 12 weeks from today. It is made clear that the interest will have to be calculated upto the date of deposit. The applicants are directed to inform the respondent's advocate within three days from the date of such deposit. It is made clear that if such deposit is not made within the time prescribed, the interim stay granted to stand vacated without further reference to the Court.
6. The respondent no.1 is directed to deposit 50% of its shareholding in the petitioner no.2 company with the office ::: Uploaded on - 27/05/2022 ::: Downloaded on - 28/05/2022 07:46:31 ::: hcs 4/11
1.carbp55.19.doc of the Prothonotary & Senior Master within one week of the applicants depositing the amount with the Prothonotary & Senior Master of this Court. The respondent shall inform the applicants' advocate about deposit of shares. It is made clear that if the applicants commit any default in making payment as directed, the respondent is not required to deposit such shares.
7. The notice of motion is disposed of on aforesaid terms. No order as to costs."
5. The said order dated 8th August 2019 of learned Single Judge was challenged in the Supreme Court by filing Special Leave Petition (Civil) Diary No.19547 of 2021 inter alia by said Dharmesh S. Jain and Another. The said SLP was dismissed by the order dated 17th September 2021. However, the Petitioners in SLP sought extension of time to comply with the order of the learned Single Judge dated 8th August 2019 and therefore, the Supreme Court granted further eight weeks time to comply with the said order.
6. Said Dharmesh S. Jain and Another filed Miscellaneous Application No.1668 of 2021 in SLP (C) No.14724 of 2021 seeking recall of order of the Supreme Court. However, said Misc. Application was disposed of by order dated 28/10/2021 directing the Petitioners in Supreme Court to comply with and deposit the amount as per order passed by the learned Single Judge and within the time granted by the Supreme Court. It has been further observed that non-compliance of the same shall be treated very seriously and non-deposit of the amount as directed by the learned Single Judge shall be treated as non-compliance of the order of the Supreme Court and also having a serious consequences.
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7. Said aforesaid orders were not complied with therefore, ultimately Contempt Petition (C) No.940 of 2021 was filed by the present Respondent in the Supreme Court. By the order dated 10th March 2022 passed in said Contempt Petition, the Supreme Court inter alia recorded a finding that the said Dharmesh S. Jain willfully disobeyed the order passed by the learned Single Judge dated 8th August 2019, and also disobeyed the order dated 28th October 2021, passed by the Supreme Court. Therefore, the Supreme Court held said Dharmesh S. Jain as guilty of the contempt of the Supreme Court for willful disobedience of the order passed by the learned Single Judge dated 8/8/2019 and specifically for disobedience of order dated 28/10/2021 passed by the Supreme Court. Therefore the Supreme Court held that said Dharmesh Jain was liable to be punished suitably under the provisions of the Contempt of Courts Act and adjourned the matter for hearing said Dharmesh S. Jain on the point of the sentence.
8. By order dated 12th May 2022, the Supreme sentenced Mr.Dharmesh S. Jain to undergo seven days simple imprisonment, as also, imposed a fine on both the Respondents in Contempt Petition, which is quantified as Rs.5,00,000/- to be deposited before the High Court of Judicature at Bombay within a period of two weeks. The Supreme Court further directed that on such deposit being made, the amount of Rs.4,00,000/- be paid to the Petitioner in Contempt Petition (C) No.940 of 2021 i.e. to the Respondent in present Commercial Arbitration Petition and Rs.1,00,000/- be transferred to the Maharashtra State Legal Services Authority. The Supreme Court further directed that to give one last opportunity to the contemnor to purge the contempt and comply with the orders passed by the Supreme Court as well as of the High Court, the aforesaid sentence shall be kept in abeyance for a period of two weeks, failing which, the aforesaid sentence shall take effect ::: Uploaded on - 27/05/2022 ::: Downloaded on - 28/05/2022 07:46:31 ::: hcs 6/11
1.carbp55.19.doc and on non-compliance Mr.Dharmesh S. Jain will then surrender to the concerned Court/Authority to undergo the sentence imposed by the Supreme Court i.e. seven days simple imprisonment for willful disobedience of the order passed by the Supreme Court and High Court. The relevant portion of the order dated 12th May 2022, of the Supreme Court is quoted hereinbelow for ready reference :
"4. In the above circumstances and in furtherance of our earlier judgment and order dated 10.03.2022 whereby the respondents, more particularly, respondent no.1 has been held guilty for willful disobedience of the order passed by this Court dated 28.10.2021 in Miscellaneous Application No.1668 of 2021 in Special Leave Petition (Civil) No.14724/2021, as also, the order passed by the High Court dated 08.08.2019 in Notice of Motion No.960/2019 in Commercial Arbitration Petition No.55/2019 and rendered himself liable for suitable punishment under the provisions of the Contempt of Courts Act and even thereafter granting them sufficient opportunities to either settle the dispute amicably or comply with the orders of this Court and the High Court, neither the orders have been complied with nor the dispute has been settled amicably, we hereby sentence respondent no.1 - Dharmesh S. Jain to undergo seven days simple imprisonment, as also, impose a fine on both the respondents, which is quantified as Rs.5,00,000/- (rupees five lakhs) to be deposited before the High Court of Judicature of Bombay within a period of two weeks from today and on such deposit, Rs.4,00,000/- (rupees four lakhs) be paid to the petitioner herein and Rs.1,00,000/- (rupees one lakh) be transferred to ::: Uploaded on - 27/05/2022 ::: Downloaded on - 28/05/2022 07:46:31 ::: hcs 7/11
1.carbp55.19.doc the Maharashtra State Legal Services Authority. However, so as to give one last opportunity to the contemnor to purge the contempt and comply with the orders passed by the Bombay High Court as well as this Court, it is observed that the aforesaid sentence shall be kept in abeyance for a period of two weeks from today, failing which, the aforesaid sentence shall take effect and on non-compliance, the respondent no.1 herein - Dharmesh S. Jai will then surrender before the concerned Court/Authority to undergo the sentence imposed by this Court, i.e., seven days simple imprisonment for a willful disobedience of the orders passed by this Court and the High Court."
9. Mr.Paranjpe, learned counsel appearing for the Petitioner states that said amount of Rs.5,00,000/- as has been directed by the Supreme Court is deposited in this Court on 24th May 2022 i.e. within time granted by the Supreme Court.
10. The said period of two weeks during which said sentence was kept in abeyance by the Supreme Court vide order dated 12th May 2022, completed on 26th May 2022.
11. Today, Mr. Dharmesh S. Jain is present in the Court and surrenders before this Court. Mr. Paranjpe, learned counsel appearing on behalf of Petitioners identifies Mr.Dharmesh S. Jain.
12. Mr.Pranjape, learned counsel appearing for the Petitioners pointed out section 27 and sections 31 to 34 of the Prisons Act, 1892. He also placed ::: Uploaded on - 27/05/2022 ::: Downloaded on - 28/05/2022 07:46:31 ::: hcs 8/11
1.carbp55.19.doc reliance on order of this Court (G. S. Patel, J.) passed in Chamber Summons (L) No.639 of 2018 in Chamber Summons No.735 of 2013 in Summary Suit No.475 of 2010. He more particularly relied on paragraphs 5, 6, 7 and 10 of the said order. The said paragraphs are reproduced hereinbelow for ready reference :
"5. The Civil Jails Act 1874 relates to jails in districts outside Greater Mumbai and this is clear from Section 8. I refer to this Act only because there are essential provisions in the Civil Jails Act that cannot be very different inside and outside Mumbai. It surely cannot be suggested that a person subjected to civil imprisonment outside Mumbai are to receive better treatment than those in Mumbai. The distinction is in other areas including Sections 9, 10, 11 etc. Section 13 of the Civil Jails Act says that the civil jail is to be opened daily for prisoners' visitors from 9.00 am to 3.00 pm. This may not strictly apply to a civil imprisonment in Mumbai but the other requirements including medical treatment (Section 14) should at least be applied mutatis mutandis and there is no reason why they should be ignored in a civil imprisonment in Mumbai.
6. There is no doubt that the Prisons Act 1894 does cover civil imprisonment in Mumbai. Section 27(4) clearly says that civil prisoners have to be separated from criminal prisoners and Chapter 6, Sections 31 to 33 deal with inter alia civil prisoners. Section 31 says that a civil prisoner or an unconvicted criminal prisoner is permitted to maintain himself, to purchase or receive from private sources at proper ::: Uploaded on - 27/05/2022 ::: Downloaded on - 28/05/2022 07:46:31 ::: hcs 9/11
1.carbp55.19.doc hours food, clothing, bedding and other necessary items. If he is unable to do so, these are to be provided to him. Civil prisoners may, in addition under Section 34, with the Superintendent's permission work and follow any trade or profession. There are similar provisions as well. Section 40 deals with visits inter alia to civil prisoners and requires that due provision be made for admission into every prison of persons with whom civil prisoners may desire to communicate. A separate provision is made for prisoners awaiting trial.
7. Then there is the Prison Manual. There are statutory rules for the provision of proper food etc and Rule 3 requires that civil prisoners are to be confined in a civil jail or a portion of a criminal prison set apart for that purpose and not allowed to hold communications or to be associated with criminal prisoners. The note says that a separate room need not be provided for each prisoner individually. All that this means is that a number of civil prisoners may be required to share a room but they have to be segregated from criminal prisoners. It seems to be undisputed that in this case these provisions have not been followed. Rana's case that the barracks in which he is held are over crowded is evidently correct. On behalf of the State Government, it is submitted that there were a few petty criminals with whom Rana was forced to share his confinement. It makes no difference whether the other person is accused or convicted of a petty crime or a heinous crime. The separation is between civil and criminal prisoners and that is the end of it.::: Uploaded on - 27/05/2022 ::: Downloaded on - 28/05/2022 07:46:31 :::
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10. It seems to me, however, inconceivable that the State of Maharashtra should be unable to provide what the statute requires it to provide. This is not a matter of discretion and I am making it clear that the State Government has no choice whatsoever in this matter. Either the State Government will provide for some other more modern method of restricts movement or home confinement as is done in jurisdictions overseas, employing appropriate technology, or it will follow these statutes and make available a proper civil jail."
13. Mr.Paranjpe, the learned counsel appearing for Mr.Dharmesh S. Jain also pointed out section 13 of the Civil Jails Act, 1987. Mr. Patki, the learned Additional Government Pleader pointed out section 8 of the Act which specifies that said Act shall apply to Civil Jails in the State of Bombay outside Greater Bombay. He also pointed out paragraph 5 of the abovereferred order of G.S. Patel, J.,
14. The Prisons Act, 1894 defines "civil prisoner" means any prisoner who is not a criminal prisoner under sub-section (4) of section 3. "Criminal prisoner" is defined under sub-section (2) of section 3 as meaning "any prisoner duly committed to custody under the writ, warrant or order of any Court or authority exercising criminal jurisdiction or by order of a Court- martial. Thus, it is clear that the Petitioner is a civil prisoner.
15. Mr. Abhay Patki, learned Additional Government Pleader states that Mr. Dhiraj Raut, API of Azad Maidan police station,who is present in the Court will take custody of Mr.Dharmesh S. Jain.
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16. In view of the aforesaid order of the Supreme Court Mr. Dharmesh S. Jain is taken into custody of this Court and his custody is handed over to Mr.Dhiraj Raut, API of Azad Maidan police station. Mr. Dhiraj Raut, API is directed to handover custody of Mr. Dharmesh S. Jain to the Superintendent of Byculla Civil Jail, who shall accept custody of Mr.Dharmesh S. Jain for the purpose of undergoing sentence imposed by the Supreme Court i.e. seven days simple imprisonment for willful disobedience of the order passed by the Supreme Court and the High Court.
17. The jail authorities are directed to comply with the order dated 12th May 2021, passed by the Supreme Court.
18. It is needless to observe that the jail authorities will comply with the provisions of Prisons Act, 1894 and also directions issued by learned Single Judge (G.S. Patel, J.) in Chamber Summons (L) No.639 of 2018 by order dated 26th April 2019.
19. The Prothonotary and Senior Master of this Court is directed to pay to the Petitioner in the Supreme Court in Contempt Petition No.9430 of 2021 i.e. Respondent in present Commercial Arbitration Petition an amount of Rs.4,00,000/- forthwith and Rs.1,00,000/- be transferred to the Maharashtra State Legal Services Authority immediately.
20. All concerned to act on an authenticated copy of this order.
[MADHAV J. JAMDAR, J.] ::: Uploaded on - 27/05/2022 ::: Downloaded on - 28/05/2022 07:46:31 :::