Supreme Court - Daily Orders
M/S Spicejet Limited. vs Kalanithi Maran on 13 February, 2023
Author: Pamidighantam Sri Narasimha
Bench: Pamidighantam Sri Narasimha
1
IN THE SUPREME COURT OF INDIA
CIVIL APPEAL NOS 1064-1065 OF 2023
(Arising out of SLP (C) Nos 12834-12835 of 2020)
M/s Spicejet Limited & Anr … Appellants
Versus
Kalanithi Maran … Respondent
CIVIL APPEAL NOS 1066-1067 OF 2023
(Arising out of SLP (C) Nos 12882-12883 of 2020)
ORDER
1 Leave granted.
2 The appeals arise from an order dated 2 September 2020 of a Single Judge of the
High Court of Delhi which was followed by an order dated 15 October 2020 in review.
3 Pursuant to an application under Section 9 of the Arbitration and Conciliation Act 1996, the High Court directed the appellants to deposit an amount of Rs 579 crores on 29 July 2016. The order of the Single Judge was modified by the Division Bench on 3 July 2017 by directing the appellant to deposit an amount of Rs 250 crores in cash and to secure an amount of Rs 329 crores by furnishing a bank guarantee.
4 The arbitral tribunal made its award on 20 July 2018 and directed the appellants to pay an amount of Rs.578 crores in the following manner : Signature Not Verified Digitally signed by GULSHAN KUMAR
(a) An amount of Rs 308 crores in cash together with 12% interest for 30 ARORA Date: 2023.02.16 16:12:50 IST Reason: 2 months pendente lite;
(b) An amount of Rs 270 crores either in the form of compulsory redeemable preference shares or by the return of money in terms of a Share Purchase Agreement.
5 The arbitral award mandates that if the above payments are not made within a stipulated period from the date of award, interest at the rate of 18% per annum would be levied till payment.
6 On 25 March 2019 in the course of execution proceedings, an amount of Rs 250 crores which is deposited by the appellant was released to the respondent. By an order of the High Court dated 20 September 2019, the quantum of the bank guarantee of Rs 329 crores stood reduced to Rs 270.86 crores while an amount of Rs 58 crores was released in cash to the respondent. As a consequence of the above position, a total amount of Rs 308 crores has been received by the respondents in cash in their capacity as decree holder while a bank guarantee of Rs 270.86 crores is alive to secure the remainder of the principal amount. 7 By an order dated 2 September 2020, the Single Judge directed the appellants to deposit a sum of Rs 242,93,70,845.56 within six weeks. An application seeking modification of the order, in substance a review, was rejected by an order dated 15 October 2020.
8 We have heard Mr. Mukul Rohatgi, senior counsel appearing on behalf of the appellant and Mr. Maninder Singh, senior counsel appearing on behalf of the respondent.
39 Mr. Maninder Singh, senior counsel has placed on the record a calculation chart which indicates that the principal amount which is due to the respondent in terms of the arbitral award is Rs 579.08 crores while the interest receivable up to 13 February 2023 is Rs 362.49 crores.
10 The admitted position before the Court is that as of today, the respondent has received a total amount of Rs 308 crores. The principal amount which is due under the arbitral award is Rs 579.08 crores. The bank guarantee which has been issued at the behest of the appellant in the amount of Rs 270.86 crores is alive.
11 The interest liability has been computed at Rs 362.49 crores @18% per annum simple interest.
12 Mr. Mukul Rohatgi, senior counsel appearing on behalf of the appellant submits that even prior to the arbitral award on 20 July 2018, the appellants had deposited an amount of Rs 250 crores in cash and if this amount is duly accounted for, the computation of the interest would have to be scaled down. Moreover, it has been submitted that interest @ 18% is excessive and this is an aspect which would be urged before the High Court when the petition under Section 34 of the Arbitration and Conciliation Act 1996 is taken up. 13 Mr. Maninder Singh, senior counsel appearing on behalf of the respondent-decree holder, on the other hand, submits that the computation of the interest liability has been correctly made.
14 At this stage, when the petition under Section 34 of the Arbitration and Conciliation Act 1996 is pending, it is not necessary for this Court to enter upon a 4 detailed examination of the quantum of interest that would be payable even on the assumption that the arbitral award is eventually affirmed. The correctness of the arbitral award is to be tested on the anvil of Section 34 for which a petition is pending before the High Court.
15 Hence, we direct as follows :
(i) The bank guarantee shall be encashed immediately and the proceeds shall be payable to the respondent-decree holder within two weeks. This will ensure that quantum of the principal sum due in the award is paid over in its entirety;
(ii) The appellant shall, within a period of three months, pay an amount of Rs 75 crores to the respondent towards the liability on account of interest pending the disposal of the petition under Section 34;
(iii) In the event that the appellant defaults in complying with the above direction for payment or any part thereof, the award shall become executable forthwith in its entirety.
16 This order which has been passed during the pendency of the proceedings under Section 34 of the Arbitration and Conciliation Act 1996 before the High Court shall not be construed as any adjudication by this Court on the merits of the rival contentions.
17 The order dated 2 September 2020 passed by the Single Judge of the Delhi High Court shall stand modified in the above terms. 18 The High Court is requested to expedite the disposal of the petition under Article 5 34 of the Arbitration and Conciliation Act, 1996. 19 The appeals are accordingly disposed of. 20 Pending applications, if any, stand disposed of.
…..…..…....…........……………….…......CJI [Dr Dhananjaya Y Chandrachud] …..…..…....…........……………….…........J. [Pamidighantam Sri Narasimha] …..…..…....…........……………….…........J. [J B Pardiwala] New Delhi;
February 13, 2023.
-GKA-
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ITEM NO.25 COURT NO.1 SECTION XIV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s).12834-12835/2020 (Arising out of impugned final judgment and order dated 02-09-2020 in OMP(ENF.)(COMM.) No. 32/2019 15-10-2020 in OMP (EFA) (COMM.) No. 32/2019 passed by the High Court Of Delhi At New Delhi) M/S SPICEJET LIMITED. & ANR. Petitioner(s) VERSUS KALANITHI MARAN Respondent(s) (Mediation report has been received.
(IA No. 114235/2020 - EXEMPTION FROM FILING AFFIDAVIT IA No.110263/2020 - EXEMPTION FROM FILING AFFIDAVIT IA No. 110261/2020
- EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT IA No.114232/2020 - PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ ANNEXURES IA No. 110262/2020 - PERMISSION TO FILE LENGTHY LIST OF DATES IA No. 80739/2021 - VACATING STAY) WITH SLP(C) No. 12882-12883/2020 (XIV) (FOR EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT ON IA 110770/2020 FOR EXEMPTION FROM FILING AFFIDAVIT ON IA 110772/2020 FOR APPLICATION FOR EXEMPTION FROM FILING ORIGINAL VAKALATNAMA/OTHER DOCUMENT ON IA 110778/2020 FOR PERMISSION TO FILE LENGTHY LIST OF DATES ON IA 110780/2020 FOR PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ANNEXURES ON IA 114217/2020 FOR EXEMPTION FROM FILING AFFIDAVIT ON IA 114221/2020 FOR VACATING STAY ON IA 80732/2021) Date : 13-02-2023 These matters were called on for hearing today. CORAM : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE PAMIDIGHANTAM SRI NARASIMHA HON'BLE MR. JUSTICE J.B. PARDIWALA For Petitioner(s) Mr. Mukul Rohatgi, Sr. Adv.
Mr. Sanjay Abbot, Adv.
7Mr. Arshdeep Singh Khurana, Adv.
Mr. Malak Manish Bhatt, AOR Ms. Neeha Nagpal, Adv.
Mr. Abhinav Sharma, Adv.
For Respondent(s) Mr. Maninder Singh, Sr. adv.
Mr. M Sathyanarayanan, Sr. Adv.
Ms. Nandini Gore, Adv.
Ms. Sonia Nigam, Adv.
Mr. Yash Dubey, Adv.
Mr. Prabhas Bajaj, Adv.
M/S. Karanjawala & Co., AOR UPON hearing the counsel the Court made the following O R D E R 1 Leave granted.
2 The appeals are disposed of in terms of the signed order. 3 Pending applications, if any, stand disposed of.
(GULSHAN KUMAR ARORA) (SAROJ KUMARI GAUR)
AR-CUM-PS ASSISTANT REGISTRAR