Madras High Court
A.K.S.Cold Storage Limited vs Idbi Bank on 16 August, 2022
Author: R.N.Manjula
Bench: R.N.Manjula
C.R.P (NPD).No.1627 of 2022 and
C.M.P.No.8134 of 2022t
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on 19.07.2022
Pronounced on 16.08.2022
CORAM:
THE HON'BLE Ms.JUSTICE R.N.MANJULA
C.R.P (NPD).No.1627 of 2022 and
C.M.P.No.8134 of 2022
A.K.S.Cold Storage Limited,
Rep. By its Director Kalaiselvi
S.F.No.956, AKS Farm,
Bathrakaliamman Koil Road,
Thekkampatti Village,
Mettupalayam 641 305. ... Petitioner
Vs.
IDBI Bank,
Rep. by its Manager,
Having its Office at
D.No.589, Sri Lakshmi Lodging Complex,
Raja Street, Coimbatore 641 001. ... Respondent
PRAYER : Civil Revision Petition is filed under Article 227 of The
Constitution of India, to set aside the fair and final order dated 14.12.2021,
made in E.P.No.53 of 2021 on the file of the Principal District Judge,
Coimbatore in A.O.P.No.163 of 2019, on the file of the Principal District
Judge, Coimbatore.
For Petitioner : Mr.M.Roshan Atiq
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ORDER
This Civil Revision Petition has been preferred to set aside the fair and final order dated 14.12.2021, made in E.P.No.53 of 2021 on the file of the Principal District Judge, Coimbatore in A.O.P.No.163 of 2019, on the file of the Principal District Judge, Coimbatore.
2. Heard the learned counsel for the petitioner and also perused the materials placed on record.
3. The short facts of the case are as follows:
The revision petitioner is the respondent in the execution proceedings against whom Arb.O.P.No.163 of 2019 was filed by the respondent Bank.
During the pendency of the Arbitration Original Petition, the parties have arrived at a compromise in the mediation held between them. In terms of the compromise, the Arbitration Original Petition was ordered on 27.01.2020.
Since payments were not made in terms of the memorandum of settlement dated 20.01.2020, it has culminated into an enforceable order of the Principal District Court, Coimbatore dated 27.01.2020. The execution proceedings have been initiated in E.P.No.53 of 2021. In the said execution proceedings, an 2/10 https://www.mhc.tn.gov.in/judis C.R.P (NPD).No.1627 of 2022 and C.M.P.No.8134 of 2022t order to attach the petition mentioned property was ordered on 14.12.2021.
Aggrieved over that, this Civil Revision Petition has been preferred.
4. The learned counsel for the revision petitioner submitted that the petitioner is a Cold Storage Unit in which the agricultural products of various agriculturalists have been stored and hence they cannot be sold; further, the owners of the property have already sold their stocks and as of now, the petition mentioned property is not available for sale; it is further submitted that the order dated 27.01.2020, is not an executable one because it is not a decree. In support of the above contentions, the learned counsel for the petitioner submitted the decision of the Delhi High Court held in the case of Angle Infrastructure Pvt. Ltd. Vs. Ashok Manchanda & Ors in EFA (OS) No.1 of 2015, CM.Nos.16/2015, 9331/2015 & 998/2016 dated 09.03.2016.
5. The respondent Bank who had given the loan to the borrowers whose commodities are held in the custody of the petitioner Storage Unit, after getting letters of deposit of their commodity by way of pledge for the loan granted.
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6. The petitioner Storage Unit stood as a collateral guarantor for the loans given to the commodity holders; since the loans were not paid, the arbitration proceedings were held to realise the dues of the Bank; during the pendency of the arbitration proceedings, a petition was filed under Section 9 of the Arbitration and Conciliation Act seeking for an order of temporary injunction against the petitioner from taking possession of the articles stored in the godown, by the respondent/Bank; during the pendency of those proceedings, the matter was settled in a mediation held between the parties and an order has also been passed by the Court on 27.01.2020, in terms of the memo of settlement; since the petitioner did not make payment in compliance of the terms of compromise, the execution proceedings were initiated to recover the same.
7. Since the goods of the commodity holders have already been pledged and is in custody of the petitioner Storage Unit and the petitioner stood as a guarantor, it cannot be now claimed that the commodity viz., Chillies which were stored in the petitioner Storage Unit do not belong to the petitioner. In fact, the petitioner had not raised all these grounds in Arb.O.P.No.163 of 2019. Instead, he agreed to pay the dues to the Bank and also sell the Chillies 4/10 https://www.mhc.tn.gov.in/judis C.R.P (NPD).No.1627 of 2022 and C.M.P.No.8134 of 2022t of the commodity holders in his possession, in order to realize the money and pay it to the respondent Bank for discharging the liability.
8. The learned counsel for the petitioner also submitted that unlike a decree, an order of the Tribunal cannot be executed and hence the order of attachment is not legal. It is not the contention of the petitioner that the order dated 27.01.2020 was stayed by any Court. Under such circumstances, nothing would prevent the Executing Court to pass appropriate orders for executing its order dated 27.01.2020. Though it is claimed by the petitioner that the commodities have been sold, no documents have been produced to substantiate the same and in view of the same, the learned Executing Judge has ordered attachment.
9. It is needless to state that the arbitral awards are enforceable under Chapter 8 of the Arbitration and Conciliation Act. For the sake of convenience, the provisions of Chapter 8 is reproduced as below:
“CHAPTER VIII OF THE ARBITRATION AND CONCILIATION ACT, 1996 5/10 https://www.mhc.tn.gov.in/judis C.R.P (NPD).No.1627 of 2022 and C.M.P.No.8134 of 2022t FINALITY AND ENFORCEMENT OF ARBITRAL AWARDS
35. Finality of arbitral awards – Subject to this part an arbitral award shall be final and binding on the parties and persons claiming under them respectively.
36.Enforcement – (1) Where the time for making an application to set aside the arbitral award under Section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the Court.
(2) Where an application to set aside the arbitral award has been filed in the Court under Section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose.
(3) Upon filing of an application under sub-
section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing:
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10. The enforceability of the arbitral award is affirmed in the very judgment cited by the learned counsel for the petitioner himself in the case of Angle Infrastructure Pvt. Ltd. Vs. Ashok Manchanda & Ors in EFA (OS) No.1 of 2015, CM.Nos.16/2015, 9331/2015 & 998/2016 dated 09.03.2016, as it is so held in paragraph No.56:
“..........
56. By virtue of Section 36 of the Arbitration & Conciliation Act, which is concerned with enforcement of an arbitral award, the Legislature has directed that such award, shall be “enforced” in accordance with the provisions of the Code of Civil Procedure, 1908, in the same “manner as if it were a decree of the court”. Therefore, even the passing of an arbitral award does not result in the passing of a decree.
It is only to be executed in the same manner as a decree would be executed.” 7/10 https://www.mhc.tn.gov.in/judis C.R.P (NPD).No.1627 of 2022 and C.M.P.No.8134 of 2022t
11. As per Section 2(1)(c) of the Arbitration and Conciliation Act, the arbitral award includes an interim award also. Even though the petitions are filed under Section 9 of the Act, interim orders passed are also executable. Because, the interim orders should be construed as awards executable in terms of Section 36 of the Arbitration Act.
12. In fact, in the case in hand, even though the proceedings have been initiated in the Arbitral Court for interim order, the parties entered into a compromise and settled the main dispute itself and thereby an award has also been passed in terms of the settlement. So, there need not be any doubt about the executability of the order passed under the Arbitration Act.
13. Since the learned Trial Judge has rightly dealt the issue and ordered attachment by taking into consideration of the perishable nature of the Chillies stored in the petitioner Storage Unit, the order passed by the learned Principal District Judge does not call for any interference.
14. In the result, this Civil Revision Petition stands dismissed and the order passed by the Principal District Judge, Coimbatore in E.P.No.53 of 2021 8/10 https://www.mhc.tn.gov.in/judis C.R.P (NPD).No.1627 of 2022 and C.M.P.No.8134 of 2022t in A.O.P.No.163 of 2019 dated 14.12.2021, is confirmed. No costs. Consequently, connected miscellaneous petition is closed.
Index: Yes/No 16.08.2022
Speaking / Non Speaking Order
gsk
To
The Principal District Judge,
Coimbatore.
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C.R.P (NPD).No.1627 of 2022 and
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R.N.MANJULA, J
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C.M.P.No.8134 of 2022
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