Gujarat High Court
Nitrex Chemicals India Limited vs National Insurance Company Limited on 25 April, 2023
Author: Ashutosh Shastri
Bench: Ashutosh Shastri
C/SCA/25838/2022 ORDER DATED: 25/04/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 25838 of 2022
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NITREX CHEMICALS INDIA LIMITED
Versus
NATIONAL INSURANCE COMPANY LIMITED
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Appearance:
MS DISHA N NANAVATY(2957) for the Petitioner(s) No. 1
MASUMI V NANAVATY(9321) for the Respondent(s) No. 1
MR VIBHUTI NANAVATI(513) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI
and
HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 25/04/2023
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE J. C. DOSHI) [1] This petition is filed under Articles 226 and 227 of the Constitution of India challenging the order passed below Exhibit 17 dated 22.09.2022 in Commercial Execution No.1983 of 2021 whereby the application filed by the petitioner - Nitrex Chemicals India Limited has been dismissed by the Judge (Commercial Court), Court No.8, City Civil Court, Ahmedabad.
[2] BRIEF FACTS OF THE CASE: Page 1 of 8 Downloaded on : Fri Apr 28 20:37:42 IST 2023 C/SCA/25838/2022 ORDER DATED: 25/04/2023
The dispute between the parties pertains to a claim for losses suffered by the petitioner has been referred for arbitration whereupon the Arbitral Tribunal by its Award dated 20.08.2019 declared that the petitioner was entitled to recover from the respondent an amount of Rs.4,68,46,002.92/- (Four Crores Sixty Eight Lakhs Forty Six Thousand and Two Rupees, Ninety Two Paise Only) along with interest at the rate of 8% per annum from 12.12.2011 till date of payment / realization. The Award also provided that the petitioner was also entitled to interest an amount of Rs.44,49,184/- (Forty-Four Lakhs Forty- Nine Thousand One Hundred and Eighty-Four Rupees Only) at the rate of 8% per annum from 12.12.2011 till 19.07.2016.
The respondent made the recourse challenging the said Arbitral Award filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") before the Small Causes Court, Ahmedabad. However, later on, same has been transferred to the Commercial Court at City Civil Court, Ahmedabad and numbered as Commercial Civil Miscellaneious Application No.216 of 2021.
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C/SCA/25838/2022 ORDER DATED: 25/04/2023 Meanwhile, the petitioner herein had preferred Execution Application before the Commercial Court at City Civil Court, Ahmedabad under Section 36 of the Act for enforcement of the Award. According to petitioner, from the date of filing of the Execution Application, the total amount recoverable by the petitioner from the respondent under the Award was Rs.8,40,38,208/-(Eight Crores Forty Lakhs Thirty Eight Thousand Two Hundred and Eight Only).
Since Execution Application was filed, the respondent - National Insurance Company Limited has preferred an application at Exh.8 in the recourse made under Section 34 of the Act being Commercial Civil Misc. Application No.216 of 2021 to stay the enforcement of the Award. During the hearing of this stay application, the National Insurance Company Limited upon its undertaking had deposited Rs.8,40,38,208/- (Eight Crores Forty Lakhs Thirty Eight Thousand Two Hundred and Eight Only).
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C/SCA/25838/2022 ORDER DATED: 25/04/2023 Pursuant to the above deposit, the present petitioner has filed an application at Exhibit 17 in the Execution Application seeking withdrawal of the amount deposited by the respondent. According to the petitioner, the petitioner was ready and willing to furnish security. After hearing both the parties, Commercial Court at City Civil Court, Ahmedabad on 22.09.2022 passed the impugned order below Exhibit 17 and rejected the withdrawal application. Hence, this petition.
[3] Heard the learned advocates appearing for the respective parties.
[4] At the outset, on perusal of the impugned order, it transpires that Commercial Court at City Civil Court, Ahmedabad has passed cryptic and non reasoned order. Prima facie, it appears that the court below has passed the order without applying the mind. It is important to refer paragraphs 5 and 6 of the impugned order so as to find out the sustainability of the said order:-
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C/SCA/25838/2022 ORDER DATED: 25/04/2023 "5. It is the case of the applicant that he is entitled for withdrawal of the amount deposited by the opponent in pursuant to the award passed by the Arbitration Tribunal and applicant is ready to furnish security in the form of Non Agriculture property situated at Manjalpur Village, Taluka & District Vadodara. It has fair market value of Rs.24,22,00,000/-. The applicant has further argued that the CMA is likely to take time and in the meantime the amount deposited by the opponent can be ordered to be withdrawn by the applicant. The said CMA was filed more than about a year ago and this court failed to understand why disposal of objection under Section 34 of the Arbitration Act is likely to take time. Ld. Counsel for the applicant instead of arguing on this application could have easily argued on the application under section 34 of the Arbitration Act and had he argued, the said CMA would have been disposed of and amount would have been ordered to be paid to the respective parties entitled for the same. But instead of arguing on the application under Section 34 of the Arbitration Act before the appropriate Court, Ld. Counsel for applicant is more interested in withdrawal of the amount deposited by the opponent.
6. Allowing withdrawal of the amount by either party is a discretion of the court although the said discretion has to be exercised judicially and not arbitrarily but where the matter can be disposed of it the parties argue the same, there is no ground why the said matter shall be delayed and the amount deposited by the opponent remain with the court for a long time. In view of same, this court is of the opinion that the discretion of the court with regard to the withdrawal of the said amount is not to be exercised in favour of the applicant in this case.
Accordingly, following order is passed. :
ORDER
1. Application filed by the applicant for withdrawal of decreetal amount, is hereby dismissed.
2. No order as to costs."
[5] What perceives, from the reason assigned by the Commercial Court at City Civil Court, Ahmedabad, that instead Page 5 of 8 Downloaded on : Fri Apr 28 20:37:42 IST 2023 C/SCA/25838/2022 ORDER DATED: 25/04/2023 of deciding the issue for withdrawal of deposited amount, on its own merit after applying the provision of law, the Commercial Court applied the thinking that, it would be better that application under Section 34 of the Act which is pending before it, can be argued instead of making the argument in withdrawal application and therefore, the Commercial Court at City Civil Court, Ahmedabad did not consider to grant the application at Exhibit 17. According to us, reasons stated by the Commercial Court at City Civil Court, Ahmedabad more particularly in paragraphs 5 and 6 are fanciful and not in accordance with the merits of the petition. Court cannot insist that the application / recourse under Section 34 of the Act should be argued instead of application for withdrawal of deposited amount and if application / recourse under Section 34 of the Act have been argued, it would have been disposed of and order would have been passed. Commercial Court cannot make the observation that petitioner is more interested in withdrawal of the amount deposited by the respondent. Those findings are unwarranted when statute has given right to the parties to prefer an application, it become obligatory upon the court concerned to Page 6 of 8 Downloaded on : Fri Apr 28 20:37:42 IST 2023 C/SCA/25838/2022 ORDER DATED: 25/04/2023 decide same on the merit without applying the whims and caprices. In nutshell the Commercial Court at City Civil Court, Ahmedabad was required to decide the application at Exhibit 17 on its own merit without being influenced by any other consideration.
[6] In view of above circumstances, we deem it fit to quash and set aside the order passed below Exhibit 17 in Commercial Execution No.1983 of 2021 and remand the case to the Commercial Court at City Civil Court, Ahmedabad to decide the same within the time bound manner on its own merit.
[7] Upshot to the above, we proceed to pass the following
ORDER
(i) Present petition is allowed.
(ii) Impugned order passed below Exhibit 17 dated
22.09.2022 in Commercial Execution No.1983 of 2021 is hereby quashed and set aside and the case is Page 7 of 8 Downloaded on : Fri Apr 28 20:37:42 IST 2023 C/SCA/25838/2022 ORDER DATED: 25/04/2023 remanded back to the Commercial Court at City Civil Court, Ahmedabad for fresh consideration on its own merit.
(iii) Commercial Court at City Civil Court, Ahmedabad is hereby directed to decide the application at Exhibit 17 in Commercial Execution No.1983 of 2021 afresh on its own merit without being influenced by observations if any made hereinabove on or before 10.06.2023. The Commercial Court shall scrupulously follow the time limit stated herein.
(iv) We make it clear that we have not observed the merits of the case.
(ASHUTOSH SHASTRI, J.) (J. C. DOSHI, J.) DHARMENDRA KUMAR Page 8 of 8 Downloaded on : Fri Apr 28 20:37:42 IST 2023