Calcutta High Court
West Bengal State Electricity ... vs M/S. Kamarhatty Power Limited & Anr on 13 December, 2017
Author: Ashis Kumar Chakraborty
Bench: Ashis Kumar Chakraborty
ORDER SHEET
AP 1017 OF 2017
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
WEST BENGAL STATE ELECTRICITY DISTRIBUTION COMPANY LTD & ANR
Versus
M/S. KAMARHATTY POWER LIMITED & ANR.
............
BEFORE:
The Hon'ble JUSTICE ASHIS KUMAR CHAKRABORTY Date : 13th December, 2017.
Mr. Anindya Kr. Mitra, sr. advocate, Mr. B. Mitra, Mr. S.S. Koley...for petitioners.
Mr. S.N. Mitra, sr. advocate, Mr. A. Roy, Mr. R. Sarkar, Mr. D. Dinda, Mr. D. Sahu, Mr. N. Singh, Mr. S. Roy...for respondent nos.1 & 2.
The Court : This is an application under section 9 of the Arbitration and Conciliation Act, 1996, as amended by Act 3, 2016 (in short "the Act of 1996") after publication of the award dated June 22, 2016 by the learned arbitrator, thereby allowing the petitioners' claim for refund of Rs.3 crores by the respondent no.1. By the said award, the arbitrator further held that the petitioner no. 1 is liable to refund the amount deducted by it on account of discount, from the bill raised by the respondent no.1. The counter claims raised by the respondent no. 1 against the petitioner were, however, rejected by the learned arbitrator.
The transactions between the petitioner no. 1 and the respondent no. 1, which gave rise to the arbitral disputes related to generation of electricity by the 2 latter and distribution of the same by the former. From the records it appears that the claim of the present petitioner no. 1, in the arbitral proceeding, for refund of Rs.3 crores arose on account of delayed payment surcharge levied by the respondent no. 1 on the petitioner no. 1, which the latter had paid to the former in terms of an order dated September 24, 2015 passed by the Supreme Court in IA Nos. 3-4/2015 and 5-6/2015 in SLP (C) No.9384-9385/2015. The Supreme Court directed the petitioner to pay the said amount of Rs.3 crores to the respondent no. 1 without prejudice to its rights and contentions in the arbitral proceeding.
The respondent no. 1 has filed an application under Section 34 of the Act of 1996, being AP No.852 of 2016 before this Court for setting aside of the said award dated June 22, 2016 passed by the learned arbitrator and the same is pending disposal before this Court.
The ground on which the petitioner no. 1 seeks interim orders in this application is that in order to frustrate execution of the arbitral award against the respondent no.1 has taken steps to transfer its assets and properties. In this regard, the petitioner no. 1 has placed reliance on the balance sheets of the respondent no.1 company for the year as on March 31, 2015 and March 31, 2016 wherefrom it appears that in the financial year ending on March 31, 2015 the respondent no. 1 had fixed assets of Rs.14,09,43,799/- whereas in the financial year ending on March 31, 2015 the same has been reduced to Rs.2,1,617/-.
According to Mr. Anindya Mitra, learned senior advocate appearing for the petitioners that the respondent no. 1 has realised that it has no chance to succeed in the application for setting aside of the arbitral award and, as such, it has started to transfer its assets and properties to render any application of the 3 petitioner no. 1 for execution of the arbitral award infructuous. It was contended that it is a fit case that the respondent no. 1 be restrained from transferring any of its assets and properties.
On the other hand, Mr. S.N. Mitra, learned senior advocate appearing for the respondents submitted that the respondent no. 1 has not transferred any of its asset or property after passing of the arbitral award dated June 22, 2016 and the same would be evident from the award itself. In this regard, he referred to paragraph 45 of the award passed by the learned arbitrator recording that the plant of the respondent no.1 had already been shut down in May, 2011 and subsequently, taken over by the creditor. Therefore, according to him, the petitioner cannot make out any case that it has only recently discovered the transfer of the assets and properties of the respondent no. 1 for the purpose of filing this application. Mr. Mitra also referred to the orders dated March 23, 2015 and September 24, 2015 passed by the Supreme Court in the aforementioned special leave petitions recording the fact that the petitioner no. 1 itself agreed not to move any application under Section 9 of the Act of 1996 during the pendency of the arbitral proceeding before the learned Arbitrator. He further submitted that as on the date of passing of the order dated September 24, 2015 the petitioner was aware of the closure of the business of the respondent no.1 way back in the year 2011. Urging these facts, it was urged contended that the petitioner has made out no case for obtaining any ad interim order in this application during the pendency of the application under Section 34 of the Act of 1996.
I have considered the materials on record, as well as the arguments advanced by the learned senior advocate appearing for the respective parties. In the present case, it is not in dispute that in terms of the award dated June 22, 4 2016, after giving credit of the amount of Rs. 8,22,620/- directed to be refunded to the respondent no. 1, the petitioner is entitled to receive Rs. 2,91,77,380/- from the respondent no. 1. It is a fact that the application for setting aside of the said award is pending before this court. Section 9 of the Act of 1996 confers right on an award holder to pray for an appropriate order to secure its claim as allowed by an arbitrator in the arbitral proceeding. In the present case, it cannot be disputed that during the pendency of the arbitral proceeding the respondent no. 1 has transferred its assets and properties of a huge amount.
Considering the above facts of the case, I cannot convince myself to hold that the petitioner is not entitled to obtain any order in this application to secure its claim of Rs. 2,91,77,380/-.
Accordingly, there will be an ad- interim order restraining the respondent no. 1 from transferring or alienating or encumbering or creating any third party interest in respect of any of its assets and properties till disposal of the application under Section 34 of the Act of 1996.
Let, the respondents file their affidavit-in-opposition within January 5, 2018; reply, if any, thereto be filed within January 12, 2018.
Let this application, along with AP No. 852 of 2016 appear under the heading "Adjourned Motion" on January 18, 2018.
(ASHIS KUMAR CHAKRABORTY, J.) pkd./s.chandra