Bombay High Court
Ajay Jogindernath Mehra vs Ecopark Developers Llp on 29 February, 2024
Author: R.I. Chagla
Bench: R.I. Chagla
2024:BHC-OS:3385
6-IA(L) 883.2024 in CARBP(L) 19393.2023.doc
Kavita S.J.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
INTERIM APPLICATION (L) NO.883 OF 2024
IN
COMMERCIAL ARBITRATION PETITION (L) NO.19393 OF 2023
Ajay Jogindernath Mehra & Ors., ... Applicants/
Org. Petitioners
Versus
Ecopark Developers LLP ...Respondent
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Mr. Chetan Kapadia, Senior Counsel a/w Mr. Chirag Kamdar, Mrs.
Jasmine Kachalia, Mr. Deepu Jojo i/b Wadia Ghandy & Co. for the
Applicants/Original Petitioners.
Mr. Zal Andhyarujina, Senior Counsel a/w Mr. Nilkunj Mehta, Mr.
Parag Kabadi, Ms. Falguni Thakkar i/b DSK Legal for Respondent.
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CORAM : R.I. CHAGLA, J.
DATED : 29TH FEBRUARY, 2024.
ORDER :
1. By this Interim Application, the Applicants/Original Petitioners have sought a stay on the effect, implementation and KAVITA SUSHIL JADHAV operation of the impugned part of the Award dated 17 th March, 2023, Digitally signed by KAVITA SUSHIL JADHAV Date: 2024.03.01 17:20:54 +0530 on such terms as this Court may deem fit. 1/6 ::: Uploaded on - 01/03/2024 ::: Downloaded on - 09/03/2024 19:09:09 :::
6-IA(L) 883.2024 in CARBP(L) 19393.2023.doc
2. By a separate order, the delay in filing the Arbitration Petition has been condoned and the Arbitration Petition has been taken on file subject to terms imposed therein.
3. Substantial arguments have been canvassed by Mr. Chetan Kapadia, learned Senior Counsel appearing for the Applicants/Original Petitioners and by Mr. Zal Andhyarujina, learned Senior Counsel appearing for the Respondent. This Court has been taken through the findings of the learned Sole Arbitrator in the impugned Award dated 17th March, 2023. The learned Sole Arbitrator has directed the Petitioners to refund the Respondent an amount of Rs.9,63,00,000/- and Rs.1,05,31,900/- together with interest at the rate of 12% per annum from the date of filing of the Statement of Claim till payment. Thus, the impugned Award is in the nature of a money Decree.
4. It is well settled that where the impugned Award is in the nature of a money Decree, 100% of the awarded amount is required to be deposited as a condition for stay being granted of the impugned Award. This Court has from time to time held that only when the Petitioner makes out grounds of facial perversity and untenability of 2/6 ::: Uploaded on - 01/03/2024 ::: Downloaded on - 09/03/2024 19:09:09 ::: 6-IA(L) 883.2024 in CARBP(L) 19393.2023.doc the impugned Award without any great convolutions, the standards laid down by this Court for unconditional stay may be made out.
5. This has been held by this Court in Oasis Landmark LLP Vs. Gannon Dunkerley & Co., Ltd. 1 which follows the decision of this Court in Kishore Shah & Ors. Vs. Urban Infrastructure Trustees Ltd. 2 and the decision of the Supreme Court in PSA Sical Terminals Pvt. Ltd. Vs. The Board of Trustees of V.O. Chidambranar Port Trust Tuticorin 3. Further, this Court in Kishore Shah (supra) has held that unless there is an exceptional, unique and compelling case, required for an unconditional stay of a money Award/Decree, unconditional stay will not be granted. Further, the Division Bench of this Court in Ecopack India Paper Cup Pvt. Ltd. Vs. Sphere International 4, has held that the perusal of provisions of Section 36 of the Arbitration Act shows that jurisdiction so conferred on the Court is a discretionary jurisdiction. The proviso to sub Section (3) of Section 36 makes it implicit that provisions of Order 41 Rule 1, sub Rule 3 and Rule 5 become relevant. Thus, this Court would exercise the discretion and grant a stay to the execution of decree if "sufficient cause" is made 1 2023 SCC OnLine Bom 1845 2 2020 SCC OnLine Bom 4098 3 Civil Appeal Nos. 3699-3770/2018 - decision dated 28th July, 2021 4 2018 SCC OnLine Bom 540 3/6 ::: Uploaded on - 01/03/2024 ::: Downloaded on - 09/03/2024 19:09:09 ::: 6-IA(L) 883.2024 in CARBP(L) 19393.2023.doc out and party seeking stay satisfies the Court that it will sustain substantial loss and inter alia satisfies the condition as stipulated in Order 41 Rule 1, sub Rule 3 and Rule 5.
6. I have perused the findings in the impugned Award. There are findings of learned Arbitrator that the amount of Rs.9.63 Crores is to be treated as consideration and in view of the subject Agreement not going ahead and / or performed, this amount is to be returned by the Petitioners to the Respondent. These findings are in my prima facie view perverse as they are contrary to the Clauses of the subject Agreement entered into between the parties which treat the amounts differently. Further, it was for the learned Arbitrator to act in conformity with the terms of the Agreement and if there is any departure therefrom, there should have been reasons for such departure.
7. The learned Senior Counsel on both sides have cited law on the issue of whether non-refundable deposit in the Agreement (Rs.6.63 Crores has been treat as non-refundable deposit in the subject Agreement) are to be treated as part of consideration and refundable. The submissions on this issue as well as the contention 4/6 ::: Uploaded on - 01/03/2024 ::: Downloaded on - 09/03/2024 19:09:09 ::: 6-IA(L) 883.2024 in CARBP(L) 19393.2023.doc of the Respondent that in view of the sum of Rs.3 crores which was awarded to the Respondent/Claimant having been refunded by the Petitioners to the Respondent, the impugned Award has been accepted are required to be kept open, to be determined at the hearing of the Arbitration Petition.
8. I have considered that the impugned Award is in the nature of money decree. Further, this is not compelling case requiring an unconditional stay of the money award / Decree. This Court in the aforementioned decisions has held that the impugned Award / Decree must be shown without any great convulsions to be facially perverse and untenable. Thus, a 100% deposit of the awarded amount is required to be made by the Petitioner.
9. In that view of the matter, the relief sought for in the Interim Application for stay on the effect, implementation and operation of the impugned part of the Award dated 17 th March, 2023 is granted, subject to deposit by the Petitioner of the awarded amount of Rs.12,75,66,166/- which includes interest awarded,within a period of 10 weeks from the date of this order.
10. It is made clear that the interest which has been awarded at 5/6 ::: Uploaded on - 01/03/2024 ::: Downloaded on - 09/03/2024 19:09:09 ::: 6-IA(L) 883.2024 in CARBP(L) 19393.2023.doc 12% per annum will continue to run till the aforementioned amount is deposited.
11. The Prothonotary and Senior Master of this Court is directed to invest the deposited amount in a fixed deposit of a nationalized bank immediately upon its deposit.
12. The Respondent is at liberty to make an Application for withdrawal of the aforementioned amount as and when deposited and which shall be determined according to its own merits.
13. Considering the aforementioned prima facie view taken on the findings in the impugned Award being perverse, the Arbitration Petition is admitted and hearing expedited.
14. Interim Application is accordingly disposed of.
[R.I. CHAGLA, J.] 6/6 ::: Uploaded on - 01/03/2024 ::: Downloaded on - 09/03/2024 19:09:09 :::