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Bilcare Limited vs Council Of Scientific And Industrial ... on 21 January, 2019

Author: Rajiv Shakdher

Bench: Rajiv Shakdher

$~30
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
+     ARB. A. (COMM.) 2/2019
      BILCARE LIMITED                                     ..... Appellant
                          Through      Mr. Sandeep Sharma and Mr. Karan
                                       Bahl, Advs.
                          versus
      COUNCIL OF SCIENTIFIC AND INDUSTRIAL RESEARCH
                                                            ..... Respondent
                          Through      Mr. Bhuvnesh Satija and Mr. Sachin
                                       Yadav, Advs.

      CORAM:
      HON'BLE MR. JUSTICE RAJIV SHAKDHER
                   ORDER

      %            21.01.2019

I.A. 744/2019
1.    Allowed, subject to just exceptions.
ARB. A. (COMM.) 2/2019

2. Issue notice. Mr. Satija accepts notice on behalf of the respondent.

3. Mr. Sharma, learned counsel for the appellant, says that the impugned order passed by the learned Arbitrator is flawed as it is plainly contrary to the provisions of The Maharashtra Relief Undertakings (Special Provisions) Act, 1958 (in short „1958 Act‟).

3.1 Mr. Sharma says since the petitioner has been declared a relief undertaking via a notification issued in that behalf, which remains valid till November, 2019, the arbitration proceedings ought to have been stayed. 3.2 For this purpose, reliance is placed on Section 4(1)(a)(iv) of the ARB. A. (COMM.) 2/2019 Pg.1 of 4 1958 Act. The relevant part of Section 4(1)(a)(iv) of the 1958 Act reads as follows:

"4(1)(a)(iv) any right, privilege, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking and any remedy for the enforcement thereof shall be suspended and all proceedings relative thereto pending before any court, tribunal, officer or authority shall be stayed"

4. It is not in dispute that the appellant has taken a soft loan facility from the respondent.

5. The dispute relates to the money allegedly owed by the appellant to the respondent.

6. The appellant had approached this Court in an earlier round, when, I had passed an order dated 5.9.2018.

7. At that juncture, I had set aside the earlier order of the Arbitral Tribunal on the ground that the learned Arbitrator had not articulated his reasons for dismissing the application for stay of arbitration proceedings. However, in the impugned order, the learned Arbitrator has articulated his reasons though the conclusion remains the same. Being aggrieved, the appellant has once again approached the Court.

8. In sum, the learned Arbitrator has taken the view that the expression, "any right, privilege, obligation or liability accrued or incurred" shall necessarily relate to right and privileges qua the Central and State Acts referred to in the Schedule appended to the 1958 Act. 8.1. According to the learned Arbitrator, Section 4(1)(a)(iv) would not cover the instant dispute which emanates from a commercial transaction ARB. A. (COMM.) 2/2019 Pg.2 of 4 entered into between the parties.

9. As indicated hereinabove, Mr. Sharma has contended to the contrary and, in support of his submissions, has relied upon the following judgments apart from the plain language of Section 4(1)(a)(iv):

(i) India Meters Ltd., Ambatur, Madras vs. Motichand Sivaraj, 2002 SCC Online MAD 465.

(ii) Jaysynth Dyechem and etc. vs. Mewar Textile Mills Ltd., 1987 SCC Online RAJ 24.

10. Prima facie, to my mind, Section 4(1)(a)(iv) is sui generis and does not take colour from provisions of sub-clauses (i), (ii) and (iii) of clause (a) sub-Section (1) of Section 4.

10.1 The expression "any right, privilege, obligation or liability accrued or incurred" could apply, in my opinion, to the transactions other than those related to the Central and State Acts referred to in the Schedule.

11. However, as indicated above, this is only a prima facie view and I would have to hear the respondent further in the matter.

12. Accordingly, for the moment, the proceedings before the learned Arbitrator shall have to be stayed.

13. The respondent will file its reply within three (3) weeks from today.

14. Rejoinder thereto, if any, be filed before the next date of hearing.

15. Renotify the matter on 13.5.2019.

16. Learned counsel candidly accept that the stay on the arbitration proceedings will have to obtain till such time a decision is rendered in the appeal or notification by efflux of time or otherwise loses its efficacy.

ARB. A. (COMM.) 2/2019 Pg.3 of 4

17. Accordingly, proceedings before the learned Arbitrator are stayed till further order of the Court. The application is, consequently, disposed of.

                                                    RAJIV SHAKDHER, J

JANUARY 21, 2019
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ARB. A. (COMM.) 2/2019                                           Pg.4 of 4