TMI Blog2012 (10) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... view, should not be the reason to overlook the provisions of both the Acts. It is difficult to dissect, as contended by the learned counsel appearing for the Creditors that the Motion be maintained against the other Directors, for the simple reason that the modified award is against all the Directors but admittedly the Appeal is still pending. It is made clear that, once the modified award attains finality, the Creditors may take out the proceedings, if permissible, in accordance with law. Thus inclined to set aside the Insolvency Notice, in question. - NOTICE OF MOTION NO. 47 OF 2012 IN INSOLVENCY NOTICE NO. N/19 OF 2012 - - - Dated:- 16-10-2012 - ANOOP V.MOHTA J. P.Shah, Sandip Parikh Advocates JUDGEMENT Anoop V. Mohta, ( 1. ) Heard finally. ( 2. ) One Mr. Harshad Moorlidhar Shah, Judgment Debtor No. 3 has taken out this Motion to set aside Insolvency Notice No. N/19 of 2012 dated 29 June 2012, which was issued by the Insolvency Registrar on the basis of Award dated 2 May 2005 in Arbitration Petition No. 543 of 2003/ There was no stay of execution. Therefore, called upon to furnish the security for the awarded amount of ₹ 3,72,78,897/ along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with all the attendant disabilities. Therefore, firstly, such a notice was intended to be issued only after a regularly constituted Court, a component of judicial organ established for the dispensation of justice, has passed a decree or order for the payment of money. Secondly, a notice under the Insolvency Act is not a mode of enforcing a debt; enforcement is done by taking steps for execution available under the CPC for realizing moneys. 61. In the light of the above discussion, we further hold that the Insolvency Notice issued under Section 9(2) of the P. T. I. Act 1909 cannot be sustained on the basis of arbitral award which has been passed under the Arbitration Conciliation Act, 1996. We answer the two questions in favour of the appellant. ( 7. ) The learned counsel appearing for the Judgment Creditors, on the other hand, has relied on Section 9(2) of Insolvency Act and contended that if any order passed by the Court which is executable, such insolvency notice can be issued. He further contended that by order dated 3 March 2010, against the order passed by the Single Judge confirming and modifying the award, the Division Bench of this Court not granted any stay and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decree or order set aside under any law providing for the relief of indebtedness and that (i) he has made an application before the competent authority under such law for the setting aside of the decree or order; or (ii) the time allowed for the making of such application has not expired; c) that the decree or order is not executable under the provisions of any law referred to in clause (b) on the date of the application.] ( 10. ) The Insolvency Act and the provisions so referred above itself contemplates that a Creditor, who has obtained a decree or order against the Debtor for the payment of money, which has become final and the execution whereof has not been stayed, can apply for Insolvency Notice. The Debtor if failed to comply with the same within a period prescribed, further steps will be taken in accordance with law. The provision itself permits the later to move an application under Section 5, for seeking Insolvency notice itself. Section 9 Subclause (5) provides the conditions where the Court can set aside the Insolvency Notice. It provides that the Debtors are entitled to apply for setting aside the insolvency notice on the various grounds, (a) to show th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easure under section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court. ( 13. ) It is clear, therefore, from the above position that the award attains finality subject to above provisions. The Application to set aside the award, if expired and/or refused, the award shall be enforceable under the CPC, in the same manner, as if it were the decree of the Court. It is relevant to note the provisions of Appeals under Section 37 as available under the Arbitration Act. In the present case, it is against the refusal to set aside the Arbitral Award. This section itself contemplates and provides a statutory Appeal against the orders passed under the respective Section. Section 34 is one of it. The Appeal, therefore, so provided under the Arbitration Act, unless decided finally, in my view, itself means the award has not attained finality. Mere rejection of Application to set aside the Arbitral Award itself cannot be the reason to enforce the award by treating the same as the final decree or order. The Arbitration Appeal under the Arbitration Act, definitely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not attained finality, and therefore, it is unenforceable under the Arbitration Act. Therefore, the invocation of the Insolvency Act, in this background, is also unacceptable. In my view, the Insolvency Notice so issued, is impermissible and contrary to the law. The Applicant has made out the case to set aside the Insolvency Notice dated 29 June 2012. ( 17. ) The Court has modified and passed the Award against all the Directors. The Appeal was preferred by 3 Directors only. The present motion is taken out only by one Director. At this stage, in view of the above observations, the modified award itself has not attained finality, the challenge made by one Director, and not by others, in my view, should not be the reason to overlook the provisions of both the Acts. ( 18. ) It is difficult to dissect, as contended by the learned counsel appearing for the Creditors that the Motion be maintained against the other Directors, for the simple reason that the modified award is against all the Directors but admittedly the Appeal is still pending. It is made clear that, once the modified award attains finality, the Creditors may take out the proceedings, if permissible, in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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