TMI Blog2005 (7) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractors to execute the said work. Petitioner was to do the work of widening, strengthening and reconstruction of road for a length of 77 km, in two stretches, one from km 147 to km 108 and the other from km 8 to km 38 which the petitioner completed to the entire satisfaction of the respondent and the State of Rajasthan and a certificate to that effect was issued. It is alleged that despite the completion of the work to the satisfaction of all concerned and receiving the payment from the Public Works Department of Rajasthan Government, the respondent withheld the payment of certain bills of the petitioner in regard to escalation amount. The petitioner invoked the arbitration agreement for resolution of the dispute. Arbitral Tribunal is presently looking into the claims of the petitioner and certain counter claims filed by the respondent. According to the petitioner the respondent is likely to receive a sum of ₹ 4.51 crores from the State of Rajasthan towards escalation costs out of which petitioner's share comes to ₹ 1.33 crores which the respondent is bound to pass on to the petitioner. That in case the amount is not passed on to the petitioner or preserved eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition. 6. I have heard Mr.M.S. Vinaik, learned counsel representing the petitioner and Mr. P.K. Bansal, learned counsel representing the respondent at length and have given my thoughtful consideration to their respective submissions. 7. Before dwelling on the merits of the petition, it is pertinent to notice that before filing the present petition, the petitioner had moved an application under Section 17 of the Act before the Arbitral Tribunal praying for interim orders for the preservation and protection of subject matter of arbitration. In the said application the prayer was as under : It is Therefore most respectfully prayed that this learned Arbitral Tribunal may be pleased to order and direct the respondent to refrain from appropriating the payment of ₹ 5.88 crores approximately (or such other amount whether higher or lower that may be released by the Rajasthan PWD) and order the said amount to be deposited into a fixed deposit in a nationalized bank till the pendency of the arbitral proceedings. Any other order or orders that may be deemed fit in the circumstances may also be passed by this Learned Arbitral Tribunal. 8. The said application was contes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal. This omission cannot be explained on any other hypothesis except that the petitioner wanted to deliberately suppress the facts about filing similar proceedings before the arbitral tribunal and having suffered an unfavorable order. The Apex Court and various High Courts have taken a serious view of the incidence of suppression of facts or putting forth misleading facts by a party in the petition and have held that ordinarily a party seeking an equitable relief before the Court would be unsuited on the ground of suppression of relevant and material facts even if the party has a case on merits. In the present case, it would appear that the petitioner has deliberately suppressed not only the facts about the petitioner having approached the Arbitral Tribunal with an identical or similar prayer and the same having not found favor with the Tribunal but also failed to disclose about the respondent having been declared a sick company within the meaning of Sick Industrial Companies (Special Provisions )Act,1985 {SICA}. Therefore, for this reason alone this Court must hold that the petitioner has disentitled itself to an equitable relief like the one sought in the present petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic till the BIFR finally disposes of the reference made under Section 15 of the 1985 Act. The legislature has advisedly used an omnibus expression 'the like' as it could not have conceived of all possible coercive measures that may be taken against a sick undertaking. Section 29 of the 1951 Act permits coercive action against the defaulting industrial concern of the type which would be taken in execution or distress proceedings, the only difference being that in the latter case the concerned party would have to use the forum prescribed by law for the purpose of securing attachment and sale of property of the defaulting industrial concern whereas in the case of a Financial Corporation that right is conferred on the creditor corporation itself which is permitted to take over the management and possession of the properties and deal with them as if it were the owner of the properties. If the Corporation is permitted to resort to the provision of Section 29 of the 1951 Act while proceeding under Section 15 to 19 of the 1985 Act are pending it will render the entire process nugatory. In such a situation the law merely expects the corporation and for that matter any other creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zure' or 'a seizure of assets so as to conserve them for the creditor in case he should afterwards get judgment.' In UK, Lord Denning gave this procedure a fashionable name- Mareva injunction. In the parlance of arbitration law, it is usually called 'pre-award attachment.' This remedy has been available in India from the inception of the Code of Civil Procedure 1908. The order of attachment, before judgment, is passed to ensure the availability of such property at the time of execution of a decree. The procedure relating to 'attachment before judgment' is contained in Order 38, Rule 5 to 13 in the First Schedule to the Code of Civil Procedure. Before a person is entitled to an order of attachment before judgment Rule 5 requires the plaintiff to prove that the following circumstance exists: (i) the defendant is about to dispose of the whole or any part of his property. (ii) the defendant is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court; (iii) the defendant is intending to do so to cause obstruction or delay in the execution of any decree that may be passed against him. Vague and gener ..... X X X X Extracts X X X X X X X X Extracts X X X X
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