9911796707
TMI Blog2023 (10) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ey were heard together. These petitions challenge such different orders below the relevant exhibit applications. Hence, all these petitions are taken up for hearing and are decided by this common judgement. 2. Learned counsel for the respective parties have made their submissions only in context of Special Civil Application No. 5509 of 2021 and Special Civil Application No. 18901 of 2022. This Court therefore, would deal with the factual and the legal aspects in context of these two petitions. SCA NO. 5509 OF 2021 3. This petition is filed for quashing and setting aside the order dated 29.02.2020 passed below applications Exh. 11 and Exh. 45 in Commercial Execution Petition No. 161 of 2019 by the Court of the Principal Senior Civil Judge, Jamnagar. 4. Facts in brief are as under: 4.1 Ultrabulk A/S, is a Danish Company engaged in the business of operating and trading ships. It entered into two Cooperation Agreements dated 06.06.2007 and 05.07.2007 with Gujarat (NRE) Coke Limited. Mr. Arun Kumar Jagatramka is the Chairman and Managing Director of Gujarat. By the end of first quarter of 2013, Gujarat (NRE) Coke Limited was indebted to Ultrabulk A/S in the sum of USD 4,259,395. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not conclusive as it has not been given on the merits of the case. He would submit that the judgement debtor is a resident of Kolkata and the alleged personal guarantee has been executed in Australia. The judgement debtor is neither a resident of England nor has any cause of action occurred in England to confer the territorial jurisdiction to the Courts of England. 5.2 That the foreign judgement is not conclusive as the same has not been passed in consonance with Section 13(b) of the CPC, inasmuch as, it has not been given on merits of the case. He would submit that it is an admitted position that Gujarat (NRE) Coke Limited has made a payment of USD 2,452,471 against the applicant's claim of USD 4,259,395. Despite this fact, the impugned foreign judgement has been passed by failing to appropriate the said amount against the judgement debtor's personal guarantee. Having received part of the amount, the Court ought to have apportioned the said amount against the amount covered by the personal guarantee. 5.3 That it was the judgement debtor's defense that the personal guarantee was drafted by the lawyer of the claimant and did not involve any lawyer from his side and therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the respondent before the Calcutta High Court in a suit filed by the petitioner. His opinion therefore, was in conflict of interest and not independent. An interested witness who had appeared for the defence could not have been examined. 5.8 Mr. Kavina therefore submitted that the order below Exh. 11 and Exh. 45 negating the contention raised by the petitioner is contrary to law and therefore the order dated 29.02.2020 of the Principal Senior Civil Judge, Jamnagar, in such proceedings be quashed and set aside. 5.9 In support of his submissions, Mr. Kavina would rely on the following decisions: (I) In case of Mannalal Khaitan and others v. Kedarnath Khaitan and others reported in (1977) 2 SCC 424 (II) In case of Algemene Bank Netherland NV v. Satish Dayalal Choksi reported in 1989 SCC Online Bombay 282 (III) In case of Mrs Shobha Vishwanatha v. DP Kingsley reported in (1996) 1 CTC 620 (IV) In case of Noy Vellesena Engineering Spa v. Jindal Drugs Limited reported in 2006 SCC Online Bombay 545 (V) Full Bench decision in case of A. Pleader, Madura in the context of the proprietary of Mr. Majumdar giving evidence as a witness when appearing as a counsel. (VI) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of imagination can a personal guarantee issued by an Indian Citizen on behalf of an Indian company to a foreigner be equated with an illegal activity. FEMA unlike FERA refers to the Nation's policy of managing foreign exchange. In case of a particular act violating any provision of FEMA or the Rules framed thereunder, permission of the Reserve Bank of India may be obtained post-facto and the violation can be condoned. 6.5 Mr. Nanavati would submit that a defense of the kind which the petitioner has made would dissuade foreign commercial entities from relying on the guarantees given by the Indian companies. No case has been made out by the judgement debtor that the foreign decree falls foul of the grounds under Section 13 of the CPC. 6.6 Mr. Nanavati would submit that it is wrong for the petitioner to assume that the English Court had held that the foreign decree cannot be enforced in India and be enforced in other countries. He would submit that the learned counsel for the petitioner had misinterpreted the observations when in fact, such observations merely meant that the decree holder had an option if it so wished to enforce the foreign decree in other countries. 6.7 Mr. Nanava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aying further proceedings of the Execution Petition be passed, pending admission of CP (IB) No. 266 of 2021. By the impugned order, dated 06.09.2022, the Executing Court rejected such application. Hence, the petition. 8. Mr. Percy Kavina learned Senior Advocate appearing with Mr. Vivek Gupta for the petitioner in context of this petition made the following submissions: 8.1 He would submit that if the case status of the National Company Law Tribunal in the screenshot of the website is seen, which is annexed to the petition, the State Bank of India had filed application initiating insolvency proceedings under Section 95 of the IBC against the petitioner on 08.09.2021. As per Section 96(1)(a) of the IBC, an interim moratorium commences from the date of the application in relation to all the debts of the petitioner and it shall cease to effect on the date of admission of such application. He would therefore submit that the Execution Proceedings, during the pendency of IBC proceedings shall be deemed to be stayed by virtue of the mandate of the IBC. 8.2 Mr. Kavina would submit that on 08.09.2021 on the date when the SBI filed an application, a specific bar by deeming fiction relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to and obtained an order from the Calcutta High Court staying the personal insolvency proceedings against him, now cannot be allowed to approbate and reprobate by taking benefit of such proceedings. 9.2 A coordinate bench of this Court vide order dated 15.12.2022 in MCA No. 1 of 2022 in Special Civil Application No. 17965 of 2021 has not granted the judgment debtor / petitioner to reargue the same contentions which he had raised in the MCA. 9.3 Mr. Nanavati would further submit that the doctrine of constructive res-judicata would bar the judgement debtor from taking a plea of Section 96 of IBC. By his conduct, between 20.09.2021 and 10.03.2022 in proceedings before the Trial Court, this Court and the Supreme Court, the petitioner has waived his statutory right under Section 96 of the IBC. Mr. Nanavati would in this respect refer to a brief chronology of dates and events necessary for the examination of the issue at hand. 9.4 Elaborating on these contentions, Mr. Nanavati would submit that Section 96(1)(A) of the IBC only provides for an interim moratorium. IBC talks of reorganization and insolvency resolution in a time bound manner. If the contention of the decree holder is acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Balwant Regular Motor Service, Amravati and others ETC. reported in (1969) 1 SCR 808 (VIII) In case of Moon Mills Ltd. v. M.R. Meher, President, Industrial Court, Bombay and others reported in AIR 1967 SC 1450 (IX) In case of Sarguja Transport Service v. State Transport Appellate Tribunal, M.P. Gwalior and others reported in (1987) 1 SCC 5 (X) In case of Babulal Badriprasad Varma v. Surat Municipal Corporation and others reported in (2008) 12 SCC 401 (XI) In case of Alcon Electronics Private Limited v. Celem S.A. of FOS 34320 Roujan, France and Another reported in (2017) 2 SCC 253 (XII) In case of Udyami Evam Khadi Gramodyog Welfare Sanstha and another v. State of Uttar Pradesh and others reported in (2008) 1 SCC 560 (XIII) In case of Advocate-General, State of Bihar v. M/s. Madhya Pradesh Khair Industries and Another reported in (1980) 3 SCC 311 ANALYSIS IN SPECIAL CIVIL APPLICATION NO. 5509 OF 2021 10. At the cost of reiteration, what is under challenge in this petition is an order below Exh. 11 and Exh. 45 by which the petitioner's applications objecting to the conclusiveness of the foreign judgement and request for declaring that the judgement and decree as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or adjustment. (3) The provisions of section 47 shall as from the filing of the certified copy of the decree apply to the proceedings of a District Court executing a decree under this section, and the District Court shall refuse execution of any such decree, if it is shown to the satisfaction of the Court that the decree falls within any of the exceptions specified in clauses (a) to (f) of section 13. [Explanation 1.-- "Reciprocating territory" means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section; and superior Courts, with reference to any such territory, means such Courts as may be specified in the said notification. Explanation 2.-- "Decree" with reference to a superior Court means any decree or judgment of such Court under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty, but shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment.]] At the outset, on the scope of inquiry and exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the Gujarat Liabilities plus the interest based on annual Libor plus 2% to the Beneficiary. ... This Guarantee shall be governed exclusively by English law and the English Courts shall have exclusive jurisdiction over all and any disputes arising out of or in relation to this guarantee. I irrevocably confirm that I will not contest and/or defend any application and/or proceedings to enforce this Personal Guarantee in England and Wales or elsewhere including (but not limited to) India and Australia and the Beneficiary shall be entitled to immediate judgment should payment not be made hereunder upon the Beneficiaries first written demand. No issue shall be taken as to jurisdiction and/or enforceability of this Personal Guarantee." 16. There is no dispute that Gujarat did not pay the Gujarat Liabilities, namely, US$ 4,259,395 by 31 December 2013. The question which arises is whether, in that event, on the true construction of the guarantee Mr. Jagatramka is obliged to pay a sum equivalent to US$ 4,259,395 or that sum, less US$ 1.95 million. That depends upon whether the guarantee provides for a primary liability arising upon demand or whether the guarantee is a true guarant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplementary skeleton argument which I asked Mr. Stevenson to provide. It is to be noted that Mr. Stevenson and those instructing him very properly reviewed the documentation and concluded that the sums paid by Gujarat in fact totalled US$ 2,452,471 (rather more than Mr. Jagatramka said had been paid) and further that by an email dated 9 July 2013 from Mr. Saigal some US$ 499,975 had been appropriated to the sums due under the Deed of Agreement." The reasoning of the foreign judgement would indicate that the Court held that the instrument signed by the petitioner provided for an on demand bond and if such demand was validly made, the petitioner was bound to pay "a sum equal to USD 4,259,395". The court, as is evident from para 16 of the judgement, interprets the relevant clauses of the guarantee in coming to such conclusion. What is evident on examining this contention is the ground so raised can only be taken to assail the foreign judgement on merits in an appeal to the Court of Appeal in the UK. An erroneous application of law cannot be a ground so as to say that it was a failure to render the judgements on the merits of the case. This Court cannot sit in appeal over a Foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not employ lawyers and signed the guarantee which had been drafted by Ultrabulk's lawyers as they had taken into account points made on behalf of Mr. Jagatramka in the course of the negotiations. There is nothing which could vitiate his consent to the guarantee." (d) It is necessary to see the exercise undertaken by the parties preceding this final draft from the list of dates given by the learned counsel for the respondent. (e) We may also consider these dates and events while considering the challenge with regard to the deposition and credibility of evidence of the expert witness. We may therefore deal with the submissions in context of this challenge. Reading the judgement of the foreign Court, it was contended that the examination of an expert witness, Mr.Amitava Majumdar could not have been taken into consideration as the Court completely ignored the fact that Shri Majumdar had appeared for the respondent before the Calcutta High Court. Several decisions were cited by the learned counsels for the respective parties. Let us first see the chronology as unfolding in this context. 1 1st Mar. 2017 An ex parte Legal Opinion issued by by Ms. Rimali Batra of DSK Legal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the issues on which they disagree on and a summary of the reasons for their disagreement. 5 27th 2017 Apr. Decree Holders Expert Witness writes to Ms. Rimali Batra of DSK Legal the individual who issued the Ex Parte Legal Opinion on seeking a reply his earlier email message dated 12th Apr. 2017. 6 28th 2017 Apr. Ms. Rimali Batra of DSK Legal the individual who issued the Ex Parte Legal Opinion writes to the Decree Holders Expert Witness inter alia stating: "We acknowledge receipt of your emails dated 12.04.2017 and 27.04.2017. Please note that we have no instructions from Gujarat NRE on the subject issue. We have, in a timely manner, appraised Gujarat NRE about both your e-mails. We will write to you, as soon as we have any intimation from Gujarat NRE." 7 9th 2017 Oct. The Decree Holder's lawyers had written to the Judgment Debtor in relation to the pre-trial formalities and inter alia stated as follows: "We repeat that it is important that you cooperate and reply to us urgently: (a) letting us know whether you will becalling witnesses of fact and/or expert witnesses to give oral evidence at the trial and, if so, confirm their identity; and (b) confirming w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n expert instructed by another party; or (b) a single joint expert appointed under rule 35.7, written questions about his report. (2) Written questions under paragraph (1) (a) may be put once only; (b) must be put within 28 days of service of the expert's report ; and (c) must be for the purpose only of clarification of the report. Unless in any case, (i) the court gives permission; or (ii) the other party agrees. (3) An expert's answers to questions put in accordance with paragraph (1) shall be treated as part of the expert's report. (4) Where- (a) a party has put a written question to an expert instructed by another party in accordance with this rule; and (b) the expert does not answer that question, the court may make one or both of the following orders in relation to the party who instructed the expert- (i) that the party may not rely on the evidence of that expert; or (ii) that the party may not recover the fees and expenses of that expert from any other party. Court's power to direct that evidence is to be given by a single joint expert 35.7- (1) Where two or more parties wish to submit expert evidence on a particular issue, the court ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... understand that I am proffering evidence in the capacity of an expert and not as a witness for a party. Furthermore, my attention has been drawn to part 35 of the Civil Procedure Rules of England and Wales, the practice directions framed thereunder and the 'Guidance for the Instruction of Experts in Civil Claims' which I have read and understand. I further understand that I have an overriding duty to held the English High Court impartially and independently on matters relevant to my area of expertise. To the best of my knowledge, I have discharged this paramount duty towards the English High Court." This disclosure in our opinion clearly demonstrates that only after the evidence was recorded and a finding has been arrived at on this basis, has the petitioner sought to object. At no stage of the trial or during its course, did the petitioner take objection on this which evidently indicates that he waived his rights. The petitioner chose not to cross examine the expert witness despite the judge posing questions to the expert witness. What is evident from the reproduction of the CPR and the events is that the decree holder's witness did contact the expert witness of the petitioner M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . That said, section 8 of the FEMA Act provides as follows: 8. Realisation and repatriation of foreign exchange.-Save as otherwise provided in this Act, where any amount of foreign exchange is due or has accrued to any person resident in India, such person shall take all reasonable steps to realise and repatriate to India such foreign exchange within such period and in such manner as may be specified by the Reserve Bank. - Save as otherwise provided in this Act, where any amount of foreign exchange is due or has accrued to any person resident in India, such person shall take all reasonable steps to realise and repatriate to India such foreign exchange within such period and in such manner as may be specified by the Reserve Bank." 33. In exercise of its powers under the section 8 of the FEMA Act, the RBI issued Notification No. FEMA 9/2000-RB dated 3 May 2000 which provided as follows: 3. Duty of persons to realise foreign exchange due : A person resident in India to whom any amount of foreign exchange is due or has accrued shall, save as otherwise provided under the provisions of the Act, or the rules and regulations made thereunder, or with the general or special permissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed not be obtained in advance of the guarantee being given. Providing of a personal guarantee without first obtaining permission is not itself a breach of FEMA. Post-facto permission can be obtained. Even otherwise as observed, and in our opinion rightly so, relying on a decision of the Bombay High Court in the case of Noy Vellesena Engineering Spa v. Jindal Drugs Limited (supra), the Court held that a party cannot take advantage of his own wrong. Paras 22, 23 and 24 of the foreign judgement read as under: "22. It is also important to note that FEMA does not invalidate a guarantee that has been provided without permission. The Indian Courts have come down heavily upon parties seeking to raise self-serving and dishonest pleas by taking advantage of their own wrongs in failing to obtain requisite RBI approvals as contemplated under the FEMA regime to wriggle out of liabilities arising out of contracts with foreign parties. The Bombay High Court in the case of Noy Vallesina Engineering SpA A v. Jindal Drugs Limited, Notice of Motion No. 826 of 2006 in Arbitration Petition No. 156 of 2005, 2006 (3) Arb LR 510 (Bom) ("Noy Vallesina") held that a party cannot take advantage of his own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n: "159. Delhi High court in case of SRM Exploration Pvt.Ltd. has dealt with the provisions of FEMA, 1999 including section 3 and has held that there was no provision voiding the transaction in contravention thereof. Delhi High Court has also referred to Section 47 of FERA 1973 which prohibited from entering into contract agreement directing or indirectly for operation of the said Act or any provisions thereof. It is held by Delhi High Court that the legislature while reenacting the law on the subject has chosen to do away with such a provision which shows a legislative intent to not void the transaction even if in violation of the said Act. I am in respectful agreement with the view expressed by Delhi High Court in case of SRM Exploration Pvt.Ltd. (supra). Delhi High Court in the said judgment has held that the world is a shrinking place today and commercial transactions spanning across borders abound. The court was of the opinion that if the court is dissuaded for the reason of the transaction for which the parties had stood surety/guarantee being between foreign companies, the court would be sending a wrong signal and dissuading foreign commercial entities from relying on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Patronage Letter was issued in contravention of the provisions of FEMA or in breach of any other legal requirements. The defence is, therefore, raised for the first time only after receiving statutory notice i.e. after almost four years of issuance of the Patronage Letter. Assuming that Videocon have committed any wrong in issuing the Patronage Letter without obtaining permission of the Reserve Bank, as per the settled legal position, it is not open to a party to take advantage of its own wrong. In Eurometal Ltd. v. Aluminium Cables and Conductors (U.P) Pvt. Ltd.), [(1983) 53 Comp Cas 744 Cal and SRM Exploration Pvt. Ltd. v. N & S & N Consultants S.R.O, [(2012) 4 Comp LJ 178 (Del)], Calcutta and Delhi High Courts respectively have frowned upon company facing a winding up petition taking up such dishonest defence. In these decisions High Courts have taken the view that in matters of commercial transactions involving crores of amount where the company facing winding up proceedings had stood a guarantor, if any such defence were to be accepted, we would be giving a wrong signal and dissuading foreign commercial entities from relying on the guarantees given by Indian Companies and whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge instead of policing foreign exchange, the policeman being the Reserve Bank of India under FERA. It is important to remember that Section 47 of FERA no longer exists in FEMA, so that transactions that violate FEMA cannot be held to be void. Also, if a particular act violates any provision of FEMA or the Rules framed thereunder, permission of the Reserve Bank of India may be obtained post-facto if such violation can be condoned. Neither the award, nor the agreement being enforced by the award, can, therefore, be held to be of no effect in law. This being the case, a rectifiable breach under FEMA can never be held to be a violation of the fundamental policy of Indian law. 89. The Appellants, however, relied upon certain observations in Dropti Devi v. Union of India (2012) 7 SCC 499. In that case, a challenge was made to the constitutional validity of Section 3 of Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as "COFEPOSA"), stating that by reason of the new legal regime articulated in FEMA, in replacement of FERA, the said provision has become unconstitutional in the changed situation. This submission was repelled by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 13. As far as the contention of the learned counsel for the petitioner that the Foreign Judgement has purportedly held that foreign decree cannot be enforced in India and ought to be enforced in other countries is concerned, it is clear that such an observation was only to suggest that the decree holder had an option to enforce a foreign decree against the assets of judgement debtor in other countries. The judgements cited in the case of Mrs Shobha Vishwanatha (supra), Algemene Bank Netherland NV (supra) were in the context of FERA regime and therefore reliance by the counsel for the petitioner on these are misplaced. 14. The judgement in the case of Manna Lal (supra) affirms the fact that a post facto permission can be obtained. 15. As far as the decision on interested witness in the case of R.K. Agrawal (supra) is concerned, the advocate wanted to lead evidence as a witness of a fact in the same proceedings before the same court where he appeared as an advocate. 16. Moreover in Special Civil Application No. 8334 of 2019 filed by the petitioner wherein a challenge was made to an order to Exh. 19 application, the Division Bench of this Court observed that having participated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs were instituted by the State Bank of India on 08.09.2021 by filing application under Section 95(1) of the IBC, in light of Section 96 thereof, an interim moratorium had commenced from 08.09.2021 i.e. the date of filing of CP(IB) No. 266 of 2021 before NCLT. Taking recourse to Section 238 of IBC, no further proceedings in execution proceeding be conducted in view of statutory stay. The respondent - decree holder raised several contentions that in view of the conduct of the petitioner himself in filing an application IA (IB) No. 872 before NCLT seeking dismissal of the main IBC proceedings and having challenged the vires of these very provisions, namely, Sections 95 & 96 of IBC, the contradictory conduct disentitles the petitioner of such relief. 20. Referring to various rounds of challenge before this court in various petitions, it was the submission of the decree holder from the dates of litigation's chequered history from 08.09.2021 to 10.03.2022 that based on the principle of constructive res-judicata, on principle of waiver, on the conduct of blowing hot and cold and being allowed to approbate and reprobate and interpreting the relevant provisions of IBC, the trial court he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2021 in Exh.94 in which the Judgment Debtor had been directed by this Hon'ble Court to furnish security by way of a cash deposit of Rs. 12,89,19,458/ pending the conclusion of the inquiry of whether the Judgment Debtor has, or has had since the date of the decree, the means to pay the amount of the decree or some substantial part thereof. Despite knowing of the NCLT Personal Bankruptcy proceedings prior to 20th September 2021, the Judgment Debtor on 26th October 2021 chose not to raise the contention of the purported bar of the jurisdiction of this Hon'ble Court to direct the judgment debtor to furnish security by way of a cash deposit of Rs. 12,89,19,458/ in light of Section 96 of the Insolvency and Bankruptcy Code. 28.5 On 29th October 2021, the final hearing of Exh. 111 Application had taken place in relation to the Judgment Debtors Fourth Round of the challenge to the jurisdiction of this Hon'ble Court to entertain the present execution proceedings. Despite knowing of the NCLT Personal Bankruptcy proceedings prior to 20th September 2021, the Judgment Debtor on 29th October 2021 chose not to raise the contention of the purported bar of the jurisdiction of this Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decree or some substantial part thereof. Despite knowing of the NCLT Personal Bankruptcy proceedings prior to 20th September 2021, the Judgment Debtor on 15th December 2022 chose not to raise the contention of the purported bar of the jurisdiction of this Court to direct the judgment debtor to furnish security by way of a cash deposit of Rs. 12,89,19,458/ in light of Section 96 of the Insolvency and Bankruptcy Code. 29.1 On 27th December 2021, this Court dismissed the Judgment Debtors application in Exh. 111 which was the Judgment Debtors Fourth Round of the Challenge to the jurisdiction of this Court to entertain the present execution proceedings. Despite knowing of the NCLT Personal Bankruptcy proceedings prior to 20th September 2021 and between 20th September 2021 to 27th December 2021 chose not to bring to the attention of this Court the purported bar of the jurisdiction of this Court in light of Section 96 of the Insolvency and Bankruptcy Code. This Court dismissed the Judgment Debtors application in Exh.136 wherein the Judgment Debtor made outrageous and preposterous allegations against the Ld. Presiding Officer of this Court and requested her to recuse herself from hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 10th April 2019 dismissed by the Hon'ble Gujarat High Court order dated 26th August 2019 in SCA No. 8334 of 2019 wherein it is observed as under: "13....... On the contrary, the record indicates that having filed objections under Section 13 of the CPC before the Commercial Court at Rajkot, only with an aim and object to delay the execution proceedings, the petitioner filed the present application Exh. 19 and on its dismissal, the present writ petition under Article 227 of the Constitution of India. 14.....It would not be out of place to record that having participated in the proceedings before the Commercial Court in London, UK, having given a guarantee and the judgment of English Court having become final, only with a view to throw spanner in the execution of such decree, the present petition is filed only with a view to create hurdle and delay the execution proceedings, which is nothing but an abuse of the process of the Court. We confirm the findings of the Court below and the Commercial Court having jurisdiction, has jurisdiction to entertain the execution petition filed by the respondent. The petition is devoid of any merits and the same is liable to be dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons (a) to (f) of Section 13 of the Code of Civil Procedure, 1908 ("CPC") being Exhibit 11 and the Judgment Debtor's second jurisdictional challenge to the jurisdiction of the Trial Court being Exhibit 45. * On 20th September 2021 - The Judgment Debtor filed IA (IBC)/872(KB)2021 before the NCLT Kolkata, seeking dismissal of the Personal Insolvency proceedings i.e., CP (IB) 266/2021 filed against him by the State Bank of India. * On 4th October 2021 - An order was passed by the Trial Court in Exhibit 94 directing the Judgment Debtor to deposit a sum of Rs. 12,89,19,458/under Order XXI Rule 40(b) of CPC as security pending an inquiry of his means to satisfy the decree. * On 20th October 2021 - The Judgment Debtor filed SCA No. 17399/2021 before this Hon'ble Court seeking to impugn the Trial Court's order dated 4th August 2021 in Exhibit 65 holding that the Trial Court has jurisdiction to entertain the present execution. * On 13th December 2021 - Judgment Debtor files WPA No. 20315/2021 before Calcutta High Court in which he has challenged the constitutionality of Section 96 of IBC. * On 27th December 2021 - Trial Court dismissed the Judgment Debtors application in Exhibit 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present SCA No. 18901/2022 passes an interim order staying the proceedings before the Trial Court till the next date of hearing. * On 15th December 2022 - The Ld. Division Bench of this Hon'ble Court dismisses as withdrawn the MCA No. 1/2022 in SCA No. 17965/2021. 22. To the contention of the petitioner that with the SBI filing a petition for personal Insolvency proceedings there would be automatic stay, let us consider the relevant provisions of IBC. Sections 95 to 100 of IBC reads as under: "Section 95. (1) A creditor may apply either by himself, or jointly with other creditors, or through a resolution professional to the Adjudicating Authority for initiating an insolvency resolution process under this section by submitting an application. (2) A creditor may apply under sub-section (1) in relation to any partnership debt owed to him for initiating an insolvency resolution process against- (a) any one or more partners of the firm; or (b) the firm. (3) Where an application has been made against one partner in a firm, any other application against another partner in the same firm shall be presented in or transferred to the Adjudicating Authority in which the first me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority in writing either- (a) confirming the appointment of the resolution professional; or (b) rejecting the appointment of the resolution professional and nominating another resolution professional for the insolvency resolution process. (3) Where an application under section 94 or 95 is filed by the debtor or the creditor himself, as the case may be, and not through the resolution professional, the Adjudicating Authority shall direct the Board, within seven days of the filing of such application, to nominate a resolution professional for the insolvency resolution process. (4) The Board shall nominate a resolution professional within ten days of receiving the direction issued by the Adjudicating Authority under sub-section (3). (5) The Adjudicating Authority shall by order appoint the resolution professional recommended under sub-section (2) or as nominated by the Board under sub-section (4). (6) A resolution professional appointed by the Adjudicating Authority under subsection (5) shall be provided a copy of the application for insolvency resolution process. Section 98. (1) Where the debtor or the creditor is of the opinion that the appointed under section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 95, the resolution professional may require the debtor to prove repayment of the debt claimed as unpaid by the creditor by furnishing- (a) evidence of electronic transfer of the unpaid amount from the bank account of the debtor; (b) evidence of encashment of a cheque issued by the debtor; or (c) a signed acknowledgment by the creditor accepting receipt of dues. (3) Where the debt for which an application has been filed by a creditor is registered with the information utility, the debtor shall not be entitled to dispute the validity of such debt. (4) For the purposes of examining an application, the resolution professional may seek such further information or explanation in connection with the application as may be required from the debtor or the creditor or any other person who, in the opinion of the resolution professional, may provide such information. (5) The person from whom information or explanation is sought under sub-section (4) shall furnish such information or explanation within seven days of receipt of the request. (6) The resolution professional shall examine the application and ascertain that- (a) the application satisfies the requirements se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94 and 95 of the IBC. According to the Court, the process can be calculated as a period of 41 days from the date of institution of the application. Therefore, though the interim moratorium commences on the date of the application i.e. on 14.09.2021, a Resolution Professional has to be nominated within seven days from filing of the application. Within ten days from receiving such direction the Board had to make that nomination of the Resolution Professional. The Resolution Professional has to thereafter examine the application within ten days of his appointment and submit a report. 24. Section 100(1) provides that the adjudicating authority shall within 14 days from the date of submission of the report pass an order admitting or rejecting the application referred to in section 94 and section 95 of IBC. The Trial Court, taking into consideration the conduct of the petitioner between 20.09.2021 and 10.03.2022 in the proceedings before High Court and the Hon'ble Supreme Court came to the conclusion that the petitioner waived his statutory rights under Section 96 of the I.B.C. 25. Let us indicate, how, in our opinion, the observations of the Trial Court cannot be faulted. After the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter thereby directly adjudicated upon between the same parties, therefore Section 44A has a direct interaction with Section 13, CPC. The provisions of Section 13 and its clauses are incorporated to become applicable while exercising powers for execution under Section 44A. Section 13 as stated above relates to the conclusiveness of foreign judgment which can be executed under Section 44A but for the exceptions contained in clauses (a) to (f) of Section 13, CPC. 6.4.2 The decree of the foreign court is treated by way of deeming fiction as if it had been passed by the 'district court'. The parties will be producing the certified copy of the decree from the court which has passed the decree for the purpose of execution and will comply with other requirements mentioned in the provisions. As per the Sub section 3 of Section 44A- the provision of Section 47 shall as from the filing of certified copy of the decree apply to the proceedings of district court executing a decree under this Section. The word 'decree' is explained in Explanation 2 and in Explanation 1 'reciprocating territory' is referred to. 6.4.3 Section 38 of the CPC deals with the aspect the Court by which the decree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of CPC were amended to be applied to the commercial suits, it would not mean or imply that the commercial court does not have the power to execute. 6.9 In Morlays (B'Ham) Limited. Vs. Roshanlal Ramsahai and Another [AIR 1961 Bom 156], the Bombay High Court considered the words 'as if' used in Sub-section (1) of Section 44A, CPC to observe that the words 'as if' are used to make the whole scheme of Order XXI applicable in respect of the execution of decrees of foreign court mentioned in Sub section 1. In other words, it can be said that when foreign decree is sought to be executed under Section 44A, CPC, the provisions relating to execution in CPC shall have a play together to be applied. Merely because while amending certain provisions of CPC as per the Section 16 of the Commercial Courts Act, the provisions regarding execution are not touched, it would not mean or imply that the commercial court does not have the power to execute. 7. For the foregoing reasons and discussion, a clear position of law emerges that commercial court does have the jurisdiction to try and decide the execution applications arising from the judgment and decree passed by the commercial c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed. The view taken by the court below is reasonable on facts and in law. 5.8 In view of all the above facts and background and when there are circumstances suggesting that despite possessing the means, the judgment-debtor has neglected and refused to pay the decreetal amount, furnishing of security by judgment-debtor is warranted. The security is considered proper to be solicited by the judgment-debtor to ensure that the rights of the decree holder are not defeated. 5.9 It is in on such premise of facts and reasons, the impugned order, as above, in exercise of powers Order XXI Rule 40(b) of the Code of the Civil Procedure, 1908, requires the judgment debtor to furnish security and sum of Rs. 12,89,19,458/which is the equivalent amount to the worth of the book value of shares in the four Australian companies held by the judgment-debtor. The impugned order is proper and reasonable in law as such in directing the judgment-debtor in furnish security. 6. In view of the above discussion, while no ground exists to interfere with the said order requiring the judgment-debtor to furnish the security to the aforesaid extent, what becomes conspicuous in the impugned order that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 27.12.2021. 31. When the petitioner challenged the order dated 04.02.2022 in Special Civil Application No. 17965 of 2021 which directed the judgement debtor to furnish a bank guarantee of Rs. 12,89,19,458/-, the Supreme Court dismissed the SLP making observations as under: "We have heard Shri Shyam Divan, learned Senior Advocate appearing on behalf of the petitioner and Shri Neeraj Kishan Kaul, learned Senior Advocate appearing on behalf of the respondent. In the facts and circumstances of the case and having gone through the impugned judgment and order passed by the High Court and more particularly when against the dues of Rs. 40,00,00,000/- (Rupees Forty Crores), the petitioner is directed to furnish the Bank Guarantee of approximately Rs. 12,00,00,000/- (Rupees Twelve Crores) in exercise of power under Order 21 Rule 40 (2) of the CPC, we see no reason to interfere with the impugned judgment and order passed by the High Court. The Special Leave petition stands dismissed. Pending application(s), if any, shall stand disposed of." 32. Immediately three days thereafter, on 09.03.2022, the application Exh. 147 was filed wherein the order under challenge was passed. More than on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India. 14. It would not be out of place to record that having participated in the proceedings before the Commercial Court in London, UK, having given a guarantee and the judgment of English Court having become final, only with a view to throw spanner in the execution of such decree, the present petition is filed only with a view to create hurdle and delay the execution proceedings, which is nothing but an abuse of the process of the Court. We confirm the findings of the Court below and the Commercial Court having jurisdiction, has jurisdiction to entertain the execution petition filed by the respondent. The petition is devoid of any merits and the same is liable to be dismissed and is hereby rejected in limine with cost of Rs. 25,000/to be deposited by the petitioner within a period of one week with This Hon'ble Court Legal Services Committee." 34. What is further important to note is that the petitioner on 27.09.2022 filed an MCA being MCA No. 1 of 2022 in SCA No. 17965 of 2021 seeking modification / review of the order dated 04.02.2022 which was confirmed by the Supreme Court on 07.03.2022. Apart from waiver, therefore this is a case where the petitioner is clearly approba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cution Petition No. 161 of 2021 so that no further proceedings in the said execution petition are conducted in breach of the said deemed statutory stay by virtue of operation of the aforesaid provision of law. 10. The aforesaid issue is no longer res-integra inasmuch as in its order dated 07-06-2022 passed in IA (IB) No. 310/KB/2022 in CP (IB) No. 319/KB/2021, the NCLT Kolkata has held that even a subsequent petition filed by a creditor of a person who is already subjected to Personal Insolvency proceedings by one of his creditors under Section 95(1) of the IB Code, 2016 after filing and registration of one such petition which is pending adjudication, is be deemed to have been stayed as per Section 96 (1)(b)(i) of the Code, the NCLT Kolkata recalled its earlier order issuing notice in the petition filed by IFCI Ltd and stayed further proceedings of the subsequent petition filed by IFCI Ltd in view of pendency of the petition filed by SBI. 11. It is submitted that since the applicant has been pursuing/ contesting 2 applications under Section 10 and 7 of the Insolvency and Bankruptcy Code, 2016 relating to Gujarat NRE Coke Ltd and Bharath NRE Coke Ltd. respectively before the NCL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner has been giving up cause and wants to withdraw the present Misc. Civil Application. 5.1 Accordingly, the Misc. Civil Application was not pressed and was permitted to be withdrawn. 6. As the petitioner is giving up its prayer and seeks to withdraw the present application, permission as prayed for is granted." 36. As far as the IBC is concerned and with regard to the correctness of the order with regard to the currency of the interim moratorium, the preamble provides to complete the resolution in a time bound manner. 37. In the case of Rahul Shah (supra), the Hon'ble Supreme Court observed as under:- "41. Having regard to the above background, wherein there is urgent need to reduce delays in the execution proceedings we deem it appropriate to issue few directions to do complete justice. These directions are in exercise of our jurisdiction under Article 142 read with Article 141 and Article 144 of the Constitution of India in larger public interest to subserve the process of justice so as to bring to an end the unnecessary ordeal of litigation faced by parties awaiting fruits of decree and in larger perspective affecting the faith of the litigants in the process of law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of suit if due diligence was exercised by the applicant. 11. The Court should allow taking of evidence during the execution proceedings only in exceptional and rare cases where the question of fact could not be decided by resorting to any other expeditious method like appointment of Commissioner or calling for electronic materials including photographs or video with affidavits. 12. The Court must in appropriate cases where it finds the objection or resistance or claim to be frivolous or mala fide, resort to Sub-rule (2) of Rule 98 of Order XXI as well as grant compensatory costs in accordance with Section 35A." 38. Therefore, in our opinion, as rightly observed in the order under challenge, the IBC must be disposed of expeditiously. Even in the case of Cauvery Coffee Traders (supra), the Hon'ble Supreme Court has held that law does not permit a person to approbate and reprobate. The relevant paragraphs read as under: "34. A party cannot be permitted to "blow hot and cold", "fast and loose" or "approbate and reprobate". Where one knowingly accepts the benefits of a contract or conveyance or an order, is estopped to deny the validity or binding effect on him of such cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he process of the Court by instituting suits again and again on the same cause of action without any good reason the Code insists that he should obtain the permission of the Court to file a fresh suit after establishing either of the two grounds mentioned in sub-rule (3) of rule 1 of Order XXIII. The principle underlying the above rule is rounded on public policy, but it is not the same as the rule of res judicata contained in section 11 of the Code which provides that no court shall try any suit or issue in which the matter directly or substantially in issue has been directly or substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court. The rule of res judicata applies to a case where the suit or an issue has already been heard and finally decided by a Court. In the case of abandonment or withdrawal of a suit without the permission of the Court to file a fresh suit, there is no prior adjudication of a suit or an issue is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fresh petition can file a fresh writ petition in the High Court under that Article. On this point the decision in Daryao's case (supra) is of no assistance. But we are of the view that the principle underlying rule 1 of Order XXIII of the Code should be extended in the interests of administration of justice to cases of withdrawal of writ petition also, not on the ground of res judicata but on the ground of public policy as explained above. It would also discourage the litigant from indulging in bench-hunting tactics. In any event there is no justifiable reason in such a case to permit a petitioner to invoke the extraordinary jurisdiction of the High Court under Article 226 of the Constitution once again. While the withdrawal of a writ petition filed in a High Court without permission to file a fresh writ petition may not bar other remedies like a suit or a petition under Article 32 of the Constitution of India since such withdrawal does not amount to res judicata, the remedy under Article 226 of the Constitution of India should be deemed to have been abandoned by the petitioner in respect of the cause of action relied on in the writ petition when he withdraws it without such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trine have been held to be applicable to writ proceedings, by another Constitution Bench decision of this Court in Devilal Modi V/s STO Wherein this Court observed: "8. It may be conceded in favour of Mr. Trivedi that the rule of constructive res judicata which is pleaded against him in the present appeal is in a sense a somewhat technical or artificial rule prescribed by the Code of Civil Procedure. This rule postulates that if a plea could have been taken by a party in a proceeding between him and his opponent, he would not be permitted to take that plea against the same party in a subsequent proceeding which is based on the same cause of action; but basically even this view is founded on the same considerations of public policy, because if the doctrine of constructive res judicata is not applied to writ proceedings, it would be open to the party to take one proceeding after another and urge new grounds every time; and that plainly is inconsistent with considerations of public policy to which we have just referred." 23. Reference may also be made to the Constitution Bench decision in Direct Recruit Class II Engg. Officers' Assn. V/s State of Maharashtra wherein this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promise. However, a statutory right may also be waived by implied conduct, like, by wanting to take a chance of a favourable decision. The fact that the other side has acted on it, is sufficient consideration. ... 18. The question of waiver of mandatory requirement of a statute was considered by this Court in depth in Commr. Of Customs V/ s Virgo Steels, by referring to a catena of judgments beginning from the judgment of the Privy Council in Vellayan Chettiar V/s Province of Madras wherein it was held that though notice under Section 80 of the Civil Procedure Code, 1908 is mandatory, the suit would not be bad if the non-issuance of notice is waived by the party for whose benefit the provision has been enacted. 19. Similarly, in S. Raghbir Singh Gill V/s S. Gurcharan Singh Tohra, the argument that the requirement of Section 94 of the Representation of the People Act, 1951 cannot be waived was rejected observing that a privilege conferred or a right created by a statute, if it is solely for the benefit of a party, the said party can waive it. However, where a provision enacted is founded on public policy, the Courts would be slow to apply the doctrine of waiver. The doctrine a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment debtor. Below the application so filed, the Principal Senior Civil Judge, Jamnagar, by an order dated 04.10.2021 ordered to attach the house property of the judgement debtor at NRE House at 45A, Saru Section Road, Jamnagar. SCA NO.18079 OF 2021 46. The captioned petition has been filed by the petitioner praying to quash and set aside order below Exh.92 dated 04.10.2021 in the aforesaid proceedings. The respondent herein had filed an application under Order XXI, Rule 41(1a) with regard to the examination of the judgement debtor as to which source of funds of Rs.50 crores which he intends to bring into Gujarat NRE Coke Limited pursuant to the composite scheme of compromise and arrangement between the judgement debtor and the creditors. By the order dated 04.10.2021, the Trial Court allowed the application directing the petitioner to disclose such source. 47. The learned counsel for the respective parties have restricted their arguments to Special Civil Application No. 5509 of 2021 and Special Civil Application No. 18901 of 2022. 48. In light of the orders passed in Special Civil Application No. 5509 of 2021, whereby the order dated 29.02.2020 passed below application Exh. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
