TMI Blog2023 (10) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... of judgement debtor in other countries. The judgements cited in the case of Mrs Shobha Vishwanatha [ 1996 (4) TMI 529 - MADRAS HIGH COURT ], Algemene Bank Netherland NV [ 1989 (12) TMI 271 - HIGH COURT OF BOMBAY] were in the context of FERA regime and therefore reliance by the counsel for the petitioner on these are misplaced. The conduct speaks volumes in the case i.e. how clearly after every attempt to stall the execution proceedings failed, did the petitioner, as an after thought, try to forestall the execution proceedings. There is no merit in the petition - Petition dismissed. Seeking a formal order staying further proceedings in the execution petition in view of deemed stay of further proceedings as per the provisions of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- 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. Now coming to the question of constructive res-judicata as held in the case of Sarguja Transport Services [ 1986 (11) TMI 377 - SUPREME COURT] , that though the principles of res-judica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Ultrabulk A/S for a sum of USD 4,259,395. The petitioner had agreed that if Gujarat (NRE) Coke Limited would not pay the liabilities by 31st December 2013, he would on first written demand, pay a sum equivalent to liability plus interest. Ultrabulk A/S demanded the sum of USD 4,259,395 plus interest under the personal guarantee. Mr. Jagatramka has failed to pay any part of that sum. As a result thereof, Ultrabulk A/S (the decree holder-respondent herein) instituted proceedings before the High Court of Justice, Queens Bench, Commercial Court of London, U.K., against the petitioner - judgement debtor under the personal guarantee, by issuing a claim form. After exchange of pleadings, the English High Court on 09.11.2017, passed a foreign decree directing the judgement debtor to make payment of the amount as aforesaid in addition to accrued interest to the decree holder. 4.2 The decree holder instituted execution proceedings under Section 44A of the Code of Civil Procedure, 1908 (for short the CPC ), in relation to the foreign decree. On 07.05.2018, the petitioner judgment debtor filed application Exh. 11 resisting the execution of the foreign decree on the grounds that the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive since it has been passed by refusing to recognize the law of India which is applicable to the facts and circumstances of the case. It was very much apparent that the petitioner could not issue any such personal guarantee as per the relevant provisions of Foreign Exchange Management (Guarantees) (Regulations), 2000 and Foreign Exchange Management Act (FEMA), 1999, without the specific approval / permission of the Reserve Bank of India. Reading the relevant regulations, Mr. Kavina would submit that since no specific prior approval was sought from or granted by the Reserve Bank of India before giving the guarantee, the respondent could not have enforced the personal guarantee. Accordingly, since the impugned foreign judgement and decree has been passed by refusing to recognize the law of India where the provisions of FEMA Act and the Regulations are applicable, the judgement and decree are not conclusive. 5.5 Assailing the foreign judgement in context of Section 13(d) of the CPC, Mr. Kavina would submit that the judgement has been obtained in violation of principles of natural justice. He would submit that it is evident from record that the judgement debtor-petitioner had reque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 1994 Mh.L.J. 186 in context of the proprietary of an advocate appearing as a witness where he has been a counsel for a party. 6. Mr. Devang Nanavati, learned Senior Advocate appearing with Mr. Harsh Parekh, learned advocate for the respondent would make the following submissions: 6.1 That the Commercial Court at Jamnagar vide order dated 29.02.2020 rightly rejected the objections of the petitioner and held that the foreign decree is enforceable as a decree passed by the Trial Court under Section 44A of the Civil Procedure Code. 6.2 That the scope of examination of this Court is limited to the issue whether the petitioner-judgement debtor makes out any case on any of the grounds mentioned in sub-sections (a) to (f) of Section 13 of the CPC. He would submit that the decree has been obtained after following due judicial process and therefore the Executing Court cannot inquire into the validity, legality or otherwise of the judgement. 6.3 It is not open for the petitioner to raise a contention regarding the alleged professional misconduct of the decree holder s expert witness. Taking the Court to the timeline, Mr. Nanavati would submit that in accordance with the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r by failing to give credit for the sum of USD 2.3 million. The judgement debtor has wrongfully sought to couch its purported contention that the foreign decree wrongfully construed the personal guarantee as an on-demand bond. If, according to the petitioner, this was an erroneous application of law, there was a right to appeal and this was not a ground on which a foreign decree can be held to be inconclusive under Section 13(b) of the CPC. Reading Section 13(b) of CPC, he would submit that it was not a judgement which was not given on merits because the Court had applied its mind and considered the evidence available. He would invite the attention of the Court to para 3 of the foreign decree wherein consideration of evidence has been considered. In support of his submissions, Mr. Nanavati would rely on the following decisions: (I) In case of Vijay Karia and others v. Prysmian Cavi E Sistemi SRL and others reported in (2020) 11 SCC 1 (II) In case of SRM Exploration Pvt. Ltd. v. N S N Consultants S.R.O. reported in 2012 (129) DRJ 113 (DB) (III) In case of Videocon Industries Limited v. Intesa Sanpaolo S.P.A. reported in 2014 SCC OnLine Bom 1276 SCA NO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion commences. Further, Section 238 of the IBC provides that the provisions of this Code shall have effect notwithstanding anything inconsistent therewith. 8.3 Mr. Kavina would submit that since the petitioner was contesting two applications under Sections 10 and 7 of the IBC relating to Gujarat (NRE) Coke Limited and Bharat (NRE) Coke Limited, the petitioner was under the bona-fide impression that the moratorium relating to personal insolvency proceedings will commence after admission of CP by the NCLT, Kolkata. The petitioner was unaware that unlike as in the case of Corporate Insolvency Resolution Process, wherein a moratorium under Section 14 of the IBC is declared only after the admission of the petition in case of Personal Insolvency Resolution Process an interim moratorium automatically kicks in on filing of a petition under Section 95 of the IBC. 8.4 Mr. Kavina would submit that the learned Trial Judge had reserved orders on application Exhs. 90, 92 and 94 on 18.09.2021. Since the order below Exh.94 was challenged by filing SCA No. 17965 of 2021 and the modified order was challenged by SLP which was dismissed from 07.03.2022, it was only thereafter that the present ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same would lead to an absurd scenario wherein, there would be a stay on his personal insolvency proceedings as well as stay of execution proceedings. 9.5 Mr. Nanavati submits that the petitioner has obtained a stay order on 15.06.2022 from the Calcutta High Court. In these circumstances, the judgement cited by the learned advocate in the case of Stichting Doen-postcode Loterij (supra) will not apply. 9.6 The act of having elected to obtain an order from the Calcutta High Court amounts to blowing hot and cold. On the one hand, the petitioner is taking shelter under Section 96 of the IBC for not complying with the order of furnishing bank guarantee and on the other itself challenging the validity of the Code. 9.7 Referring to paras 6 to 11 of MCA No. 1 of 2022, Mr. Nanavati would submit that the petitioner relinquished his challenge and therefore the petition so filed would be barred by constructive res-judicata. 9.8 Mr. Nanavati would submit that if the conduct of the petitioner between 20.09.2021 and 10.03.2022 is seen, it is apparent that the petitioner waived his right. The interest of the petitioner is diametrically opposite to that of his creditors. Mr. Nan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the foreign judgement and request for declaring that the judgement and decree as not enforceable in India have been dismissed. The case of the petitioner is that the judgement and decree fails the test of Section 13(a) to (f) of the Code of Civil Procedure. For the purposes of this judgement, Section 13 of the CPC is reproduced as under: Section 13. When foreign judgment not conclusive. A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except- (a) where it has not been pronounced by a Court of competent jurisdiction; (b) where it has not been given on the merits of the case; (c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of [India] in cases in which such law is applicable; (d) where the proceedings in which the judgment was obtained are opposed to natural justice; (e) where it has been obtained by fraud; (f) where it sustains a claim founded on a breach of any law in force in [India]. 11. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an arbitration award, even if such an award is enforceable as a decree or judgment.]] At the outset, on the scope of inquiry and examination of the Court, the Supreme Court in the case of Alcon Electronics Private Limited (supra) held as under: 14. A plain reading of section 13 CPC would show that to be conclusive an order or decree must have been obtained after following the due judicial process by giving reasonable notice and opportunity to all the proper and necessary parties to put forth their case. When once these requirements are fulfilled, the executing Court cannot enquire into the validity, legality or otherwise of the judgment. 15. A glance on the enforcement on the foreign judgment, the position in common law is very clear that a foreign judgment which has become final and conclusive between the parties is not impeachable either on facts or law except on the limited grounds enumerated under section 13 CPC. In construing Section 13 CPC we have to look at the plain meaning of the words and expressions used therein and need not look at any other factors. (b) On the conclusion that the judgement failed to appropriate the amount already paid by the Gujara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 guarantee which provides for a secondary liability in the sense that the guarantor's liability mirrors the liability of the principal debtor. Whilst there is authority for the proposition that there is a presumption against construing an instrument as an on demand bond where it is not given by a bank or other financial institution (see Autoridad del Canal de Panama v Sacyr SA [2017] EWHC 2228 at paragraph 81(4) per Blair J. ) there is no doubt, in my judgment, that the instrument signed by Mr. Jagatramka provided for an on demand bond and that if such demand was validly made Mr. Jagatramka was bound to pay a sum equal to US$ 4,259,395 , not such sum as Gujarat was in fact liable to pay at that time. The following parts of the guarantee lead to that conclusion: i) Mr. Jagatramka agreed to pay a sum equivalent to the Gujarat Liabilities which were defined as being US$ 4,259,395. Mr. Jagatramka did not agree to pay a sum of money to be determined by reference to Gujarat's actual liability at the material t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Decree passed by the English Court as the same as rightly contended by the respondent s counsel amounted to going behind the decree. Once the Court has applied its mind and considered the evidence made available, it cannot be said that there was no adjudication on merits. Reading the foreign judgement indicates that it has considered the following evidence: 16.1 Oral evidence from Mr. Olesen, the Executive Vice President of the Decree Holder; 16.2 Oral evidence from Mr. Clulow, a partner at Reed Smith, the Decree Holder s Solicitors; 16.3 Witness statement of Mr. O'Neil, a former partner at Reed Smith; the Decree Holder s Solicitors; 16.4 Expert evidence of Indian law was adduced from Mr. Majumdar, an Indian lawyer, who gave evidence by video link from India; 16.5 Witness Statement of Mr. Saigal, a broker, who attended the negotiations leading to the Personal Guarantee/ On-Demand Bond with the Judgment Debtor; 16.6 The opinion rendered on Indian law by Ms. Batr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions 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 Gujarat NRE ( Ex Parte Legal Opinion ) had been filed by the Judgment Debtor in the proceedings before the English High Court, UK. 2 3rd Mar. 2017 English High Court, UK passes a directional order holding as follows: 4. Each party shall have permission to adduce expert evidence as follows: Expertise: Indian Law Issues to be covered: Those aspects of Indian law which are relied upon by the Defendant in support of his case that the Personal Guarantee is void and/or invalid and/or unenforceable. 5. Signed reports of experts of like disciplines shall be exchanged simultaneously by 4 PM on 27 March 2017. 6. Experts of like disciplines shall hold discussions for the purpose of identifying the issues between them and shall prepare a joint written statement by 4 PM on 10 April 2017 identifying the issues (if any) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RE 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 whether you will have legal representation at the trial or whether you will attend the hearing as a litigant in person. 8 30th 2017 Oct Hearing before the English High Court, UK during which the examination in chief of the Decree Holder s expert witness on Indian law, Mr. Amitava Majumdar had taken place by video conference wherein the judgment of the Bombay High Court in the case of POL India Projects Limited v. Aurelia Reederi Eugern Friederich, Arbitration Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port. 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 may direct that the evidence on that issue is to given by one expert only. (2) The parties wishing to submit the expert evidence are called the instructing parties . (3) Where the instructing parties cannot agree who should be the expert, the court may direct that the expert be selected in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 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 Ms. Rimali Batra of DSK Legal on the issue of preparing a joint report setting out the points which they agree and/or disagree but Ms. Batra informed the decree holder s witness that she had no instructions. What is also eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 permission of the Reserve Bank, take all reasonable steps to realise and repatriate to India such foreign exchange, and shall in no case do or refrain from doing anything, or take or refrain from taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 wrong by not applying for FEMA permission and thereafter allege that the foreign award is against the public policy of India as the necessary FEMA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 assurances/guarantees given by Indian companies and which would ultimately restrict the role of India in such international comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 which would ultimately undermine the role of India the world of trade and commerce. We could not agree less. (n) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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 this Court stating: 67. The importance of foreign exchange in the development o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner 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 in the proceedings before the English Commercial Court, having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.09.2021 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 held that proceedings under IBC cannot be applied i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 Hon'ble Court in light of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantial 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 hearing the case. Desp ..... 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 dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned under sub-sections (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 Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ober 2022 This Hon ble Court in the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The Board shall within seven days of receipt of directions under sub-section (1) communicate to the Adjudicating Authority 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, and submit a report to the Adjudicating Authority recommending for approval or rejection of the application. (2) Where the application has been filed under section 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 exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V. 23. If the learned Trial Court s reasoning are fathomed, it suggests that it is of the opinion that the code prescribes a specific time limit for completion of the process after institution of the application under Sections 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection. The execution can be refused if it is shown that the decree falls within any of the exception in Section 13. 6.4.1 At this stage, it may be stated that Section 13, CPC provides that foreign judgment shall be conclusive as to any 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 di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CPC as per the Section 16 of the Commercial Courts Act, the commercial court does not have the jurisdiction to try and decide the execution petitions. Merely because there is no amendment in relation to the execution provisions brought about and certain other 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuting Court has duly found that they are indicative of unwillingness and avoidance on part of the judgment-debtor to pay the decreetal amount despite availability of means with him to pay. The Court has considered therefore that order for furnishing security deserved to be passed. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came the applications Exh. 111 and Exh. 45. One glaring aspect that stands out like an eye-sore is the conduct of the petitioner in filing WPA No. 20315 of 2021 before the Calcutta High Court, wherein, he challenged the constitutionality of Section 96 of the IBC. That application was also dismissed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 exhibit 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 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olkata. 9. The applicant further submits that in view of language of Section 96(1)(b)(i), the impugned execution petition is deemed to have been stayed; however, as stated above, the applicant preferred application Exh. 147 being the fact of filing of CP (IB) 266/2021 before NCLT, Kolkata Bench by SBI against him on record of Execution 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the Court in Special Civil Application No. 18901 of 2022 i.e. the present Special Civil Application granted interim order staying proceedings before Trial Court. On 15.12.2022, the MCA was listed and the High Court recorded the following: 5. Learned senior advocate for the applicant stated on instructions of the petitioner that the petitioner 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 exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction under Section 47 or under Order XXI of CPC, must not issue notice on an application of third-party claiming rights in a mechanical manner. Further, the Court should refrain from entertaining any such application(s) that has already been considered by the Court while adjudicating the suit or which raises any such issue which otherwise could have been raised and determined during adjudication 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he cannot be permitted to institute a fresh suit in respect of the same subject-matter again after abandoning the earlier suit or by withdrawing it without the permission of the Court to file fresh suit. Invito benificium non datur. The law confers upon a man no rights or benefits which he does not desire. Whoever waives, abandons or disclaims a right will loose it. In order to prevent a litigant from abusing the 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 subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e merits by the Court. We wish to make it clear that the conclusions thus reached by us are confined only to the point of res judicata which has been argued as a preliminary issue in these writ petitions and no other. 9. The point for consideration is whether a petitioner after withdrawing a writ petition filed by him in the High Court under Article 226 of the Constitution of India without the permission to institute 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 Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rue that where a matter has been constructively in issue it cannot be said to have been actually heard and decided. It could only be deemed to have been heard and decided. The first reason, therefore, has absolutely no force. 41. In the case of Shiv Chander More (supra), the Hon ble Supreme Court in paragraphs 22 to 24 held as under: 22. The principles of constructive res judicata which are also a part of the very same doctrine 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in the case of Arce Polymers (supra), in paras 16 and 18 to 21 held as under: 16. Waiver is an intentional relinquishment of a known right. Waiver applies when a party knows the material facts and is cognizant of the legal rights in the matter, and yet for some consideration consciously abandons the existing legal right, advantage, benefit, claim or privilege. Waiver can be contractual or by express conduct in consideration of some compromise. 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. Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Interim relief granted earlier, stands vacated forthwith. SCA NO.17793 OF 2021 45. The captioned petition has been filed challenging the order dated 04.10.2021 passed below Exh. 90 by the Court of the Principal Senior Civil Judge, Jamnagar, in Execution Petition No.161 of 2019. By that application, the decree holder has prayed for the prohibitory order under Order 21 Rule 54 of the Code of Civil Procedure with respect to the immovable property in the ownership of the judgement 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 arrangemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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