9911796707
TMI Blog2016 (9) TMI 1666X X X X Extracts X X X X X X X X Extracts X X X X ..... nown as Asian Natural Resources (India) Limited. This Award was passed on 17/01/2011. This Award was confirmed right up to the Supreme Court. Thereafter, an execution application was filed by Respondent No. 2 in this Court. Despite several efforts being made by them, the Award could not be executed against BIL and almost for a period of five years, not a farthing could be recovered from the judgment-debtor. After the inquiry was made by the judgment-creditor, they realized that the funds belonging to BIL were systematically being transferred to its sister concerns in a meticulous manner and this process, in fact, has started immediately after the matter was referred to the Arbitral Tribunal. It is the case of Respondent No. 2 - Vitol S.A. that by using all possible methods for defeating the claim of the judgment-creditor, monies were transferred, siphoned off, fraudulent documents were prepared and liabilities were transferred. After obtaining this information and making in-depth study of the financial statements of BIL and the Appellant - Bhatia Global Trading Limited ("BGTL"), Respondent No. 2 - Vitol S.A. came to know that 40,600 MT of coal was purchased in the name of BGTL and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods or without being fully satisfied that the goods were owned by the judgment debtor and not by anyone else and has arrived at a finding that Bhatia Global Limited and Bhatia International Limited (Asian Natural Resources (India) Limited) is one and the same party by allegedly piercing the veil. While doing so, admittedly, no notice has been issued to Bhatia Global Limited which is a Company incorporated under the provisions of the Companies At. It is also quite well settled that exercise of piercing the veil has to be done only under certain circumstances as laid down by the Apex Court in series of judgments. Even assuming that the learned Single Judge was of the view that it was necessary to pierce the veil then notice ought to have been given to Bhatia Global Limited and only thereafter such a finding could have been given. The impugned order, therefore, is liable to be set aside on this ground alone." In view of the directions given by this Court, the learned Single Judge examined the material on record and came to the conclusion that the Sharp was the owner in respect of 20,000 MT of coal and rest of the coal belonged to BIIL. Against said judgment and order of the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el appearing on behalf of Respondent No. 2 at length. 9. The learned Senior Counsel appearing on behalf of the Appellant submitted that the learned Single Judge has erred in carrying out the exercise of making an investigation at the stage of issuance of precept under Section 46 of the CPC. He submitted that the Appellant had a remedy of filing an application under Order 21 Rule 58 and if such an application was filed the Court was duty bound to give an opportunity to the third party to establish its case. He submitted that it was not open for the learned Single Judge to have given finding in her order by relying on the transfer agreement dated 28/11/2009. He then submitted that though the learned Single Judge has, in para 4 of her judgment, mentioned that the objection taken by the Appellant ought to have been taken in an application under Order 21 Rule 58 and though she has observed that the application filed by the Appellant was not an application under Order 21 Rule 58, she has still given a finding that the goods belonged to BIL. Thirdly, it was submitted that even without going into the material on record, a finding was given by the learned Single Judge in para 30 of her ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Single Judge has proceeded to decide the application as if it was an application under Order 21 Rule 58 and decided title of the goods which were lying at the said Ports under Order 21 Rule 58. 10. The learned Senior Counsel appearing on behalf of Respondent No. 2, however, rightly pointed out that in the Memo of Appeal a specific ground which was taken was that the application was filed in the form of an objection made under Order 21 Rule 58 of the CPC and the entire arguments was advanced before the learned Single Judge on that basis, whereas here in the Appeal Court a contrary stand has been taken for the first time by the Appellant. 11. We must note here that it does appear from the grounds which are taken by the Appellant that before the learned Single Judge, an application was argued as if it was an application under Order 21 Rule 58. Ground No. 10 of the Memo of Appeal reads as under:- "x) The Ld. Judge ought to have appreciated that present Chamber Summons is preferred in a form of an objection made under Order 21 Rule 58 of the CPC for recalling the order of issuance of precept." In spite of this, the learned Single Judge was very clear in her mind about th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yzing all the record which was put before her. 14. We concur with the view taken by the learned Single Judge that the instances and circumstances which have been discussed by her after examining the transfer agreement showed that the said transfer agreement was sham and bogus and which was executed only for the purpose of defeating the claim of Respondent No. 2. 15. We are therefore of the view that no case is made out by the Appellant for interfering with the findings given by the learned Single Judge. The learned Single Judge was aware of the settled position in law and therefore in para 4 of her judgment which is reproduced hereinabove, she has clearly mentioned that this is not an application under Order 21 Rule 58 of the CPC. It would be profitable to have a look at Order 21 Rule 58 of the CPC, which reads as under:- "ORDER XXI EXECUTION OF DECREES AND ORDERS Payment under decree" " Adjudication of claims and objections 58. Adjudication of claims to, or objections to attachment of, property.-(1) Where any claim is preferred to, or any objection is made to the attachment of, any property attached in execution of a decree on the ground that such property is not liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on shall be entertained - (a) where, before the claim is preferred or objection is made, the property attached has already been sold; or (b) where the Court considers that the claim or objection was designedly or unnecessarily delayed. Therefore, the Executing Court has power to regulate the procedure before deciding the claims or objections which are filed by the third parties. Keeping that in mind, the learned Single Judge has made those observations in para 4 of the said order. 16. The learned Senior Counsel appearing on behalf of the Appellant expressed an apprehension that the Executing Court being a District Court would be influenced by the observations made by this Court. He submitted that the said findings ought not to have been given by the learned Single Judge. 17. We disagree with the said submission made by the learned Senior Counsel appearing on behalf of the Appellant because the learned Single Judge in her order has clearly mentioned that the application was not an application under Order 21 Rule 58, though the Appellant themselves had treated that application as an application under Order 21 Rule 58. In para 5 of her order the learned Single Judge has observed as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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