TaxTMI 
TaxTMI 
2023 (10) TMI 69
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....edings several orders have been passed, they 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 indeb....
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....e CPC, Mr. Kavina would submit that the foreign judgement 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....
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....Indian law before it, had prior to deposing before the Court appeared 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....
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....he foreign decree correctly interpreted the provisions of FEMA and Regulations thereunder. He would submit that by no stretch 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 m....
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....eedings cannot be continued in view of the interim moratorium and therefore the applicant petitioner prayed before the Executing Court that a formal order staying 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 ....
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....the personal insolvency proceedings against the judgement debtor when they have been stayed at the instance of the petitioner by the Calcutta High Court. The petitioner after having elected 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 th....
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....e and others reported in (2014) 11 SCC 744 (VI) In case of Arce Polymers Private Limited v. Alphine Pharmaceuticals Private Limited and others reported in (2022) 2 SCC 221 (VII) In case of Maharashtra State Road Transport Corporation v. 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 CIVI....
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....if it had been passed by the District Court. (2) Together with the certified copy of the decree shall be filed a certificate from such superior Court stating the extent, if any, to which the decree has been satisfied or adjusted and such certificate shall, for the purposes of proceedings under this section, be conclusive proof of the extent of such satisfaction 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 ref....
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....ts') I am also aware of the liability due on date, i.e. USD 4 259,395/- to the Beneficiary by Gujarat under the Agreement (the 'Gujarat Liabilities'). NOW, therefore, I, the Guarantor, hereby unconditionally and irrevocably guarantee that, if for any reason Gujarat do not repay the Gujarat Liabilities latest by 31 December 2013 then I will on the Beneficiary's first written demand from the Beneficiary, pay a sum equivalent 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 ....
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....s then those liabilities were those which arose under the Cooperation Agreements which currently exceed US$20 million. If that were wrong and Mr. Jagatramka's liability was coextensive with Gujarat's liability under the Deed of Agreement then the further alternative argument is that, having regard to the manner in which sums paid by Gujarat were appropriated, both by Ultrabulk and Gujarat, the liability of Mr. Jagatramka is in fact US$ 3,259,492.43. This further alternative argument is explained in a supplementary 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....
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....tramka would provide a guarantee. Following that meeting Reed Smith invited him to provide a draft. On 23 June 2013 Reed Smith said that unless a draft was received the next day they would draft the guarantee. Mr. Saigal wrote saying that Mr. Jagatramka "has been discussing internally and with his legal people". But no draft was provided and so Reed Smith provided a draft on 24 June 2013. 6. There then followed a period of negotiation at the end of which the guarantee was signed. There is nothing which would give rise to a defence in the circumstance that Mr. Jagatramka did 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 the....
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.... 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." 4 12th 2017 Apr. Decree Holders Expert Witness writes to Ms. Rimali Batra of DSK Legal the individual who issued the Ex Parte Legal Opinion on the modalities of complying with the directional order dated 3rd March 2017 passed by the English High Court, UK wherein the expert witness of both parties would have to prepare a joint report identifying 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....
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.... (2) When a party applies for permission under this rule he must identify- (3) If permission is granted under this rule it shall be in relation only to the expert named or the field identified under paragraph (2). (4) The court may limit the amount of the expert's fees and expenses that the party who wishes to rely on the expert may recover from any other party. General requirement for expert evidence to be given in a written report 35.5- (1) Expert evidence is to be given in a written report unless the court directs otherwise. (2) If a claim is on the fast track, the court will not direct an expert to attend a hearing unless it is necessary to do so in the interests of justice. Written questions to experts 35.6 (1) A party may put to- (a) an 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 o....
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....h (3) to be inaccurate or incomplete. Use by one party of expert's report disclosed by another 35.11 Where a party has disclosed an expert's report, any party may use that expert's report as evidence at the trial. ... Consequence of failure to disclose expert's report 35.13 A party who fails to disclose an expert's report may not use the report at the trial or call the expert to give evidence orally unless the court gives permission." (g) Perusal of chronology of dates, events and excerpts of exchanges between the parties indicate that such procedure as is envisaged in the relevant rules so prescribed are followed. Even otherwise this was an issue relating to the merits of the issue. The expert witness Mr. Amitava Majumdar had in the form of a letter dated 27.03.2017 made a declaration which reads as under: "6. At the outset, I would like to disclose the fact that I have appeared on behalf of Ultrabulk Shipping A/S and Ultrabulk A/S in the proceedings filed by Mr. Arun Kumar Jagatramka before the Calcutta High Court. I understand that I am proffering evidence in the capacity of an expert and not as a witness for a party. F....
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....hatia International Limited (2015) 1 Bom CR 100 and Texmaco Ltd. v. Deputy Director, Enforcement Directorate, 1997 Company Cases Vol. 88 Pg. 228. It follows that a guarantee will not be invalid even if both sides are aware that the guarantor does not have the requisite approvals when it is executed. Issue III - What would be the ramifications of a personal guarantee being issued by an Indian entity / citizen in favor of a foreign company for and on behalf of and Indian company if the same has been executed in Australia as opposed to India ? 32. I do not believe that the location of execution of the personal guarantee is relevant as long as the guarantor is a person resident in India. I am, however, of the opinion that the FEMA regime would not be triggered in an event there is no outflow of foreign exchange out of India or foreign exchange is not being repatriated out of India. In light of the same, In an event the Indian citizen has a bank account in Australia and makes payment to the foreign entity from the bank account in Australia the FEMA regime would not be triggered in the first place. That said, section 8 of the FEMA Act provides as follows: 8. Re....
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....indicates that in the context of the opinion of the expert, it is evident that the FEMA regime was brought in to amend the Foreign Exchange Regulation Act, 1973 (FERA). Section 6 of the FEMA Act reads as under: "6(3) "Without prejudice to the generality of the provisions of sub-section (2), the Reserve Bank may, by regulations, prohibit, restrict or regulate the following - (j) giving of a guarantee or surely in respect of any debt, obligation or other liability incurred (i) by a person resident in India and owned to a person resident outside India; or (j) Regulation 3 of the Guidelines and Foreign Exchange Management (Guarantees) Regulation, 2000 reads as under: "3. Prohibition Save as otherwise provided in these regulations or with the general or special permission of the Reserve Bank, no person resident in India shall give a guarantee or surely in respect of, or undertake a transaction, by whatever name called, which has the effect of guaranteeing, a debt, obligation or other liability owed by a person resident in India to, or incurred by, a person resident outside India." (k) Interpreting this provision, the Court held....
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.... Court) of the Bombay High Court in the case of Videocon Industries v. Intesa Sanpaolo SPA (Appeal (L) No. 29 of 2014 in Company Petition No. 528 of 2012); 2014 SCC OnLine Bom 1276 in which it rejected the contention that a guarantee given by an Indian party was unenforceable and expressed the opinion that such an alibi if given judicial recognition would "dissuade foreign commercial entities from relying upon guarantees given by Indian companies which would ultimately undermine the role of India in the world of trade and commerce." 24. I have been personally involved in the case of POL India Projects Limited v. Aurelia Reederei Eugen Friederich GMBH Schiffahrtsgesellschaft & Company KG (2015) 7 Bom CR 757 ("POL India") where the Bombay High Court held that a performance guarantee issued by an Indian shipbroker to guarantee the obligations of a Dubai based charter under a voyage charterparty was enforceable as a matter of Indian law despite the fact that the Indian shipbroker did not obtain permission from the RBI at any point of time. In that case, the Bombay High Court once again quoted with approval the propositions of law laid down by the aforesaid judgments. The Bomba....
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....the transactions in contravention thereof. We may mention that the predecessor legislation to FEMA namely FERA 1973 vide Section 47 prohibited entering into any contract or agreement directly or indirectly evading or avoiding any operation of the said Act or any provision thereof. However Sub Section (3) thereof also provided that such prohibition shall not prevent legal proceedings being brought in India for recovery of a sum which apart from the provision of FERA would be due. However the legislature while re- enacting the law on the subject has chosen to do away with such a provision. We are of the view that the same shows a legislative intent to not void the transaction even if in violation of the said Act. Thus we are of the opinion that the plea of the appellant Company in this regard is without any force." (m) Even the Bombay High Court in the case of Videocon Industries Limited (supra) has held that accepting such a dishonest plea of Indian parties to avoid liabilities on the pretext of violation of FEMA would send a wrong signal to foreign investors. "41. In any view of the matter, it is also necessary to know that Videocon had never contended in any of its cor....
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....exchange unless permitted. As pointed out by the Supreme Court in Life Insurance Corporation of India v. Escorts Ltd. (supra), the object of FERA was to ensure that the nation does not lose foreign exchange essential for economic survival of the nation. With the liberalization and opening of India's economy it was felt that FERA must be repealed. FERA was enacted to replace the Foreign Exchange Regulation Act, 1947 which was originally enacted as a temporary measure. The Statement of Objects and Reasons of FERA indicate that FERA was enacted as the RBI had suggested and Government had agreed on the need for regulating, among other matters, the entry of foreign capital in the form of branches and concerns with substantial non- resident interest in them, the employment of foreigners in India etc. 110. The contention that enforcement of the Award against Unitech must be refused on the ground that it violates any one or the other provision of FEMA, cannot be accepted; but, any remittance of the money recovered from Unitech in enforcement of the Award would necessarily require compliance of regulatory provisions and/or permissions." 88. This reasoning commends itse....
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....te foreign exchange regulations. The Court was careful to note that any illegal activity which jeopardises the economic fabric of the country, which includes smuggling activities relating to foreign exchange, are a serious menace to the nation and can be dealt with effectively, inter alia, through the mechanism of preventive detention. From this to contend that any violation of any FEMA Rule would make such violation an illegal activity does not follow. In fact, even if the reasoning contained in this judgment is torn out of its specific context and applied to this case, there being no alleged smuggling activity which involves depletion of foreign exchange, as against foreign exchange coming into the country as a result of sale of shares in an Indian company to a foreign company, it does not follow that such violation, even if proved, would breach the fundamental policy of Indian law. 12. Having considered these provisions, what is evident is that transactions that violate FEMA cannot be held to be void. If any act violates the provisions of FEMA, permission of RBI may be obtained postfacto. Therefore, it cannot be said that the foreign judgement is in breach of Indian law or fa....
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....ow 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 Gujarat High Court Legal Services Committee." 17. For the aforesaid reasons, therefore, there is no merit in the petition i.e. Special Civil Application No. 5509 of 2021 and the same is accordingly dismissed. Interim relief stands vacated. Civil Application also stands disposed of. ANALYSIS OF SPECIAL CIVIL APPLICATION NO. 18901 OF 2022 18. To recapitulate, apart from the challenge to the foreign judgement as being not conclusive and enforceable for the reasons stated in the applications Exs. 11 and 45 which order was a subject matter of challenge in Special Civil Application No. 5509 of 2021, the judgement-debtor on 09.03.2022 two years after the orders in Exs. 11 & 45 applications filed Application Ex. 147 seeking a formal order staying further proceedings in the execution petition in view of deemed stay of further proceedings as per the provisions....
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....es the Judgment Debtor cannot feign ignorance of the pendency of the NCLT Personal Bankruptcy Proceedings after 20th September 2021. 28.2 On 04th October 2021, this Court pronounced its judgment in Exh. 90, 92 & 94. The Decree Holder has attention drawn to despite knowing of the NCLT Personal Bankruptcy proceedings prior to 20^th September 2021, the Judgment Debtor between 20th September 2021 to 04th October 2021 did not call upon this Hon'ble Court to refrain from passing orders in Exh.90, 92 & 94. 28.3 On 13th October 2021, the Judgment Debtor has filed an Affidavit in support of SCA No. 17399/2021 before the Hon'ble Gujarat High Court in which he had impugned order dated 04th August 2021 in Exh.65 passed by this Court wherein this Court dismissed the Judgment Debtors third round of objections. Despite knowing of the NCLT Personal Bankruptcy proceedings prior to 20^th September 2021, the Judgment Debtor on 13th October 2021 chose not to raise the contention that this Hon'ble Court did not have jurisdiction to take further steps in the instant Execution proceedings in light of Section 96 of the Insolvency and Bankruptcy Code. 28.4 On 26th Oct....
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....2021, the Judgment Debtor on 01st November 2021 chose not to raise the contention of the purported bar of the jurisdiction of this Court in light of Section 96 of the Insolvency and Bankruptcy Code. 28.8 On 13th December 2021, the Judgment Debtor has filed a Writ Petition under Article 226 of the Constitution of India before the Calcutta High Court being WPA No. 20315 of 2021 in which the Judgment Debtor has sought a declaration that Section 94 to 100 (including Section 96) of the Insolvency and Bankruptcy Code are purportedly unconstitutional on the ground that they violate Article 14 of the Constitution of India and principles of natural justice. The Decree Holder claims thereby on one hand in WPA No. 20315 of 2021 before the Calcutta High Court the Judgment Debtor has contended that Section 96 of the The Insolvency and Bankruptcy Code is unconstitutional whereas in the present Exh.147 before this Hon'ble Court the Judgment Debtor is seeking to take benefit from Section 96 of the Insolvency and Bankruptcy Code. 29. On 15th December 2021, the final hearing of SCA No. 17965/2021 had taken placed before the Hon'ble Gujarat High Court in relation to the Judg....
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....;ble Gujarat High Court dismissed SCA No. 17399/2021 in relation to the appeal against order dated 04th August 2021 in Exh. 65 passed by this Court by holding that this Hon'ble Court has jurisdiction to entertain the present execution proceedings by making the below observations on the conduct of the Judgment Debtor. The Judgment Debtor was directed to furnish security for the sum of Rs. 12,89,19,458/ by way of Bank guarantee equal to the said amount. 29.4 On 18th February 2022, the Judgment Debtor has filed SLP (Civil) No.3300 of 2022 before the Hon'ble Apex Court against order dated 04th February 2022 in SCA No. 17965/2021 passed by the Hon'ble Gujarat High Court wherein no contention had been taken in relation to the purported applicability of Section 96 of the Insolvency and Bankruptcy Code had been raised. 29.5 On 07th March 2022, during the hearing of SLP (Civil) No. 3300 of 2022 before the Hon'ble Apex Court, no argument in relation to the applicability of Section 96 has been raised by the Judgment Debtor. The Hon'ble Supreme Court of India vide order dated 07th March 2022 dismissed SLP (Civil) No. 3300 of 2022. 30. Attention is....
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....elation to the appeal against order dated 04th August 2021 in Exh.65 passed by this Court by holding that this Court has jurisdiction to entertain the present execution proceedings and made observations on the conduct of the Judgment Debtor. 30. 3.The Fourth Round being at Exh. 111 which is dismissed by the Trial Court vide order dated 27th December 2021 and the present application at Exh.147. 31. In the instant case, as early as on 20th September 2021 the Judgment Debtor was aware of the NCLT Personal Bankruptcy proceedings against him but chose to institute the instant present Exh. 147 application only on 10th March, 2022. Thus, the Judgment Debtor knew the proceedings instituted before NCLT since 20.09.21 as well as the proceedings before the High Court and Supreme Court since from 20.09.21 - 10.03.22." 21. Before we examine the correctness of the aforesaid order, a reiteration of a brief chronology of dates is apt. • On 26th August 2019 - The Ld. Division Bench of this Hon'ble Court in SCA 8334/2019 dismissed the Judgment Debtor's appeal against the Trial Court's order dated 10th April 2019 in Exhibit 19 in which the Judgment Debtor had challen....
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....ry 2022 - An order was passed by this Hon'ble Court dismissing SCA No. 17399/2021 i.e., Third Round challenging the jurisdiction of the Trial Court filed by the Judgment Debtor against the Trial Courts order dated 4th August 2021 in Exhibit 65 holding that the Trial Court has jurisdiction to entertain the present execution proceedings. • On 7th March 2022 - Order of the Supreme Court of India dismissing SLP (Civil) No. 3300 of 2022 against this Court's order dated 4th February 2022 in SCA No. 17965/2021 which directed the Judgment Debtor to furnish a bank guarantee of Rs. 12,89,19,458/-. • On 9th March 2022 - Just 3 days after the aforesaid Supreme Court Order, Judgment Debtor files Exhibit 147 before the Trial Court seeking "a formal order staying further proceedings in the captioned execution petition pending admission of CP (IP) 266/2021 by the NCLT, Kolkata". • On 15th June 2022 - The Judgment Debtor on his own volition obtained from the Calcutta High Court in WPA No. 20315/2021 an order staying the Personal Insolvency Proceedings against him. The Calcutta High Court had taken note of a similar challenge pending before the Supreme Court of....
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....tor shall also provide a copy of the application made under sub-section (1) to the debtor. (6) The application referred to in sub-section (1) shall be in such form and manner and accompanied by such fee as may be prescribed. (7) The details and documents required to be submitted under sub-section (4) shall be such as may be specified. Section 96. (1) When an application is filed under section 94 or section 95- (a) an interim-moratorium shall commence on the date of the application in relation to all the debts and shall cease to have effect on the date of admission of such application; and (b) during the interim-moratorium period- (i) any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed; and Application by creditor to initiate insolvency resolution process. Inter immoratorium. (ii) the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt. (2) Where the application has been made in relation to a firm, the interim-moratorium under sub-section (1) shall operate against all the partners of the firm as on the date of the applica....
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.... against whom no disciplinary proceedings are pending. (4) Without prejudice to the provisions contained in sub-section (1), the creditors may apply to the Adjudicating Authority for replacement of the resolution professional where it has been decided in the meeting of the creditors, to replace the resolution professional with a new resolution professional for implementation of the repayment plan. (5) Where the Adjudicating Authority admits an application made under sub-section (1) or sub-section (4), it shall direct the Board to confirm that there are no disciplinary proceedings pending against the proposed resolution professional. (6) The Board shall send a communication within ten days of receipt of the direction under subsection (5) either- (a) confirming appointment of the nominated resolution professional; or Appointment of resolution professional. Replacement of resolution professional. rejecting appointment of the nominated resolution professional and recommend a new resolution professional. (7) On the basis of the communication of the Board under sub-section (3) or sub-section (6), the Adjudicating Authority shall pass an order ....
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....the resolution professional shall submit a report recommending that the application by the debtor under section 94 be treated as an application under section 81 by the Adjudicating Authority. (9) The resolution professional shall record the reasons for recommending the acceptance or rejection of the application in the report under subsection (7). (10) The resolution professional shall give a copy of the report under subsection (7) to the debtor or the creditor, as the case may be. Submission of report by resolution professional. Section 100. (1) The Adjudicating Authority shall, within fourteen days from the date of submission of the report under section 99 pass an order either admitting or rejecting the application referred to in section 94 or 95, as the case may be. (2) Where the Adjudicating Authority admits an application under sub-section (1), it may, on the request of the resolution professional, issue instructions for the purpose of conducting negotiations between the debtor and creditors and for arriving at a repayment plan. (3) The Adjudicating Authority shall provide a copy of the order passed under sub-section (1) along with t....
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.... holder for security under Order XXI, Rule 40(b) of the Code of Civil Procedure, the Trial Court allowed the application and held that pending the conclusion of the inquiry of whether the judgement 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 and refuses or neglects to pay the amount of the decree, the judgement debtor is directed to furnish security in the sum of Rs. 12,89,19,458/- by way of cash deposit with the registry of the Trial Court within six weeks from the date of the order. Prior thereto, the Trial Court, on 04.08.2021, on an application Exh.65 of the judgement debtor with a prayer to hold that the executing court has no jurisdiction to entertain the application was rejected. Against the order dated 04.08.2021, Special Civil Application No. 17399 of 2021 was filed by the petitioner. This Court, by an order dated 04.02.2022, dismissed the petition holding as under: "6.4 Coming to the facts of the present case, it is the decree of English Court, the reciprocating territory, is being executed under Section 44A, CPC. This provision in the CPC, 1908, provides for Execution of decrees pa....
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.... upon adjudication of commercial dispute and now sought to be executed under Section 44A which is deemed in law to be the decree as if it has been passed by district court. Upon conjoint reading of Section 44A and Section 38 CPC, it could be certainly deduced that the decree passed by the English Commercial Court can be executed by the commercial court when presented under Section 44A of the CPC. It becomes a decree as if it has been passed by district court. It would be only proper to read the word 'the Commercial Court' which had passed the decree in Section 44A CPC in place of the word 'District Court', when it is a decree passed by foreign court - the reciprocating territory, and sought to be executed. 6.6 When the execution is filed from the decree of commercial court, the 'commercial dispute' continues to exists. In the execution proceedings initiated to execute the decree of the commercial court, the characteristics of the 'commercial dispute' is not lost, rather the dispute continues in the same nature, that is the 'commercial dispute'. 6.7 The jurisdiction of the commercial court under Section 6 of the Commercial Courts Act extend to try all suits and app....
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....6/2023 to seek a stay of the proceedings invoking grounds under Section 96 of the IBC. 28. Even when the order dated 04.10.2021 at Exh. 94 was passed whereby the debtor was directed to deposit a sum of Rs. 12,89,19,458/- and on 29.10.2021 that order was challenged by filing Special Civil Application No. 17965 of 2021, the judgement debtor raised no contention that he was not required to deposit the said amount in the Court on the ground of Section 96 of the IBC. On the very date, i.e. on 04.02.2022, when the judgement debtor's petition to challenge Exh. 65 order was dismissed, this Court also dismissed the petition modifying the order of the Trial Court by allowing the judgement debtor to furnish a bank guarantee in substitution of cash deposit. On the conduct of the petitioner, the Court, in paras 5.6 to 7 observed as under: "5.6 The Court below observed about the conduct of the judgment-debtor, "The extent to which the judgment-debtor has gone is also indicated by the fact that inspite of the knowledge of the orders of the court the judgment-debtor has not obeyed them. This makes it clear that the party who was absolutely no regard for the orders of the court must be ....
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....rsome but also unreasonable. The security to the aforesaid sum could be solicited by directing the judgment-debtor to furnish the bank guarantee of the equivalent amount. The impugned order is required to be interfered with to be modified to the said and such limited extent. 6.1 As a result, while maintaining the impugned order as well as the reasons supplied by the Court in so far it requires the judgment-debtor to furnish security, the direction in the order is modified to the limited extent that the judgment debtor petitioner herein may furnish the security for the sum of Rs. 12,89,19,458/by way of bank guarantee equal to the said amount. 7. The present Special Civil Application is dismissed subject to modification in the order to the above extent." 29. Even in para 5.2 of the order in Special Civil Application No. 17399 of 2021, the Court observed that it is depreciable that despite the above findings of the Division Bench, the very ground is raised and re-raised in yet another proceedings. "5.2 It could be well said therefore that the ground that the dispute is not 'commercial dispute' and consequentially the Commercial Court lacks inherent jurisd....
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....onduct 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. The observations of the Trial Court, in an application filed at Exh. 136 for recusal of the learned Presiding Officer, are worth mentioning. "26. ....... As discussed earlier, the history ofthe case as narrated hereinabove goes to suggest that the Judgment Debtor has been Written Submissions of the Decree Holder in insincere even in the proceedings before the English Court. It appears that such tendencies and practices attempted by litigants to threaten and intermediate the court in order to dissuade the Presiding Officers of the courts from hearing the matters as in the present one are because of the illusion that they are going to miss some mundane pleasure and keep on hankering after it. The oath of the office which mandates to perform duties to the best of the ability without fear or favour, affection or ill- will requires the Presiding Officer to go ahead with the hearing and not be overawed by such submissions. 27. In the light of the above conduct of the allegat....
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....ng modification of this Court's order dated 04.02.2022 in Special Civil Application No. 17965 of 2021 read as under:- "6. In view of the aforesaid provisions contained in Section 95 and 96 of the IBC, an interim moratorium has commenced from 08- 09-2021, i.e., the date of filing of CP (IB) 266/2021 before the NCLT, Kolkata by SBI and was operating on 04-10-2021 and 04-022022 when orders below Exh. 94 and in SCA No. 17965 of 2021 were passed by the Trial Court and this Hon'ble Court, respectively; since the aforesaid proceedings was pending for admission on that day and, accordingly, there was a specific bar by deeming fiction relating to continuation of any legal action or proceeding pending in respect of any debt of the application and initiation and/or continuation of any proceedings in respect of any debt was deemed to have been stayed." 7. In addition to the above, it is also submitted that Section 238 of the IBC provides that the provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. As such, the statutory bar c....
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....djudicating Authority only after admission of a petition filed under the aforesaid sections., he was under a bonafide impression/ belief that a moratorium relating to personal insolvency proceedings would also come into force only after admission of CP (IB) No.266 of 2021 by the NCLT, Kolkata filed by SBI against him. As such, the applicant continued to contest various proceedings initiated by the respondent against him in Execution Petition No. 161 of 2019, being completely unaware of the interpretation of Section 96 (1) (b)(i) of the IB Code, 2016 which provides for an automatic moratorium over all legal actions or proceedings pending in respect of any debt due to the petitioner on filing of such application under section 95(1) of the IB Code. Accordingly, the applicant was unaware unlike as in the case of a Corporate Insolvency Resolution Process wherein a moratorium under Section 14 of the IB Code is declared only after admission of a petition under Section 7 or 9 or 10 of the IB Code, in case of Personal Insolvency Resolution Process, an interim moratorium automatically kicks in on filing of a petition under Section 95(1) of the Code and accordingly, continued pursuing/ contes....
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....ed directions: 1. In suits relating to delivery of possession, the court must examine the parties to the suit under Order X in relation to third 2. party interest and further exercise the power under Order XI Rule 14 asking parties to disclose and produce documents, upon oath, which are in possession of the parties including declaration pertaining to third party interest in such properties. 3. In appropriate cases, where the possession is not in dispute and not a question of fact for adjudication before the Court, the Court may appoint Commissioner to assess the accurate description and status of the property. 4. After examination of parties under Order X or production of documents under Order XI or receipt of commission report, the Court must add all necessary or proper parties to the suit, so as to avoid multiplicity of proceedings and also make such joinder of cause of action in the same suit. 5. Under Order XL Rule 1 of CPC, a Court Receiver can be appointed to monitor the status of the property in question as custodia legis for proper adjudication of the matter. 6. The Court must, before passing the decree, pertaining to ....
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....eyance or order. This rule is applied to do equity, however, it must not be applied in a number as to violate the principles of right and good conscience. (Vide Nagubhai Ammal V. B. Sharma Rao, CIT V. V.MR.P. Firm Muar, Maharashtra SRTC V. Balwant Regular Motor Service, P.R. Deshpande V. Maruti Balaram Haibatti, Babu Ram V. Indra Pal Singh, NTPC Ltd. V. Reshmi Constructions, Builders & Contractors, Ramesh Chandra Sankla V. Vikram Cement and Pradeep Oil Corpn. V. MCD.) 35. Thus, it is evident that the doctrine of election is based on the rule of estoppel the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppels in pais (or equitable estoppel), which is a rule in equity. By that law, a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he otherwise would have had." 39. Now coming to the question of constructive res-judicata as held in the case of Sarguja Transport Services (supra), that though the principles of res-judicata is not strictly applicable to writ petitions under Article 227 of the Constitution of India, the leg....
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....s involved, yet the Code provides, as stated earlier, that a second suit will not lie in sub-rule (4) of rule 1 of Order XXIII of the Code when the first suit is withdrawn without the permission referred to in sub-rule (3) in order to prevent the abuse of the process of the Court. 8. The question for our consideration is whether it would or would not advance the cause of justice if the principle underlying rule 1 of Order XXIII of the Code is adopted in respect of writ petitions filed under Articles 226/227 of the Constitution of India also. It is common knowledge that very often after a writ petition is heard for some time when the petitioner or his counsel finds that the Court is not likely to pass an order admitting the petition, request is made by the petitioner or by his counsel, to permit the petitioner to withdraw from the writ petition without seeking permission to institute a fresh writ petition. A Court which is unwilling to admit the petition would not ordinarily grant liberty to file a fresh petition while it may just agree to permit the withdrawal of the petition. It is plain that when once a writ petition filed in a High Court is withdrawn by the petitioner h....
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....withdraws it without such permission. In the instant case the High Court was fight in holding that a fresh writ petition was not maintainable before it in respect of the same subject-matter since the earlier writ petition had been withdrawn without permission to file a fresh petition. We, however. make it clear that whatever we have stated in this order may not be considered as being applicable to a writ petition involving the personal liberty of an individual in which the petition- er prays for the issue of a writ in the nature of habeas corpus or seeks to enforce the fundamental fight guaranteed under Article 21 of the Constitution since such a case stands on a different footing altogether. We however leave this question open." 40. In the case of Forward Construction (supra), the law as regard to constructive res-judicata was discussed as under: "20. So far as the first reason is concerned, the High Court in our opinion was not right in holding that the earlier judgment would not operate as res judicata as one of the grounds taken in the present petition was conspicuous by its absence in the earlier petition. Explanation IV to Section 11 CPC provides that any matter w....
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....rs' Assn. V/s State of Maharashtra wherein this Court once again reiterated that the principles of constructive res judicata apply not only to what is actually adjudicated or determined in a case but every other matter which the parties might and ought to have litigated or which was incidental to or essentially connected with the subject-matter of the litigation. This Court observed; "35. ...an adjudication is conclusive and final not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had decided as incidental to or essentially connected with the subject-matter of the litigation and every matter coming into the legitimate purview of the original action both in respect of the matters of claim and defence. Thus, the principle of constructive res judicata underlying Explanation IV of Section 11 of the Civil Procedure Code was applied to writ case. We, accordingly hold that the writ case is fit to be dismissed on the ground of res judicata. 24. It is in the light of the above authoritative decisions of this Court no longer open to the appellants to contend that the principles of constru....
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....is founded on public policy, the Courts would be slow to apply the doctrine of waiver. The doctrine applies in the first situation as the right to waive inheres in the concept of personal privilege and right. 20. Reference in this regard can be also made to the ratio in Krishan Lal V/s State of J&K and Martin & Harris Ltd. V/s Addl. District Judge. In Bank of India V/s O.P. Swarnakar and in Lachoo Mal V/s Radhey Shyam, this Court elucidated the general principle that everyone has a right to waive and to agree to renounce an advantage of law or rule made solely for the benefit and protection of the person in private capacity. If a party gives up the advantage that could be taken of a particular position in law, it cannot later be permitted to change and turn around so as to avail of that advantage. However, this rule will not apply when there is a prohibition against contracting out of the statute, which prohibition would have its consequences or in case the waiver would be contrary to public policy. Further, a person cannot waive a right of a third person. 21. This principle has been subsequently followed in Pravesh Kumar Sachdeva v. State of Uttar Pradesh and Oth....