TaxTMI 
TaxTMI 
2016 (8) TMI 1606
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....ursuance of the order dated 17 February 2014 passed by the Division Bench in Appeal No.41 of 2014. Today the stage of sale is that a deed of conveyance remains to be executed. The other appeal being Appeal (Lodg) No.275 of 2016 arises out of an order passed by the learned Single Judge on a Chamber Summons filed by the Respondents, wherein the Respondents had prayed that Appellant Nos. 3 to 5 (original Respondents nos. 3 to 5) be directed to execute a deed of conveyance jointly in respect of the properties as sold to the Petitioners in pursuance of the order dated 17 February 2014 in Appeal No.41 of 2014. As the issues as raised before the learned Single Judge leading to the passing of the orders as impugned in the respective appeals are common on law and facts, we feel it appropriate to decide these appeals by this common order. 2. After hearing the learned Counsel for the parties, we are of the opinion that appeal (lodg) No.276 of 2016 which arises out of the Chamber Summons taken out by the Appellants can decide the fate of the companion Appeal (Lodg) no.275 of 2016 which arises out of the Respondents' chamber summons. 3. At the outset we may note that as regards the....
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....hat as the BIFR reference was pending, the properties belonging to Appellant Nos. 3 to 5 which were furnished as security for repayment of the outstanding dues of Appellant No.1 should not be sold. The Appellants' also urged that as the guarantees were given by Appellant Nos.3 to 5, guaranteeing repayment of loan of Appellant No.1 in favour of the Respondent, no steps ought to be taken by the Respondent in respect of the personal properties of the guarantors which were mortgaged. 5. The learned Single Judge after hearing the parties and more particularly considering the provisions of Section 22 of the Sick Industrial Companies (Special Provisions) Act,1985 (for short "SICA") vis a vis the proceedings under Section 9 of the Arbitration Act by an order dated 13 February 2013 held that since consent terms were arrived between the parties resulting in the order dated 19 June 2012 in the Section 9 Arbitration Petition (Arbitration Petition No.707 of 2012), the amendment to Section 22(1) of the SICA did not bar enforcement of such an order passed by the Court in terms of the consent terms. It was thus held that the implementation of the consent orders which interalia pertained to ....
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....ommissioner. 7. The Appellants however filed another Chamber Summons (lodg.no.754 of 2013) seeking stay of the sale of the properties at the hands of a private receiver on the ground that the mortgaged properties were not properly valued. By an order dated 24 July 2013 of the learned Single Judge, this chamber summons was dismissed keeping open all objections as regards valuation to be raised at the time of confirmation of sale. 8. The private commissioner could get only one bid from the Petitioner. The Appellants also failed to make any bid. By further order dated 27 November 2013 the learned Single Judge granted an opportunity to the Appellants to bring an offer higher than Rs.4 crores as offered by the Respondent failing which the Respondent's offer would stand confirmed. By a further order dated 19 December 2013, the learned Single Judge inter alia considering various objections of the Appellants accepted the offer of Rs.4 crores as made by the Respondent. 9. The said order dated 19 December 2013 passed by the learned Single Judge accepting the Respondent's offer was challenged by the Appellants in Appeal No.41 of 2014. By a detailed order dated 17 February 201....
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....n favour of the Respondent stood confirmed. The Respondent accordingly furnished a bank guarantee as directed by the Division Bench in its order dated 17 February 2014 and only a ministerial act of executing a conveyance in favour of the Respondent had remained to be undertaken. 11. On the above background the Appellants moved Chamber Summons No.1690 of 2015 on which the impugned order has been passed, now seeking stay to the execution of conveyance again on the same premise that the BIFR reference is pending and till the disposal of the BIFR reference, no further steps ought to be taken to execute conveyance and/or give effect to the orders of the Division Bench dated 17 February 2014 (supra) as confirmed by the Apex Court vide order dated 2 May 2014. This plea of the Appellants was on the basis that after the issue on the BIFR reference was decided by the learned Single Judge by an order dated 13 February 2013 rejecting the contention of the Appellants, there are subsequent judicial decisions which would support the Appellants' contention that thus further proceedings of sale ought to be stayed. The reliance of the Appellants before the learned Single Judge was on the foll....
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.... error in rejecting the prayers for stay to the execution of the conveyance as prayed in the chamber summons. No other ground has been urged in the course of the submissions. On the other hand learned Counsel for the Respondent has supported the impugned order. 15. We have heard the learned counsel at length. With the assistance of the learned Counsel for the parties, we have perused the various orders passed in the proceedings and which we have noted above as also the impugned orders. 16. After hearing the learned Counsel for the parties and on considering the various orders which are passed in the different proceedings as also the decisions of the learned Single Judge in Armada (Singapore) Pte Ltd. (supra) and Ankur Drugs and Pharma Ltd. (supra) as relied on behalf of the Appellants, we are unable to persuade ourselves to interfere in the impugned order passed by the learned Single Judge, for the reasons which we set out. 17. Admittedly, the properties in question belong to Appellant Nos.3 to 5 who are the guarantors and these properties are mortgaged properties and not owned by the company-borrower. There is no dispute that the sale of these properties was agreed betwee....
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....s a decree is pressed by the petitioner and if any coercive orders are proposed to be passed which are prohibited under Section 22 of SICA, the executing Court can consider the effect thereof. Be that as it may, the petitioner has already applied for appropriate direction before the BIFR and thus I am inclined to accept the submission of the learned senior counsel for the respondent that no coercive orders can be passed by this Court for execution of the said foreign award as a decree of this Court at this stage. 42. This Court in the case of Pol India Projects Limited (supra) has also adverted to the judgment of the Delhi High Court in the case of Penn Racquet Sports v. Mayor International Limited, reported in ILR (2011) Delhi 181 has held that the award should be contrary to fundamental policy of Indian law for the Court of India for recognition and enforcement of the foreign award. The judgment in the case of Shri Lal Mahal Ltd. (supra) and the judgment of this Court in the case of Pol India Projects Limited (supra) squarely apply to the facts of this case. In my view, scope of objection under Section 48 to the enforcement of the foreign award is very limited. None of t....
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.... in the such circumstances of the case in hand. 19. In our opinion the reliance of the Appellants on the decision of Delhi High Court in Ankur Drugs and Pharma Ltd. (supra) would also not assist the Appellants. This was the case in which the Appellant was in liquidation as also a reference under the SICA was pending and in view of this position the Appellant had prayed for stay of the arbitration proceedings as also a plea was taken that the arbitration proceedings cannot taken against the guarantoRs. The learned Arbitrator had rejected the objection of the Appellants. In this context the learned Single Judge of Delhi High Court considering the position in law, stayed the arbitral proceedings till such time a leave of the BIFR is obtained. As can be seen from these facts Ankur Drugs and Pharma Ltd. (supra) was not a case where there was any consent order between the parties. It was also not a case where the issue on the plea of pendency of BIFR proceedings in the context of a consent order of sale of the mortgaged properties was adjudicated as in the present case. It was also not a case where under the orders of the Division Bench in the light of the consent terms, the sale came....
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....ttained finality. We have to deal with the case in hand on the facts as they stand which we have recorded above. We are concerned with the implementation/execution interalia application based upon the consent terms between financial institution and the guarantor. The industrial/company's (Respondent's) arbitration is pending before the Arbitral Tribunal. There is no executable order passed under Section 9 application against the company and/or its property. There is no coercive steps taken in this proceeding against the Respondent -Industry/Company or its property pending BIFR proceedings. Therefore, in view of the consent terms finality so attained, we see no reason to interfere with the order so passed by the learned Judge. 23. As a result of the above discussion, we are certain that the impugned order requires no interference. The appeal is without any merit and is accordingly rejected. APPEAL (LODG) No.275 of 2016 24. In view of the decision in Appeal (Lodg) No.276 of 2016, undoubtedly, the impugned order dated 9 June 2016 passed in Chamber Summons No.64 of 2016 cannot be interfered. The learned Single Judge has rightly directed Appellant Nos.3 to 5 to jointly ....