Allowed

M/s. Rashmi Metaliks Limited v. M/s Techno Unique Infratech Pvt. Ltd.

Telangana HC6 Jun 2022CRP/1774/2021

Case brief

AI extract

What is this about?

The High Court allowed a civil revision petition, setting aside an order by the Commercial Court that had returned an execution petition. The Court held that since the judgment debtor was situated in Hyderabad, the Commercial Court possessed territorial jurisdiction to enforce the arbitral award under Section 36 of the Arbitration Act and Order 21 Rule 10 of the CPC. The Commercial Court was direc

What did the court decide?

The order of the Commercial Court in CEP SR No.1762 of 2021 dated 08-09-2021 is set aside, and the Court is directed to entertain the execution petition and pass appropriate orders after hearing all p

M/s. Rashmi Metaliks Limited Vs M/s Techno Unique… — Execution and Attachment | Telangana HC (2022)

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IN THE HIGH COURT FOR THE STATE OF TELANGA A AT HYDERABAD

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MONDAY, THE SIXTH DAY OF JUNE TWO THOUSAND AND TWENTY TWO

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE SATISH CHANDRA HARMA AND

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THE HONOURABLE SRI JUSTICE ABHINAND KUMAR SH VILI

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CIVIL REVISION PETITION NO: 1774 OF 2021

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Petition under Anicle 227 of the Constitution of lndia, again aggrieved by the Order dated 08/09/2021 in CEP.SR No.176212021 in Arbitrat n Application NO.12BI2019 on the file of the Hon'ble Special Court for Trial a disposal of Commercial Disputes at Hyderabad.

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Between:

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lv'l/s. Rashmi Metaliks Limited, A company incorporated under the pro sions of the Companies Act, 1956, having its registered office at Premlata, 39, hakespeare Sarani, Kolkata and works at NH- 6, Gokulpur, Shyamraipur, Pu Medinipur, Kharagpur-721 394, District- Medinipur (W), West Bengal, repre nted by its Authorised signatory Sri. Sayan Sarkar, S/o Somenath Sarkar.

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...PETITIONERY DECREE HOLDER/ PLICANT

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AND

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[v1/s Techno Unique lnfratech P!'t. Ltd, A company incorporated under th provrsrons of the Companies Act, 1956, having its registered office at HIG- 30, Pha -5, KPHB Colony/ Kukatpally, Hyderabad- 500 072, Represented by its Director S MalineniSambasivaRao ...RESpoNDENT/ JUDGMENT DEBT.R/ R PONDENT

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For the Petitioner : SRI DISHIT BHATTACHARJEE, Advocate

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For the Respondent : SRI G.VASANTHA RAYUDU, Advocate SRI D.RAGHURAM (AMICUS CURIAE)

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The Court made the following: ORDER

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HON'BLE THI CHIEF JUSTICE SATISH CHANDRA SHARMA AND

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HON'BLE SRI JUSTICE ABHINAND KUMAR SHJ\rILI

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C.R.P.No. 1774 of 2O2l

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ORDER: Per tlon ble Sn Justtce Abttitnnd^./l.l,r.lr -.tu)L,tltj

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This Civil Revision Petition is filed agFirieved by the orders tr assed by the Special Court for Tria.l and Disposal of Oommercial Disputes, Hyderabad in C.E.P. S.R. No. 176'.t of 2O2l dt.OB-O9-2O21.

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H:ard Sri Dishit Bhattacharjee, learned counsel for the petitioner, Sri G. Vasantha Ray-udu, learned coL nsel for the respondent rmd Sri P.Sri Raghuram, earned Amicus Curiar:.

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It has been contended by the petitioner that it is a registered companl- engaging in the business o^- manufacturing steel ancl other a-llied products arrd during the year 2017, the rt:spondent has approached the petitioner for purchas,e of TMT Bars manu acturecl b-r' it and upon discussiotr, it was

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agreed between the parties, that the pe tioner company would sell and deliver diverse quan ties ol steel product and TMT Bars to the resp ndent company at its site subject to the iss af ce ol purchase order b1' the respondent company fro time to time.

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lNCSS 4. During the course of AI1 transactions, the respondent was deemed to amount ol Rs.38,23,819.55 ps to the petition r and the gradually, the dues liable to be paid b respondent-company accumulated I to een Rs.5,32,a3,522 l-. As there was a dispute b the parties, the petitioner has invoked arbi atron clause and u,'hen there was no response fro the respondent, Application No.128 of 2Ol9 is filed der Section 1 I (6) ol the Arbitration and Conciliatio Act, 1996 (ior short^'the Act, 1996') before the High ourt for the State of Telangana, and the Honble the Chief Justice vide ordcrs dt.25-O2-2O20, has allowe the

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application a od appointed Honble Sri .Ittstice V.Eswaraiah a.s sole Arbitrator and the leirrned Arbitrator was pleased to pass award on 19-01-2021 in favour of tl re petitioner. In spite of the Ar'ritrator passing awa d in favour of the petitiont:r', the respondent w1s not complying the Award. In those set of circur rstances, the petitioner has filed an application u:rder Section 9 of the Act, 1996 vide COP No. 109 of 2)19 before the XXIV Additional Chief Judge-cum-C ommercial Court, City Civil Court, Hyderabad rnd the sarne \r'as numbered as COP No.32 of 2021, and sought interim protectior.r pending Arbitration.

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W ren the respondents were not c,)mplying the award passed by the learned Arb^jtrator, the petitioner hr.s filed Execution Petition under C-rrdt:r 21 Rules 43,^(,4 ald 66 of CPC belore the Clourt at Kukatpally n 17-O8-2O2 1. under rr,hose.jrrrisdii:tion, the responcent compan'u' is situated and ftrr-rr tioning.

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The Court at Kukatpally has returned the trPSR No.6735 of 2O2l on 24-O8-2O21 with an endo ement that "E.P. does not come under the te torial jurisdiction and it is to be liled before the roper I Court. Hence, returned. "

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Therealter, the petitioner has hled C PSR No.1762 ol 2021 before the Commercial Cou but the Court below vide orders dt.Oa-Og-2O2 has returned the CEP SR No.1762 of 2O2l wi an observation that it should be presented befo e the The proper Court having territorial jurisdiction. learned counsel for the petitioner had contend that I action of Commercial Court at Hyderabad not entertaining CtrP SR No. 1762 of 202 1 rs thout application of mind and it has every jurisdic nto entertain the tr.P. Therelore, learned counsel r the petitioner has contended that appropriate ord sbe the passed in the Revision Petition by setting asi orders of the Commercial Court in COP SR No.1 62 ol

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2O2l dt.O8 O9-2O21 and further dire,:t the Commercial lourt to entertain the E.P. as it has territorial jur: sdiction.

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LerLrned counsel for the respond,:rrt had contended that as per Section 3 of the Act l9!)6, the Commercial Court has no jurisdiction ancl it has rightly returned the E.P. Therefore, lhere are no merits in thr Revision Petition ald the sarne is Lable to be dismisr;ed.

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Lt arned Amicus Curiae has contcncled that Section 2 (t) of the Act, 1996 delines Cor-rrl u,hich reads as un,ler:

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'[(e) "Court" means-

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(i in he case of an arbitralion oth!r tlkut itrlt r, tot i<tntil cotnmer"ial arbitration, the principctl c'itil cotrrt Lt/ or,gint jurisdict'on in a district, and includcs the I Iigh t (,ut t ut t.','rL t\t ()l its ordir zry original civil jurisdictktn. hut itrg ltu tr,ltt't i, trt tt ,t* irlt the que. tions forming the .suhject-ntol(t' ul tlL' Ltrhitntton il tl1,' sunte h,'d been lhe subjectnkltler of Lt.\utt I'ut ttt)(\ ttut tttcltkl( ttuy civ,lcourl ofa grade inJ'arior to.ttclt prtnt'rprtl ctt'tl ourl. ,tr ury: Coi^'rl o1' Small Causes..

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(ii) in the case of international commerciul arbitration, the Court in exercise of its ordinary original cit'il jurisdiction, jurisdiction to decide lhe queslions lorming the subject-matt. of the arbitration i,f the same had been the suhject-matler of a ond in olher cases, a High Court hrn'ing .jurisdiction lo appeals from decrees of courts subordfuate to thot High Court:

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(f) "inlernotional commercial arbitration means arbitrarion relating lo disputa.s arising^out ol lt'gal^rLldlionsh vlhelher contraclual or not. consklercel u.s anrmercial under law in force in India and wherc at least one of tha purties is-

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(i) an individual who is a national of. or ltahituully resident in, country olher rhan India: or

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(ii) a body corporate which is incorporated in ut.t'counlry ol lhan India: or

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(iii) an association or o bodt o./' indit'idut s v,h()se cent managemenl and control is exercised in anr cowtry olher t India; or

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(iv) the Governntant of d l(,reiX counll

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Further, the Commercial Court is a designated in the instant case and the Au.ard passed by the learned Arbitrator was not challenged by the respondent under Section 34 of the Act,¹

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Hence, the Award becomes executable under Sec 36 and as per Section 36 (2}, and it becomes a de

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-7/

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within the mraning of CPC and Section 36 of the Act, 1996, reads rs under:

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"!. Enforcement.*(l ) Where the time -lbr mat(ing an applicatio,,to set aside the arbitral award under Secrkn 3l has axpired, tl en, subject to the provisions of sub-set'tion (;), .such award sfull be enforced in accordance wilh the prot i:ir.'ns oJ' the^('ode cf Civil Procedure, 1908 (5 of 1908). in rhe vame manner as if it were a decree of the court.

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(Jl lI/here cn application to set aside the arbitral av,ard has betn liled in th' court under Section 34, the filing of^sut'hun qtplication shall not by itself render that award unenJbtctuble, unles.s the t ourt grants an order of stay of the olrrutioa ol tlrc suitl arbitr,,l award in accordance wilh the prot'isions o-t subsectbn (3), cn a separate application made Jbr thar purpo;a

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( 3 ) L pon ./i ing of an applicalion under sub-sect hn ( 2) .lot' : tat o.l tllL' operatfu'n of the arbitral award, the court mat. ;ubjaL' t',.strh tttrulitions $ it mdy deem Jit, grant stay of the op.:rarion ol such uv ard -for r easons to be recorded in writing:

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l'roviled t.rut Ihe courl shall, while considcring tht unltlt;Ltrt'n lor^{gront o/ stay in the case} of an arbitral^av,ard /br^pu)nk'nt of t ont:),, ho' e due regard to the provisions .f itr grunt ol : tut ol u nona) de ree under lhe provisions oJ the⁽ otlt^,l('ivil l'nxaclure. 1908 (5 of1908): J

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' ll'tttridt lltrrthcr that vthere the (.'ourt is .rrti.s/i,.'Ll t/t,rr ,t ltt.trttt /(/( r:(' r11.rr'^t tttale oul that,

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(a) the arbitration agreement or contract which is lhe basis the award; or (b) the making of the award, was induced or effected by fraud or corruption. it shall st thc award unconditionally pending disposal of the challenge u Section 34 to the award. Explanation.*For the removal qf douht.s. it i\ lercb)' ed that the above proviso shall apply lo all court t'usts urisittg o of or in relation to arbitral proceedings, irrespettive rt v'hetlrcr he arbitral or court proceedings v,ere conmentL'd pr er lhe commencement of the Arbitralion urul Concili<tt (Amendment) Act, 201 5 (3 of 201 6)^" and as per Section 38 ol the CPC, a decree exe ted eit-l:rer by Court which passed it or by the Co rt to which it is sent for execution. Section 38 of the CPC reads as under: ".39. Court by which fea ,'tar ht ?-t?culed .l Llttrtt'nay ht' executed eilher by the Court which passcd it. or b1 thL' Court^tr:t vhith it^ts senl fot execttion.^" 1S Further, the Commercial Court at Hyderaba CUS having jurisdiction to be tried arld the lean-ied Am Curiae has further drawn our attention to the

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juclgment rt ndered in Ashok Leyland Finance Limited, Hyderabad vs. P.Vengal Rao & :tnotherr and in the seid case, it was held that Court within the mealing of lection 2 (e) of the Act, 1996 ,loes not include the :ourt belore which an execution petition has been fi ed. The Court had in this crase had differentiate< | between the court which passed the decree and r,ne which can execute the same a-nci the Supreme Court in Sundaran Finance Lirnited v Abdut Samad and Anothef concludes that thc Execution P.:tition can be filed in front of an/ court at an1' place ir the country. However, courls shoulcl have the re< uisite jurisdiction to execute 1-he' same bv s'av ol attiLchment of property. This junsdiction depenris on the judgment debtor and where ,sr.rch .J.Dr is locateci. Even i[ the properties are orLtside the tclritor-iirl^jr" risdiction of Commercial Court, zr pctition CAII be lii,'d und()F- Qrder 2l Rule 4(t^,llPC lc-rr

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ll()o9)l r\Pl .t l7 sN) rl{) l8 ) I \C( 612

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attachment of property and the bank account in the present case instantly accessible from an),wh and physical presence of a person to operate and ttach the same is not necessar5r. Therefore, the Com ercial Court at Hyderabad has jurisdiction. 9. This Court, having considered th rival submissions made by the parties, is of the con dered view that the Court below has erroneously re rncd the CEP SR No.l762of 2021 dt.OB-O9'2O2r s set aside and the Commercial Court shall entert n the E.P. preferred by the petitioners ald pass app riate SSA Tv orders in the E.P. after hearing all the rrec parties. 10. With these observations, the Civil R s 1() t-l Petition is a-lIowed. There sha1l be no order as to costs.

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Be fore parting with the case, this Court

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appreciates he efforts made by Sri P.Sri Raghurarn,

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learned Ami< us Curiae in assisting the Court

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Pe nding miscellaneous applications, if any,

shall stand r losed.

SC/-B.SATYAVATHI

ASSISIANT REGISTRAR

//TRUE COPY//

SECTIO N OFFICER

The Judge, Sper ial Court for trial and disposal of Commercial Disputes, at Hyderabad.

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One CC to Sri D shit Bhattacharjee, Advocate (OPUC)

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One CC to Sri G Vasantha Rayudu, Advocate (OPUC)

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One CC to Sri P Raghuram, (Amicus Curiae) Advocate (OF'UC)

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Two CD Copies

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One Spare Cop'

IrKj

HIGH^COURT

DATED:06/06/2022

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ORDER

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CRP.No.1774 ot 202'l

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ALLOWING THE ]RP WITHOUT COSTS.

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I ( o (r )

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M/s. Rashmi Metaliks Limited v. M/s Techno Unique Infratech Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

M/s. Rashmi Metaliks Limited v. M/s Techno Unique Infratech Pvt. Ltd.

Case brief

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What did the court decide?

What the court decided

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