Case BriefsHigh Courts

Allahabad High Court: Dr Yogendra Kumar Srivastava, J., held that,

Section 36 of the 1996 Act makes the arbitral award capable of being enforced in a like manner as a decree without any further judicial intervention.

Instant petition was filed under Section 226 of the Constitution of India principally seeking a writ of certiorari for quashing of the order passed by the Special Judge, SC/ST Act arising out of Execution Case.

Question for Consideration

Whether an order passed by the executing court during the course of enforcement of an arbitral award would be amenable to a writ of certiorari under Article 226 of the Constitution of India?

Analysis, Law and Decision

The A&C Act, 1996 was enacted to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation.

In terms of Section 36 (1) where the time for making an application to set aside the arbitral award under Section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the court.

When the time for making an application to set aside the arbitral award under Section 34 has expired, then, subject to the provisions of sub-section (2), the award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the Court.

Therefore, the enforcement of an arbitral award under the 1996 Act, is to be made as per the terms of Section 36 and, unlike the 1940 Act, there was no requirement of filing an application to make the award a rule of the Court. Under the said Act, it would not be possible to resist the enforcement of an award by contending that the award has not been converted into a decree for the reason that the award has now to be enforced as per the procedure under the CPC in the same manner as if it were a court decree.

Question as to whether the award of the arbitrator under the 1996 Act tantamount to a decree or not was considered in Leela Hotels Ltd. v. Housing and Urban Development Corporation Ltd., (2012) 1 SCC 302, wherein it was held that the language used in Section 36 makes it clear that such an award has to be enforced under the CPC, in the same manner as if it were a decree of the Court. “…the language of the section leaves no room for doubt as to the manner in which the award of the arbitrator was to be accepted.”

“…provision for enforcement of an award, as per terms of Section 36, having been provided for in the same manner as if it were a decree of the court, it would follow that the court enforcing the award would exercise powers under the CPC which are available to a court executing a decree. This power would not be limited or trammelled by any other provision of the Act, 1996.”

Court added that execution is the enforcement of decree by a judicial process which enables the decree-holder to realise the fruits of the decree in his favour. The court enforcing the award would be a civil court exercising judicial powers and the orders to be passed in these proceedings would be judicial orders.

Whether judicial orders of a civil court would be amenable to writ jurisdiction under Article 226 came up for consideration in the case of Radhey Shyam v. Chhabi Nath, (2015) 5 SCC 423.

The law laid down in the nine-Judge Constitution Bench in the case of Naresh Shridhar Mirajkar v. State of Maharashtra, AIR 1967 SC 1 was also referred, wherein after considering the history of writ of certiorari and various English and Indian decisions, a conclusion was drawn that “certiorari does not lie to quash the judgements of inferior courts of civil jurisdiction”.

3-Judge Bench in the case of Radhey Shyam v. Chhabi Nath, (2015) 5 SCC 423 extensively referring to the legal position on the scope of writ of certiorari concluded that orders of civil court stand on different footing from the orders of authorities or tribunals or courts other than judicial/civil courts.

In the above decision, expression “inferior court” is not referable to judicial courts and accordingly judicial orders of civil courts are not amenable to a writ of certiorari under Article 226 and a writ of mandamus does not lie against a private person not discharging any public duty. It was also held that the scope of Article 227 is different from Article 226.

In view of the above, the legal position that emerged was that,

Judicial orders of civil court would not be amenable to writ jurisdiction under Article 226 and that challenge thereagainst can be raised under Article 227.

 High Court held that an order passed by the executing court in proceedings for enforcement of an arbitral award under Section 36 of the Act 1996, being a judicial order passed by a civil court of plenary jurisdiction, the same would not be amenable to a writ of certiorari under Article 226 of the Constitution of India. [Magma Leasing Ltd. v. Badri Vishal,  2021 SCC OnLine All 806, decided on 18-11-2021]


Advocates before the Court:

Counsel for Petitioner: C.K. Parekh

Counsel for Respondent: S.C., Shri Prakash Dwivedi

Case BriefsHigh Courts

Karnataka High Court: A Division Bench of Abhay S. Oka, CJ and M. Nagaprasanna, J. dealt with issue of powers which can be conferred on the Court-appointed Administrator for recovery proceedings.

The instant Writ Petition was filed under Articles 226 and 227 of the Constitution of India praying to issue a writ in the nature of mandamus by constituting a team of Auditors to conduct Forensic Audit of accounts and all transactions of Respondent 7 from the year 2010 till 31-12-2020 at the earliest and to constitute a Special Investigation Team headed by High Ranking Officer to investigate the role of every person involved or connected to Respondent 8 Society both by Respondent 2 and by Respondent 5, 6 and 9 being monitored by this Court and submit report thereby.

The present matter deals with the issue of powers which can be conferred on the Court-appointed Administrator of Sri Guru Sarvabouma Souharda Credit Co-operative Limited (for short “the Credit Co-operative”) The said Credit Co-operative is registered under Section 4 of the Karnataka Souhardha Sahakari Act, 1997 (for short “Act of 1997”). Various allegations have been made about several financial irregularities, acts of misappropriation, acts of embezzlement of funds and creation of fictitious accounts to the extent of 500.00 Crores in relation to the Credit Co-operative. It also deals with the cause of the investors of Sri Guru Raghavendra Sahakara Bank Niyamitha (for short “the said Co-operative Bank”) in which the said Credit Co-operative has invested an amount of about Rs 235.00 Crores which it seeks to recover.

In the order of appointment of an administrator for the said credit cooperative, Court observed

“The State Government has appointed a Competent Authority in accordance with sub-section (1) of Section 5 of the said Act of 2004. However, the powers, duties and functions of the Competent Authority under the said Act of 2004 are well defined. The Competent Authority has not been empowered to look after the day-to-day functioning of the Credit Co-operative.

There is no one who can effectively deal with the investors. Therefore, the question is whether a retired Senior Bank Official can be appointed as an Administrator who will ensure that the day-to-day activities of the Credit Co-operative will continue.”

The order also proposed two names out of which Shri K.S. Shyam Prasad, Retired Deputy General Manager, Canara Bank was appointed as an Administrator and it was observed that what powers can be exercised by the retired Bank Officer who is appointed as the Administrator. The Court observed “To enable the Court to decide the said question, we propose to direct the Administrator to take charge of the Credit Co-operative and to examine the records of the said Credit Co-operative. After examining the records and after making a study of the situation at the grass root level, the Administrator will submit a report to this Court stating what according to him are the immediate steps required to be taken for restoring the functioning of the said Credit Co-operative”

The Court observed that apart from the fact that the Court appointed Administrator, it cannot create new liabilities, the act of renewal of the Fixed Deposits may give a false hope to the investors. Therefore, it was proposed to permit the Administrator to renew the Fixed Deposits of the investors on the requisition in writing submitted by each investor stating that he or she is fully aware that even if the Fixed Deposit is renewed, and that there is no guarantee that the principal amount and interest will be paid by the said Credit Co-operative to him/her. Moreover, the investor will have to give undertaking not to make any personal claim against the Administrator on the basis of the renewed Fixed Deposits.

Other powers granted to the Administrator of Sri Guru Sarvabouma Souharda Credit Co-operative Limited, Mr K.S. Shyam Prasad are:

  1. To continue day-to-day functioning of the said Credit Co-operative without creating any liability except the liabilities which are permitted under this order;
  2. The administrator shall be empowered to initiate recovery proceedings against the borrowers of the said Credit Co-operative by issuing notices and by filing appropriate proceedings in accordance with law on behalf of the said Credit Co-operative. For that purpose, the Administrator shall be entitled to engage services of Advocates;
  3. In the event, any borrower comes forward to repay the loan amount, after obtaining a specific leave of this Court, the Administrator shall be entitled to accept the amount due and payable from the borrower, execute necessary documents and issue provisional discharge certificate. The amount received from the borrowers shall be credited to the account of the said Credit Co-operative in the name of the Competent Authority under the said Act of 2004;
  4. We permit the Administrator to accept the upto date amount due and payable from Shri Sreepathi Herele P, to execute necessary registered document of cancellation of mortgage and to issue discharge certificate subject to compliance with the conditions as suggested by the Administrator in his report. The amount received from the said borrower shall be credited to the account of the Competent Authority under the said Act of 2004;
  5. On the request in writing made by any member of the Credit Co-operative holding Fixed Deposits for renewal of the Fixed Deposits, the Administrator is permitted to renew the Fixed Deposits provided the person holding the Fixed Deposit, gives a written undertaking stating that he or she is fully aware that even if the Fixed Deposit is renewed, there is no guarantee that the principal amount and interest will be paid by the said Credit Co-operative. The investor shall also give an undertaking that he will be entitled to receive the principal amount of Fixed Deposit and interest only to the extent permitted under the orders of the Special Court under the said Act of 2004. The investor of the Fixed Deposit will also give an undertaking not to make any personal claim against the Administrator on the basis of the renewal of the Fixed Deposit. Only after such undertakings in writing are given by the investor and after making due inquiry about the genuineness of the Fixed Deposit receipt, the Administrator shall renew the Fixed Deposits;
  6. The Administrator shall submit a report to the Competent Authority under the said Act of 2004 containing details of the amounts payable as on today towards arrears of the salary of the staff, arrears of rent in respect of office premises, arrears of electricity, water and maintenance charges in respect of the office premises, internet charges, sundry expenditures incurred on running of the office. He will also submit an estimate of the amount required per month for meeting the aforesaid expenditure for running the office of the said Credit Co-operative. The Administrator shall also submit an ad hoc estimate of the amount required towards Advocate’s fees. As soon as the details are received, the Competent Authority shall be immediately make an application to the Special Court for permitting the Competent Authority to release the aforesaid amounts to the Administrator. The Special Court shall pass an order on the applications/report submitted by the Competent Authority within maximum period of one month from the date of filing of the report/application by the Competent Authority;
  7. We direct the ED to apply to the Competent Court under the Prevention of Money Laundering Act, 2002, for permitting the said Credit Cooperative toe its office premises for running its office. If such an application is made, the said Court shall decide the same at the earliest;
  8. It will be open for the Administrator to make a requisition for conduct of statutory audit or re-audit of the accounts of Credit Co-operative;
  9. We direct that the Administrators of both the Co-operative Bank and the said Credit Co-operative shall hold regular meetings to sort out various issues arising between two entities;
  10. In the event the Administrator of the Credit Co-operative needs further directions, he will submit a report to the Court through the learned Additional Government Advocate, who will immediately move the Court on the basis of the said report for necessary directions.

The matter will be next heard on 18-08-2021.[K.R. Narsimha Murty v. Secretary Ministry of Co-operative Societies, Writ Petition No. 7350 OF 2020 (GM-RES-PIL), decided on 23-07-2021]


Arunima Bose, Editorial Assistant has reported this brief.


Appearances

IN W.P. NO. 7350 OF 2020

Mr. Sushal Tiwari, Advocate for applicant on I.A.No.12/2020;

Mr. V. Sreenidhi, AGA for R-1 & R-3 to R-6;

Mr. Manmohan P.N. for R-12;

Mr. R.V.S. Naik and Mr. V. Vinay Giri Advocate for R-2 and R-10;

Mr.  Rajesh S.V., Advocate for intervenors;

Mr. A.M. Vijay, Advocate for intervenors;

Mr. Madhukar Deshpande, Advocate for R-11;

Mr. Abhinav R, Advocate for impleading applicant on I.A.No.7/2020;

Mr. S.P.Shankar and Mr. B.V. Malla Reddy, Advocate for impleading applicant on I.A.No.11/2020; R-7 and R-8 are served;

Mr. Halesha R.G., Advocate for impleading applicant on  I.A.No.13/2020;

Mr. Shyam Prasad, Administrator 

IN W.P. NO. 8674 OF 2020

Mr. Satyanand B.S. for petitioners

Mr. V. Sreenidhi, for R-1, R-2, R-4 to R-6 & R-10;

Mr. R.V.S. Naik, Mr. V. Vinay Giri, Advocate for R-3;

Mrs. Vani H, Advocate for R-7

Case BriefsHigh Courts

Bombay High Court: A Division Bench of S.S. Shinde and N.B. Suryawanshi, JJ., dismissed a petition whereby the petitioners sought their release by invoking the writ of Habeas Corpus on the ground that their judicial custody was authorised beyond a period of 15 days he designated court, which is contrary to the mandate of Section 309(2) CrPC.

The petitioners were accused in a criminal case registered under various provisions of IPC and the MPID Act, 1999. The main ground pressed in to service by Subhash Jha and Harekrishna Mishra, Advocates for the petitioners, was that the proviso to Section 309(2) CrPC provides for remand of the accused of a term not extending 15 days at a time. In the present case, from time to time, the judicial custody of the petitioners was extended beyond 15 days, which according to them was in violation of Article 21 of the Constitution. Per contra, M.M. Deshmukh, APP for the State, opposed the writ petition.

Perusing Section 309(2) along with its first proviso, the High Court noted that the proviso to Section 309(2) CrPC carves out the exception to the general provision thereby imposing restriction that no Magistrate shall remand the accused persons to custody under Section 309(2) CrPC for a term exceeding 15 days at a time.

However, applying the settled principles of interpretation of statutes, the Court went on to observe: “In our considered opinion, the restrictions imposed on the Magistrate by this proviso are not applicable to the Court of Sessions.” It was further stated: “…on plain reading of section 309(2) of CrPC and its proviso, we are of the considered view that the said provision is clear and unambiguous and the distinction enshrined in provision cannot be read in the main provision of section 309(2) of CrPC to put limitation on the power of the trial Court while exercising the powers under section 309(2) of CrPC”

Also, relying on Saurabh Kumar v. Koneila Jail, (2014) 13 SCC 436 and State of Maharashtra v. Tasneem Rizwan Siddiquee, (2018) 9 SCC 745, the High Court reiterated that writ of Habeas Corpus is not maintainable against the judicial order remanding the accused into the custody and appropriate remedy is to seek bail.

The High Court, therefore, held that the petitioners were entitled to the writ of habeas corpus and their remedy lie elsewhere. Resultantly, the instant petition was dismissed. [Harshad Dinanath Bari v. State of Maharashtra, 2019 SCC OnLine Bom 5701, decided on 18-12-2019]

Patna High Court
Case BriefsHigh Courts

Patna High Court: The Bench of Ahsanuddin Amanullah, J. was hearing an application under Section 482 of the Code of Criminal Procedure, 1973 which sought quashing of Family Court’s order whereby applicant-husband was directed to pay maintenance to his wife (2nd respondent herein).

At the outset, this Court called for a report from the Family Court, in the present matter. The said report stated that the applicant, till date had not complied with Family Court’s order to pay maintenance. At this juncture, learned counsel for the applicant Mr Dineshwar Prasad Singh submitted that he may be permitted to withdraw the application.

The Court opined that the applicant could not be allowed to simply withdraw the application, when his mala fide conduct stood exposed. It was observed that strict order was required to ensure payment of maintenance to the 2nd respondent, moreso, when there was a judicial order to that effect. The Court, under its inherent power under Section 482 CrPC is also required to pass an order for securing the ends of justice.

Accordingly, the application was disposed of as withdrawn, directing the Family Court to take all coercive measures against the applicant for ensuring compliance of its order directing payment of maintenance.[Sanjay Yadav v. State of Bihar, 2019 SCC OnLine Pat 601, Order dated 03-05-2019]

Case BriefsHigh Courts

Delhi High Court: The Bench of R.K. Gauba, J. quashed the summoning order passed by Metropolitan Magistrate against the CEO of Swiggy observing that it does not pass the muster of a judicial order.

The incident 

The incident occurred at Delhi-19, a restaurant in Kalkaji, Delhi. The company “Swiggy” is a food aggregator which collects food and beverages from restaurants as per customer’s orders through delivery personnel described as PDP (pick-up and delivery partners). On 14-7-2018, there was a rush of PDPs at Delhi-19 as there was some delay in service by the restaurant. The situation got out of hand inasmuch as the Fleet Manager of Swiggy had to intervene. It was alleged that later some of the PDPs returned and ransacked Delhi-19. In such course, violence erupted and one Kanav Madnani suffered injuries. An FIR was registered on statement of the proprietor of Delhi-19 and after the filing of first charge-sheet was filed against arrested persons. Subsequently, a supplementary charge-sheet was filed on the basis of which CEO of Swiggy (petitioner) was summoned to appear before the Metropolitan Magistrate.

The charge

In the supplementary charge-sheet, the CEO of Swiggy along with others was sought to be put on trial for the offence punishable under Section 109 read with Section 338 IPC. It was indicated that he was negligent in framing the policies with respect to the employment of delivery boys and failed to take preventive steps, thereby having intentionally aided by illegal omission, the commission of offence under the sections mentioned herein.

High Court’s decision

The High Court noted that the petitioner was stationed in Bangalore far away from the Delhi, the place of incident. The court was of the view that having regard to CEO’s role and responsibilities, the Magistrate was expected to subject the entire material presented before him to a closer scrutiny.  It was held that the summoning order did not pass the muster of a judicial order. There was no consideration of background facts or the connection between the offence and role of the CEO. In such circumstances, the summoning order was quashed and the matter was remitted back to MM for fresh consideration.[Sriharsha Majety v. State (NCT of Delhi), 2019 SCC OnLine Del 6730, dated 25-01-2019]