- 1 - IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Appeal No.1184 of 1999 In Notice of Motion No.8 of 1999 In Notice No.N/55 of 1998 Mr.Shailesh Harinarayan Bajaj, ) Carrying on business at 406, ) Commerce House, 114, ) Nagindas Master Road, Fort, ) Mumbai - 400 023. ).. Appellant Vs. 1. Creative Garments Limited, ) a Body Corporate, incorporated) under the Companies Act, 1956) and having its registered ) office at 9, Amir Industrial ) Estate, Sun Mill Compound, ) Lower Parel, Mumbai 400 013. ) 2. Creative Outwear Limited, ) a Company incorporated under ) the Companies Act, 1956 and ) having its registered office ) at 191, Amir Industrial Estate,) Sun Mill Compound, ) Lower Parel, Mumbai 400 013. ).. Respondents -- Shri Zal Andhyarujina i/b Ravi Goenka for the appellant. None for the respondents. -- CORAM : R.M.S.KHANDEPARKAR & D.G.KARNIK, JJ DATED : 25TH JUNE, 2007 - 2 - ORAL JUDGMENT: ( Per D.G.KARNIK, J ) ORAL JUDGMENT: ( Per D.G.KARNIK, J ) ORAL JUDGMENT: ( Per D.G.KARNIK, J ) 1. Heard the learned counsel for the appellant. None present for the respondents. 2. This appeal is directed against the judgment and order dated 17th August, 1999 passed by a learned Single Judge of this Court in Notice of Motion No.8 of 1999 taken out by the appellant for setting aside insolvency notice No.N/55 of 1998. 3. A dispute between the appellant and the respondents was referred to arbitration and an award was passed against the appellant on 26th February, 1997 directing him to pay a sum of Rs.10,00,000/- (Rupees Ten Lacs) to the respondents. On failure on the appellant to pay them the amount due and payable under the award dated 26th February, 1997, the respondents served on the appellant a notice of insolvency bearing No.N/55 of 1998. Within the statutory period the appellant took out a Notice of Motion No.8 of 1999 for setting aside the said insolvency notice No.N/55 of 1998. By the impugned order, the learned Single Judge dismissed the notice of motion of the appellant as stated above and - 3 - declared that the appellant had committed an act of insolvency by not paying the amount awarded by the arbitration award. 4. In Paramjeet Singh Patheja v. ICDS Ltd., Paramjeet Singh Patheja v. ICDS Ltd., Paramjeet Singh Patheja v. ICDS Ltd., reported in AIR 2007 SC 168, the Supreme Court has laid down that no insolvency notice can be issued under Section 9(2) of the Presidency Towns Insolvency Act, 1909 on the basis of an arbitration award. The Supreme Court has further held that an arbitration award is neither a decree nor an order of payment of money within the meaning of Section 9(2) of the Presidency Towns Insolvency Act and consequently the notice of insolvency cannot be issued under Section 9(2) thereof. 5. In the present case, the insolvency notice was issued on the basis of the arbitral award dated 26th February, 1997. As held by the Supreme Court the insolvency notice could not have been taken out for non payment of money due under an arbitral award. In the circumstances, the impugned order cannot be sustained. 6. learned counsel for the appellant states that in fact the amount due under the award has been paid, - 4 - though the payment was made late and not within the time mentioned in the insolvency notice. As we have held that the insolvency notice itself was not maintainable, it is not necessary to go into this contention. 7. For these reasons, the appeal is allowed. The impugned order is set aside. The Notice of Motion No.8 of 1999 stands allowed in terms of prayer clauses (a), (c) and (d). (R.M.S.KHANDEPARKAR, J) ( D.G.KARNIK, J)