Civil Revision No.1010 of 2009 -1- ***** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 1. Civil Revision No.1010 of 2009 Date of decision: 30.03.2009. Shree Baidyanath Ayurved Bhawan Ltd. .....Petitioner Versus M/s Bhatia Enterprises and another ...Respondents 2. Civil Revision No.1010 of 2009 M/s Bhatia Enterprises and another .....Petitioners Versus Shree Baidyanath Ayurved Bhawan Ltd. ...Respondent CORAM: HON'BLE MR. JUSTICE S.D.ANAND. Present: Mr. Sumeet Mahajan, Senior Advocate with Mr. Sham Lall Bhalla, Advocate for the petitioner Mr. A.K.Bansal, Advocate for the respondents ***** S.D.ANAND, J. The effectual adjudication of the controversy would be facilitated by noticing the attendant circumstances in the first instance. The petitioner herein is a registered company which Civil Revision No.1010 of 2009 -2- ***** manufactures Ayurvedic and patent medicines which are perishable in character. Respondent no.1 herein was, at one point of time, a clearing and forwarding agent of the petitioner for the activities of the latter in the State of Punjab. The contractual relationship between the petitioner and the respondent no.1 (and also respondent No.2) was governed by agreement dated 1.10.1999 (Annexure P-1) which had been executed and registered at Jhansi (UP). On account of certain circumstances, the petitioner company cancelled the agency of respondent no.1. The petitioner also lodged a FIR (No.303 dated 14.11.2001 under Sections 406,468 and 471 IPC, Police Station, Kotwali, Jhansi-Annexure P-2). The prosecution, in that context, is pending in the court of the learned Chief Judicial Magistrate, Chandigarh. Besides, cancelling the agency and lodging of FIR, the petitioner also initiated arbitration proceeding wherein one Shri M.P. Dixit was appointed as Arbitrator in terms of agreement dated 1.10.1999 (Annexure P-1). Initially, the respondent entered appearance therein but abstained from the arbitration proceedings thereafter. The Arbitrator passed an award dated 10.7.2004 (Annexure P-3), upholding the entitlement of the petitioner to a sum of Rs.3,56,54,487/- from the respondent. As a counter blast thereof, the respondent no.1 put forward a forged agreement dated 1.4.1999. No such agreement exists. Neither the original agreement nor a copy thereof had ever been produced by the respondent no.1 in the course of the proceedings between the parties. On that account, the petitioner Civil Revision No.1010 of 2009 -3- ***** filed a criminal complaint No.3297 dated 5.6.2003 which is pending consideration in the Court of the Chief Judicial Magistrate, Jhansi. Respondent no.2 herein had lodged a FIR (No. 48 dated 8.3.2003 under Sections 420, 467, 468 IPC at Police Station Division No.8, Ludhiana). It was from that record that the petitioner was able to obtain a copy of the alleged agreement dated 1.4.1999 (Annexure P-4 & Annexure P-4/A). That FIR was investigated by the police which forwarded a plea for cancellation thereof and that plea has been accepted by the learned Illaqa Magistrate, vide order dated 31.7.2004 (Annexure P-5). The police have recorded a finding therein that the alleged agreement dated 1.4.1999 is not a genuine document and it is a false and fabricated document. On the basis of the alleged agreement dated 1.4.1999. respondent no.1 allegedly appointed one Shri Sudesh Kukreja, resident of House NO. 142, NAC, Shivalik Enclave, Manimajra, UT, Chandigarh, as Arbitrator. That exparte appointment is violative of Section 11 of the Indian Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) and also para 24 of that alleged agreement which reads as under:- “This agreement is being executed at Jhansi and if any dispute of difference arising at any time between the parties hereto touching or relating to this Agreement or any terms or conditions thereof or any liability of unpaid outstanding dues on stockiest or any other matter related therewith, shall be referred to the Chief Executive Officer of the Company or person so nominated in this regard by Civil Revision No.1010 of 2009 -4- ***** him, for arbitration and his decision shall be final and binding upon the company and the C&F agent. This agreement will be bound by the exclusive jurisdiction of Courts and authorities at Jhansi, U.P.” In terms of the above quoted para, a controversy between the parties thereto was to be referred to “the Chief Executive Officer of the Company or person so nominated in this regard by him”. The Arbitrator aforementioned passed an alleged award dated 23.1.2004 (Annexure P-6). That exparte award is void abinitio on the basic plea that no such agreement ever existed, that the petitioner was not a signatory thereto and also because no notice of the arbitration proceedings had been served upon the petitioner. It was for the first time on 31.1.2004 that a copy of the impugned exparte award dated 23.1.2004 was forwarded to the petitioner who, in the context, filed a petition (Annexure P-8) under Section 34 of the Act which is pending consideration in the Court of learned District Judge, Jhansi. That petition had been filed within time and all the grounds of challenge indicated herein had also been raised there as well. The respondent no.1 filed an execution application in the Court of the learned District Judge, Ludhiana. The petitioner filed a plea (Annexure P-10) therein for the issuance of a direction to the respondent no.1 to produce the original agreement dated 1.4.1999. The respondent no.1 pleaded inability to produce the original agreement dated 1.4.1999, by raising a plea in the counter (Annexure P-12) that it was lying with the Arbitrator. Even a photocopy of the award was not filed therein. Civil Revision No.1010 of 2009 -5- ***** The petitioner filed an objection petition in the Court of learned District Judge, Ludhiana, challenging the very maintainability thereof. It was also averred that the impugned exparte award dated 23.1.2004 was a result of fraud and collusion between the respondent no.1 and Arbitrator Shri Kukerja. The plea, in short, taken up by the petitioner in the course of objections is that the real agreement between the parties is dated 1.10.1999 (on the basis whereof award dated 10.7.2004 had been passed by Shri Dixit Arbitrator in favour of the petitioner and against the respondent) and that the execution application (filed by respondent no.1) in the Court of learned District Judge, Ludhiana, is premature in view of the fact that the objection petition dated 18.7.2005 (Annexure P-13) filed by the petitioner is pending consideration in the Court of learned District Judge, Jhansi. During the pendency of objections filed by the petitioner in the Court of the learned District Judge, Ludhiana, the respondent no.1 filed an application under Section 46 of the C.P.C. with a request for issuance of percept to the District Judge, Mohali. That plea for the issuance of percept was resisted by the petitioner (vide annexure P-16) by raising a plea that the impugned exparte award dated 23.1.2004 is not yet enforceable on account of the pendency of the objection petition in the Court of learned District Judge, Jhansi. The District Judge, Ludhiana, without deciding the objection petition filed by the petitioner, issued a percept to the District Judge, Ropar having jurisdiction at Mohali. Vide that order (Annexure P-17), the District Judge, Ludhiana, also forwarded Civil Revision No.1010 of 2009 -6- ***** therewith “the list of the moveable properties lying stored in the Depot of the JD at Zirakpur including objections as to maintainability for further action.” In the context of the latter part of the order, the District Judge, Ludhiana, observed as under:- “Shri Sudesh Mahajan, Advocate Counsel for the applicant submitted that under Section 46 CPC this Court is duty bound to send the execution file along with list of attached properties to the Court where the property is lying and is to be attached, along with objections if any. The award was not passed by this Court, but was passed by the Arbitrator. If the award is not enforceable and the objections are pending before the competent Court at Jhansi, then this court should not stop the issuance of percept to that Court at Mohali and the objections if any can be disposed off by that Court. In case the Court at Mohali found that the execution petition is not maintainable and the property cannot be attached and sold then that Court can pass appropriate order and the matter would be argued before that Court.” Thereafter, the District Judge, Ludhiana, issued the following exparte order on 2.8.2008 (Annexure P-18) :- “Upon hearing the decree holder it is ordered that this percept be sent to the Court of District Judge at Ropar under section 46 of the Code of Civil Procedure 1908 with direction to attach the property specified in the annexed schedule and to hold the same pending any application Civil Revision No.1010 of 2009 -7- ***** which may be made by the decree holder for execution of the decree.” Thereafter, “the valuable and perishable Ayurvedic medicines worth Rs.1.50 crores (approx.)” were taken into possession by the Bailiff “from the godowns of the petitioner”. Aggrieved by the above mentioned sequence of events, the petitioner filed two revision petitions (CR No.4257 of 2008 challenging the order dated 26.7.2008 of the District Judge, Ludhiana vide which issuance of percept to the District Judge, Ropar had been ordered and CR No. 4259 of 2008 vide which the order dated 2.8.2008 was forwarded by the District Judge, Ludhiana to its counter part at Ropar). During the pendency of those revision petitions before this Court, the petitioner filed a plea dated 14.8.2008 (Annexure P- 21) before the District Judge, Ropar, for the release of goods attached by that Court. Simultaneously, respondent no.1 also filed a plea on 3.8.2008 before that very Court ( the District Court, Ropar) for a direction to the Bailiff to attach all the articles which had been indicated in the list aforementioned. Both the parties contested the respective pleas filed by the party opposite. The District Judge, Ropar, forwarded the proceedings taken in implementation of the percept, along with the pleas filed by both the parties to the District Judge, Ludhiana with the following order:- “It may be added that percept was received from the Court of District Judge, Ludhiana in this Court on Civil Revision No.1010 of 2009 -8- ***** 4.8.2008 and also on receipt of percept, warrant of attachment was issued against the list of property and report was called for 6.9.2008. The report has already been received. As the parties have come present and they have filed the replied/objections. So percept is returned with the report and reply/objections of the parties to be decided by the Executing Court.” In the meantime, the petitioner had also filed a plea for shifting of the attached goods to a safer place. That plea was allowed by the District Judge, Ludhiana on 6.9.2008 (Annexure P- 24). Thereafter, the respondent filed a plea dated 15.9.2008 (Annexure P-26) before the Ludhiana District Court for sale of the goods under attachment. In the meantime, the respondent also filed a Civil Revision petition No. 5058 of 2008 challenging therein the order dated 6.9.2008 of the Ludhiana District Court (allowing the shifting of attached goods to a safer place). That revision petition (filed by the respondent) and also two revision petitions (filed by the petitioner) came up before this Court on 22.9.2008. All these were dismissed as withdrawn, with a direction to the District Judge, Ludhiana, to dispose of the objection petition filed by the petitioner within a period of two months from the date of that order. It was further ordered by this Court that the attachment shall stay intact till the disposal of the objection petition. The District Judge, Ludhiana, disposed of the objection petition on 12.11.2008. In the course of the impugned order, the Ludhiana District court observed that “Infact objection petition filed by Civil Revision No.1010 of 2009 -9- ***** judgment debtor before this Court is not an objection petition under Section 34 of the Arbitration and Conciliation Act, but it is a petition objecting to the continuous of the execution petition since the matter is already sub-judiced before the competent Court at Jhansi.” It also noticed that “the present execution filed by the decree holder is to be enforce the said exparte award at Ludhiana, whereas neither the award was passed at Ludhiana, nor on the fact of it judgment debtor are working or residing at Ludhiana. Original agreement dated 1.4.1999 nor its copy has been placed on file inspite of insistence and moving of application to that effect by the judgment debtor. Shri Stevon Soni, Advocate, counsel for J.D. Stated at bar that in both the areements dated 1.4.1999relied upon by the decree holder and dated 1.10.1999 relied upon by the J.Ds, exclusive jurisdiction to try the dispute arising out of these agreement is at Jhansi. Shri M.P.Dixit, Arbitrator who gave award in favour of the J.D.is to be tune of Rs.3,56,457,37 which is to be recovered from the D.H.” The Court proceeded to observed thereafter as under:- “In these peculiar circumstances of the case, the position before this Court is that the execution petitions are pending in this Court relating to ex-parte award passed by Shri Sudesh Kukerja, Arbitrator. However, an petition under Section 34 of the Arbitration and Conciliation Act in respect of award passed by Shri M.P.Dixit, Arbitrator is pending before District Judge, Jhansi for 29.11.2008 and the matter is sub-judiced before that Court. That Court at Jhansi alone is to decide the objections raised by the Civil Revision No.1010 of 2009 -10- ***** judgment debtor whether the award passed by Shri Sudesh Kukreja, Arbitrator which was obtained exparte by the decree holder, is valid or not. In these circumstances the exparte award obtained by the decree holder from Shri Sudehs Kukreja, Arbitrator, has not yet become final and enforceable and the execution petitions pending at Ludhiana in respect of above controversy are liable to be stayed. As such the proceedings are ordered to be adjourned sine die till adjudication of the petition under Section 34 of the Arbitration and Conciliation Act by the learned District Judge, Jhansi. All the execution applications, miscellaneous applications and contempt application relating to above said controversy are ordered to be kept pending and are adjourned since die. File be consigned to record room.” Thereafter, the petitioner filed a plea (Annexure P-33) for the release of goods under attachment. Along with the plea aforementioned, the petitioner also filed a plea for the review of the order dated 12.11.2008. Both these applications filed by the petitioner were simultaneoulsy disposed of by the Ludhiana District Court, vide impugned order dated 27.1.2009 (Annexure P-35). Both the pleas were declined with the following orders:- “I have already passed a detailed order dated 12.11.2008 running into 13 pages, which is a speaking order and the matter in controversy stood dealt with by me at length and that order dated 12.11.2008 be read as part of this order. Civil Revision No.1010 of 2009 -11- ***** Through that order I have already made it clear that execution proceedings are adjourned since die till adjudication of the petition under Section 34 of the Arbitration and Conciliation Act by the learned District Judge, Jhansi. It was further made clear that all the execution applications, miscellaneous applications and contempt application relating to above said controversy are ordered to be kept pending and are adjourned since die. There is no ambiguity, error or infirmity in the said order. The ball is in the Court of learned District Judge, Jhansi for adjudication. The goods were not attached by this Court. The parties, if aggrieved, should approach the competent Court as per law. As such both the applications are dismissed accordingly.” The petitioner is in revision against that order. It is apparent, from a conjunctive perusal of the material obtaining on the file, that the Ludhiana District Judge had ordered the adjournment sine die of the proceedings “till adjudication of the petition under Section 34 of the Arbitration and Conciliation Act by the learned District Judge, Jhansi”. That Court further ordered that “all the execution applications, miscellaneous applications and contempt application relating to above said controversy are ordered to be kept pending and are adjourned since die. There is no ambiguity, error or infirmity in the said order. The ball is in the Court of learned District Judge, Jhansi for adjudication. The goods were not attached by this Court. The parties, if aggrieved, should Civil Revision No.1010 of 2009 -12- ***** approach the competent Court as per law.” It may be noticed here that the petitioner has presently applied for the invalidation of only that part of the impugned order whereby the release of the attached goods was declined by the Ludhiana District Court. It is apparent therefrom that the petitioner has no grievance with regard to other part of the order vide which the proceedings were ordered to be adjourned sine die till the disposal of objection petition under Section 34 of the Act which is pending consideration before the Court of District Judge, Jhansi. It is apparent from the record that it was in pursuance of a percept issued by the Ludhiana District Judge that the goods were attached by the Ropar District Judge. The former Court could not have validly authorised the objections etc. ( to the proposed attachment) to be decided by the latter Court. In that view of things, the refrain on the part of Ropar District Judge from deciding objections was appropriate. Be that as it may, Ludhiana District Judge just could not have refused to order the release of the attached goods in view of the own finding of that Court that proceedings had to be adjourned sine die on account of pendency of the objection petition and till the adjudication of the objection petition under Arbitration Act by the District Judge, Jhansi. It was, thus, the accepted position that the execution proceedings in accordance with law would be feasible only after the disposal of the objection petition by the Court of District Judge, Jhansi. If that Court was to accept the objection petition, there was obviously no question of taking of any proceedings in the execution. If the order was otherwise, the Civil Revision No.1010 of 2009 -13- ***** Executing Court could certainly proceed further in accordance with law and execute the award if it was otherwise competent for being executed at Ludhiana. In the light of view obtained by none else or other than the Ludhiana District Judge, it was plainly illogical for that Court to decline to release those attached goods. The attachment of goods, ordered in pursuance of a premature execution application had to be compulsively quashed. The Ludhiana District Judge, by declining the relief in the relevant behalf, did not exercise discretion in an appropriate manner. In the light of the foregoing discussion, the petition shall stand allowed. The impugned order passed by the learned Ludhiana District Judge (to the extent it refrained from ordering the release of attached goods) shall stand set aside. The goods under attachment shall be released forthwith. Civil Revision No.1599 of 2009 has been filed by M/s Bhatia Enterprises and Parveen Bhatia to obtain invalidation of the orders dated 12.11.2008 and 27.1.2009 vide which the Ludhiana District court adjourned the proceedings sine die till the disposal of the objection petition filed by the respondent therein which is pending consideration in the Court of the District Judge, Jhansi. The grievance of the learned counsel for the petitioners is that this Court had directed the Ludhiana District Court to dispose of the objection petition; whereas that Court proceeded to adjourn the proceedings sine die. The plea raised thereby is that the impugned order is not in conformity with the order passed by this Court. The plea is denuded of merit. The District Judge, Civil Revision No.1010 of 2009 -14- ***** Ludhiana recorded reasons for directing adjournment sine die of the proceedings till the objection petition pending before the District Judge, Jhansi was disposed of. It cannot, by any stretch of interpretation, be said that order is not in conformity with the order passed by this Court. I have also not been persuaded to fault the impugned order on any valid score in view of the pendency of proceedings pending in the Court of District Judge, Jhansi. In the light of the allowance of Civil Revision No.1010 of 2009 (Shree Baidyanath Ayurved Bhawan Ltd. Vs. M/s Bhatia Enterprises and another), this petition has to be dismissed. Ordered accordingly. March 27, 2009 (S.D.Anand) Pka Judge