~T ^'^ © j^:" ..^"••" ft^ IN THE HON'BLE HIGH COURT OF CHHATTISGARH AT BILASPUR W.P. (C) N0. 8123-72010 Petitioner : M/s Sal Udyog (Pvt.) Ltd. A company incorporated under the .v^^t^^re^evant Provislons °fthe Companies ^5-' I'^^t"^ ^oe^ct^^ having its Registered Office .^^\ y'YUJ^^^^' at Bhanpuri Industrial Area .^^•^^' ^-^' ^ Respondents: '%. te.rf^*l ^y^B ^y/ ^y'^' at Bhanpuri Industrial Area Raipur (C.G.) VERSUS The State of Chhattisgarh Through-Chief Secretary State of Chhattisgarh DKS Bhawan, Raipur (C.G.) Principal Secretary, Government of Chhattisgarh, Forest Department, DKS Bhawan, Raipur (C.G.) WRIT PETITION UNDER ARTICLES 226 & 227 OF CONSITITION OF INDIA FOR ISSUANCE OF APPROPRIATE WRIT/ORDER/DIRECTION FOR QUASHING THE ORDER DATED 22.06,2010 PASSED BY SH. SANDEEP BAKSHL LD. DISTRICT nJDGE, RAIPUR, CHATTISGARH IN THE EXECUTION CASE N0. 6^A OF 20QrTITLED AS M/S SAL UDYOG PVT. LTD. VS. STATE OF CHATTISGARH & ANR., AND FOR OTHER APPROPRIATE DIRECTIONS :r w HIGH COURT OF CHHATTISGARH AT BILASPUR Sinale Bench: Hon'ble Shri Justice Prashant Kumar Mishra Writ Petition (C.) No.6127 of 2010 M/s SalUdyog (Pvt.) Ltd. versus The State of Chhattisgarh and another ORDER Postfor 18-11-2010 Sd/- Prashant Kumar Mishra Judge ^ l^ail 'IJ \^fy HIGH COURT OF CHHATTISGARH AT BILASPUR Sinale Bench: Hon'ble Shri Justice Prashant Kumar Mishra Writ Petition (C.) No.6127 of 2010 Petitioner Respondents versus M/s Sal Udyog (Pvt.) Ltd. The State of Chhattisgarh and another Present: Shri Ratan K. Singh, Senior Advocate with Shri Vishnu Koshta and Shri Arvind Kumar Sharma, counsel for the petitioner. Shri Kishore Bhaduri, Additional Advocate General with Shri Ajay Dwivedi, Deputy Government Advocate for the State/respondents. Writ Petition under Articles 226 and 227 ofthe Constitution of India ORDER (Passed on t^ November, 2010) Challenge in this petition under Articles 226 and 227 of the Constitution of India is to the legality and validity of the order passed by the executing Court of the District Judge, Raipur disposing of and rejecting the petitioner/decree-holder's prayer for release and payment of amount of Rs.1.3 Crores in favour of the Central Bank of India. 2. Undisputed facts, in short, are that by agreement dated 30-8- 1979 the State of Madhya Pradesh agreed to supply 10,000 tonnes of Sal Seeds to the purchaser for a period of12 years with a renewal clause. Fresh agreement was executed between the parties on 30- 4-1992 for a period till 29-4-2004. The renewal agreement stood terminated by virtue of Section 5A of the Madhya Pradesh Vanopaj fKe Kararon Ka Punarikshan Adhiniyam, 1987. The "":.:;-" ^, ,,,.-.^^ "^ /' ^ i'vaa^] petitioner/purchaser served a notice dated 6-12-1999 upon the Secretary, Department of Forest, Government of Madhya Pradesh for refund of excess payment of Rs. 1,72, 17,613/- made by them for Sale Seeds for the period 1981-82 to 31-12-1998. A claim was made on 16-7-1999 for Rs.3 Crores against the State of Madhya Pradesh. Clause 23 of the agreement contained an arbitration clause. On an application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (henceforth 'the Act, 1996') bearing M.C.C. No.509/2000 was moved in the High Court of Madhya Pradesh, which was later on transferred to the High Court of Chhattisgarh and Hon'ble Mr. Justice R.C.Shrivastava was appointed as Sole Arbitrator vide order dated 21-3-2002, however, on an application by the purchaser, the High Court, vide order dated 12-11-2003, passed in M.C.C. No. 129/03, appointed Mr. Ashok Masih as Sole Arbitrator, who passed an award of Rs.7,43,46,712/- in favour of the purchaser including interest upto February, 2005 at the rate of 18% per annum along with future interest at the rate of 18% per annum with effect from 1-3-2005. On the application filed by the State under Section 34 of the Act, 1996 the award was modified, setting aside the interest awarded from the date of agreement till 31-12-1998 and ordering that thepurchaser shall be entitled for interest at the rate of 18% per annum from 6-12-1999 till the date of payment. 3. It is further not in dispute that against the said order of the District Judge, Raipur passed under Section 34 of the Act, 1996 modifying the award, the State of Chhattisgarh preferred Arbitration Appeal No.22/2006 and the petitioner/purchaser preferred ^sas^ j '^ M ^.' ^.^ .•'/' .-€: ~%>...^y -^.%:£^£3;"1 M.A.No.727/2006, which was disposed of by a common order dated 21-10-2009 (Annexure P-9). A Division Bench of this Court dismissed the appeal preferred by the purchaser/petitioner and partly allowed the appeal preferred by the State. The operative part of the order dated 21-10-2009 contained in paragraphs 26 and 27 reads thus: "26. Learned District Judge has rightly modified the impugned award and has allowed the interest from 6.12.1999, the day on which the purchaser applied for appointment of Arbitrator. Therefore, the appeal preferred by the purchaser is liable to be dismissed and is accordingly dismissed. 27. Further, taking into consideration the arguments advanced by Mr. Harit in this regard that the purchaser did not raise any objection from 1979 to 1998 for a period of 19 years and did notclaim refund of any excess amount from the State in these years; excess amount deposited by the purchaser is to be adjusted as deposit towards subsequent period; there is no provision under the agreement regarding payment of interest by the State to the purchaser for excess deposits and the learned District Judge has awarded interest @ 18% per annum from 6.12.1999, we are of the opinion that awarding of interest @ 18% per annum from 6.12.1999 till the realization of the amount will be too excessive. Therefore, looking to the peculiar facts and circumstances of the case and also considering that rate of interest prevailing in the country has substantially reduced, we partially allow the appeal preferred by the \ State and reduce the rate of interest from 18% to 9% from6.12.1999." 4. The purchaser/petitioner preferred S.L.P.(Civil)No.2824-2825 of 2010 before the Hon'ble Supreme Court, which came to be dismissed on 5-2-2010 (Annexure P-10). 5. It appears that the Central Bank of India had preferred an application for recovery of amount of Rs.1,26,26,441/- against the petitioner in T.A.No.289/98 pending before the Debt Recovery Tribunal, Jabalpur (henceforth 'the DRT'). In the said recovery proceeding, the Bank moved an application for attachment of the amount awarded by the Sole Arbitrator in favour of the present petitioner. By an order dated 10-3-2005, the DRT directed attachment of Rs.3 Crores out of the award amount passed by the Arbitrator Mr. Ashok Masih on 17-2-2005. The present petitioner/purchaser, which was the non-applicant/defendant in the recovery suit pending before the DRT, preferred an appeal before the Debt Recovery Appellate Tribunal, Allahabad (henceforth 'the DRAT') to challenge the order of attachment passed by the DRT. The appeal was disposed of by the DRAT vide order dated 7-9-2006 (Annexure P-6) modifying the DRT's order dated 10-3-2005 (Annexure P-5) directing attachment of Rs. 1.3 Crores instead of Rs.3 Crores directed by the DRT. 6. When the subject arbitration award was modified by the District Judge by his order dated 14-3-2006 (Annexure P-7) and the arbitration appeal was pending before the High Court, the State of Chhattisgarh/judgment-debtor of the subject arbitration case deposited an amount of Rs.4.25 Crores before the District Judge on / 8-2-2007. Out of the said amount, an amount of Rs.2,91,90,357/- /:/^% ^ was paid to the petitioner/decree-holder and an amount of Rs.1.3 Crores was retained, as on the said date the DRAT's order was operative, when the rate of interest was modified by the High Court from 18% to 9% by the order passed in the Arbitration Appeal No.22/2006 dated 21-10-2009 (Annexure P-9), it came to be noticed that not only the amount of Rs.1.3 Crores has been deposited in excess, but an additionalexcess amount of Rs.35,30,976.51 has been paid to the petitioner/decree-holder. 7. In the meanwhile, the Central Bank of India and the petitioner entered into a compromise and on the basis of the said compromise, the DRT passed judgment dated 26-2-2010 (Annexure P-12). Paragraph 3(f) of the said judgment records the agreement between the Central Bank of India and the petitioner that defendant No.1 (the petitioner herein) should make endeavour to release Rs. 1.3 Crores lying with the Court of District Judge, Raipur for appropriation towards compromise amount of Rs.1.5 Crores. In the compromise judgment, the DRAT directed release of the attached amount in favour of the applicant/Central Bank of India for appropriation towards the settlement as per the compromise. 8. The petitioner/decree-holder, which is the judgment-debtor in the recovery proceeding initiated by the Central Bank of India before the DRT moved the subject application I.A.No.2 (Annexure P-13) under Section 151 of the Code of Civil Procedure, 1908 (henceforth 'the Code') before the executing Court of arbitration case, i.e., the District Judge, Raipur for release of the amount of Rs. 1.3 Crores in favour of the Central Bank of India, Raipur. The District Judge has Yl^y 6 rejected the petitioner's prayer, hence, this petition has been preferred. 9. Learned Senior Advocate appearing for the petitioner has argued that the judgment-debtor, i.e., the State of Chhattisgarh having deposited the amount for satisfaction of the decree, the State would cease to be the owner of the amount which was otherwise lying in the custody of the executing Court under the orders of attachment by the DRT/DRAT and, thus, the said amount should have been released in favour of theCentral Bank of India and the learned District Judge was not justified in refusing the prayer. It is submitted by him that the order of attachment passed by the DRT has attained finality and that the present executing Court has no powers to nullify the attachment order passed by the DRT/DRAT. Referring to Section 63 of the Code and relying on the judgments in Mrs. Dhanji Shah Mistry vs. Sikander Nawaz Jung and others, ILR 1966 AP Series 1268, Sardar Govindrao Mahadik and another vs. Devi Sahai and others, AIR 1982 SC 989, Janak Raj vs. Gurdial Singh and another, AIR 1967 SC 608, M.G.Brothers, Kurnool vs. Shah Tolchand Parswachand and Co., Bellary and another, AIR 1963 Mysore 147 and S.Noordeen vs. V.S.Thiru Venkita Reddiar and others, AIR 1996 SC 1293, learned Senior Advocate for the petitioner has strenuously urged to issue notice and pass interim order in favour of the petitioner. 10. Learned Additional Advocate General appearing for the State/respondents on advance notice has argued that the order ^ passed by the District Judge does not suffer from any illegality •^..-iv^%. //' ^{ '^ '^ •^. l/'-—.,,. U 1 '—^ .lls^€ ^iM^ whatsoever and the instant petition deserves outright dismissal as the petitioner cannot make a prayer for satisfaction of the decree passed against it and in favour of the Central Bank of India by the DRAT from the amount deposited by the State before the District Judge in execution of the award passed in arbitration dispute when admittedly the subject amount of Rs.1.3 Crores is the property of the State Government being in excess of the entire decreetal amount for which the petitioner is entitled. Learned Additional Advocate General for the State/respondents would submit that when the petitioner is not entitled for the amount of Rs. 1.3 Crores as the award in its favour has already been satisfied in its entirety, its prayer before the District Judge as well as the instant petition is not at all maintainable. 11. From the break-up of the amounts deposited by the present judgment-debtor/State before the District Judge, as has been mentioned in the impugned order, it would appear that the State has deposited an amount ofRs.1,65,30,976/- in excess ofthe decreetal amount for which the petitioner was entitled under the arbitration award, which has been made a decree and has attainted finality after the order passed by the High Court, which has been affirmed by the Hon'ble Supreme Court. The break-up is as under: ^ "1- PrincipalAmounts (Rs.96,62,971.93+Rs.1,95,27,385.30 2- Add: Interest @ 09% High Court Order 21.10.2009 On Rs.2,91,90,358.23 from 6.12.1999 to 21.10.2009 i.e. 3608 days 3- Total Amount Receivable (Principal Rs.2,91,90,358.23+lnterest. Rs.2,59,69,022.26) 4- Less Cheque Received i. Cheque No.642232 Dated 2.2.2006 2,91,90,358.23 2,59,69,022.26 5,51,59,380.49 ^. .^./ 8 issued by Forest Department, Govt. of Chhattisgarh, Raipur :96,62,972/-= ii. Cheque No.642231 Dated 2.2.2006 issued by Forest Department, Govt. of Chhattisgarh, Raipur : 1,95,27,3857-= iii. Cheque No.330020 dated 2.3.2007, issued by H'ble Court, Raipur Deposited by Forest :4.25,00,000/= Hold for Central Bank :130,00,000/=; 2.95.00,000/= 5- Excess Amount Received (Net Payable) Rs.5,86,90,357.00 Rs.35,30,976.51" 12. From the orders passed by the DRT at the time of directing attachment of Rs.1.3 Crores and the judgment dated 26-2-2010 (Annexure P-12) passed by the DRT in pursuance to the compromise application between the Central Bank of India and the petitioner, it would appear that the State was neither a party nor was noticed before passing a judgment on compromise and directing reiease of the amount of Rs.1.3 Crores in favour of the Central Bank of India. It further appears that the DRT was never apprised of the fact that the said amount of Rs. 1.3 Crores no longer belongs to the present petitioner, which was the decree-holder in the arbitration case and against whom the recovery proceeding was initiated by the Central Bank of India. In the order passed by the DRT only such amount could have been released in favour of the Central Bank of India, which belonged to the petitioner, however, when the amount of Rs. 1.3 Crores does not belong to and is not the property of the petitioner, the said amount cannot be released in favour of the Central Bank of India as it would amount to directing the State Government to satisfy a decree passed against the present petitioner in spite ofthe fact that the present petitioner is not entitled to the said amount of Rs. 1.3 Crores as the arbitration award/decree in its favour has been fully satisfied by the State. 9 13. The argument raised by learned Senior Advocate appearing for the petitioner that the State having deposited theamount towards satisfaction of the decree ceases to be the owner of the amount is not acceptable because after the modification of the arbitration award by the High Court in appeal the amount of Rs. 1.3 Crores is in excess of the amount which the State was liable to deposit. The effect of the modification of the decree is that the State was not at all liable to deposit the amount and, thus, the State would be treated as owner of the amount of Rs. 1.3 Crores. Asearlier mentioned, the State was never noticed by the DRT at the time of making attachment orwhile passing a judgment on the basis of compromise, whereas the provisions contained in Order 21 Rule 52 of the Code provides that before ordering attachment of property in custody of Court or public officer notice to such Court should be issued. 14. The judgments relied by learned Senior Advocate appearing for the petitioner are distinguishable on facts. In Janak Raj vs. Gurdial Singh and another (supra), the question was the reversion of the immovable property belonging to the judgment-debtor, which has been sold in auction and the sale has already been confirmed. The present is a case of movable property and it is an uncontroverted position that the present decree-holder, i.e., the petitioner has already received the entire decreetal amount. In M.G.Brothers, Kurnool vs. Shah Tolchand Parswachand and Co., Bellary and another (supra), the issue was regarding release of the attached property, which was attached before judgment under Order 38 of the Code. Similar are the facts in Sardar Govindrao 'i 1—€^ 10 Mahadik and another vs. Devi Sahai and others (supra). In Mrs. Dhanji Shah Mistry vs. Sikander Nawaz Jung and others (supra), a Division Bench of Andhra Pradesh High Court, ultimately, decided that the decree-holder would be entitled to the credit of the amount equal to its entitlement and would not form part of the judgment- debtor's property. Thus, only such amount for which the present decree-holder, i.e., the petitioner was entitled would not form part of the judgment-debtor's property, i.e., the State's property, meaning thereby, any amount for which the decree-holder is not entitled would form part of thejudgment-debtor's, i.e,, the State's property. 15. Even otherwise, the present is a petition under Articles 226 and 227 of the Constitution of India. It is not equitable and in any case the jurisdiction ofthe Court cannot be exercised in favour ofthe petitioner when admittedly the petitioner is not entitled to the amount of Rs.1.3 Crores as it has already received the entire decreetal amount and the State cannot be directed to satisfy the decree obtained by the Central Bank of India against the petitioner and thereafter to recover the amount from the petitioner by indulging in a litigation by way of filing a suit for recovery against the petitioner. 16. In Delhi Development Authority vs. Skipper Construction Co. (P) Ltd. and another, (1996) 4 SCC 622, the Hon'ble Supreme Court has held that the Courts of India are not only Courts of law but also Courts of equity. Applying the principle, this Court is not inclined to exercise its equitable and discretionary jurisdiction under Articles 226 and 227 of the Constitution of India in the facts and Y circumstances of the case as the petitioner has already received the \ 11 entire decreetal amount to which it was entitled under the arbitration award. 17. Consequently, the instant writ petition fails and is hereby dismissed. Sd/- Prashant Kumar Mishra Judge Gopal