Supreme Court of India Hpcl BioFuels Ltd vs Shahaji Bhanudas Bhad on 7 November, 2024 2024 INSC 851 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 12233 OF 2024 (ARISING OUT OF SLP (C) NO. 5589 OF 2024) M/S HPCL BIOFUELS LTD. …APPELLANT VERSUS M/S SHAHAJI BHANUDAS BHAD …RESPONDENT JUDGMENT Signature Not Verified Digitally signed by SANJAY KUMAR Date: 2024.11.07 17:00:12 IST Reason: J. B. PARDIWALA, J.: For the convenience of exposition, this judgment is divided into the following parts: A. FACTUAL MATRIX............................................................................ 2 I. PROCEEDINGS UNDER THE IBC .................................................................... 5 II. PROCEEDINGS BEFORE THE HIGH COURT.................................................... 10 B. SUBMISSIONS ON BEHALF OF THE APPELLANT ................. 14 C. SUBMISSIONS ON BEHALF OF THE RESPONDENT .............. 17 D. ISSUES FOR DETERMINATION ................................................... 19 E. ANALYSIS .......................................................................................... 20 I. ISSUE NO. 1 ................................................................................................ 23 a. Scope and applicability of Order 23 Rule 1 of the CPC to proceedings other than suits ................................................................................... 23 II. ISSUE NO. 2 ................................................................................................ 44 a. Application under Section 11(6) of the Act, 1996 is not for the same relief as an application under Section 9 of the IBC ........................... 57 III. ISSUE NO. 3 ................................................................................................ 67 F. CONCLUSION ................................................................................... 78 Page 1 of 79 1. Leave granted. 2. This appeal arises from the final judgment and order dated 31.01.2024 (“impugned order”) passed by the High Court of Judicature at Bombay in Commercial Arbitration Petition No. 1 of 2023, where the petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Act, 1996”) at the instance of the M/s Shahaji Bhanudas Bhad (“the respondent”) and appointed Justice (Retd.) Dilip Bhosale as the sole arbitrator to adjudicate the disputes and differences between HPCL Biofuels Ltd. (“the appellant”) and the respondent. A. FACTUAL MATRIX 3. The appellant is a Government company within the meaning of Section 4(35) of the Companies Act, 2013 and is engaged inter alia in the business of manufacturing biofuels. The appellant is a whollyowned subsidiary of Hindustan Petroleum Corporation Ltd. 4. The respondent is engaged in the business of manufacture, supply and erection of the equipment and machinery required for the setting up of sugar factories and allied products in the name of M/s S.S. Engineer, as a sole proprietor. Page 2 of 79 5. Between 27.06.2012 and 30.08.2012, the appellant floated tenders for enhancing the capacity of various process stations and Boiling House at Lauriya (West Champaran) and Sugauli (East Champaran). The respondent participated in the bidding process and was declared as the successful bidder. Subsequently, in accordance with the terms and conditions of the tender, the appellant in October and November of 2012 issued purchase orders in favour of the respondent for enhancing the capacity of the concerned Boiling House on a turnkey basis. Between 21.11.2012 and 25.03.2014, the respondent supplied various equipment under the purchase orders and raised invoices for the same. 6. While the work was in progress, the appellant expressed its concerns about the slow progress of work, quality of materials supplied and nonadherence to timelines by the respondent and attempts were made to resolve the same through mutual discussions between the parties. 7. On 13.06.2013, the appellant floated two more tenders for the purpose of completion of certain work and s