Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.11907 OF 2018
[Arising out of SLP (C) No.14585 of 2015]
State Trading Corporation of India
Ltd. ... Appellant(s)
Versus
M/s Global Steel Holding Limited
& Ors. ... Respondent(s)
WITH
Contempt Petition(c) No.747 of 2017
IN
S.L.P. (c) No.14585 of 2015
AND
Contempt Petition(c) No.1058 of 2018
IN
S.L.P. (c) No.14585 of 2015
AND
Contempt Petition(C) NO………...OF 2018
(D.NO. 24803 OF 2018)
J U D G M E N T
Abhay Manohar Sapre, J.
Signature Not Verified
Digitally signed by
ASHOK RAJ SINGH
Date: 2019.04.06
10:42:59 IST
Reason:
In S.L.P.(C) No.14585/2015
1. Leave granted.
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2. This appeal is filed against the final judgment
and order dated 09.03.2015 passed by the Delhi
High Court in Execution Petition No.337 of 2014
with EA Nos.69798 of 2014 and EA Nos.199200 of
2015 whereby the High Court has dismissed the
Execution Petition and the accompanying
applications filed by appellant STC herein on the
ground of lack of jurisdiction.
3. In order to appreciate the controversy involved
in this appeal, it is necessary to set out the relevant
facts hereinbelow.
4. On 04.04.2005, a tripartite agreement was
entered into between the appellant i.e. State Trading
Corporation a Governmentowned Corporation
(hereinafter referred to as “STC”), respondent No.1
M/s Global Steel Holding Ltd. (hereinafter referred
to as “GSHL”), incorporated in the Isle of Man
Channel Islands, and respondent No. 2 M/s
Global Steel Philippines Inc., incorporated in the
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Philippines (hereinafter referred to as “GSPI”).
Respondent No. 3 is Mr. Pramod Mittal, the
Chairman of the respondent nos. 1 and 2
companies, i.e. GSHL and GSPI. The agreement was
for purchase and sale of commodities known as
HR Coils and CR Coils.
5. Mr. Dushyant Dave, learned senior counsel
appeared for the appellant – STC, while the
respondents were represented by Mr. Kapil Sibal,
Senior Advocate along with Mr. Gautam Mittra.
6. In performance of the agreement, disputes
arose between the parties, particularly with respect
to the nonpayment of outstanding dues to the
appellant STC. The parties, therefore, decided to
settle their disputes by means of conciliation
proceedings with the assistance of two Conciliators.
7. The parties (STC, GSHL and GSPI) entered into
a Settlement Agreement under Section 73 of the
Arbitration and Conciliation Act, 1996 (for short
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“the Act”) on 15.11.2011. In terms of the
Settlement Agreement, the GSHL and GSPI agreed
to pay a total amount of US$ 355,818,019.29 with
interest @ 13.25% p.a. by 11.05.2012 as per para
(D) of the Settlement Agreement to the appellant –
STC, and in the manner set out in detail in clauses
A to K of the Settlement Agreement.
8. The GSHL and GSPI paid some amounts
pursuant to the Settlement Agreement to STC.
However, they failed to ensure full compliance with
the terms of the Settlement Agreement dated
15.11.2011 and committed default in paying full
payment to appellant STC.
9. The parties therefore entered into a Further
Settlement Agreement dated 17.05.2012 through
the intervention of the Conciliators.
10. As per the Further Settlement Agreement
dated 17.05.2012, GSHL and GSPI agreed to pay a
total amount of US $ 347,737,209.68 inclusive of
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interest at the rate of 13.50 % p.a. (Rs.1605 crores
in Indian currency) by 10.11.2012 in the manner
set out in detail in clauses (i) and (vi) of the
agreement to the appellant STC. Both the
Settlement Agreement and the Further Settlement
Agreement were executed by respondent No. 3 Mr.
Pramod Mittal as Chairman of GSHL and GSPI,
respectively.
11. As per Clause 12 (iv) of the Further Settlement
Agreement ( supra ), respondent No. 3 Mr. Pramod
Mittal furnished a Personal Guarantee dated
17.05.2012 wherein he personally guaranteed
payment of the outstanding amount payable by
GSHL and GSPI to the appellant – STC in terms of
the Settlement Agreement dated 15.11.2011
together with interest @ 13.25% p.a. and Further
Settlement Agreement dated 17.05.2012. The said
respondent undertook to pay the outstanding
amount, and stated that the guarantee shall remain
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valid till the entire outstanding dues of GSHL and
GSPI were fully discharged.
12. Since GSHL and GSPI failed to fulfill their
complete obligations under the Further Settlement
Agreement dated 17.05.2012, the appellant STC
herein filed an Execution Petition bearing
No.337/2014 in the High Court of Delhi on
30.08.2014 against GSHL (R1), GSPI (R2) and Mr.
Pramod Mittal, Chairman, GSHL(R3) seeking to
execute the Settlement Agreements dated
15.11.2011 and 17.05.2012 against all the
respondents for recovery of the balance outstanding
amounts due and payable.
13. The appellant – STC, the decree holder, filed
Execution Applications Nos. 697/2014 and 199
200/2015. Insofar as application No.697/2014 was
concerned, it was filed under Order 21 Rule 11 (2) of
CPC for attachment and sale of all shares and other
assets of the respondent No.1, with a further prayer
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for issuance of warrants of arrest against the
Directors and Principal Officers of respondent Nos.1
and 2 till realization of entire dues.
14. The Delhi High Court vide order dated
09.03.2015, dismissed the Execution Petition along
with the accompanying applications on the ground
that admittedly none of the judgmentdebtors is
located within the jurisdiction of the Court. The
Registered Offices of respondent Nos. 1 and 2 were
outside India. The Execution Petition could be
entertained by a Court within whose jurisdiction the
judgmentdebtors, or their properties were situated.
That since none of them is ordinarily resident within
the jurisdiction of the Court, the Execution Petition
could not be entertained, and was dismissed with
liberty to the decreeholder to approach the
appropriate court for enforcement of the Settlement
Award in accordance with law.
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15. Aggrieved by the Order dated 09.03.2015
passed by the Delhi High Court, the appellant STC
(Decree Holder) filed the present Special Leave
Petition before this Court.
16. During the pendency of the Special Leave
Petition, various Orders were passed from timeto
time directing the respondents to make payments to
STC. The details and break up of payments offered
and then made by the respondents to the appellant
STC on different dates are mentioned in the
Orders dated 19.08.2015, 21.09.2015, 14.12.2015,
05.2.2016, 06.02.2017, 10.04.2017, 31.07.2017,
22.03.2018, 15.05.2018, 13.08.2018, and
06.09.2018.
17. The Senior Counsel for the respondents, Mr.
Kapil Sibal submitted that an amount of Rs. 810
crores approximately was paid towards the
outstanding liability under the two Settlement
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Agreements dated 15.11.2011 and 17.05.2012 to
the appellant STC.
18. When the matter was taken up for final
hearing, the Senior Counsel Mr. Kapil Sibal
appearing for the respondents offered to deposit Rs.
800 crores, without prejudice to their right to
prosecute the case, within 4 weeks to show their
bona fides to the Court.
19. Accordingly, on 31.10.2018, the following
Order was passed:
“ Mr. Kapil Sibal, learned senior counsel
appearing for respondent No. 2 in SLP (Civil)
No. 14585/2015, during the course of
hearing, states that without prejudice to the
right to prosecute the case, they are
prepared to deposit the sum of Rs.
800,00,00,000/ (Rupees Eight Hundred
Crores) within the period of 4 weeks from
today.
Let them so deposit.
It is made clear that nonpayment of the
amount will be viewed seriously. ”
20. That on 29.11.2018, the Senior Counsel for the
respondents brought Demand Drafts for Rs.810
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crores in favour of the Decree Holder – STC. The
matter was posted for hearing on 04.12.2018.
21. When the matter was taken up for hearing on
04.12.2018, the Demand Drafts for Rs. 800 crores
were directed to be handed over to the Court Master
in a sealed envelope.
22. With the payment of Rs. 800 crores on
04.12.2018, the respondents have till date
deposited an amount of Rs.1610 crores
approximately in INR in discharge of their liability.
23. As a consequence, the entire liability of the
respondents till 10.11.2012 would stand
discharged.
24. The issue which now only remains for
resolution is the interest payable from 10.11.2012
onwards. The interest payable on the outstanding
amounts was left to be determined by the Court, by
the senior counsel appearing for both the parties.
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25. At this juncture, we consider it appropriate to
place on record our appreciation of the valuable
assistance provided by both the senior counsel, Mr.
DA Dave and Mr. Kapil Sibal in enabling the parties
to resolve the disputes. The senior counsel
addressed the myriad legal issues which arose in
the case with clarity, persuasiveness, lucidity and
industry.
26. Learned senior counsel for the respondents
submitted that even though the question with
respect to payment of interest pendente lite , and the
rate of interest, was not the subjectmatter of the
original proceeding, it was prayed that this Court
may give a quietus to the long pendency of this
litigation by passing appropriate orders.
27. Both the senior counsel prayed that this
Court, in exercise of its jurisdiction under Articles
136 and 142 of the Constitution, exercise its
extraordinary jurisdiction to determine the amount
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payable towards interest, and the period within
which it should be paid.
28. Having heard the learned senior counsel for
the parties, and on perusal of the record, we are of
the considered opinion that it is not necessary to
decide the various legal issues arising in the case
which were ably presented by both the learned
senior counsel in support of their case on the
question of jurisdiction of the Delhi High Court in
entertaining and deciding the Execution Petition
filed by the appellant.
29. Since the parties have requested for
termination of these proceedings finally in this
appeal itself, and secondly, the outstanding dues
have already been cleared by the respondents
during the pendency of this appeal though late
leaving only a limited controversy alive regarding
payment of interest, we are of the considered
opinion that there is no legal impediment in
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deciding the issue of payment of interest and its
rate in this appeal finally to give quietus to this
litigation.
30. Having given our anxious consideration to all
the aforementioned factors, we are of the view that
the respondents are liable to pay Interest on the
principal sum of Rs.1610 crores to the appellant at
rate of 8% per annum payable from 10.11.2012, i.e.
when the entire payment became due.
31. We direct that:
(i) The Demand Drafts for Rs. 800 crores (Rupees
Eight Hundred Crores) furnished by the
respondents, be handed over to STC Decree
Holder;
(ii) A lumpsum amount of Rs.600 crores (Rupees
Six Hundred Crores) worked out on the basis
of 8% S.I. per annum (rounded off) be paid by
the respondents to the appellant towards full
and final satisfaction of the amounts due
13
under the Settlement Agreement dated
15.11.2011, and Further Settlement
Agreement dated 17.05.2012.
(iii) The amount of Rs.600 crores be paid by the
respondents to STC towards interest in 12
weeks from the date of this Order.
(iv) Upon payment of the said amount by
28.02.2019, all claims arising out of the two
Settlement Agreements ( supra ), would stand
finally settled, and put a complete closure to
all pending proceedings of any nature
whatsoever, between the parties, wherever filed
and/or pending against each other.
(v) If, however, the amount of Rs. 600 crores
awarded towards interest is not paid on or
before 28.02.2019, it would amount to
contempt of the Order passed by this Court,
and it would be open to the appellant to take
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appropriate action against the respondents in
accordance with law for noncompliance.
32. In light of the foregoing discussion and the
directions, the appeal, along with all pending
applications, stand disposed of. The contempt
petitions are also disposed of accordingly.
………………………………..J
(ABHAY MANOHAR SAPRE)
…..………………………………J.
(INDU MALHOTRA)
New Delhi,
December 06, 2018
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