Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 50/2023
PETRONET LNG LIMITED .....Petitioner
Through: Mr. Diwakar Maheshwari, Mr.
Karun Mehta and Ms. Pratiksha Mishra,
Advs.
versus
AFCONS INFRASTRUCTURE LIMITED .....Respondent
Through: Mr. Rajeev Sharma, Sr.
Advocate with Mr. Abhishek Birthray, Ms.
Shreya Sharma, Mr. Kartikeya Tripathi and
Mr. Nishant Kandpal, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
ORDER (ORAL)
% 04.07.2024
I.A. 10949/2024
1. IA 2339/2023 was filed by the petitioner in the present OMP,
seeking stay of operation and implementation of the arbitral award,
dated 26 September 2022, under challenge. By order dated 17
February 2023, this Court had, in para 7, directed that the award dated
26 September 2022 would stand stayed subject to the petitioner
depositing 70% of the awarded amount with the respondent within
four weeks, against an equivalent bank guarantee to be provided by
the respondent.
2. That arrangement has continued in force since then.
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Digitally Signed By:AJIT
KUMAR
Signing Date:06.07.2024
17:25:24
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By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:06.07.2024
17:24:39
3. The respondent has now moved the present application, seeking
a direction to the petitioner to deposit the remaining 30% of the
awarded amount subject to an equivalent bank guarantee being
provided by the respondent.
4. For this purpose, the respondent has relied on the order passed
by the Supreme Court in Manish v. Godawari Marathawada
1
Irrigation Development Corporation to contend that the Supreme
Court has, in the case of money awards, uniformly held that the
entertainment of a Section 34 challenge has necessarily to be subject
to deposit of the entire awarded amount.
5. Mr. Diwakar Maheshwari, learned Counsel for the petitioner,
submits that this aspect was in fact argued before this Court on 17
February 2023 and it was in awareness of the orders passed by the
Supreme Court that the Coordinate Bench, on that date, decided to
subject the grant of stay only to deposit of 70% of the awarded
amount. He submits that, even thereafter, the prayer for a direction to
the petitioner to deposit the remaining 30% was raised by the
respondent, but has not been favourably considered by this Court. He,
therefore, submits that the respondent cannot be permitted, time after
time, to raise the same argument, once it was raised and not accepted
by this Court.
6. The order dated 17 February 2023 does not indicate any
application of mind by the court to the orders passed by the Supreme
Court, or that the court has, even thereafter, taken a conscious decision
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Digitally Signed By:AJIT
KUMAR
Signing Date:06.07.2024
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By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:06.07.2024
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to limit the direction for deposit to 70%. There are subsequent orders
dated 8 February 2024 and 4 April 2024, which also note that the
respondent required the petitioner to deposit the remaining 30% of the
awarded amount. However, neither of these orders record any finding
on the said prayer.
7. It cannot, therefore, be said that the respondent is foreclosed
from raising this prayer today.
8. Besides, there is no order disposing of IA 2339/2023. That IA,
therefore, continues to remain pending.
9. The direction for deposit of 70% as contained in the order dated
17 February 2023 is, therefore, only in the nature of an ad interim
direction, and is always subject to the final order which would be
passed in IA 2339/2023. Being in the nature of an ad interim
direction, there can be no requirement for the respondent to seek any
modification thereof. At the time of disposal of IA 2339/2023, this
Court would obviously consider the law that applies.
10. In so far as the legal position is concerned, the Supreme Court
has being taking a consistent view that, in the case of money awards,
100% of the awarded amount has necessarily to be directed to be
deposited.
11. Among orders which had taken this view are the order in
Manish , cited by the respondent, as well as Toyo Engineering
1
2018 SCC OnLine SC 2863
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Digitally Signed By:AJIT
KUMAR
Signing Date:06.07.2024
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By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:06.07.2024
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2
Corporation v. IOCL . Para 3 of Toyo Engineering Corporation
reads thus :
| “ | 3. This Court repeatedly having held that Order XLI Rule 5 | |
|---|---|---|
| principles are to be followed in these cases, we find that largely | ||
| because public corporations are involved, discretion continues to | ||
| be exercised not on principles under Order XLI Rule 5 but only | ||
| because large amounts exist and that Government Corporations | ||
| have to pay these amounts under Arbitral Awards. Both these | ||
| considerations are irrelevant, as has been pointed out by us earlier. | ||
| As a matter of fact, the very matter referred to in the order dated | ||
| 09.08.2019 and 06.03.2020, namely, O.M.P. (COMM) No. | ||
| 366/2017 has resulted in a dismissal of a Section 34 petition in an | ||
| award that was granted out of one of 17 other contracts arising out | ||
| of the same general transaction. Mr. Sharma was at pains to point | ||
| out that the Section 34 petition was dismissed in that matter on | ||
| completely different grounds. Be that as it may, O.M.P. (COMM) | ||
| No. 366/2017 at the highest, therefore, would be irrelevant. This | ||
| O.M.P. (COMM) No. 366/2017 appears to be the main plank on | ||
| which an amount of Rs. 125 Crores alone was ordered to be | ||
| deposited out of an awarded amount of Rs. 662 Crores. | ||
| Resultantly, we set aside both the orders and require a 100% | ||
| deposit of the awarded amount to be made within a period of six | ||
| weeks from today. The appellants may apply to the High Court to | ||
| withdraw this amount on security. | ” |
12. It is also worthwhile to refer, in this context, to another order
dated 14 September 2018 passed by the Supreme Court in Srei
Infrastructure Finance Ltd. v. Candor Gurgaon Two Developers
3
and Projects Pvt. Ltd . In that case, the Supreme Court directed 100%
deposit, but modulated the direction by requiring 60% of the deposit
to be made in cash and 40% to be secured by way of bank guarantee.
13. The position that emerges is that apparently that, though the
Court is required, in the case of money awards, to subject grant of stay
to securing of 100%, i.e. the entire awarded amount, the Court has the
2
2021 SCC OnLine SC 3455
3
Manu/SCOR/73122/2018
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KUMAR
Signing Date:06.07.2024
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By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:06.07.2024
17:24:39
latitude, nonetheless, to modulate the direction by allowing part of the
amount to be deposited by way of bank guarantee.
14. The considerations which weigh with the court while examining
a prayer for interim relief are, classically, the existence of a prima
facie case, balance of convenience and irreparable loss.
15. In the light of the approach advocated by the Supreme Court in
Manish and Toyo Engineering , a prima facie case for directing the
petitioner to deposit the remaining 30% of the awarded amount must
be found to exist.
16. The direction for 70% of the deposit has continued to remain in
force now for almost a year and a half since 17 February 2023,
without ever having been challenged by the respondent. In that view
of the matter, keeping in mind the principles of balance of
convenience and irreparable loss, I am inclined to dispose of IA
2339/2023 with a direction to the petitioner to furnish a bank
guarantee for the remaining 30% of the awarded amount favouring the
respondent from a nationalized bank, within a period of four weeks
from today.
17. With this limited modification, IA 2339/2023 as well as the
present application both stand disposed of.
C. HARI SHANKAR, J.
JULY 4, 2024
dsn
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O.M.P. (COMM) 50/2023 Page 5 of 5
Digitally Signed By:AJIT
KUMAR
Signing Date:06.07.2024
17:25:24
Digitally Signed
By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:06.07.2024
17:24:39