SLEEPWELL INDUSTRIES CO. LTD. Vs. LMJ INTERNATIONAL LTD.

JUDGEMENT

(1.) There are two execution applications being EC 487 of 2013 and EC 488 of 2013. The judgment debtor initially challenged the enforceability of the said two awards. By a composite order dated 4.12.2018, the maintainability as well as enforceability of the award was decided against the judgment-debtor and the said award were held to be enforceable. Subsequently, another application was filed challenging the enforceability of the said award in EC No. 487 of 2013 and the said application was also dismissed on merits. This order is the subject matter of special leave petition pending before the Hon'ble Supreme Court being SLP(C) No. 540 of 2018. The said two objections were overruled and the judgment debtor was directed to create a fixed deposit for a sum of Rs. 1.80 crores by debiting its account with the Bank of Baroda, International Branch and the original fixed deposit receipt was directed to be deposited with the Registrar, Original Side. By a further order the judgment debtor was directed to be present in Court for examination. The Special Leave Petition challenging the order dated 4.12.2014 was dismissed and thereafter the award holder pressed the application for execution. Against the order of furnishing bank guarantee and requiring the judgment debtors to be present for examination two separate appeals were preferred. In the said two appeals judgment debtors sought time to furnish bank guarantee as directed by the order dated 3rd September, 2015. The appeal was disposed of by extending the period of furnishing the bank guarantee. The Registrar, Original Side was directed to accept the said bank guarantees and not to disburse any amount lying in the fixed deposit account to the decree holder till the disposal of the objections raised in the execution applications. Thereafter, an application was filed by the judgment debtor in EC 487 of 2013 which is in the nature of Section 48 of the Arbitration and Conciliation Act. The said application was disposed of by an order dated 22nd August, 2017 upholding the award. The judgment debtor being aggrieved preferred a special leave petition in the meantime. In terms of earlier orders, the judgment debtor created the fixed deposit of Rs. 1.8 crore and also furnished bank guarantees aggregating to a sum of Rs. 3.24 crore covering both the execution applications. The Hon'ble Supreme Court in the Special Leave Petition passed an order on 5th January, 2018 by which liberty was given to the award holder to withdraw Rs. 1.8 crore without furnishing any guarantee. By a subsequent order dated 20th April, 2018, leave was given to the award holder to realise 50% of the bank guarantee by encashment of the bank guarantee by the Registry of Calcutta High Court and such amount was to be released in favour of the respondent. The said direction was passed subject to final adjudication in the Special Leave Petition. After encashment of the said bank guarantee, the bank guarantee stood reduced to Rs. 1,62,08,853/- and the validity of the said bank guarantee was extended by the judgment debtor for a period up to 19th September, 2018. In between, the award holder filed an application before the Hon'ble Supreme Court being IA No. 73339/2018 for clarification and/or appropriate direction. In the said application the award holder has stated that the total claim of the applicant as on 30th April, 2018 in connection with the Special Leave Petition is Rs. 4,68,48,519.16/-. Even after compliance of the orders dated 5th January, 2018 as modified on 5th March, 2018 and 20th April, 2018, the applicant would be receiving a total sum of Rs. 3,42,08,852.50. The balance amount payable in connection with the foreign award as on 30th April, 2018 which is the subject matter of the Special Leave Petition would be Rs. 1,26,39,666.67. Even interest amount from the fixed deposit which is lying with the Registrar, Original Side amounting to Rs. 37,86,979/- and the balance amount of Rs. 61,10,421.33 after satisfying the claim in EC No. 488 of 2013 and compliance of the order dated 20th April, 2018 would not be sufficient to cover the balance dues of the applicant in connection with the foreign award in the Special Leave Petition. There would be still a deficit of approximately Rs. 27,42,266.33.

(2.) At the time of passing of the order dated 5th January, 2018 as modified on 5th March, 2018, the applicant was not aware that in addition to the sum of Rs. 1.80 crore interest of about Rs. 37,86,979/- was also lying with the Registrar, Original Side in connection with the aforesaid fixed deposit. It is stated that the direction as contained in the order dated 5th January, 2018 as modified on 5th March, 2018 should also be made applicable to the interest amount which is lying with the Registrar in connection with the fixed deposit to the tune of Rs. 37,86,979/-. In the said application, the petitioner, inter alia, has prayed for a direction upon the Registrar, Original Side to obtain necessary permission from the competent authority of the Reserve Bank of India to disburse the interest on FDR amounting to Rs. 37,86,979/- to the applicant on the same terms and conditions as contained in the earlier orders.

(3.) In this proceeding the petitioner now has prayed for release of the said fund to the credit of EC No. 488 of 2013. The said clarification application was heard along with a modification application filed by the judgment debtor and the following order was passed:-