Writ Petition No. 7017 of 2019 · The High Court
Case Details
- 1 - NC: 2025:KHC:17222 WP No. 7017 of 2019 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE M.I.ARUN WRIT PETITION NO.7017 OF 2019 (GM-CPC) BETWEEN: 1. JURONG CONSULTANTS (INDIA) PVT. LTD. NO.41/7, 1ST & 2ND FLOOR, 15TH CROSS, MES COLLEGE ROAD, MALLESWARAM, BENGALURU-560 003 REPRESENTED BY ITS DIRECTOR MR. UMESH M. MUDNUR.
Legal Reasoning
(BY SRI ARJUN P.K., ADVOCATE) AND: 1. VISHAL INFRASTRUCTURE LIMITED NO.52, R.V. ROAD, BASVANAGUDI BENGALURU-560 004 REPRESENTED BY MR. RAVI NARAYAN RAO (ADMINISTRATIVE OFFICER). 2. JURONG INFRASTRUCTURE (INDIA) LTD. JURONG HOUSE, NO.1/5, Digitally signed by H K HEMA Location: HIGH COURT OF KARNATAKA …PETITIONER - 2 - NC: 2025:KHC:17222 WP No. 7017 of 2019 PALACE ROAD, BENGALURU-560 001 REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER. …RESPONDENTS (BY SRI S.P. KULKARNI, SENIOR ADVOCATE FOR SRI VASANTHKUMAR K.M., ADVOCATE FOR R.1; R.2: NOTICE HELD SUFFICIENT VIDE COURT ORDER DATED 18.08.2022) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH OR SET ASIDE THE IMPUGNED ORDER DATED 28.01.2019 (ANNEXURE-A) AND IMPUGNED WARRANT DATED 29.01.2019 (ANNEXURE-B) PASSED IN EXECUTION PETITION NO.908/2016 BY THE ADDITIONAL CITY CIVIL JUDGE (CCH-68) AS BEING PATENTLY ILLEGAL, PERVERSE AND UNSUSTAINABLE IN LAW, ETC. THIS PETITION COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THROUGH PHYSICAL HEARING/VIDEO CONFERENCING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE M.I.ARUN - 3 - NC: 2025:KHC:17222 WP No. 7017 of 2019 ORAL ORDER 1. It is submitted that there was a dispute between respondent No.1 and respondent No.2 which was referred to arbitration and an award has been passed in favour of respondent No.1 and respondent No.2 is held to be liable to pay certain amounts to respondent No.1. Respondent Nos.1 and 2 are limited companies. 2. Respondent No.1 initiated Execution Case No.908/2016 to execute the arbitral award against respondent No.2. In the said execution petition, a warrant has been issued for attachment and sale of movable properties belonging to respondent No.2. When the same was sought to be executed, a post dated cheque has been issued in favour of respondent No.1 by the petitioner. Thereafter, the present writ petition is filed by the petitioner on the ground that an order of attachment in execution of the arbitral award was sought to be made against the petitioner-company which is a different legal entity altogether as compared to respondent no.2 and the petitioner-company has issued the cheque concerned under duress. On the said ground, it is prayed that the warrant issued - 4 - NC: 2025:KHC:17222 WP No. 7017 of 2019 by the trial court be set aside and the cheque issued by the petitioner should not be encashed and the same should be returned to the petitioner. 3. By order dated 18.08.2022, this Court has ordered that notice to respondent No.2 is held sufficient. In spite of service of notice, respondent No.2 has remained absent. 4. Per contra, respondent No.1 submits that respondent No.2 goes by the name Jurong Infrastructure (India) Ltd. and the petitioner-company goes by the name Jurong Consultants (India) Private Limited. It is admitted that both are two different legal entities in the eye of law, but the same are managed by same set of persons and in discharge of the liability of respondent No.2, one of the Directors of the petitioner who is the authorized signatory to sign the cheque has voluntarily issued the same in favour of respondent No.1 in discharge of the liability of respondent No.2. Respondent No.1 denies the existence of any coercion or duress in issuing the said cheque. It is further submitted that the petitioner, if aggrieved has an alternative and efficacious remedy under Order XXI Rule 58 of CPC. - 5 - NC: 2025:KHC:17222 WP No. 7017 of 2019 5. A registered company is a person in the eye of law and generally the shareholders are liable only to the extent of their respective shareholdings for the liability of the said company. Admittedly, the petitioner and respondent No.2 are separate legal entities and under normal circumstances, unless there is a contract to the contrary or by operation of law where the petitioner is held liable to make good the liability of respondent No.2, the petitioner-company cannot be made liable for the liability of respondent No.2. However, nothing prevents the petitioner from discharging the liability of respondent No.2, if it intends to do so voluntarily. 6. Under the given peculiar facts and circumstances of the case, the bone of contention between the petitioner and respondent No.1 is that, respondent No.1 contends that in discharge of the liability of respondent No.2, the petitioner has voluntarily issued a cheque and there was no coercion or duress against the petitioner-company and as an afterthought, it has filed the instant writ petition setting up the defence that the petitioner-company is a separate legal entity as compared to respondent No.2 and whereas, it is the contention of the petitioner-company that the cheque has been issued under - 6 - NC: 2025:KHC:17222 WP No. 7017 of 2019 duress. This aspect involves disputed question of fact, which this Court cannot decide in exercise of its powers under Article 226 of the Constitution of India. 7. Order XXI Rule 58 of CPC reads as under: "58. Adjudication of claims to, or objections to attachment of property.—(1) Where any claim is preferred to, or any objection is made to the attachment of, any property attached in execution of a decree on the ground that such property is not liable to such attachment, the Court shall proceed to adjudicate upon the claim or objection in accordance with the provisions herein contained: Provided that no such claim or objection shall be entertained— (a) where, before the claim is preferred or objection is made, the property attached has already been sold; or (b) where the Court considers that the claim or objection was designedly or unnecessarily delayed. (2) All questions (including questions relating to right, title or interest in the property attached) arising between the parties to a proceeding or their representatives under this rule and relevant to the adjudication of the claim or objection, shall be determined by the Court dealing with the claim or objection and not by a separate suit. - 7 - NC: 2025:KHC:17222 WP No. 7017 of 2019 (3) Upon the determination of the questions referred to in sub-rule (2), the Court shall, in accordance with such determination,— (a) allow the claim or objection and release the property from attachment either wholly or to such extent as it thinks fit; or (b) disallow the claim or objection; or (c) continue the attachment subject to any mortgage, charge of other interest in favour of any person; or (d) pass such order as in the circumstances of the case it deems fit. (4) Where any claim or objection has been adjudicated upon under this rule, order made thereon shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree. (5) Where a claim or an objection is preferred and the Court, under the proviso to sub-rule (I), refuses to entertain it, the party against whom such order is made may institute a suit to establish the right which he claims to the property in dispute; but, subject to the result of such suit, if any, an order so refusing to entertain the claim or objection shall be conclusive." 8. As the petitioner has an alternative and efficacious
Decision
remedy, the writ petition is hereby disposed of with liberty to the petitioner to make necessary application before the Executing Court in accordance with law. The interim order - 8 - NC: 2025:KHC:17222 WP No. 7017 of 2019 granted by this Court on 19.02.2019 is continued for an additional period of sixty days or till such time, the trial court takes a decision on the application to be made by the petitioner, whichever is earlier. It is hereby made clear that the trial court shall decide the case on merits without being influenced by any of the observations made hereinabove. Sd/- (M.I.ARUN) JUDGE hkh. List No.: 1 Sl No.: 38