Sikkim Power Development Corporation v. M/s. Amalgamated Transpower (India) Ltd.

Judgment

#1. The Petitioners/Appellants have filed an application under Order XLVII Rule 1 of the Code of Civil Procedure, 1908 (for short, the “CPC”), dated 01-02-2022, seeking a review of the Order dated 07-10-2021 passed in I.A. No.1 of 2020 in Arb.A. No.1 of 2020, on grounds that the Order suffers from an error apparent on the face of it. 2(i). For clarity in the matter, it is essential to recapitulate that the Petitioners/Appellants under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the “Arbitration Act”) had challenged the Award dated 30-09-2017 of the sole Arbitrator before the Learned Commercial Court, East Sikkim, at Gangtok, in Arbitration Case No.05 of 2017 [Sikkim Power Development Review Pet.(C) No.01 of 2022 2 Sikkim Power Development Corporation and Another vs.

M/s. Amalgamated Transpower (India) Ltd. Corporation Ltd. (SPDCL) and Another vs. Amalgamated Transpower (India) Ltd. (ATPIL)]. The Arbitral Tribunal had allowed the claim filed by the Respondent and dismissed the counter-claims filed by the Petitioners/Appellants. A decree of specific performance of the Agreement dated 21-12-2002 was passed in favour of the Respondent with damages against the Appellants. The Learned Commercial Court, East Sikkim, at Gangtok, partly upheld the Arbitral Award dated 30-09-2017 vide its impugned Order dated 26-12-2019. An Appeal being Arb.A. No.01 of 2020 against the finding of the Learned Commercial Court was filed by the Petitioners herein. (ii) Notice was issued on 22-06-2020 to the Respondent on I.A.

No.01 of 2020 supra the application filed by the Appellants seeking a Stay of the impugned Judgment of the Learned Commercial Court. In the interregnum, the Learned Single Judge of this Court granted ex parte ad interim stay of the impugned Judgment until further orders. (iii)

After hearing the rival submissions of Learned Counsel for the parties, the ex parte ad interim order of stay was confirmed vide Order dated 07-10-2021. The directions of this Court in the said Order were inter alia as follows; “8.(i) In view of the rival contentions put forth, we are of the considered opinion that Learned Counsel for the Appellants has made out a case for grant of Stay of the operation of the Arbitral Award till further orders of this Court. (ii) Consequently, the ex parte ad interim Order of Stay granted by this Court vide Order, dated 22.06.2020, stands confirmed until further orders. (iii) However, considering the submissions of Learned Counsel for the Respondent as reflected supra, whereby his specific prayer is for deposit of the amounts as granted in Prayer “G‟ and Prayer „I‟, the Appellants are directed to deposit two Bank Drafts, Review Pet.(C) No.01 of 2022 3 Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd. one for a sum of Rs.85,43,11,904/- (Rupees eighty five crores, forty three lakhs, eleven thousand, nine hundred and four) only, (i.e. Rs.47,13,53,405/- + for a sum of Rs.38,29,58,499/-) and another Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only, within sixteen weeks from today. …………………………………………………………………..”

#3. The Appellants filed the instant Review Petition on 01- 02-2022 as stated supra seeking a review of the Order dated 07- 10-2021, along with I.A. No.01 of 2022 an application under Section 5 of the Limitation Act, 1963, seeking condonation of 76 days delay in filing the Review Petition, while placing reliance on the Order of the Hon‟ble Supreme Court dated 10-01-2022 in In Re : Cognizance for Extension of Limitation [Miscellaneous Application No.21 of 2022 in Miscellaneous Application No.665 of 2021 in Suo Motu Writ Petition (C) No.03 of 2020]. Contesting the aforementioned delay, the Respondent on 21-02-2022 filed I.A. No.05 of 2022 in Arb.A. No.01 of 2020 and averred inter alia as follows therein; “18. That, in addition to the Review Petition, the Appellants have also filed an Application of Condonation of delay of 76 days (i.e. from 06.11.2021 to 20.01.2020) sighting (sic) Hon‟ble Supreme Court of India‟s suo-motu cognizance of situation arising from COVID. But, as per the records of this Hon‟ble Court, the Appellants had submitted their detail arguments in Virtual Court on 25.10.2021, 26.10.2021; have done physical filing of in Ist/2nd week of Nov.2021; Documents appeared through V.C on 10.11.2021 and appeared physically before this Hon‟ble Court during court proceeding on 24.11.2021.” Learned Counsel for the parties were heard on the delay petition (supra) and in consideration of the Order of the Hon‟ble Supreme Court, the delay was condoned and the Review Petition taken up for hearing. A reply dated 01-06-2022 was filed on behalf of the Respondent to the Review Petition dated 01-02-2022. Review Pet.(C) No.01 of 2022 4 Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.

#4. Prior in time, on 21-02-2022, an application being I.A. No.5 of 2022 came to be filed by the Respondent under Section 151 of the CPC along with an affidavit inter alia submitting that the non-depositing of the amount by the Appellants despite the Order of this Court dated 07-10-2021, under the guise of a frivolous Review Petition along with a frivolous petition for condonation of delay is also an epitome of dodging payment of the amount ordered. Reply was filed by the Appellants to this application supra on 20-04-2022.

#5. Learned Counsel for the Petitioners contended that an error apparent on the face of the Order dated 07-10-2021 passed in I.A. No.01 of 2020 in Arb.A. No.01 of 2020 existed for the reasons enumerated hereinbelow; that, the Petitioners/Appellants under Section 151 of the CPC had filed an application for Stay, being I.A. No.01 of 2020 in Arb.A. No.01 of 2020 on 06-03-2020. Reply to which was filed by the Respondent on 22-03-2021 and a rejoinder thereof by the Appellants on 23-04-2021. That, the Respondent in its reply dated 22-03-2021 to the application for Stay had inter alia stated as under; “19. The amount which is due to be deposited by the Appellants in view of the operation of the 2015, Act and the settled law, an amount of Rs.131,56,40,332/- (Due as on 30.09.2020) has already become final and binding in terms of Section 36 of the Arbitration and Conciliation Act with respect to Prayer G and Prayer K of the Award. For this the Respondent has already filed an Execution Petition before the Hon‟ble District Judge, East Sikkim, registered as Civil Execution Case No.15 of 2020. Therefore the remaining amount which is further liable to be deposited the Appellants are mentioned in the TABLE below. Findings in Arbitral Award Whether interfered the Commercial Court U/s 34? Amount payable to the Respondent/ Applicant Review Pet.(C) No.01 of 2022 5 Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd. The Tribunal awarded Rs.265.10 Crores towards Prayer 1 (Loss toward Cost Escalation) (Para 803 @ Pg. 419) Total No Crores Rs.265.10 with post award interest of 18% (Refer Para 813 @ Page 425 of the Award) approximating Rs.431,00,17,589/- (Upto 23.3.2021) Rs.431,00,17,589/-

#20. The Respondent having filed a separate Appeal under Section 37, before this Hon‟ble Court as Arb. A/80/2020, seeking for an alternate claim of damage as granted by the Arbitral Tribunal the above mentioned amount in the table has not been pressed for execution.” [emphasis supplied]

#6. That, in view of the reply supra, the Respondent had thus admitted that as far as the amount of Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only, was concerned the Respondent was not pressing for its execution as they had preferred a separate Appeal before this Court seeking an alternate claim for damages. It was further submitted that, contrary to the aforestated averments, the Respondent during the course of arguments on the Stay application prayed for the deposit of the amount of Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only. That, despite the above averments in the reply of the Respondent to the Stay application at Paragraphs 19 and 20, extracted supra, while confirming the interim Order dated 22-06-2020, this Court in its Order dated 07- 10-2021 directed the Appellants to deposit two Bank Drafts in the Registry of this High Court for an amount of Rs.85,43,11,904/- (Rupees eighty five crores, forty three lakhs, eleven thousand, nine hundred and four) only, [i.e. Rs.47,13,53,405/- (Rupees forty seven crores, thirteen lakhs, fifty three thousand, four hundred and Review Pet.(C) No.01 of 2022 6 Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd. five) + Rs.38,29,58,499/- (Rupees thirty eight crores, twenty nine lakhs, fifty eight thousand, four hundred and ninety nine] and another Bank Draft of an amount of Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only, within 16 (sixteen) weeks from 07-10-2021. That, the Order consequently suffers from an error apparent on the face of it as it failed to take into consideration the submissions of the Respondent that they were not pressing for execution of the awarded amount of Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only. That, this Court had also failed to take into consideration that the Respondent had consciously not pressed for execution of the said amount. That, in the light of the stand of the Respondent the direction for deposit of the said amount of Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only, is erroneous. It was also stated that the Court erred in directing the Appellants to deposit the balance Bond amount in Court and failed to take into consideration that when the Respondent had itself breached its obligation to submit the Bank Guarantee to the Petitioners, then the Petitioners could not have been legally called upon to deposit the amount of the balance Bond amount. Hence, the grounds submitted are sufficient for this Court to review its Order dated 07-10-2021 thereby deleting/modifying the direction to the Appellants to deposit the Bank Draft of Rs.85,43,11,904/- (Rupees eighty five crores, forty three lakhs, eleven thousand, hundred four) Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only. Review Pet.(C) No.01 of 2022 7 Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd. 7(i). Per contra, it was contended by Learned Counsel for the Respondent that firstly the Arbitration Act, as amended, is a complete Code in which there is no provision for a Review and hence, the Appellants could not file a Review Petition under Order XLVII Rule 1 of the CPC seeking a review of its Order. That, in the absence of any such provision, any Order in review, if passed would be ultra vires, illegal and without jurisdiction. That, this Court in its Order dated 07-10-2021 has directed deposit of the amount in terms of the provisions of Section 36 of the Arbitration Act, as amended in 2015, and under binding precedents of the Hon‟ble Supreme Court which the Petitioners are seeking an alteration by claiming a review, which is wholly impermissible. That, in fact the Petitioners have under the guise of a Review Petition filed an Appeal assailing the Order of this Court, which can only be filed through an appropriate appeal before the higher Court and not through a Review Petition. It was next urged that in prescribing the amount to be deposited under Section 36 of the Arbitration Act, as amended in 2015, the Court does not consider whether any Execution Petition towards any particular claim is filed or not. The Court is only to consider the awarded amount or what is the amount concurrently upheld by the Court under Section 34 of the Arbitration Act as in the instant case. That, the claim of the Petitioners that the Order to deposit Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only, is erroneous in light of Paragraphs 19 and 20 of the reply of the Respondent dated 22-03-2021, to the Stay application, is totally false. That, the directions of this Court to the Appellants to deposit the two Bank Drafts within 16 (sixteen) weeks‟ period ended on 27-01- Review Pet.(C) No.01 of 2022 8 Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd. 2022 despite which the Appellants failed to make the deposits and instead filed the Review Petition. That, whether Execution Petition is to be filed or not is the discretion of the Respondent. That, Section 36 of the Arbitration Act, as amended in 2015, expressly provides for deposit of the awarded amount for grant of stay, it does not state the relevance of filing or non-filing of Execution Petition by the award holder. (ii). That, the Petitioners‟ interpretation that as the Respondent had not pressed for execution meant that they would not press for execution of the claim is bizarre. That, as soon as the Respondent noticed that the Petitioners had not deposited the two Bank Drafts as per the Order of this Court dated 07-10-2021, the Respondent filed an Execution Petition for Prayer 1 Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only, before the Commercial Court on 19-02-2022 which is registered as Execution Petition (C) No.05 of 2022. That, in fact, the Petitioners have not even deposited a separate Bank Draft of Rs.85,43,11,904/- (Rupees eighty five crores, forty three lakhs, eleven thousand, nine hundred and four) only, for which they have not sought any extension, establishing a deliberate defiance of the Order of this Court. Hence, in light of the above mentioned facts and circumstances, this Court be pleased to dismiss the Review Petition with exemplary costs.

#8. Learned Counsel the Appellants in rebuttal contended that the Appellants had legally and validly invoked the grounds permissible under Law for review of the Order and also on the basis of facts as applicable to the case in question. It was reiterated that the Respondent itself had stated that it was not Review Pet.(C) No.01 of 2022 9 Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd. pressing for execution of Order relating to the award of the amount of Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only. This being a material fact it had a legal bearing on the exercise of discretion by this Court while deciding the application of Stay of the arbitral award preferred by the Appellants. It is denied that Sections 34 and 37 of the Arbitration Act mandates that the hearing of objection petition/appeal on merits can be taken up only on the amount which was directed by the Court being deposited by the Appellants/Objectors, hence the Petition filed by the Respondent under Section 151 of the CPC be dismissed.

#9. The rival contentions were heard at length and given due consideration. While addressing the arguments of Learned Counsel for the Respondent that the Arbitration Act is a self- contained Act which provides for no review, in ITI Ltd. vs. Siemens Public Communications Network Ltd.1 the Supreme Court held as hereunder; “19. Revisional jurisdiction of a superior court cannot be taken as excluded simply because subordinate courts exercise a special jurisdiction under a special Act. The reason is that when a special Act on matters governed by that Act confers a jurisdiction on an established court, as distinguished from a persona designata, without any words of limitation, then the ordinary incident of procedure of that court including right of appeal or revision against its decision is attracted. The right of second appeal to the High Court has been expressly taken away by sub-section (3) of Section 37 of the Act, but for that reason it cannot be held that the right of revision has also been taken away. ……………………..” The Supreme Court in Mahanagar Telephone Nigam Limited vs. Applied Electronics Limited2 held that;