Union Of India Vs Infrastructure Leasing And Financial Services Ltd. & Ors.

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Judgment

25 paragraphs · 760 words

ORDER

These IAs be listed on 19^th July, 2022.

I.A. No. 2114 of 2021

Heard Sri Arun Kathpalia, Learned Sr. Counsel for the Applicant and Sri Ramji Srinivasan, Learned Sr. Counsel appearing for the Respondent as well as Sri Aditya Sikka appearing for Union of India.

This Appeal has been filed by Sadbhav Engineering Limited containing the following prayers:

(a)
allow the present application;
(b)
modify the order dated 11.01.2019 passed by this Hon’ble Tribunal and allow the Arbitral Tribunal and/or the member(s) of the Arbitral Tribunal to open the Signed Award dated 06.08.2020 from the sealed cover and deliver the same to the parties to the arbitration proceedings;
(c)
Direct one of the two members of the Arbitral Tribunal namely Justice V.K. Gupta (retd.) and Mr. V. Murahary Reddy to collect the original Award and the arbitral record of the case, collected from the office of Late Justice M.Y. Eqbal (Retd.)
(d)
Pass such other or further order as may deem fit and appropriate by this Hon’ble Tribunal in the facts and circumstances of the case.”

This Tribunal vide its Order dated 11/01/2019 has issued following directions:

"2.
So far as the pending arbitration proceedings are concerned, if any pending before one or other Arbitral Tribunal in which the ‘ILFS’ or any of its 348 Group Companies are parties, in such case, the Arbitral Tribunal may proceed with to determine the claim and counter claim, if any, made by the parties and may pass the award, and keep it in a seal cover. The Arbitral Tribunal are also prohibited to pass any order under Section 17 of the Arbitration & Conciliation Act, 1996 against ‘ILFS’ or any of its Group Companies. Sealed cover will be kept till the final decision of the petition under Sections 241 & 242 of the Companies Act, 2013 pending before the National Company Law Tribunal, Mumbai Bench. However, if the award is given in favour of the ‘ILFS’ or any of its Group Companies, in such case, the award need not be kept in a sealed cover, even during the pendency of the Company Petition."

Learned Counsel for the Appellant submits that award insofar the Applicant is concerned is in sealed cover and has not yet been opened although more than three years have elapsed. It is submitted that direction be issued for modifying the Order. The sealed cover which has not opened from two years need to be opened so that parties may take remedial action in accordance with law.

Sri Ramji Srinivasan, Learned Counsel for the Respondent opposing the prayer submits that Order was passed by this Tribunal on 11/01/2019, keeping in view the Resolution of the ILFS and its entities and further to freeze all claims on the cut-off date 15/10/2018. He submits that the Orders passed in the Appeal stopping enforcement and recovery or any execution are still in force. Hence, even if the award in sealed cover is directed to be opened. The Applicant shall not be entitled to enforce the award or make recovery from the ILFS or its subsidiary.

Sri Arun Kathpalia submits that he is entitled to take all action in pursuance of the award. Since, the entity i.e., Jharkhand Road Project Implementation Company Limited is a green entity.

Sri Ramji Srinivasan submits that even though it is green entity, it may fall in the red category.

We have considered the submissions of the Parties.

The Order dated 11/01/2019 which was passed for keeping the award in sealed cover is now more than three years ago. It has submitted by Counsel for the Applicant that the award was prepared and signed more than two years ago.

We are of the view that the award which is kept in the sealed cover need to be opened by the Arbitrators and parties may be communicated the award.

We without entering into the issues and submissions raised by the parties regarding the future actions in consonance with the award, only observe that all contention and the course of action shall be open to the parties to be taken in accordance with law.

We make it clear that this Order should be treated as only modification of para 2 of the Order dated 11/01/2019.

I.A. No. 2114 of 2021 is disposed of accordingly.

I.A. No. 557 & 645 of 2022

List these Applications on 19^th July, 2022. In continuation of our Order dated 07/03/2022 we further direct that Bank shall release the expenses of Resolution also.

I.A. No. 586 of 2022

List this Application tomorrow i.e., on 27^th May, 2022.