Non-compliance with court directions for deposit can result in the dismissal of a challenge to an arbitral award.

JUDGMENT

Prateek Jalan, J. (Oral)

I.A. 21327/2022 [application on behalf of the petitioner seeking appropriate directions to the Registry for taking on record the bank guarantee dated 22.11.2022] & I.A. 2494/2023 [application on behalf of the respondent for dismissal of the objection petition]

1. OMP(COMM) 432/2017 has been filed by SEPCO Electric Power Construction Corporation [hereinafter, "SEPCO"] under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter, "the Act"] challenging an award dated 17.10.2017 [Annexure P/1 to SEPCO's list of documents.], rendered by a three-member arbitral tribunal adjudicating disputes between SEPCO and Power Mech Projects Ltd. [hereinafter, "Power Mech"] under a contract agreement dated 13.12.2010 and a supplementary agreement dated 13.10.2012.

2. The arbitral tribunal allowed the claim of Power Mech to the extent of Rs.142,42,73,979/-and SEPCO's counter claim to the extent of Rs.1,59,480/-[after adjustment of some amount against one of the claims of Power Mech]. Consequently, the tribunal passed an award in the sum of Rs.142,41,14,499/-in favour of Power Mech.

Facts

3. After the filing of the present petition by SEPCO, Power Mech also filed a post-award petition under Section 9 of the Act, being OMP (I)(COMM) 523/2017, for a direction upon SEPCO to deposit the awarded amount in Court.

4. During the pendency of the said petition, inter alia the following orders were passed:

a. By an order dated 14.12.2017 [read with a rectification order dated 09.02.2018], the Court recorded the submission on behalf of SEPCO that it had contracts worth Rs.10,000 crores in India. SEPCO was directed to file an affidavit of movable and immovable assets, including details of its bank accounts and amounts lying therein within two weeks.

b. It was recorded, in an order dated 09.02.2018, that SEPCO had filed an affidavit stating that there were three work orders with it, and an amount of Rs. 2058.42 crores was due to it, for which it had already executed the work.

c. By order dated 24.07.2018, the Court noted the contents of SEPCO's further affidavit dated 02.01.2018. The submission of learned counsel was also noted to the effect that SEPCO was in the process of executing several high value projects, and that it would be in a position to satisfy the award in case it was to fail in its petition under Section 34 of the Act. The following directions were passed:

"7.1 Therefore, for the moment, SEPCO is directed to do the following:

(i) SEPCO will disclose the exact particulars and the location of the assets mentioned in paragraph no.4 of its affidavit dated 2.1.2018.

(ii) 10% of the amount available in the bank accounts referred to in paragraph no.5 of the very same affidavit, as on 24.7.20 18, shall be deposited with the Registry of this Court. Furthermore, deposits, if any, made hereafter in the said accounts to the extent of 10%, will also be deposited with the Registry of this Court every 15 days.

(iii) Liberty is, however, given to SEPCO to seek variation of the direction contained in Clause (ii) above, if security worth Rs. 142 crores is furnished to the Court favouring PMPL.

(iv) The affidavit, as directed above, will be filed within one week from today."

[Emphasis supplied.]

d. On 12.02.2019, it was directed as follows:

"1. Mr. Sethi, learned senior counsel for the respondent, says that he will file an affidavit stating therein the following:

(i) The list of assets which find mention in the valuers' report alongwith their location and valuation given by the valuer.

(ii) The list of assets which, according to him, the valuer has not valued. In respect of these assets their location and approximate valuation will also be given.

(iii) Furnish a bank guarantee in the sum of Rs.30 crores of a scheduled Indian bank.

2. Learned senior counsel says that on account of the spring festival in China, it could take at least six (6) weeks to furnish the bank guarantee.

3. Mr. Sethi says, however, the affidavit can be furni