Back
IN THE HIGH COURT OF DELHI
Prathiba M. Singh, J.
India Off Set Printers Pvt. Ltd. - Appellant
Versus
Intech Capital Ltd. - Respondent
EX.F.A. 3 of 2020 & CM Appls. 7447 of 2020, 850 of 2021, 6169 of 2021 and EX.F.A. 4 of 2020 & CM Appls. 7499 of 2020 and 6174 of 2021
Decided On : 01-09-2021
The court confirmed that the execution of an arbitration award is mandated when borrowers fail to comply with payment obligations, emphasizing the importance of full disclosure in judicial proceedings.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Execution of Award - Order for attachment of machinery issued due to non-payment of decretal amount by the Appellants, who defaulted on loan agreements. The award was not contested, leading to ex-parte confirmation. Interest at 18% p.a. granted. (Paras 3, 5, 14)
(B) Judicial conduct - Disclosure and candor in affidavits, with the Appellants concealing essential facts regarding the agreement to sell and payments. (Paras 12, 14)
Facts of the case:
The Appellants, borrowers under a loan agreement, failed to make payments leading to an ex-parte arbitration award in favor of the lender. Execution proceedings initiated due to continued defaults, resulting in orders for attachment.
Findings of Court:
Attachment of machinery deemed appropriate due to Appellants' lack of compliance and transparency regarding financial matters, despite the attachment orders being challenged.
Issues: Key issues involved whether the Appellants had grounds for contesting the execution orders, and the conduct of the Appellants in failing to disclose pertinent facts in court.
Ratio Decidendi: Court emphasized that its role in execution is limited to affirming the decree's validity and assessing if the objections raised are meritorious. The Appellants' negligence in their financial obligations justifies the Executing Court's actions.
Result: Appeals dismissed.
| Table of Content |
|---|
| 1. background of loan and arbitration (Para 2 , 3 , 4 , 5) |
| 2. application for de-sealing of machinery (Para 6 , 9 , 10) |
| 3. contradictory facts from affidavits (Para 8 , 11 , 12) |
| 4. court's reasoning on execution and conduct (Para 13 , 14 , 15) |
| 5. dismissal of appeals (Para 16) |
JUDGMENT
Prathiba M. Singh, J. (Oral)--This hearing has been done through video conferencing.
2. The present two appeals have been filed challenging the impugned orders dated 9th January, 2020 by which the Executing Court has issued warrants of attachment of the machines of the Appellants.
3. The brief background to this case is that Appellant No.1, which is a Private Limited Company engaged in the business of publishing and printing books, had availed of loan facilities from the Respondent - Intech Capital Ltd. The loans were disbursed sometime in 2012. However, due to defaults by the Appellants, the matter was referred to arbitration. On 19th August, 2015, the Sole Arbitrator passed an ex-parte award in favour of the Respondent. The operative portion of the award reads as under:
"19. In the facts and circumstance of the present case, I am of the view that despite several opportunities, the respondents have not contested, filed or protest against the claim or any of the documents and were proceeded ex-parte vide order dated 26.05.15. In my opinion, from the conduct of the respondents it is clear that they have no defense to the claim and are intentionally not appearing in the arbitration proceedings. There is no dispute that the loan Agreement along with other documents was executed between the parties, accordingly the respondents were bound by the terms of the documents and under liability to pay the installments.
20. Undisputedly the respondent no.1 had defaulted in payment. Respondent nos. 2 & 3 being the guarantor are also liable for the payment due along with principle amount due. The claimant is able to prove its case on the bases of the documents. After going the statement of claim, statement of accounts, evidence and all other documents annexed along with the statement of claim, this Arbitrator is of the opinion that all the respondents are severally/jointly liable for the amount due and payable to the claimant.
21. Accordingly the claim is allowed and an award is passed for a sum of Rs.1,11,12,898/- against the respondents and in favour of claimant.
The claimant would be entitle to interest @18% p. a. on the amount awarded from 13.02.2015 till the final payment is made.
22. Further, claimant is also entitled for cost of litigation a sum of Rs.50,000/- against the respondents. The respondents shall pay severally or jointly the amount to claimant within 30 days from the date of this award."
4. The said award was not challenged by the Appellants. Accordingly, the Respondent sought to execute the award. In the execution proceedings, warrants of attachment have repeatedly been issued since 2017. An application was then moved by the Appellants filing objections against the warrants of attachment. It is in these proceedings that the impugned orders dated 9th January, 2020 have been passed directing attachment of the machinery. The operative portion of the impugned orders reads as under:
"An application u/s 151 CPC filed today on behalf of JD no.2 is being dismissed for want of any merit in the application. There is no merit m the submission that JDs are willing to make payment of Rs. 5 lakh in case DH settles both the execution petition for around Rs. 60 lakhs. It is important to note that total decreetal amount in both the execution petition bearing no.9624/16 and 9658/16 as on date is more than Rs. 2.5 crore.
Warrant of attachment of machines be issued along with police aid. Copy of today's order-sheet be annexed with warrant of attachment to rule out any confusion in issuance of warrant of attachment. To appear before learned ACJ on 25.01.2020 and for report on 27.02.2020."
5. From the above it is clear that as against the total
