11-EXA 581-10 IN ARB PRO 1-06 & 2-06 24-4.DOC
Santosh
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION EXECUTION APPLICATION NO. 581 OF 2010 IN ARBITRATION PROCEEDING NO. 1 OF 2006 AND ARBITRATION PROCEEDING NO. 2 OF 2006 National Agricultural Co Op Marketing Federation of India (NAFED) Versus Swarup Group of Industries & Anr
…Claimant ...Respondents
Mr AK Thakur, with Shashipal Shankar, for the Claimant. Mr SC Chitgopikar, Deputy Sheriff Present. Mr Mohit Chaudhary, with Ashish Mehta, Prasad Das, Sana Bundeally, i/b Ashish Mehta, for the Judgment Debtor. CORAM: DATED:
PC:1.
G.S. PATEL, J 24th April 2017
The Claimant, The National Agricultural Co-operative
Marketing Federation of India Ltd (“NAFED”) obtained an arbitral interim award dated 3rd December 2008 against the Respondents, The Swarup Group of Industries and one Guruswarup Srivastava.
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11-EXA 581-10 IN ARB PRO 1-06 & 2-06 24-4.DOC
This was followed by a final award dated 31st December 2013 and an additional award dated 18th February 2015. 2.
At this stage, I am concerned only with the interim award. It
appears from reading of that award that it was by consent of both parties. It required the Respondents to the arbitration to pay Rs.104.25 crores to NAFED. The interim award set out the mode in which such payment was to be effected. The interim award did not require direct cash payment but contemplated the transfer of various types of assets, both movable and immovable, in satisfaction of this amount of Rs.104.25 crores. Among the assets was an area of 45,745 Square Feet in Mega Mall, Goregaon, Mumbai. This was already mortgaged to the Claimant. At the time of the interim award it was valued at Rs.58.85 crores. 3.
There were provisions for a further transfer of an additional
built up area of 3283 sq ft in the same premises at an agreed valuation of Rs.4.58 crores, the total area thus being transferred to the Claimant computed at 49,028 sq ft and valueed at Rs.73.43 crores. On transfer of this immovable property the accepted value was to be set off against the liability of Rs.104.25 crores. 4.
This left a balance of Rs.30.82 crores and Clause (f ) of the
interim award said this: “(f) The Respondent shall pay the balance amount of Rs.30.82 crores to the Claimant either by payment of cash or by transferring property or other valued security of equivalent value acceptable to the Claimant which
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11-EXA 581-10 IN ARB PRO 1-06 & 2-06 24-4.DOC
shall also be done within a period of two months from today.”
5.
The interim award makes it clear that these valuations were
good for two months. 6.
It seems that amongst the other properties secured to the
claimant were 25 valuable art works by MF Hussain purchased by the Respondents at the price of Rs.1 crore each. 7.
On 30th April 2015 Mrs Justice Dalvi took up three different
Chamber Summonses which sought to stay the execution of the award. Her order on those Chamber Summonses was carried in Appeal (L) No.433 of 2015. By an order dated 28th April 2016, the order of 30th April 2015 was quashed and set aside. All three Chamber Summonses were restored to file and sent back for disposal de novo on merits. At the time when the parties approached the Appeal Court and took the order of 28th April 2016, they seem to have overlooked the fact that in other Chamber Summonses in execution and based on orders of 21st March 2013 and 23rd June 2015, Mr Justice Shriram had passed orders of 29th March 2016, 2nd April 2016, 15th April 2016 and 27th April 2016. All four of these orders were prior to the Appeal Court order of 28th April 2016 but these were not brought to the notice of the Appeal Court. 8.
The submission on behalf of the Respondents before me
today is that I should interpret the Appeal Court order of 28th April 2016 as implicitly setting aside or nullifying the four orders passed by Mr Justice Shriram on 29th March 2016, 2nd April 2016, 15th
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11-EXA 581-10 IN ARB PRO 1-06 & 2-06 24-4.DOC
April 2016 and 27th April 2016. I do not think that it is possible or even proper for me to do anything of this sort. The parties must approach the Appeal Court (AS Oka and PD Naik JJ) and obtain a clarification that the result of the setting aside of the principal order of 30th April 2016 would be also to set aside all subsequent orders. That is not an order that I can make today especially since Mr Justice Shirram had passed orders in execution and obviously all these orders were passed before the Appeal Court’s order. Consequently, it is for the Appeal Court to clarify what the effect of its order is on the subsequent orders passed by Mr Justice Shriram. 9.
As regards the units of property at Mega Mall, Goregaon,
there is no dispute this is in possession of the Deputy Sheriff. That position must remain unaltered at least for the present until a clarification is obtained from the Appeal Court and further steps can be taken. Mr Justice Shriram’s order of 27th April 2016 carves out an exception for Unit No.12 and Unit No.3-A. This is on the basis that these two units were separately mortgaged to Respondent No.6. Even that position will be remained unchanged for now. 10.
As regards the 25 art works, it seems that these are presently
stored in some cupboard at IndusInd Bank Ltd, Lokhandwala Branch. This is a most unsatisfactory state of affairs. The Deputy Sheriff’s report dated 13th April 2017 lists these art works. Some of the canvases are of very large size (72 inches x 52 inches etc.) At this stage, it is not known whether these art works will fetch Rs.1 crore each. Possibly some may fetch much more, while others may fetch less. At some stage, arrangements will have to be made for a proper auction of these art works, with a reserve bid fixed, and in my view
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this best done by a established Art Auction House and not by the Deputy Sheriff since Art Auctioneers are specialists in valuing art works and conducting such auctions. However I have no manner of doubt that if left as they are in this improper storage at IndusInd Bank, these paintings and art works are likely to suffer damage or a degradation in value. That is not in the interest of either side. 11.
The suggestion across the bar from the Respondents that they
be moved to the Jahangir Art Gallary, the National Gallery in Delhi or the National Gallery Modern Art in Mumbai all must be rejected. These are not bodies that offer proper art warehousing services. The works need to be maintained in an environment that is controlled for humidity and temperature, among other concerns. There is such an commercial enterprise in Mumbai called the Fine Art Warehouse at Wadala. The Deputy Sheriff will therefore for the purposes of preservation of the property immediately contact the Fine Art Warehouse. He will supply an authenticated copy of this order and request the Fine Art Warehouse to store these Art works till further notice. At this stage, the Plaintiff will be required to put the Deputy Sheriff in sufficient funds to pay for the warehousing charges. This is on the understanding that these costs will have to be recovered from the sale proceeds of the art works. In other words they cannot be adjusted against the Claimant’s decretal claim but will be separately recoverable in any case. At a later stage, directions will have to be issued for the auction of these art works. That will have to await a clarification from the Appeal Court. The Deputy Sheriff will make the necessary enquiries with Fine Art Warehouse, obtain an estimate and report to the Court.
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12.
For this limited purpose I will list the matter again on 2nd
May 2017 for directions as to warehousing. 13.
The Fine Art Warehouse will also advise the Deputy Sheriff
whether it is able to supervise the collection and transportation of these art works from the Indusind Bank at Lokhandwala Branch, transit insurance, etc., to the Fine Art Warehouse premises or site. 14.
I realise these arrangements may seem somewhat complicated
but these are, I think, necessary to preserve the value of these art works and all this is clearly in the interest of the Plaintiffs themselves. 15.
List the matter for further hearing on 2nd May 2017.
16.
There is also a question as to the locker rental to be paid to
the Indusind Bank. The Deputy Sheriff will ask them the amount and include that in his report next Tuesday. 17.
The Claimants have deposited an amount of Rs.5,00,000/- as
per the previous order. There is a bill of the valuer for valuing the immovable properties. This is in the amount of Rs.2,73,700/-. The amount will be paid by the Deputy Sheriff from the funds in his hands.
(G. S. PATEL, J.)
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P1-EXA581-10.DOC
Shephali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION EXECUTION APPLIATION NO. 581 OF 2010 IN ARBITRATION PROCEEDING NO. 1 OF 2006 IN ARBITRARION PROCEEDING NO. 2 OF 2006 National Agriculture Co-op Marketing Federatio of India (NAFED) Versus Swarup Group of Industries & Anr
…Plaintiffs …Defendants
Mr SD Chitgopekar, Deputy Sheriff, present. CORAM: DATED:
PC:1.
G.S. PATEL, J 26th April 2017
Not on board. Mentioned at the instance of the Deputy
Sheriff. Fine Arts Warehouse has requested permission to inspect the 25 art works in the Indusind Bank at Lokhandwala, Andheir (E). The Deputy Sheriff may grant the permission and make the necessary arrangements.
(G. S. PATEL, J.)
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