Roads and Bridges Development Corporation of Kerala Ltd. v. K.S & Company

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **WEDNESDAY, THE 17TH DAY OF JANUARY 2018 / 27TH POUSHA, 1939** **OP(C).No. 3430 of 2017** **E.P.NO. 238/2017 OF I ADDITIONAL DISTRICT COURT, ERNAKULAM ------------** ## **PETITIONER(S)/JUDGEMENT DEBTOR :** **THE ROADS AND BRIDGES DEVELOPMENT CORPORATION OF KERALA LTD. 2ND FLOOR, PREETHI BUILDING, MV ROAD, PALARIVATTOM, KOCHI- 682 025, REPRESENTED BY ITS MANAGING DIRECTOR, DR. ASHA THOMAS-IAS.** **BY ADVS.SRI.VIPIN P.VARGHESE SRI.ADARSH MATHEW SRI.DILJITH K.MANOHAR** ## **RESPONDENT(S)/DECREE HOLDER :** **K.S & COMPANY HAVING ITS REGISTERED OFFICE AT PLOT NO.39, ANNA NAGAR, MADURAI- 625 020, REPRESENTED BY ITS PARTNER NOW MANAGING PARTNER K.SUDNARESAN, AGED 53 YEARS, S/O.KRISHNAMURTHY, K.S & COMPANY, PLOT NO.39, ANNA NAGAR, MADURAI- 625 020, NOW AT PLOT NO.473, PALLIVASAL STREET, ANNA NAGAR, MADURA- 625 020.** **BY ADVS. SRI.K.S.BABU** **SMT.N.SUDHA SRI.BABU SHANKAR SMT.BOBBY U. NAIR** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 17-01-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Msd.** **OP(C).No. 3430 of 2017 (O)** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **EXHIBIT P1-P1(6): TRUE COPY OF THE E.P NO.238/2017 OF THE 1 ADDL. DISTRICT JUDGE, ERNAKULAM. EXHIBIT P2-P2(3): TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY THE RESPONDENT IN E.P. NO.238/2017 WITH CORRECT CALCULATION STATEMENT. EXHIBIT P3-P3(5): TRUE COPY OF THE ORDER DATED 04-11-2017 IN E.P NO.238/2017 PASSED BY THE 1ST ADDL. DISTRICT JUDGE, ERNAKULAM.** ## **RESPONDENT(S)' EXHIBITS :** **EXHIBIT R1: THE TRUE COPY OF E.P.NO. 238/2017 FILED BY THE RESPONDENT/DECREE HOLDER BEFORE THE SUB-COURT, ERNAKULAM. EXHIBIT R1(A): THE TRUE COPY OF THE BALANCE STATEMENT DATED 03.10.2017 FILED BY THE PETITIONER/DECREE HOLDER BEFORE THE DISTRICT COURT, ERNAKULAM IN E.P.NO. 238/2017.** **//TRUE COPY//** **P.S.TO JUDGE** ## **Msd.** ## **ALEXANDER THOMAS, J.** ================== O.P(C).No. 3430 of 2017 ================== Dated this the 17[th] day of January, 2018 ## **J U D G M E N T** By the award rendered as early as on 18.5.2009 by the sole arbitrator concerned, Justice Sri.K.K.Narendran (Retired) former Judge of this Court, the respondent herein/decree holder/claimant was allowed to realise an amount of Rs. 3,19,49,950/- along with interest thereon @ 9% p.a. from 19.5.2009 till the date of realisation. Against the arbitral award, the petitioner herein/ judgment debtor had filed O.P.No. 1114/2009 before the District Court, praying to set aside the said award. As per order dated 5.10.2012, the petition filed by the petitioner herein/judgment debtor as O.P.No. 1114/2009 to set aside the award was dismissed by the District Court, Ernakulam. Thereafter, the matter was taken up in Arbitration Appeal No.6/2013 at the instance of the petitioner herein/ judgment debtor before this Court, which was also dismissed on 19.3.2013. Later, the petitioner herein/judgment debtor filed SLP No.14483/2013 before the Apex Court challenging the abovesaid appellate order and the award and the said SLP was also dismissed on 14.2.2017. It is pointed out by both sides that, at the time of the admission of the SLP, the Apex Court had directed the petitioner herein/judgment debtor to deposit Rs.3 crores before the Apex Court and the respondent herein/decree holder was O.P(C)3430/17 - : 2 :- allowed to withdraw the said amount from the Apex Court by furnishing the bank guarantee issued by a scheduled bank. Thereafter, the respondent herein has filed instant execution petition, E.P.No.238/2017 before the Court of 1[st] Addl. District Judge, Ernakulam, to set in motion the execution proceedings so as to realise the entire balance amounts due in respect of the above arbitral award. 2. In the execution petition, the prayer is to call upon the judgment debtor to deposit the E.P. claim to the tune of Rs. 1,85,69,479/and also to attach the amounts that belong to the judgment debtor in the possession of the garnishee and to direct the garnishee to deposit the amount attached before the court and also to order attachment and sale of properties that belong to the J.D and to allow the decree holder to adjust the execution petition claim from the sale proceeds, etc. The execution court on 10.8.2017, had directed the garnishee to deposit Rs. 44,09,655/and accordingly, the garnishee had deposited the said amount. Subsequently, the decree holder and judgment debtor were directed to file their respective calculation statements. The judgment debtor thereafter filed execution application E.A.No.1538/2015 praying to recall the order dated 10.8.2018 directing the garnishee to deposit the above amount. The judgment debtor thus contended that the J.D is a Government owned Company and that if the amount deposited by the garnishee is ordered to be adjusted in the Execution Petition, it will cause irreparable injury to them, etc. The counsel for the respondent-decree holder has placed O.P(C)3430/17 - : 3 :- reliance on the decisions of the Apex Court in rulings as in _**Gurpreet Singh v. Union of India**_ reported in (2006) 8 SCC 457, _**Leela Hotels Ltd. v. Housing & Urban Development Corpn. Ltd.** reported in_ (2012) 1 SCC 302, _**BHEL v. R.S. Avtar Singh & Co.,**_ reported in (2013)1 SCC 243, etc. 3. The execution court as per Ext.P-3 order noted that the entire remaining controversy rested only in a narrow compass as to the correctness of the respective calculation statements. The execution court had directed both sides to file their respective calculation statements. As per the initial calculation statement dated 3.8.2017 filed by the counsel for the decree holder dated 3.8.2017, the amount due from the J.D. is shown as Rs.44,09,655/-. Subsequently, another calculation statement dated 3.10.2017 was filed on behalf of the decree holder by rectifying certain errors and as per the new statement, the amount due to the D.H. is Rs.43,00,815/-. The court below has noted that no further calculation statement was submitted by the counsel for the J.D. disputing the correctness of the calculation statement dated 3.10.2017 submitted by the decree holder. After perusing the materials on record, the court has come to the conclusion that there is no error in the calculation as per the statement dated 3.10.2017 submitted by the decree holder is concerned and that court found that same is acceptable and accordingly, directed that the amount to be deposited by the garnishee is Rs.44,09,655/- and that the amount to be adjusted is Rs. 43,00,815/- and the excess amount deposited O.P(C)3430/17 - : 4 :- and refundable to the J.D. is estimated at Rs. 1,08,840/-. In the light of these aspects, the court below had found that there is no error in the calculation statement dated 3.10.2017 submitted by the decree holder and accordingly, permitted the decree holder to adjust the amount due to them to tune of Rs. 43,00,815/- from the amount deposited by the garnishee and the excess amount to the tune of Rs. 1,08,840/- was directed to be refunded to the J.D. (petitioner herein). In these terms, the court below finally disposed of the E.P. by allowing the same, as mentioned herein above. It is this order at Ext.P-3 that is under challenge. 4. Heard Sri.Vipin P.Varghese, learned counsel appearing for the petitioner/J.D. and Smt.N.Sudha, learned counsel appearing for the respondent/decree holder. 5. Both sides submitted before this Court that the issue posed before this Court is only relating to the correctness or otherwise of the subsequent calculation statement dated 3.10.2017 submitted on behalf of the decree holder, as referred to in para 5 of the impugned Ext.P-3 order. To a specific question posed by this Court to the learned counsel appearing for the petitioner, as to whether the finding made in para 5 of the impugned Ext.P-3 order that no further calculation statement was filed by the counsel for the J.D. to dispute the correctness of the subsequent calculation statement dated 3.10.2017 submitted by the decree holder is correct. To this, the learned counsel for the petitioner, on the basis of the instructions, has fairly submitted that though the petitioner had initially submitted a O.P(C)3430/17 - : 5 :- calculation statement dated 3.8.2017, no further statement was submitted on behalf of the J.D. to dispute the correctness of the aforesaid subsequent calculation statement dated 3.10.2017 submitted by the decree holder, etc. 6. The counsel for the petitioner/judgment debtor has urged that the subsequent calculation statement dated 3.10.2017 submitted by the decree holder is not correct. Whereas the counsel for the respondent/ decree holder would submit that it has been well settled by a catena of rulings especially that of the Constitution Bench of the Apex Court in _**Gurpreet Singh v. Union of India**_ , reported in (2006)8 SCC 457, that if the amount deposited falls short of the decree amount, then the decree holder is entitled to apply the rule of appropriation and the amount deposited should be adjusted first towards the interest and then towards costs, and then only the same can be adjusted as against the principal amount due under the decree, unless the decree otherwise directs and that in the instant case the decree does not say about the manner of appropriation and therefore, the abovesaid legal principal laid down by the Apex Court squarely applies to the facts of this case. It is further pointed out that the abovesaid legal principle laid down by the Constitution Bench of the Apex Court has been followed in a catena of subsequent decisions as _**Leela Hotels Ltd. v. Housing & Urban Development Corpn. Ltd.** reported in_ (2012) 1 SCC 302, _**BHEL v. R.S. Avtar Singh & Co.,**_ reported in (2013)1 SCC 243, etc. O.P(C)3430/17 - : 6 :- 7. Initially this Court had granted interim stay in this Original Petition (Civil) as per order dated 30.11.2017. Later the respondent herein/ decree holder filed I.A.No. 2233/2017 in the above O.P(C). praying for a direction for disbursal of the amounts deposited before the execution court on furnishing of bank guarantee. This Court after hearing both sides had passed interim order dated 21.12.2017 on I.A.No. 2233/2017 (filed by the D.H) in O.P(C).No. 3430/2017, which reads as follows: _It is stated by the applicant in the I.A/respondent in the O.P(C)/decree holder in para 5 of the affidavit dated 1.12.2017 accompanying the I.A that on 3.10.2017, the Additional District Court-I, Ernakulam has closed the Execution Petition No.238/2017 after recording full satisfaction of the award/decree passed by the Sole Arbitrator and the Cheque Application was also allowed. It is pointed out that the amount deposited comes to Rs.43,00,815/- (Rupees Forty Lakhs Eight Hundred and Fifteen only). It is accordingly prayed in the above I.A that directions may be issued to permit the applicant herein to withdraw the said amount on furnishing bank guarantee of City Union Bank, Madurai Branch, etc. It is also pointed out by the applicant herein that after passing of the impugned Arbitral Award, the judgment debtor had filed O.P(Arb).No.1114/2009 before the Additional District Court concerned which was dismissed, which was challenged in Arbitration Appeal No.6/2013 before this Court, which was also dismissed by this Court and later, the matter was taken up in S.L.P.No.14483/2013 before the Apex Court, which was also dismissed on 14.2.2017. It was thereafter, the applicant herein has moved the Execution Petition. The main objection raised by the respondents in the I.A/petitioner in the O.P is that there are substantial mistakes in the calculation statement. But it is pointed out by the applicant in the I.A that the petitioner in the Original Petition has never filed any objections. The respondent has already produced the calculation statement as per Ext.R-1(a) along with counter affidavit of that party. In case the petitioner in the Original Petition has any objections to Ext.R-1(a) calculation statement, it is for the petitioner to submit their version of the calculation statement to establish as to how the computation made in Ext.R-1(a) calculation statement is wrong. The issue as to whether there are any mistakes in the computation statement submitted by the applicant will be decided after the ensuing holidays. In the meanwhile, it is ordered in the interest of justice that the court below concerned forthwith will release 90% of the above said deposited amount to the applicant herein, on condition that the applicant herein should furnish sufficient bank guarantee of the City Union Bank, Madurai Branch, to the satisfaction of the court below concerned.”_ 8. It is now pointed out by respondent/decree holder that so far the amount has not been disbursed to the decree holder by the court below in compliance with this Court's interim order dated 21.12.2017 presumably O.P(C)3430/17 - : 7 :- on account of Review Petition, R.P.No. 20/2018 filed at the instance of the Original Petitioner so as to impugn the interim order dated 21.12.2017. This Court as per the abovesaid interim order dated 21.12.2017 had also directed both sides to file their respective calculation statements and this Court had also ordered that as the respondent herein has already produced the abovesaid calculation statement dated 3.10.2017 as Ext. R-1 (a) along with the counter affidavit, then in case the petitioner in the O.P(C) has any objection to Ext. R-1 (a) calculation statement dated 3.10.2017, it is for the petitioner to submit their version of the calculation statement so as to establish before this Court as to how the computation made in Ext.R-1 (a) calculation statement is wrong and that issue as to whether there are any mistakes in the computation statement submitted by the applicant could be considered later. 9. The learned counsel for the respondent/decree holder has filed calculation statement dated 16.1.2018 in this O.P(C) stating that in Ext. R-1 (a) dated 3.10.2017, interest for ten days was omitted to be included and that the actual amount due to the decree holder comes to Rs. 43,35,401/and not as Rs. 43,00,815/- as shown in Ext. R-1 (a) calculation statement dated 3.10.2017. However, in spite of this Court order dated 21.12.2017, it is rather surprising that even till date the petitioner has not cared to submit their version of the calculation statement to show the details as to how the calculation statement of the decree holder as per Ext. R-1(a) dated 3.10.2017 is wrong. The submission now made by the petitioner's counsel O.P(C)3430/17 - : 8 :- is that they do not propose to file any calculation statement before this Court and they rely on their calculation version is the one shown in para 5 of Ext.P-2 counter affidavit dated July, 2017 filed by them in E.P.No. 238/2017. Para 5 of Ext.P-2 counter affidavit dated July, 2017 filed by the petitioner herein before the execution court reads as follows: _“6. Based on the award dtd.18.05.2009, the actual amount due to claimant is as follows:_ _- Amount of award Rs. 3,19,49,950 - Amount deposited in Supreme Court on Rs. 3,00,00,000 12.07.2012 Balance claim - Rs. 19,49,950 - Interest from 18.05.2009 to 12.07.2013 Rs. 1,19,43,154 for Rs. 3,19,49,950 31949950 x 1516 x 9 365 100 - Interest from 12.07.2013 to 06.06.2017 Rs. 6,85,154 for 1949950 x 365 1001425 x 9 --------------Total - Rs. 1,45,78,258” ===========_ The abovesaid aspects Ext.P-2 counter affidavit do not disclose any reasons or the details as to how and why the computation statement in Ext. R-1 (a) dated 3.10.2017 is wrong. In view of the aforesaid stand taken by the petitioner in not even filing their version by way of statement as how Ext. R-1 (a) calculation statement dated 3.10.2017 submitted by the petitioner is wrong, this Court could have dismissed this Original Petition, as the petitioner has not cared to provide the details as sought for in the interim order dated 21.12.2017 to show as to how Ext.R-1(a) calculation statement dated 3.10.2017 is wrong, etc. O.P(C)3430/17 - : 9 :- 10. However, taking into account the fact that the petitioner is a Company owned by the Government of Kerala, this Court is inclined to take a lenient view in the matter. At the same time, the decree holder cannot be made to suffer indefinitely inasmuch as the award was rendered as early as on 18.5.2009. Successive challenges made as against the correctness of the award have already been repelled by various courts concerned including the Apex Court. The execution court has noted that the petitioner/judgment debtor had not bothered to file any subsequent calculation statement, after the submission of Ext.R-1(a) calculation statement dated 3.10.2017 submitted by the decree holder. An opportunity was given by this Court to the petitioner to submit detailed statement and their versions to show as to how and why Ext.R-1 (a) dated 3.10.2017 is wrong. But still the petitioner has not chosen to avail that facility. Whereas even without any specific direction from this Court, the decree holder has ventured to file another detailed calculation statement dated 16.10.2017 before this Court showing that interest for 10 days was omitted to be included in Ext. R-1(a) dated 3.10.2017 and that the actual amount is slightly higher than the one shown in Ext.R-1(a). Accordingly, in the interest of justice it is ordered in modification and supersession of the interim order dated 21.12.2017 that the execution court concerned will forthwith release 80% of the amount deposited, to the respondent herein/ decree holder on condition that the respondent decree holder should furnish sufficient bank guarantee of a scheduled bank to the satisfaction of O.P(C)3430/17 - : 10 :- the court below concerned. The respondent's counsel submits that they are prepared to furnish sufficient bank guarantee of the City Union Bank, Madurai, to the satisfaction of the court below concerned. The said submission made on behalf of the respondent is recorded. However, it is also ordered in the interest of justice it is ordered that the matter is remitted to the execution court concerned only for the limited purpose for giving an opportunity to both sides to submit their calculation statements once again. Accordingly, Smt.N.Sudha, learned counsel appearing for the respondent submits on the basis of the instructions of her party that the respondent/decree holder will submit a fresh calculation statement based on the calculation statement 16.1.2018 now submitted before the execution court within 3 days. The said submission made on behalf of the respondent/decree holder is recorded. The petitioner is given one last opportunity to submit their version of the calculation statement showing as to who Ext.R-1(a) calculation statement dated 3.10.2017 and the present calculation statement dated 16.1.2018 filed by the respondent/decree holder is wrong, etc. This should be done by the petitioner within one week from today. The court below will consider the submissions made on both sides regarding the correctness of the calculation statement and then pass appropriate orders thereon. The court below should also duly advert to the specific contention raised by the respondent decree holder based on the Apex Court ruling in _**Gurpreet Singh v. Union of India**_ , reported in (2006)8 SCC 457 and other rulings stated herein above. The execution O.P(C)3430/17 - : 11 :- court will pass necessary orders thereon without much delay, preferably within a period of two weeks from the date of production of a certified copy of this judgment. The parties will produce the certified copies of this judgment along with their respective calculation statements. It is made clear that that in case the petitioner does not file their calculation statement at least within one day prior to the date of hearing, then the execution court may proceed further with the matter based on the available materials on record and then pass appropriate orders. The direction to disburse 80% of the amount to the respondent/ decree holder subject to furnishing a bank guarantee will be dependent on the outcome of the orders to be passed by the court below as directed above. With these observations and directions, the aforecaptioned Original Petition (Civil) stands finally disposed of. Sd/sdk+ **ALEXANDER THOMAS, JUDGE** TRUE COPY P.S. TO JUDGE