w w w . L a w y e r S e r v i c e s . i n



INDO Engineering Works Vrsus Rashtriya Ispat Nigam Ltd.

    Civil Revision Petition Nos. 489 & 427 of 2021

    Decided On, 16 July 2021

    At, High Court of Andhra Pradesh

    By, THE HONOURABLE MR. JUSTICE C. PRAVEEN KUMAR & THE HONOURABLE MR. JUSTICE B. KRISHNA MOHAN

    For the Petitioner: Rama Chandra Rao Gurram, Advocate. For the Respondent: W.B. Srinivas, Advocate.



Judgment Text

Common Order: (B. Krishna Mohan, J.)

CRP No.489 of 20201 :

1. This Civil Revision Petition arises against the Order in I.A.No.222 of 2019 in C.A.O.P.No.12 of 2019 on the file of the Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam dated 20.12.2019 allowing the petitioner to with draw 25% of the deposited amount out of 75% of the awarded amount deposited in the Court without furnishing any security and the remaining amount to be withdrawn on furnishing bank guarantee with an undertaking to repay the said withdrawal amount subject to outcome of the Judgment and Decree in CAOP No.12 of 2019 pending before the trial Court.

2. Heard the learned counsel for the petitioner and the learned counsel for the respondent No.1.

3. The petitioner herein is the petitioner in the interlocutory application and the 1st respondent in the CAOP No.12 of 2019 before the trial Court. The respondents herein are the respondents in the interlocutory application and the 1st respondent herein is the petitioner in CAOP No.12 of 2019 before the Court below.

4. The 2nd respondent herein is only the proforma party.

5. It is the case of the petitioner herein that it has filed I.A.No.222 of 2019 in CAOP NO.12 of 2019 on the file of the Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam under Section 19 of Micro, Small and Medium Enterprises Development Act, 2006 R/W Section 151 of C.P.C., seeking an order of payment of Rs.1,85,33,990.86 ps. (Rupees one Crore eighty five lakhs thirty three thousand nine hundred ninety and eighty six paise only) to the credit of its current account No.32282344011 of State Bank of India, Dwarakanagar Branch, Visakhapatnam pending disposal of the main application of the 1st respondent herein in CAOP No.12 of 2019 filed under Section 34 of the Arbitration and Conciliation Act, 1996. The petitioner herein averred that the 1st respondent herein filed the above said CAOP before the trial Court to set aside the award passed by the 2nd respondent herein in the proceedings No.21C/IFC/12926 dated 22.11.2018 and the same is pending. While so, the trial Court directed the 1st respondent to deposit 75% of the awarded amount before 30.07.2019 vide its Order in I.A.No.01 of 2019 in CAOP No.12 of 2019. Accordingly, the 1st respondent herein has deposited initially an amount of Rs.1,63,16,833.86 ps (Rupees One Crore sixty three lakh sixteen thousand eight hundred thirty three and eight six paise only) purported to be an equivalent amount for the 75% of the awarded amount. Since it is not an equivalent to the 75% of the awarded amount, the petitioner herein raised the said objection claiming the balance amount of Rs. 22,70,157/- (Rupees Twenty two lakh seventy thousand one hundred and fifty seven only) to be deposited by the 1st respondent herein and the same was considered and directed it to be paid a sum of Rs.22,17,157/- instead of Rs.22,70,157/- by the trial Court in it’s order. Then the 1st respondent herein deposited a further sum of Rs.22,70,157/-. With that a total sum of Rs.1,85,33,990.86 paise is lying with the credit of the trial Court, instead of Rs.1,85,86,990.20 paise towards an equivalent amount of 75% of the awarded amount payable by the 1st respondent herein. The deposit of 75% of the awarded amount is a condition precedent to maintain an application under Section 34 of the Arbitration and Conciliation Act. Hence it has deposited the above said amount in CAOP No.12 of 2019 before the trial Court. It is further averred that as the petitioner herein is also entitled for the interest amount as per the award till its realization under the Micro, Small and Medium Enterprises Development Act, it has prayed through the above said I.A., before the trial Court seeking to pass an order of depositing of Rs.1,85,33,990.86 (Rupees One crore eighty five lakh thirty three thousand nine hundred ninety and eighty six paise only) to the credit of the petitioner’s account pending disposal of the main CAOP No.12 of 2019 of the trial Court.

6. The 1st respondent herein contested the said application before the Court below contending that the said petition is not maintainable either under law or on facts and the 1st respondent has already deposited 75% of the awarded amount before the trial Court in due compliance of the Orders of the said Court, the petitioner has already received the entire amount due to it for the works done as agreed and the award passed by the 2nd respondent herein/the arbitrator is in correct and the interest awarded by it is without any principal due there under and without jurisdiction. Hence, the 1st respondent herein was constrained to file an application under Section 34 of the Arbitration and Conciliation Act, which is pending in CAOP No.12 of 2019 on the file of the Special Judge for Trial and disposal of Commercial Disputes, Visakhapatnam. Since the 1st respondent herein has got a very case to succeed in the main application, the above said I.A., filed by the petitioner herein cannot be ordered as it becomes difficult to realise the huge amounts from the petitioner herein, in the event of allowing the CAOP No.12 of 2019 by the said Court. Hence, sought for dismissal of the above said I.A.

7. By considering the rival contentions of both the sides, the trial Court passed a detailed order in I.A.No.222 of 2019 in CAOP No.12 of 2019 dated 20.12.2019 and the operative portion of the same is as follows :

“In the result, the petition filed by the petitioner is allowed. The petitioner is permitted to withdraw 25% of the deposited amount out of 75% lying in the Court without furnishing any security and the remaining amount on furnishing bank guarantee. The petitioner is liable to repay the said withdrawal amount to the respondent if the respondent has succeeded in the main application filed under Section 34 of Arbitration and Conciliation Act i.e., CAOP 12 of 2019 which is pending on the file of this Court. There shall be no order as to costs.”

8. Aggrieved by the same, the petitioner herein filed the above said Civil Revision Petition.

9. The learned counsel for the petitioner contends that imposing a condition to withdraw the total 75% of the deposited amount by furnishing a bank guarantee as per the orders of the trial Court is onerous and the petitioner herein cannot comply with the said condition as it is a small scale unit. The trial Court ought to have seen the “undertaking” given by the petitioner herein and as such it should have allowed the petitioner to withdraw the total deposited amount without furnishing any security.

10. On the other hand, the learned counsel appearing for the 1st respondent contended that the 1st respondent has got a good case in the pending CAOP No.12 of 2019 before the trial Court and it has got all fair chances of success. In the event of succeeding the same it would be difficult for the first respondent herein to recover the amounts from the petitioner herein if no security is furnished by them. However, agreed for withdrawal of the deposited amount with furnishing third party security and in terms of the undertaking given by the petitioner herein before the trial Court.

11. On perusal of the Order of the trial Court and the material available on record, it is to be seen that the 2nd respondent herein passed an award in the proceedings No.21C/IFC/12926 dated 22.11/2018 directing the 1st respondent herein to pay an amount of Rs.2,17,55,778.48 ps (Rupees Two crores seventeen lakh fifty five thousand seven hundred seventy eight and forty eight paise only) under the provisions of Micro, Small Medium Enterprises Development Act, 2006. As stated supra, questioning the same, the 1st respondent herein filed CAOP No.12 of 2019 on the file of the Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam under Section 34 of Arbitration and Conciliation Act, 1996 and as per the orders of the trial Court, the 1st respondent herein deposited an amount of Rs.1,85,33,990.86 paise, as against the claim of Rs.1,85,86,990.20 paise towards 75% of the awarded amount to the credit of the CAOP No.12 of 2019 before the Court below for entertaining the said O.P.

12. Now the issue left over for consideration is whether to allow the petitioner to withdraw the above said deposited amount by furnishing security or without any security? The same is resolved as hereunder.

13. In the result, the order of the trial Court dated 20.12.2019 is modified as follows :

“The petitioner herein is permitted to withdraw the 75% of the awarded amount deposited by the 1st respondent herein in the Court below through its current account No.32282344011 of the State Bank of India, Dwarakanagar Branch, Visakhapatnam subject to certain conditions:

1) Out of the amount so deposited 25% of the amount, if not already withdrawn, be permitted to be withdrawn without furnishing any security.

2) The remaining 50% of the amount so deposited may be permitted to be withdrawn on furnishing third party security.

3) The withdrawals so made shall be subject to the outcome of CAOP No.12 of 2019 on the file of the Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam.

4) Further, the withdrawal of Rs.1,85,33,990.86 ps (Rupees One crore eighty five lakh thirty three thousand nine hundred ninety and eighty six paise only) shall be with an understanding th

Please Login To View The Full Judgment!

at the petitioner would repay the said amount subject to the final orders in CAOP No.12 of 2019. 5) The third party security shall be furnished to the satisfaction of the trial court. 6) The properties so furnished as security shall be accompanied with a valuation certificate issued by the concerned officer of the Sub- Registrar’s Office and the genuinity of the documents so furnished shall be accompanied with the certificate issued by the MRO.” 14. Accordingly, this Civil Revision Petition is disposed of. There shall be no order as to costs. As a sequel, miscellaneous petitions, if any pending in this case, shall stand closed. CRP No.427 of 20201 : 15. In view of the orders passed in Civil Revision Petition No.489 of 2021 no further orders are necessary in the connected Civil Revision Petition No.427 of 2021. Accordingly, this Civil Revision Petition is dismissed, with no costs. As a sequel, miscellaneous petitions, if any pending in this case, shall stand closed.
O R