V. Ramasubramanian ORDER
V. Ramasubramanian, J.
SPECIAL LEAVE PETITION (CIVIL) No. 11476-77 OF 2021
61. Despite a fine analysis by my learned sister, of the relevant provisions of the Reserve Bank of India Act, 1934 and the Banking Regulation Act, 1949 and the fine distinction that the Hon'ble Judge has brought out between a 'scheduled Bank' defined in the Act, in contrast to a 'scheduled Indian Bank' not defined anywhere statutorily, I regret my inability to persuade myself to agree to the view taken by my learned sister. In my considered view, the special leave petitions deserve to be dismissed. The reasons are provided herein below.
62. As pointed out by my sister, the award-debtor has come up with these Special Leave Petitions challenging (i) the dismissal of an appeal Under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act'); and (ii) the dismissal of a review petition arising there from. The appeal Under Section 37 of the Act arose out of the rejection of a petition for recalling an order passed in an application for interim measure Under Section 9 of the Act.
63. The Petitioner suffered an arbitration award dated 17.10.2017 in a sum of Rs. 142,41,14,499/-. The award is the subject matter of challenge in a petition OMP (COMM.) No. 432 of 2017 Under Section 34 of the Act. It appears that the petition Under Section 34 was accompanied by an application for stay of execution of the award, but the same has not yet been finally disposed of.
64. However the Respondent filed an independent petition Under Section 9 of the Act, and sought a direction to the Petitioner to secure the award amount. In the said petition in I.A. No. 11128 of 2018 in OMP (I)(COMM.) No. 523 of 2017, an order was passed on 12.02.2019. Since the genesis of the dispute before us could be traced to the said order, it is extracted 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 along with 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 furnished within the next two (2) weeks. It is ordered accordingly.
4. The judgment Debtor will file the affidavit within two (2) weeks; with a copy being furnished to the counsel for the decree holder.
5. Insofar as the bank guarantee is concerned, it will be furnished within 6 weeks as indicated by the counsel.
6. Further, the bank guarantee in the sum of Rs. 30 crores will be that of a scheduled bank located in India.
7. Renotify the matter on 31.7.2019.
8. In the meanwhile, the judgment Debtor will continue to make deposit with the Registry of this Court in terms of the order dated 24.7.2018.
65. Pursuant to the aforesaid order, the Petitioner furnished a bank guarantee issued by the Industrial and Commercial Bank of China Limited, Mumbai Branch dated 22.03.2019 (hereinafter referred to ICBC).
66. It appears that thereafter the Respondent moved another application in I.A. No. 5185 of 2019 in OMP(I)(COMM.) No. 523 of 2017 seeking Garnishee Orders in respect of the amounts that the Petitioner was entitled to receive under a settlement agreement entered into with one of their customers. While dealing with the said application, the learned Judge found that instead of furnishing a bank guarantee of a scheduled Indian bank, the Petitioner had furnished bank guarantee of ICBC, in view of the confusion created in paragraph 6 of the order dated 12.02.2019. Therefore, by an order passed on 09.04.2019, in I.A. No. 5185 of 2019, the learned Judge directed the Petitioner to substitute the bank guarantee of ICBC, with a bank guarantee of a scheduled Indian bank. The relevant portion of the order passed by the learned judge in I.A. No. 5185 of 2019 dated 09.04.2019 reads as follows:
... ... ...
5. Furthermore, Mr. Sethi says that in compliance of the order dated 12.02.2019 which required the Respondent to furnish a bank guarantee of a Scheduled Bank, the Respondent has complied with the same and submitted a bank guarantee of Industrial and Commercial Bank of china Limited (in short "ICBC")
6. However, a careful perusal of the order would show that Mr. Sethi had offered to furnish a bank guarantee of a Scheduled Indian bank and that while dictating the operative part of the order, I had indicated that it would be a scheduled bank located in India, therefore, the confusion, if any caused is now removed. The Respondent will substitute the bank guarantee filed with a guarantee of a Scheduled Indian bank of an equivalent value.
... ... ...
67. It is relevant to point out here that the order dated 09.04.2019 was passed by the very same Judge who passed the order dated 12.02.2019. The learned Judge was thus aware of what transpired in court on 12.02.2019 and hence recorded in the order dated 09.04.2019 as to what happened in court on 12.02.2019. It is needless to emphasize that what is recorded in a judicial order about what transpired during the hearing in court, is to be taken to be a correct reflection of what transpired.
68. However, the Petitioner filed an application in I.A. No. 7096 of 2019 seeking to recall the directions contained in paragraph 6 of the order dated 09.04.2019. The main grievance as projected by the Petitioner in the said petition was that the non-acceptance of the bank guarantee furnished by ICBC may be taken as a reflection on the reputation of the bank.
69. But by an order dated 16.05.2019, the learned Judge dismissed I.A. No. 7096 of 2019, clarifying that the credentials of ICBC are not at all doubted and that what was sought to be done by the order dated 09.04.2019, was merely to correct an error that crept in the order dated 12.02.2019. Paragraph 5 of the order dated 16.05.2019 reads as follows:
... ... ...
5. I may clarify, at the outset, that it is not this Court's endeavour to doubt in any manner the credentials of ICBC. The record, however, shows that the applicant/Respondent had in fact, on its own, offered to furnish a bank guarantee of a Scheduled Indian Bank. The confusion, if any, in the mind of the applicant/Respondent, as rightly pointed out by Mr. Nigam, was removed on 09.04.2019. The applicant/Respondent has moved this application after nearly four weeks of the clarification issued in that behalf. Thus, having passed an order based, essentially, on the offer made by the counsel for the applicant/Respondent, I do not see any good reason to recall the direction. ...
70. Challenging the order dated 16.05.2019, passed in I.A. No. 7096 of 2019, the Petitioner moved an intra-court appeal in FAO(OS) (COMM.) No. 136 of 2019 Under Section 37 of the Act read with Section 13 of the Commercial Courts Act, 2015. This appeal was dismissed by the Division Bench by an order dated 27.11.2020 primarily on the ground that the order under appeal was an interim one which is largely discretionary and that the scope and power of the appellate court in appeals against interim orders is limited to certain factors.
71. The Petitioner thereafter moved an application for review in R.P. No. 5 of 2021 seeking a review of the order dated 27.11.2020. The review petition was dismissed by an order dated 12.03.2021. Therefore, challenging the dismissal of the appeal and the dismissal of the review petition, the Petitioner has come up with these Special Leave Petitions.
72. Thus we have 2 Special Leave Petitions, one challenging the dismissal of the appeal Under Section 37 and another challenging the dismissal of the review petition. The SLP arising out of the order passed in the review petition deserves to be thrown out without much ado, since the refusal of a court to review its order due to the absence of the parameters prescribed in Order 47 Rule 1 Code of Civil Procedure, cannot give rise to a substantial question of law of public importance, warranting our interference Under Article 136.
73. In so far as the other SLP challenging the order passed in the appeal Under Section 37 of the Act is concerned, the same arises out of an interim order passed Under Section 9 of the Act. As rightly observed by the Division Bench of the High Court, interim orders are discretionary and there is no question of interference with the exercise of the discretion, even in an intra-court appeal, much less in an SLP Under Article 136.
74. All that the learned Judge did on 09.04.2019, was to correct a mistake that inadvertently crept in his order. The correction that the learned Judge sought to make, was in tune with the very offer made by the Petitioner at the first instance on 12.02.2019. When an interim order has been passed particularly in a fact situation arising out of an offer made by one of the parties, especially by the very same learned Judge, I fail to understand how the case can be elevated to the status of one raising a substantial question of law warranting our interference Under Article 136.
75. I have extracted in full, the first order dated 12.02.2019 and the relevant portions of the orders dated 09.04.2019 and 16.05.2019. The order dated 12.02.2019 shows (i) that it was not an adjudicatory order but passed entirely on the basis of an offer made by the Petitioner herein; and (ii) that paragraphs 4 and 5 of the order gave two weeks time to the Petitioner to file an affidavit and six weeks time to furnish bank guarantee. The statement of the learned Senior Counsel for the Petitioner to file an affidavit is recorded in paragraph 1 of the order dated 12.02.2019. Paragraph 1 of the order dated 12.2.2019 indicates three items with respect to which the Petitioner undertook to file an affidavit. Item No. (iii) of paragraph 1 is very specific that one of the contents of the affidavit should be to furnish a bank guarantee in a sum of Rs. 30 crores of a 'scheduled Indian bank'. Paragraph 5 directs the Petitioner to furnish bank guarantee within six weeks 'as indicated by the counsel'.
76. To a pointed question whether an affidavit containing all the three items mentioned in paragraph 1 was filed or not, as directed in paragraph 4 of the order dated 12.02.2019, the reply of Mr. K.V. Vishwanathan, learned Senior Counsel for the Petitioner was that an affidavit containing the matters indicated in Item Nos. (i) and (ii) of paragraph 1 of the order was filed and that in view of the directions contained in paragraph 6 to furnish a bank guarantee of a scheduled bank located in India, there was no necessity to incorporate in the affidavit, the matter covered by Item No. (iii) of paragraph 1.
77. But I do not agree. If a party to a proceeding invites an order by making an offer, he is obliged to honour the commitment made in the form of the offer. The contention of Mr. K.V. Vishwanathan that his client's offer in paragraph 1(iii) of the order dated 12.02.2019 to furnish a bank guarantee of a scheduled Indian bank stood modified by paragraph 6 of the order, is not acceptable. This is for the reason that the very same learned Judge from whom the order dated 12.02.2019 was invited, clarified on 09.04.2019 that what he had in mind was what was actually offered by the Petitioner. Once the same learned Judge has clarified that there was no intention to accept the offer made by the Petitioner with a modification, it is not open to the appellate court to upset the discretion exercised by the learned Judge.
78. Both in the orders dated 09.04.2019 and 16.05.2019, the very same learned Judge had clarified (i) as to what transpired in court; (ii) as to what was offered; and (iii) as to what was the purport of the order dated 12.02.2019. Therefore, the matter should be allowed to rest there.
79. Even the contention that the credentials of ICBC will be taken to have been doubted, was considered by the learned Judge in his order dated 09.04.2019 and the matter was clarified. Therefore, the question of any harm to the reputation of ICBC does not arise.
80. Lastly it is contended by Mr. K.V. Vishwanathan, learned Senior Counsel for the Petitioner that the bank guarantee was taken by the Petitioner from ICBC, upon payment of a non-refundable charge of Rs. 30 lakhs and that therefore assuming that there was a mistake on the part of the Court, it cannot be corrected by the Court resulting in a financial loss of Rs. 30 lakhs to the Petitioner. The maxim "actus curiae neminem gravabit" is sought to be invoked by the learned Senior Counsel for the Petitioner.
81. But in my considered view the Petitioner has to blame itself, for the loss if any. The order dated 12.02.2019 gave (i) two weeks time to the Petitioner to file an affidavit incorporating all the three items of matters indicated in paragraph 1 of the order dated 12.02.2019; and (ii) six weeks time to furnish bank guarantee as indicated by the counsel. Therefore the Petitioner ought to have filed an affidavit containing all the three ingredients, before taking the bank guarantee from ICBC. If they had done so, the affidavit would have contained a statement, in tune either with what was undertaken by them or with what was mentioned in the order. The filing of an affidavit in such a manner, would have given a wake up call to the Respondents and shown the bonafides of the Petitioner. But without doing so, the Petitioner filed an affidavit containing only those matters covered by Items (i) and (ii) of paragraph 1 and thereafter furnished a bank guarantee of ICBC. Since the Petitioner did not adopt a course of action as undertaken by them, it is not open to them to say that they were misled by the direction in paragraph 6 of the order dated 12.02.2019 and that therefore they should not be prejudiced on account of a mistake committed by the court.
82. This is a case where the Petitioner, after making a clear offer to furnish a bank guarantee of a scheduled Indian bank, has chosen to take advantage of a mistake that crept in paragraph 6 of the order. Therefore, he is not entitled to take advantage of the Latin maxim "actus curiae neminem gravabit".
83. In my humble considered view, these special leave petitions do not deserve to be entertained Under Article 136 of the Constitution of India in view of the fact (i) that the very same Judge who passed the first Order dated 12.02.2019, clarified the same by his subsequent Order dated 09.04.2019; (ii) that the same learned Judge dismissed on 16.05.2019, the petition to recall the Order dated 09.04.2019; (iii) that the Commercial Division Bench of the High Court dismissed the appeal arising out of the Order dated 16.05.2019; and (iv) that the Commercial Division Bench again reiterated its orders, by dismissing the review petition. We must remember that all this arose out of an interim measure Under Section 9 of the Act and the Petitioner is seeking to upset all of this in a petition Under Article 136 of the Constitution as though there is a substantial question of law of great importance.
84. The question whether there exists statutorily, a distinction between "a Scheduled Indian Bank" and "a Scheduled Bank located in India" does not arise for consideration in this case, as the dispute primarily revolves around what was offered in Court by one of the parties, what was accepted in Court, and what was recorded in the Order and clarified later. If without any offer from the Petitioner, an adjudication had been made by the Court directing the Petitioner to furnish bank guarantee of a particular type of bank and a dispute had been raised thereafter, it is only then that a question of law as to the status of such a bank with reference to the statutory provisions, would have arisen.
85. Therefore, in my considered view and with the greatest of respect for my learned Sister, I deem it fit to dismiss the Special Leave Petitions as not giving rise to any substantial question of law warranting our interference Under Article 136 of the Constitution.
ORDER
Since we have not been able to agree, let the matter forthwith be placed before Hon'ble the Chief Justice of India for appropriate directions.
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