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TMI Blog2017 (3) TMI 1552X X X X Extracts X X X X X X X X Extracts X X X X ..... y, it is apparent that the situation would be resolved, in the same manner, as it would have been resolved in cross-suits filed by the rival parties, before different jurisdictional courts. In our considered view, the above conclusion is imperative for a harmonious interpretation of the relevant provisions of the Patents Act." In view of the above we do not feel the necessity of expressing our views on the other issues which are left open. Accordingly we hold that application does not warrant admission and the same is dismissed with cost of ₹ 1,00,000/- (Rs. One Lac). - C.P. No. (IB)-22(PB)/2017 - - - Dated:- 24-3-2017 - M.M. Kumar, C.J. (President) and R. Varadharajan, Member (J) For the Appellant: Vijay Nair, Sanyogita Jain, Prashant Jain and Aparna Malhotra, Advs. For the Respondent: Chetan Sharma, Sr. Adv., Abhishek Swaroop and Abhishek Shivpuri, Advs. ORDER 1. M/s. Annapuma Infrastructure Pvt. Ltd. Ors. - applicants (for brevity 'the applicants) have invoked the provision of Section 9 of Insolvency and Bankruptcy Code 2016 (for brevity 'the Code') with a prayer to trigger Insolvency Process against M/s. SORIL Infra Resources Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing numbered as FAO(OS)(COMM) 20 of 2017 has been filed under section 37 of the Arbitration Act against the order dated 19.12.2016 passed by learned single Judge while dismissing the appeal under section 34 of the Arbitration Act. It has also been pointed out that execution proceedings to recover the amount due under the award dated 9.9.2016 have also been initiated and are pending consideration before Hon'ble Delhi High Court. It is thus evident that the dispute has arisen on account of payment of rent and interest/damages on the rental amount. 5. Mr. Vijay Nair learned counsel for the Petitioner has vehemently argued that the applicant has to be regarded as a 'Operational Creditor' within the meaning of section 9 read with section 5(20) and 5(21) of the Code. A reference has also been invited to the definition of words the 'debt' and 'default' as defined in section 3(11) and section 3(12) of the Code. It has been submitted that the Demand Notice dated 13.1.2017 was served on 16.1.2017. According to the learned counsel on the date of service of Demand Notice the award of the Arbitrator had attained finality as the application u/s. 34 of the Arbitrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te on which a request for referring such a dispute to arbitration is received by the respondent. The 'arbitration proceedings' and it comes to an end in terms of section 32 on the date of announcing the final award or by an order of the arbitral Tribunal in accordance with sub-section (2) of section 32 of the Arbitration Act. According to the learned counsel there are no arbitral proceeding pending in accordance with the provision of section 32 which have come to an end on 9.9.2016. The proceeding could be considered pending between the period contemplated by section 21 and section 32 of the Arbitration Act. In support of his submission learned counsel has placed reliance on the observations made in para 10 of the judgment rendered by Hon'ble High Court of Bombay in the case of Rendezvous sports World v. Board of Control for Cricket in India MANU/MH/2637/2016and argued that the term arbitral proceedings would not include post-award proceedings i.e. proceedings for enforcement of the arbitral award or proceedings to challenge the arbitral award, which arise only after the award is made. Therefore the pendency of appeal u/s. 37 of the Arbitration Act and the execution p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would be attracted only when the said debt is payable to (i) Central Government; (ii) State Government; and (iii) Local Authority. 13. According to the learned counsel sections 8, 9, 5(2), 5(21) must be construe in accordance to the object of the Code as outlined in the long title. Learned counsel has maintained that any external aid for construction of the provisions in the Code like the Committee report must be avoided because it was after the report that the Parliament has passed the code. The Code as it stands must be construed strictly. In support of his submissions learned counsel has invited out attention to para 9 10 of the judgment rendered in the case of Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate AIR 1958 SC 353 14. Mr. Sharma has placed reliance on the judgment delivered by us in Sajive Kunwar v. AMR infrastructure (IB-06(PB) 2017 decided on 16.2.2017) where it has been held that a person who claims to be 'Operational Creditor' must show that he is covered by section 5(20) of the Code which defines the expression 'Operational Creditor'. Such person is also required to satisfy the requirement of section 5(21) by showing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a complete halt. According to the learned counsel it would result in delirious effect and a profit making corporate entity may suffer in its reputation and irreparable loss. 18. It has further been pointed out that arbitration proceeding do not in terms come to an end on the announcement of award which is to pass through the process of challenge u/s. 34 and then u/s. 37 of the Arbitration Act as well as subject to any further proceedings before Hon'ble the Supreme Court. In support of his submissions learned counsel has placed reliance on the observations made in para 10 by a Division of Bombay High Court in the case of DSL Enterprises Pvt. Ltd. v. Mrs. N.C. Chandratre Income tax Officer, TDS-I, Nasik Ors. MANU/MH/0187/2013 and has argued that award would attained finality only after remedies available to a party are exhausted u/s. 34 37 of the Arbitration Act or even in further appeal to Hon'ble the Supreme Court. For the same proposition reliance has also been placed on an another judgment of Bombay High Court rendered in the case of Rajendra N. Mehtra and Ors. v. Prabhudas Liladhar P. Ltd. 2013 (1) Mh.LJ. 532. 19. Mr. Nair for the applicant in rebuttal has arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the corporate debtor demanding repayment of the operational debt in respect of which the default has occurred. 21. A co-joint perusal of the aforesaid provisions makes it clear that a corporate debtor has option available under section 8(2) of the Code. The corporate debtor could either place on record material disclosing the existence of a dispute or to pay the unpaid debt. According to section 5(b) of the Code the expression dispute includes a suit or arbitration proceedings relating to (a) the existence of the amount due; (b) the quality of goods or service or (c) the breach of representation or warranty. The definition of the word 'dispute' is not exhaustive but is, in fact illustrative. In other words a 'corporate debtor' is not left with the only option of showing the existence of dispute by way of a pending suit, arbitration or to show the breach of representation or warranty. The corporate debtor would be well within his right to show that 'goods' and services were not supplied at all or the supply was far from satisfactory in case of demand raised by an 'operational creditor'. Hence a corporate debtor would be well within his rights to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contesting the litigation tooth nail before this forum. In this backdrop respondent has claimed no default within the meaning section 8(1) read with section 3(12) of the Code is deemed to have occurred. It is also pertinent to notice that execution proceedings for enforcement of the award have also been initiated and are pending for consideration of the Hon'ble Delhi High Court on 12.5.2017. 24. In the face of the aforesaid facts we find that there is complete answer to the claim made by the applicant in terms of section 8(2)(a) read with section 9(1) of the 'Code' which bars initiation of insolvency process. It cannot be said that arbitration proceedings have come to an end merely on the dismissal of application under section 34 of the Arbitration Act as sought to be canvassed on behalf of the applicant. The proceedings are yet to attain finality as appeal under section 37 of the Arbitration Act is pending. On behalf of the respondents reliance has rightly been placed on the judgment of the Bombay High Court rendered in the cases of DSL Enterprises Private Ltd. (DB) and Rajendra (SB) (Supra). 25. We have not been able to persuade ourselves to accept the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghtest hesitation in accepting the above contention (fifth in the series of contentions), that even though more than one remedies are available to the respondents in Section 64 of the Patents Act, the word or used therein separating the different remedies provided therein, would disentitle them, to avail of both the remedies, for the same purpose, simultaneously. On principle also, this would be the correct legal position. 23. Keeping in view the submissions advanced at the hands of the learned counsel for the appellants (as have been noticed in the foregoing paragraphs), the question which arises for determination is, that having chosen both the above remedies, which one of the two, should the respondents, be permitted to pursue. The answer to the above query, will, if possible, have to be determined from the provisions of the Patents Act itself. In this behalf we may at the outset record, that learned counsel for the rival parties, did not invite our attention to any provision from the Patents Act, which would provide a clear pointer, to the course to be adopted. Whilst it was undoubtedly submitted, on the one hand, that the choice should fall in favour of the superior foru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India having jurisdiction to grant the relief claimed, or in any Court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court. Explanation-The pendency of a suit in a foreign Court does not preclude the Courts in India from trying a suit founded on the same cause of action. 27. 151. Saving of inherent powers of Court.-Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. Therefore, where an issue is already pending adjudication between the same parties, in a Court having jurisdiction to adjudicate upon the same, a subsequently instituted suit on the same issue between the same parties, cannot be allowed to proceed. A similar question arises for consideration before this Court, in the present controversy. If the respondents in their capacity as any person interested , had file ..... X X X X Extracts X X X X X X X X Extracts X X X X
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