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Friday, December 7, 2018

Since GSHL and GSPI failed to fulfill their complete obligations under the Further Settlement Agreement dated 17.05.2012,under Section 73 of the Arbitration and Conciliation Act, 1996 , the appellant ­ STC herein filed an Execution Petition bearing No.337/2014 in the High Court of Delhi on 30.08.2014 against GSHL (R­1), GSPI (R­2) and Mr. Pramod Mittal, Chairman, GSHL(R­3) seeking to execute the Settlement Agreements dated 15.11.2011 and 17.05.2012 against all the respondents for recovery of the balance outstanding amounts due and payable. - The Delhi High Court vide order dated 09.03.2015, dismissed the Execution Petition along with the accompanying applications on the ground that admittedly none of the judgment­debtors is located within the jurisdiction of the Court. The Registered Offices of respondent Nos. 1 and 2 were outside India. The Execution Petition could be entertained by a Court within whose jurisdiction the judgment­debtors, or their properties were situated. That since none of them is ordinarily resident within the jurisdiction of the Court, the Execution Petition could not be entertained, and was dismissed with liberty to the decree­holder to approach the appropriate court for enforcement of the Settlement Award in accordance with law.- Pending spl, at the directions several payments were made and finally a demand draft for Rs.800 crores was made - so entire amount was made - the question of interest was left remains - on compromise to put a full stop to the litigation - it was directed to pay interest 8% peranum and matter was closed.

Since   GSHL   and   GSPI   failed   to   fulfill   their complete obligations under the Further Settlement Agreement dated 17.05.2012,under Section  73 of  the Arbitration   and   Conciliation   Act,   1996  , the appellant ­ STC herein   filed   an   Execution   Petition   bearing No.337/2014   in   the   High   Court   of   Delhi   on 30.08.2014 against GSHL (R­1), GSPI (R­2) and Mr. Pramod   Mittal,   Chairman,   GSHL(R­3)   seeking   to execute   the   Settlement   Agreements   dated 15.11.2011   and   17.05.2012   against   all   the respondents for recovery of the balance outstanding amounts due and payable. -  The   Delhi   High   Court  vide  order   dated 09.03.2015, dismissed the Execution Petition along with the accompanying applications on the ground
that   admittedly   none   of   the   judgment­debtors   is located   within   the   jurisdiction   of   the   Court.   The Registered Offices of respondent Nos. 1 and 2 were outside   India.   The   Execution   Petition   could   be entertained by a Court within whose jurisdiction the judgment­debtors, or their properties were situated. That since none of them is ordinarily resident within the jurisdiction of the Court, the Execution Petition could not be entertained, and was dismissed with liberty   to   the   decree­holder   to   approach   the appropriate court for enforcement of the Settlement Award in accordance with law.- Pending spl, at the directions several payments were made and finally a demand draft for Rs.800 crores was made - so entire amount was made - the question of interest was left remains - on compromise to put a full stop to the litigation - it was directed to pay interest 8% peranum and matter was closed.

Hon'ble Mr. Justice Abhay Manohar Sapre 
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.11907  OF 2018
[Arising out of SLP (C) No.14585 of 2015]
State Trading Corporation of India
Ltd.          ... Appellant(s)
Versus
M/s Global Steel Holding Limited
& Ors.      ... Respondent(s)
WITH
Contempt Petition(c) No.747 of 2017
IN
S.L.P. (c) No.14585 of 2015
AND
Contempt Petition(c) No.1058 of 2018
IN
S.L.P. (c) No.14585 of 2015
AND
Contempt Petition(C) NO………...OF 2018
                       (D.NO. 24803 OF 2018)
J U D G M E N T
Abhay Manohar Sapre, J.
In S.L.P.(C) No.14585/2015
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1. Leave granted.
2. This appeal is filed against the final judgment
and order dated 09.03.2015 passed by the Delhi
High Court in Execution Petition No.337 of 2014
with EA Nos.697­98 of 2014 and EA Nos.199­200 of
2015 whereby the High Court has dismissed the
Execution   Petition   and   the   accompanying
applications filed by appellant ­ STC herein on the
ground of lack of jurisdiction.
3. In order to appreciate the controversy involved
in this appeal, it is necessary to set out the relevant
facts hereinbelow.
4. On   04.04.2005,   a   tripartite   agreement   was
entered into between the appellant i.e. State Trading
Corporation   a   Government­owned   Corporation
(hereinafter referred to as “STC”), respondent No.1 ­
M/s Global Steel Holding Ltd. (hereinafter referred
to   as   “GSHL”),   incorporated   in   the   Isle   of   Man
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Channel   Islands,   and   respondent   No.   2   ­   M/s
Global   Steel   Philippines  Inc.,   incorporated  in   the
Philippines   (hereinafter   referred   to   as   “GSPI”).
Respondent   No.   3   is   Mr.   Pramod   Mittal,   the
Chairman   of   the   respondent   nos.   1   and   2
companies, i.e. GSHL and GSPI. The agreement was
for purchase and sale of commodities known as ­
HR Coils and CR Coils.
5. Mr.   Dushyant   Dave,   learned   senior   counsel
appeared   for   the   appellant   –   STC,   while   the
respondents were represented by Mr. Kapil Sibal,
Senior Advocate along with Mr. Gautam Mittra.
6. In   performance   of   the   agreement,   disputes
arose between the parties, particularly with respect
to   the   non­payment   of   outstanding   dues   to   the
appellant ­ STC. The parties, therefore, decided to
settle   their   disputes   by   means   of   conciliation
proceedings with the assistance of two Conciliators.
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7. The parties (STC, GSHL and GSPI) entered into
a  Settlement  Agreement  under Section  73 of  the
Arbitration   and   Conciliation   Act,   1996   (for   short
“the   Act”)   on   15.11.2012.     In   terms   of   the
Settlement Agreement, the GSHL and GSPI agreed
to pay a total amount of US$ 355,818,019.29 with
interest @ 13.25% p.a. by 11.05.2012 as per para
(D) of the Settlement Agreement to the appellant –
STC, and in the manner set out in detail in clauses
A to K of the Settlement Agreement.
8. The   GSHL   and   GSPI   paid   some   amounts
pursuant   to   the   Settlement   Agreement   to   STC.
However, they failed to ensure full compliance with
the   terms   of   the   Settlement   Agreement   dated
15.11.2011  and   committed   default   in   paying  full
payment to appellant ­ STC.
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9.     The   parties   therefore   entered   into   a   Further
Settlement   Agreement   dated   17.05.2012   through
the intervention of the Conciliators.
10. As   per   the   Further   Settlement   Agreement
dated 17.05.2012, GSHL and GSPI agreed to pay a
total amount of US $ 347,737,209.68 inclusive of
interest at the rate of 13.50 % p.a. (Rs.1605 crores
in Indian currency) by 10.11.2010 in the manner
set   out   in   detail   in   clauses   (i)   and   (vi)   of   the
agreement   to   the   appellant   ­   STC.   Both   the
Settlement Agreement and the Further Settlement
Agreement were executed by respondent No. 3 ­ Mr.
Pramod   Mittal   as   Chairman   of   GSHL   and   GSPI,
respectively.
11. As per Clause 12 (iv) of the Further Settlement
Agreement (supra), respondent No. 3 ­ Mr. Pramod
Mittal   furnished   a   Personal   Guarantee   dated
17.05.2012   wherein   he   personally   guaranteed
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payment   of   the   outstanding   amount   payable   by
GSHL and GSPI to the appellant – STC in terms of
the   Settlement   Agreement   dated   15.11.2011
together with interest @ 13.25% p.a. and Further
Settlement Agreement dated 17.05.2012. The said
respondent   undertook   to   pay   the   outstanding
amount, and stated that the guarantee shall remain
valid till the entire outstanding dues of GSHL and
GSPI were fully discharged. 
12. Since   GSHL   and   GSPI   failed   to   fulfill   their
complete obligations under the Further Settlement
Agreement dated 17.05.2012, the appellant ­ STC
herein   filed   an   Execution   Petition   bearing
No.337/2014   in   the   High   Court   of   Delhi   on
30.08.2014 against GSHL (R­1), GSPI (R­2) and Mr.
Pramod   Mittal,   Chairman,   GSHL(R­3)   seeking   to
execute   the   Settlement   Agreements   dated
15.11.2011   and   17.05.2012   against   all   the
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respondents for recovery of the balance outstanding
amounts due and payable.
13. The appellant – STC, the decree holder, filed
Execution   Applications   Nos.   697/2014   and   199­
200/2015. Insofar as application No.697/2014 was
concerned, it was filed under Order 21 Rule 11 (2) of
CPC for attachment and sale of all shares and other
assets of the respondent No.1, with a further prayer
for   issuance   of   warrants   of   arrest   against   the
Directors and Principal Officers of respondent Nos.1
and 2 till realization of entire dues. 
14.   The   Delhi   High   Court  vide  order   dated
09.03.2015, dismissed the Execution Petition along
with the accompanying applications on the ground
that   admittedly   none   of   the   judgment­debtors   is
located   within   the   jurisdiction   of   the   Court.   The
Registered Offices of respondent Nos. 1 and 2 were
outside   India.   The   Execution   Petition   could   be
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entertained by a Court within whose jurisdiction the
judgment­debtors, or their properties were situated.
That since none of them is ordinarily resident within
the jurisdiction of the Court, the Execution Petition
could not be entertained, and was dismissed with
liberty   to   the   decree­holder   to   approach   the
appropriate court for enforcement of the Settlement
Award in accordance with law.
15. Aggrieved   by   the   Order   dated   09.03.2015
passed by the Delhi High Court, the appellant ­ STC
(Decree   Holder)   filed   the   present   Special   Leave
Petition before this Court.
16. During   the   pendency   of   the   Special   Leave
Petition, various Orders were passed from time­totime
directing the respondents to make payments to
STC. The details and break up of payments offered
and then made by the respondents to the appellant
­   STC   on   different   dates   are   mentioned   in   the
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Orders dated 19.08.2015, 21.09.2015, 14.12.2015,
05.2.2016,   06.02.2017,   10.04.2017,   31.07.2017,
22.03.2018,   15.05.2018,   13.08.2018,   and
06.09.2018.
17. The Senior Counsel for the respondents, Mr.
Kapil Sibal submitted that an amount of Rs. 810
crores   approximately   was   paid   towards   the
outstanding   liability   under   the   two   Settlement
Agreements   dated   15.11.2010   and   17.05.2012   to
the appellant ­ STC.
18. When   the   matter   was   taken   up   for   final
hearing,   the   Senior   Counsel   Mr.   Kapil   Sibal
appearing for the respondents offered to deposit Rs.
800   crores,   without   prejudice   to   their   right   to
prosecute the case, within 4 weeks to show their
bona fides to the Court.
19. Accordingly,   on   31.10.2018,   the   following
Order was passed:
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“Mr.   Kapil   Sibal,   learned   senior   counsel
appearing for respondent No. 2 in SLP (Civil)
No.   14585/2015,   during   the   course   of
hearing, states that without prejudice to the
right   to   prosecute   the   case,   they   are
prepared   to   deposit   the   sum   of   Rs.
800,00,00,000/­   (Rupees   Eight   Hundred
Crores) within the period of 4 weeks from
today.
Let them so deposit.
It is made clear that non­payment of the
amount will be viewed seriously.”
20.  That on 29.11.2018, the Senior Counsel for the
respondents   brought   Demand   Drafts   for   Rs.810
crores in favour of the Decree Holder – STC. The
matter was posted for hearing on 04.12.2018.
21.  When the matter was taken up for hearing on
04.12.2018, the Demand Drafts for Rs. 800 crores
were directed to be handed over to the Court Master
in a sealed envelope.
22.   With   the   payment   of   Rs.   800   crores   on
04.12.2018,   the   respondents   have   till   date
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deposited   an   amount   of   Rs.1610   crores
approximately in INR in discharge of their liability.
23. As a consequence, the entire liability of the
respondents   till   10.11.2012   would   stand
discharged.
24.     The   issue   which   now   only   remains   for
resolution is the interest payable from 10.11.2012
onwards. The interest payable on the outstanding
amounts was left to be determined by the Court, by
the senior counsel appearing for both the parties.
25. At this juncture, we consider it appropriate to
place   on  record  our  appreciation  of   the   valuable
assistance provided by both the senior counsel, Mr.
DA Dave and Mr. Kapil Sibal in enabling the parties
to   resolve   the   disputes.   The   senior   counsel
addressed the myriad legal issues which arose in
the case with clarity, persuasiveness, lucidity and
industry.
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26. Learned   senior   counsel   for   the   respondents
submitted   that   even   though   the   question   with
respect to payment of interest pendente lite, and the
rate of interest, was not the subject­matter of the
original proceeding, it was prayed that this Court
may give a quietus to the long pendency of this
litigation by passing appropriate orders.
27. Both   the   senior   counsel   prayed   that   this
Court, in exercise of its jurisdiction under Articles
136   and   142   of   the   Constitution,   exercise   its
extraordinary jurisdiction to determine the amount
payable   towards   interest,   and   the   period   within
which it should be paid.
28. Having heard the learned senior counsel for
the parties, and on perusal of the record, we are of
the considered opinion that it is not necessary to
decide the various legal issues arising in the case
which   were   ably   presented   by   both   the   learned
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senior   counsel   in   support   of   their   case   on   the
question of jurisdiction of the Delhi High Court in
entertaining   and   deciding   the   Execution   Petition
filed by the appellant.
29. Since   the   parties   have   requested   for
termination   of   these   proceedings   finally   in   this
appeal itself, and secondly, the outstanding dues
have   already   been   cleared   by   the   respondents
during   the   pendency   of   this   appeal   though   late
leaving only a limited controversy alive regarding
payment   of   interest,   we   are   of   the   considered
opinion   that   there   is   no   legal   impediment   in
deciding the issue of payment of interest and its
rate in this appeal finally to give quietus to this
litigation.
30. Having given our anxious consideration to all
the aforementioned factors, we are of the view that
the respondents are liable to pay Interest on the
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principal sum of Rs.1610 crores to the appellant at
rate of 8% per annum payable from 10.11.2012, i.e.
when the entire payment became due.
31. We direct that:
(i) The Demand Drafts for Rs. 800 crores (Rupees
Eight   Hundred   Crores)   furnished   by   the
respondents, be handed over to STC ­ Decree
Holder;
(ii) A lump­sum amount of Rs.600 crores (Rupees
Six Hundred Crores) worked out on the basis
of 8% S.I. per annum (rounded off) be paid by
the respondents to the appellant towards full
and   final   satisfaction   of   the   amounts   due
under   the   Settlement   Agreement   dated
15.11.2010,   and   Further   Settlement
Agreement dated 17.05.2012.
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(iii) The amount of Rs.600 crores be paid by the
respondents   to   STC   towards   interest   in   12
weeks from the date of this Order.
(iv) Upon   payment   of   the   said   amount   by
28.02.2019, all claims arising out of the two
Settlement   Agreements   (supra),   would   stand
finally settled, and put a complete closure to
all   pending   proceedings   of   any   nature
whatsoever, between the parties, wherever filed
and/or pending against each other.
(v) If,   however,   the   amount   of   Rs.   600   crores
awarded   towards   interest   is   not   paid   on   or
before   28.02.2019,   it   would   amount   to
contempt of the Order passed by this Court,
and it would be open to the appellant to take
appropriate action against the respondents in
accordance with law for non­compliance.
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32. In light of the  foregoing discussion  and the
directions,   the   appeal,   along   with   all   pending
applications, stand disposed of. The   contempt
petitions are also disposed of accordingly.
………………………………..J
(ABHAY MANOHAR SAPRE)
            …..………………………………J.
     (INDU MALHOTRA)
New Delhi,
December 06, 2018
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