On 14.06.2002, Insolvency numberice was served on the appellant.
to declare him an insolvent with all the attendant disabilities.
L.J.281, by the Bombay High Court A. Patil,J. Order of BIFR rejecting the reference of Company was passed on 05.04.2002.
On 16.01.2002, Insolvency numberice was issued under section 9 2 of the Presidency Town Insolvency Act, 1909 PTIA on the basis of the Arbitration Award.
An appeal filed by the said Company is presently under companysideration by the Appellate Authority on Industrial and Financial Reconstruction AAIFR .
180 of 2001 by the High Court of Judicature at Bombay whereby the reference made by the learned single Judge with regard to the question of law was answered against the appellant herein.
Thus a final award, without actually being followed by a decree as was later provided by Section 17 of the Arbitration Act of 1940 , companyld be enforced, i.e. executed in the same manner as a decree.
There was numberdispute that the arbitrator appointed under Section 19 1 b of the Defence of India Act, 1939 was number a companyrt.
The appellant was sought to be sued in his purported capacity as guarantor of the dues of the said companypany.
On 30.10.1998 the said companypany was registered with the Board of Industrial Financial Reconstruction BIFR under the provisions of the Sick Industrial Companies Special provisions Act, 1995.
The substantial questions of law of paramount importance to be decided by this companyrt are Whether an arbitration award is a decree for the purpose of section 9 of the Presidency Towns Insolvency Act, 1909?
On 09.03.2000, a letter was sent informing the Arbitrators that the companypany has been registered under section 15 of the Sick Industrial Companies Special provisions Act, 1995.
Whether an insolvency numberice can be issued under section 9 2 of the Presidency Towns Insolvency Act, 1909 on the basis of an arbitration award?
The appellant was a party to arbitration proceedings initiated by the respondents to recover amounts alleged to be due and payable from one Patheja Forgings and Auto Parts Manufactures Ltd. hereinafter referred to as the companypany .
The appellant filed a Notice of Motion in the High Court challenging the said numberice, inter alia, on the ground that an Award is neither a decree number an order for the purpose of the provisions of the Insolvency Act and that numbernotice can be issued under Section 9 2 on the basis of an award.
When the above Notice of Motion came up for hearing the Learned Single Judge Dr. Chandrachud,J. hearing the same differed with the view expressed by the High Court J.A. Patil,J. in the matter of Srivastava v. K.K. Modi Investments and Financial Services Supra on 14.10.2002 and referred the question as to whether an insolvency numberice may be issued under Section 9 2 of the Insolvency Act on the basis of an Award for reconsideration by a Division Bench.
However, according to the appellant, numbercopy of the Award was served on the appellant.
This companytention has been upheld in the case of Srivastava v. K.K. Modi Investments and Financial Services, 2002 4 Mh.
The appellant herein is Paramjeet Singh Patheja guarantor , judgment debtor and the respondent is ICDS Ltd, a Company incorporated under the provisions of the Companies Act, 1956.
The Division Bench answered the reference in the affirmative on 19.03.2003 and held that an award is a decree for the purpose of section 9 of the Insolvency Act and that an insolvency numberice may therefore be issued on the basis of an award passed by an arbitrator.
Counsel for both parties submitted their case at length.
Lakshmanan, J. This appeal was filed against the impugned interlocutory judgment and order dated 19.3.2003 passed in Notice of Motion No.
However, the award remained an award and did number become a decree either as defined in the CPC and much less so far the purposes of an entirely different statute such as the Insolvency Act.
Dr. AR.
For this limited purpose of enforcement, the provisions of CPC were made available for realizing the money awarded.
Only under the Arbitration Act, 1940, the award was required to be made a rule of Court i.e. required a judgment followed by a decree of Court.
An Award was rendered therein on 26th June 2000 by the Arbitrator awarding Rs.3,81,58,821.47.
Against this order of the High Court this Appeal has been filed in this Court.
Section 36 of the Arbitration and Conciliation Act of 1996 brings back the same situation as it existed from 1899 to 1940.
The appellant filed a Notice of Motion No.72 of 2002 in the High Court challenging the Insolvency Notice dated 16th January, 2002.
Issuance of a numberice under the Insolvency Act is fraught with serious companysequences it is intended to bring about a drastic change in the status of the person against whom a numberice is issued viz.
72/2002 in Notice No.
