Whether creditor can seek more than one remedy simultaneously?

 We may only end by saying that cases like the present one have to be decided by balancing the interest of creditors to whom money is owing, with a debtor company which will now go in the red since a winding up petition is admitted against it. It is not open for persons like the appellant to resist a winding up petition which is otherwise maintainable without there being any bona fide defence to the same. We may also hasten to add that the respondent cannot be said to be blowing hot and cold in pursuing a remedy under the Recovery of Debts Act and a winding up proceeding under the Companies Act, 1956 simultaneously. Here, it is important to refer to the judgment of Lord Atkin in Lissenden v. C.A.V Bosch, Ltd., [1940] 1 All E.R 425, at 436-437, which says:

“The doctrine of election could have no place in the present case. The applicant is not faced with alternative rights. It is the same right that he claims, but in larger degree. In Mills v. Duckworth, [1938] 1 All E.R 318, a plaintiff who had been awarded damages for negligence had taken the judgment sum out of a larger sum paid into Court and had then appealed against the quantum of damages, and was met by a similar objection to his appeal. Greer, L.J, in overruling the objection, pointedly said, at p. 321:

“He [the plaintiff] said: “I am not going to blow hot and cold. I am going to blow hotter.”

Here the applicant is not faced with a choice between alternative rights. He has exercised an undisputed right to compensation, and claims to have a right to more. One has not lost one's right to a second helping because one has taken the first.”

30. When secured creditors like the respondent are driven from pillar to post to recover what is legitimately due to them, in attempting to avail of more than one remedy at the same time, they do not “blow hot and cold”, but they blow hot and hotter. The appeals are accordingly dismissed with no order as to costs.

In the Supreme Court of India

(Before R.F Nariman and Navin Sinha, JJ.)

Civil Appeal No. 1291 of 2019

Swaraj Infrastructure Pvt. Ltd.v.  Kotak Mahindra Bank Ltd

Citation: 2019 SCC OnLine SC 92

Print Page

Whether decree holder of foreign arbitral award enforceable in India can file application for winding up?

This court is in full consonance with the above views. A decree holder would not cease to be a creditor. The liability is only crystallized in the form of a decree or award. A creditor has a right to invoke the provisions of the Companies Act. This court is of the view that a decree holder can only be in a better position. He will have a right to either execute a decree or file an application for winding up.

13. The learned senior counsel for the respondent has contended that the respondent has filed an appeal against the order in O.P.No.56/2014. The learned counsel for the petitioner has relied upon the judgement of the Honourable Supreme Court reported in 2011 (8) SCC 333 cited supra to contend that the appeal under the Letters Patent Act is not maintainable.

14. Upon perusal of the records, it can be seen that the Respondent has raised all the defences available to them under Section 48 before this Court in O.P.No.56/2014 and the same was negatived. The Respondent has not challenged the award before the jurisdictional court. The appeal said to have been filed by the Respondent in 2014 is not even numbered. Obviously, there is no stay. This court feels that it is unnecessary to go into the maintainability of the appeal. In the said circumstances, it can only be construed as no appeal is pending against the order in O.P.No.56/2014 and therefore, the award has become final and enforceable. As per Section 49 of the Arbitration and Conciliation Act, once the court finds that the foreign award is enforceable, the award shall be deemed to be a decree of that court. Therefore, the Petitioner is deemed to have obtained a decree from this court. As this court has already held that the decree holder would still continue to be creditor, this petition for winding up is maintainable. This court is also of the view that any leave or permission need not to be obtained when the right is conferred by law. Therefore, the contention of the learned senior counsel for the rtthat the decree in O.P.No.56/2014 only permits the Petitioner to file an execution petition is also rejected.

Madras High Court

Sims Metal Management Limited vs Sabari Exim Private Limited on 31 March, 2015

CORAM: MR.JUSTICE R.MAHADEVAN

CP.No.350/2014

Print Page