Read Time: 12 minutes

Synopsis

The Supreme Court recently observed that comity of courts is a principle well recognised throughout the world and this principle has not only been duly recognised, but also reiterated by this court time and again.

The apex court came down heavily upon a party for an abortive attempt to violate the principle by getting over an arbitral award by a jurisdictional forum in London by initiating criminal proceedings in India.

A bench of Justices M M Sundresh and Rajesh Bindal quashed the criminal proceedings pending before XIV Additional Chief Metropolitan Magistrate, Hyderabad, after hearing senior advocates Mukul Rohatgi and Sidharth Luthra on behalf of appellant Pushkar Jamnerkar.

The subject matter of the criminal complaint was with respect to a manuscript of May 17, 2013 which led to an agreement inter se the parties. The arbitral proceedings had been initiated at the seat of arbitration in London. Arguments had been heard preceded by the examination of the witnesses. On the admissibility, relevancy and proof pertaining to the document, the Arbitral Tribunal heard the parties at length. Specific findings had been given by the Arbitral Tribunal on that aspect. The Arbitral Tribunal had noted that there was no allegation by the respondent no. 2, Nagarjuna Fertilizers and Chemicals Limited that the appellant had put markings on the manuscript dishonestly.   

Accordingly, an arbitral award was passed in favour of the appellants. In fact, three awards had been passed at different stages. The respondent no.2 made an abortive attempt by filing a claim petition before the Commercial Court at Dubai, and an anti-suit injunction application was also filed in London.

We have been informed that the claim petition filed at Dubai was withdrawn subsequently, the bench said.

To give effect to the arbitral award passed in the favour of respondent no.3, TRAMMO DMCC, an Enforcement Petition was filed before the High Court of Delhi and an interim order of injunction had been obtained against the respondent no. 2 prohibiting it from transferring, alienating or encumbering any of its assets. 

However, a few days thereafter, a criminal complaint had been filed invoking Section 200 of the Code of Criminal Procedure, notwithstanding the fact that the appellant was residing outside Hyderabad and without even complying with Section 202 of the Code, for the offences punishable under Sections 465, 468, 471 and 420 of the Indian Penal Code, on the file of the XIV Additional Chief Metropolitan Magistrate at Hyderabad.    

Alleging that the said initiation of the criminal complaint was a clear abuse of the process of law, the appellant invoked Section 482 of the Code to quash the criminal complaint and proceedings.  

By the impugned judgment, the petition under Section 482 of the Code was dismissed by the high court holding that the contentions raised by the appellant had to be decided at the time of trial.

The counsel appearing for the appellant and the respondent no. 3 submitted that the facts spoke for themselves.

This is nothing but a clear attempt to use the judicial process to circumvent the arbitral award passed by a competent forum. The arbitral award has become final inter-se the parties and the proceedings are pending at present before the Bombay High Court for its enforcement, the counsel submitted.

Additionally, they said, an application had also been moved at the instance of the respondent no. 2 seeking to stay the enforcement proceedings pending before the Bombay High Court, in view of the pendency of the present appeal. In such a view of the matter, the appellant urged that appropriate orders will have to be passed by setting aside the criminal proceedings initiated against the appellant and appropriate directions has to be issued to the Bombay High Court to expedite the hearing in the pending enforcement proceedings.   

The counsel, appearing for the respondent no. 2 submitted that the scope of arbitration proceedings is different from the complaint given and the criminal proceedings arising therefrom. The criminal complaint discloses a cognizable offence. It is not in dispute that the markings have been made in the manuscript of May 17, 2013. As rightly held by the high court, it is a matter for evidence that has to be considered by the jurisdictional Magistrate. Hence, there is no reason for interference with the impugned order, they said.

After hearing the parties, the bench said, the arbitral award had become final inter-se the parties.

It is the duty of the court not only to accept the arbitral award passed by a forum having jurisdiction outside the country, but also to see to it that it is given effect to, unless law so prohibits, court said.

"At this juncture, we have no hesitation in reiterating that this is nothing but an abortive attempt being made by the respondent No.2 to ensure that the arbitral award is not given effect to. In other words, this is nothing but an abuse of the process of law. The very same document has been considered threadbare by the Arbitral Tribunal at London. On the said document, evidence has been led by both the sides. As against the evidence lead by respondent No.2, the evidence lead on behalf of the appellant and the respondent No.3 found favour with the Arbitral Tribunal," the court noted.

By way of a criminal proceeding, the arbitral award passed cannot be interdicted or set aside. Considering the facts of the case, we have no hesitation in holding that the very criminal complaint at the instance of respondent no. 2 is itself an abuse of the process of law and its continuance would cause further injustice to both the appellant and the respondent no.3, the bench said.

The apex court set aside the high court order declining to exercise its jurisdiction by invoking Section 482 of the Code.

It requested the high court to consider expediting the hearing of the petition filed for the enforcement of the arbitral award at the instance of the respondent no.3. 

Case Title: Pushkar Jamnerkar Vs The State of Telangana & Ors