@JUDGMENTTAG-ORDER
Mukul Mudgal, J.@mdashThese applications (IAs. 3969/99 & IA. 10309/99) arise from the Award dated 24th March, 1993.
2. The first application, i.e., IA. 3969/99 is filed on behalf of respondent No. 1/H.A.L. u/s 151 CPC praying for stay of the operation of the impugned Award dated 24.3.1993. The prayer clauses in the said application read as follows:-
"a) Stay of operation of the Award dated 24.3.99 to the extent that the Award directs the Applicant to deliver the aircraft to the plaintiff in flying condition within one week of receipt of payment of Rs. One crore, and levies a penalty of Rs. 50,000/- per day upon the failure of the Applicant to do so within one week of receipt of the payment.
b) Permit the Applicant to encash the cheque bearing No. 175451 dated 01.4.1999 drawn on State Bank of Hyderabad, for the Sum of Rs. One crore, issued by the plaintiff in favor of the Applicant, pending disposal of the objections, and further directs the plaintiff to take possession of the aircraft from the Applicant at Kanpur in as is where is condition."
3. The second application (IA. 10309/99) is filed on behalf of the petitioner/Jagson International Ltd. (Hereinafter referred to as ''Jagson'') u/s 151 CPC seeking directions as to delivery/return of the cheque dated 1.4.1999 for Rs. One crore by the respondent as petitioner is no more interested/willing to make payment of Rs. One Crore as the respondent has already defaulted in complying with the Award. The prayer clause in IA. 10309/99 reads as follows:-
"i) to direct the the Respondent to deliver/return the cheque dated 1.4.1999 for Rs, one crore forthwith as the Petitioner is no more interred/willing to make payment of Rs. One crore as the Respondent has already defaulted in complying with the Award."
The applicant/H.A.L. ''S case is as under:
4. The aircraft in question was owned by the petitioner-Jags on and on 24.6.1991 by an agreement the Jagson requested HAL, i.e., the respondent herein to repair the aircraft to make it airworthy. The HAL repaired the aircraft at the cost of Rs. 1 crore and brought it to Delhi on 2.12.1991. There were further repairs required to be carried out and at the request of the Jagson on 16.12.1991, the HAL agreed to carry out these further repairs in order to secure the Certificate of Airworthiness for commercial flying. This certificate was obtained by the HAL on 6.3.1992 for one year. However, the bills raised by the HAL for repairing the aircraft and obtaining the certificate of airworthiness were not paid by Jagson because of the stand taken by the Jagson that no further repairs were carried out and the sum of Rs. 1.06 crores paid earlier by Jagson represented full recommendation for all work done. As HAL had exercised lien in declining to return the aircraft as its dues were not paid, Jagson had filed the Suit No. 1776-A/92 u/s 20 of the Arbitration Act, for reference of the disputes to the Arbitrator Along with IA. 3089/92 seeking possession of the aircraft.
5. On 4th September, 1992 in the said Suit No. 1776-A/92 filed by Jagson, this Court had passed the following order :
"Without going into the question as to what exact amounts payable by the petitioners to respondent as labour charges and price of the components it is apparent that besides the labour charges, price of the components supplied by the respondent and the fact that customs and excise duty and sales tax is also payable, it would be in the fitness of the things that in case the petitioner further pays Rs. 2 crores in account in addition to the amount already paid by it and furnishes bank guarantee for the balance amount, the respondent No. 1 is directed to hand over the aircraft in question to the petitioner. This is however, without prejudice to the rights of the parties and without any expression of opinion on the merits of the case.
"This application stands disposed of accordingly."
6. The above order dated 4th September, 1992 was unsuccessfully challenged by filing a SLP in the Hon''ble Supreme Court which was dismissed on 15.3.93 and thus the order dated 4th September, 1992 became final and thereafter on 19.8.1993 this Court had appointed an Arbitrator and the present award impugned in these proceedings arises from the said proceedings. HAL further stated that in March 1994 Jagson filed a suit for permanent injunction before the Senior Sub Judge without disclosing the earlier orders of this Court and the Hon''ble Supreme Court and obtained an Order dated 5.3.1994 directing the return of the aircraft by the HAL to Jagson. However, on 11.3.1994 this Court stayed the aforesaid order dated 5.3.1994 passed by the Senior Sub Judge. Thereafter before the appointed Arbitrator, Jagson made an application for return of the aircraft which was rejected by an Order dated 23.1.1995. The Order of the arbitrator dated 23.1.1995 reads as follows:
"So far as the interim relief claimed by Jagsons is concerned it is admitted that they had made similar prayer before the High Court of Delhi and the High Court vide its detailed order dated 4th September, 1992 directing HAL to hand over the aircraft in question to Jagsons provided they paid a sum of Rs. 2 crores, in account in addition to the amount already paid and furnished a bank guarantee for the balance amount. Admittedly, M/s. Jagson filed a SLP before the Supreme Court against this order, which was dismissed. High Court was, however, requested to dispose of the main petition requesting for reference to arbitration as early as possible.
In the presence of these orders the prayer for interim award directing HAL to hand over the aircraft to M/s Jagsons cannot be granted. I also find no justification for modifying the conditions imposed by the High Court for return of the aircraft.
7. HAL has pleaded that the aircraft was fully ready for commercial operations on 6.3.92 and in spite of numerous opportunities, Jagson chose not to take the aircraft back and consequently the aircraft has not been flown for the last seven years and requires further extensive maintenance work costing approximately Rs. 2.5 crores more and it will in these circumstances take more than four to six months to make it airworthy. The HAL''s case is that it is Jagson who is fully responsible for the current situation.
8. The learned Arbitrator has awarded the sum of Rs. 2 crores to HAL by his impugned Award dated 24.3.1999. The Arbitrator held the HAL to be entitled for balance sum of Rs. 1 crore after the payment of Rs. 1 crore already made out by the Jagson. The Arbitrator declined the claim of Jagson for compensation and HAL''s claims to interest and the other claims. Consequently the Arbitrator directed as follows:
"I direct that Jagson do pay to HAL within one month the net sum of Rs.1 crore and be delivered the air-craft in flying condition within one week of such payment. I have reduced the time in view of the fact that with every succeeding day rolling into the fold of time, the utility of the air-craft is being proportionately reduced.
If Jagson fails to pay the sum of rupees one crore to HAL within one month as directed, interest at 18 % shall be payable from 1.6.1999 till payment is made. In case HAL fails to make over the aircraft within one week of payment, Jagson shall be entitled to recover compensation of rupees fifty thousand per day. This direction is subject to variation, if any, by the Court."
9. Pursuant to the Award dated 24th March, 1999, Jagson sent a cheque of Rs. 1 crore on 6.4.1999 to HAL signifying its assent to the Award. Jagson has not filed any objections to the Award. In the meanwhile the validity of the cheque has expired.
10. The petitioner/Jagson in reply to is 3969/99 has submitted that according to the learned arbitrator the only direction which is subject to variation is the payment of compensation of Rs. 50,000/- per day and the other directions have not been permitted by the arbitrator to be varied and this variation also could only be made at the time of the final decision and no cause has been shown by HAL for variation of this direction at this stage.
11. The terms of the operative portion of the Award extracted hereinbefore do not support the plea of the learned counsel for the plaintiff-Jagson. The arbitrator''s observations regarding the variation by the Court cannot be held confined only to the direction for payment of the compensation of Rs. 50,000/- per day. Furthermore even assuming the plea of the learned counsel for the respondent in so far as the variation permitted by the arbitrator is concerned, to correct, the jurisdiction of the Court to pass interim orders is not conditioned by the directions given by the Arbitrator. Accordingly this plea of the petitioner Jagson is unsustainable.
12. A perusal of the facts of the case clearly shows that it is Jagson which largely responsible for the delay and the state of affairs obtaining today and at this stage one cannot lose sight of the fact that the Jagson had not only concealed before the Senior Sub the Order passed by this Court on 4.9.1992 but also the order of the Hon''ble Supreme Court dismissing the SLP against the above order dated 4.9.92 on 15.3.1993. It is thus very clear that prima facie Jagson''s conduct has not availed of the order granting them custody of the aircraft on 4th September, 1992 by a learned Single Judge of this Court which order in spite of its unsuccessful challenge before the Hon''ble Supreme Court was not availed of by Jagson and the aircraft''s possession was not taken by Jagson by meeting the conditions imposed by the said order dated 4th September, 1992. Furthermore on 23.1.95 the arbitrator had declined another request made by Jagson for return of the aircraft. The arbitrator also by his order dated 23.1.1995 refused to vary the conditions imposed in the order dated 4th September, 1992 by this Court.
13. The other plea raised by Jagson is that enforcement of one part of the award and the staying of the other part is not permissible in law and the relief at prayer (b) of IA. 3969/99 for encashment of cheque of Rs. One crore could not be granted. Since the direction to return the aircraft is dependant upon payment of Rs. 1 crore contained in the award, this plea of the petitioner-Jags on is justified and has to be Sustained. Consequently the respondent/H.A.L.''s prayer for encashment of the cheque for Rs. 1 crore cannot be granted at this stage. Furthermore pending the hearing of the objections to the Award, the applicant/Jagson''s prayer made in IA. 10309/99 relating to the return of the cheque dated 1.4.1999 issued by the Jagson, i.e., petitioner herein as well as HAL''s prayer for keeping the cheque for Rs. 1 crore alive and current as it was expiring cannot be granted at this juncture. These pleas will be subject to the final result of the objections raised against the Award dated 24.3.1999. Accordingly the aforesaid pleas raised in IAs. 3969/99. & 10309/99 will be considered at the time of the final hearing of the objections.
14. Insofar as respondent No. 1''s prayer made in IA. 3969/99 for staying operation of the Award 24.3.1999 to the extent that it directs the applicant to deliver the aircraft in the flying condition is concerned, I am satisfied that HAL has made out a case for suspension of the penalty of Rs. 50,000/- per day levied by the Award dated 24.3.1999. It is clear that the levy of a penalty of Rs. 50,000/- per day pending the consideration of the objections would serve no useful purpose and one has to consider the possibility of success/failure of the objections particularly when the Award directs the applicant/HAL to deliver the aircraft in flying condition within one week of the payment of Rs. 1 crore. Furthermore as already noticed in this Judgment the order dated 4th September; 1992 permitting return of the aircraft to Jagson was not availed of by petitioner-Jags on. I have already held that prayer (b) of the respondent\\applicant-H.A.L. for encashing the cheque of Rs. 1 crore, made in the present application, i.e., IA. 3969/99 cannot be granted. Significantly payment of the amount of Rs. 1 crore is the premise on which the direction to return the aircraft to Jagson is founded. I have already held that the prayer for keeping the cheque alive cannot be granted at this stage. Since the encashment of Rs. 1 crore as prayed for in prayer (b) is not being granted the consequent return of the aircraft and upon failure to return damages of Rs. 50,000/- per day obviously cannot be sustained at this Court dated 4th September, 1992 postulated a payment of Rs. 2 crore in addition to the amount already paid by Jagson plus bank guarantees. If this was the interim order on 4th September, 1992 the amount cannot at this stage certainly be lower in the year 2000 when according to the respondent passage of 7 years more would entail further extensive expenditure to make the stationary aircraft airworthy. In the circumstances of the case it would be just and proper that the Award dated 24th March, 1999 is stayed pending the hearing of the objections as an interim measure to the extent it directs the HAL/applicant to handover the aircraft to the petitioner/JAGSON in flying condition within one week of receipt of payment of Rs. one crore. The further direction of payment of Rs. 50,000/- per day will also consequently remain stayed until objections to the award are heard. It will be, however, open to the JAGSON to take the delivery of the aircraft on ''as is where is basis'' and have it repaired at its own expense and submit a bill of repairs in this Court. The outcome of final orders on the direction of penalty of Rs. 50,000/- per day and the restitution, if any, to be made to the petitioner/JAGSON for expenses incurred in making the aircraft airworthy as of today, shall be considered at the time of final hearing of the Objections and will be subject to the result of these Objections. The IA. 3969/99 is thus disposed of.
