Supreme Court Dismisses Recall Application in Arbitration Enforcement Dispute - Upholds Earlier Order Directing Deposit of Awarded Sum with Serious Consequences for Non-Compliance. Court Found Application Was Afterthought Filed After Contempt Proceedings Initiated and Original Order Was Passed After Hearing Both Parties Considering Applicants' Repeated Failure to Comply Despite Multiple Extensions.

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Case Note & Summary

The Supreme Court considered a miscellaneous application filed by the applicants (original petitioners) seeking recall of an order dated 28.10.2021 passed in Miscellaneous Application No. 1668 of 2021. The applicants had challenged an arbitral award before the High Court, which had ordered deposit of 50% of the awarded sum as a condition for hearing. Despite multiple extensions granted by both the High Court and Supreme Court, the applicants failed to make the deposit. The respondent then filed Miscellaneous Application No. 1668 of 2021 before the Supreme Court, which resulted in the order dated 28.10.2021 directing deposit with serious consequences for non-compliance. The applicants sought recall of this order on three grounds: that the miscellaneous application was not maintainable as it was filed in a disposed matter; that no notice was issued to them; and that such directions could not have been issued in a special leave petition. The court heard arguments from both sides. In its analysis, the court noted that counsel for the applicants had appeared and been heard before the order dated 28.10.2021 was passed, and no objections regarding maintainability or request for adjournment had been raised at that time. The court found the present recall application to be an afterthought filed only after contempt proceedings were initiated against the applicants. On merits, the court observed that the applicants had repeatedly failed to comply with deposit orders despite multiple extensions, showing an intention to delay execution. The order dated 28.10.2021 had been passed after considering the respondent's apprehensions about further delay. The court concluded that no case had been made out for recalling the order and dismissed the application.

Headnote

A) Civil Procedure - Recall of Orders - Principles for Recalling Orders - Supreme Court Rules, 2013 - Applicants sought recall of order dated 28.10.2021 passed in Miscellaneous Application No. 1668 of 2021, alleging non-maintainability and lack of notice - Court found application was afterthought filed after contempt proceedings initiated and counsel had been heard before original order - Held that no case made out for recall as order was passed after hearing both parties considering peculiar facts (Paras 3-8).

B) Arbitration Law - Enforcement of Awards - Compliance with Court Orders - Arbitration and Conciliation Act, 1996 - Applicants failed to deposit 50% of awarded sum despite multiple extensions from High Court and Supreme Court - Court noted applicants' conduct showed intention to delay execution - Held that order dated 28.10.2021 directing deposit with serious consequences for non-compliance was justified in peculiar circumstances (Paras 5-7).

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Issue of Consideration

Whether the order dated 28.10.2021 passed in Miscellaneous Application No. 1668 of 2021 should be recalled on grounds of non-maintainability, lack of notice, and alleged impropriety of directions issued

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Final Decision

The present application stands dismissed. No case is made out to recall order dated 28.10.2021 passed in M.A. No. 1668/2021.

Law Points

  • Maintainability of miscellaneous applications in disposed matters
  • principles for recalling orders
  • consequences of non-compliance with court orders
  • exercise of inherent powers under Article 142 of the Constitution of India
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Case Details

2022 Lawtext (SC) (1) 25

Miscellaneous Application (details not specified)

2022-01-25

[M.R. SHAH J. , SANJIV KHANNA J.]

Shri Shyam Divan, Shri Jayant Bhushan, Shri Kunal Vajani

Applicants – original petitioners

Contesting respondent

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Nature of Litigation

Miscellaneous application seeking recall of order dated 28.10.2021 passed in Miscellaneous Application No. 1668 of 2021

Remedy Sought

Applicants sought recall of order dated 28.10.2021

Filing Reason

To challenge order directing deposit of 50% of awarded sum with serious consequences for non-compliance

Previous Decisions

High Court order dated 08.08.2019 directing deposit of 50% of awarded sum; Supreme Court order dated 17.09.2021 granting further eight weeks' time; Supreme Court order dated 28.10.2021 directing deposit with serious consequences for non-compliance

Issues

Whether order dated 28.10.2021 should be recalled on grounds of non-maintainability, lack of notice, and alleged impropriety

Submissions/Arguments

Miscellaneous Application No. 1668/2021 was not maintainable as filed in disposed matter No notice was issued to applicants in Miscellaneous Application No. 1668/2021 Such direction could not have been issued in special leave petition Non-compliance would only mean no stay of arbitral award and execution to proceed

Ratio Decidendi

Recall applications cannot be entertained when original order was passed after hearing both parties and applicant raises objections belatedly as afterthought, especially when filed after contempt proceedings initiated. Courts may issue directions with serious consequences for non-compliance when party repeatedly fails to comply with orders despite multiple extensions, showing intention to delay proceedings.

Judgment Excerpts

The present miscellaneous application has been preferred by the applicants – original petitioners with a prayer to recall order dated 28.10.2021 The present application is nothing but an afterthought and only with a view to get out the contempt proceedings order dated 28.10.2021 has been passed after hearing the learned counsel for both the parties

Procedural History

High Court order dated 08.08.2019 directed deposit of 50% of awarded sum; Supreme Court order dated 17.09.2021 granted further eight weeks' time; Respondent filed M.A. No. 1668/2021; Supreme Court passed order dated 28.10.2021 after hearing both parties; Applicants filed present recall application on 17.01.2022; Contempt Petition No. 940/2021 filed on 18.11.2021 with notice issued on 10.12.2021

Acts & Sections

  • Arbitration and Conciliation Act, 1996:
  • Supreme Court Rules, 2013:
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