M/S Bpl Ltd v. M/S Morgan Securities & Credits Pvt. Ltd

order as to costs.

NAVIN CHAWLA, J DECEMBER 18, 2018 RN

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 11.09.2018 Date of decision : 18.12.2018 + OMP (COMM) 176/2017 & I.A.No.6316 /2018 M/S BPL LTD ..... Petitioner Through Mr.Parag Tripathi, Sr. Adv.with Mr.Dhananjay Joshi, Mr.G.Umapathy, Ms.R.Mekhala and Mr.Aditya Singh, Advs. Versus M/S MORGAN SECURITIES & CREDITS PVT. LTD ... Respondent Through Mr.K.Dutta and Mr.Simran Mehta, Advs. + O.M.P. (COMM) 190/2017 & I.A. No.6302/2018 MORGAN SECURITIES & CREDITS PVT LTD. ..... Petitioner Through Mr.K.Dutta and Mr.Simran Mehta, Advs. versus ELECTRONIC RESEARCH PVT.LTD. & ORS. ..... Respondents Through Mr.Parag Tripathi, Sr. Adv.with Mr.Dhananjay Joshi, Mr.G.Umapathy, Ms.R.Mekhala and Mr.Aditya Singh, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. These petitions under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') have been Page 2 filed by the parties to the arbitration proceedings which has resulted in the Arbitral Award dated 14.12.2016 passed by the Sole Arbitrator. (M/s BPL Ltd. shall hereinafter be referred to as the petitioner, M/s Morgan Securities and Credits Pvt. Ltd. shall be referred to as the respondent and Electric Research Pvt. Ltd. shall be referred to as 'ERPL'). 2. One M/s BPL Display Device Ltd. (hereinafter referred to as 'BDDL') had sold certain goods to the petitioner. The two companies requested the respondent for extending bill discounting facility to BDDL. The same was sanctioned by the respondent by way of its letter dated 27.12.2002 (to the extent of Rs.6 crores) and 11.06.2003 (to the extent of Rs.6.50 crores). The said Sanction Letters referred to BDDL as the Drawer and the petitioner as the Drawee. The bill discounting period was upto 150 days. 3. Clauses 3 and 4 of the Sanction Letter dated 27.12.2002 are relevant for the purposes of the present petitions and are reproduced hereinbelow: "3. Bill of Exchange/Hundi shall be with recourse to Drawer. Therefore the liability to repay amount to Morgan Securities &Credits Private Limited (hereinafter referred to as "the Discounting Company") on the due date shall be of Drawer and- Drawee jointly and severally. In case the Drawee does not make payment on due date of any bill of exchange/hundi, the Drawer shall make the payment of all the amount due thereon to without any notice or demand or presentment from the payee or the holder in this behalf. Page 3 4. The Drawee/Drawer agrees that normal agreed rate for providing Bill Discounting facility is 36% p.a., however as a special case the Discounting Company is providing the Bill Discounting facility at concessional rate of 22.5% p.a. payable upfront. In case of delay or default in making payment of amount of the Bill of Exchange or overdue bill discounting charges/interest or any part thereof on it's due date, the concessional rate will be withdrawn and the normal rate of bill discounting charges of 36% p.a. monthly rests, shall be payable by the Drawee/Drawer from its due date. Margin @ 3% p.m. for 3 days shall be deducted at the time of discounting, to be adjusted against delays in repayment, if any." 4. In the Sanction Letter dated 11.06.2003, apart from the above terms, ERPL was added as a guarantor and was to provide Comfort Letter along with Post Dated Cheques guaranteeing repayment of the amount due to the respondent. ERPL had issued the Comfort Letter and also the Post Dated Cheques in accordance with the Sanction Letter dated 11.06.2003. 5. The Bills of Exchange were drawn by BDDL directing the petitioner to pay to the respondent the sum of money mentioned in each of these Bills of Exchange within the period mentioned therein. 6. The respondent, claiming that a sum of Rs.25,79,91,096/- had become due and payable by the petitioner and BDDL, invoked the Arbitration Agreement contained in the Sanction Letters. The arbitration was initially initiated by the respondent against the petitioner and BDDL. ERPL was subsequently impleaded as respondent no.