{"id":132998,"date":"2000-04-19T00:00:00","date_gmt":"2000-04-18T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/jagson-international-ltd-vs-hindustan-aeronautics-ltd-on-19-april-2000"},"modified":"2017-07-15T16:39:01","modified_gmt":"2017-07-15T11:09:01","slug":"jagson-international-ltd-vs-hindustan-aeronautics-ltd-on-19-april-2000","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/jagson-international-ltd-vs-hindustan-aeronautics-ltd-on-19-april-2000","title":{"rendered":"Jagson International Ltd. vs Hindustan Aeronautics Ltd. on 19 April, 2000"},"content":{"rendered":"<div class=\"docsource_main\">Delhi High Court<\/div>\n<div class=\"doc_title\">Jagson International Ltd. vs Hindustan Aeronautics Ltd. on 19 April, 2000<\/div>\n<div class=\"doc_citations\">Equivalent citations: 2000 VAD Delhi 851<\/div>\n<div class=\"doc_author\">Author: M Mudgal<\/div>\n<div class=\"doc_bench\">Bench: M Mudgal<\/div>\n<\/p>\n<pre><\/pre>\n<p>ORDER<\/p>\n<p> Mukul Mudgal, J. <\/p>\n<p>1.     These applications (IAs. 3969\/99 &amp; IA. 10309\/99) arise from the  Award dated 24th March, 1993.\n<\/p>\n<p>2.   The  first  application, i.e., IA. 3969\/99 is filed on behalf  of  respondent No. 1\/H.A.L. under Section 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:-\n<\/p>\n<p>     &#8220;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.\n<\/p>\n<p>     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 favour 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.&#8221;\n<\/p>\n<p>3.   The second application (IA. 10309\/99) is filed on behalf of the  petitioner\/Jagson  International  Ltd. (Hereinafter referred  to  as  &#8216;Jagson&#8217;) under  Section 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:-\n<\/p>\n<p>     &#8220;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.&#8221;\n<\/p>\n<p>     The applicant\/H.A.L. &#8216;S case is as under:\n<\/p>\n<p>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 under  Section 20 of the Arbitration Act, for reference of the disputes  to the Arbitrator alongwith IA. 3089\/92 seeking possession of the aircraft.\n<\/p>\n<p>5.   On 4th September, 1992 in the said Suit No. 1776-A\/92 filed by Jagson, this Court had passed the following order :\n<\/p>\n<p> &#8220;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.\n<\/p>\n<p>     &#8220;This application stands disposed of accordingly.&#8221;\n<\/p>\n<p>6.   The  above  order dated 4th September, 1992 was  unsuccessfully  challenged  by  filing a Special Leave Petition in the  Hon&#8217;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&#8217;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:\n<\/p>\n<p> &#8220;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 Special Leave Petition 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.\n<\/p>\n<p>     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.\n<\/p>\n<p>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&#8217;s case  is that it is Jagson who is fully responsible for the current  situation.\n<\/p>\n<p>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&#8217;s claims to interest and the other claims.  Consequently the Arbitrator directed as follows:\n<\/p>\n<p>     &#8220;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.\n<\/p>\n<p>     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.&#8221;\n<\/p>\n<p>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.\n<\/p>\n<p>10.  The  petitioner\/Jagson in reply to IA 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.\n<\/p>\n<p>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&#8217;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.\n<\/p>\n<p>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&#8217;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&#8217;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&#8217;ble  Supreme Court was not availed of by  Jagson  and  the aircraft&#8217;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.\n<\/p>\n<p>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.&#8217;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&#8217;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&#8217;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. &amp; 10309\/99 will be considered at the time  of  the final hearing of the objections.\n<\/p>\n<p>14.  Insofar  as respondent No. 1&#8217;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 judgement 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<br \/>\nwithin 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 &#8216;as  is  where  is basis&#8217; 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.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Delhi High Court Jagson International Ltd. vs Hindustan Aeronautics Ltd. on 19 April, 2000 Equivalent citations: 2000 VAD Delhi 851 Author: M Mudgal Bench: M Mudgal ORDER Mukul Mudgal, J. 1. These applications (IAs. 3969\/99 &amp; IA. 10309\/99) arise from the Award dated 24th March, 1993. 2. The first application, i.e., IA. 3969\/99 is filed [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-132998","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Jagson International Ltd. vs Hindustan Aeronautics Ltd. on 19 April, 2000 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/jagson-international-ltd-vs-hindustan-aeronautics-ltd-on-19-april-2000\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Jagson International Ltd. vs Hindustan Aeronautics Ltd. on 19 April, 2000 - Free Judgements of Supreme Court &amp; 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