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Abdul Ghaffar Abdul Rehman v. Shivnath Rai Harnarain (I) Ltd. And Another
Factual and Procedural Background
M/s Abdul Ghaffar Abdul Rehman filed two special leave petitions, later numbered Civil Appeal No. 3656 of 2006 and Civil Appeal No. 3657 of 2006, challenging separate interim orders of the Delhi High Court passed in OMP No. 300 of 2001 (a petition under Section 9 of the Arbitration and Conciliation Act, 1996).
- Order dated 18-3-2004 (IA No. 10382/2003): The High Court directed that a disputed consignment be auctioned at the Atari border by the Railway authorities, with sale proceeds to be deposited in court, without prejudice to parties’ claims.
- Order dated 24-9-2004 (IAs Nos. 3966 & 6239/2004): After hearing all parties, the High Court authorised release of ₹19,70,064 and ₹2,33,800 to the Excise Departments of Yamuna Nagar and Dehradun respectively, again without prejudice to rival claims.
The consignment was in fact auctioned and ₹1,95,30,000 realised. The Supreme Court had earlier stayed any disbursement of these proceeds. By the time the matters came up for final hearing, the Section 9 petition remained pending in the High Court since October 2001.
Legal Issues Presented
The opinion addresses a procedural matter and does not frame distinct legal issues.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
- The Court noted that the consignment had already been auctioned pursuant to the High Court’s order, rendering the challenge to that order (Civil Appeal 3656/2006) infructuous.
- Because the substantive Section 9 application—covering all competing claims, including those of the Excise and Railway authorities—was still pending before the High Court, the Supreme Court declined to examine the merits of the parties’ rival claims.
- The Court considered expeditious disposal of the Section 9 application the proper course, as it would comprehensively resolve the dispute over entitlement to the auction proceeds.
- An earlier stay granted by the Supreme Court, prohibiting disbursement of the sale proceeds, was directed to continue until the High Court decides the Section 9 application.
- The Court expressly refrained from expressing any opinion on the merits of the claims, preserving the parties’ liberty to seek appropriate relief before the High Court.
Holding and Implications
The appeals were DISPOSED OF as infructuous, with no order as to costs.
Direct consequences:
- The auction proceeds remain deposited with the Delhi High Court and will not be disbursed until that court decides the pending Section 9 application.
- The Delhi High Court is requested to dispose of the Section 9 application “as expeditiously as possible” and in any event no later than 30-11-2006.
- All parties, including the Excise and Railway authorities, retain liberty to apply to the High Court for appropriate directions.
No broader legal precedent was set; the decision is confined to managing an interim situation and directing prompt resolution in the pending arbitration-related proceedings.
Dr. Ar. Lakshmanan, J.— Leave granted.
2. Heard learned Senior Counsel on either side.
Civil Appeal No. 3656 of 2006
[@ SLP (C) No. 21127 of 2004]
3. This appeal was filed by M/s Abdul Ghaffar Abdul Rehman against the interim order dated 18-3-2004 passed by the High Court of Delhi in IA No. 10382 of 2003 in OMP No. 300 of 2001. By the said order, the High Court ordered that the consignment in question be sold at the Atari border itself through the Chief Commercial Manager, Northern Railway in accordance with Railways' rules and regulations regarding public auctions of such goods and the entire sale proceeds be deposited in the High Court. The High Court made it clear that the order would be without prejudice to the pleas of the parties in regard to their claims over the consignment in question. Though this order was passed on 18-3-2004, the instant special leave petition was filed in this Court by the appellant only on 24-8-2004. It is now stated that in the meanwhile the consignment was auctioned and a sum of Rs 1,95,30,000 was realised as sale proceeds. Since goods have already been sold by complying with the direction of the High Court the appeal has become infructuous and no relief can be granted to the appellant in this Civil Appeal No. 3656 of 2006 [@ SLP (C) No. 21127 of 2004]. We, therefore, dispose of the same in view of change in the circumstances, confirming our order dated 1-10-2004 by which this Court directed that the amount to be deposited in the High Court pursuant to the auction-sale should not be disbursed.
Civil Appeal No. 3657 of 2006
[@ SLPs (C) Nos. 2081-82 of 2005]
4. This appeal was again filed by M/s Abdul Ghaffar Abdul Rehman against the interim order dated 24-9-2004 passed by the High Court of Delhi in IAs Nos. 3966 and 6239 of 2004 in OMP No. 300 of 2001. By the said order the High Court, after hearing all the respective parties, allowed the application filed by M/s Shivnath Rai Harnarain (I) Ltd. for payment of excise and other dues. By the said order, the Registry of the High Court was directed to prepare two cheques, one in the sum of Rs 19,70,064 in the name of the Excise Department, Yamuna Nagar and another for Rs 2,33,800 in the name of the Excise Department, Dehradun. The High Court also made it clear that the payment will be without prejudice to the rights and pleas of the parties in regard to their respective claims.
5. This Court by interim order dated 7-2-2005, after issuing notice in the special leave petition, ordered impleadment of the Commissioner of Excise, Yamuna Nagar and Commissioner of Excise, Dehradun, in whose favour the directions have been made by the High Court to issue cheques for payment of excise duty. Notice was also ordered to the impleaded party. In the meanwhile, this Court stayed the operation of order dated 24-9-2004.
6. The matter was argued by Mr Kailash Vasdev, learned Senior Counsel for the appellant and Dr. A.M Singhvi, learned Senior Counsel for the respondents at length. Since the main matter filed under Section 9 of the Arbitration and Conciliation Act is pending before the High Court, we are not inclined to consider the arguments advanced by the learned Senior Counsel on merits at this stage. The proper course, in our opinion, would be to request the High Court to dispose of the Section 9 application at the earliest. Since the matter is pending in the High Court from October 2001, we request the High Court to dispose of the Section 9 application as expeditiously as possible at any rate not later than 30-11-2006. We make it clear that we are not expressing any opinion on the merits of the rival claims including the claims of the Excise and Railways. It is open to those parties to approach the High Court for appropriate relief. The stay granted by this Court in regard to disbursement of the amount shall be in force till the disposal of the Section 9 application. The liberty is reserved to all parties to approach the High Court for expeditious disposal and for other directions, if any.
7. The appeals are accordingly disposed of with no orders as to costs.
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