Motorola Inc Vs. Modi Wellvest - Court Judgment

Mukul Mudgal, J.

1.This order will dispose of the preliminary issue raised by the judgment debtor, M/s Modi Wellvest Private Limited(in short hereinafter referred to as `JD' or `MWPL') to the effect that the present execution petition to enforce a foreign award against it does not lie within the territorial jurisdiction of this Court and should be dismissed on this ground.

2. The decree holder, M/s Motorola, Inc.(in short the `DH') has moved this Court for an execution/enforcement of a New York Convention award as per Explanationn to Section 47 of the Arbitration and Conciliation Act, 1996(in short the `1996 Act').

3. Mr. T.R. Andhyarujina, the learned senior counsel, appearing for MWPL has contended inter alias as under:-

(a) that primarily the DH has filed the execution petition in this Court on the basis that a Shareholder Guarantee, containing the arbitration clause had been executed between the parties at New Delhi.

(b) that the primary assets of the MWPL are 51% of the shares of the company Spice, having its registered office in New Delhi where the Register of Shares is maintained.

(c) that the execution petition is predicated further on the premise that the business of the MWPL is to primarily attend the shareholder's meeting of the Company Spice located at New Delhi.

(d) that the demand for payment was also made at the address for service as per the Shareholders Guarantee which is at New Delhi.

(e) that the MWPL/JD has its office at 13th Floor, Modi Corp Tower, 98, Nehru Place, New Delhi where all notices and correspondence at the request of the MWPL had been served.

4.There is no averment in the execution petition that there any monies of MWPL are situated in Delhi so as to confer jurisdiction on this Court. The aforesaid basis of the petition for execution as set out in paragraph 3 above does not individually or collectively confer jurisdiction on this Court under Section 47 of the 1996 Act.

5. Reliance has been placed on the Explanationn to Section 47 of the 1996 Act which reads as follows:-

''In this section and all the following sections of this Chapter, ''Court'' means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercised of its ordinary original civil jurisdiction, having jurisdiction over the subject-matter of Award if the same had been the subject-matter of a suit but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.

It is submitted by the learned senior counsel for JD that only the subject-matter of the award is to be considered for the purposes of conferring jurisdiction on a Court under Section 47 of the 1996 Act for enforcement of foreign awards.

6. Section 2(e) of the Act defines `Court' qua domestic awards, as follows:-

''Court''means the principal civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction having jurisdiction to decide the question forming the subject-matter of the arbitration of the same had been the subject matter of a suit but does not include any civil court of a grade inferior to such principal Civil Courts, or any Court of Small Causes.'

The essential ingredient thus for construing the Court's jurisdiction is not the subject matter of the award but the subject matter of the arbitration. It is thus contended that the arbitrator has held that the subject-matter of the award is a sum of $3.3 million payable to the DH by the MWPL and consequently:-

(g) that the award is only for monies and not for the shares of MWPL in Spice Corporation.

(h)that since the decree for payment of monies can be recovered in a Court from a defendant by an action in personam as per Section 16 of the Code, the DH had to proceed against the MWPL by filing an appropriate proceeding in personam against the MWPL which had to be within the jurisdiction of a Court where MWPL is situated, i.e., Modi Nagar at U.P.

(i) that there is no averment that the MWPL carries on business in Delhi nor has it been averred that the subject-matter of the award, i.e., money of MWPL is within the territorial jurisdiction of this Court.

(j) Reliance was placed by the counsel for the JD on Tata International Ltd., Mumbai Vs Trisuns Chemical Industry reported as 2002 A.L.R. 432 wherein the Bombay High Court held that the Court would have no jurisdiction in the absence of the subject matter of the award being within the jurisdiction of this Court to hear and decide the petition.

(k) that apart from holding of shares of Spice Communication Co., MWPL does not own any other assets though the DH had contended that the MWPL holds money in bank accounts in New Delhi.

(l)that bank accounts which were referred to by DH were at one time held in New Delhi by the JD and held an amount to the tune of Rs.50,000/- approx.but such accounts are no longer within the territorial jurisdiction of this Court as the accounts have already been closed.

(m)that the main basis for DH choosing the jurisdiction of this Court is the averment that since MWPL holds 51% of the share of Spice having a registered office in New Delhi and where the Register of Shares has been maintained, this Court has jurisdiction.

(n) that the aforesaid plea of the DH is unsustainable as subject matter of the award is not the recovery of the shares of MWPL held in Spice but moneys of MWPL which are its assets.

(o)that in any event the DH has first to obtain a decree under Section 49 of the 1996 Act from a competent Court which has jurisdiction over MWPL after the Court is satisfied that there are no objections to the enforcement of the Award under Section 48 of the 1996 Act and only then the award can be executed.

(p)that the judgment in Fuerest Day Lawson vs Jindal Exports : [2001]3SCR479 does not hold that the foreign award can straightway be executed like a decree in any Court irrespective of the jurisdiction. It only holds that under the 1996 Act, the Court decides on the enforceability of the award under Section 48 and in the same proceeding it can take steps to execute the same.

Reliance was also placed on the following provisions of Order XXI Rule 30; Order XXI Rule 41; Order XXI Rule 43; Order XXI Rule 46; Order XXI Rule 79 and Order XXI Rule 80 of the of the Code.

1. Qua Order XXI Rule 30 which reads as under:-

'30.Decree for payment of money.___Every decree for the payment of money, including a decree for the payment of money as the alternative to some other relief, may be executed by the detention in the civil prison of the judgment-debtor, or by the attachment and sale of his property, or by both.'It is contended that a decree for payment of money may be executed by detention in Civil prison of the judgment debtor or by attachment and sale of his property or by both.

2. Qua Order XXI Rule 41 which reads as under:-

''41.Examination of judgment-debtor as to his property. [(1)] Where a decree is for the payment of money the decree-holder may apply to the Court for an order that

(a) the judgment-debtor, or

(b)[where the judgment-debtor is a corporation], any officer thereof, or

(c) any other person, be orally examined as to whether any or what debts are owing to the judgment-debtor and whether the judgment-debtor has any and what other property or means of satisfying the decree; and the Court may make an order for the attendance and examination of such judgment-debtor, or officer or other person, and for the production of any books or documents.

[2] Where a decree for the payment of money has remained unsatisfied for a period of thirty days, the Court may, on the application of the decree-holder and without prejudice to its power under sub-rule (1), by order require the judgment-debtor or where the judgment-debtor is a corporation, any officer thereof, to make an affidavit stating the particulars of the assets of the judgment-debtor.

(3) In case of disobedience of any order made under sub-rule (2), the Court making the order, or any Court to which the proceeding is transferred, may direct that the person disobeying the order be detained in the civil prison for a term not exceeding three months unless before the expiry of such term the Court directs his release.]''

It is contended that where a decree is for payment of money the judgment debtor can be examined as to his other property etc., and required to state the particulars of his assets.

3. Qua Order XXI Rule 43 which reads as under:-

''43.Attachment of movable property, other than agricultural produce, in possession of judgment-debtor.___Where the property to be attached is movable property, other than agricultural produce, in the possession of the judgment-debtor, the attachment shall be made by actual seizure, and the attaching officer shall keep the property in his own custody or in the custody of one of his subordinates, and shall be responsible for the due custody thereof:

Provided that, when the property seized is subject to speedy and natural decay, or when the expense of keeping it in custody is likely to exceed its value, the attaching officer may sell it at once.''

It is contended that where the property to be attached is movable property in the possession of the judgment debtor, the attachment has to be made by actual seizure from the judgment debtor.

4. Qua Order XXI Rule 46 which reads as under:

''46. Attachment of debt, share and other property not in possession of judgment-debtor.__(1) In the case of__

(a) a debt not secured by a negotiable instrument,

(b) a share in the capital of a corporation,

(c) other movable property not in the possession of the judgment-debtor, except property deposited in, or in the custody of, any Court, the attachment shall be made by a written order prohibiting;__

(i) in the case of the debt, the creditor from recovering the debt and the debtor from making payment thereof until the further order of the Court;

(ii) in the case of the share, the person in whose name the share may be standing from transferring the same or receiving any dividend thereon;

(iii) in the case of the other movable property except as aforesaid, the person in possession of the same from giving it over to the judgment-debtor.

(2) A copy of such order shall be affixed on some conspicuous part of the Court-house, an another copy shall be sent in the case of the debt, to the debtor, in the case of the share, to the proper officer of the corporation, and, in the case of the other movable property(except as aforesaid), to the person in possession of the same.

(3) A debtor prohibited under clause (i) of sub-rule (1) may pay the amount of his debt into Court, and such payment shall discharge him as effectually as payment to the party entitled to receive the same.''

It is contended that this provision relied upon by the DH has no application as it deals with property not in the possession of the judgment debtor but a third party.

5. Qua Order XXI Rule 79 which reads as under:-

''79.Delivery of movable property, debts and shares.__(1) Where the property sold is movable property of which actual seizure has been made, it shall be delivered to the purchaser.

(2) Where the property sold is movable property in the possession of some person other than the judgment debtor, the delivery thereof to the purchaser shall be made by giving notice to the person in possession prohibiting him from delivery possession of the property to any person except the purchaser.

(3) Where the property sold is a debt not secured by a negotiable instrument, or is a share in a corporation, the delivery thereof shall be made by a written order of the court prohibiting the creditor from receiving the debt or any interest thereon, and the debtor from making payment thereof to any person except the purchaser, or prohibiting the person in whose name the share may be standing from making any transfer of the share to any person except the purchaser, or receiving payment of any dividend on interest thereon, and the manager, secretary or other proper officer of the corporation from permitting any such transfer or making any such payment to any person except the purchaser.''

It is contended that this indicates when the property sold is a movable property of which actual seizure has been made as per Rule 43, it shall be delivered to the purchaser and Sub-Rule 3 of Rule 79 clearly states that where the property sold is a share in a Corporation, an order prohibiting a person in whose name the share may be standing can be made, transferring the share to any person except the purchaser.

6. Qua Order XXI Rule 80 which reads as under:-

''80.Transfer of negotiable instruments and shares.__(1) Where the execution of a document or the endorsement of the party in whose name a negotiable instrument or a share in a corporation is standing is required to transfer such negotiable instrument or share, the Judge or such officer as he may appoint in this behalf may execute such document or make such endorsement as may be necessary, and such execution or endorsement shall have the same effect as an execution or endorsement by the party.

(2) Such execution or endorsement may be in the following form, namely:

AB by CD, Judge of the Court of (or as the case may be), in a suit by EF against AB.

(3) Until the transfer of such negotiable instrument or share, the court may, by order, appoint some person to receive any interest or dividend due thereon and to sign a receipt for the same; and any receipt so signed shall be as valid and effectual for all purposes as if the same had been signed by the party himself.''

It is contended that where execution by endorsement of the party in whose name a share in a Corporation is standing is required, to transfer the share, necessary documents are to be executed by a Court or an officer to be appointed by a Court as being a transfer on behalf of the shareholder and such order of endorsement shall have the same effect effect as an execution or endorsement by the party.

7. Finally it has been contended that unless and until DH obtains a monetary decree against the MWPL in a court having jurisdiction in personam over MWPL and only failing satisfaction the DH can execute the monetary decree against whatever assets MWPL has including shareholding by MWPL in Spice Corporation by attachment and sale of these shares. The situs of a share being at the registered office of the Company is an irrelevant factor as held by the Supreme Court in Vishwanathan Vs Rukan-ul-Mulk : [1963]3SCR22 . The Hon'ble Supreme Court has held in the above judgment that an action to obtain shares can be in personam against the holders of the shares within the territorial jurisdiction of this Court and the situs of the shares is irrelevant for transfer of shares.

8. The following paragraph of the aforesaid judgment in Vishwanathan's case (supra) holds that the situs of the share in any question between the Company and the holder is the place of the registered office of the Company:-

''The situs of the shares in any question between the Company and the holders thereof was the registered office of the Company in Bellary [outside the State of Mysore], but the share certificate must, on the case of the plaintiffs as set out in the plain , be deemed to be with the executors and compliance with the decree, if any, passed against the executors for an order of retransfer could be obtained under the Code of Civil Procedure (See Order XXI, rr.31 and 32 Mysore Civil Procedure Code). There is no rule of private international law recognized by the courts in India which renders the Bangalore Court incompetent to grant a decree directing retransfer of the shares merely because the shares have a situs in a dispute between the Company and the shareholders outside the jurisdiction of the foreign court: Counsel for the plaintiffs submitted that the Mysore Court was incompetent to deliver an effective judgment in respect of the shares, but by personal compliance with an order for retransfer judgment in favor of the plaintiffs could be rendered effective.''

Thus it has been contended that this Court does not have territorial jurisdiction to entertain the present execution petition.

9. In its reply to the preliminary plea of lack of territorial jurisdiction raised by the Judgment Debtor, the learned senior counsel for the Decree Holder, Shri Soli J. Sorabjee while supporting the territorial jurisdiction of this Court has submitted as under:-

(a)Under the Explanationn to Section 47 of the act, the `Court' having means a Court having jurisdiction if the same had been the subject matter of the suit and since the subject matter of the award is money and money in the form of bank accounts and assets of the JD in the form of shares are located in the jurisdiction of this Court, territorial jurisdiction exists in this Court to enforce/execute the award. In the Schedule 'A' to the Execution Petition details of 51% share of Spice and three bank accounts in Delhi have been detailed as follows:-

''List of Assets of Judgment Debtor

I. List of Bank Accounts held by Judgment Debtor.

a) State Bank of Patiala, New Delhi.

b) Citibank, New Delhi.

c) The Hongkong and Shanghai Bank Corporation, New Delhi.

II. List of shares owned by Judgment Debtor. 281,249,000 Equity Shares of Rs.10/- each fully paid up and issued at par, held in Spice Communications Limited, having its Registered Office at Hemkunt Tower, 98, Nehru Place, New Delhi 110 019.''

(b) The Judgment Debtor had also filed an affidavit of assets pursuant to the freezing injunction by the English Court which stated as follows:-

''Without prejudice to the rights and contents of the Company in the matter particularly in relation to the jurisdiction of the English Court to try and entertain the aforesaid application, pursuant to paragraph 3(1) of the Order, the details of the asset of the Company are as follows:

281,489,400 Equity Shares of Rs.10/- each fully paid and issued at part, held in Spice Communications Ltd.

Bank Balance aggregating to Rs.52,643 in the Bank Accounts as detailed below:-

a) State Bank of Patiala, New Delhi. Rs.37,524

b) Citibank, New Delhi. Rs. 8,583

c) The Hongkong and Shanghai

Bank Corporation, New Delhi. Rs. 52,643''

(c)In Brace Transport Corporation of Monrovia, Bermuda v. Orient Middle East Lines Ltd., Saudi Arabia (1995) 2 SCC 280, the Hon'ble Supreme Court has held that the enforcement of a foreign award can be done wherever the assets of the losing party are located. The award holder has the choice of the country in which to enforce it and may go forum shopping. Reliance in particular has been placed on the following passages of the aforesaid judgment :

''13 . ..................................

'' A party seeking to enforce an award in an international commercial arbitration may have a choice of country in which to do so; so it is sometimes expressed, the party may be able to go forum shopping. This depends upon the location of the assets of the losing party. ................

(d) Reliance has also been placed on Fuerest Day Lawson v. Jindal Exports, : [2001]3SCR479 , wherein it has been held as follows:-

'' 28. Alternatively it was contended that a party holding a foreign award has to file a separate application and produce evidence as contemplated under Section 47 and also satisfy the conditions laid down under Section 48 and it is only after the Court decides about the enforceability of the award, it should be deemed to be a decree under Section 49 as available for execution. In other words, the party must separately apply before filing an application for execution of a foreign award. ...............

xx xx xx xx 29. . If the argument of the respondent is accepted, one of the objects of the Act will be frustrated and defeated. Under the old Act, after making award and prior to execution, there was a procedure for filing and making an award a rule of Court i.e. a decree. ...... The only difference as found is that while under the Foreign Award Act a decree follows, under the new Act the foreign award is already stamped as the decree.

(e) It has been contended that a decree of money can be executed by detention in the civil prison and by the attachment and sale of his property as per Order XXI Rules 30 and 64 of the Code, which read as follows:-

''Order XXI R 30

Decree for payment of money - Every decree for the payment of money, including a decree for the payment of money as the alternative to some other relief, may be executed by the detention in the civil prison of the judgment-debtor, or by the attachment and sale of his property, or by both. Order XXI R 64

''Power to order property attached to be sold and proceeds to be paid to person entitled -- Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same.''(f)51% shares of Spice are held by the Judgment Debtor and this asset of the Judgment Debtor in the form of shares are located in Delhi. Under Section 2(46) of the Companies Act, 1956, a share is defined to mean a share in the share capital of the company and consequently a share in a corporation held by any person is located where the registered office of the corporation is located i.e. where it can be effectively dealt with. Reliance has been placed on the following judgments, relevant extracts of which read as follows:-

''1) Vishwanathan v. Abdul Wajid, : [1963]3SCR22 .

15. ................... Undoubtedly, the registered office of India Sugars and Refiners Ltd., was in Bellary in the Province of Madras, the situs of the shares which are moveable --- may normally be the place where they can be effectively dealt with (see Erie Beach Co. v. Attorney-General for Ontario, 1930 A C 161 : AIR 1930 PC 10and Brassard v. Smith, 1925 A C 371. The situs of the shares of the India Sugars and Refineries Ltd. may thereforee be properly regarded as without the territorial jurisdiction of the Mysore Court at the date of the institution of the suit by the plaintiffs......................................

2. Erie Beach Co. Ltd. v. Attorney General of Ontario AIR 1930 PC 10

In Attorney-General v. Higgins (1) as in Brassard v. Smith (2), duty upon, shares was in question. In Attorney-General v. Higgins (1), Baron Martin held that when transfer of shares in a company must be effect by a change in the register, the place where the register is required by law to be kept determines the locality of the shares ..................

3. Bassard v. Smith (1925) AC 371

It is quite true that in that case the head office as well as the register was in Scotland, but in their Lordship's view it is impossible to hold that in view it is impossible to hold that in that case the position of the head office was the dominant factor merely on the strength of a phrase used by the reporter of the Attorney-General's argument, and a casual reference made to case by Lord Esher in a subsequent case of Attorney-General v. Lord Sudeley. In the present case Duff J., dealing no doubt with the ''no local situation'' argument, sad as follows: ''And the Chief Baron's judgment, I think, points to the essential element in determining situs on case of intangible chattels for the purpose of probate jurisdiction as ''the circumstance that the subjects in question could be effectively dealt with within the jurisdiction.'' this is, in their Lordship's opinion, the true test. Where could the shares be effectively dealt with? The answer in the case of these shares is in Nova Soctia only, and that answer solves the question''

(g)This Court has power to attach and sell the assets of the Judgment Debtor because its assets and properties are located within the territorial jurisdiction of this Court irrespective of the situs of MWPL and the plea that the location of the shares certificates indicates the place of execution, taken by the Judgment Debtor is misplaced. The share certificates are nothing but evidence of title of the shares and not the actual property in shares, similar to title deeds not being anything but the title of the immovable property. Reliance has been placed on Section 84 of the Companies Act which reads as follows:-

''84(1) Certificate of shares

A certificate, under the common seal of the company, specifying any shares held by any member, shall be prima facie evidence of the title of the member of such shares.''

(h) Reliance has also been placed on the procedure prescribed under Order XXI Rules 46(1)(b), 46(2), 64, 66, 76, 79(3) and 80. The relevant provisions of Order XXI Rules 64, 66 and 76 read as follows:-

''Order XXI

Rule 64

''Power to order property attached to be sold and proceeds to be paid to person entitled -- Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same.

Rule 66

''Proclamation of Sales by Public auction --(1) Where any property is ordered to be sold by public auction in execution of a decree, the Court shall cause a proclamation of the intended sale to be made in the language of such Court.

(2) Such Proclamation shall be drawn up after notice to the decree holder and the judgment-debtor and shall state the time and place of sale, and specify as fairly and accurately as possible:-

(a) the property to be sold, (or, where a part of the property would be sufficient to satisfy the decree, such part) ;

(b) the revenue assessed upon the estate or part of the estate, where the property to be sold is an interest in an estate or in part of an estate paying revenue to the Government;

(c) any encumbrance to which the property is liable;

(d) the amount for the recovery of which the sale is ordered; and

(e) every other thing which the Court considers material for a purchaser to know in order to judge of the nature and value of the property;

Provided that where notice of the date for settling the terms of the proclamation has been given to the judgment debtor by means of an order under Rule 54, it shall not be necessary to give notice under this rule to the judgment debtor unless the Court otherwise directs:

Provided further that nothing in this rule shall be construed as requiring the Court to enter in the proclamation of sale its own estimate of the value of the property, but the proclamation shall include the estimate, if any, given by either or both of the parties.)

(3) Every application for an order for sale under this rule shall be accompanied by a statement signed and verified in the manner hereinbefore prescribed for the signing and verification of pleadings and containing, so far as they are known to or can be ascertained by the person making the verification, the matters required by sub-rule (2) to be specified in the proclamation.

(4) For the purpose of ascertaining the matters to be specified in the proclamation, the Court may summon any person whom it thinks necessary to summon and may examine him in respect of any such matters and require him to produce any document in his possession or power relating thereto.''

Rule 76

Negotiable Instruments and shares in corporations-(1) Where the property to be sold is a negotiable instrument or a share in a corporation, the Court may, instead of directing the sale to be made by public auction, authorise the property shall forthwith be re-sold.

(2) On payment of the purchase-money, the officer or other person holding the sale shall grant a receipt for the same, and the sale shall become absolute.

(3) Where the movable property to be sold is a share in goods belonging to the judgment-debtor and a co-owner, and two or more persons, of whom one is such co-owner, respectively bid the same sum for such property or for any lot, the bidding shall be deemed to be the bidding of the co-owner.''

(i) The quantum of money now available in banks accounts of the JD in Delhi is not material for determining territorial jurisdiction particularly when it has been admitted on behalf of the Judgment Debtor during arguments that bank accounts have been closed subsequent to the filing of the execution petition and thus the quantum of the amount held in such bank accounts today is wholly irrelevant so as to oust the jurisdiction of this Court so long as on the date of filing of the execution petition the ban accounts had monies in it.

(j) The Decree Holder has clearly stated in paragraph 1(xii)(b) of the Execution Petition that it seeks the assistance of this Court to attach and sell the assets set forth in Schedule A which mentions three bank accounts in Delhi and in prayer (b), the Decree Holder has sought attachment and sale of all movable and immovable assets. In paragraph V of the execution petition, it has been specifically averred that the business of MWPL/judgment debtor is conducted at New Delhi.

(k) The present action for enforcement and execution of the award is neither against the person of the judgment debtor nor against the title of the shares or retransfer, it is merely an action for attachment and for sale of assets of the judgment debtor and only relevant factor is location of the assets of the property and not the location of the Judgment Debtor.

(l) Since it is admitted by the judgment debtor that the situs of the shares held by it in Spice is in New Delhi such assets in the form of shares are thereforee located in Delhi within the territorial jurisdiction of this Court. Each share being a part of the share capital stands located where the registered office of the company is situated i.e. Delhi.

(m) Finally the plea that of the Judgment Debtor that the Motorola/Decree Holder first have to obtain a monetary decree against MWPL in a Court having jurisdiction in personam over MWPL and only thereafter file execution proceedings in relation to the such decree is contrary to the law laid down in Fuerest Day Lawson (supra) where foreign award is treated to be a decree of Indian Court. Such a plea is also contrary to the principles of law in Brace Transport's case (supra) where it has been held that award can be enforced where the assets of the losing party is located irrespective of the presence of the Judgment Debtor within the jurisdiction of the executing Court.

10. The sum and substance of the pleas of the judgment debtor is that the only current assets of judgment debtor are 51 per cent shares of Spice which company and its shareholders' register is situated in Delhi though the share capital is held by the JD in Modipuram, UP and its erstwhile bank account in Delhi having been cleared during these proceedings, no assets are available and subject to the plea that a foreign award can not be executed straightaway as a decree, the decree holder can at best approach a Court in Modipuram, UP to execute the decree.

11. Thus the judgment debtor contends :

a) No bank account of judgment debtor are held in Delhi as of today.

b) By virtue of the location of share certificates of SPICE in Modipuram, no execution of the decree in Delhi is permissible in law.

c) Unless the Court having jurisdiction in personam over the judgment debtor, MWPL, grants a money decree based on the foreign award, no execution proceedings can lie for the execution of such a foreign award.

12. In my view the plea relating to non-executability of an award without the obtaining a decree under Section 49 of the Act from a competent court and the further plea that such execution can only be done after such a court is satisfied that there are no objection to the enforcement of the award under Section 48 is covered by the judgment of the Hon'ble Supreme Court in Fuerest Day Lawson, : [2001]3SCR479 and the Supreme Court had clearly rejected a similar plea to the effect that a party holding a foreign award has to file a separate application and produce evidence as contemplated under Section 49 of the Act and also satisfy conditions stipulated under Section 48 and an award would only be deemed to be a decree under Section 49 after available for execution. The Supreme Court in negativing such a plea held that in order not to frustrate and defeat the object of the 1996 Act, the foreign award under the 1996 Act was stamped as a decree. Consequently since the foreign award has been held by the Supreme Court to be akin to the decree and is executable as a decree, this plea is, thereforee, wholly lacking in merit and is thus rejected.

13. The second plea of the judgment debtor is that no bank accounts of the JD or any amount therein existed in Delhi today. It is not in dispute that the bank accounts existed when this execution petition was filed and had about Rs.50,000/- in them. While in the pleadings an attempt was made by the judgment debtor to obfuscate the issue by pleas which while averring that bank accounts no longer existed in Delhi, nevertheless omitted to give the dates of closure of the accounts, the learned senior counsel for the JD, Shri Andharujina, however, very fairly stated that the bank accounts in Delhi were closed during the pendency of this execution petition. Consequently when at the time of filing of this execution petition, assets of the JD in the form of monies were available in bank accounts in Delhi, the jurisdiction of this Court to proceed with this execution was established. Whether the amount available in the bank account was sufficient to satisfy the decree or that the account stood closed during the execution proceedings in my view are not considerations which have any bearing on the applicability of Section 47 to enable the availability of and indeed the maintainability of the present execution proceedings under Section 47 of the 1996 Act.

14. The plea regarding the subject matter of the arbitration and the award being money and in such an event the inexecutability of such an award qua shares, said to be situated in Modipuram, is also required to be dealt with. Once an execution petition is founded on averments relating to existing bank accounts of the JD in Delhi and found to be maintainable in Delhi, all other pleas relating to an award in money not being executable qua shares become meaningless. Significantly the existence of the bank accounts in Delhi and the shareholding of Spice by the JD was affirmed on oath on an affidavit filed by the JD itself.

15. In so far as the plea of JD of its holding of the share certificates at Modipuram and consequent ousting of the jurisdiction of this Court on this ground is concerned, the judgments in Vishwanathan's case (supra), Eri Beach Co. Ltd' case (supra) and

Brassard's case(supra) clearly hold that shares are held at the registered office of the Company and hence even proceeding on the assumption that shareholder certificates are held at Modipuram, an execution petition qua such shares of such a company with its registered office at Delhi is certainly maintainable at Delhi. There is nothing which prevents an astute JD from transferring its shares/assets to another place repeatedly so as to escape/avoid execution and consequently since the situs of the share has been held by the Supreme Court in Vishwanathan's case (supra) to be the registered office of a company, which in the present context of Spice is in Delhi, this execution petition is maintainable on this ground too in this Court.

16. In so far as the plea relating to non-pleading of any assets of the JD being in Delhi is concerned, it clearly stated in Para (xii) (b) that the assistance of the Court was sought for attaching and selling assets in Schedule A which specifically referred to three bank accounts and the shares of Spice Communications Ltd., owned by the JD and said to be at Delhi and thus the execution petition had sufficient pleadings qua the assets of the JD being at Delhi.

17. Reliance on Order XXI Rule 30 of the Code by the JD is also unsustainable as it is clear that the provision itself permits the attachment and sale of the property of a JD in execution of a decree for payment of money. In the present case the Decree

Holder has sought to attach and sell the shares which are undoubtedly the properties of the JD. Similarly the reliance on Order XXI Rule 41 of the Code is also unsustainable because when Order XXI Rule 41 of the Code itself permits the examination of the JD as to his property and in the present case JD itself filed an affidavit disclosing the shares of Spice Communications Pvt. Ltd., owned by it, and, thereforee the plea of applicability of Order XXI Rule 41 is without merit. Similarly Order XXI Rule 43 of the Code provides for actual seizure of immovable property, I fail to see how an attachment and eventual sale of shares of the JD in Delhi held in Delhi is barred by virtue of Order XXI Rule 43 of the Code. Similarly qua Order XXI Rule 46 of the code, it has been contended that the shares are not in possession of the JD but a third party i.e. Spice and thereforee Order XXI Rule 46 of the Code comes into play and bars this execution petition. In my view, Order XXI Rule 46 of the Code is merely a enabling provision. I fail to see how this can bar the present execution petition. Furthermore, on the Judgment Debtor's own showing such third person i.e. Spice Communication Ltd. is situated in Delhi. For the same reason, Order XXI Rule 79 of the code is also inapplicable. I am also unable to understand how Order XXI Rule 80 of the Code comes in the way of the present execution petition because it provides for a mode of transfer in respect of negotiable instruments and shares and cannot by itself bar attachment and sale of such shares.

18. In so far as the reliance on Vishwanathan's case (supra) is concerned, the said judgment itself holds that the situs of shares in question is the registered office of the company and I fail to see how this judgment comes to the aid of the judgment debator. In accordance with the Vishwanathan's case (supra) the situs of the shares is normally the place where they can be effectively dealt with and consequently the it is not in dispute that as per the law laid down in Eri Beach Co. Ltd' case the location of the shares is the registered office of the company where the register is required by law to be kept and this determines the locality of the shares. Similar was the view taken in Bassard's case (supra) both of which judgments, i.e., Eri Beach Co. Ltd' case (supra) and Bassard's case (supra) were referred to with approval by the Hon'ble Supreme Court in Vishwanathan's case (supra).

19. The DH is also right in contending that the present action for execution of the award is not action against personam of the JD and not even against the title of the shares but is for an attachment and sale of the assets of the JD. The only relevant factor is the location of the assets or the property and not the JD itself and in the present case the DH is right in contending that the location of the assets in question, i.e., shares and bank accounts, is in Delhi and this Court thus has jurisdiction.

20. Finally the position of law now is well settled as per the judgment of the Hon'ble Supreme Court in Brace Transport Corporation's case(supra) wherein it has been held that a party seeking enforcement of an international award will be able to go forum shopping and locate the assets of the losing party for executing the award. Thus it is open to the DH to locate the assets of the losing party that is the judgment debtor which have been found to be in New Delhi in the form of both bank accounts and shares of Spice Communications Ltd.

21. To sum up the conclusions are:

(a) the DH holds a foreign arbitral award against the JD.

(b) the award grants a sum of $33 million in favor of the decree holder and against the judgment debtor.

(c) the JD had bank accounts in Delhi and held shares of a company having a registered office in Delhi.

(d) these amounts and shares are undoubtedly assets of the JD company

(e) a foreign award is executable as a decree

(f) Order XXI Rule 30 of the Code permits the sale of the property of the JD company in execution of a decree.

22. Accordingly there is no merit in the preliminary plea of the judgment debtor of the maintainability of this execution petition in this Court on account of lack of territorial jurisdiction. This plea of lack of territorial jurisdiction to proceed with this execution petition is thus rejected.

List this petition and the EAs on 7th February, 2005.