REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.11907  OF 2018

[Arising out of SLP (C) No.14585 of 2015]

State Trading Corporation of India 

Ltd.          ... Appellant(s)

Versus

M/s Global Steel Holding Limited

& Ors.      ... Respondent(s)

WITH

Contempt Petition(c) No.747 of 2017

IN

S.L.P. (c) No.14585 of 2015

AND

Contempt Petition(c) No.1058 of 2018

IN

S.L.P. (c) No.14585 of 2015

AND

Contempt Petition(C) NO………...OF  2018

                       (D.NO. 24803 OF 2018)

J U D G M E N T

Abhay Manohar Sapre, J.

In S.L.P.(C) No.14585/2015

1.Leave granted.

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2.This appeal is filed against the final judgment

and order dated 09.03.2015 passed by the Delhi

High Court in Execution Petition No.337 of 2014

with EA Nos.697­98 of 2014 and EA Nos.199­200 of

2015 whereby the High Court has dismissed the

Execution   Petition   and   the   accompanying

applications filed by appellant ­ STC herein on the

ground of lack of jurisdiction.

3.In order to appreciate the controversy involved

in this appeal, it is necessary to set out the relevant

facts hereinbelow.

4.On   04.04.2005,   a   tripartite   agreement   was

entered into between the appellant i.e. State Trading

Corporation   a   Government­owned   Corporation

(hereinafter referred to as “STC”), respondent No.1 ­

M/s Global Steel Holding Ltd. (hereinafter referred

to   as   “GSHL”),   incorporated   in   the   Isle   of   Man

Channel   Islands,   and   respondent   No.   2   ­   M/s

Global Steel Philippines Inc., incorporated in the

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Philippines   (hereinafter   referred   to   as   “GSPI”).

Respondent   No.   3   is   Mr.   Pramod   Mittal,   the

Chairman   of   the   respondent   nos.   1   and   2

companies, i.e. GSHL and GSPI. The agreement was

for purchase and sale of commodities known as ­

HR Coils and CR Coils.

5.Mr.   Dushyant   Dave,   learned   senior   counsel

appeared   for   the   appellant   –   STC,   while   the

respondents were represented by Mr. Kapil Sibal,

Senior Advocate along with Mr. Gautam Mittra.

6.In   performance   of   the   agreement,   disputes

arose between the parties, particularly with respect

to   the   non­payment   of   outstanding   dues   to   the

appellant ­ STC. The parties, therefore, decided to

settle   their   disputes   by   means   of   conciliation

proceedings with the assistance of two Conciliators. 

7.The parties (STC, GSHL and GSPI) entered into

a Settlement Agreement under Section 73 of the

Arbitration   and   Conciliation  Act,   1996   (for   short

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“the   Act”)   on   15.11.2011.     In   terms   of   the

Settlement Agreement, the GSHL and GSPI agreed

to pay a total amount of US$ 355,818,019.29 with

interest @ 13.25% p.a. by 11.05.2012 as per para

(D) of the Settlement Agreement to the appellant –

STC, and in the manner set out in detail in clauses

A to K of the Settlement Agreement.

8.The   GSHL   and   GSPI   paid   some   amounts

pursuant   to   the   Settlement   Agreement   to   STC.

However, they failed to ensure full compliance with

the   terms   of   the   Settlement   Agreement   dated

15.11.2011 and committed default in paying full

payment to appellant ­ STC.

9.    The parties  therefore  entered into  a Further

Settlement   Agreement   dated   17.05.2012   through

the intervention of the Conciliators.

10.As   per   the   Further   Settlement   Agreement

dated 17.05.2012, GSHL and GSPI agreed to pay a

total amount of US $ 347,737,209.68 inclusive of

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interest at the rate of 13.50 % p.a. (Rs.1605 crores

in Indian currency) by 10.11.2012 in the manner

set   out   in   detail   in   clauses   (i)   and   (vi)   of   the

agreement   to   the   appellant   ­   STC.   Both   the

Settlement Agreement and the Further Settlement

Agreement were executed by respondent No. 3 ­ Mr.

Pramod   Mittal   as   Chairman  of  GSHL   and   GSPI,

respectively.

11.As per Clause 12 (iv) of the Further Settlement

Agreement (supra), respondent No. 3 ­ Mr. Pramod

Mittal   furnished   a   Personal   Guarantee   dated

17.05.2012   wherein   he   personally   guaranteed

payment   of   the   outstanding   amount   payable   by

GSHL and GSPI to the appellant – STC in terms of

the   Settlement   Agreement   dated   15.11.2011

together with interest @ 13.25% p.a. and Further

Settlement Agreement dated 17.05.2012. The said

respondent   undertook   to   pay   the   outstanding

amount, and stated that the guarantee shall remain

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valid till the entire outstanding dues of GSHL and

GSPI were fully discharged. 

12.Since   GSHL   and   GSPI   failed   to   fulfill   their

complete obligations under the Further Settlement

Agreement dated 17.05.2012,the appellant ­ STC

herein   filed   an   Execution   Petition   bearing

No.337/2014   in   the   High   Court   of   Delhi   on

30.08.2014 against GSHL (R­1), GSPI (R­2) and Mr.

Pramod   Mittal,   Chairman,   GSHL(R­3)   seeking   to

execute   the   Settlement   Agreements   dated

15.11.2011   and   17.05.2012   against   all   the

respondents for recovery of the balance outstanding

amounts due and payable.

13.The appellant – STC, the decree holder, filed

Execution   Applications   Nos.   697/2014   and   199­

200/2015. Insofar as application No.697/2014 was

concerned, it was filed under Order 21 Rule 11 (2) of

CPC for attachment and sale of all shares and other

assets of the respondent No.1, with a further prayer

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for   issuance   of   warrants   of   arrest   against   the

Directors and Principal Officers of respondent Nos.1

and 2 till realization of entire dues.  

14.   The   Delhi   High   Court  vide  order   dated

09.03.2015, dismissed the Execution Petition along

with the accompanying applications on the ground

that   admittedly   none   of   the   judgment­debtors   is

located  within the  jurisdiction of the Court. The

Registered Offices of respondent Nos. 1 and 2 were

outside   India.   The   Execution   Petition   could   be

entertained by a Court within whose jurisdiction the

judgment­debtors, or their properties were situated.

That since none of them is ordinarily resident within

the jurisdiction of the Court, the Execution Petition

could not be entertained, and was dismissed with

liberty   to   the   decree­holder   to   approach   the

appropriate court for enforcement of the Settlement

Award in accordance with law.

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15.Aggrieved   by   the   Order   dated   09.03.2015

passed by the Delhi High Court, the appellant ­ STC

(Decree   Holder)   filed   the   present   Special   Leave

Petition before this Court.

16.During   the   pendency   of   the   Special   Leave

Petition, various Orders were passed from time­to­

time directing the respondents to make payments to

STC. The details and break up of payments offered

and then made by the respondents to the appellant

­   STC   on   different   dates   are   mentioned   in   the

Orders dated 19.08.2015, 21.09.2015, 14.12.2015,

05.2.2016,   06.02.2017,   10.04.2017,   31.07.2017,

22.03.2018,   15.05.2018,   13.08.2018,   and

06.09.2018.

17.The Senior Counsel for the respondents, Mr.

Kapil Sibal submitted that an amount of Rs. 810

crores   approximately   was   paid   towards   the

outstanding   liability   under   the   two   Settlement

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Agreements dated 15.11.2011 and 17.05.2012 to

the appellant ­ STC.

18.When   the   matter   was   taken   up   for   final

hearing,   the   Senior   Counsel   Mr.   Kapil   Sibal

appearing for the respondents offered to deposit Rs.

800   crores,   without   prejudice   to   their   right   to

prosecute the case, within 4 weeks to show their

bona fides to the Court.

19.Accordingly,   on   31.10.2018,   the   following

Order was passed:

“Mr.   Kapil   Sibal,   learned   senior   counsel

appearing for respondent No. 2 in SLP (Civil)

No.   14585/2015,   during   the   course   of

hearing, states that without prejudice to the

right   to   prosecute   the   case,   they   are

prepared   to   deposit   the   sum   of   Rs.

800,00,00,000/­   (Rupees   Eight   Hundred

Crores) within the period of 4 weeks from

today.

Let them so deposit.

It is made clear that non­payment of the

amount will be viewed seriously.”

20.  That on 29.11.2018, the Senior Counsel for the

respondents   brought   Demand   Drafts   for   Rs.810

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crores in favour of the Decree Holder – STC. The

matter was posted for hearing on 04.12.2018.

21.  When the matter was taken up for hearing on

04.12.2018, the Demand Drafts for Rs. 800 crores

were directed to be handed over to the Court Master

in a sealed envelope.

22.   With   the   payment   of   Rs.   800   crores   on

04.12.2018,   the   respondents   have   till   date

deposited   an   amount   of   Rs.1610   crores

approximately in INR in discharge of their liability.

23.As a consequence, the entire liability of the

respondents   till   10.11.2012   would   stand

discharged. 

24.     The   issue   which   now   only   remains   for

resolution is the interest payable from 10.11.2012

onwards. The interest payable on the outstanding

amounts was left to be determined by the Court, by

the senior counsel appearing for both the parties.

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25.At this juncture, we consider it appropriate to

place on record our appreciation of the valuable

assistance provided by both the senior counsel, Mr.

DA Dave and Mr. Kapil Sibal in enabling the parties

to   resolve   the   disputes.   The   senior   counsel

addressed the myriad legal issues which arose in

the case with clarity, persuasiveness, lucidity and

industry. 

26.Learned   senior   counsel   for   the   respondents

submitted   that   even   though   the   question   with

respect to payment of interest pendente lite, and the

rate of interest, was not the subject­matter of the

original proceeding, it was prayed that this Court

may give a quietus to the long pendency of this

litigation by passing appropriate orders. 

27.Both   the   senior   counsel   prayed   that   this

Court, in exercise of its jurisdiction under Articles

136   and   142   of   the   Constitution,   exercise   its

extraordinary jurisdiction to determine the amount

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payable   towards   interest,   and   the   period   within

which it should be paid.

28.Having heard the learned senior counsel for

the parties, and on perusal of the record, we are of

the considered opinion that it is not necessary to

decide the various legal issues arising in the case

which   were   ably   presented   by   both   the   learned

senior   counsel   in   support   of   their   case   on   the

question of jurisdiction of the Delhi High Court in

entertaining   and   deciding   the   Execution   Petition

filed by the appellant.

29.Since   the   parties   have   requested   for

termination   of   these   proceedings   finally   in   this

appeal itself, and secondly, the outstanding dues

have   already   been   cleared   by   the   respondents

during   the   pendency   of   this   appeal   though   late

leaving only a limited controversy alive regarding

payment   of   interest,   we   are   of   the   considered

opinion   that   there   is   no   legal   impediment   in

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deciding the issue of payment of interest and its

rate in this appeal finally to give quietus to this

litigation.

30.Having given our anxious consideration to all

the aforementioned factors, we are of the view that

the respondents are liable to pay Interest on the

principal sum of Rs.1610 crores to the appellant at

rate of 8% per annum payable from 10.11.2012, i.e.

when the entire payment became due.

31.We direct that:

(i)The Demand Drafts for Rs. 800 crores (Rupees

Eight   Hundred   Crores)   furnished   by   the

respondents, be handed over to STC ­ Decree

Holder; 

(ii)A lump­sum amount of Rs.600 crores (Rupees

Six Hundred Crores) worked out on the basis

of 8% S.I. per annum (rounded off) be paid by

the respondents to the appellant towards full

and   final   satisfaction   of   the   amounts   due

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under   the   Settlement   Agreement   dated

15.11.2011,   and   Further   Settlement

Agreement dated 17.05.2012.

(iii)The amount of Rs.600 crores be paid by the

respondents   to   STC   towards   interest   in   12

weeks from the date of this Order.

(iv)Upon   payment   of   the   said   amount   by

28.02.2019, all claims arising out of the two

Settlement   Agreements   (supra),   would   stand

finally settled, and put a complete closure to

all   pending   proceedings   of   any   nature

whatsoever, between the parties, wherever filed

and/or pending against each other.

(v)If,   however,   the   amount   of   Rs.   600   crores

awarded towards interest  is not paid on or

before   28.02.2019,   it   would   amount   to

contempt of the Order passed by this Court,

and it would be open to the appellant to take

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appropriate action against the respondents in

accordance with law for non­compliance.

32.In light of the foregoing discussion and the

directions,   the   appeal,   along   with   all   pending

applications, stand disposed of. The   contempt

petitions are also disposed of accordingly.

……………………………… ..J

 (ABHAY MANOHAR SAPRE)

            …..………………………………J.

     (INDU MALHOTRA)

New Delhi,

December 06, 2018

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