Filing Information In Sealed Covers For Enforcement Of Arbitral Award Is Contrary To Natural Justice: Calcutta High Court
The Calcutta High Court bench of Justice Ravi Krishan Kapur held that the procedure of filing information in sealed covers for enforcement of arbitral award is contrary to the basic process of justice. It held that the concept of sealed covers also makes serious inroads into the principle of natural justice and fairness. The bench held that: “If the respondent was in the...
The Calcutta High Court bench of Justice Ravi Krishan Kapur held that the procedure of filing information in sealed covers for enforcement of arbitral award is contrary to the basic process of justice. It held that the concept of sealed covers also makes serious inroads into the principle of natural justice and fairness.
The bench held that:
“If the respondent was in the dark about the financial affairs of the petitioner prior to the filing of the application under section 9 of the Act, it is now sought to be kept in anxiety and suspense if the filing of sealed covers is permitted. There is no element of public interest nor national security involved in these proceedings. The parties are commercial men. The disputes raised between the parties are purely contractual. The underlying interests of both the parties is pure and simple money. In these commercial matters, there is no place for confidentiality nor privacy nor sealed covers.”
Brief Facts:
The Petitioners approached the Calcutta High Court (“High Court”) to file their respective Affidavit of Assets in a sealed cover without handing over a copy to any third party. This request arose in the context of a post-award application under Section 9 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). An interim order directed the Petitioners to file affidavits disclosing all their assets and encumbrances to enforce an arbitration award. The Petitioners were required to detail their fixed, movable, tangible, intangible assets, properties, intellectual properties, bank accounts, receivables, loans, liabilities, and pending litigations.
The Petitioners argued that public disclosure of their assets could lead to misuse by third parties and that their affidavits contain confidential financial information, which might prejudice them.
Observations by the High Court:
The High Court noted that the procedure of filing information in sealed covers is ordinarily contrary to the basic process of justice. It is a fundamental principle in adversarial proceedings that anything the court can see must also be accessible to the opposite party. The concept of sealed covers significantly undermines the principles of natural justice and fairness. It held that if the Respondent was unaware of the financial affairs of the petitioner before filing the application under Section 9 of the Arbitration Act, allowing sealed covers would only exacerbate their anxiety and suspense.
The High Court noted that the purpose of ordering the filing of an Affidavit of Assets is to protect the Respondent's interest post-award. By directing the Petitioners to file these affidavits, the court aimed to identify the Petitioners' properties and assets that could be subjected to execution or enforcement. This practice is a standard method of discovery to determine whether a reluctant judgment debtor has any assets or properties to satisfy the decree. The fundamental objective behind filing the Affidavit of Assets is to ascertain whether the petitioners possess sufficient money or assets to satisfy the awarded amount (referred to Shew Kumar Nopany vs. Grindlays Bank Limited AIR 1986 Cal 328 and Mathiyam Bivi Ammal vs. The Union Bank Ltd., Kumbakonam AIR 1938 Mad 771).
The High Court found no merit in the objections raised by the Petitioners. Consequently, all the applications were dismissed.
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Case Number: AP-COM/490/2024 IA NO: GA-COM/2/2024, GA-COM/3/2024, GA-COM/4/2024, GA-COM/5/2024, GA-COM/6/2024, GA-COM/7/2024
Advocate for the Petitioner: Mr. S.N. Mookherjee, Sr. Adv. Mr. Ratnanko Banerji, Sr. Adv. Mr. Suddhasatva Banerjee, Adv. Mr. Chayan Gupta, Adv. Mr. Anand S. Pathak, Adv. Mr. Vijay Purohit, Adv. Mr. Shivam Pandey, Adv. Mr. A. Mookherji, Adv. Mr. Anirudhya Dutta, Adv. Ms. S. Hoon, Adv. Mr. S. Bajaj, Adv. Mr. Nav Dhawan, Adv. …for the petitioner
Advocate for the Respondent: Mr. Anindya Kumar Mitra, Sr. Adv. Mr. Debashis Karmakar, Adv. Mr. Sarvapriya Mukherjeee, Adv. Mr. Piyush Agarwal, Adv. Mr. A. Nandi, Adv. Mr. Debojyoti Das, Adv. Mr. Satyam Ojha, Adv. Mr. Parikshit Lakhotia, Adv. Ms. Ridhi Jain, Adv. …for respondent no. 1 Mr. Pijush Agarwal, Adv. Mr. A.Nandi, Adv. Mr. Debojyoti Das, Adv. Mr. Ishaan Saha, Adv. Mr. S. Ojha, Adv. Mr. Parikshit Lakhotia, Adv. Mr. Riddhi Jain, Adv. …for the respondent no.2 Mr. Krishnaraj Thaker, Adv. Mr. Debashis Karmakar, Adv. Mr. Pijush Agarwal, Adv. Mr. A.Nandi, Adv. Mr. Debojyoti Das, Adv. Mr. Ishaan Saha, Adv. Mr. S. Ojha, Adv. Mr. Parikshit Lakhotia, Adv. Mr. Riddhi Jain, Adv. …for the respondent no.3 Mr. Dhruba Ghosh, Sr. Adv. Mr. Debashish Karmakar, Adv. Mr. Rajarshi Dutta, Adv. Mr. Pijush Agarwal, Adv. Mr. A.Nandi, Adv. Mr. Debojyoti Das, Adv. Mr. Ishaan Saha, Adv. Mr. S. Ojha, Adv. Mr. Parikshit Lakhotia, Adv. Mr. Riddhi Jain, Adv. …for the respondent no.4 Mr. Siddhartha Datta, Adv. Mr. Aditya Mukherjee, Adv. Ms. Trisha Mukherjee, Adv. Mr. Chetan Kumar Kabra, Adv. …for the respondent no.5 Mr. Abhrajit Mitra, Sr. Adv. Mr. Debashis Karmakar, Adv. Mr. Sarvapriya Mukherjee, Adv. Mr. Piyush Agarwal, Adv. Mr. A. nandi, Adv. Mr. Debojyoti Das, Adv. Mr. Satyam Ojha, Adv. Mr. Parikshit Lakhotia, Adv. Mr. Riddhi Jain, Adv. …for the respondent no.6.