RELIANCE INFRATEL LTD Vs ETISALAT DB TELECOM PVT. LTD.

Applicability of the doctrine of ‘Amity or Comity’ is the issue involved in these matters.

2. Petitioners are licensees under Section 4 of the Indian Telegraph Act, 1885. Respondents are also licensees operating in different circles. Petitioners provide for passive infrastructure to the Respondents herein. They entered into several agreements in this behalf. Inter-alia on the premise that the Respondent owes a huge sum of means to the Petitioners herein, these petitions have been filed. Several interim prayers have been made in the petition being :- (i) a direction to the Respondent to secure the outstanding of over Rs.1270.45 crore as on 31.01.2012 by way of deposit in Court and/or attachment of the equipments of the Respondent; (ii) a direction to the Respondent to secure the outstanding amount of Rs.1270.45 crore as on 31.01.2012, restraining the Respondent from in any manner dealing with/disposing off or parting with possession, alienating, transferring or selling or encumbering or creating third party rights or charge on any of the assets and movable or immovable properties, advances, loans etc. of the Respondent or on any part thereof;

(iii) attachment of all the movable and immovable properties of the Respondent including but not limited to bank accounts/ machineries/equipments; (iv) pending the hearing and final disposal of the Petition appoint a competent person as receiver in respect of all the assets both movable and immovable, and affairs of the Respondent; (v) restrain the Respondent from interfering with the Petitioner‟s possession and control of the existing sites including in respect of the equipment installed by Respondent; (vi) Petitioner shall be permitted to have lien on the Respondent‟s equipments; (vii) The Respondent be directed to disclose and/or furnish information to the Petitioner of all its assets both movable and immovable as also receivables.”

3. Respondent herein filed a short reply in respect of the said interim prayer made by the Petitioner, wherein jurisdiction of this Tribunal was questioned.

4. By an order dated 10.04.2012, this Tribunal held that it has jurisdiction to decide the issues between the parties. However, no ad-interim order was passed in favour of the Petitioner as it had been brought to the notice of this Tribunal that the Delhi High Court, while considering an application filed by Viom Networks Ltd. had restrained the Respondent from transferring its properties. Respondent, however, has brought to our notice two other proceedings, which have been initiated in the meantime. Standard Chartered Bank has filed an application before the Debt Recovery Tribunal at Mumbai and by an order dated 16.4.2012, it was directed:- “After hearing the Counsel for the Applicant and considering the veracity of the matter, but without going into the merits of the main O.A., the interim order is being passed against the Defendant, allowing prayer 9 (b), (d), and (e). In the mean time, Mr. A. K. Singh, Advocate, is hereby directed to appoint Advocate Commissioner/ Receiver by this Tribunal to take necessary inventory of the hypothecated goods and as well as assets, belonging to Defendant company in all the addresses/places which shall be provided by the Applicant Bank. The Advocate Commissioner/Receiver is also hereby directed to take possession of the invented hypothecated goods and other assets belonging to Defendant company and keep them under safe custody by appointment of necessary security personnels to protect the same. The Registrar I/c. of this Tribunal is hereby directed to issue necessary Warrant of Appointment to Mr. A. K. Singh, Advocate, within two days from today. A sum of Rs.30,000/- is fixed as initial remuneration payable to the Advocate Commissioner/Receiver by the Applicant Bank. The Advocate Commissioner/Receiver is hereby directed to submit Status Report within four weeks from today.

In the mean time, in view of the aforesaid order passed by this Tribunal, the Applicant Bank is hereby directed to give necessary details of addresses/places wherein the Defendant company keeping all its hypothecated goods and other assets charged to the Applicant Bank within a week‟s time from today. Further, under the principles of natural justice, one more fresh notice is hereby directed to be served upon the Defendant company by the Applicant Bank and file proof of service when the matter shall be taken up for further proceedings.”

5. It has further been placed on record that the said order has been modified to the following effect :- “i) Para No.2, (6th line from the bottom) the word “unsecured” shall be replaced with “secured” and the word “no security” shall be replaced with “insufficient”; ii) Para No.3 (5th line from the top) the phrase „and the employees were terminated‟ shall be replaced with “employees have left the company”; iii) Para No.3 (last line from the bottom) the word “unsecured” shall be replaced with “secured” and the last line on that page and first line on next page should read as “that the loan is a secured one, but the Defendant is likely to remove”; (iv) Para No.4 (4th line from the bottom) after the Phrase „allowing prayer 9(b), (d) and (e)‟ should be replaced with “allowing prayer 10(b), (c) and (d) of the Interim application”;

(v) Para No.4 (last line from the bottom) needs to read as “Mr. A. K. Singh, Advocate is directed to be appointed as Advocate Commissioner/Receiver”.”

6. An application for winding up has also been filed by Etisalat Mauritius Ltd. against the Respondent herein. Kathawalla, J. of Bombay High Court in Company Petition No. 114 of 2012 passed the following order on 28.3.2012 :- “Since the Winding up Petition is already filed, the Company seeks permission of the Court to disburse the salaries of its employees in the sum of approximately Rs.9.00 Crores. The learned Advocates appearing for the Parties have no objection if the Company is allowed to pay the salaries of its employees for the month of March 2012. In view thereof, the Company is granted permission to disburse the salaries for the month of March 2012 to its employees which is approximately in the sum of Rs.9.00 Crores.”

7. We are informed that pursuant to and in furtherance of the said directions, various creditors including the Petitioners herein had filed their claims before the learned Company Judge. In its order dated 11.04.2012, it was noticed :- “Today several creditors of the Company have appeared before this Court and have claimed that the Company owes them various amounts ranging from Rs.60 Lacs to Rs.1,500 Crores. The Company Petition is placed for admission on 18th April 2012. In the meantime, the creditors/claimants shall, on or before 16th April 2012, file their respective Affidavits before this Court setting out the particulars of their claim against the Company along with documents in support thereof and shall serve the same on the Advocates for the Parties. Until further Orders, the Company shall not make any payments to any of the creditors/claimants of the Company without obtaining prior permission of this Court. This Order is passed without prejudice to the rights and contentions of the Parties.”

8. The interim order passed by the learned Company Judge is only to the effect that the Respondent herein has been prohibited from paying any amount to its creditors.

9. Mr. Ramji Srinivasan, learned senior counsel appearing on behalf of the Petitioner would contend that there is no bar for this Tribunal to pass an interim order so as to secure the interest of the Petitioner.

10. The Supreme Court of India in Centre for Public Interest Litigation Vs. Union of India reported in (2012) 3 SCC 1 directed cancellation of the licences held by the Petitioner. However, so as not to put the customers to any disadvantage, the Petitioners have been permitted to carry out their operations till 30.6.2012, which has since been extended to 31.8.2012.

11. Respondent has many creditors. Different creditors, as indicated heretobefore, have approached different forums. Some interim orders have also been passed in those proceedings.

12. Mr. Chandoke appearing for the Respondent would contend that keeping in view the order passed by the Debts Recovery Tribunal at Bombay appointing a Receiver/Advocate Commissioner, who not only has been directed to take possession of all assets of the Respondent but also take adequate security measures to protect such properties, o other or further interim order need be passed in these proceedings.

13. Before us, leaned counsel for the Standard Chartered Bank has also appeared, although so far it has neither been impleaded as a party nor has it been allowed to intervene in the matter.

14. Keeping in view the order of this Tribunal that it has jurisdiction to determine the disputes between the parties, there cannot be any doubt or dispute that it has also the jurisdiction to pass interim orders. Interim orders are inter-alia passed for the purpose of protecting the subject matter of the dispute. Petitioner cannot be put to any disadvantage only because other creditors of the Respondent have approached the other forums. While, however, saying so, we are not unmindful of the doctrine of Amity or Comity. In Prabhjot Singh Mand & Ors. Vs. Bhagwant Singh & Ors. reported in (2009) 9 SCC 435, the law is stated in the following terms :- “This Court in India Household and Healthcare Ltd. vs. LG Household and Healthcare Ltd [(2007) 5 SCC 510] noticed:

17. This aspect of the matter has been considered in A Treatise on the Law Governing Injunctions by Spelling and Lewis wherein it is stated:

Section 8. Conflict and loss of jurisdiction. --Where a court having general jurisdiction and having acquired jurisdiction of the subject-matter has issued an injunction, a court of concurrent jurisdiction will usually refuse to interfere by issuance of a second injunction. There is no established rule of exclusion which would deprive a court of jurisdiction to issue an injunction because of the issuance of an injunction between the same parties appertaining to the same subject-matter, but there is what may properly be termed a judicial comity on the subject. And even where it is a case of one court having refused to grant an injunction, while such refusal does not exclude another coordinate court or Judge from jurisdiction, yet the granting of the injunction by a second Judge may lead to complications and retaliatory action....”

xxx xxx xxx

19. A court while exercising its judicial function would ordinarily not pass an order which would make one of the parties to the lis violate a lawful order passed by another court.”

See also Tamilnad Mercantile Bank Shareholders Welfare Association Vs. S.C. Sekar & Ors. reported in (2009) 2 SCC 784 and Shankar Cooperative Housing Ltd. Vs. M. Prabhakar & Ors. reported in (2011) 5 SCC 607).

15. The doctrine of Amity or Comity would apply in a case where conflicting interim orders are passed. While passing an interim order in favour of the Petitioner, if due care is taken of the other orders passed by the Debts Recovery Tribunal and/or the High Courts of Delhi and Bombay, we are of the opinion that the said doctrine shall not be breached.

16. In a situation of this nature, we are of the opinion that interest of justice will be sub-served if in respect of the equipments of the Respondent, which are in possession and control of the Petitioner in terms of the agreement, it is restrained from interfering with the possession and/or transferring the said equipments which are not hypothecated to the bank and have been in possession and control of the Petitioners, and furthermore, it is restrained from disturbing the possession of the Petitioner with regard thereto.

17. There cannot be any doubt or dispute that even in the event the Receiver takes possession of the said equipments in terms of the order passed by Debts Recovery Tribunal, keeping in view the fact that the equipments belonging to the Respondent and are installed in the ‘towers’ belonging to the Petitioner which are under its possession, it must give access to the Receiver with regard thereto.

18. Liberty is granted to the Petitioner, which even is otherwise available to it, to file an appropriate application(s) before the learned Company Judge as also before Debts Recovery Tribunal. Respondent, furthermore, is directed to bring to the notice of this Tribunal if the orders of the Hon’ble Delhi and Bombay High Court and the Hon’ble Debts Recovery Tribunal are in any way varied, modified or rescinded.

19. The hearing of this petition, however, shall be expedited.

..………....... (S.B. Sinha) Chairperson

………………. (P.K. Rastogi) Member rkc