The Calcutta High Court dismissed an application filed under Order XXI Rule 58 & Section 151 CPC read with Section 36 of the Arbitration and Conciliation Act, 1996 by Starlight Real Estate (Ascot) Mauritius Ltd. and Starlight Real Estate Mauritius Ltd., objecting to the execution of an arbitral award dated May 16, 2013. The applicants alleged that the award, which was being executed by Jagrati Trade Services Pvt. Ltd., was obtained by fraud and collusion, and therefore non-executable in law.
The Court rejected the plea, holding that the objections were barred by res judicata, as the same issues had already been decided in an earlier civil suit and its subsequent appeals. Earlier, the Division Bench had dismissed the suit on merits, holding that the shareholders (the applicants) had no independent right to challenge the arbitral award passed against the Augustus Avani Land Developers Pvt. Ltd. That decision was affirmed by the Supreme Court in February 2024, which declined to interfere.
Justice Krishna Rao observed that the applicants cannot circumvent the earlier rulings by filing a collateral challenge during execution. The Court found that the plea of fraud, which was the foundation of the current application, had already been adjudicated upon.
The Bench reiterated that once a matter has been heard and finally decided between the same parties, the principle of constructive res judicata bars its re-agitation in subsequent proceedings.
The Court further noted that the execution process had substantially concluded, with the Receiver having already realised and disbursed the decretal amount of ₹28.51 crores to Ascot Realty Pvt. Ltd., the joint venture company, in compliance with prior court orders. The applicants’ claim filed years later was held to be not only barred by law but also delayed and misconceived under the proviso to Order XXI Rule 58 CPC.
In conclusion, the Court held that the execution of the arbitral award could not be stayed or reopened on the pretext of fraud or lack of jurisdiction, and dismissed the objection petition as barred by res judicata.
Cases Referred
• Sheodan Singh v. Daryao Kunwar (Smt.), 1966 SCC OnLine SC 98
• Srihari Hanumandas Totala v. Hemant Vithal Kamat & Ors., (2021) 9 SCC 99
• Kancherla Lakshminarayana v. Mattaparthi Syamala & Ors., (2008) 14 SCC 258
Appearances
Decree Holder- Mr. Mainak Bose, Sr. Adv., Ms. Pubali Sinha Chowdhury, Mr. Sarosij Dasgupta, Ms. Arpita Dey, Ms. Mini Agarwal
Applicants- Mr. Aman Hingorani, Sr. Adv, Ms. Debjani Mitra,Mr. Rajat Dutta
