Supreme Court of India

STATE TRADING CORPORATION OF INDIA LTDversusM/S GLOBAL STEEL HOLDING LIMITED & ORS.

Citation: 2019 INSC 355
Decided: 12 March 2019
Bench: ABHAY MANOHAR SAPREINDU MALHOTRA

Holding

Since the settlement amount was fully paid and all liabilities were satisfied, the Supreme Court quashed all proceedings arising from the agreements.

Summary

The State Trading Corporation of India (STC) and Global Steel Holding Ltd (GSHIL) entered into settlement agreements in 2010 and 2012 under which GSHIL was to pay interest of Rs 600 crore at 8% p.a. by 28 February 2019. The amount was paid, and STC declared that all liabilities under the settlements were fully satisfied. The Supreme Court, exercising its powers under Articles 136 and 142 of the Constitution, quashed all criminal and civil proceedings that had arisen from the agreements, including a CBI‑filed FIR, an ECIR by the Enforcement Directorate, a show‑cause notice from the High Commission in London, look‑out notices, and pending IPC complaints under sections 420 and 409. The Court also noted that STC would not pursue winding‑up proceedings against GSHIL in the Isle of Man. Consequently, the application was disposed of without any order as to costs.

Issues considered

Whether the payment of the settlement amount discharges all liabilities and warrants the quashing of pending criminal and civil proceedings arising from the settlement agreements.
Whether the Supreme Court can exercise its constitutional powers under Articles 136 and 142 to set aside such proceedings.

Legislation cited

Constitution of Indias. Art. 136, s. Art. 142
Indian Penal Code, 1860s. 409, s. 420

Subjects

settlement agreementquashing of criminal proceedingsSupreme Court powersArticle 136Article 142interest paymentliability dischargeEnforcement DirectorateFIRIPC sections 420, 409winding‑up

Judgment

1040               SUPREME[2019]
                           COURT   REPORTS
                                 2 S.C.R. 1040              [2019] 2 S.C.R.


 A             STATE TRADING CORPORATION OF INDIA LTD
                                          v.
               M/S GLOBAL STEEL HOLDING LIMITED & Ors.
                     (M.A.No.320/2019 in C.A.No.11907/2018)
                                  March 12, 2019
 B
        [ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ]
              Constitution of India:
              Art. 136 r/w Art. 142 – Power under – Exercise of – On facts,
       settlement agreements between the parties – Payment of Rs 600 crores
       by the respondent towards interest@ 8% p.a. by the stipulated period,
 C
       to the appellant – Held: All liabilities arising under the settlement
       agreement stands satisfied – Thus, in exercise of power u/Art. 136/
       142, the proceedings-FIRs, ECIR by the Enforcement Directorate,
       show cause notices and complaints, arisen from the Agreements
       quashed.
 D            CIVIL APPELLATE JURISDICTION : Miscellaneous
       Application No. 320 of 2019
                                         IN
              Civil Appeal No. 11907 of 2018.
              From the Judgment and Order dated 09.03.2015 of the High
 E     Court of Delhi at New Delhi in Execution Petition No. 337 of 2014.
              Dushyant Dave, Kapil Sibal, Sr. Advs., Uday Gupta, Ms. Shivani
       Lal, Tarkeshwar Nath, Hiren Dasan, Madhu Sudan Bhayana, M. K.
       Tripathi, Mrs. Sarla Chandra, Gautam Mitra, Pankaj Baghla, Gaurav
       Mitra, Rishad Medora, Avishkar Singhvi, Ms. Deepali Dwivedi, Samar
 F     Kachwaha, Nipun Katyal, Mohit D. Ram, Ms. Binu Tamta, Mrs. Anil
       Katiyar, Shiv Mangal Sharma, Ms. Anju Jain, Hitesh Sachar, Ms. Shruti
       Kiran, Advs. for the appearing parties.
             The following Order of the Court was passed
                                  ORDER
 G
             1. Pursuant to the Order dated December 6, 2018 passed by this
                Court, we are informed by Senior Counsel Mr. D. A. Dave
                representing the State Trading Corporation of India, and Mr.
                Kapil Sibal, Senior Advocate for the Respondents, that the
                amount of Rs. 600 crores payable by the Respondents towards
 H              Interest @ 8% p.a. by 28th February, 2019 has been paid. As a
                                        1040
        STATE TRADING CORPORATION OF INDIA LTD v.                                   1041
         M/S GLOBAL STEEL HOLDING LIMITED & ORS.

             consequence, all the liabilities under the Settlement Agreement        A
             dated 15.11.2010, and Further Settlement Agreement dated
             17.05.2012, stand fully satisfied. It is stated on behalf of S.T.C.
             that there is no further claim of the Appellants against the
             Respondents, arising out of the aforesaid Agreements.
        2. As a consequence, in exercise of our powers under Article                B
           136 r.w. Article 142 of the Constituion of India, we hereby
           quash the following proceedings which have arisen from the
           Agreements mentioned hereinabove :
           i.    F.I.R. lodged by C.B.I. on Complaint of State Trading
                 Corporation bearing R.C. No. - 217/2017/A0005/CBI/
                                                                                    C
                 ACU-VI/AC-II/New Delhi.
           ii. E.C.I.R. by Enforcement Directorate on the basis of the
                 F.I.R. lodged by C.B.I. bearing ECIR No. – ECIR/03
                 DZ-I/2017 dated 29.03.2017.
           iii. Show Cause Notice dated 29.12.2017 issued by the High
                                                                                    D
                 Commission of India, Passport & Consular Wing, India
                 House, London.
           iv. Any Look Out Notice issued against Mr. Pramod Mittal
                 or his wife, or their children, by the Authorities and/or
                 Agencies arising from the aforesaid Agreements.
           v. Eleven Complaints under S. 420 and 409 I.P.C. pending                 E
                 before the Court of Shri Dharmendra Kumar, Ld.
                 Metropolitan Magistrate, Patiala House Courts, New
                 Delhi.
        3. It was further stated by Mr. D.A. Dave, Senior Advocate on
           instructions of his clients, that since the amounts due and owing        F
           to S.T.C. under the Agreements mentioned hereinabove, stood
           satisfied, it would not prosecute the Winding-Up proceedings
           instituted by it against GSHIL – Respondent No. 1 in the Isle
           of Man Court. We take on record the said statement made by
           S.T.C.
                                                                                    G
                 M.A. No.320/2019, stand disposed of in the above terms
           with no Order as to Costs.

Nidhi Jain                                                      M.A. disposed of.


                                                                                    H

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