Bombay High Court
Schindler India Private Limited vs Shreedham Builders And 3 Ors on 17 April, 2024
Author: Abhay Ahuja
Bench: Abhay Ahuja
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO.14527 OF 2022
IN
EXECUTION APPLICATION (L) NO.14522 OF 2022
Schindler India Private Limited ... Applicant
Vs.
Shreedham Builders and ors. ... Respondents
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Mr. Rajmani Varma with Ms. Shraddha Chheda i/by M/s Naveep Vora &
Associates, Advocates for the Applicant.
Mr. Ajit Anekar with Ms. Ashlesha Modak and Ms. Siddhant Sawhney i/by
M/s Auris Legal, Advocates for the Respondents.
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CORAM : ABHAY AHUJA, J.
DATE : 17 APRIL, 2024.
P.C. :
1. This Interim Application seeks execution of award dated 17 th April, 2020 against Respondent No.1 - partnership firm pursuant to which the Respondent No.1 was directed to pay Rs.10,07,604/- in addition to interest and Rs. 5,57,530/- towards cost. That award was communicated by the sole Arbitrator to the parties by email dated 17 th April, 2020. It is submitted that the Respondents had not made any payment towards satisfaction of the award and therefore, the Execution Application was filed on 25th April, 2022. That therefore, this Court's assistance is sought by way of this Interim Application for execution of the said award.
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2. Mr. Rajmani Varma, learned counsel appearing for the Applicant would submit at the outset that this Court may grant prayer of disclosure in terms of prayer clause (d).
3. On the other hand, Mr. Ajit Anekar, learned counsel appears for the Respondents and as recorded earlier raises a preliminary objection as to the maintainability of the Execution Application submitting that under the Arbitration and Conciliation Act, 1996, (the "Act"), the Execution Application can be filed only after the time for making an Application to set aside the arbitral award under Section 34 of the Act has expired whereas the Execution Application has been made prior to the expiry of the said period. Mr. Anekar refers to the affidavit-in-reply dated 4 th May, 2023 filed on behalf of the Respondents and submits that the award dated 17th April, 2020 was received by the Respondents only on 6 th July, 2020 that due to the outbreak of the Covid-19 pandemic and the consequent lock-down declared by the Government of State as well as Centre, the Respondents could not file Petition under section 34 of the Act within the prescribed period of 90 days. That owing to the Covid-19 pandemic, the Hon'ble Supreme Court, taking cognizance of the same and the challenges faced by the country on account of the Covid-19 Priya R. Soparkar 2 of 8 ::: Uploaded on - 19/04/2024 ::: Downloaded on - 29/04/2024 05:56:05 ::: 3 902 ial 14527-22 in exal 14522-22-os.doc pandemic and the resultant difficulties faced by the litigants across the country in filing Petitions, Applications, Suits, Appeals and all other proceedings within the period of limitation prescribed under the General Law of Limitation or the Special Laws, by order dated 10 th January, 2022 in Miscellaneous Application No.21 of 2022, in suo-moto Writ Petition (C) No.3 of 2020 suspended the limitation from 15 th March, 2020 to 28th February, 2022 thereby excluding the said period from computation of the limitation period. Learned counsel would submit that the Respondents have filed Petition under section 34 of the Act challenging the award only on 27th May, 2022, which is pending. Mr. Anekar would submit that however the Execution Application has been filed on 2 nd May, 2022. That the time limit of 90 days is available for filing Petition under section 34 of the Act for challenging the award and that the same expired only on 30th May, 2022. Mr. Anekar would submit that infact a further period of 30 days is provided under section 34 of the Act had the Respondents not filed the Petition on 27th May, 2022. That the Execution Application could not have been filed on 2 nd May, 2022 as the time to challenge the award expired only on 30th May, 2022.
4. That therefore, the Execution Application is premature and that Priya R. Soparkar 3 of 8 ::: Uploaded on - 19/04/2024 ::: Downloaded on - 29/04/2024 05:56:05 ::: 4 902 ial 14527-22 in exal 14522-22-os.doc this Court reject the same as not maintainable. Mr. Anekar relies upon the decision of the Delhi High Court in the case of Vindya Telelinks Limited Vs. Bharat Sanchar Nigam Limited and anr., 103(2003) Delhi Law Times 82 in support of his contention that the language of section 36(1) of the Act is mandatory and that it is only after the time for making an Application to set aside the Arbitral Award under section 34 of the Act has expired that an award can be enforced and therefore, this present Application is premature.
5. Mr. Varma, learned counsel for the Applicant has filed a rejoinder contesting the submissions on maintainability and submits that section 36(1) of the Act refers to the enforcement of the award as if it were the decree of the Court and no where bars the filing of the Execution Application prior to the expiry of the period for making an Application for setting aside an arbitral award.
6. I agree with the submissions made on behalf of the Applicant. For the sake of convenience, section 36 of the Act, is usefully quoted as under
:
"36. Enforcement--(1) Where the time for making an Priya R. Soparkar 4 of 8 ::: Uploaded on - 19/04/2024 ::: Downloaded on - 29/04/2024 05:56:05 ::: 5 902 ial 14527-22 in exal 14522-22-os.doc application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-
section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court.
(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose.
(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing:
Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).
Provided further that where the Court is satisfied that a Prima facie case is made out that,--
(a) the arbitration agreement or contract which is the basis of the award; or
(b) the making of the award,was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award.
Explanation.--For the removal of doubts, it is hereby clarified that the above proviso shall apply to all court cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral or court proceedings Priya R. Soparkar 5 of 8 ::: Uploaded on - 19/04/2024 ::: Downloaded on - 29/04/2024 05:56:05 ::: 6 902 ial 14527-22 in exal 14522-22-os.doc were commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 (3 of 2016)."
(Emphasis Supplied)
7. As can be seen that sub-section (1) of section 36 restricts enforcement of an award until the time for making an application to set aside the arbitral award under section 34 of the Act has expired and of-
course subject to provisions of sub-section (2) where an Application for setting aside the award has been made under section 34 of the Act. Infact sub-section (2) of section 36 of the Act clarifies that mere filing of Application to set aside the arbitral award would not by itself render the award unenforceable, unless there is a stay to the operation of the said award in terms of sub-section (3). Admittedly in the facts of this case, there is no stay on the operation of the award. What the learned counsel for the Respondents is seeking to canvass is that although the time to file the Application for setting aside the arbitral award expired on 30 th May, 2022, in view of section 36(1) of the Act, the Execution Application filed on 2nd May, 2022 itself was premature. Section 36(1) of the Act as noted above is a section to be observed by the Court while enforcing an award.
The statute mandates the Court not to enforce an arbitral award until the time to set aside the arbitral award has expired. Although the Execution Priya R. Soparkar 6 of 8 ::: Uploaded on - 19/04/2024 ::: Downloaded on - 29/04/2024 05:56:05 ::: 7 902 ial 14527-22 in exal 14522-22-os.doc Application has been filed on 2nd May, 2022, the Court has not passed any orders enforcing the said award. In this view of the matter, the objection of the learned counsel as to the maintainability is hereby rejected. The judgment of the Delhi High Court relied upon by the learned counsel for the Respondents is distinguishable and would not aid the case of the Respondents.
8. After the objection of maintainability is rejected, Mr. Anekar, learned counsel for the Respondents seeks time to file reply to the Interim Application.
9. Let the reply be filed by 9 th May, 2024 with a copy to the other side.
Rejoinder, if any, be filed by 20th June, 2024 with a copy to the other side.
10. List on 27th June, 2024.
11. In the meanwhile, let there be relief in terms of prayer clause (d) which reads thus :
"(d) Since the award has remained unsatisfied for more than 30 days from the date of its passing and /or communication of the Arbitral Award, the Respondents be Priya R. Soparkar 7 of 8 ::: Uploaded on - 19/04/2024 ::: Downloaded on - 29/04/2024 05:56:05 ::: 8 902 ial 14527-22 in exal 14522-22-os.doc directed to disclose on Affidavit their means for satisfying the the decree / award pursuant to Order 21 Rule 41 Sub-Rule 2 of the Code of Civil Procedure, 1908, by means of balance sheet, profit and loss account and Income tax returns as well as Income from all sources in last five years, particulars of immovable properties, financial assets, including all bank accounts, DEMAT accounts, safety deposit lockers; investments including FDRs, stocks, shares, loans, actionable claims, movable assets such as motor vehicles, computer, laptop, electronic gadgets, plant, machinery, furniture, intangible assets;
garnishee(s) and trade receivables and the details of sale of properties, since invocation of Arbitration Clause, alongwith supporting documents and such other and further disclosure as this Hon'ble Court may deem fit."
12. Let the disclosures on oath be made on behalf of the Respondent No.1 by Respondents No.2 and 3 within a period of four weeks.
(ABHAY AHUJA, J.)
PRIYA
RAJESH
SOPARKAR
Digitally signed by
PRIYA RAJESH
SOPARKAR
Date: 2024.04.19
15:34:23 +0530
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