Calcutta High Court (Appellete Side)
Poonam Agarwal vs Pooja Construction Company on 16 August, 2018
Author: Sabyasachi Bhattacharyya
Bench: Sabyasachi Bhattacharyya
In the High Court at Calcutta
Civil Revisional Jurisdiction
Appellate Side
The Hon'ble Justice Sabyasachi Bhattacharyya
C.O. No. 844 of 2018
Poonam Agarwal
Vs.
Pooja Construction Company
Limited and others.
With
C.O. No. 824 of 2018
Sri Mahendra Kumar Agarwal
Vs.
Calicut Engineering Works Ltd.
With
C.O. No. 1124 of 2018
Calicut Engineering Works Limited
Vs.
Pooja Construction Company
For the petitioner
in C.O. 844 of 2018 : Mr. Rudraman Bhattacharya,
Mr. V. Raja Rao,
Ms. Pallavi Gandhi
For the petitioner in
C.O. 824 of 2018 and
opposite party no. 3
in C.O. 844 of 2018 : Mr. Vijay Nand Misra,
Mr. Ayan Kumar Chatterjee
For the opposite party
no. 2 in C.O. 844 of 2018,
for the opposite party in
C.O. 824 of 2018 and
for the petitioner in
C.O. 1124 of 2018 : Mr. Suddhasatva Banerjee,
Mr. Chayan Gupta,
Mr. Tirthankar Dey,
Mr. K.N. Jana
Hearing concluded on : 31.07.2018
Judgement on : 16.08.2018.
Sabyasachi Bhattacharyya, J.:-
All three revisional applications are taken up together, since those arise from the
same arbitral award and have their facts substantially common. The brief facts of the case
are:
One Chandmal Agarwala took a loan from, and entered into an arbitration agreement
with, Calicut Engineering Works Limited on behalf of Pooja Construction Company, a
partnership firm, representing himself to be a partner of the said firm.
Subsequently a dispute arose with regard to non-repayment of the loan, which
resulted in Calicut Engineering invoking the arbitration agreement and referring the
matter to arbitration.
Although the arbitral proceeding was against the respondent Pooja Construction
Company and notice thereof was served and duly received by Pooja Construction Company, Chandmal contested the said proceeding all along (at least for one and a half years) on behalf of the respondent. Subsequently, however, Chandmal denied that he was a partner of Pooja Construction and/or entered into the relevant transactions, but disclosed that his son Mahendra Kumar Agarwala and daughter-in-law Poonam Agarwala (wife of son Surendra) were partners.
The sole arbitrator formulated the following issues :
Whether Chandmal Agarwala represented Pooja Construction Company as partner or not?
Whether his signature is genuine or not?
The arbitral proceeding culminated in an award being passed on April 2, 2002. Salient features of the award are as follows:-
a) Respondent Pooja Construction Company was directed to pay to the claimant Calicut Engineering an amount of Rs. 3,00.000/- (Rupees Three Lakh Only).
b) Failing so, the claimant would be entitled to recover the amount by attaching assets and other properties of the respondent or the partners of the respondent jointly and severally or as per other provisions of law for realisation of decretal dues.
c) Interest at the rate of 18 % per annum would be payable by the respondent.
d) Costs of Rs. 30,000/- (Rupees Thirty Thousand Only) was payable by the respondent.
e) Rs. 4,000/- (Rupees Four Thousand Only) was awarded against the claimant as the claimant's remaining share of the arbitrator's remuneration.
The said award was again clarified by a supplementary award dated April 8, 2002, which deleted Poonam Agarwala's name and introduced Surendra Kumar Agarwala as a partner of the respondent firm.
Such award dated April 2, 2002, as clarified on April 8, 2002, was never challenged under Section 34 of the Arbitration and Conciliation Act, 1996 and has attained finality.
The award-holder Calicut Engineering levied execution of the award in the Alipore Judges' Court, giving rise to Title Execution Case No. 8 of 2003.
Vide Order dated December 9, 2015, the executing court allowed an application under Section 42 of the 1996 Act, filed by Mahendra, holding that execution lay before the City Civil Court at Calcutta. The claimant challenged the said order in C. O. No. 1247 of 2016, which challenge was withdrawn on August 31, 2016. Thereafter the claimant filed an execution case in the City Civil Court at Calcutta, which was again transferred to the Alipore Judges' Court on the ground of lack of territorial jurisdiction, and was renumbered as Arbitration Execution Case No. 107 of 2017.
Mahendra Kumar Agarwal, a son of Chandmal and a partner in Pooja Construction Company, filed an application under Section 151 of the Code of Civil Procedure for dismissal of the execution application. The said application was dismissed on February 12, 2018.
The said dismissal has been challenged by Mahendra Kumar Agarwal in C.O. No. 824 of 2018, which is one of the three revisions under consideration at present.
An application having been filed by the award-holder Calicut Engineering under Order XXI Rules 37 and 38 of the Code of Civil Procedure in the aforesaid execution case, the same was disposed of by the executing court by directing the award-debtors (apparently including Poonam Agarwal) to liquidate the decretal amount in terms of the award.
An application by Poonam for recall of a previous order dated February 19, 2018 (whereby Poonam was mentioned as Judgment Debtor 4, though she apparently was not a partner of the award-debtor firm, which was evident from previous orders) was also disposed of (in effect refused) by the same order dated March 29, 2018, directing the award-debtors to liquidate the decretal amount.
C.O. No. 844 of 2018 has been filed by Poonam Agarwal against such order. On the other hand, Mahendra filed an application under Section 24 of the Code of Civil Procedure for transfer of Arbitration Execution Case No. 107 of 2017 from the Eighth Court of Additional District Judge at Alipore to any other court on the ground of bias of the judge, thereby giving rise to Miscellaneous Case no. 206 of 2018. A limited order of stay was passed in connection with the said miscellaneous case, which is the subject- matter of challenge in C.O. No. 1124 of 2018, filed by the award-holder, namely, Calicut Engineering Works Limited.
C.O. No. 824 of 2018
Mahendra Kumar Agarwal, one of the partners of the Award-debtor Pooja Construction Company, took out an application under Section 151 of the Code of Civil Procedure for dismissal of the execution case, bearing Arbitration Execution Case No. 107 of 2017, levied by the award-holder Calicut Engineering Works Limited to execute the arbitral award against Pooja Construction. The said application under Section 151 of the Code was dismissed by the Additional District Judge, Fifth Court at Alipore on February 12, 2018. The said order has been challenged by Mahendra in C.O. No. 824 of 2018. The primary grounds on which Mahendra mounts such challenge are as follows:
i) The arbitration agreement dated August 18, 1997 describes Chandmal Agarwala as representing Pooja Construction Company in the capacity of its partner.
Chandmal also signed such agreement on behalf of Pooja Construction Company as its partner. However, the partnership deed of the firm shows that Chandmal was never a partner therein.
ii) Although the arbitral proceeding was filed against Pooja Construction Company as respondent, Chandmal entered appearance and contested the proceeding on behalf of the said firm. The arbitral award records that Chandmal, though purported to have represented the partnership firm from inception of the proceeding for about one and a half years, later denied being a partner or having entered into transactions on behalf of the firm.
iii) The arbitrator framed two issues, as to whether Chandmal represented Pooja Construction as its partner or not, and as to whether his signature was genuine or not.
iv) During the arbitral proceeding the arbitrator, vide letter dated October 9, 2001, had acknowledged that a written statement along with a partnership deed dated November 4, 1993, filed on behalf of Chandmal Agarwal, was received.
v) In the last minutes of the meeting dated February 28, 2002, the arbitrator recorded as follows (as quoted from the written notes of argument of Mahendra in C.O. No. 824 of 2018):-
"Today is the date fixed for final disposal of the Arbitration of the proceedings. Last minute dated 19.12.2001, it was decided that signature of the Chandmul Agarwal should be sent to handwriting expert for examination. It was submitted by Mr. Tapan Sil, Ld. Advocate for the Claimant that it is unnecessary to send it before any agency for verification. His Client's claim was against the Pooja Construction Company. Nobody is appearing for the Pooja Construction Company, Mr. Pandey, Ld. Advocate submitted before the Tribunal that Chandmul Agarwal is not party or partner of Pooja Construction Company. I have gone through the papers very carefully and I find that Chandmul Agarwal's name is not appearing. Although the partners are the sons of Chandmul Agarwalla."
vi) The award recorded that even admitting that Chandmal was not a partner of the respondent-firm, the whole claim was against the respondent-firm and nobody came forward to defend the case for the respondent; as such, presumption of guilty conscience was taken.
vii) Thus, although it was held that Chandmal was not a partner of the respondent- firm, and although the intitial arbitration agreement was between Chandmal as partner of the respondent-firm and the claimant-company, the arbitrator assumed jurisdiction without having authority under the law to do so. The arbitration agreement was invalid and conferred no jurisdiction on the arbitrator to adjudicate the dispute, which rendered the award a nullity, being vitiated by inherent lack of jurisdiction. Thus the execution case ought to have been dropped on a finding that the award itself was a nullity.
viii) Section 7 (4) (a), read with Section 2 (h), of the Arbitration and Conciliation Act, 1996 contemplates that an arbitration agreement is an agreement in writing and signed by the parties. Pooja Construction Company was not a signatory to the present arbitration agreement and the Arbitrator, in the minutes of the meeting dated February 28, 2012, also referred to in the award, found that the name of Chandmal Agarwal does not appear in the partnership deed dated November 4, 1993.
ix) This apart, the petitioner submitted that proceedings against partnership firms are governed by Order XXX of the Code of Civil Procedure, and under Order XXX Rule 8 (4), if the court holds that any person served with summons as a partner was not a partner of the firm and was not liable as such, that shall not preclude the plaintiff from otherwise serving summons on the firm and proceeding with the suit; but in that event, the plaintiff shall be precluded from alleging the liability of that person as a partner of the firm in execution of any decree that may be passed against the firm.
Since no partner of the Pooja Construction Company was served and no fresh summons was issued in the present matter even after the arbitrator having found that Chandmal was not a partner of the respondent-firm, the arbitral proceeding could not have been adjudicated by the arbitral tribunal at all. In this context, learned counsel for the petitioner refers to the judgment reported at AIR 1964 SC 581 [Gajendra Narain Singh vs. Johrimal Prahlad Rai]. Paragraph no. 6 of the said judgment reads as follows:
6. Rule 8 of Order 30 provides:
"Any person served with summons as a partner under Rule 3 may appear under protest, denying that he is a partner, but such appearance shall not preclude the plaintiff from otherwise serving a summons on the firm and obtaining decree against the firm in default of appearance where no partner has appeared."
The rule enables the person served as a partner to appear under protest and to deny that he is a partner of the firm which is sued. Appearance under protest by the person sued renders the service of summons as regards the defendant firm ineffective. The plaintiff may obtain a fresh summons against the firm and serve it in the manner prescribed by Order 30 Rule 3 against another person who is alleged to be a partner by the plaintiff or against the person who has the control or management of the partnership business. A decree against the defendant firm so obtained may with leave under Order 21 Rule 50(2) be executed against the firm and also against the person who had been initially served as a partner and who had appeared under protest denying that he was a partner. The plaintiff, however, is not obliged to obtain a fresh summons: he may request the Court to adjudicate upon the plea of denial raised by the person served and appearing under protest. The Court will then proceed to determine the issue raised by that plea. If the Court finds on evidence that the person served was not a partner at the material time, the suit cannot proceed, unless summons is served afresh under Rule 3: if the Court holds that he was a partner, service on him will be regarded as good service on the firm and the suit will proceed against the firm.
x) Placing reliance next on Order XXI Rule 50 (2) of the Code of Civil Procedure, learned counsel for the petitioner submits that since the award was being sought to be executed against a person other than that contemplated in Order XXI Rule 50 (1) of the Code, a leave ought to have been obtained before proceeding to execute the award against the respondent-firm and the partners of the firm. Such leave having not been obtained, the execution could not be proceeded with at all.
xi) Citing a judgment reported at (2005) 9 SCC 686 [Dharma Prathishthanam vs. Madhok Construction (P) Ltd.], it was submitted that the court had suo moto power to set aside an award made by an arbitrator who could never be appointed and such award would undoubtedly be void and non est.
xii) Learned counsel for the petitioner next cited the judgment reported at AIR 2004 Cal 267 [Saraswat Trading Agency vs. Union of India] for the proposition that a decree which is a nullity in the eye of law is no decree and hence even by consent of parties such a decree cannot be executed by the Court. Even if the judgment debtor did not raise the question before, it could not be denied the remedy available to it under Section 47 of the Code of Civil Procedure in such cases.
xiii) The next judgment cited by the petitioner was reported at AIR 1991 SC 957 [Prabartak Commercial Corporation Ltd. vs. Chief Administrator, Dandakaranya Project and Anr.], where an arbitral award passed under the Arbitration Act, 1940 was set aside in an appeal under Section 39 (1) (vi) of the said Act, on the ground that the arbitrator had no jurisdiction to pass the award.
xiv) Learned Counsel for the petitioner then cited a judgment reported at AIR 1970 SC 1475 [V.D. Modi vs. R.A. Rehman], for the proposition that when a decree is made by a court having no inherent jurisdiction to make it, objection as to its validity can be raised in execution proceedings.
xv) The other judgment cited by the petitioner was reported at (2006)13 SCC 567 [Sandeep Kumar and Ors. vs. Master Ritesh and Ors.], for the proposition that an arbitration agreement cannot be invoked against persons who were not parties to the agreement.
As such, it was argued on behalf of the petitioner, the impugned order ought to be set aside and the execution case to be dismissed.
In controverting such allegations, the award-holder / opposite party argued that notice of the proceedings was duly served upon the respondent Pooja Construction Company. Chandmal, representing the respondent, contested the proceedings from inception. Chandmal also represented the respondent-firm when obtaining loan from, and entering into agreements with, the award-holder company. Such representation was duly acted upon by Pooja Construction Company, the respondent, by encashment of cheques and repayment of part loan to the award-holder, as is evident from the certificate issued by the banker of the respondent-firm.
Chandmal, it is argued by the award-holder/opposite party, had unfettered authority to appear and plead on behalf of the respondent and he also exercised his unfettered authority while obtaining loan from the award-holder, namely Calicut Engineering Works Limited, on behalf of the respondent. Since an award of Rs. 3,00,000/- (Rupees Three Lakh Only) was passed against the respondent Pooja Construction Company, the respondent or its partners, jointly and severally, are liable to satisfy such award. It is also submitted that neither Pooja Construction Company nor anyone else has challenged the award before an appropriate forum, which has thus attained finality.
The award-holder/opposite party gave a notice to the award-debtor firm for payment of the awarded amount. The award-debtor replied by a letter dated December 18, 2002 where the present petitioner, namely Mahendra Kumar Agarwal, signed as a partner of the award-debtor Pooja Construction Company. Pooja Construction Company also issued a letter dated January 9, 2003 to the award-holder Calicut Engineering Works Limited.
After the award was put into execution before the Alipore court, Mahendra, the present petitioner, filed an application under Section 42 of the 1996 Act, which was allowed. Consequentially the award-holder filed an execution case in the City Civil Court at Calcutta after withdrawing a revision against the order allowing the application under Section 42 of the 1996 Act. Thereafter the execution case was again transferred to the Alipore court, being renumbered thereafter as Arbitration Execution Case No. 107 of 2017, due to lack of territorial jurisdiction and the time spent during pendency before the Alipore court was excluded.
The petitioner Mahendra filed Vakalatnama in the execution case as one of the partners of the award-debtor firm and thereafter had the same struck off and filed fresh power as the sole proprietor of the said firm. In another application under Section 151 of the Code of Civil Procedure, Mahendra stated that he is not a partner of the award-debtor firm. It is argued by the opposite party that such stand of Mahendra is dishonest, and is belied by the partnership deed of the award-debtor company, which reflects Mahendra and Surendra Kumar Agarwal (husband of Poonam Agarwal) as partners.
It is further submitted that the petitioner Mahendra, being the partner of Pooja Construction Company, the award-debtor firm, was all along aware of the award passed against the said firm, which would be evident from the caveats lodged by the said firm and Surendra Kumar Agarwal in connection with various orders.
It is further argued by learned Counsel for the opposite party that the executing court cannot go beyond the decree. Since the award dated April 2, 2002, as clarified by the supplementary award dated April 8, 2002, has attained finality and no application under Section 34 of the 1996 Act has been taken out against the same, issues which could be raised in the arbitral proceeding itself or in a challenge under Section 34 could not be raised for the first time before the executing court.
Learned counsel for the award-holder submits that Rs. 14,31,336.99 p. (Rupees Fourteen Lakh Thirty-One Thousand Three Hundred and Thirty Six and Ninety-Nine Paise Only) has already become due and payable to the award-holder/opposite party from the award-debtor firm, as on July 30, 2018, with further interest at the rate of 18 % per annum on the principal awarded amount of Rs.3,00,000/- (Rupees Three Lakh Only) and a sum of Rs. 30,000/- (Rupees Thirty Thousand Only) towards costs.
The opposite party also prays for an order of civil imprisonment against the partners of the award-debtor firm and exemplary costs to compensate the award-holder.
Upon considering the submissions of both sides, it is evident that the award-debtor firm, Pooja Construction Company, is a partnership firm run by a single family. As it appears from the partnership deed of the said firm, Mahendra Kumar Agarwal and Surendra Kumar Agarwal, two brothers, are the partners thereof. Their father Chandmal, acting on behalf of the partnership firm (run entirely by members of his family), obtained a loan from the award-holder company as well as entered into an arbitration agreement in connection with such transaction. Such loan amount was not only encashed and utilized by the award-debtor firm, that is, Pooja Construction Company, but the said firm also repaid a part of the loan. Such acts ex facie operate as ratification of representation of the award-debtor firm by Chandmal throughout the transactions in question and the arbitral proceeding.
Such ratification was bolstered when, despite notice of the arbitral proceeding having been served on Pooja Construction Company itself, it was the same Chandmal (who was 'co-incidentally' the father of the partners of the said firm) who represented the firm from inception of the proceeding before the arbitral tribunal.
Thereafter, when the arbitral proceeding matured, Chandmal, with the air of a sorcerer, chose to disclose that he was neither a partner nor could, in law, represent the partnership firm. The arbitrator, rightly, saw through such deceit and fixed responsibility for the acts of Chandmal, acting on behalf of the award-debtor firm, on the said firm. Since the firm (and, as a corollary, its partners) had ratified its representation by Chandmal (the patriarch of the family) at every stage, the firm and its partners would be bound by Estoppel, in any event, and debarred from disowning the actions of Chandmal.
Even if Chandmal was not a partner of the award-debtor firm, there was no bar in law for the firm and/or its partner to authorize him to represent the firm at every stage. Absence of such authority was a question of fact and a subject-matter to be raised in the arbitral proceeding itself. It was not a question of such stature that it would vitiate the award or render it null, by denuding the arbitral tribunal of its inherent jurisdiction or authority to decide the dispute.
Hence, in the circumstances, the points urged by the petitioner Mahendra would all be barred by the principle of res judicata and/or constructive res judicata, in view of the award having attained finality, having not been challenged for over one and a half decades under Section 34 of the 1996 Act or otherwise, before any competent forum.
Adjudication of such questions, now sought to be raised by Mahendra, would all take the executing court to the pre-award realm, thus amounting to going behind the decree. After having delayed the proceedings over years by taking recourse to several dilatory tactics, the family has now set up Mahendra, one of the partners of the award-debtor firm, to adopt and continue the modus operandi all along adopted by it, to frustrate the award and prevent the award-holder from obtaining the fruits of the award.
As to non-compliance of the provisions of Order XXX Rule 8 (4) of the Code of Civil Procedure, apart from the same being a technical objection, in the present case, notice of the arbitral proceeding was served on the partnership firm itself and the award-holder is not seeking to fix liability of the award on Chandmal, but on the firm and its partners. Hence, the bar stipulated in Rule 8 (4) of Order XXX of the Code would not even be attracted.
This apart, Section 19 (1) of the 1996 Act provides that the arbitral tribunal shall not be bound by the Code of Civil Procedure or the Indian Evidence Act. In the absence of any agreement between the parties as to procedure, the arbitral tribunal had a free hand in deciding its own procedure for conducting the matter. As such, the said objection of the petitioner is not tenable in law.
The same logic applies to the objection as to the award-holder having not obtained a leave under Order XXI Rule 50 (2) of the Code of Civil Procedure. Even if such leave were to be necessary, which it was not in the present case, the very fact of the executing court dismissing the application of the petitioner under Section 151 of the Code and proceeding with the execution case before and after such dismissal is witness to deemed leave having been granted any way by the said court. Hence such objection also has no legs to stand on.
A synthesis of the cited judgments reveals that the consistent view of the Supreme Court has been that even the executing court can address an issue of nullity of a decree or award due to inherent lack of jurisdiction.
However, such issue has to be self-evident and palpable and a protracted fresh trial in the execution case could not be permitted at the instance of the judgment debtor in the garb of raising the question of nullity of the decree/award. In the present case, not only was such issue a factual question, to be decided on evidence, the arbitral tribunal had in any event decided such issue by deeming Chandmal to have represented the award- debtor firm effectively at all stages, pre and post litigation. Hence a re-adjudication of such issue would violate the other cardinal and settled legal principles of res judicata and incapability of an executing court to go behind the decree/award sought to be executed.
Accordingly, C.O. No. 824 of 2018 is dismissed on contest, thereby affirming the order impugned therein, dated February 12, 2018 passed by the Additional District Judge, Fifth Court at Alipore, District: South 24-Parganas in Arbitration Execution Case No. 107 of 2017. The petitioner will pay costs of Rs. 50,000/- (Rupees Fifty Thousand Only) to the award-holder/opposite party within a fortnight from date to compensate the harassment caused to the opposite party by the petitioner by raising frivolous pleas, thereby seeking to protract the proceedings.
C.O. No. 844 OF 2018 This revision arises at the instance of Poonam Agarwal, wife of Surendra Kumar Agarwal, one of the partners of the award-debtor firm, Pooja Construction Company. The matter arises from the same arbitral proceedings narrated above, in connection with C.O. No. 824 of 2018.
In the award dated April 2, 2002 passed by the arbitral tribunal, the respondent Pooja Construction Company was directed to pay to the claimant an amount of Rs. 3,00,000/- (Rupees Three Lakh Only), failing which the claimant was entitled to recover the amount by attaching assets and other properties of the Respondent or its partners jointly and severally, along with interest at the rate of 18% per annum and costs of Rs. 30,000/- (Rupees Thirty Thousand Only). The claimant was to pay Rs. 4,000/- (Rupees Four Thousand Only) as its share of arbitrator's remuneration.
However, in such award, the arbitrator had recorded an observation that Chandmal had disclosed that he was not a partner of the respondent-firm, but his son Mahendra Kumar Agarwala and daughter-in-law (wife of other son Surendra), namely Poonam, were the then present partners.
By a supplementary award dated April 8, 2002, which was in the nature of a clarification to the award dated April 2, 2002, the arbitrator deleted the last aforesaid line and substituted the same with the observation that Mahendra Kumar Agarwala and Surendra Kumar Agarwala were the then present partners of the respondent-firm.
Such clarificatory supplementary award apparently absolved Poonam from her liability to meet the award as a partner of the award-debtor firm. However, the executing court subsequently proceeded on the premise that Poonam was also a partner of the said firm and hence liable jointly and severally with the other partners to satisfy the award.
An application by Poonam for recall of a previous order dated February 19, 2018 (whereby Poonam was mentioned as Judgment Debtor 4, though she apparently was not a partner of the awad-debtor firm, which was evident from previous orders) was also disposed of (in effect refused) by Order No. 28 dated March 29, 2018 passed by the executing court, directing the award-debtors to liquidate the decretal amount.
C.O. No. 844 of 2018 has been filed by Poonam Agarwala contending that she was absolved from the purview of the award dated April 2, 2002 by the specific observation made in the supplementary award dated April 8, 2002, that Mahendra and Surendra were the partners of the award-debtor firm, coupled with the deletion of the previous finding as to Poonam being a partner of Pooja Construction Company.
It is further contended on behalf of Poonam, the petitioner in C.O. No. 844 of 2018, that her name did not appear as a partner in the partnership deed of Pooja Construction Company, the award-debtor firm. As such, it is argued, the executing court ought to have recalled its previous order recording Poonam as judgment debtor no. 4 and absolved her from the rigours and effect of the arbitral award.
Such contention is controverted on behalf of the primary contesting opposite party, being the award-holder / opposite party no. 2, primarily on the premise that Poonam had filed an application under Section 47 of the Code of Civil Procedure in the executing court, which was dismissed for non-prosecution by the executing court on March 20, 2010. Poonam, the present petitioner, took no steps to restore the same.
Again, Poonam filed an application under Order I Rule 10 of the Code of Civil Procedure for expunging her name from the execution case, which also met with dismissal vide Order dated February 3, 2018.
Yet again, Poonam filed an application, this time under Section 151 of the Code of Civil Procedure for omitting the description of her property, which was also the subject- matter of execution of the arbitral award. The said application was also dismissed by an Order dated February 12, 2018.
The orders dated February 3, 2018 or February 12, 2018 were never challenged by Poonam, the present petitioner. As such, it is argued, the issue now raised by her is barred by the principle of res judicata.
In a different suit filed by Poonam Agarwal against one Raj Kumar Poddar and others, Poonam claimed to be the owner of Flat No. 1 on the fifth floor of premises no. 110, Dr. Meghnad Saha Sarani (formerly Southern Avenue) by transfer from her husband Surendra Kumar Agarwala, who is a partner of Pooja Construction Company, the present award-debtor.
Poonam assailed an order passed in such suit in revision. In such revision, by an Order dated July 10, 2012, a co-ordinate Bench of this Court recorded that the said flat stood in the name of Poonam by way of a circuitous transaction and that Poonam's husband Surendra had transferred the flat to her after her husband inherited the same from his father Chandmal (who contested the present arbitral proceeding on behalf of the award-debtor firm). Poonam had then volunteered to pay on behalf of her husband Surendra, a partner of Pooja Construction Company, the present award-debtor, the dues in respect of the said flat in respect of which Surendra had suffered an award and was facing execution for non-payment of arrears of service and maintenance charges of the said flat.
This apart, learned counsel for the opposite party no. 2 / award-holder submitted that Poonam had given an undertaking that she would not alienate/encumber her share in the property/flat. However, on July 30, 2018 it was informed to this court that the property was mortgaged. Thus, the stand of the present petitioner Poonam, according to the opposite party no. 2, is dishonest.
The award-holder / opposite party no. 2 further submits that Poonam should be restrained from alienating or encumbering any part or portion of the said flat till pendency of the execution proceedings. It is argued that Order XXI Rule 41 (1) (c) of the Code of Civil Procedure permits the decree holder to seek an order against any other person to be orally examined as to whether any or what debts are owing to the judgment debtor and whether the judgment debtor has any and what other property or means of satisfying the decree; and the court may make an order for the attendance and examination of such other person, and for the production of any books or documents. "Any other person" in Rule 41 (1) (c) of Order XXI of the Code has to be read in isolation qua Rule 41 (2) of the Code and there was no scope for expanding the said expression, it was argued, to be read with Rule 41 (2).
It was submitted that although Poonam was not a partner of the award-debtor firm as per the partnership deed disclosed by Mahendra Kumar Agarwal, a partner of the said firm, it was evident that, in order to defraud the award-holder and to prevent it from getting the fruits of the award, Mahendra, Surendra and Poonam colluded and connived with each other to circumvent execution of the award against them.
Upon hearing both sides, it appears that a similar point was urged by Poonam in her application under Section 47 of the Code, which was dismissed for default. Such order at best debars Poonam from filing another similar application by importing the principle embodied in Order IX Rule 9 of the Code of Civil Procedure. However, Poonam cannot be said to be precluded by such dismissal for default, from urging the same point in defence in the execution proceeding against her.
Moreover, Poonam's application under Order I Rule 10 of the Code, for expunging her name from the execution case, was rejected on the hyper-technical ground that the execution application impleaded "Poonam Agarwal" and not "Poonam Agarwala", the latter being the name of the present petitioner. Such dismissal comprises no adjudication as to Poonam's liability vis-à-vis the awarded amount; rather, the same keeps the option open to Poonam Agarwala, the present petitioner, to object to execution against her property on the ground that her surname is "Agarwala" and not "Agarwal", as mentioned in the execution proceeding.
As such, the portion of the order impugned in C.O. No. 844 of 2018, whereby the petitioner's prayer for recall of the order recording her as judgment debtor no. 4 was turned down, cannot be sustained, since, in any event, Poonam cannot be termed as a judgment debtor since she has never been a partner of the award-debtor firm.
Accordingly, C.O. No. 844 of 2018 is disposed of by setting aside the portion of the impugned order, bearing Order No. 28 dated March 29, 2018, whereby the prayer of the petitioner Poonam Agarwala to recall the order, in which she was recorded as judgment debtor no. 4 in Arbitration Execution Case No. 107 of 2017, pending before the Fifth Court of Additional District Judge at Alipore, was turned down. The name of the present petitioner, namely Poonam Agarwala, in whichever way spelt, be expunged from the said execution case. It is made clear that the execution case will now proceed against the award-debtor firm and its partners, namely Mahendra Kumar Agarwala and Surendra Kumar Agarwala, only.
There will be no order as to costs.
C.O. No. 1124 of 2018 On the facts of the arbitral proceedings as discussed above, this revision has been preferred by the award-holder, namely Calicut Engineering Works Limited.
Mahendra Kumar Agarwala, one of the partners of the award-debtor firm, Pooja Construction Company, filed an application under Section 24 of the Code of Civil Procedure for transfer of Arbitration Execution Case No. 107 of 2017 from the Eighth Court of Additional District Judge at Alipore to any other court on the ground of bias of the judge, thereby giving rise to Miscellaneous Case no. 206 of 2018. A limited order of stay was passed in connection with the said miscellaneous case, which is the subject-matter of challenge in C.O. No. 1124 of 2018, filed by the award-holder, namely, Calicut Engineering Works Limited.
Learned counsel for the petitioner argues that the impugned order of stay was passed behind the back of the petitioner, without serving any copy on the petitioner, in the teeth of an order passed by this court directing the connected execution proceeding to be disposed of within two months from the date of communication of the order to the executing court.
It is alleged that the miscellaneous case under Section 24 of the Code of Civil Procedure was filed by Mahendra Kumar Agarwal deliberately with a wrong cause title, omitting the name of the award-holder whose execution case was sought to be transferred. Subsequently an application for amendment of the said transfer application has been taken out.
Surendra Kumar Agarwala, another partner of the award-debtor firm, has also filed an application contending that the executing court had no jurisdiction to pass certain orders since the presiding officer of the said court was already under an order of transfer when such orders were passed.
The motive of the partners of the award-debtor firm, it is contended, is only to stall the execution case by filing frivolous applications.
It is submitted by the petitioner that the application under Section 24 of the Code, bearing Miscellaneous Case No. 206 of 2018, may itself be dismissed, and the connected execution case may be directed to be disposed of expeditiously pursuant to earlier direction of this court.
It is further submitted that no stay order is now subsisting in view of refusal to extend the limited stay, granted by the order impugned herein, vide a subsequent order, bearing Order No. 9 dated July 7, 2018. However, since the next date has been fixed for hearing of the amendment application and the miscellaneous case itself is still pending, the execution case may be delayed further citing pendency of those applications.
It appears from the order impugned in C.O. No. 1124 of 2018 that the same was a limited ad interim order of stay granted till June 20, 2018. From a photocopy of a certified copy of a subsequent order dated July 7, 2018, produced in court at the time of hearing of the present revisional application, it appears that since no extension of the impugned order was granted on June 20, 2018, the returnable date, the District Judge at Alipore refused to extend the stay any further vide the said order dated July 7, 2018.
As such, it appears that the revisional application, being directed against a limited stay order which has spent its force, has become infructuous; more so, in view of extension of the same having been categorically refused by a subsequent order, bearing Order No. 9 dated July 7, 2018.
In such circumstances, it would not be prudent to adjudicate on the merits of the same.
In such view of the matter, C.O. No. 1124 of 2018 is disposed of as infructuous. The District Judge at Alipore, District: South 24-Parganas is requested to dispose of Miscellaneous Case No. 206 of 2018, pending in the said court, along with all connected applications, as expeditiously as the business of the said court permits, without granting unnecessary adjournments to the parties.
There will be no order as to costs.
Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.
( Sabyasachi Bhattacharyya, J. )