Bombay High Court
Nandbala Nathala Mayani vs Jaswantrai Chhaganlal Mayani & Ors on 16 July, 2018
Author: G.S. Patel
Bench: G.S. Patel
Nanbala N Mayani v Jaswantrai C Mayani & Ors
5-6-EXA530-11.DOC
Shephali
Reportable
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
EXECUTION APPLICATION NO. 530 OF 2011
WITH
CHAMBER ORDER NO. 916 OF 2012
IN
EXECUTION APPLICATION NO. 530 OF 2011
WITH
CHAMBER SUMMONS NO. 1170 2017
IN
EXECUTION APPLICATION NO. 530 OF 2011
WITH
NOTICE OF MOTION (L) NO. 1538 OF 2018
Nandbala Nathala Mayani ...Decree Holder
Versus
Jaswantrai Chhaganlal Mayani & Ors ...Judgment Debtor
WITH
GARNISHEE NOTICE NO. 1302 OF 2017
IN
EXECUTION APPLICATION NO. 530 OF 2011
Page 1 of 9
16th July 2018
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Nanbala N Mayani v Jaswantrai C Mayani & Ors
5-6-EXA530-11.DOC
AND
GARNISHEE NOTICE NO. 1303 OF 2017
IN
EXECUTION APPLICATION NO. 530 OF 2011
Mr Kamal Khata, with Mr Ashish Anand, Siddhi Vora, I/b Nityoah
Suneel & Associates, for the Decree Holder.
Dr Abhinav Chandrachud, with Mr Akshay Udeshi, I/b Sanjay
Udeshi & Co, for the Judgment Debtor No. 1.
Mr NJ Devashrayee, for the Bank of Maharashtra.
CORAM: G.S. PATEL, J
DATED: 16th July 2018
ORAL ORDER:-
1. There is a preliminary objection -- at least that is how it is described -- by the Judgment Debtor represented by Dr Chandrachud. Respondent No.1 is a partner of the Judgment Debtor firm. It is, I think, something of a misnomer to say that there is anything preliminary about this objection. The Award dated 21st January 2011 has been in execution for some time. The Execution Application itself is now seven years old. There have been Garnishee Proceedings against banks and amounts have been received in this Court. Those are the subject matter of separate orders. The Award itself was in the amount of Rs.40,57,895/- (inclusive of legal expenses of Rs.2,25,000/-).
2. The objection on behalf of the Judgment Debtors is this. According to them, following the 2015 amendment with effect from Page 2 of 9 16th July 2018 ::: Uploaded on - 23/07/2018 ::: Downloaded on - 24/07/2018 00:24:58 ::: Nanbala N Mayani v Jaswantrai C Mayani & Ors 5-6-EXA530-11.DOC 23rd October 2015 to the Arbitration & Conciliation Act, 1996 ("the Arbitration Act"), Section 36 uses the word "Court" in quite distinct contexts in its sub-section. Section 36 of the Arbitration & Conciliation (Amendment) Act, 2015 as amended reads:
"36. Enforcement -- Where the time for making an 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, 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."
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3. The distinction that Dr Chandrachud draws is in the use of the lower case 'court' in Section 36(1) as opposed to the capitalised 'Court' in sub-sections 2, 3 and in Section 34 of the Act. 1 It is his submission that Section 2(1)(e) contains a definition of only the latter use, i.e. Court with the upper case "C" and it reads thus:
"2(1)(e) "Court" means--
(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject- matter of the arbitration if the same had been the subject- matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court"
4. He therefore submits that the enforcement of an award under Section 36(1) must be through a 'court' that has the necessary pecuniary jurisdiction, and this use of the word 'court' is to be 1 There is an inconsistency in the printed copies of the Arbitration & Conciliation (Amendment) Act, 2015. The publication from Universal Law Publishing Co. Pvt. Ltd. uses the lower case "c". The one from Professional Book Publishers uses the capitalised "C" throughout. In this judgment, I have referred to the Gazette copy of the Act.
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5. He places reliance first on the decision of a learned Single Judge of this Court in Shakti International Pvt Ltd v Excel Metal Processors Private Limited.2 There, dealing with provisions of Section 17, i.e. interim measures ordered by an Arbitral Tribunal and specifically with the provision that an Arbitral Tribunal shall have the same power for making orders as the Court has for the purpose, and in relation to any proceedings before it, Kathawalla J held that this meant that while the Arbitral Tribunal could appoint a private receiver it could not appoint the Court Receiver because the Arbitral Tribunal was not a 'Court' as defined in Section 2(1)(e). I am of course bound by that decision. But I am also entirely in agreement with it. However, I am of the view that the decision in Shakti International stands on a completely different footing from the present submission.
6. What Section 36(1) speaks of is not the question of jurisdiction, or choice of Executing Court, but of the manner in which an Arbitral Award is to be put into execution. All that it says is that an Arbitral Award is to be executed as if it is a decree of any court. To agree with the submission of Dr Chandrachud, (that Section 36(1) could not have used the capitalised Court) would render an incongruous result: it would then mean that only Arbitral Awards passed by a Court as defined -- in this case the High Court on its Original Side -- could ever be put into execution. That simply 2 (2017) 3 AIR Bom 388 : 2017 SCC OnLine Bom 321.
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7. Dr Chandrachud in fairness accepts that the purpose of these amendments was not to complicate or to protract the process of enforcement of Arbitral Awards but to make them simpler. I fear that the consequence of his submission is to do exactly the reverse and there would be multiple Courts simultaneously exercising different power over the same award for no discernible or logical reasons. I do not believe that the decision of the learned Single Judge of the Kerala High Court in Metro Silks & Sarees v Darpan Traders3 materially assists Dr Chandrachud in his submission. Indeed the last five lines or so of paragraph 5 of that decision seem to militate against an acceptance of his case.
8. It is of course well established in Raghunath Rai Bareja & Anr v Punjab National Bank & Ors4 that one does not lightly presume an error on the part of the legislature. But I am presuming no error. I am accepting the correctness of what the legislature did. I am merely disagreeing with Dr Chandrachud's interpretation of it.
3 (2009) 3 KLT 916 : 2009 SCC OnLine Ker 6359.
4 (2007) 2 SCC 230.
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9. A quick look at Report No. 246 of the Law Commission of India of August 2014 on the amendments proposed to the Arbitration Act should settle the matter completely. At page 56, the Law Commission set out its recommendation for an amendment to Section 36. This is what the Law Commission said (the emphasis is mine):
Amendment of Section 36
19. In section 36,
(i) add numbering as sub-section (1) before the words "Where the time" and after the words "Section 34 has expired," delete the words "or such application having been made, it has been refused" and add the words "then subject to the provision of sub-section (2) hereof,"
(ii) insert sub-section "(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 the award unenforceable, unless upon a separate application made for that purpose, the Court grants stay of the operation of the award in accordance with the provisions of sub-section (3) hereof;"
(iii) insert sub-section "(3) Upon filing of the separate application under sub-section (2) for stay of the operation of the award, the court may, subject to such conditions as it may deem fit, grant stay of the operation of the award for reasons to be recorded in writing."
(iv) insert proviso "Provided that the Court shall while considering the grant of stay, in the case of an award for money shall have due regard to the provisions for grant of stay of money decrees under the Code of Civil Procedure, 1908."
Page 7 of 916th July 2018 ::: Uploaded on - 23/07/2018 ::: Downloaded on - 24/07/2018 00:24:58 ::: Nanbala N Mayani v Jaswantrai C Mayani & Ors 5-6-EXA530-11.DOC [NOTE: This amendment is to ensure that the mere filing of an application under section 34 does not operate as an automatic stay on the enforcement of the award. The Supreme Court in National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd. and Anr, (2004) 1 SCC 540, recommends that such an amendment is the need of the hour.]
10. The Law Commission did not, therefore, set out to change the usage of the word Court/court in Section 36(1). More to the point, as paragraph (iii) quoted above shows, it used the upper and lower case words almost interchangeably; and on Dr Chandrachud's interpretation, even Section 36(3) should have 'court' with a lower- case 'c', which it does not. Consequently, for the purposes of Section 36, the 'court', throughout, is the 'Court' as defined.
11. Finally, and not to put too fine a point on it, even after the amendment, this Act (like many others) is replete with punctuation and other errors. A straightforward example is the portion below Section 17(1)(e) where the comma after the word 'order' is clearly redundant. There are many number of such examples in this and other statutes and I believe we are best advised to read the statutes for what they intend, and what their objects and purposes are, rather than to interpret for what a punctuation may or may not convey. There is always a time and a place for that level of exactitude. This is not it.
12. At this stage, I am not inclined to allow any withdrawal or appropriation against the arbitral award or decree. As I noted in my order of 25th June 2018, there are some amounts that have been Page 8 of 9 16th July 2018 ::: Uploaded on - 23/07/2018 ::: Downloaded on - 24/07/2018 00:24:59 ::: Nanbala N Mayani v Jaswantrai C Mayani & Ors 5-6-EXA530-11.DOC withdrawn by one or more of the Judgement Debtors from the Small Cause Court. After that order, they have withdrawn nothing. It will need to be ascertained which of the parties is entitled to withdraw what amount in what proportion from which account. The officers of the Bank of Maharashtra are excused from further attendance in Court (meaning this Court; and, yes, with a capital C). In the meantime, Judgment Debtor No.1 and the Decree Holder will respectively file Affidavits giving complete details of the amounts that they have respectively withdrawn till date with all particulars. I am given to understand that although the Decree Holder was also entitled to withdraw amounts from the deposits made in the Small Causes Court, those withdrawals have not been allowed. For this reason I am not permitting any withdrawals from the present amount that are deposited in this Court either.
13. Affidavits to be filed and served on or before 30th July 2018.
14. List the matter on 13th August 2018.
(G. S. PATEL, J.) Page 9 of 9 16th July 2018 ::: Uploaded on - 23/07/2018 ::: Downloaded on - 24/07/2018 00:24:59 :::