Madhya Pradesh High Court
Dewas Transport Pvt. Ltd. Thr. Shri Jai ... vs The State Of Madhya Pradesh on 18 December, 2018
Equivalent citations: AIRONLINE 2018 MP 1352
1 MP No.5385/2018
HIGH COURT OF MADHYA PRADESH
MP No.5385/2018
Dewas Transport Pvt. Ltd
Vs.
State of MP
Indore, Dated:18.12.2018
Shri.Aniket Naik, learned counsel for petitioner.
Shri Kostubh Pathak, learned counsel for
respondent/State.
Heard.
By this Miscellaneous Petition under Article 227 of
the Constitution the petitioner has challenged the order of
learned Addl.District Judge dated 26/10/2018 whereby the
respondent's application for stay has been allowed and the
execution of the award dated 31/7/2018 and 6/8/2018 has
been stayed.
Facts in nutshell are that in the arbitration
proceedings the Arbitrator had passed the award dated 31/7/2018 and 6/8/2018 as against the respondent State government which came to be challenged at the instance of the respondent by filing objection u/S.34 of the Arbitration & Conciliation Act, 1996 (for short "the Act") and in those proceedings the respondent had filed an application seeking stay of the execution of the award and by the order under challenge the learned Addl. District Judge has stayed the execution of the award.
Learned counsel for petitioner submits that the learned Addl. District Judge has committed an error in Digitally signed by Varghese Mathew Date: 19/12/2018 17:58:34 2 MP No.5385/2018 staying the execution of the award without imposing any condition in respect of deposit of the amount. He further submits that provisions contained in Sec.36(3) of the Act are mandatory and without imposing the condition, the award cannot be stayed in absolute terms. He also submits that order 27 of the CPC has not been made applicable to these proceedings under the M.P. Arbitration Rules, 1997. He has also submitted that the security is required to be furnished in terms of Order 41 Rule 5(3) of the CPC.
As against this, learned counsel for respondent has supported the impugned order and has submitted that the respondent being a State, no security is required to be furnished for securing the execution of the award and that the court below has assigned due and proper reasons while granting the stay and even in terms of Order 27 Rule 8-A the provisions of Order 41 Rule 5 of the CPC are not applicable to the government.
I have heard the learned counsel for parties and perused the record.
The impugned order of the court below is a detailed well reasoned order. The court below has granted the unconditional stay taking note of the fact that both the parties have filed the objection u/S.34 of the Act. The award for a sum of Rs.2,50,06,500/- has been passed as against the respondent State with the condition that if the awarded amount is not deposited within one month, then it will bear interest @ 12% with effect from 1/8/2018. Hence, it has been found that on staying the execution of the Digitally signed by Varghese Mathew Date: 19/12/2018 17:58:34 3 MP No.5385/2018 award the petitioner will not suffer any financial loss. The court below has also taken note of the fact that since the award is to be executed against the State government, therefore, at this stage there is no justification for directing the State to deposit the amount or to furnish the security.
Sec.36 of the Act dealing with the enforcement of the award reads as under:-
"36-- Enforcement.--(1) 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(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)."
In terms of Sec.36(3) above, the Court hearing objection u/S.34 of the Act has power to stay the operation of the award. The submission of counsel for petitioner on the basis of the judgment in the matter of State of Uttar Digitally signed by Varghese Mathew Date: 19/12/2018 17:58:34 4 MP No.5385/2018 Pradesh Vs. Jogendra Singh (1964) 2 SCR 197, State of Rajasthan & Ors. Vs. Harishanker Rajendrapal (1965) 3 SCR 402 to read the 'may' in sub-section(3) as 'shall' is found to be devoid of any merit because in every case 'may' mentioned in the statute cannot be read as 'shall' and it is the context in which the word 'may' is used which determines whether it should be used as 'shall'. Sec.36(3) gives discretion to the court to pass an appropriate order of stay, hence the said discretion cannot be curtailed by reading the "may" as "shall".
So far as the submission of counsel for petitioner based upon the order 41 Rule 1(3) of the CPC is concerned, it is settled by the supreme court in the matter of M/s.Malwa Strips Pvt. Ltd Vs. M/s.Jyoti Ltd 2009 AIRSCW 1113 that in exceptional cases the stay of execution of the money decree can be granted. That apart, in the present case the award is against the State government which has been questioned by the government by filing objection u/S.34 of the Act. Order 27 Rule 8-A of the CPC provides that no such security as is mentioned in Order 41 Rule 5 and 6 shall be required from the government. Though Order 27 is not expressly included in the Schedule to the M.P. Arbitration Rules, 1997, but the principle lies beneath the provision can always be attracted by the court while deciding the stay application.
Counsel for petitioner has placed reliance upon the judgment in the case of Kanpur Jal Sansthan and another Vs. Bapu Constructions (2015) 5 SCC 267 but that was a case of an instrumentality of the government Digitally signed by Varghese Mathew Date: 19/12/2018 17:58:34 5 MP No.5385/2018 and not of the government itself, therefore, drawing the said distinction it was held that Order 27 Rule 8-A and 8-B are applicable only to the government. He has also placed reliance upon the judgment of the supreme court in the matter of Fiza Developers & Inter-Trade Pvt. Ltd Vs. AMCI(India) Pvt. Ltd & another (2009) 17 SCC 796 but the part of the judgment relied upon by the learned counsel for petitioner only holds the proceedings u/S.34 are not full fledged regular suit under the CPC, hence the said judgment does not carry the petitioner's case any further. Even in respect of the provisions contained in Order 41 Rule 1(3) of the CPC the Supreme Court in the matter of Sihor Nagar Palika Bureau Vs. Bhabhlubhai Virabhai & Co. (2005) 4 SCC 1 has held the power to be discretionary in nature which is meant to be exercised in appropriate cases.
Having regard to the aforesaid factual and legal position, I am of the opinion that the court below while passing the impugned order has assigned due and cogent reasons for stay of the award. The order does not suffer from any jurisdictional error. This court is exercising the limited supervisory jurisdiction under Article 227 of the Constitution and in this regard the Supreme Court in the matter of Jai Singh and others Vs. Municipal Corporation of Delhi and Another reported in 2010(9) SCC 385 while considering the scope of interference under Article 227 of the Constitution, has held that the jurisdiction under Article 227 cannot be exercised to correct all errors of judgment of a court, or tribunal acting within the limits of Digitally signed by Varghese Mathew Date: 19/12/2018 17:58:34 6 MP No.5385/2018 its jurisdiction. Correctional jurisdiction can be exercised in cases where orders have been passed in grave dereliction of duty or in flagrant abuse of fundamental principles of law or justice.
Since the order of the court below does not suffer from any patent illegality, therefore, no case for interference in the impugned order is made out. The miscellaneous petition is accordingly dismissed, however with a direction to the court below to decide the pending application u/S.34 of the Act itself as expeditiously as possible preferably within a period of nine months from the date of receipt of certified copy of this order.
(Prakash Shrivastava) JUDGE vm Digitally signed by Varghese Mathew Date: 19/12/2018 17:58:34