Calcutta High Court
The State Of West Bengal & Ors vs M/S. Dilip Kumar Saha on 18 December, 2018
Author: Ashis Kumar Chakraborty
Bench: Ashis Kumar Chakraborty
GA 2586 OF 2018
With
AP 89 OF 2015
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
THE STATE OF WEST BENGAL & ORS.
Versus
M/S. DILIP KUMAR SAHA
BEFORE:
The Hon'ble JUSTICE ASHIS KUMAR CHAKRABORTY
Date : 18th December, 2018.
Appearance:
Mr. Utpal Bose, Senior Advocate
Mr. S. Mitra, Advocate
...for Dooars Construction Company.
Mr. S. Sen, Senior Advocate
Mr. P. Sinha, Advocate
Mr. A. Mandal, Advocate
...for the State.
The Court : In this application under Section 36 (2) of
the Arbitration and Conciliation Act, 1996, as amended by Act 3 of
2016 (in short, the Act of 1996), the petitioner, the State of
West Bengal has prayed for unconditional stay of operation of the
arbitral award dated October 29, 2014 passed by a sole arbitrator
directing them to pay various amounts of money to the respondent,
the claimant in the arbitration.
The petitioner had filed the application under Section 34 of the Act of 1996 for setting aside of the said arbitral award dated 2 October 29,2014 within the time stipulated under Section 34 (3) of the Act of 1996 and the same was admitted in the year 2015.
As per the unamended provision of Section 36 of the Act of 1996 with the filing of the application under Section 34 Act of 1996, the enforcement of the arbitral award stood automatically stayed. But with the incorporation of sub-Sections (2) and (3) of Section 36 of the Act of 1996, in order to obtain stay of execution of an arbitral award, made in an arbitral proceeding which commenced after October 25, 2015, the award debtor has to file an application under sub-Section (2) of Section 36 of the Act of 1996. In view of the decision of the Supreme Court in the case of Board of Control for Cricket of India-vs-Kochi Cricket Association, reported in AIR 2018 SC 1549, the Proviso to sub- section (3) of Section 36 is also applicable in the present case. Thus, without the petitioner obtaining an order for stay of operation of the impugned arbitral award, the respondent award holder in entitled to execute the arbitral award. The said decision of the Supreme Court in the case of Board of Control Cricket of India (supra) was dated March 15, 2018. Before the respondent award holder filing any execution application, on September 11, 2018 the petitioner has filed this application for unconditional stay of operation of the impugned arbitral award. According to the petitioner, as per the Proviso to sub-Section (3) of Section 36 of the Act of 1996, in order to obtain stay of 3 arbitral award directing for payment of money, the Court shall have regard to the provisions in the Code of Civil Procedure (in short "the Code") for grant of stay of operation of a money decree by the Appellate Court, and may direct the award holder either to deposit or secure the entire awarded amount in the Court. The petitioner, however, emphasised that since it is a "Government" within the meaning of the said term under Rule (8-B) of Order XLI of the Code, by virtue of the provision of Rule (8-A) thereof, it is exempted from the operation of the provision of sub rule (5) of Order XLI of the Code and, consequently, it is entitled to obtain unconditional stay of operation of the impugned award. In support of such contention, the petitioner has relied on a judgment dated September 5, 2018 passed by this Court in GA No. 1903 of 2018 with A.P. No. 1121 of 2016 (Union of India and another vs. Pam Development Pvt. Ltd.). By the said judgment, considering the decision of the Supreme Court in the case of Kanpur Jalasangasthan Vs. Bapu Construction, reported in (2015) 5 SCC 267 and the provisions contained in Proviso to sub-Section (3) of Section 36 of the 1996 Act, read with sub-Rule (5) of Rule 5 of Order XXXXI and Rules (8-A) and (8-B) of Order XLI of the Code, this Court held that the Union of Indian, as "the Government" within the meaning of the said term under Rule (8-B) of Order XLI of the Code, it is entitled to obtain unconditional stay of operation of an arbitral award directing payment of money. The petitioner 4 further submitted that the said judgment dated September 5, 2018 passed by this Court was challenged by the respondent in the said application, G.A. No. 1903 of 2018, with A.P. No. 1121 of 2016 before the Supreme Court in SLP(C) No.25765 of 2018 which was rejected on December 3, 2018. Urging these grounds, the petitioner pressed for an order for unconditional stay of operation of the arbitral award.
The respondent, however, raised strong objection to the prayer of the petitioner for unconditional stay of operation of the impugned arbitral award. According to the respondent, in the said judgment dated September 5, 2018 passed in GA No.1903 of 2018 with AP No.1121 of 2016, this Court followed the Full Bench decision of this Court in the case of Union of India vs. Amitava Pal, reported in AIR 2015 CAL 189 and held that the petitioner therein had filed the application for stay of operation of the impugned award without undue delay. According to the respondent, in the said judgment, this Court further held that the petitioner in the said application, GA No.1903 of 2018 with AP No.1121 of 2016 had stated that unless operation of the impugned award is stayed, it would suffer financial losses which is public money. It was stressed that in the present case, the arbitrator made the impugned award on October 29, 2014 and thereafter, an application was filed for setting aside of the impugned arbitral award. It was submitted that thogh on March 15, 2018, the decision of the 5 Supreme Court in the case of Board of Control for Cricket of India (Supra) was passed and it was only on September 10, 2018 the petitioner filed this application. Thus, according to the respondent, in the present case, it cannot be held that the petitioner has filed this application without undue delay. It was further submitted that the petitioner has not been able to substantiate any case of suffering any irreparable loss or injury being suffered without an unconditional stay of operation of the arbitral award. Urging all these grounds, respondent prays for rejection of the prayer of the petitioner for unconditional stay of operation of the arbitral award.
I have considered the materials on record as well as the arguments advanced on behalf of the respective parties. In view of the decision of the Supreme Court in the case of Board of Control for Cricket of India (Supra), the Proviso to sub-Section 3 of Section 36 of the Act of 1996 is applicable even in respect of awards passed before the Act 3 of 2016 came into force. Thus, before granting stay of operation of any arbitral award directing for payment of money the Court is required to have due regard to the provisions for grant of stay for money decree under the provisions of the Code. Therefore, ordinarily while dealing with an application under sub-section (2) of Section 36 for stay of operation of an award directing payment of money, the Court has to consider the provisions of sub-rule (5) of Rule 5 of Order XLI of 6 the Code. Therefore, while dealing with an application for stay of operation of an arbitral award directing for payment of money the Court has the power to direct the award debtor either to deposit the entire awarded amount or to secure the awarded amount. However, when the Union of India or the State Government prefers an appeal against a money decree passed against it by the trial Court, by virtue of the provisions contained in Rule (8-A) of the Code it is exempted from the provisions of sub-rule 5 of Rule 5 of Order XLI of the Code. Similarly, as held by the said judgment dated September 5, 2018 in GA No.1903 of 2018 with AP No.1121 of 2016 when the State Government or Union of India files an application for stay of operation of an award made against it for payment of money, they are entitled to obtain the exemption granted under sub-Rule (8-A) of Order XLI of the Code. In the present case, it is only in view of the decision of the Supreme Court in the case of Board of Control for Cricket of India (Supra), the petitioner is required to file an application for stay of operation of the impugned arbitral award. Admittedly, the said decision was passed by the Supreme Court on March 15, 2018 and the present application was filed by the petitioner on September 10, 2018 i.e. within the period of less than six months from the date of the said Supreme Court decision, that too before any application being filed the respondent award-holder for execution of the award. Considering all these facts I do not find 7 that there has been any inordinate delay on the part of the petitioner to file the present application. Further, in paragraph 13 of the application the petitioner has stated that unless an order is passed directing the stay of operation of the arbitral award it shall suffer irreparable loss or injury.
For all the reasons as aforesaid, I find that the petitioner is entitled to obtain unconditional stay of operation of the arbitral award. Accordingly, there shall be an order directing unconditional stay of operation of the arbitral award dated October 29, 2014 passed by the sole arbitrator in the arbitral proceeding between the parties herein till disposal of the application A.P. No. 89 of 2015.
The application, A.P. No. 89 of 2015 shall appear in the monthly list of February 2019 for hearing.
A prayer is made on behalf of the respondent for stay of operation of this order. Such prayer is considered and rejected.
(ASHIS KUMAR CHAKRABORTY, J.) SK./akg/S.De