Gauhati High Court
Subhas Projects And Marketing Ltd. vs Assam Urban Water Supply And Sewerage ... on 28 February, 2003
Equivalent citations: AIR2003GAU158, (2003)2GLR449, [2003]48SCL473(GAU), AIR 2003 GAUHATI 158, 2003 ARBI LR(SUPP) 382, (2003) 2 GAU LR 449, (2003) 2 GAU LT 259, (2003) 4 CIVLJ 362
Author: Ranjan Gogoi
Bench: H.K.K. Singh, Ranjan Gogoi
JUDGMENT Ranjan Gogoi, J.
1. This civil revision application is directed against the order dated 21.10.1998 passed by the learned District Judge, Kamrup at Guwahati in Money Execution Case No. 6 of 1998. By the aforementioned order, the learned court below has rejected the application for execution of an interim award dated 23.2.1988 filed by the present petitioner.
2. The brief facts of the case may be noted as hereunder :
The revision petitioner herein contends that to resolve and settle a dispute with regard to the entitlement of the present petitioner to certain outstanding dues, the parties to the present revision petition had agreed to refer the dispute to arbitration, pursuant whereto the revision petitioner, had appointed one Sri S. K. Jain as its Arbitrator. The Managing Director of the respondent Board by letter dated 12.12.1996 appointed one Sri K.D. Lahkar as its Arbitrator and both the Arbitrators appointed one Sri Jatin Hazarika, IAS (Retired) as the umpire. According to the revision petitioner, the arbitral Tribunal as constituted above entered into the reference of the dispute between the parties and the respondent Board had time and again sought for and was granted adjournments to enable it to file its reply to the claims made by the present revision petitioner. Consequent upon appointment of a new Managing Director of the respondent Board, for the first time, in the proceeding held by the Tribunal on 27.8.1997, a question was raised with regard to the competence and jurisdiction of the arbitral Tribunal to hear the dispute. Such objections to the jurisdiction of the Tribunal was taken by the respondent Board, inter alia, on the ground that the contract agreement between the parties did not visualize any reference to arbitration and that the then Managing Director of the Board had unauthorisedly appointed Sri K. D. Lahkar as its arbitrator. According to the revision petitioner, several adjournments were granted at the instance of the respondent Board to enable it to place before the Tribunal the opinion of the Legal Remembrancer with regard to the jurisdiction of the Tribunal to hear the dispute which opinion was stated to have been sought for. Eventually, as the aforesaid opinion of the Legal Remembrancer was not placed before the Tribunal in spite of grant of several opportunities and as no written statement was also filed on behalf of the respondent Board, the arbitral Tribunal in a sitting held on 23.2.1998, while keeping the question of jurisdiction alive and pending passed an interim award in favour of the claimant revision petitioner for a sum of Rs. 35 lakhs to be paid by the respondent Board against a Bank Guarantee to be furnished by the revision petitioner herein.
3. According to the revision petitioner, the said interim award was not challenged by the respondent Board by filing an application for setting aside the same as contemplated by Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act). On expiry of the period of limitation for filing such an application as prescribed by Section 34 of the Act, the revision petitioner filed an application for execution of the award, on the basis of which Money Execution Case No. 5 of 1998, was registered in the court of learned District Judge, Kamrup at Guwahati. The respondent Board filed its objections against the said execution contending primarily that the award was a nullity in law and therefore, not executable. By the impugned order dated 21.10.1998 passed by the learned District Judge, Kamrup, the application for execution filed by the claimant-revision-petitioner having been dismissed, the instant civil revision application has been filed.
4. We have heard Mr. T. C. Markanda, learned counsel appearing on behalf of the revision petitioner and Mr. M.K. Choudhury, learned counsel appearing on behalf of respondent Board.
Mr. Markanda, learned counsel appearing on behalf of the revision petitioner has contended that under Section 16 of the Act, objections to the competence and jurisdiction of arbitral Tribunal to entertain a dispute must be raised and decided by the Tribunal and not by any other Forum, in the instant case, such a question was raised on behalf of the respondent Board which has been kept pending and the interim award has been passed on account of persistent failure on the part of the respondent Board to contest the proceeding before the learned Tribunal, in any meaningful manner. An interim award, it is submitted, is within the competence of an arbitral Tribunal by virtue of Sections 17 and 31 of the Act. Learned counsel has further contended that against an award final or interim passed under Section 31, the competent court may be moved by filing an application for setting aside the award on any of the grounds enumerated in Section 34(2) of the Act. Learned counsel has submitted that in the instant case the respondent Board did not file any application for setting aside the interim award dated 29.2.1998 within the time framed stipulated by Section 34 and on expiry of the aforesaid time frame, the interim award dated 23.1.1996 had become executable as a decree of the civil court. Thus, it is contended, is by virtue of the provisions of Section 36 of the Act. Learned counsel has further contended that all the limitations inherent in an executing court to consider the legality of the decree passed would also apply to the court executing an award under Section 36. As an executing court cannot go behind the decree to examine its legality or tenability, the court executing an award passed under the Act would also be bound by such limitations. That apart, in view of the provisions of Section 34 of the Act, no objection to the execution of the award can be taken by the "Judgment Debtor" on any of the grounds enumerated in Section 34. To hold otherwise would be rendering the provisions of Section 34 nugatory, it is contended by the learned counsel for the revision petitioner.
5. Adverting to the facts of the present case, learned counsel for the petitioner, has submitted that in the instant case the execution of the interim award dated 23.2.1998 was resisted by the respondent Board on the ground of lack of power and competence of the arbitral Tribunal to pass the award in question. Not only such a question will have to be decided by the Tribunal itself, no such objection on the abovestated ground can be taken to resist the execution of an award inasmuch any such objection would fall within this grounds enumerated in Section 34 of the Act for setting aside the award. As no application to set aside the interim award was filed by the respondent Board, the provisions of Section 34 cannot be circumvented by allowing the respondent Board to urge the said ground in its objections filed to resist the execution of the award.
6. Mr. M.K. Choudhury, learned counsel for the respondent Board while controverting the submissions advanced by the revision petitioner has contended that the interim award dated 23.2.1998 is a nullity in law inasmuch as reference of the alleged dispute between the parties to Arbitration by the person holding the office of the Managing Director of the respondent Board at the relevant point of time was wholly unauthorized, it is also submitted by Mr. Choudhury that in the instant case there was no arbitration agreement between the parties and when an award passed is a nullity in law, no application to set aside such an award is contemplated; all objections to the award can be taken at the stage of execution. That apart, it has been contended on behalf of the respondent Board that the award or the copy of the same furnished to the respondent Board is without the signatures of an the Arbitrators ; it is not properly stamped and is merely the minutes of the proceedings held before the Arbitrator on 23.2.1998. Such minutes of the proceedings before the Arbitrator cannot partake the character of an award within the meaning of Section 31 of the Act. On the aforesaid broad grounds, it is contended that no illegality or infirmity can be found in the order of the learned court below rejecting the application for execution.
7. The submissions advanced by the learned counsel for the parties have been duty considered by us. Section 31 of the Act does not prescribe any particular form or manner of passing an award. An award is an expression of an adjudication of a dispute between the parties and as long as the manifestation of the decision on the dispute raised is clear and un-ambiguous, it will not be correct to hold an award to be invalid merely because it does not subscribe to any particular format. A unstamped or insufficiently stamped award is at best a curable irregularity. Viewed from the aforesaid perspective the objections of the respondent Board regarding the validity of the award on the aforesaid two grounds would hardly call for any serious consideration of this court.
8. The law relating to the power of an executing court under the provisions of Section 47 of the Code of Civil Procedure is well settled. The difficulty is not with regard to the principles of law, but with regard to the application of such principles. In view of the clear language of Section 47 of the Code of Civil Procedure, it has always been understood that while the executing court cannot go behind the decree to determine its legality, objections regarding the validity of the decree has to be decided in an execution proceeding. However, such objections must appear on the face of the record and cannot be left to be determined by a long drawn process either of evidence or reasoning. The same principles of law would undoubtedly apply to the execution of an award under Section 36 of the Act. It is also our considered view that the inhibitions that would operate upon the court while executing an award would be some what more in view of the provisions of Section 34 of the Act. As Section 34 of the Act has enumerated specific grounds on which an application for setting aside of an award may be filed, any such objection to the award on the grounds enumerated in Section 34 cannot be allowed to be agitated or re-agitated while resisting the execution of the award. To that extent, the argument advanced by Mr. Markanda appearing on behalf of the revision petitioner is well founded, in the instant case no objection under Section 34 of the Act was filed on behalf of the respondent Board. In such a situation to permit the respondent Board to raise the question of jurisdiction of the arbitral Tribunal to pass the interim award in question in its objections resisting the execution of the award, cannot be understood to be permissible in law. Such a course of action would render the provisions of Section 34 virtually redundant. As evident from the subsequent facts of the case on which there is no dispute at the Bar, it appeals that the arbitral proceeding has now to recommence. The question or jurisdiction of the arbitral Tribunal which has not yet been decided, therefore, must be decided by the Tribunal itself and we are confident that this question if agitated by any party, would be brought to its logical conclusion by the Tribunal. However, entertainment of said question by the learned District Judge in an execution proceeding and in treating the conclusion reached by it as the foundation for its decision cannot be said to be corrective law.
9. The next logical step to the conclusion reached by us as aforementioned, would be remit the matter to the District Judge for passing the necessary and consequential orders. However, there is one disquieting feature or the case which has come to our notice. The learned District Judge in the impugned judgment dated 21.10.1998 has recorded a finding that the interim award dated 23.2.1996 has not been signed by all the Arbitrators. We have perused the record of the proceeding before the learned District Judge as called for by us. What is disclosed by the record in original is that while the claimant/ revision-petitioner has filed a copy of the interim award along with its application for execution, the respondent Board, in the documents filed before the learned District Judge has filed a copy of the award received by it. While the copy of the award filed by the claimant/revision-petitioner bears the signatures of all the three Arbitrators, the copy of the award filed by the respondent Board bears the signature of the Principal Arbitrator only. It is perhaps on the aforesaid basis that the learned District Judge has found that the award had not been signed by all the Arbitrators. We have also noticed that the award in original was not placed by the Arbitrators before the court. The proper course of action for the District Judge, in our considered view, would have been to call the award from the Arbitrators. We therefore, direct that the learned District Judge will now call for the Award in original from the Arbitrators and thereafter pass further orders in the execution proceeding in accordance with the principle enumerated in the present judgment and order.
10. This revision application stands disposed of with the above directions.