Calcutta High Court
Eastern Gases Ltd vs Usha Martin Ltd on 17 January, 2018
Author: Soumen Sen
Bench: Soumen Sen
ORDER SHEET
GA No.3954 of 2017
EC No.330 of 2017
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
EASTERN GASES LTD.
Versus
USHA MARTIN LTD.
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 17th January, 2018.
Appearance:
Mr. J.S. Dhatt, Adv.
Mr. Rudraman Bhattacharyya, Adv.
Mr. Jay Prakash Mondal, Adv.
The Court: This is an application in the nature of Section 47 of the Code of Civil Procedure. The application is filed on the assumption that an award passed under the Arbitration and Conciliation Act, 1996 is treated to be a deemed decree. The judgment debtor has filed an application for setting aside of the award. The judgment debtor did not comply with the order passed by a Coordinate Bench for securing a sum of Rs.25 lacs within the period specified in the said order. By reason of default, the said award was put into execution. The learned Counsel appearing on behalf of the applicant judgment debtors submits that in view of the fact that this application has been filed, the Coordinate Bench has not entertained the prayer for accepting the security tendered belatedly. 2
In this application it is argued on behalf of the judgment debtor that the procedure contemplated under the Act has not been followed inasmuch as the Arbitrator has not adjudicated the claim and has delegated his power to a chartered accountant. The mere acceptance of the amount quantified by the chartered accountant is not an adjudication on merits of the claim inasmuch as the Arbitrator cannot delegates its power to the chartered accountant.
The learned Counsel has referred to a Division Bench judgment of our Court in 'Juggobundhu Saha versus Chand Mohan Saha' reported at AIR 1916 Calcutta 806 and a decision of the Hon'ble Supreme Court in 'Mcdermott International Inc. versus Burn Standard Co. Ltd. & Ors.' reported at (2006)11 SCC 181 for the proposition that the Arbitrator is not authorized to delegate its power and function and any departure from the agreed procedure would make the said award null and void.
Apart from the fact that a Coordinate Bench of this Court in a decision reported in 2004 (2) Arbitration Law Report Page 469 (Cal) in the case of "Krishna Kumar Mundhra versus Narendra Kumar Anchalia" has held that in view of existence of Section 34 of the Arbitration and Conciliation Act, the proper remedy is to apply for setting aside of the award and the grounds that are available to an award debtor under Section 34 of the Act cannot be used for the purpose of reopening the award under Section 47 of the Code of Civil Procedure, this Court is also of the view that even if one strictly applies the parameters of Section 47 of the Code of Civil Procedure, the objection raised in the said application does not come within the purview of the said Section. The invalidity of the award on the 3 ground that the Arbitrator has not followed the agreed procedure or has delegated his function to a chartered accountant cannot be the grounds of challenge under Section 47 of the Code of Civil Procedure. In Krishna Kumar (supra) in paragraph 9 it was held:
"Be that as it may, the learned counsel has sought to bring in these questions within the scope and ambit of Section 47, CPC and he has contended, if the decree itself is a nullity or without jurisdiction, in that event, the Executing Court can go behind the decree. He relied on the decision of Bhavan Vaja vs. Solanki Hanuji Khodaji Mansang, AIR 1972 SC 1371 and Kiran Singh vs. Chaman Paswan, AIR 1954 SC 340. The principles laid down therein are accepted proposition with which there is no scope of any doubt. If the decree is a nullity or without jurisdiction, the said question can also be raised in the execution and the Executing Court can go behind the decree. This is a principle which is an exception to the principle that executing Court cannot go behind the decree. This proposition has not been disputed by Mr. Mitra. But the question remains whether these questions can be raised in a proceeding under Section 47 CPC in an execution of an Award in terms of Section 36 of the Act. In fact, the provisions contained in Section 34 of the Act of 1996 are somewhat similar to Section 47, CPC. Section 47 CPC renders the scope very wide and includes any and every dispute between the parties to be settled or resolved in the same proceedings and not by separate proceedings in the execution of the decree itself. Whereas Section 34 while providing for similar provision has restricted the grounds of challenge enumerated therein. It has not made the same open to any 4 and every dispute between the parties. Section 34 also prescribes the grounds under which it can be challenged and after the question is decided, the Award becomes final in terms of Section 35. If no application under Section 34 is made, then after the expiration of the period limited the Award becomes enforceable in terms of Section 36, which also does not provide that the provisions of the Code as such would become applicable. Section 36 creates a fiction that it would be enforceable as if it were a decree of the Court within the scope of Order 21, CPC. This enforcement of the Award under Order 21, CPC would not attract the application of Section 47 CPC simply by reason of the expression used in Section
36. Section 36 cannot be read independent of the other provisions contained in the Act itself. All the provisions are to be reconciled with the other provisions of the Act. Section 36 cannot be read out of context and independent of the scheme of the Act. Reference to another statute does not attract application of such other statute to the referring statute unless expressly provided for. A reference in a statute to another statute does not invite inconsistency in the referring statute. Any such reference, if made, has to be interpreted in the context in which the reference is made and not inconsistent with the provisions of the referring statute itself. If it brings inconsistency, then the same is to be avoided. If Section 47, CPC is to be attracted, then the restrictions provided in Section 34 of the Act would be redundant. It cannot be interpreted in the manner inconsistent with the provisions contained in the other part of the Act. That apart the finality of the decree under the Code is reached after the decision under Section 47, CPC, if raised. But the Legislature in its wisdom thought it fit to incorporate the scope 5 similar to Section 47 CPC in Section 34 of the Act in order to bring finality before the decree becomes executable. Same procedure cannot be expected to be incorporated in a statute twice over Legislature never intends repetition. At the same time, the object of the Act is directed towards speedy and hazard-free finality with a view to avoid long drawn procedure based on technicalities. Therefore, having regard to the provisions of Sections 4,5, 12, 13, 16, 34 and 35, Section 36 cannot be interpreted in a manner inconsistent with any of those provisions to attract the provisions contained in the Code in its entirety. Therefore, in the application filed under the provisions of CPC for the purpose of execution of an Award, the Court cannot overlook the scope and ambit within which the Court is to execute the Award taking aid of the provisions for execution contained in the CPC not inconsistent with the provisions contained in the 1996 Act. Therefore, in my view, Section 47, CPC cannot be attracted despite the provisions contained in Section 36 in respect of an Award when the Award is sought to be executed thereunder."
It is not being alleged that there is no arbitration agreement or the disputes are not amenable to arbitration or that the said dispute is not arbitrable. Moreover, the petitioner has accepted the order by which the petitioner was directed to furnish security.
Under such circumstances this application is not maintainable and stands dismissed. However, there shall be no order as to costs.
(SOUMEN SEN, J.) sp/b.pal.