Punjab-Haryana High Court
Shiv Shakti Rice Mills vs Punjab State Warehousing Corporation ... on 25 April, 2005
Equivalent citations: (2005)140PLR699
JUDGMENT M.M. Kumar, J.
1. This petition filed under Article 227 of the Constitution prays for setting aside order dated 11.12.2004 passed by the District Judge, Sangrur dismissing the objections of the JD-petitioner to the execution proceedings initiated by the decree holder-respondent No. 1 under Order XXI Rule 11 Code of Civil Procedure, 1908 (for brevity 'the Code'). It is pertinent to mention that an award dated 10.6.2003 was passed against the Judgment debtor-petitioner by the Arbitrator. The judgment-debtor petitioner did not file any objection within the stipulated period of three months as provided by Section 34(3) of the Arbitration and Conciliation Act, 1996 (for brevity 'the Act'). Accordingly, the award became executable as postulated by Section 36 of the Act. However, objections were filed on 14.5.2004 which have been dismissed by the Id. District Judge holding that the award dated 10.6.2003 was sent to the Judgment debtor-petitioner by registered post which is presumed to have been delivered to it. The application under Section 34(3) of the Act for setting aside award was required to be filed within three months of the receipt of award. However, application was filed on 14.5.2004. In respect of the other argument that the award could not have been executed against the partners of the petitioner firm the District Judge has concluded that under Order XXI Rule 50 CPC where the decree has been passed against the firm, the execution may be granted against any person who has appeared in his own name or who has admitted on the pleadings that he is, or who has been adjudged to be partner and against any person who has been summoned and has failed to appear. He has concluded as under:
"As mentioned above, Darshan Lal and Suresh Kumar were personally served and failed to appear. Anish Joshi and Jagat Bhushan were proved as the partners of the JD firm which was duly served and therefore, the award dated 10.6.2003 can be executed against all of them. It was reported before the Arbitrator that Anish Joshi has died. The award therefore can be enforced against his legal representatives with respect to the property they inherited from him. The objection petition filed by the JDs against the execution of the award therefore cannot sustain and the same is hereby dismissed."
2. After hearing the learned counsel I am of the considered view that no exception is provided to interfere with the well reasoned order passed by the Id. District Judge. Section 34(3) and 36 of the Act which are relevant for disposal of the petition reads as under:
"34. Application for setting aside arbitral award-
(1) and (2) xx xx xx (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal.
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter."
36. Enforcement.- Where the time for making an application to set a side t he arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a decree of the Court." .
3. A perusal of the above provisions of the Act shows that recourse against arbitral award can be taken by filing an application for setting aside the same within a period of three months from the date on which the party making the application had received the arbitral award. Another eventuality provided by Sub-section (3) of Section 34 of the Act is when the applicant has been prevented by sufficient cause from filing the application within the specified period of three months and the Court is satisfied about the sufficient cause of delay then the application may be entertained within a further period of 30 days. In the event of non existence of any of the grounds contemplated by Section 34(3) of the Act the award becomes enforceable under Section 36 of the Act. These provisions mark a radical departure from the Arbitration Act, 1940. It further provides that an application for setting aside the award is to be made in accordance with Sub-sections (2) and (3) of Section 34 of the Act. The afore-mentioned provision came up for consideration of the Supreme Court in the case of Union of India v. Popular Construction Co., . In this regard, the observations of the Supreme Court read as under:-
4. "Furthermore, Section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting side such award' in accordance with sub Section (2) and sub Section (3). Sub-section (2) relates to grounds for setting aside an award and is not relevant for our purposes. But an application filed beyond the period mentioned in Section 34, Sub-section (3) would not be an application "in accordance with" that sub-section. Consequently by virtue of Section 34(1), recourse to the Court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasised by the provisions of Section 36 which provide that "where the time for making an application to set aside the arbitral award under Section 34 has expired...the award shall be enforced under the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the Court."
This is a significant departure from the provisions of the Arbitration Act, 1940. Under the 1940 Act, after the time to set aside the award expired, the court was required to "proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow " (Section 17). Now the consequence of the lime expiring under Section 34 of the 1996 Act is that the award becomes immediately enforceable without any further act of the Court. If there were any residual doubt on the interpretation of the language used in Section 34, the scheme of the 1996 Act would resolve the issue in favour of curtailment of the Court's powers by the exclusion of the operation of Section 5 of the Limitation Act."
(emphasis added).
4. When the facts of the present case are examined in the light of the provisions of Sections 34 and 36 of the Act as interpreted by the Supreme Court in the case of Popular Construction Co. (supra) no doubt is left that the Id. District Judge has committed no legal error warranting exercising of jurisdiction of this Court under Article 227 of the Constitution. The award was passed on 10.6.2003 and the same was sent by registered post to the judgment debtor - petitioner on 10.6.2003. The postal receipt has been placed on record and the letter was not received back by the decree holder - respondent. In view of the provisions of Sub-section (3) of Section 34 of the Act a presumption would arise that the award was delivered to the judgment debtor- petitioner. The application was required' to be filed within three months as postulated by Section 34 of the Act failing which the award has become executable as decree of Civil Court in accordance with the provisions of the Code of Civil Procedure, 1908. It has been observed by the Supreme Court that an application for setting aside the award filed beyond the period of limitation cannot be considered to have been filed in accordance with Sub-sections (3) and (4). Therefore recourse to the Court against the arbitral award cannot be made beyond the period prescribed. Admittedly, no application for condonation of delay in accordance with the proviso to Sub-section (3) of Section 34 of the Act discloses a sufficient cause which prevented the decree-holder petitioner from filing the application for setting aside the award has been made. Therefore, the instant petition is wholly mis-conceived and is liable to be dismissed.
For the reasons recorded above, this petition fails and the same is dismissed.