Madras High Court
Kamarajar Port Limited vs Ennore Tank Terminal Private Limited
Author: R.Subramanian
Bench: R.Subramanian
A.Nos.2291 & 2292 of 2019
in EP No.124 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on Delivered on
25.07.2019 19.08.2019
CORAM:
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
Application Nos.2291 and 2292 of 2019
in EP No.124 of 2018
Kamarajar Port Limited,
2nd Floor, (North wing), 3rd Floor,
Jawahar Building,
No.17, Rajaji Salai, Chennai 600 001
Rep. By its General Manager (CS & BD) ... Applicant in both the Petitions
Vs
Ennore Tank Terminal Private Limited,
Regd. Office at Neeladri Building,
No.9, Cenotaph Road,
Alwarpet, Chennai 600 018.
Rep. By its Authorised Signatory,
Mr.Umesh Gajanan Rao Shedde ... Respondent in both the Petitions
Prayer in Appl. No.2291 of 2019: Application is filed under Order XIV
Rule 8 of the Original Side Rules read with Order 21 Rule 26 and Section
1/48
http://www.judis.nic.in
A.Nos.2291 & 2292 of 2019
in EP No.124 of 2018
151 of the Code of Civil Procedure, praying to stay the operation of the
order dated 08.02.2019 passed in E.P.No.124 of 2018 passed by the
Learned Master of the High Court pending disposal of the present Appeal.
Prayer in Appl. No.2292 of 2019: Application is filed under Order XIV
Rule 12 read with Order XIV Rule 8 of the Original Side Rules, praying to
set aside the order dated 08.02.2019 passed in E.P.No.124 of 2018
passed by the Learned Master of this Court.
For Applicant : Mr.S.Parthasarathy, SC
in both the Petitions M/s.Krishna Ravindran
For Respondent : Mr.Vijay Narayanan (Advocate General)
in both the Petitions Assisted by Mr.K.Gowtham Kumar
C O M M ON O R D E R
The applicant in Application No.2292 of 2019 challenges the order of the learned Master dated 08.02.2019 made in EP No.124 of 2018, in and by which, the learned Master had directed the respondent/applicant herein to approve DRP 2014, to allot 330 meters expansion of the existing jetty 2/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 (MLT-1), to allot an area of 300 square meters to setup truck drivers resting area and allot 3.75 acres of land to install additional storage facility to the petitioner within a period of six weeks. The Execution Petition in EP No.124 of 2018 was laid by the respondent herein seeking execution of the award of the Arbitral Tribunal dated 28.09.2017.
2. The Execution Petition was resisted by the judgment debtor/applicant herein on various grounds. The above order came to be passed in the Execution Petition over ruling the objections of the judgment debtor/applicant herein. Aggrieved, the applicant has come forward with this application seeking to set aside the order of the learned Master under Order 14 Rule 12 of the Original Side Rules.
3. When the above applications were taken up for hearing Mr.Vijay Narayan, learned Advocate General appearing for the respondent/decree holder raised the question of maintainability of the Appeal. Considering the nature of the proceedings, Counsels were required to address arguments on the maintainability of the Appeal under Order 14 Rule 12 of the Original 3/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Side Rules.
4. I have heard Mr.S.Parthasarathy, learned Senior Counsel assisted by Mr. Krishna Ravindran, for the applicant and Mr.Vijay Narayan, learned Advocate General assisted by M/s.K.Gowtham Kumar, appearing for the respondent.
5. In support of his contention that the appeals are not maintainable, the learned Advocate General would submit that an appeal against the order of the Master made in an execution proceeding launched under Section 36 of the Arbitration and Conciliation Act 1996, cannot be maintained in view of the provisions of Section 5 read with Section 37(1) of the said Act. Elaborating on his submissions, Mr.Vijay Narayan, learned Advocate General would submit that the Arbitration and Conciliation Act, being a Special enactment and self contained Code an appeal remedy, not otherwise provided for under the Act, cannot be availed of by the parties, more so, when the same is prohibited under the Arbitration and Conciliation Act. He would draw my attention to Section 5 of the Arbitration 4/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 and Conciliation Act, 1996, which reads as follows:
5. Extent of Judicial Intervention:-
Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.
6. Relying upon the provisions of Section 5, extracted above, the learned Advocate General would submit that the judicial intervention in the process of arbitration is subject to the provisions of the Arbitration and Conciliation Act and no judicial authority can intervene in proceedings under the Arbitration and Conciliation Act, except where there is a provision for such intervention. The learned Advocate General would also point out that Section 8, Section 9, Section 11, Section 17, Section 34 and Section 37 are some of the provisions which provide for intervention by a Judicial Authority in the course of arbitration. 5/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018
7. He would also draw my attention to the provisions of Section 37 of the Arbitration and Conciliation Act, which provides for appeals against some of the orders passed during the course of the arbitration proceedings or in proceedings challenging the award under Section 34. Section 37 of the Arbitration and Conciliation Act 1996, reads as follows:
37. Appealable orders.— (1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:—
(a) refusing to refer the parties to arbitration under section 8;
(b) granting or refusing to grant any measure under section 9;
(c) setting aside or refusing to set aside an arbitral award under section 34.
(2) Appeal shall also lie to a court from an order of the arbitral tribunal— 6/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018
(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or (b) granting or refusing to grant an interim measure under section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.
8. Making a particular reference to the language of Section 37, extracted supra, the learned Advocate General would contend that the words “and from no others” appearing in the Section would make it abundantly clear that the legislature did not contemplate conferring the right of appeal against each and every order made in the course of Arbitration proceedings or in the course of execution proceedings, under Section 36 of the Arbitration and Conciliation Act. He would also invite my attention to Section 50 of the said Act, to contend that an appellate remedy during execution proceedings is not available to the parties to an arbitration 7/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 proceeding.
9. Mr.Vijay Narayan, learned Advocate General, would also rely upon the following judgments of the Hon’ble Supreme Court, in support of his contention
1. Fuerst Day Lawson Limited v. Jindal Exports Limited, reported in 2011 (8) SCC 333;
2. Kandla Export Corporation and another v. OCI Corporation and another, reported in 2018 (14) SCC 715;
3. Sundaram Finance Limited v. Abdul Samad and another, reported in 2018 (3) SCC 622.
10. The proceedings in Fuerst Day Lawson Limited v. Jindal Exports Limited, referred to supra, arose under Part II of the Arbitration and Conciliation Act, namely enforcement of foreign awards. While considering the scope and nature of Sections 45, 49 and 50 of the said Act, the Hon’ble Supreme Court held that a Letters Patent Appeal against 8/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 an order passed in an Appeal under Section 50 of the said Act is not maintainable. The Hon’ble Supreme Court while considering the said question took note of the language of Section 50 of the Act, to conclude that a Letters Patent Appeal will not lie against an order passed under Section 50. As already adverted to Section 50 comes under Part II of the Act, which deals with execution of foreign awards. Sub Section (2) of Section 50 prohibits a Second Appeal against an order passed in an Appeal under Section 50.
11. It will be convenient, at this juncture to extract the provisions of Section 50 of the Arbitration and Conciliation Act 1996.
50. Appealable orders.— (1) An appeal shall lie from the order refusing to—
(a) refer the parties to arbitration under section 45;
(b) enforce a foreign award under section 48, to the court authorised by law to hear appeals from such order.
9/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 (2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.
A reading of the above provision would show that there are only two orders against which an appeal would lie to the Court authorised by Law to hear appeals from such orders. They are
(i) An order refusing to refer the parties for arbitration under Section 45
(ii) An order refusing to enforce a foreign award under Section 48
12. Sub Section 2 of Section 50 clearly lays down that no Second Appeal shall lie from order passed in an appeal under the Section, but nothing in the Section shall affect or takeaway any right to appeal to the Hon’ble Supreme Court. The bone of contention between the parties in Fuerst Day Lawson Limited v. Jindal Exports Limited, was the 10/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 maintainability of the Letters Patent Appeal against an order passed by a learned Single Judge of the High Court, in exercise of the Appellate jurisdiction conferred on under Section 50 of the Act.
13. While it was contented by the respondent that the Letters Patent Appeal against an order passed under Section 50 will not be maintainable, inasmuch as, Section 50 (2) prohibits a Second Appeal from an order passed under Section 50, it was, however, contented by the Appellants that the Hon’ble Supreme Court should rather frame question, as to whether, the provisions under 1996 Act, namely the Arbitration and Conciliation Act 1996, would exclude the jurisdiction of High Court under its Letters Patent either expressly or even impliedly.
14. While answering the said question the Hon’ble Supreme Court after referring to P.S. Sathappan (Dead) By Lrs vs Andhra Bank Ltd. & Ors, reported in 2004 (11) SCC 672, had concluded that the power of the High Courts under the Letters Patent, can be regulated or even ousted under certain circumstances, one such provision was Section 104(2) of the 11/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Code of Civil Procedure, which in effect excluded the Letters Patent jurisdiction of the High Court. The Hon’ble Supreme Court was called upon to consider, as to whether, Section 104(2) of the Code of Civil Procedure in effect barred the exercise of the power under Clause 15 of the Letters Patent of the Madras High Court. The Hon’ble Supreme Court held that P.S. Sathappan (Dead) By Lrs vs Andhra Bank Ltd. & Ors, is actually an authority on the interplay of Section 104(2) of the Code of Civil Procedure and the Letters Patent of the jurisdiction of the High Court.
15. The Constitution Bench in P.S. Sathappan (Dead) By Lrs vs Andhra Bank Ltd. & Ors, however, concluded that Section 104(2) would not over ride the provisions of the Letters Patent of the Madras High Court. It is seen from the reports in Fuerst Day Lawson Limited v. Jindal Exports Limited, that the judgment of the Constitution Bench in P.S. Sathappan (Dead) By Lrs vs Andhra Bank Ltd. & Ors, referred to supra, was heavily relied upon by the appellants in support of their contention that the Letters Patent Appeal would lie against the orders of the learned Single Judge made in exercise of the Appellate powers under Section 50 of the 12/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Arbitration and Conciliation Act, 1996. It was also contended that Section 50 unlike Section 37 did not contain the words “and from no others”, which according to the appellants made all the difference and therefore, an appeal would lie against the Appellate Order passed by the High Court in exercise of its powers under Section 50 of the Act.
16. After considering the entire scope of the Act as well as the difference between the Foreign Awards (Recognition and Enforcement) Act, 1961 and the Arbitration and Conciliation Act, 1996, Part (II) which deals with the enforcement of foreign awards, the Hon’ble Supreme Court finally concluded that a Second Appeal/Letters Patent Appeal against an order passed by the High Court under Section 50 of the Act is not maintainable. The Hon’ble Supreme Court finally concluded that no Letters Patent Appeal will lie against an order which is not appealable under Section 50 of the Arbitration and Conciliation Act, 1996. The fundamental reason or the sheet anchor of the conclusions of the Hon’ble Supreme Court in Fuerst Day Lawson Limited v. Jindal Exports Limited, was that the Arbitration and Conciliation Act, 1996 is a self contained code that it 13/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 carries with it a negative import that only such acts as are mentioned in the Act are permissible to be done and acts or things not mentioned therein are not permissible to be done.
17. In the light of the above conclusion reached, the Hon’ble Supreme Court held that no Letters Patent Appeal would be available against an order passed by the High Court under Section 50 of the Arbitration and Conciliation Act, 1996. This principle of law laid down in Fuerst Day Lawson Limited v. Jindal Exports Limited, was substantially followed in Kandla Export Corporation and another v. OCI Corporation and another. Relying upon the above judgment, Mr.Vijay Narayan, learned Advocate General would contend that the present Appeal directed against the order of the Master made in execution proceedings is not maintainable. In Kandla Export Corporation and another v. OCI Corporation and another, the Hon’ble Supreme Court was concerned with the scope of Sections 37 and 50 of the Arbitration and Conciliation Act, vis-à-vis that of Section 13 of the Commercial Courts Act. The very question that was raised in the Appeals, before the Hon’ble Supreme Court 14/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 was, as to whether, an appeal which is not maintainable under Section 50 of the Arbitration and Conciliation Act, 1996, is nonetheless maintainable under Section 13(1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act, 2015. As could be seen from the very question framed, the Hon’ble Supreme Court was concerned with two special enactments, namely, the Arbitration and Conciliation Act, 1996 and the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015.
18. In deciding the above question the Hon’ble Supreme Court adverted to the law laid down in Fuerst Day Lawson Limited v. Jindal Exports Limited, to conclude that if an appeal is not maintainable under Section 50 of the Arbitration and Conciliation Act, the same would not be maintainable under Section 13 of the Commercial Courts Act also, particularly in view of the language of the proviso to Section 13 of the Commercial Courts Act.
19. Mr.Vijay Narayan, learned Advocate General would further point 15/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 out that an interpretation of an enactment should be in tune with an objects sought to be achieved by the Act. The Arbitration and Conciliation Act 1996, is almost an adoption of the Uncitral Report on Arbitration law and the necessary intendment of the legislature was to provide for speedy resolution of disputes of commercial nature and expeditious enforcement of foreign awards. Therefore, according to the learned Advocate General, unnecessary judicial intervention or judicial intervention not otherwise provided for under the Act, should not be encouraged by the Courts, as the same would defeat the very object of the speedy resolution of the dispute/enforcement of foreign awards.
20. Reliance is also placed by the learned Advocate General on the judgment of the Hon’ble Supreme Court in Sundaram Finance Limited v. Abdul Samad and another, reported in 2018 (3) SCC 622, wherein, the Hon’ble Supreme Court had held that provisions relating to transfer of the decree or issue of precepts as found in the Code of Civil Procedure would not be applicable to applications seeking execution of awards filed under Section 36 of the Arbitration and Conciliation Act, 1996. The Hon’ble 16/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Supreme Court which was concerned with an order passed by the Executing Court returning an application for execution on the ground of jurisdiction, since there were conflicting views of various High Courts on the point the appellant, namely, Sundaram Finance Limited, directly approached the Hon’ble Supreme Court challenging the order of the Executing Court returning the application for execution.
21. While considering the said question, as to whether, an award is executable by any Court where such award or decree can be executed or the award is to be treated as a decree of the Court which has the jurisdiction over the arbitral proceeding or within whose jurisdiction the award is passed and the decree holder must get the decree transferred or transmitted for execution under the provisions of the Code of Civil Procedure, the Hon’ble Supreme Court held that in view of the language of Section 36 of the Arbitration and Conciliation Act, which provides that an award of the Arbitrator will be deemed to be a decree of a Civil Court and it is executable as per the procedure prescribed under the Code of Civil Procedure, it cannot be said that an award is a decree of a particular Court. 17/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 In doing so, the Hon’ble Supreme Court had taken note of the provisions of Sections 37, 38 and 39 of the Code of Civil Procedure. The Hon’ble Supreme Court also took note of the provisions of Section 46 of the Code of Civil Procedure which dealt with precepts. The main reasoning on which the Hon’ble Supreme Court held that an award passed by the arbitrator or an Arbitral Tribunal though deemed to be a decree of a Civil Court cannot be said to be a decree of a particular Civil Court which had jurisdiction over the arbitral proceedings or within whose jurisdiction an award came to be passed.
22. As a result of the said view, the Hon’ble Supreme Court concluded that an award can be executed in any Court, wherever, it can be executed conveniently without seeking transfer of the decree. The judgment of the learned Single Judge of this Court in Kotak Mahindra Bank Ltd v. Sivakuma Sundari & others, reported in 2011 (4) LW 745, was also considered by the Hon’ble Supreme Court while concluding on the jurisdiction of Courts in relation to execution of awards. The combined effect of the above decisions, according to the learned Advocate General, 18/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 is that any Appeal against any proceeding under the Arbitration Act should be only to the extent provided under the Act and no appeal would lie from an order passed by a Court in execution of the award under Order 21 of the Code of Civil Procedure or otherwise.
23. Contending contra, Mr.S.Parthasarathy, learned Senior Counsel appearing for the applicant/judgment debtor would submit that an award of the arbitrator is deemed to be a decree of the Civil Court under Section 36 of the Arbitration and Conciliation Act and is made executable under the Code of Civil Procedure 1908, in the same manner as if it were a decree of the Court. Laying considerable emphasis on the words “the award shall be enforced under the Code of Civil Procedure in the same manner as if it were a decree of the Court”, Mr.S.Parthasarathy, learned Senior Counsel would submit that once an award is passed the execution of it is outside the scope of the Arbitration and Conciliation Act and therefore, an appeal provided under the Original Side Rules of the High Court or under Order 43 of the code of Civil Procedure would be available to the parties during execution.
19/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018
24. Mr.S.Parthasarathy, learned Senior Counsel would also invite my attention to Section 32 of the Arbitration and Conciliation Act which provides for termination of proceedings. Section 32, reads as follows:
32. Termination of proceedings.— (1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2).
(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where
(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute,
(b) the parties agree on the termination of the proceedings, or
(c) the arbitral tribunal finds that the 20/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 continuation of the proceedings has for any other reason become unnecessary or impossible.
(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings
25. According to Mr.S.Parthasarathy, learned Senior Counsel appearing for the applicant, the arbitration proceedings are terminated by the final award or by the order of the Arbitral Tribunal under Sub Section 2 of Section 32. Once the proceedings before the Arbitration Tribunal or the Arbitrator are terminated as provided for under Section 32, the award becomes executable, as if it were a decree of a Civil Decree and therefore, procedure contemplated under the Code of Civil Procedure or under the Original Side Rules of the High Court including the Appellate or Revisional remedies provided, therein would be available to the person aggrieved by an order of the Executing Court. Therefore, according to him, an appeal would nevertheless lie under order 14 Rule 12 of the Original Side Rules 21/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 against an order passed by the learned Master in execution of an award.
26. Mr.S.Parthasarathy, learned Senior Counsel would also contend that a proceeding under Order 14 Rule 12, though is referred to as an appeal against the order of the learned Master, the same cannot in the strict sense be termed as an appeal, inasmuch as, the learned Master carries out proceedings in execution only as a delegate of the High Court and therefore, the proceeding though called an appeal under Order 14 Rule 12 of the Original Side Rules, could only be termed as a review of the order of the learned Master. In support of his contention, Mr.S.Parthasarathy, learned Seinor Counsel would rely upon the judgment of the Division Bench of this Court in Sreyas Sripal v. T.P.Anand, reported in 2007 (3) LW 680. While deciding on the maintainability of an appeal against the order of the learned Single Judge passed in an appeal against the order of the learned Master under Order 14 Rule 12 of the Original Side Rules, the Division Bench concluded that dehors section 100 (A) of the Code of Civil Procedure, an Appeal against the order of the learned Single Judge of this Court made in a proceeding under Order 14 Rule 12 of the 22/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Original Side Rules, would be maintainable, inasmuch as, the proceeding under Order 14 Rule 12 though has been given the nomenclature of an Appeal under the Rule is actually in the nature of a review. While doing so, the Hon’ble Division Bench had observed as follows:
“8. Applying the same logic, this Court cannot exercise the power of appeal or revision against the order of the Master, which is passed by him in the capacity as a delegate of the High Court. It is well settled that ordinarily an appeal would lie from a lower Authority to the higher Authority and an order passed by the delegate is in exercise of powers given by the delegator and such an order is not appelable or revisable.
Therefore, we are inclined to accept the
contention of the learned Senior Counsel
Mr.Yashod Vardhan that the word appeal in Order XIV Rule 12 is a misnomer, but it is actually a power of review of this Court.” 23/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018
27. Relying upon the above observation of the Division Bench, Mr.S.Parthasarathy, learned Senior Counsel would strenuously contend that the above appeal is perfectly maintainable and it cannot be said that the proceeding is in the nature of an Appeal against the order of the learned Master. Mr.S.Parthasarathy, learned Senior Counsel would also draw my attention to the judgment of the Hon’ble Supreme Court in ITI Limited v. Siemens Public Communications Network Ltd., reported in 2002 (5) SCC 510, wherein, the Hon’ble Supreme Court concluded that the bar of Second Appeal under Section 37(2) would not bar a revisional remedy before the High Court. Of course the judgment in ITI Limited v. Siemens Public Communications Network Ltd., has been doubted by the Hon’ble Supreme Court in Mahanagar Telephone Nigam Ltd v. Applied Electronics Limited, reported in 2017 (2) SCC 37.
28. Mr.S.Parthasarathy, learned Senior Counsel would also draw my attention to the judgment of the Division Bench of this Court in Fathima 24/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Automobiles v. P.K.P. Nair and other, which actually arose under the provisions of Tamil Nadu Buildings (Lease and Rent Control) Act, wherein the Division Bench held that in view of Section 18 of the Tamil Nadu Buildings (Lease and Rent) Control Act, the provisions of the Code of Civil Procedure would be applicable to proceedings in execution of an eviction order passed by the Appropriate Authority under the Tamil Nadu Buildings (Lease and Rent) Control Act. While doing so the Division Bench concluded that a separate suit for removal of obstruction caused in execution proceedings filed seeking execution of an order of eviction passed under the enactment will not lie and obstruction has to be decided under the provisions of Order 21 Rule 97, 98, 99 and 100 of the Code of Civil Procedure. Section 18 of the Tamil Nadu Buildings (Lease and Rent) Control Act, reads as follows:
“Section 18: Execution of Orders:
1. Every order made under Sections 10, 14, 15, 16 and 17 and every order passed on appeal under Section 23 or on revision under Section 25 shall be executed by the controller as if such an order 25/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 is an order of a civil court and for this purpose the controller shall have the powers of a Civil Court.
2. An order passed in execution under Sub Section (1) shall not be subject to any appeal or revision”
29. While interpreting Section 18(2) which provides that an order passed in execution under Subsection (1) shall not be subject to any appeal or revision, the Division Bench concluded that the intendment of the legislature is that an order passed in execution shall not be subject to an Appeal under Section 23 or Revision under Section 25 of the Act, before the Authorities constituted under the Act.
30. The Division Bench further concluded that an order passed by the Rent Controller in execution should be taken to be an independent order passed under the Civil Procedure Code and not under the Rent Control Act. In holding so, the Division Bench observed as follows:
“The order passed by the Rent Controller in an 26/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Application under Order 21, Rule 97 cannot in our view be taken to be an order passed under Section 18(1) of the Act. That should be taken to be an independent order passed under the Civil Procedure Code and not under the Rent Control Act. Though the order is actually passed by the Rent Controller in an application under Order 21 Rule 97 of the Code of Civil Procedure that should be taken to have been passed by him in exercise of the powers of a Civil Code as provided in Section 18(1) of the Act. We are not therefore in a position to construe the order passed by the Rent Controller in an application Order 21 Rule 97 as an order passed by the Rent Controller under Section 18(1) so that the bar under Section 18(2) could be invoked.”
31. Mr.S.Parthasarathy, learned Senior Counsel would submit that 27/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 the proceedings in execution under the Rent Control Act and the proceedings in execution of the award under the Arbitration and Conciliation Act, are both under the Code of Civil Procedure and therefore, a bar cannot be readily inferred. Mr.S.Parthasarathy, learned counsel would also draw my attention to para 14 of the judgment of the Hon’ble Supreme Court in Sundaram Finance Limited v. Abdul Samad and Another, reported in 2018 (3) SCC 622, in support of his submission that insofar as, the execution is concerned the same falls outside the Arbitration and Conciliation Act and the provisions of the Code of Civil Procedure as well as the that of the Original Side Rules of this Court would apply to such execution proceedings. He would also draw my attention to the following observations of the Hon’ble Supreme Court in Sundaram Finance Limited v. Abdul Samad and another, reported in 2018 (3) SCC 622, “14. .... It is, thus, the enforcement mechanism, which is akin to the enforcement of a decree but the award itself is not a decree of the Civil Court as no decree whatsoever is passed by 28/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 the Civil Court. It is the Arbitral Tribunal which renders an award and the tribunal does not have the power of execution of a dcree. For the purposes of execution of a decree the award is to be enforced in the same manner as it if was a decree under the said Code” to contend that the execution part of the award is actually outside the Arbitration and Conciliation Act, and as such the provisions of the Act cannot be invoked to bar an Appellate or a Revisional remedy which is otherwise statutarily available.
32 I have considered the rival submissions.
33. The proceedings on hand stem out of an execution of an Arbitral award Section 36 of the Arbitration and Conciliation Act, which deals with the enforcement of awads reads as follows:
29/48
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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 30/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 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).
34. A reading of Section 36 would make it clear that insofar as enforcement is concerned an award is deemed to be a decree of a Civil Court and is enforceable as if it were a decree of the Court under the Code of Civil Procedure. While Mr.S.Parthasarathy, learned Senior Counsel would submit that the entire mechanism for execution of decrees of a Civil Court including the right of Appeals and Revisions provided under Order 21 of the Code of Civil Procedure and Order 43 of the Code of Civil Procedure, would apply to proceedings in execution of the award, the 31/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 learned Advocate General would contend that Section 36 does not explicitly provide that the entire Code of Civil Procedure would apply and according to him, though an award is executable as if it were a decree of a Civil Court under the Code of Civil Procedure, the same would still be subject to the provisions of the Arbitration and Conciliation Act,.
35. In deciding the said question one as to first look at the necessary intendment of the legislation. Section 32 of the Arbitration and Conciliation Act, provides for termination of Arbitration proceedings. As per Section 32 of the Act, the arbitral proceedings terminate upon passing of the award or by an order of the Arbitral Tribunal passed under Sub Section 2 of Section
32. Sub Section 2 of Section 32 mandates the Arbitral Tribunal to order termination of the Arbitral proceedings were a claimant withdraws his claim or the parties agree on the termination of the proceedings or the Arbitral Tribunal finds the continuation of the proceedings, for any other reason, become unnecessary or impossible. Therefore, once an award is passed the proceedings in Arbitration gets terminated. The enforcement is governed by chapter VIII of the Act, which provides for finality and 32/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 enforcement. A close reading of Section 36, extracted supra, would show that an award shall be enforced under the Code of Civil Procedure 1908, in the same manner as if it were a decree of a Civl Court.
36. Section 49 of the Arbitration and Conciliation Act, 1996, which deals with an enforcement of foreign awards reads as follows:
“49. Enforcement of foreign awards.— Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that Court.” The essential difference between the language of Section 36 and Section 49 is as follows:
“While Section 36 provides for enforcement of an award under the Code of Civil Procedure in the same manner as if it were a decree of the Court, Section 49 makes an award a decree of that Court which passed an order for its enforcement under Section 48.” 33/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018
37. The essential difference is a local award passed under Passed under Part (I) of the Arbitration and Conciliation Act can be executed in any Court under the provisions of Code of Civil Procedure, whereas, a foreign award which is held to be enforceable under Section 48 of the Arbitration and Conciliation Act, is deemed to be a decree of that Court which passes an Order under Section 48 holding that such an award is enforceable. The essence of the contentions of the learned Advocate General is that an award is only deemed to be a decree of the Civil Court and is executable as such under the Code of Civil Procedure and it is not made an actual decree of a Civil Court. Therefore, according to him, the entire provisions of the Code of Civil Procedure dealing with execution or appeals or revisions cannot be invoked and judicial intervention if at all could be only to the extent provided for under the Arbitration and Conciliation Act itself.
He would buttress his submissions by relying upon the provisions of Section 5 and Section 37 of the Arbitration and Conciliation Act.
38. No doubt, Section 5 of the Arbitration and Conciliation Act provides that any judicial intervention in the course of Arbitration 34/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Proceedings can be only to the extent provided under the Act. Section 37 of the Arbitration and Conciliation Act provides for appeals only against certain orders passed either under Section 9 or under Section 34 of the Act and from no others. Section 37(3) also provides that no Second Appeal would lie from an order passed in an appeal under Section 37.
39. Mr.Vijay Narayan, learned Advocate General would also invite my attention to the conclusions of the Hon’ble Supreme Court in Fuerst Day Lawson Limited v. Jindal Exports Limited, to contend that the provisions of the Arbitration Act is exhaustive in nature and if an order is not appealable under Section 50, an appeal cannot be maintained under any other provision of law. The Hon’ble Supreme Court in Fuerst Day Lawson Limited v. Jindal Exports Limited, was concerned with the maintainability of Second Appeal against an order passed by the High Court in exercise of powers under Section 50.
40. There is a difference between the language of Section 49 and the language of Section 36 of the Act. As I already pointed out Section 49 35/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 makes the award a decree of that Court which found it to be enforceable under Section 48. Therefore, an award passed under Part II of the Arbitration and Conciliation Act, becomes a decree of a particular Court which finds it to be enforceable, on the other hand a local award passed under Part I of the Arbitration and Conciliation Act, is only deemed to be a decree of a Court enforceable as per the provisions of the Code of Civil Procedure. This difference was noted by the Hon’ble Supreme Court in Sundaram Finance Limited v. Abdul Samad and another, ported in 2018 (3) SCC 622, wherein the Hon’ble Supreme Court concluded that provisions relating to transfer of a decree are not applicable to execution of the award, since an award passed under Part I of the Arbitration and Conciliation Act, is only deemed to be a decree of the Civil Court enforceable under the Code of Civil Procedure and not a decree of a particular Court.
41. Reverting to the reliance placed upon by the learned Advocate General in Fuerst Day Lawson Limited v. Jindal Exports Limited, I am unable to accept the contentions of the learned Advocate General based 36/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 on the said judgment of the Hon’ble Supreme Court. In Fuerst Day Lawson Limited v. Jindal Exports Limited, Hon’ble Supreme Court was concerned with execution of a foreign award and maintainability of a Second Appeal against an order passed under Section 50 in execution of such award. In view of the explicit language of Section 50(2) which barred a Second Appeal against an order passed in Execution proceedings, the Hon’ble Supreme Court concluded that dehors the provisions of Letters Patent of High Court, a Second Appeal would not lie against an order passed in an Appeal under Section 50. The order that was challenged before the Hon’ble Supreme Court in the Appeal was made in exercise of the power under Section 49 in enforcement of foreign award by a learned Single Judge of the High Court. These orders were challenged in appeals before the Division Bench and the Division Bench dismissed the Appeals as not maintainable. The conclusion of the Division Bench was challenged before the Hon’ble Supreme Court.
42. It was in this back drop, the Hon’ble Supreme Court considered the scope of Section 50(2) of the Act and held that a Second Appeal 37/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 cannot lie against the order of the learned Single Judge, irrespective of the provisions of the Letters Patent. In coming to the said conclusion, the Hon’ble Supreme Court laid considerable stress on the fact that the Arbitration and Conciliation Act being a self contained Code and exhaustive, it carries with it a negative import that only such acts as are mentioned in the Act are permissible to be done and the acts or things not mentioned therein and are not permissible to be done. This principle enunciated by Hon’ble Mr. Justice Tulzapurkar, could be applicable only if the proceedings are held to be within the scope of the Arbitration and Conciliation Act, 1996.
43. A close reading of provisions of Sections 36 and 32 of the Arbitration and Conciliation Act 1996, would show that the Arbitration proceedings terminate with the passing of an award. Once an Arbitration proceeding is terminated on the passing of the award, the enforcement of it is governed by Section 36. As could be seen from the language of Section 36, an award is executable under the Code of Civil Procedure as if it were a decree of the Court. Therefore, the essential import is that an 38/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 award is executable as a decree and the procedure prescribed for execution of a decree under the Code of Civil Procedure would be applicable. Once an award is passed and the proceedings are terminated under Section 32, the Execution part is really outside the Arbitration and Conciliation Act, as far as awards passed under Part I are concerned. This has been made clear by the Hon’ble Supreme Court in Sundaram Finance Limited v. Abdul Samad and another. A reading of para 14 of the said judgment, extracted above, would show that the Tribunal does not have the power of execution and for the purposes of execution of a decree, the award is enforceable in the same manner as if it were a decree under the Code of Civil Procedure. The deeming fiction created by Section 36 was also taken note of by the Hon’ble Supreme Court and while deciding on the applicability of provisions relating to transfer of a decree. The Hon’ble Supreme Court took note of the deeming fiction and held that an award under Section 36 is deemed to be a decree of the Court for purpose of an execution and only for that purpose. However, the Hon’ble Supreme Court in Sundaram Finance Limited v. Abdul Samad and another, concluded that the provisions of the Code of Civil Procedure, relating to 39/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 transfer of decree will not be attracted, inasmuch as, an award passed under Part I is treated or is deemed to be a decree of a Court and not a decree of a particular Court. Therefore, I am constrained to conclude that the judgment of the Hon’ble Supreme Court in Fuerst Day Lawson Limited v. Jindal Exports Limited, cannot be taken to have laid down a proposition so as to bar all appeals arising out of execution of an award.
44. Similarly the reliance placed in Kandla Export Corporation and another v. OCI Corporation and another, by the learned Advocate General may not also support his contention. In Kandla Export Corporation and another v. OCI Corporation and another, an appeal was sought to be filed under Section 13(1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act, 2015, against the order of the High Court passed under Section 48 of the Arbitration and Conciliation Act, 1996. The judgment debtor challenged the said order passed by the High Court under Section 48, under Section 13 (1) of the Commercial Courts, Commercial Division and Commercial 40/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Appellate Division of High Court Act. The Hon’ble Supreme Court considering the scope of the provisions of Section 50 of the Arbitration and Conciliation Act, vis-a-vis the scope of the provisions of Section 13 (1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act concluded that what is expressly barred under the Arbitration Act, cannot be allowed to be done under the Commercial Courts Act.
45. Section 50 of the Arbitration and Conciliation Act permits appeals only against orders refusing enforcement of a foreign award under Section 48, thus it could be seen that there is express bar of an appeal against an order, passed under Section 48 of the Arbitration of Conciliation Act, permitting enforcement of a foreign award. It is in this back drop, the Hon’ble Supreme Court concluded that what is prohibited under Section 50 of the Arbitration of Conciliation Act, cannot be done under Section 13(1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act, 2015. Therefore, I find that the judgment in Kandla Export Corporation and another v. OCI Corporation and 41/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 another, does not also support the contention of the learned Advocate General.
46. On the other hand, as rightly contended by Mr.S.Parthasarathy, learned counsel appearing for the applicant, the provisions under Section 36 of the Act, makes an award a deemed decree executable under the provisions of the Code of Civil Procedure. Once execution is levied under the Code of Civil Procedure, it follows that the said execution shall be in the manner as provided under the Code of Civil Procedure, subject to all rights of appeals under the Code. A Division Bench of this Court, while dealing with Section 18(2) of the Tamil Nadu Buildings (Lease and Rent) Control Act, which bars an appeal against an order passed in execution had specifically held that 18 (2) must be restricted to an appeal or revision under Section 23 or 25 of the said Act, and the same would not bar an appeal under the provisions of Order 43 of the Code of Civil Procedure or a revision under Section 115 of the Code of Civil Procedure. The observations of the Division Bench have already been extracted supra. 42/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018
47. I am in respectful agreement with the said observations of the Division Bench and if the said proposition of law laid down by the Division Bench is applied to the case on hand, the bar of an appeal under Section 37, could be only in relation to order passed under the provisions of the Arbitration and Conciliation Act and not in relation to orders passed in execution of an award, which is outside the Act, under the Code of Civil Procedure. Though the judgment in ITI Limited v. Siemens Public Communications Network Ltd., has been doubted by the subsequent judgment in Mahanagar Telephone Nigam Limited v. Applied Electronics Limited, reported in 2017 (2) SCC 37, the proceedings in Mahanagar Telephone Nigam Limited, did not stem out of execution proceedings. The question that arose for consideration was maintainability of cross-objection in an appeal filed under Section 37 of the Arbitration and Conciliation Act. This disagreement was basically on the question, as to whether, the Code of Civil Procedure could be made applicable to the proceedings under Part I, namely, proceedings either under Section 34 or 37 of the Arbitration and Conciliation Act.
43/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018
48. The Hon’ble Supreme Court in Mahanagar Telephone Nigam Limited v. Applied Electronics Limited, or in ITI Limited v. Siemens Public Communications Network Ltd., was not concerned with applicability of the provisions of the Code of Civil Procedure in execution of an award. Admittedly, the Arbitration and Conciliation Act, does not provide for a separate mechanism for execution of the award of the Arbitrators or the Arbitral Tribunal. Section 36 makes an award executable under the Code of Civil Procedure, as if it were a decree of the Court. This would definitely, in my considered opinion mean that whatever procedure that is prescribed for execution of a decree of the Civil Court under the Code of Civil Procedure will be applicable to execution of an award also.
49. I am unable to comprehend a situation where the provisions of the Code of Civil Procedure, would be invoked for execution of the award and the provisions of the same Code of Civil Procedure have to be excluded for the purposes of appeal against the orders passed in such execution. Of course, Section 5 of the Arbitration and Conciliation Act provides that judicial intervention shall be to the extent provided under the 44/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 Act. Once it is concluded that the execution proceedings are actually outside the scope of the Arbitration and Conciliation Act and under the Code of Civil Procedure, I do not think the provisions of Section 5 could be applied in order to impose an imaginary bar on the Appellate remedy.
50. Insofar as the executions in the Original Side of this Court are concerned, the learned Master acts only as a delegate of the Court. Though an appeal is provided under Order 14 Rule 12 of the Original Side Rules, against the order of the learned Master passed in execution, as rightly contended by Mr.S.Parthasarathy, learned Senior Counsel with the aid of the judgment of the Division Bench in Sreyas Sripal v. T.P.Anand, reported in 2007 (3) LW 680, the proceedings are only in the nature of the review of the learned Master and therefore, the bar created under Section 37 of the Arbitration and Conciliation Act would not be attracted.
51. In the light of the above discussions, the inevitable conclusion is that an appeal as provided under Order 14 Rule 12 of the Original Side Rules is available against the order of the learned Master, in execution of 45/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 an award passed under Part I of the Arbitration and Conciliation Act, in view of the specific language of Section 36 that the execution of an award passed under Part I would be governed by the Code of Civil Procedure.
52. After the order where reserved Mr.S.Parthasarathy, learned Senior Counsel mentioned the matter on 13.08.2019 in the presence of the learned Advocate General Mr.Vijay Narayan, with a request to take note of the provisions of Section 8 of the Arbitration and Conciliation Amendment Act 2019 (Act 33 of 2019), which reads as follows:
“Section 8: In section 37 of the principal Act, in sub-section (1), for the words “An appeal”, the words “Notwithstanding anything contained in any other law for the time being in force, an appeal” shall be substituted.” Relying upon the introduction of the non obstante clause in Section 37 by the Amending Act, Mr.S.Parthasarathy, learned Senior Counsel would contend that since the appeal in question had been filed prior to the amendment, the provisions of th e Code of Civil Procedure would be 46/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 applicable insofar as the matters relating to execution.
53. Per contra Mr.Vijay Narayan, learned Advocate General would submit that the introduction of the non obstante clause by the Amending Act would not alter the situation. In the light of the view taken by me that proceedings in execution are outside the Arbitration and Conciliation Act and they would be governed by the Code of Civil Procedure, I do not think I should venture upon pronouncing on the effect of the introduction of the non obstante clause by the Amending Act.
54. In the result, I conclude that the appeal filed is maintainable and the objection regarding maintainability is overruled.
19.08.2019 Index : Yes Internet: Yes Speaking Order jv 47/48 http://www.judis.nic.in A.Nos.2291 & 2292 of 2019 in EP No.124 of 2018 R.SUBRAMANIAN,J.
jv Pre Delivery Order Application Nos.2291 and 2292 of 2019 in EP No.124 of 2018 19.08.2019 48/48 http://www.judis.nic.in