Bombay High Court
Mohamed Ali Shakil Kochra vs Suresh Meghraj Shroff on 24 January, 2024
Author: R.I. Chagla
Bench: R.I. Chagla
6-ia-3562-2023.doc
jsn
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
INTERIM APPLICATION NO.3562 OF 2023
IN
COM EXECUTION APPLICATION (L) NO.15176 OF 2023
Mohamed Ali Shakil Kochra & Ors. ...Applicants /
Petitioners
Versus
Suresh Meghraj Shroff and Ors. ...Respondents
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Mr. Rohaan Cama, Ms. Ayushi Anandpara, Rupesh Geete and Mr.
Jaiveer Dhakan i/b. Satyaki Law Associates for the Applicants /
Petitioners.
Sarosh Bharucha with Nikhil Verma and Ms. Shraddha DubePatil i/b.
Jay and Co. for the Respondents.
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CORAM : R.I. CHAGLA J.
DATE : 24TH JANUARY, 2024.
ORDER :
1. A preliminary objection has been raised with regard to the maintainability of the Execution Proceedings on the ground that there is no award passed by the learned Arbitrator. However, during oral arguments, Mr. Bharucha on behalf of the Respondents has submitted that an Award had been passed and from which an Application was preferred by the Respondents under Section 33 of the Arbitration and Conciliation Act, 1996 ('the Arbitration Act') 1/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc which till date not been disposed of by learned Arbitrator. Thus it appears that the Respondents are now confining their preliminary objection to the maintainability of the Execution Proceedings on the ground that the Application under Section 33 of the Arbitration Act has not been disposed of by the learned Arbitrator.
2. Mr. Bharucha has referred to the relevant provisions of the Arbitration Act. Section 33(1) of the Arbitration Act provides that a party to an Arbitration Proceedings may within thirty days from the receipt of the Arbitral Award unless another period of time has been agreed upon by the parties, after notice to the other party, request the Arbitral Tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award. Further, if so agreed by the parties, a party with notice to the other party, may request the Arbitral Tribunal to give interpretation of a specific point or part of the award. Thereafter, in Section 33(2) it is provided that, if the Arbitral Tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the Arbitral Award. Section 33(4) provides for an Additional Award as to 2/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc claims presented in the arbitral proceedings but omitted from the arbitral award. The additional award is to be made within sixty days from the receipt of such request. Further, under Section 33 (6) it is provided that Arbitral Tribunal may extend the necessary period of time within which it shall make a correction, give an interpretation or make an Additional Arbitral award under sub-Section (2) or sub Section (5) of Section 33.
3. Mr. Bharucha has also relied upon Section 32(3) of the Arbitration Act which provides that subject to Section 33 and sub Section 4 of the Section 34, the mandate of the Arbitral Tribunal shall terminate with the termination of the Arbitral Proceedings. Further, he has relied upon Section 34(3) of the Act which provides for an Application for setting aside an Arbitral Award 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 has been made under Section 33, from the date on which that request has been decided by the Arbitral Tribunal.
4. Mr. Bharucha also relied upon Section 36(1) of the Arbitration Act which provides where the time for making an 3/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc 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 in the same manner as if it were a decree of the Court.
5. Mr. Bharucha has submitted that a reading of the aforesaid provisions make it clear that when an Application under Section 33 of the Arbitration Act has not been decided by the learned Arbitrator, the time for making an application for setting aside an Arbitral Award under Section 34 does not commence and that there is no termination of the mandate of the Arbitral Tribunal. He has referred to the Application which has been preferred by the Respondents after the Final Award was passed on 5th January, 2023 i.e. on 2nd February, 2023, raising objections and seeking corrections of facts by the learned Arbitrator. He has submitted that whether the Application was served or not can only be considered after directing the learned Arbitrator is directed to give his say as to whether the Application had been responded to by the Applicant.
6. Mr. Bharucha has submitted that though an order had 4/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc been passed in the Execution Proceedings by this Court, being order dated 4th August, 2023, which directed the Respondents to file Affidavit of Disclosure, this was the subject matter of Review Petition viz. Review Petition (L) No.24832 of 2023. This Court by an order dated 1st November, 2023 had dismissed the Review Petition by holding in paragraph 10 that, "while the objections pertaining to the award and it being executed, raised on behalf of the Petitioners go to the very root of the matter and such objections could obviously be raised in the execution application also, this Court is of the opinion that a prima facie view could certainly be taken in the matter, in order to examine as to whether the order dated 04.08.2023 deserves to be reviewed". Thereafter, this Court has in paragraph 11 of the said Order held that having perused the material on record and the forwarding letter dated 5th January, 2023 sent by the learned Arbitrator as also the quoted paragraphs of the Award, this Court has reached a prima facie conclusion that the award could be executed and in that light the relief of disclosure sought for in the Interim Application filed in the Execution Application could be ordered, after considering rival contentions.
7. Mr. Bharucha has submitted that this Court had 5/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc restricted the observations in the said Order to the issue as to whether a Review could be sought by the Respondents of the order dated 4th August, 2023 passed by the Executing Court. This is made clear from paragraph 16 of the said Order, wherein this Court had made clear that the Petitioners who are the present Respondents are at liberty to raise the objections in the Execution Application as available in law, including specific objection as regards the finality of the Award in question. He has submitted that accordingly, the preliminary objection has been raised to the maintainability of the Execution Application. He has further submitted that though the Supreme Court has not interfered with the said Order dated 1st November, 2023, that cannot prevent the Respondents from raising the preliminary objection as to maintainability of the Execution Proceedings.
8. Mr. Bharucha has placed reliance upon the decision of the Supreme Court in Ved Prakash Mithal and Sons Vs. Union of India1, wherein the Supreme Court had considered the judgment of this Court in Amit Suryakant Lunawat Vs. Kotak Securities, Mumbai 2 and in particular paragraph 13 thereof and has held that the 1 2018 SCC OnLine SC 3181.
2 2010 (6) Mh.L.J. 764.
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6-ia-3562-2023.doc judgment does not reflect the correct position in law. Section 34(3) specifically speaks of the date on which the request under Section 33 has been "disposed of" by the Arbitral Tribunal. Further, the Supreme Court was also of the view that "disposal" of the application can be either by allowing or dismissing it.
9. Mr. Bharucha has further relied upon the judgment of the Delhi High Court in the case of Vindhya Telelinks Ltd. Vs. Bharat Sanchar Nigam Ltd. & Anr.3 which considered a similar situation wherein an application under Section 33 of the Arbitration Act had not been considered by the learned Arbitrator. He has placed specific reliance upon paragraph 17 of the said judgment wherein Delhi High Court has refrained from going into facts and circumstances of whether the application under Section 33 of the Arbitration Act was well merited or otherwise, because that decision of the Arbitrator has not been challenged before the Court and also the legal position has to be decided de-hors the individual facts and circumstances of a particular case.
10. Mr. Bharucha has submitted that this Court ought 3 2003 (68) DRJ 50.
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6-ia-3562-2023.doc not to go into whether the Application under Section 33 is well merited or otherwise and leave to the learned Arbitrator to decide the Application. He has further submitted that without the application under Section 33 of the Act being disposed off there is no commencement of the limitation period for challenging the award under Section 34(3) of the Arbitration Act.
11. Mr. Rohaan Cama the learned Counsel appearing for the Applicants has taken this Court through relevant list of dates. He has in particular placed reliance upon the correspondence exchanged between the Respondents and the learned Arbitrator, wherein from time to time, reference is made to the Award dated 5th January, 2023 of the learned Arbitrator in Email dated 14th June, 2023 where the learned Arbitrator has referred to the Award as Original Arbitration Award passed and thereafter directive is issued to bring any factual mistakes / errors to the Arbitrator's notice which are apparent from records for issuing Addendum. Consequently parties made their respective submission after the initial Award and prior to final Award being prepared which is expected to be issued that month.
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12. Mr. Rohaan Cama has also referred to the communication addressed by the Respondents in a MahaRERA matter against one Kochara Developers Private Ltd., wherein the Respondents have referred to the said Award having been passed showing that Rs.1 Crore has been paid by Mr. Baban Wadgare to whom the communication is addressed and which is to be adjusted against the entitlement of the Respondents.
13. Mr. Rohaan Cama has submitted that though the Respondents have contended that from time to time an Award / Order had been passed by the Arbitrator, the Respondents had thereafter contended otherwise. He has submitted that this inconsistent stand has been noted by the Executing Court in the said order dated 1st November, 2023 passed in the Review Petition of the Respondents herein seeking review of the prior Order dated 4th August, 2023 passed by the Executing Court. He has in this context referred to paragraph 9 of the said Order, wherein the case of the Respondents has been noted namely that a conjoint reading the emails sent by the learned Arbitrator along with the award in question, would show that it cannot be said to be an arbitral award, of which execution can be sought.
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14. Mr. Cama has submitted that the stand now taken by Mr. Bharucha on behalf of the Respondents is that there was indeed an Award passed by the learned Arbitrator on 5th January, 2023 and that the Application preferred by the Respondent on 2nd February, 2023 is an Application under Section 33 of the Arbitration Act. Thus, the earlier stand of the Respondents that there was no Award passed by the Arbitrator is given up.
15. Mr. Cama has submitted that the purported Application under Section 33 cannot be an Application under that provision, particularly considering that the Application seeks correction of facts in the award passed by the learned Arbitrator. This is nothing but a review of the Award. Further, the purported Application was not served on the Applicants. He has in this context placed reliance upon an Affidavit of Rejoinder filed by the Respondents herein in the Review Petition wherein in paragraph 11, the Respondent has stated that "I humbly submit that for a want of knowledge, I cannot comment on whether these objections were forwarded by the Ld. Arbitrator to any one or more of the Respondents". He has submitted that the pre-requisite for an Application to be one under Section 33 of the Arbitration Act is that, 10/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc it is required not only to be peferred within 30 days from the receipt of the Award, but must also be with notice to the other party as provided for in Section 33(1) of the Arbitration Act. He has submitted that there has been a failure to meet this pre-requisite apart from the purported Application not meeting the criteria falling under Section 33 of the Arbitration Act. In view of the failure to challenge the award dated 5th January, 2023 within the limitation period provided under Section 34(3) of the Arbitration Act and there being no stay of the Award the Enforcement Proceedings are maintainable.
16. Mr. Cama has further submitted that the learned Single Judge of this Court by the said Order dated 1st November, 2023 dismissed the Review Petition filed by the Respondents herein on being prima facie satisfied that there was an Award passed by the learned Arbitrator on 5th January, 2023 which can be executed and found no merit in the Review Petition which had been filed by the Respondents seeking Review of order dated 4th August, 2023 passed by this Court in Execution of the Award. He has submitted that the Supreme Court has declined to interfere with the said Order dated 1st November, 2023 and by Order dated 5th December, 2023 11/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc dismissed the SLP preferred by the Respondents herein from the said Order. He has accordingly submitted that this Court as Executing Court has already taken a prima facie view that the Award dated 5th January, 2023 is an Award which can be executed.
17. Mr. Cama has placed reliance on certain decisions with regard to his contention that an Application under Section 33 of the Arbitration Act is only for correction of typographical and arithmetical errors. He has in this context relied upon the decision of the Gyan Prakash Arya Vs. Titan Industries Ltd. 4 at paragraph 13. Further, he has placed reliance upon the decision of the Supreme Court in the case of State of Arunachal Pradesh Vs. Damani Construction Co.5 at paragraphs 7 and 8, wherein the Supreme Court has held that in the garb of an application under Section 33, it is not open to the Arbitral Tribunal to review the Award passed on substantive grounds.
18. Mr. Cama has also submitted that under Section 32(1) read with Section 32(3) of the Arbitration Act, the arbitration proceedings are terminated by the Award passed by the Arbitrator. 4 (2023) 1 SCC 153.
5 (2007) 10 SCC 742.
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6-ia-3562-2023.doc He has in this context placed reliance upon the decision of the Supreme Court in Dakshin Haryana Bijli Vitran Nigam Ltd. Vs. Navigant Technologies Pvt. Ltd.6, wherein the Supreme Court has held that with the termination of arbitration proceedings, the mandate of the Arbitral Tribunal terminates and the Tribunal becomes functus officio. He has submitted that the learned Arbitrator in the present case having passed the Award dated 5th January, 2023 has become functus officio and the mandate of the Arbitrator has terminated.
19. Mr. Cama has placed reliance upon the State of Arunachal Pradesh (Supra) wherein the Supreme Court has held that after passing of an Award by the Arbitrator any reply given by the Arbitrator to a purported Application referred by a party does not give any fresh cause of action to that party to move an application under Section 34(3) of the Arbitration Act. Upon passing of the award by the learned Arbitrator, the only option with the aggrieved party was either to have moved an application under Section 34 within three months under Sub Section (3) of Section 34 or within the extended period of 30 days. The aggrieved party cannot rely 6 (2021) 7 SCC 657.
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6-ia-3562-2023.doc upon a purported application before the learned Arbitrator seeking a review of the Award to extend the limitation period for challenging an Award. He has submitted that the purported Application in the present case not coming within any of the criteria falling under Section 33(1) of the Arbitration Act is totally misconceived and any reply sent by the Arbitrator does not entitle the Respondents herein to a fresh cause of action. He has accordingly submitted that there is no merit in the preliminary objection raised by the Respondents to the maintainability of the Execution Proceedings.
20. Having considered the rival submissions in my view, there is much merit in the submissions of Mr. Rohaan Cama on behalf of the Applicants. The learned Single Judge of this Court had by the order said dated 1st November, 2023 considered the very same objection which had been raised by the Respondents herein to the maintainability of the Execution Proceedings in the Review Petition filed before the Executing Court seeking review of Order dated 4th August, 2023 which had directed the Respondents to make a disclosures it can be seen from paragraph 9 of the said Order that an inconsistent stand was taken by the Respondents namely that whilst claiming that the purported Application of the Respondents has been 14/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc filed under Section 33 of the Arbitration Act before the learned Arbitrator and the same remained to be disposed off, it is the case of the Respondents in the Review Petition that a conjoint reading of the emails sent by the learned Arbitrator along with the Award in question, would show that it cannot be an Arbitral Award, of which execution can be sought. Thus, the Respondents are nothing but blowing hot and cold and / or approbating and reprobating at the same time which cannot be permitted by this Court.
21. I do not consider there to be any reason why this Court should defer from the view taken by the learned Single Judge in the said Order dated 1st November, 2023 which rejected the Review Petition of the Respondents herein by holding that there is infact an award passed by the learned Arbitrator which can be executed. It appears that the Respondents have changed their case to that of their being an Award and that the purported application of the Respondents is falling under Section 33 of the Arbitration Act and which the learned Arbitrator till date has not decided.
22. This approach of the Respondents is highly deprecated and cannot be countenanced. The Respondents are 15/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc dishonestly attempting to avoid Execution Proceedings. It is noted that the said Order dated 1st November, 2023 dismissing the Review Petition has been upheld by the Supreme Court by order dated 5th December, 2023. The SLP preferred by the Respondents herein from the said Order has been dismissed. Although the said order dated 1st November, 2023 had made it clear that the Respondents herein are at liberty to raise objections in the Execution Application as available in law, including the specific objection as regards the finality of the award in question, it is not open for the Respondents to take a contrary stand, namely that there is in fact an Award to which the purported Application of the Respondents is filed under Section 33 of the Arbitration Act which remains to be disposed of.
23. I am of the considered view that the purported Application of the Respondents does not meet the criteria under Section 33 of the Arbitration Act. An Application under Section 33(1) is required to be invoked under that provision by giving notice to the other party and the invocation is to be within 30 days from receipt of the Arbitral Award. Further, the Application is confined to correction of computation errors, any clerical or typographical errors or any other errors of similar nature occurring in the Award. 16/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 :::
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24. The purported Application of the Respondents preferred before the learned Arbitrator seeks in my view nothing short of a review of the Award passed by the learned Arbitrator. This appears from the face of the purported Application. Further, it is surprising to note that the learned Arbitrator after the passing of the Award has given an opportunity to the parties to bring any factual mistakes / errors to the notice of the learned Arbitrator apparent from the record. This has been mentioned by the learned Arbitrator in the email dated 14th June, 2023 addressed to the Respondent. The learned Arbitrator has referred to issuing an Addendum in the event there are such factual mistakes / errors in the original Arbitral Award apparent from the records. It appears from this email that the learned Arbitrator lacks knowledge of the provisions of the Arbitration Act and in particular Section 33 of the Arbitration Act which does not contemplated the carrying out of such an exercise in the Award by issuing an "addendum". The learned Arbitrator would be best advised to make himself familiar with the provisions of the Arbitration Act prior to agreeing to act as an Arbitrator.
25. The decision relied upon by Mr. Cama for the Applicants namely State of Arunachal Pradesh (Supra) had 17/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc considered a similar Application seeking a review of the Award and attempting to bring it within the purview of Section 33 of the Arbitration Act. In that case the purported Application by way of letter had been designed not strictly under Section 33 of the Act because under Section 33 (1) of the Act a party can only seek certain correction in computation of errors, or clerical or typographical errors or any other errors of a similar nature occurring in the award with notice to the other party or if agreed between the parties, a party may request the Arbitral Tribunal to give an interpretation of a specific point or part of the award. Thus, Supreme Court had found that purported Application does not come within any of the criteria falling under Section 33(1) of the Act. It was designed as if the Applicant was seeking review of the award.
26. The Supreme Court in the said decision has accordingly held that neither the review was maintainable nor the prayer made in the application had anything to do with Section 33 of the Arbitration Act. The Supreme Court held that the Application was totally misconceived and any reply given by the Arbitrator to such an Application does not give any fresh cause of action to the Appellant therein to move an application under Section 34(3) of the Arbitration 18/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc Act. The Supreme Court held that when an Award has passed the only option with the Appellant was either to have moved an application under Section 34 within three months as required under sub-section (3) of Section 34 or within the extended period of another 30 days. However, instead of that a totally misconceived Application was filed and that too the prayer was for review and with regard to mode of payment. Such Application was held to be totally misconceived and any reply by the Arbitrator to the Application does not entitle the Appellant to a fresh cause of action for filing an Application under Section 34(3) of the Arbitration Act. In my view, this decision is apposite in the present case.
27. Further, the Supreme Court in Gyan Prakash Arya (Supra) has held that Section 33 of the Arbitration Act only entitles the learned Arbitrator to correct arithmetical or clerical errors in the Award. In the present case the Respondents herein seeks neither. Thus, the purported Application does not meet the criteria falling under Section 33 of the Arbitration Act. No notice of the Application has been given to the other party as contemplated under Section 33 (1) of the Arbitration Act. Thus, there can be no extension of the limitation period under Section 34(3) of the Arbitration Act and 19/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc accordingly there is no merit in the preliminary objection taken by the Respondents on ground of maintainability of the Execution Proceedings.
28. In my view, the decision relied upon by the Respondents viz. Vindhya Telelinks Ltd. (Supra) of the Delhi High Court is distinguishable on facts, particularly considering that the Delhi High Court was considering an Application which admittedly was filed under Section 33 of the Arbitration Act and which Application had not decided. It was in this context that the observation was made by the Delhi High Court that the Court will not consider the merits of the Section 33 Application and would await a decision of the Arbitrator for consideration. Further, the decision of the Supreme Court in Ved Prakash Mithal & Sons (Supra) relied upon by the Respondents also does not apply in the present case, particularly in view of my finding that the purported Application of the Respondent cannot be considered to be a request under Section 33 of the Act and which requires to be disposed of by the learned Arbitrator.
29. Accordingly, the preliminary objection on the 20/21 ::: Uploaded on - 01/02/2024 ::: Downloaded on - 12/02/2024 08:15:20 ::: 6-ia-3562-2023.doc maintainability of the Execution Proceedings taken by the Respondents is rejected. The Execution Proceedings are maintainable and shall be proceeded with by this Court.
30. Mr. Cama has tendered an additional Affidavit on behalf of the Applicants dated 9th January, 2024 which is taken on record.
31. Stand over to 1st February, 2024, high on board.
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