Karnataka High Court
Sree Meenakshisundaram Textiles ... vs The Cotton Corporation Of India Limited on 13 March, 2020
Bench: Alok Aradhe, M.Nagaprasanna
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF MARCH, 2020
PRESENT
THE HON'BLE MR.JUSTICE ALOK ARADHE
AND
THE HON'BLE MR.JUSTICE MR. M. NAGA PRASANNA
MFA NO.4548 OF 2016 (AA)
BETWEEN:
SREE MEENAKSHISUNDARAM TEXTILES LIMITED
A COMPANY INCORPORATED UNDER THE PROVISIONS
OF COMPANIES ACT 1956, REP. BY ITS
MANAGING DIRECTOR, SRI. C.S. SUBRAMANIAN
BELATHUR VILLAGE, K.R.NAGAR ROAD
HUNSUR - 571 105
... APPELLANT
(BY SRI. SANJAY KRISHNA V., ADV.)
AND:
1. THE COTTON CORPORATION OF INDIA LIMITED
HAVING ITS REGISTERED OFFICE AT MUMBAI
WITH SEVERAL BRANCHES ALL OVER
THE COUNTRY AND ITS BRANCHES AT HUBLI
AND RAICHUR, REP. BY ITS MANAGER
SRI. ATUL KALA SON OF SRI. PRASAD KALA
AGED ABOUT 47 YEARS, III FLOOR
WB PLAZA, NEW COTTON MARKET
HUBLI - 580 029
2. SRI. F. N. GUDDAKAR B.A.LLB(SPL)
(RETIRED DISTRICT JUDGE) ARBITRATOR
2
MAJOR, SANGOLLIRAYANNA NAGAR
NEAR GANAPATHI TEMPLE
DHARWAD - 580 001
...RESPONDENTS
(BY SRI. S. V. PRAKASH, ADV. FOR R1;
NOTICE TO R2 DISPENSED WITH)
THIS MFA IS FILED UNDER SECTION 37(1)(b) OF
THE ARBITRATION AND CONCILIATION ACT, 1996 AND
RULE 11 OF THE HIGH COURT OF KARNATAKA ACT, 1996
AND RULE 11 OF THE HIGH COURT OF KARNATAKA
ARBITRATION (PROCEEDINGS BEFORE THE COURTS)
RULES 2001 PRAYING TO ALLOW THE APPEAL AND TO SET
ASIDE THE ORDER AND DECREE DATED 24.02.2016
PASSED BY THE LEARNED PRINCIPAL DISTRICT AND
SESSIONS JUDGE, MYSURU IN A.S.NO.01/2014 AND ETC.
THIS MFA COMING ON FOR ADMISSION, THIS DAY
ALOK ARADHE J., DELIVERED THE FOLLOWING:-
JUDGMENT
The appeal is admitted for hearing. With consent of the parties, the same is heard finally.
2. In this appeal filed under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 ( hereinafter referred to as "Act"), the appellant has assailed the validity of the 3 judgment dated 24-02-2016 passed by the Trial Court, by which the objections preferred by the respondent under Section 34 of the Act has been allowed and the award dated 24-01-2014 passed by the Arbitral Tribunal has been set aside and the matter is remanded to the Arbitral Tribunal with a direction to take defence statement of the plaintiff on record and afford an opportunity to the plaintiff and dispose of the matter in accordance with law.
3. When the matter was taken up today, learned counsel for the appellant while referring to the provisions of Section 34(1) and Section 34(4) of the Act, submitted that after setting aside the award, the Court has no power to remand the matter in terms of the above provision of law and the same has been done in the instant case. In support of the aforesaid submission, reference has been made to the decision of the Hon'ble Supreme Court in the case of "KINNARI MULLICK AND ANOTHER Vs. GHANSHYAM DAS DAMANI, (2018) 11 SCC, 328." 4 Learned counsel for the respondent was unable to dispute the aforesaid proposition.
4. We have considered the submissions made by the learned counsel for the parties. After interpreting the provisions of Section 34(1) and 34(4) of the Act, the Hon'ble Supreme Court in paragraph No.15 has held as under:
"15. On a bare reading of this provision, it is amply clear that the Court can defer the hearing of the application filed under Section 34 for setting aside the award on a written request made by a party to the arbitration proceedings to facilitate the Arbitral Tribunal by resuming the arbitral proceedings or to take such other action as in the opinion of the Arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. The quintessence for exercising power under this provision is that the arbitral award has not been set aside. Further, the challenge to the said award has been set up under Section 34 about the deficiencies in the arbitral award which may be curable by allowing the Arbitral Tribunal to take such measures which can eliminate the grounds for setting aside the arbitral award. No power has been invested by Parliament in the Court to remand the matter to the Arbitral Tribunal except to adjourn the proceedings for the limited purpose mentioned in sub-section (4) of Section 34. This legal position has been expounded in McDermott 5 International Inc.10. In para 8 of the said decision, the Court observed thus: (Bhaskar Industrial Case 9,SCC Online Kar) ".... Parliament has not conferred any power of remand to the Court to remit the matter to the Arbitral Tribunal except to adjourn the proceedings as provided under sub- section (4) of Section 34 of the Act. The object of sub-section (4) of Section 34 of the Act is to give an opportunity to the Arbitral Tribunal to resume the arbitral proceedings or to enable it to take such other action which will eliminate the ground for setting aside the arbitral award.
(emphasis supplied)"
5. In view of the aforesaid enunciation of law, the impugned judgment dated 24-02-2016 is hereby set aside and the matter is remanded to the Trial Court to decide the objections preferred by the respondent under Section 34 of the Act, in the light of the observations made by the Hon'ble Supreme Court in para No.15 of the decision in the case of 'KINNARI MULLICK & ANOTHER' (supra), expeditiously, preferably within the period of six months from the date of receipt of certified copy of the order passed today.
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Accordingly, the appeal is disposed of. Needless to state that, it will be open to both the parties to raise all such contentions as may be available to them in law.
Sd/-
JUDGE Sd/-
JUDGE Psg*