Delhi High Court
Shri Anil Mehra vs M/S. East India Weaving Ltd. & Ors. on 30 March, 2001
Equivalent citations: 2001IVAD(DELHI)622, 91(2001)DLT535, 2001(59)DRJ84, 2001(2)RAJ323
Author: J.D. Kapoor
Bench: J.D. Kapoor
ORDER J.D. Kapoor, J.
1. Though application moved by the judgment debtor is under Order 39 Rules 1 and 2 CPC seeking direction to the decree holder to deposit the decretal amount recovered by him any way of execution petition but the plea raised therein are in the form of objections as to the validity of the decree. In support of this contention that the decree is void ab initio and a nullity, he has raised the following points:-
i). East India Weaving Company had purchased the goods from the decree holder but there was no arbitration agreement between the two nor was any legal liability or obligation binding the judgment debtor by way or arbitration as the judgment debtor by way of arbitration was the judgment debtor by way of arbitration as the judgment debtor was not a member of Delhi Hindustani Mercantile Association.
ii). That the award and proceedings are wholly and in gross violation of the law's mandate and therefore both of them are a nullity and non est.
2. Admittedly the applicant/judgment debtor is one of the Directors of East India Weaving Company Limited. It is also not disputed that the applicant not only in the capacity of the Director but also in the individual capacity submitted himself to the arbitration proceedings. It is again not in dispute that the applicant preferred an application under Order 34 of the Indian Arbitration and Conciliation Act 1996 challenging the validity of the award as well as its binding nature. But the applicant/Judgment debtor did not pursue this application and withdraw the same in the mid way.
3. It appears that what the applicant could not achieve by way of application under Section 34 of the arbitration Act he wants to achieve through this application which is otherwise not maintainable. Section 34 of the Arbitration Act provides a party against whom the award has been made has a recourse to a court against an arbitral award. Under these provisions an arbitral award can be set aside by the court only when the party in making the application furnishes the following proof:-
i. A party was under some incapacity; or ii. the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon under the law for the time being in force; or iii. the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or iv. the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission or arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or v. The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this part from which the parties can not derogate or failing such agreement, was not in accordance with this part; or
b) The court finds that-
i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
ii) the arbitral award is in conflict with the public policy of India.
Sub clause(3) of Section 34 places a limit of three months in making an application for setting aside the award. Section 35 provides the finality to the arbitral award. Section 36 relates to the enforcement of the award. It provides that where the time for making the application to set aside the 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 (5 of 1908) in the same manner as if it were a decree of the court.
4. As in apparent the plea that the arbitration agreement is not valid under the law to which the parties have subjected or, failing any indication thereon, under the law for the time being in force is available by way of making an application under Section 34 of the Arbitration Act only and not by way of remedy as resorted to by the applicant.
5. It is not that the judgment debtor was not aware of these provisions. He not only knew them but also availed them by making application under Section 34 of the Arbitration Act for setting aside the award. By withdrawing the same in the midstream the judgment debtor burnt its boats.
6. And not to seek reversal of the award which is enforceable as a decree of the court is not permissible. The award became final the moment the application moved under Section 34 was dismissed though as withdrawn.
7. May be that the judgment debtor wanted to gain time first by moving the application under Section 34 of the Act and then by filing objections under Section 47 of the Civil Procedure Code thereby challenging the validity of the award. No doubt any judgment debtor has the right to challenge the validity of the decree when it is sought to be executed but in the instant proceedings such a recourse is provided under Section 34 of the Arbitration Act whereby the judgment debtor can challenge the validity of the award on the ground of its being in violation of any law and therefore being a nullity. As a matter of fact, the provisions of Section 34 are substitute or provisions parallel to the provisions of Section 47 of the Civil Procedure Code.
8. For the aforesaid reasons I do not find any merit in the application and dismiss the same.
9. Since decretal amount was already been paid, the execution petition is disposed of having been satisfied.