Madhya Pradesh High Court
M/S Ravi Construction Co. vs Bharat Sanchar Nigam Limited on 17 September, 2019
Author: Subodh Abhyankar
Bench: Subodh Abhyankar
THE HIGH COURT OF MADHYA PRADESH
Arbitration Appeal No.41/2013
(M/s Ravi Construction Co. Vs. Bharat Sanchar Nigam Ltd. & another)
1
Jabalpur, Dated: 17.09.2019
Shri Kunal Thakre, learned counsel for the appellant.
Shri Satyendra Jain, learned counsel for the respondent No.1.
With the consent of learned counsel for the parties, the matter is heard finally.
This appeal has been preferred under Section 37 of the Arbitration and Conciliation Act, 1996 (for short "AC Act") against the order dated 01.02.2013 passed by the VII th Additional District Judge, Bhopal in Arbitration Case No.16/2015 (Bharat Sanchar Nigam Limited Vs. M/s Ravi Construction Co. & another) whereby the application under Section 34 of the AC Act preferred by the respondent-BSNL for setting aside the award dated 30.11.2004 has been partly allowed and the matter has been remanded back.
The facts of the case are that the appellant entered into an agreement dated 08.03.1986 with the respondent for construction of telephone exchange buildings agreement.
In the execution of aforesaid agreement, dispute arose between the parties and subsequently, the matter was referred to the arbitrator, an employee of the respondent-company who, passed the final award on 30.11.2004 in favour of the appellant. Against the aforesaid award, an application under Section 34 of the AC Act was filed by the respondent on various grounds. The aforesaid application has been decided by the learned judge of the lower Court vide the impugned order dated 01.02.2013 whereby the matter has been remanded back to the arbitrator on the ground that since the award itself was not sufficiently stamped and it was the duty the arbitrator to write the award on the sufficiently stamped paper in which the arbitrator has failed, which falls under the category of misconduct.
Digitally signed by ASHISH KUMAR JAIN Date: 25/09/2019 17:18:09THE HIGH COURT OF MADHYA PRADESH Arbitration Appeal No.41/2013 (M/s Ravi Construction Co. Vs. Bharat Sanchar Nigam Ltd. & another) 2 Learned counsel for the appellant submits that the learned judge of the lower Court has erred on both the counts; firstly, the insufficiency of the stamp on which the award is written does not fall within the purview of Section 34 of the AC, 1996 as the scope of Section 34 is confined to the grounds as have been mentioned under the provisions of said section only. In support of this contention, learned counsel has relied upon the judgment of the Apex Court rendered in the case of M. Anasuya Devi & Another Vs. M. Manik Reddy & Others reported in (2003) 8 SCC 565, whereby the Apex Court has categorically held that any issue relating to the stamp on which the award is written does not fall under Section 34 of the AC Act as the same is the subject matter of execution of the award.
Secondly, Shri Thakre has submitted that while deciding an application u/s.34 of the AC Act, the court cannot remand the matter back to the Arbitrator. In support, he has further relied upon a recent decision of the Apex Court rendered in the case of Radha Chemicals Vs Union of India passed in Special Leave to Appeal (C) No(s).2334/2018 dated 10.10.2018, whereby, while relying upon the another judgment of the Apex Court in the case of Kinnari Mullick and Another Vs. Ghanshyam Das Damani, (2018) 11 SCC 328 it is held that the Court while deciding an application Section 34 has no jurisdiction to remand the matter to the Arbitrator for a fresh decision. Thus, it is submitted that on both the aforesaid counts, learned judge of the lower Court has erred in law.
Learned counsel for the respondent has opposed the prayer of the appellant and has submitted that no illegality has been committed by the learned judge of the lower Court in remanding the matter back to the Arbitrator. Learned counsel for the respondent has also relied upon the provisions of Section 34(2A) of the AC Digitally signed by ASHISH KUMAR JAIN Date: 25/09/2019 17:18:09 THE HIGH COURT OF MADHYA PRADESH Arbitration Appeal No.41/2013 (M/s Ravi Construction Co. Vs. Bharat Sanchar Nigam Ltd. & another) 3 Act and submitted that the judgment relied upon by the learned counsel for the appellant regarding the stamps on which the award is written, was passed in the year 2013 whereas Section 34(2A) of the AC Act has been introduced by way of amendment in the year 2015 which came into force with effect from 23.10.2015 in which it is provided that an arbitration award may also be set aside if the Court finds that it is vitiated by patent illegality appearing on the face of the award. Thus, it is submitted that if the award is not written on proper stamp, the same cannot be use for any purpose and it would amount to patent illegality appearing on the face of the award.
Learned counsel for the respondent has also submitted that even otherwise on merits, the order impugned is just and proper. In the alternative learned counsel for the respondent has submitted that if this Court comes to a conclusion that the order passed by the trial Court is liable to be set aside, in that case the interest part of the award may be directed to be paid by the respondent-company excluding the time spent in prosecuting s.34 application which was allowed in their favour as also the time spent in is this appeal.
Having considered the rival submissions and on perusal of the record, this Court finds that the learned judge of the lower Court has committed patent illegality in remanding the matter back to the Arbitrator after holding that the award has been written on improper stamp.
So far as, the necessity to write the award on the proper stamp is concerned, the judgment relied upon by learned counsel for the appellant in the case of M. Anasuya Devi and Another Vs. M. Manik Reddy and Others (supra) reads as under:-
"4. After we heard the matter, we are of the view that in the present case this issue was not required to be gone into at the stage of the Digitally signed by ASHISH KUMAR JAIN Date: 25/09/2019 17:18:09 THE HIGH COURT OF MADHYA PRADESH Arbitration Appeal No.41/2013 (M/s Ravi Construction Co. Vs. Bharat Sanchar Nigam Ltd. & another) 4 proceedings under Section 34 of the Act. In fact, this issue was premature at that stage. Section 34 of the Act provides for setting aside of the award on the grounds enumerated therein. It is not in dispute that an application for setting aside the award would not lie on any other, which is not enumerated in Section 34 of the Act. The question as to whether the award is required to be stamped and registered, would be relevant only when the parties would file the award for its enforcement under Section 36 of the Act. It is at this stage the parties can raise objections regarding its admissibility on account of non-registration and non-stamping under Section 17 of the Registration Act. In that view of the matter, the exercise undertaken to decide the said issue by the Civil Court as also be the High Court was entirely an exercise in futility. The question whether an award requires stamping and registration is within the ambit of Section 47 of the Code of Civil Procedure and not covered by Section 34 of the Act."
(emphasis supplied) The said dictum of the Apex court also answers the contention raised by the learned counsel for the respondent that Section 34 (2A) of the AC Act is applicable in the present case, thus, this Court finds that the aforesaid provision will not be applicable in the present case as the sufficiency of the stamp duty is to be considered only when award is put into execution under Section 36 of the Act and not prior thereto.
Secondly, on the question of remanding the case back to the arbitrator, as has been recently held by the Apex Court in the case of Radha Chemicals (supra) that under no circumstances, the Court has jurisdiction to remand the matter back to the Arbitrator under Section 34 of the AC Act. Para 5 of the same reads as under:-
"5. This Court in a series of judgments culminating in Kinnari Mullick and Another Vs. Ghanshyam Das Damani, (2018) 11 SCC Digitally signed by ASHISH KUMAR JAIN Date: 25/09/2019 17:18:09 THE HIGH COURT OF MADHYA PRADESH Arbitration Appeal No.41/2013 (M/s Ravi Construction Co. Vs. Bharat Sanchar Nigam Ltd. & another) 5 328 held that the court while deciding a Section 34 petition has no jurisdiction to remand the mater to the Arbitrator for a fresh decision. It is, therefore clear that the learned Single Judge's judgment is contrary to this judgment as a result of which bot the judgments of the Single Judge as well as the Division Bench have to be set aside."
On due consideration of the prayer of the respondent that interest part of the award may be directed to be paid by the respondent-company excluding the time spent in prosecuting s.34 application which was allowed in their favour as also the time spent in is this appeal, this court does not find any substance in it as the appellant cannot be deprived of the fruits of the award without there being any error on his part.
In view of the aforesaid, it is held that the impugned order dated 01.02.2013 cannot be sustained in the eyes of law having passed beyond the scope of s.34 of the AC Act and the same is hereby set aside. As a result, the appeal stands allowed and the award passed by the arbitrator is hereby maintained.
(Subodh Abhyankar) Judge @shish Digitally signed by ASHISH KUMAR JAIN Date: 25/09/2019 17:18:09