 of CPC, therefore, objection filed under Section 47 of CPC is not maintainable){kind=link}
The Allahabad High Court while dismissing the petition observed that arbitral award is not a decree under Section 2(2) of CPC, therefore, objection filed under Section 47 of CPC is not maintainable.
A Single Bench of Justice Neeraj Tiwari passed this order while hearing a petition filed by India Oil Corporation Ltd and Another.
The petition has been filed challenging the order dated 08.08.2022 passed by Commercial Court, Varanasi i.e respondent no 1 in Execution Case and additional award dated 21.02.2006 passed by Arbitrator in the matter of M/s Vidhyawati Construction Col vs IOCL and another.
The facts of the case are that Original Suit was filed on 01.07.1989 for appointment of Arbitrator in accordance with provision of Arbitration Act, 1940, which was applicable at that time.
Vide order dated 12.8.1991, the Civil Court appointed Justice R.P Singh (Retired) sole arbitrator to decide the dispute. Due to pending litigation proceedings, Arbitration could only commence in the year 2001 and Arbitrator has issued notice dated 07.05.2001.
Statement of claim was filed by the respondent no 2 on 24.5.2001 before the Arbitrator upon which petitioner had filed a detailed objection and also counter claim.
Arbitrator has passed order dated 14.04.2002 to continue the proceeding as per provision of Arbitration and Conciliation Act, 1996. Ultimately, arbitration proceeding was completed and award was given on 27.04.2005 partly in favor petitioner and respondents both. After calculating the amount, it was found that respondent has to pay Rs 7,79,871/- to the petitioner. Thereafter, Arbitrator has sent the original records to Additional District Judge,-IX, Civil Court, Varanasi on the same day i.e 27.04.2005. Respondent had moved application under Section 33 of the New Act, 1996 for modification of award. Arbitrator has additional the award vide order dated 21.02.2006.
The said award was challenged before the Court by filing petition, which was dismissed as withdrawn vide order dated 08.05.2012 with liberty to file application under Section 34 of Act, 1996. Application was filed under Section 34 of New Act, 1996, which was registered as Arbitration Case and the same was dismissed vide order dated 23.03.2013.
Against that order, petitioner has preferred First Appeal From Order, which was also dismissed vide order dated 08.04.2016. As respondent was also aggrieved with the certain observations made in the award, therefore, he has preferred Special Leave to Appeal, which was dismissed vide order dated 20.01.2017 after deleting the certain observations made in the order dated 8.4.2016.
Respondents have filed Execution Application, in which petitioner has filed objection under Section 47 of CPC and same was rejected vide order dated 08.08.2022. Hence, order dated 08.08.2022 is under challenge before the Court.
Anil Sharma, Senior Counsel submitted that arbitration proceedings was initiated under Old Act, 1940 and award was given on 27.4.2005.
He further submitted that as provided in Section 14 of Old Act, 1940, vide letter dated 15.5.2005, Arbitrator has sent the entire record along with the award in a locked and sealed box to the Court of District Judge, Varanasi and also claimed the expenses. After that, Arbitrator became functus officio and having no authority to entertain any application.
He also submitted that now respondent no 2 has filed an application on 21.10.2005 under Section 33 of New Act, 1996 for modification of award beyond limitation, i.e after 30 days from the date of receipt of award unless another period of time has been agreed upon by the parties.
In the case, there is no such agreement and it is required on the part of Arbitrator to reject the application on the ground of limitation alone, but contrary to that, application was accepted and additional award dated 21.2.2006 has been given excepting the claim of respondent.
He pointed out that Arbitrator proceeded to allow the much higher amount in additional award even which was never sought in the claim petition. The additional award was also given beyond limitation without obtaining the consent of the parties as provided under Section 33 of the Act. Against the additional award, he has preferred Writ, in which earlier interim order was passed on 26.05.2006, but ultimately petition was dismissed vide order dated 8.5.2012 with liberty to petitioner to challenge the additional award under Section 34 of New Act, 1996.
Manish Goyal, Senior Counsel has vehemently opposed and submitted that petitioner cannot be permitted to blow hot and cold both as once order dated 14.04.2002 has been passed to proceed with the proceedings under New Act, 1996 and never challenged.
He further submitted that first award dated 27.4.2005 has also been given under New Act, 1996, which was never been challenged by petitioner. Therefore, petitioner-plaintiff cannot said to be aggrieved person on the ground that additional award has been been given under Section 33 of the New Act, 1996 for that Arbitrator has no authority. Petitioner has also preferred appeal under Section 34 of the New Act, 1996 in compliance of order of writ court dated 8.5.2012 rather filing appeal under Section 30 of the Old Act, 1940.
The Court noted that,
Being confronted by the Court as to whether he has lodge his dissent after continuance of award after four months upon which he has replied that his consent or dissent has no meaning for this purpose.
So far as argument with regard to Section 3 of Act, 1940 read with Paragraph 3 of First Schedule as well as Section 28 of Old Act, 1940 is concerned, Manish Goyal, Senior Advocate submitted that counsel for petitioner neither pleaded nor argued earlier about the nullity of first award, therefore, same cannot accepted in rejoinder argument. He has occasion to raise this objection while filing application under Section 34 of New Act, 1996 and FAFO before the Court
“It is undisputed that the petition has been filed against the rejection of objection under Section 47 of CPC in execution proceedings of arbitral award.
So far as the case is concerned, position is same as discussed in the matter of Larsen & Tubro Limited (Supra). Petitioner had full occasions to raise all these issues while filing appeal in Section 34 of New Act, 1996 and FAFO, but the same has never been raised. Therefore, by way of objection under Section 47 of CPC, he cannot be permitted to raise this issues nullifying the provision of Section 36 of Act, 1996.
The Court has again taken view that arbitral award is not a decree under Section 2(2) of CPC, therefore, objection filed under Section 47 of CPC is not maintainable.
To conclude this point on the basis of undisputed fact, objection under Section 47 of CPC filed against the arbitral award is not maintainable as the same is not a decree under Section 2(2) of CPC. Further, arbitral award can be executed invoking Section 36 of New Act, 1996 along with the provisions of CPC in the same manner as if it is decree of the Court.
Therefore, in light of facts of the case, provisions of law as well as pronouncements made by the Apex Court as well as the Court, I found no good reason to interfere with the impugned orders”, the Court observed.
Accordingly, the Court dismissed the petition with the cost of Rs 1,00,000/- to be paid by the petitioners to respondent no 2.