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2002 DIGILAW 559 (KER)

The State of Kerala v. K. V. Abraham

2002-08-14

K.A.MOHAMMED SHAFI, K.RADHAKRISHNAN

body2002
Judgment :- Radhakrishnan, J. In all these cases counsel appearing for the claimants raised a preliminary objection with regard to the maintainability of these appeals and hence all these cases are disposed of by a common judgment. 2. MFA. 482/98 arises out of O.P.(Arb.) 132/88 of Sub Court, Kollam. Arbitration O.P. 132/88 was filed by the claimant under sec. 17 of the Indian Arbitration Act, 1940 for passing judgment and decree in accordance with the arbitration award passed by the sole Arbitrator on 29-9-1988. The Sate of Kerala and the Superintending Engineer had also preferred I.A. 2554/88 for setting aside the award under Sec. 30 of the Act with a petition for condonation of delay. Petition for condonation of delay was dismissed on 13-9-93. Consequently I.A. 2554/88 was also dismissed and the Sub Court passed a judgment and decree for Rs. 2,86,600/- on 29-10-93 in full and final settlement of all claims and also declared that the claimant is entitled to get the security deposit released. It also ordered that the claimant would be entitled to get interest at 12% per annum from the date of award till the date of decree and also at the same rate till realization. State has filed this appeal against the judgment and decree of the court below under Sec. 39 of the Act and also seeking to set aside the award dated 26-9-98 paying court fee under Schedule II Article 4 of the Kerala Court Fees Act. No appeal has been preferred against the order dated 13-9-93 dismissing the application for condoning delay as well as the dismissal of the application for setting aside the award. 3. MFA. 647/96 arises out of O.P.(Arb.) No. 130/88 on the file of Additional Sub Court, Kollam. The work in question relates to KIP, RBC – formation of Paranthal Distributory from CH. O.M. to 5310 M. Part – II from CH 975 to 2000 M. including C.D. works. Contract agreement was dated 3-1-1984. Superintending Engineer (Retired) was appointed as the sole Arbitrator. After considering all aspects of the matter Arbitrator awarded Rs. 1,93,800/- with 12% interest per annum from the date of award till the date of decree and also future interest at the same rate. Claimant preferred OP.(Arb.) 130/88 under Sec. 17 of the Act for passing a decree and judgment in terms of the award. After considering all aspects of the matter Arbitrator awarded Rs. 1,93,800/- with 12% interest per annum from the date of award till the date of decree and also future interest at the same rate. Claimant preferred OP.(Arb.) 130/88 under Sec. 17 of the Act for passing a decree and judgment in terms of the award. Before the Sub Court State preferred a petition praying for setting aside the award with a petition I.A. 1015/91 for condonation of delay. Petition for delay condonations was dismissed on 13-9-93. Consequently the petition for setting aside the award was also dismissed. State has not filed appeal against the said order. This appeal has been preferred by the State under Sec. 39(vi) of the Arbitration Act paying court fee under Schedule II, Art. 4, Sub-clause (ii) (c) as amended as per Sec.52 of the Court Fees Act against the judgment and decree in OP(Arb.) No. 130/88 dated 29-10-93. 4. MFA. 1385/93 arises out of OP. (Arb.) 237 of 1988 filed by the State under Sec. 39 (1) of the Act to set aside the award and the judgment and decree and paid only 100/- as court fee purporting to be under Schedule II Art. 4 of the Kerala Court Fees Act 1960. Further award under challenge is a non-speaking award. 5. When the matter came up for hearing learned Government Pleader advanced arguments for setting aside the award under Sec. 30 of the Arbitration Act, 1940. We are of the view all these appeals are incompetent and not maintainable. We have already indicated that the court below has already dismissed the applications preferred by the State for setting aside the award of the Arbitrator against which they have not filed appeal under Sec. 39(vi) of the Act. Under Sec. 39(vi) of the Act State is attempting to challenge the judgment and decree passed by the court below. We are of the view such an order passed by the court below making the award rule of the court by passing the judgment and decree could be challenged only, on the grounds available under Sec.17 of the Act. Sec. 17 reads as follows: 17. We are of the view such an order passed by the court below making the award rule of the court by passing the judgment and decree could be challenged only, on the grounds available under Sec.17 of the Act. Sec. 17 reads as follows: 17. Judgment in terms of award:-- Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow., and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the award. Since State has not filed not filed appeal appeal against the judgment and decree on the grounds available under Sec. 17 of the Act these appeals are not maintainable. These appeals are not maintainable on another ground as well. Appeal under Sec. 39 is maintainable only against those orders mentioned therein. In the instant case the State has not challenged those orders dismissing the petition for condonation of delay and the orders dismissing the application for setting aside the award. Though court fee was paid in MFA.482/98 and MFA. 647/96, no challenge was made against the order dismissing the application for condoning delay and the order refusing the application for setting aside the award. In this connection we may refer to some of the judgments pronounced on the point. The Calcutta High Court in Union of India v. N.P. Singh, AIR 1963 Calcutta 1 considered a similar issue. The court held as follows: Where the grounds of appeal do not suggest that the decree is either in excess of or not in accordance with award but on the contrary the grounds urge that the decree is in terms of the award which is bad, then such an appeal is not entertainable under Sec. 17 of the Act. The court held as follows: Where the grounds of appeal do not suggest that the decree is either in excess of or not in accordance with award but on the contrary the grounds urge that the decree is in terms of the award which is bad, then such an appeal is not entertainable under Sec. 17 of the Act. Under Sec. 17 of the Act a ground of appeal which goes to challenge an award on the very same ground on which an application to challenge an award under Sec. 33 has already failed is, barred both by the express language of the conditions mentioned Sec. 17 of the Act as well as by Sec. 39 of the Act. A Division Bench of the Allahabad High Court in Ram Babu V. Lakshmi Narain and another, AIR 1963 Allahabad 252 has considered the scope of Sections 17, 39(2) and 41 of the Act held as follows: Sec.41 of the Arbitration Act makes the provisions of the code of Civil Procedure applicable to proceedings under the Arbitration Act and the result is that a decree passed under Sec. 17 of the Arbitration Act could be challenged by a first appeal under Sec. 96 of the Code of civil Procedure and on appropriate grounds in a second appeal under Sec.100 of the Code of Civil Procedure. Sec. 17, however, places some limitations on this right of appeal by laying down that “no appeal shall lie from such decree except on the ground that it is in excess of or not otherwise in accordance with the award.” This clause contained in Sec. 17 thus recognized that a decree passed under Sec. 17 is subject to right of appeal by the party aggrieved but places a limitation on that right. The right is curtailed to the extent that an appeal can be filed only on the grounds mentioned in this clause, viz., it is in excess of or not otherwise in accordance with the award. If such grounds do not exists, the right of appeal, which otherwise exists, is taken away by this clause. The right of appeal which is recognized in this clause of Sec. 17 of the Arbitration Act, is clearly the right conferred by Part VII of the Code of Civil Procedure and, consequently, proceeded to lay down the limitation in Sec. 17 on that right of appeal. The right of appeal which is recognized in this clause of Sec. 17 of the Arbitration Act, is clearly the right conferred by Part VII of the Code of Civil Procedure and, consequently, proceeded to lay down the limitation in Sec. 17 on that right of appeal. The language of the clause contained in this section is clearly in the form of a limitation on an existing right of appeal and does not by itself create any independent right of appeal. If the Legislature had intended that a decree passed under Sec. 17 of the Arbitration Act was not to be appealable under Sec. 96 of the Code of Civil Procedure and a special provision should be made for an appeal against such a decree, the language instead of being in the negative form would have been in the positive form conferring a right of appeal. Punjab and Haryana High Court in Union of India v. M/s. Shibboo Mal & Sons, Air 1989 Punjab and Haryana 205 has also considered the scope of Secs. 39, 30, 33, 14 and 17 of the Arbitration Act and held as follows: Sec. 39 of the Act provides that all orders of the nature specified in the section will be open to appeal irrespective of the fact whether they are final orders in the case and dispose it of finally, or are merely interlocutory. Against an order under Sec. 17 of the Act passing a decree in terms of the award no appeal lies under Sec. 39 of the Act but it lies under the last part of Sec. 17 on only two grounds viz. –(i) that the decree is in excess of the award; and (ii) that the decree is not in conformity with the award. In the instant case, I do not find that the learned Subordinate Judge has not passed the decree in conformity with the award or that it is an excess of the award. Clause A to C of Sec. 30 of the act set out the grounds on which an award could be set aside; and Sec. 33 further adds that the challenge could be also with reference to the existence of the validity of an arbitration agreement or an award. If no steps are taken to set aside the award under Secs. Clause A to C of Sec. 30 of the act set out the grounds on which an award could be set aside; and Sec. 33 further adds that the challenge could be also with reference to the existence of the validity of an arbitration agreement or an award. If no steps are taken to set aside the award under Secs. 30 and 33 of the Act an unassailable reason must follow under Sec. 17 of the Act and a decree is not open to challenge except by way of an appeal under the two grounds mentioned in the said section; whatever may be the ground of impeachment it has got to be agitated under Secs. 30 and 33 of the and if there is an omission to do so one cannot avoid the bar created by Sec. 17 of the Act, Resultantly, I hold that the appeal is not competent. 6. Almost identical question came up for consideration before Andhra Pradesh High Court in Hindustan Steel Works Construction Ltd. V. N.V. Chowdary and another, 2001(3) Arb. LR 291. The court considered the scope of Sects. 14, 17, 30 and 39 of the Arbitration Act and held that a reading of the above provisions it is discernible that sub-section (1) of Sec. 39 of the Act provides for an appeal before the Division Bench of the Act provides for an appeal before the Division Bench against an order passed by the learned Single Judge, if the order appealed against, falls within the six categories enumerated thereunder. The court found that the impugned award passed by the learned single Judge under Secs. 14 and 17 of the Arbitration has not been enumerated under any of the above six clauses provided under Sec. 39(1) of the Act. Consequently the appeal was dismissed as not maintainable. While dealing with the scope of Sec. 39 the apex court in State of West Bengal v. Gourangalal Chatterjee, 1993 (2) Arbitration Law Reporter 95 held that the order passed by the learned Single Judge does not fall in any one of the six categories of appealable orders under Sec. 39(1). Consequently appeal was found not maintainable. 7. While dealing with the scope of Sec. 39 the apex court in State of West Bengal v. Gourangalal Chatterjee, 1993 (2) Arbitration Law Reporter 95 held that the order passed by the learned Single Judge does not fall in any one of the six categories of appealable orders under Sec. 39(1). Consequently appeal was found not maintainable. 7. The above mentioned judicial pronouncements would positively indicate that if a party is aggrieved by the judgment and decree passed by a sub Court making the award rule of the court the same could be challenged only under Sec. 17 of the Act. Appeal has to be filed under Sec. 17 on specific ground mentioned therein. If party is aggrieved by an order dismissing an application for setting aside the award the same has to be challenged under Sec. 39(vi) of the Act. We have found in this case State preferred MFA. 482/98 and 647/96 challenging the judgment and decree passed by the Sub Court making the award rule of the court. Appeal was filed under sec. 39 of the Act and paid court fee also. State failed to challenge the order dismissing the delay condonation petition as well as the consequent dismissal of the application for setting aside the award. That order was not challenged by the State though Court fee has been paid. Instead of challenging the said order State has mistakenly challenged the judgment and decree making the award rule of the court under Sec. 39. Procedure adopted by the State is illegal. This shows the callous manner by which arbitration cases are being filed and conducted. Since the challenge is against the judgment and decree of the court below grounds available under Sec. 17 alone could be raised even if it is stated there is a misquoting of this section. Under such circumstance these appeals are not maintainable. We therefore dismiss all these appeals as not maintainable.