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2006 DIGILAW 1054 (BOM)

STATE OF MAHARASHTRA v. RAMDAS CONSTRUCTION CO.

2006-07-12

R.M.S.KHANDEPARKAR, S.R.DONGAONKAR

body2006
ORAL JUDGMENT R. M. S. KHANDEPARKAR, J. :- Reardthe learned Advocate for the parties. 2. This is an appeal stated to have been filed under section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") against the order dated 23-12-2005, whereby the lower Court has rejected the application filed by the appellants in terms of section 34(3) of the Act. 3. A preliminary objection has sought to be raised on behalf of the dents that the impugned order is not an appealable order within the meaning of said expression under section 37 of the Act. 4. The contention of the respondents is that section 37(1) of the Act clearly provides that an appeal is maintainable against granting or refusing to grant any measure under section 9 and against setting aside or refusing to set aside an al award under section 34 of the Act. By the impugned order, the Court has neither dealt with nor disposed of the application which was filed by the respond for setting aside of the award. The impugned order only deals with decides the application which was filed by the appellants under section 34(3) extension of time or for condonation of delay in filing the application by the appellants for setting aside the award. 5. On the other hand, it is the case of the appellants that the application for g aside the award being required to be filed in compliance with the decisions of sub-sections (2) and (3) of section 34 of the Act, the impugned I is in the cause of disposal of such application for setting aside of the award, therefore, the order impugned is appealable within the meaning of the said expression under section 37 of the Act. 6. It is not in dispute that by the impugned order the lower Court has dealt the issue relating to the delay in filing application for setting aside the award, as to whether such delay should be condoned and whether the application setting aside the award should be entertained. The issue as to whether the arbitral award should be set aside or not has not been dealt with under the impugned order. 7. The issue as to whether the arbitral award should be set aside or not has not been dealt with under the impugned order. 7. Section 37(1) clearly provides that an appeal shall lie from the orders passed either granting or refusing to grant any measure under section 9, or setting aside or refusing to set aside an arbitral award under section 34 of the Act. Undisputedly, therefore, whenever there is order passed either for setting aside of award or refusing to set aside the arbitral award and such order is passed in exercise of powers under section 34, the same would be appealable under section l)(b) of the Act. In the case in hand, since it is not in dispute nor it can be disputed that the impugned order does not deal with the issue as to whether the arbititral award should be set aside or not and it merely deals with the issue in relation to the delay in filling an application for setting aside of the award evidently the impugned order cannot be said to be an appealable order meaning of the said expression under section 37(1)(b) of the Act. 8. Section 34(1) of the Act provides that recourse to a Court a arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). In other words an application for setting aside of award should satisfy the requirements section (2) as well as sub-section (3) of section 34 of the Act. Merely because the application satisfies the requirements of anyone of sub-sections (2) a section 34 of the Act, it cannot be said that it is a valid and lawful a under section 34(1) of the Act. Such application has necessarily to s requirements of both the sub-sections. 9. Merely because the application satisfies the requirements of anyone of sub-sections (2) a section 34 of the Act, it cannot be said that it is a valid and lawful a under section 34(1) of the Act. Such application has necessarily to s requirements of both the sub-sections. 9. Sub-section (3) of section 34 of the Act provides that an application for setting aside may be made after three months have elapsed from date on which the party making such application had received the arbitral award or , if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal, provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the a within the said period of three months, it may entertain the application within further period of thirty days, but not thereafter. This provision of law expressly reveals that the legislature has provided a specific period of limitation an application for setting aside of the award and simultaneously the been given discretion to extend such period only by thirty days, and not the said period of thirty days. The provision is very clear in that regard. However, the scope of enquiry under sub-section (3) is restricted to the cause for delay in filing the application but it does not relate to the merits of the application setting aside of the award. Being so, a order which is to be passed in exercise of the powers under sub-section (3) of section 34 of the Act cannot extend to matter of the application for setting aside of the award but has to restrict to the aspect of delay in filing such application only. Such an order is not co to be an appealable order within the meaning of the said expression under section 37 of the Act. It is very clear from the fact that section 37 refers to orders dealing with the aspect of setting aside or refusing to set aside an arbitrial award. It does not refer to the proceedings preceding the enquiry in relation to of setting aside or refusing to set aside an arbitral award. The subject-matter of delay in filing an application and the condonation thereof relates proceedings preceding the enquiry for setting aside or refusing to set arbitral award. It does not refer to the proceedings preceding the enquiry in relation to of setting aside or refusing to set aside an arbitral award. The subject-matter of delay in filing an application and the condonation thereof relates proceedings preceding the enquiry for setting aside or refusing to set arbitral award. Once it is clear that section 37(1)(b) does not contemplate order passed in such proceeding relating to the matter preceding the e relation to setting aside or refusing to set aside an arbitral award, such cannot be considered as an appealable order within the meaning of expression under section 37 of the Act. 10. Undoubtedly the impugned order while rejecting the application for condonation of delay, clearly observes :- . "Consequently, application under section 34 of the Arbitr Conciliation Act, 1996 for setting aside the award is also rejected being barred by time." In other words; the Court has not dealt with the application for setting aside the award on merits and the same has been disposed of solely as a consequence of rejection of the application for condonation of delay and there been no enquiry as regards the rights of the parties on the issue of setting e of the award. The appealable order which is contemplated for the purpose exercise of appellate jurisdiction is the one which deals with the merits of the in relation to the claim for setting aside or refusing to set aside an arbitral award. As already stated above, the appellate powers under section 37 are not in relation to the proceedings which precedes the enquiry regarding setting aside or sing to set aside an arbitral award. Being so, the consequence of the order of dismissal of the application for condonation of delay cannot itself amount to an appealable order under section 34( 1) for the purpose of appeal under section 37 (1)of the Act. 11. It is to be noted that the jurisdiction of the Court to entertain an lication to set aside depends upon the existence of an application which ld satisfy the requirement of section 34(2) and (3) of the said Act. In absence such lawful application, the Court is not entitled to entertain the same. 11. It is to be noted that the jurisdiction of the Court to entertain an lication to set aside depends upon the existence of an application which ld satisfy the requirement of section 34(2) and (3) of the said Act. In absence such lawful application, the Court is not entitled to entertain the same. The expression award in section 34(1) of the said Act is clearly to the effect that, .be made only by an application for setting aside such award in accordance sub-section (2) and sub-section (3)." The words "only" and "in accordance " qualified by the words "sub-section (2) and sub-section (3)" apparently lose the intention of the legislature to make the compliance of both the sub-sections to be mandatory to have a lawful application for exercise of jurisdiction regarding the subject of setting aside the award by the Court. 12. At this stage the learned advocate for appellant submitted that the appellant has no other remedy available under the Act to challenge the award and, therefore, the impugned order which results in dismissal of the application setting aside of the award should be construed as an order under section 34(1) e Act. Considering the phraseology of section 34(1) of the Act, we are afraid cannot accept the contention sought to be raised on behalf of the appellant Section 34(1), as already stated, requires compliance of both the sub-sections (2) (3) to have a valid and lawful application for setting aside of the order. Non compliance of any of two sub-sections would render the application to be not maintainable in law. Once the application is considered bad in law, being not, maintainable, the order cannot be said to have been passed on merits of the case. Hence, the contention in this regard is to be rejected. 13. The learned advocate for the appellants also submitted that in view of absence of any remedy in the Act, the appellants be granted liberty to file writ petition against the impugned order. Question of granting any liberty as such, for g writ petition does not arise. In case, the appellants are entitled to challenge impugned order by way of writ petition, it will be open for the appellants to appropriate steps in this regard. 14. In the result, therefore, the appeal is dismissed in limine as being not. maintainable under section 37(1)(b) of the Act for the reasons stated above. In case, the appellants are entitled to challenge impugned order by way of writ petition, it will be open for the appellants to appropriate steps in this regard. 14. In the result, therefore, the appeal is dismissed in limine as being not. maintainable under section 37(1)(b) of the Act for the reasons stated above. re shall be no order as to the costs. 15. At this stage, at the request of the learned advocate for the appeal which is objected to by the learned advocate for the respondents, the execute the impugned order shall remain suspended for the period of eight weeks. Appeal dismissed