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2010 DIGILAW 2597 (ALL)

ASHOKA CONSTRUCTION CO. v. DISTRICT JUDGE, VARANASI

2010-08-26

PRAKASH KRISHNA

body2010
JUDGMENT PRAKASH KRISHNA, J.--Challenging the order dated 2nd August, 2010 passed by District Judge, Varanasi in Execution Case No.6 of 2006 asking the petitioner, judgement-debtor to give the particulars of its assets and bank account number, the present writ petition has been filed. 2. The background facts may be noticed in brief: The petitioner is a partnership firm and on 5th January, 1994 it entered into an agreement with the Chief Engineer, H.Q. C.E. (P) Hirak, BRO Complex for supply of earth for road embankment for a sum of Rs. 3,97,75,547. There was also an arbitration agreement. A dispute having been arisen between the parties, the matter was referred to arbitrator who gave the award dated 4th April, 2001. He awarded a sum of Rs. 22,35,342/- to the Union of India. The Union of India has put the said award under execution and the Executing Court has proceeded for recovery of the aforesaid awarded amount. On an application filed by the decree-holder under Order XXI, Rule 41, C.P.C., the judgment-debtor i.e., the present applicant by the order under revision has been directed to furnish the particulars of its property and the bank account. Feeling aggrieved by the said order, the present writ petition has been filed. 3. Learned Counsel for the petitioner in support of the writ petition submits that the execution proceedings are liable to be stayed in view of section 36 of the Arbitration & Conciliation Act, 1996. He further submits that the decree holder itself has filed objections against the arbitral award under section 34 of the Act and the said objections are still pending. Reliance has been placed on the Apex Court judgment in the case of Fiza Developers and Inter-Trade P. Ltd. v. AMCI (I) Pvt. Ltd.1. 1. JT 2009 (12) SC 519. 4. Considered the aforesaid submissions of the learned Counsel for the petitioner. 5. The facts are not in dispute. The factum that an arbitral award has been delivered by the arbitrator awarding the aforesaid amount in favour of the Union of India is not in dispute. It is also not in dispute that the present petitioner has not filed any objection under section 34 of the said Act. The objection has been filed by the decree holder i.e., Union of India against the said award. It is also not in dispute that the present petitioner has not filed any objection under section 34 of the said Act. The objection has been filed by the decree holder i.e., Union of India against the said award. On these facts, the learned Counsel for the petitioner submits that the execution proceedings are liable to be stayed till the disposal of the objections preferred under section 34 of the Act in view of section 36 thereof. 6. There are two aspects of the case. Firstly, no case for interference under Article 226 of the Constitution of India has been made out as by the impugned order, the Court below has only directed the petitioner to furnish the details of its property and the bank account. To put it differently, the impugned order does not decide anything. By no stretch of imagination, the petitioner who is a contractor can be said to be aggrieved by the said order. The Execution Court has not proceeded to execute the award in any manner. It may be a step in the direction of the execution .of the award but at this stage, by no stretch of imagination, it can be said that the petitioner is aggrieved in any manner. 7. The Court was inclined to dispose of the writ petition in view of the aforesaid findings but the learned Counsel for the petitioner insisted upon the Court to consider the larger question that the Executing Court should stay its hands in view of section 36 of the Act. Therefore, the second aspect of the case is whether such proceedings are liable to be stayed under section 36 or not. The sheet-anchor of the argument of the petitioner is that indisputably, the judgment-debtor has applied for setting aside of the award and therefore, in view of mandate laid down in section 36 of the Act, the proceedings are liable to be stayed till the disposal of the said objections. 8. In my considered view, the argument of the learned Counsel for the petitioner is misconceived and the reliance placed by him on the judgment of the Apex Court in the case of Fha Developers and Intel-Trade P. Ltd. (supra) is misplaced one. The said decision does not advance the case of the petitioner in any manner, because of the fact that the petitioner has not filed any objection under section 36 of the Act. The said decision does not advance the case of the petitioner in any manner, because of the fact that the petitioner has not filed any objection under section 36 of the Act. 9. Learned Counsel for the petitioner laid much emphasis on the following observations of the Apex Court as contained in para 9 of the judgment, which are reproduced below for the sake of the convenience: (9) THE scheme and provisions of the Act disclose two significant aspects relating to Courts vis-a-vis arbitration. The first is that there should be minimal interference by Courts in matters relating to arbitration. Second is the sense of urgency shown with reference to arbitration matters brought to Court, requiring promptness in disposal. Section 5 of the Act provides that notwithstanding anything contained in any other law for the time being in force, in matters governed by Part I of the Act, no judicial authority shall intervene except where so provided in the Act. Section 34 of the Act makes it clear that an Arbitral award can be set aside on the grounds enumerated in sub-section (2) of section 34 and on no other ground. Sub-section (3) of section 34 provides that an application for setting aside may not be made after three months and the maximum delay that can be condoned is only 30 days. In other words, the maximum period for challenging an award is three months plus 30 days, even if there is sufficient cause for condonation of a longer period delay. Section 36 provides that an award shall be enforced in the same manner as if it were a decree of the Court, but only on the expiry of the time for making an application to set aside the arbitral award under section 34, or such application having been made, only after it has been refused. Thus, until the disposal of the application under section 34 of the Act, there is an implied prohibition of enforcement of the arbitral award. The very filing and pendency of an application under section 34, in effect, operates as a stay of the enforcemmt of the award. (Emphasis laid by the petitioner) 10. Before appreciating ratio as laid down therein, it is necessary to know the background of that case. The very filing and pendency of an application under section 34, in effect, operates as a stay of the enforcemmt of the award. (Emphasis laid by the petitioner) 10. Before appreciating ratio as laid down therein, it is necessary to know the background of that case. A close reading of the above judgment of the Apex Court would show that the Apex Court in the said decision was called upon to decide as to whether framing of issues as required under Order XIV, Rule 1 of Civil Procedure Code is necessary in a proceeding under section 36 of the Act. 11. This was the only issue before the Apex Court. It was not required to decide the argument sought to be raised in the present writ petition. The aforesaid observations should be read in the context of the issue involved therein. In other words, it cannot be tom out and read out of the context. Therefore, the decisionof the Apex Court is distinguishable avd has no application to the facts of the present case. 12. It is an admitted case of the petitioner that it has rot filed any objection under section 36 of the Act. In other words, the petitioner has accepted the award of the arbitrator. Section 36 has been enacted for the benefit of objector, who has filed objection under section 36 of the Act for setting aside the arbitral award on the five grounds as specified under section 34 of the Act. 13. The purpose for which section 36 has been enacted is that till the disposal of the objection under section 34, the proceedings may be stayed for execution of the award. If there is no objection at the instance of the person against whom award has been delivered, the award has become final and as such there is no purpose for staying the proceedings any further. It is like- if a suit is filed and it is decreed partially, the defendant does not challenge the decree but the appeal is filed by the plaintiff for the remaining part of the decree, which has been decided against him, it does not mean that the decree which has been passed by the Trial Court decreeing the suit partially cannot be put to execution. 14. 14. A conjoint reading of sections 34 with section 36 makes it clear that the enforcement of that portion of award which is subject-matter of objection under section 34, only that part shall remain stayed and not the other part of the award, which is not in dispute or subject-matter of objection or proceedings under section 34 of the Act. 15. Before parting with the case, it may be noted that against the impugned award a revision should have been preferred under section 115 of the Code of Civil Procedure but the Court is not taking-up the said objection as the jurisdiction of the civil revision and of the writ petition is presently with the same Bench. 16. In view of the above, I do not find any merit in the present writ petition. The writ petition is dismissed summarily. Petition Dismissed.