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2016 DIGILAW 617 (JK)

Union of India v. Sood and Sood

2016-11-29

N.PAUL VASANTHAKUMAR, TASHI RABSTAN

body2016
JUDGMENT : Tashi Rabstan, J. This Letters Patent Appeal is directed against the judgment and order dated 23.04.2010 delivered by the learned Single Judge in AA NO. 6/2002 filed by petitioner-M/s. Sood & Sood, whereby the recovery proceedings initiated against the petitioner, respondent herein, came to be quashed with liberty to appellants-Union of India to take steps as were permissible under law to seek enforcement of the award subject to just exceptions which includes question of limitation. 2. The facts-in-brief are that on account of cancellation of its contract, petitioner, respondent herein, invoked arbitration clause of the contract agreement. When the appellants herein did not refer the matter to the arbitrator, respondent herein filed a petition under Section 20 of the J&K Arbitration Act, Svt. 2002 (hereinafter referred to as old Act), bearing AA No. 89/92. On 19th May, 1999 the then learned counsel appearing for appellants herein informed the learned Single Judge that the arbitrator had been appointed. Accordingly, vide order dated 02.06.1999 the learned Single Judge while disposing of the arbitration petition left the matter to be decided by the arbitrator regarding the plea of petitioner, respondent herein, that the matter was to be dealt with under old Act. 3. The arbitrator on entering into reference passed an award against the respondent herein on 09.11.2001, and vide communication dated 06.12.2001 directed the respondent herein to deposit an amount of Rs.13,84,913.35 along with 10% interest up to the date of payment in Govt. Treasury by 15.01.2002. Feeling aggrieved, the petitioner-respondent herein filed a petition under Section 34 of the J&K Arbitration and Conciliation Act, 1997 (hereinafter referred to as new Act) before the learned Single Judge of this Court. 4. The lone question raised by the petitioner, respondent herein, before the learned Single Judge was that since the arbitral proceedings were initiated in the year 1992, when the respondent herein filed a petition under Section 20 of the old Act for appointing and referring the matter to the arbitrator in terms of the contract agreement, the procedure for making award of the arbitrator rule of the Court, therefore, was required to be adopted under the old Act and notice under Section 14 of the said Act was, thus, required to be issued to the parties, in absence whereof the award was not capable of being executed. 5. 5. Whereas, on the other hand, the stand of appellants-Union of India before the learned Single Judge was that since the arbitrator was appointed in the year 1999 after invoking the provisions of new Act, therefore, new Act was to apply. Further, as per their stand, under the old Act, the commencement of arbitral proceedings would be deemed to have been initiated when one party to the agreement serves on the other party the notice requiring appointment of an arbitrator, whereas, in the present case, no such notice under the old Act was ever issued to them by the petitioner-respondent herein, therefore, under these circumstances, the arbitral proceedings would be deemed to have been initiated under the new Act. 6. Learned Single Judge after considering the rival contentions of the parties at length quashed the recovery proceedings initiated against the petitioner, respondent herein, with liberty to appellants-Union of India to take steps as were permissible under law to seek enforcement of the award subject to just exceptions which includes question of limitation. Hence, the present appeal on behalf of Union of India. 7. We have heard learned counsel appearing for the parties and also gone through the appeal as well as the relevant record/files annexed therewith. 8. Section 68(2)(a) of the new Act deals with repeal and saving clause, whereby the old Act came to be repealed. It provides that notwithstanding such repeal, “the provisions of the said enactment shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force”; meaning thereby the old Act was to apply and not the new Act in relation to the arbitration proceedings which had been commenced before the new Act came into force. 9. In the present case, petition under Section 20 of the old Act came to be filed by the petitioner, respondent herein, in the year 1992. 9. In the present case, petition under Section 20 of the old Act came to be filed by the petitioner, respondent herein, in the year 1992. Accordingly, notice under Section 20(3) of the old Act was issued to the appellants-Union of India in the said petition, and the same would always be deemed and construed to be a notice issued by the party making request through the intervention of the Court; meaning thereby the arbitration proceedings would be deemed to have been initiated on a date when notice under Section 20(3) of the old Act was issued to the appellants-Union of India in the petition filed under Section 20 of the old Act. Admittedly, the petitioner, respondent herein, filed the aforesaid petition in the year 1992; therefore, in view of Section 68(2)(a) of the new Act, the old act was to apply in the aforesaid case. 10. Hence, once it is concluded that the proceedings had been initiated under the old Act, then the award was required to be executed under the said Act only and a right had also been accrued to the parties to seek execution of the award under the said Act. 11. Even directing the petitioner, respondent herein, to deposit the awarded amount by invoking the provisions of new Act of 1997 was not in accordance with the said Act, Section 36 whereof provides that where time to file application for setting aside the arbitration award has expired or the application has been refused, the award shall be enforced under the Code of Civil Procedure in the same manner as it was a decree of the Court. However, the appellants-Union of India without taking recourse to this, had directed the petitioner, respondent herein, to deposit the amount before the expiry of period of three months provided under Section 36 of the new Act. Further, we are in complete agreement with the learned Single Judge that since the appellants-Union of India did not file the award in the Court in accordance with Section 14(2) of the old Act, it was not capable of being executed as a decree as contemplated under Section 17 of the old Act. 12. Therefore is view of the above, we do not find any merit in the appeal and the same is, accordingly dismissed along with connected miscellaneous petitions, if any.