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2016 DIGILAW 747 (RAJ)

Union of India v. A Cube Associates

2016-05-24

ARUN BHANSALI

body2016
ORDER : Arun Bhansali, J. This writ petition has been filed by the petitioners aggrieved against the order dated 4.5.2016 passed by the Executing Court, whereby the prayer made by the petitioners for staying the execution proceedings has been rejected. 2. An award dated 19.6.2015 for a sum of Rs. 14,26,625/- was passed by the arbitrator after the dispute was referred to him under Section 11(6) of the Arbitration and Conciliation Act, 1996 ('the Act') under the orders of this Court. 3. Feeling aggrieved, the petitioners approached the jurisdictional court under Section 34 of the Act and the said proceedings are pending. 4. The respondent initiated proceedings for execution of the award dated 19.6.2015 under Section 36 of the Act. The petitioners prayed before the executing court that in terms of Section 36 of the Act, as the proceedings under Section 34 are pending consideration before the jurisdictional court, the proceedings in execution be stayed. To which, it appears that submission was made by the respondent that as the application filed by the petitioners under Section 34 of the Act was filed beyond thirty days, the petitioners are not entitled to seek stay of the proceedings. 5. A further submission was made that in view of the amended Section 36 of the Act, as the proceedings in execution has not been stayed, the petitioners cannot seek automatic stay of the proceedings. 6. The executing court by its order impugned came to the conclusion that besides the fact that application was filed by the petitioners beyond limitation under Section 34 of the Act, as there was no order under Section 36(2) of the Act, proceedings cannot be stayed and rejected the prayer and order for further proceedings. 7. It is submitted by learned counsel for the petitioners that the submission made by the respondent regarding the application under Section 34 of the Act being barred by limitation is ex-facie incorrect as the limitation has been taken as thirty days, whereas Section 34 of the Act provides for three months limitation for filing objection. 8. 7. It is submitted by learned counsel for the petitioners that the submission made by the respondent regarding the application under Section 34 of the Act being barred by limitation is ex-facie incorrect as the limitation has been taken as thirty days, whereas Section 34 of the Act provides for three months limitation for filing objection. 8. It is further submitted that as the award was passed on 19.6.2015 before the amendment in provisions of Section 36 of the Act, which amendment came into effect on 23.10.2015, the unamended provision of Section 36 would apply and the pendency of proceedings under Section 34 of the Act is sufficient for the executing court to stay its hands off the execution proceedings and therefore, the order impugned deserves to be quashed and set-aside. 9. I have considered the submissions made by learned counsel for the petitioners and have perused the material available on record. 10. So far as the issue of limitation qua the application under Section 34 of the Act is concerned, the indication in the order that the limitation for filing objections under Section 34 of the Act is thirty days appears to be on its face contrary to the limitation prescribed under Section 34 of the Act and as admittedly the objections were filed on 7.8.2015 against the award dated 19.6.2015 it cannot be said that the same were barred. 11. So far as the submission made by learned counsel for the petitioners that as the award was passed before the provisions of Section 36 of the Act were amended w.e.f. 23.10.2015 and therefore, the amended provision would not apply is concerned, does not appear to be correct. The provisions of Section 36 of the Act prior to amendment read as under:- "36. Enforcement:- Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (V of 1908) in the same manner as if it were a decree of the Court. However, post amendment, the same reads as under:- "36. However, post amendment, the same reads as under:- "36. Enforcement:- (1) Where the time for making an application to set aside the arbitral award under Section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court. (2) Where an application to set aside the arbitral award has been filed in the court under Section 34, the filing of such an application shall not by itself render that award unenforceable, unless the court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose. (3) Upon filing of an application under subsection (2) for stay of the operation of the arbitral award, the court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing: Provided that the court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of the Code of Civil Procedure, 1908 (5 of 1908)." 12. Earlier the unamended provision provided for an automatic stay of the enforcement of the award on filing of application under Section 34 of the Act within limitation prescribed therein. However, post-amendment, sub-section (2) & (3) have been introduced and in sub-section (1), it has been provided that subject to provision of sub-section (2), the award shall be enforceable in accordance with the provisions of the C.P.C. 13. Sub-section (2) provides that the filing of application under Section 34 of the Act shall not by itself render the award unenforceable, unless the court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3). 14. Sub-section (3) provides for stay of the operation of the arbitral award, subject to condition imposed by the Court. 15. 14. Sub-section (3) provides for stay of the operation of the arbitral award, subject to condition imposed by the Court. 15. The provisions of Section 36 of the Act prior to amendment providing for stay on account of pendency of proceedings under Section 34 and post amendment providing for filing of application under Section 36(2) & (3) of the Act, essentially are procedural and merely because the award was passed prior to amendment in the provisions of Section 36, which came into effect w.e.f. 23.10.2015, it cannot be said that after the amendment, the petitioners could continue to have stay on the enforcement of the award based on the unamended provisions. 16. However, looking to the circumstances of the case where on account of enforcement of the new provision and the entire scenario with regard to enforcement of award getting changed, the executing court should have granted reasonable time to the petitioners to move to the Court dealing with Section 34 application for making an application seeking stay on the award. 17. For the said purpose, the order which this Court proposes to pass, no notice is required to be issued to the respondent as the same would unnecessary delay the proceedings. 18. Learned counsel for the petitioners submits that the petitioners have already moved an application under Section 9 of the Act before the Court and the said application under Section 9 of the Act is coming up before the Court along with Section 34 application on 23.7.2016. 19. Looking to the circumstances of the case, the petitioners may seek preponement of the date before the concerned court and the petitioners are granted time till 10.7.2016 to pursue its proceedings for stay, the proceedings for execution shall remain stayed till 10.7.2016. The executing court shall fix a date after 10.7.2016 in the matter and thereafter proceed in the matter in accordance with law. With the above directions, the writ petition stands disposed of.