Utkarsh Apparels v. Winnsome Textiles Industries Ltd.
2017-08-02
SANDEEP SHARMA, SANJAY KAROL
body2017
DigiLaw.ai
JUDGMENT : Sanjay Karol, J. Whether the present appeal (Letters Patent Appeal) is maintainable under Clause 10 of the Letters Patent, Section 104 and Order 43 of the Code of Civil Procedure or not, is the issue which we are called upon to answer. 2. At this juncture, we may only observe certain facts, leading to the filing of present appeal. Vide Award passed by the Arbitral Tribunal, so constituted under the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act), claims of the present respondent M/s Winnsome Textiles Industries Ltd. came to be adjudicated in the affirmative. The award having attained finality, the present respondent filed an application for execution of the same, claiming a sum of Rs.45,07,878/- (including interest upto 1.3.2015). 3. Notice in the Execution Petition came to be issued, and after service by way of publication, appellants, through counsel, entered appearance on 29.11.2016, on which date, the matter was adjourned to enable the learned counsel to file Power of Attorney as also obtain instructions. On the following date, i.e. 20.12.2016, the Court passed the following order: “Respondent-Judgment Debtor No.2, Rajan Pahwa, Sole Proprietor of M/s Utkarsh Apparels, is directed to attend this Court in person on 3.1.2017 and to file his affidavit indicating therein the statements of his accounts and detail of other properties on the prescribed Form No.16(A) of Appendix-E to the Code of Civil Procedure. On his failure to do so, the plea of his detention in civil imprisonment will be considered on the next date. List on 3.1.2017.” 4. On 3.1.2017, the Court adjourned the matter for compliance of earlier orders, further directing presence of Judgment Debtor No.2 Rajan Pahwa for 1.3.2017, on which date the Court passed the following order: “OMP No.71 of 2015 On the previous date, JD No.2 Rajan Pahwa was directed to attend this Court in person and also to report compliance to the order passed on 20.12.2016. He is not present nor the previous order has been complied with. Mr. Avinash Jaryal, Advocate, learned counsel representing the said JD has pleaded no instructions. Appearance on behalf of the Judgment Debtors was entered on 29.11.2016. On that day, learned Counsel appearing on their behalf had sought time for filing power of attorney and to obtain instructions. On the date next thereto i.e. 20.12.2016 no one appeared on behalf of the respondents-JDs.
Avinash Jaryal, Advocate, learned counsel representing the said JD has pleaded no instructions. Appearance on behalf of the Judgment Debtors was entered on 29.11.2016. On that day, learned Counsel appearing on their behalf had sought time for filing power of attorney and to obtain instructions. On the date next thereto i.e. 20.12.2016 no one appeared on behalf of the respondents-JDs. Being so, the following order came to be passed on that day: “Respondent-Judgment Debtor No.2, Rajan Pahwa, Sole Proprietor of M/s Utkarsh Apparels, is directed to attend this Court in person on 3.1.2017 and to file his affidavit indicating therein the statements of his accounts and detail of other properties on the prescribed Form No.16(A) of Appendix-E to the Code of Civil Procedure. On his failure to do so, the plea of his detention in civil imprisonment will be considered on the next date. List on 3.1.2017.” However, on the next date i.e. 3.1.2017, neither JD No.2 Rajan Pahwa had attended this court in person nor filed the affidavit on Form No.16(A), Appendix-E to the Code of Civil Procedure. Being so, on the prayer made on his behalf by learned Counsel he was directed to attend this Court in person today and also to report compliance to the order ibid passed on 20.12.2016. Today again the said Judgment Debtor is absent. Learned Counsel has also pleaded no instructions. Such act and conduct of JD No.2 leave no manner of doubt that he is not only evading the order passed by this Court but also the payment of the decreetal amount to the petitioner-DH. The present, as such, is a fit case where said Rajan Pahwa JD No.2 has rendered himself liable to be detained in civil imprisonment initially for a period of one month on deposit of necessary detention charges and taking requisite steps within two weeks. Ordered accordingly. The warrant be issued qua arrest of aforesaid Rajan Pahwa accordingly. The application is allowed and disposed of.” 5. In the meanwhile, appellants filed an application, being OMP No.53 of 2017, seeking recall of order dated 1.3.2017 (reproduced supra), so passed in OMP No.71 of 2015 (sic, should be 70 of 2015), in which the Court passed the following order, on 9.3.2017: “OMP No.53 of 2017 Reply be filed within a week. List on 18th March, 2017.
In the meanwhile, appellants filed an application, being OMP No.53 of 2017, seeking recall of order dated 1.3.2017 (reproduced supra), so passed in OMP No.71 of 2015 (sic, should be 70 of 2015), in which the Court passed the following order, on 9.3.2017: “OMP No.53 of 2017 Reply be filed within a week. List on 18th March, 2017. The warrant of arrest ordered to be issued against the applicant/JD, however, be kept in abeyance in the meanwhile subject to the condition that in order to show his bonafide, he will deposit the decretal amount either in toto or some substantial amount and also subject to his appearance in this Court in person on the next date.” 6. From subsequent orders dated 18.3.2017, 5.4.2017, 9.5.2017 and 24.5.2017, it is apparent that the directions so issued by the learned Single Judge, vide orders dated 20.12.2016, 3.1.2017 and 1.3.2017 were never complied with, and repeatedly adjournments were sought for depositing the decretal or substantial amount thereof. 7. Subsequently, on 9.5.2017, the Court passed the following order: “Mr. Ankush Dass Sood, Sr. Advocate, on instruction from the said respondent/JD No.2, prays for and is granted two weeks time to comply with the order passed on the previous date, however, by way of last and final opportunity. List before appropriate Bench, as per roster of Boards on 24.5.2017. Copy dasti.” 8. It is in this backdrop that this Court asked the appellants to consider as to whether they would be open to have the matter amicably resolved or not. The answer is in the negative. 9. Suggestion of Mr. R.L. Sood, learned Senior Advocate, to the appellants for depositing the entire decretal amount in the Registry of this Court, also did not find favour. 10. At the time of issuance of notice in the appeal, i.e. on 1.6.2017 itself, Mr. R.L. Sood, learned Senior Advocate, had raised a preliminary objection, with regard to its maintainability. As such, it is this question, which we are deciding today. 11. Perusal of various orders passed by the learned Single Judge only reveals the same to be in the nature of consent order. In view of the same, whether it would be permissible for the appellants to file an appeal at all or not, being a different matter, for we otherwise proceed to examine its maintainability on merits, as the issue involved is of significance and importance. 12.
In view of the same, whether it would be permissible for the appellants to file an appeal at all or not, being a different matter, for we otherwise proceed to examine its maintainability on merits, as the issue involved is of significance and importance. 12. While inviting our attention to the decision rendered by the Hon’ble Supreme Court of India in Shah Babulal Khimji v. Jayaben D. Kania & another, (1981) 4 SCC 8 , Mr. Ankush Dass Sood, learned Senior Advocate, contends that the present appeal, assailing the orders passed in an application for execution, is maintainable, under Section 104 read with Section 43 of the Code of Civil Procedure, 1908 (for short, CPC). 13. Apex Court in Shah Babulal Khimji (supra) has simply observed as under: “78. Thus, after considering the arguments of Counsel for the parties on the first two limbs of the questions, our conclusions are:- (1) That there is no inconsistency between section 104 read with Order 43, Rule 1 and the appeals under the Letter Patent and there is nothing to show that the Letter Patent in any ways excludes or overrides the application of section 104 read with Order 43, Rule 1 or to show that these provisions would not apply to internal appeals within the High Court. (2) That even if it be assumed that Order 43, Rule 1 does not apply to Letter Patent appeals, the principles governing these provisions would apply by process of analogy. (3) That having regard to the nature of the orders contemplated in the various clauses of Order 43, Rule 1, there can be no doubt that these orders purport to decide valuable rights of the parties in ancillary proceedings even though the suit is kept alive and that these orders do possess the attributes or character of finally so as to be judgments within the meaning of Clause 15 of the Letters Patent and hence, appealable to a larger Bench. (4) The concept of the Letters Patent governing only the internal appeals in the High Courts and the Code of Civil Procedure having no application to such appeals is based on a serious misconception of the legal position. 79. This now brings us to the second important which is involved in this appeal.
(4) The concept of the Letters Patent governing only the internal appeals in the High Courts and the Code of Civil Procedure having no application to such appeals is based on a serious misconception of the legal position. 79. This now brings us to the second important which is involved in this appeal. Despite our finding that section 104 read with Order 43, Rule 1 applies to Letter Patent appeals and all orders passed by a trial edge under Clauses (a) to (w) would be appealable to the Division Bench, there would still be a large number of orders passed by a trial judge which may not be covered by Order 43, Rule 1. The next question that arises is under what circumstances orders passed by a trial judge not covered by Order 43, Rule 1, would be appealable to a Division Bench. In such cases, the import, definition and the meaning of the word ‘judgment’ appearing in Clause 15 assumes a real significance and a new complexion because the term 'judgment' appearing in the Letters Patent does not exclude orders not filing under the various clauses of Order 43, Rule 1. Thus the serious question to be decided in this case and which is indeed a highly vexed and controversial one is as to what the real concept and purport of the word 'judgment' used in Clause 15 of the Letters Patent. The meaning of the word 'judgment' has been the subject matter of conflicting decisions of the various High Courts raging for almost a century and in spite of such length of time, unfortunately, no unanimity has so far been reached. As held by us earlier it is high time that we should now settle this controversy once for all as far as possible.” 14. The said decision, in our considered view, specifically does not deal with appeals, arising out of orders passed under the provisions of the Act, a special legislation, a complete Code in itself, providing a right and procedure for execution of the award. 15.
The said decision, in our considered view, specifically does not deal with appeals, arising out of orders passed under the provisions of the Act, a special legislation, a complete Code in itself, providing a right and procedure for execution of the award. 15. At this juncture, we may observe three facts – (a) the issue in question, with regard to maintainability of an appeal against an order passed, with respect to enforcement of arbitral award under Section 36 of the Act, is no longer res integra, in view of law laid down by the Hon’ble Supreme Court of India in Fuerst Day Lawson Limited v. Jindal Exports Limited, (2011) 8 SCC 333 ; (b) provisions of clauses (a) to (f) of sub-section (1) of Section 104 of CPC came to be omitted with the incorporation of Act No.10 of 1940, being the Arbitration Act, 1940; and (c) Chapter IX of the Act specifically provides remedy of appeals against an order passed under the Act. 16. The Act is divided into four parts. Part-I deals with the conduct of arbitrations, which are domestic in nature; Part-II deals with enforcement of foreign awards; Part-III deals with conciliation, whereas Part-IV deals with the supplementary provisions. 17. We are concerned with the enforcement of domestic award, which is covered under Part-I of the Act. Clause (c) of sub-section (1) of Section 2, defines, what is an “arbitral award” and clause (e) of sub-section (1) of Section 2, defines what is a “Court”. In the case of arbitration, other than international commercial arbitration, “Court” means, the Principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration, if the same had been the subject matter of the suit. 18. Now, in the instant case, it is not in dispute that this Court does have original side jurisdiction and as such would fall within the meaning of “Court” so defined under the Act. 19. Chapters III, IV, V, VI, VII & VIII of Part-I deal with the composition, jurisdiction, conduct and the proceedings to be conducted by the Arbitral Tribunal. We need not refer to the relevant provisions, for it is not disputed before us that the Arbitral Tribunal, so constituted in terms thereof, has passed an award which has attained finality.
19. Chapters III, IV, V, VI, VII & VIII of Part-I deal with the composition, jurisdiction, conduct and the proceedings to be conducted by the Arbitral Tribunal. We need not refer to the relevant provisions, for it is not disputed before us that the Arbitral Tribunal, so constituted in terms thereof, has passed an award which has attained finality. Its legality is not an issue before us. 20. It is not disputed before us that with the dismissal of application, so filed under Section 34 of the Act, the award has attained finality. It being a different matter, as is so brought to our notice by Mr. Ankush Dass Sood, learned Senior Advocate, appellants are pursuing remedies in accordance with law. Be that as it may, the fact of the matter being that as on date, the award which came to be enforced, is subsisting and bindingly enforceable as a decree, in accordance with law. 21. Significantly, by virtue of Section 35 of the Act, there is finality attached to an arbitral award. 22. Section 36, Chapter-VIII, makes the award, having attained finality, to be enforceable, in accordance with the provisions of CPC, in the same manner as it were a decree of the Court. It is under this provision that the decree-holder (respondent herein) filed an application, seeking enforcement of the award against the judgment debtors (appellants herein). 23. It is a settled position of law that the Act is a self-contained Code, fully exhaustive in nature. It provides for substantive rights and prescribes the procedure for enforcement of an award. 24. Apex Court in Fuerst Day Lawson (supra), while dealing with the enforcement of an award under Part-II of the Act, had the occasion to examine, in extenso, various provisions for enforcement of the Act, both under Part-I and Part-II, as also the remedy of appeal so provided thereunder (Sections 37 and 50). 25.
24. Apex Court in Fuerst Day Lawson (supra), while dealing with the enforcement of an award under Part-II of the Act, had the occasion to examine, in extenso, various provisions for enforcement of the Act, both under Part-I and Part-II, as also the remedy of appeal so provided thereunder (Sections 37 and 50). 25. The Court, after examining the ratio of law laid down in its earlier decisions, more specifically in P.S. Sathappan (Dead) By LRs v. Andhra Bank Ltd. and others, (2004) 11 SCC 672 , reiterated the principles laid down in Shah Babulal Khimji (supra), to the effect that when an appeal is provided for under a special Act, Section 104 of CPC shall have no application, in relation thereto, as it merely recognizes such right, but does not provide for a right of appeal, and that if a status higher than what is given to a Letters Patent over the law passed by the Parliament, including the Code of Civil Procedure, is given, it would run contrary to the history to the Letters Patent, as also the Parliamentary Acts. 26. Having considered the aforesaid principles, as also the provisions providing for enforcement of an appeal under the Act, specifically dealing with the issue of enforcement of the award and any appeal lying under the Letters Patent jurisdiction of the High Court, the apex Court in P.S. Sathappan (supra) decided the issue in the following terms: “86. Such a scheme barring a Letters Patent Appeal is found to be existing in representation of the People Act. Under Article 329 (b) of the constitution, a single judge of a High Court exercises a jurisdiction to hear an election dispute. While doing so he exercises a special jurisdiction. Having regard to the history thereof as also the limited nature of appeal from judgment disposing of an election petition expressly provided under Section 116-A of the Representation of the People Act, it will be evident that a right of appeal under the Letters patent had been held to have been taken away by necessary implication. (See N.P. Ponnuswami v. Returning Officer, Namakkal Constituency, AIR 1952 SC 64 , Upadhyaya Hargovind Devshanker v. Dhirendrasinh Virbhadrasinhji Solanki, (1988) 2 SCC 1 , and Dipak Chandra Ruhidas v. Chandan Kumar Sarkar, (2003) 7 SCC 66 ) 87.
(See N.P. Ponnuswami v. Returning Officer, Namakkal Constituency, AIR 1952 SC 64 , Upadhyaya Hargovind Devshanker v. Dhirendrasinh Virbhadrasinhji Solanki, (1988) 2 SCC 1 , and Dipak Chandra Ruhidas v. Chandan Kumar Sarkar, (2003) 7 SCC 66 ) 87. Even in the aforementioned cases also, it has been held that a Letters Patent appeal may be barred by implication. 88. The question, however, may be different when an appeal is provided for under a special statute. It is trite that Section 104 (1) of the Code saves such an appeal. Section 104, therefore, saves such appeal in view of the appeals provided under the special statute but it does not create a right of appeal as such, and it does not, therefore, bar any further appeal also, if the same is provided for under any other Act for the time being in force which would include a Letters Patent. Whenever the statute provides such a bar, it is so stated either expressly or by necessary implication. 89. It is true that Section 100-A of the Code contains a non-obstante Clause as regards the overriding effect of the said provision over the Letters Patent of the High Court but the same, in our considered opinion, was done by way of ex abundanti cautela. Furthermore, the Code of Civil Procedure (Amendment) Act, 1976 and the Code of Civil Procedure (Amendment) Act, 2002 being subsequent statutes, the same may not have any application in relation to the interpretation of sub-section (2) of Section 104 of the Code. 90. It is not necessary, in my considered opinion, that the provision restricting a further right of appeal must specifically mention the provisions of the Letters Patent of the High Courts or any other statute inasmuch as the same has to be construed having regard to the scheme thereof. What is recognized under sub-section (1) of Section 104 of the Code following the decisions of the Calcutta, Madras and Bombay High courts in Toolsee Money Dassee v. Sudevi Dassee, ILR (1899) 26 Cal. 361, Sabhapathi chetti v. Narayanasami Chetti, ILR (1902) 25 Mad. 555, and Secy of State for India in Council v. Jehangir Maneckji Cursetji, (1902) 4 Bom LR 342, respectively, are those appeals which are provided for under special statute and not an appeal from the appellate order therein.
361, Sabhapathi chetti v. Narayanasami Chetti, ILR (1902) 25 Mad. 555, and Secy of State for India in Council v. Jehangir Maneckji Cursetji, (1902) 4 Bom LR 342, respectively, are those appeals which are provided for under special statute and not an appeal from the appellate order therein. Let us at this juncture notice as to what had been decided in those cases although the position in law is, to some extent, sought to be clarified in Shah Babulal Khimji v. Jayaben D. Kania, (1981) 4 SCC 8 which would fall for discussions hereinafter in some details. 91. In Toolsee Money Dassee (supra), the question which arose for consideration was whether refusing to set aside an award against an order by a single judge of the high Court in the original side of the appeal would be governed by Section 588 of the Code of Civil Procedure, 1861. The said contention was rejected on the premise that Section 588 of the Code does not control appeals under special statute. The Court followed Hurrish Chunder chowdhry v. Kali Sunderi Debia, ILR (1882) 9 Cal 482 (PC).” 27. Thus, we are of the considered view that there being no specific provision for filing an appeal under Section 104 or Order 43 of CPC and a special mechanism being provided under the provisions of the Act, the present appeal under the provisions of the Letters Patent, would not be maintainable. 28. With profit, we may also take note of the decision rendered by a Division Bench of High Court of Bombay in Jet Airways (India) Limited v. Subrata Roy Sahara, decided on 17.10.2011, to which our attention is invited by Mr. R.L. Sood, learned Senior Advocate, wherein also the Court had an occasion to address an identical issue, i.e. maintainability of the appeal under Clause-15 of the Letters Patent, more specifically, in view of the exclusionary clause under Section 37 of the Act. The Court observed: “22. In fact a perusal of 1996 Act and the 1940 Act will indicate that both the enactments provide for filing of an appeal against only some specified orders and do not provide for an appeal against every order passed in the proceedings under the 1996 Act.
The Court observed: “22. In fact a perusal of 1996 Act and the 1940 Act will indicate that both the enactments provide for filing of an appeal against only some specified orders and do not provide for an appeal against every order passed in the proceedings under the 1996 Act. It is well established that general law cannot defeat a provision of special law to the extent to which they are in conflict; else effort has to be made on reconciling the two provisions by homogeneous reading. In the present case, the provisions of section 37 (the relevant portion of which is pari materia relevant portion of section 39 of 1940 Act) leave no manner of doubt that the provisions of the special enactment will prevail over the general law namely, the 1908 Code. The Statutory Scheme of 1996 Act and the Letters Patent and the binding precedents of Supreme Court and this Court lead us to only one conclusion that clause 15 of the Letters Patent are impliedly excluded by the 1996 Act.” 29. Further, what is a “judgment” is not defined under the Act nor the word “decree”. 30. In Paramjeet Singh Patheja v. ICDS Ltd., (2006) 13 SCC 322 , the apex Court, while construing the meaning of word “decree” under the Act, observed that the words “as if” in Section 36 of the Act demonstrate that “award” and “decree” are not the same. 31. The Act creates a legal fiction for a limited purpose of enforcement of a decree, not intending to make it a decree for all purposes, under all other statutes. 32. This takes us to yet another question, though unrelated to the controversy, in view of our finding on the main issue, and that being as to whether the impugned order is really a “judgment” within the meaning of clause-15 of the Letters Patent. 33. Apex Court in Shah Babulal Khimji (supra), as we have already noticed, has held “judgment” to mean a statement given by the Judge of the grounds of a decree or order. The Court clarified that in the course of trial, a trial Judge may pass number of orders, whereby some of the various steps to be taken by the parties in prosecution of the suit may be of a routine nature while other orders may cause some inconvenience to either of the parties.
The Court clarified that in the course of trial, a trial Judge may pass number of orders, whereby some of the various steps to be taken by the parties in prosecution of the suit may be of a routine nature while other orders may cause some inconvenience to either of the parties. These orders are purely interlocutory in nature and would not constitute a “judgment”, for a “judgment” would mean that which decides matters of moment or affect vital and valuable rights of the parties and causing serious injustice to the party concerned. 34. Now in the instant case, as we have already observed, the orders passed are more in the nature of consent, repeatedly asking for time for depositing the amount. Thus, in our considered view, the order impugned cannot be said to be in the nature of a “judgment” deciding the rights of the parties. 35. There is yet hurdle, which the appellants needs to cross. The appeal came to be preferred on 26.5.2017. The first of the orders came to be passed on 29.11.2016, whereafter effective orders came to be passed on 3.1.2017, 1.3.2017 and 9.3.2017. The appeal does not contain prayer for condonation of delay, either in the body or by way of separate application. We may also observe that objections, under Order 47 of CPC (OMP No.61 of 2017) came to be filed by the appellants on 16.3.2017, which was subsequent to passing of orders dated 3.1.2017, 1.3.2017 and 9.3.2017. Limitation is thus an issue not addressed by the appellants at all. 36. For all the aforesaid reasons, we hold the appeal to be not maintainable and the same is accordingly dismissed. 37. Needless to add, application for execution shall be considered and decided, in accordance with law, more so in view of directions contained in our order dated 21.6.2017. Pending applications, if any, also stand disposed of.