* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ EFA Nos.11/2012, 14/2012 and 15/2012
% 13th April, 2012
1. EX.F.A. 11/2012
L & T FINANCE LTD ..... Appellant
Through: Mr. Rajesh Jangra, Adv.
versus
BRAHAM PAL & ANR ..... Respondents
Through:
WITH
2. EX.F.A. 14/2012 L & T FINANCE LTD ..... Appellant Through: Mr. Rajesh Jangra, Adv.
versus
RAJ KUMAR & ANR ..... Respondents
Through:
AND
3. EX.F.A. 15/2012
L & T FINANCE LTD ..... Appellant
Through: Mr. Rajesh Jangra, Adv.
versus
SAHANSAR PAL & ORS ..... Respondents
Through:
EX.F.A. No.11/2012, EX.F.A. No.14/2012 & EX.F.A. No.15/2012 Page 1 of 5
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
CM No.6431/2012(for exemption) in EFA No.11/2012, CM No.6471/2012(for exemption) in EFA No.14/2012 & CM No.6522/2012(for exemption) in EFA No.15/2012 Allowed, subject to all just exceptions.
Applications stand disposed of.
EFA No.11/2012, EFA No.14/2012 & EFA No.15/2012
1. These three appeals are being disposed of by this common order as the challenge is to the identical orders of the Executing Court. By the impugned orders dated 9.2.2012, the Executing Court has dismissed the execution petitions filed for execution of the Awards passed in favour of the appellant/Finance Company. The Execution petitions were dismissed without even issuing notices to the respondents.
2. Executing Court has dismissed the execution petitions by holding that since no disputes had arisen, the Arbitrator could not have entered into the reference and passed the Awards. It has been held that since the Awards were passed without disputes existing, the Awards were EX.F.A. No.11/2012, EX.F.A. No.14/2012 & EX.F.A. No.15/2012 Page 2 of 5 null and void/without jurisdiction, and hence the Executing Court could not implement such Awards. The Executing Court has held that merely because one person asserts a right and which is repudiated by another is not a difference, i.e. merely because the appellant/Finance Company sought payment, and which could not be paid by the borrowers, there is no dispute or difference by mere non-payment and therefore the Awards could not be passed. The Executing Court has relied upon two judgments in the cases of Dilip Construction Company vs. Hindustan Steel Ltd. WIR 1973 Madhya Pradesh 261 and M/s Pearl Hosiery Mills Ludhiana Vs. Union of India and Anr.
3. So far as the judgment in the case of M/s Pearl Hosiery (supra) is concerned, the said judgment was passed under the Arbitration Act, 1940 wherein an application was filed under Section 34 of the Act to stay the suit on account of the fact that the parties were governed by an Arbitration Agreement and therefore the disputes ought to be referred to the Arbitration. It was held by a learned Single Judge of this Court in the case of M/s. Pearl Hosiery (supra) that since what were the disputes which were sought to be referred to Arbitrator had not been stated in application under Section 34 of the Arbitration Act, 1940, therefore, the application did not lie. This EX.F.A. No.11/2012, EX.F.A. No.14/2012 & EX.F.A. No.15/2012 Page 3 of 5 judgment has therefore no application in the facts of the case where Award has been passed after issuing notices to the respondents in the cases who were the principle borrowers and the guarantors.
4. So far as the judgment in the case of Dilip Construction Company (supra) is concerned, the said judgment holds that there is a want of inherent jurisdiction in Umpire unless there is reference by both sides and Award can be challenged at any stage even in collateral proceedings. It was also held in the judgment of the Dilip Construction Company (supra) that the parties who appear before the Arbitrator after objecting to his jurisdiction cannot said to have waived their rights to challenge the Award on the ground of Award being passed by the Arbitrator/Umpire without authority. This judgment also therefore has no application in the facts of the cases where Awards have been passed after notices were issued to the principal borrowers and guarantors who failed to appear after due service, resulting in passing of the Awards.
5. I am in fact perturbed by not only the procedure adopted by the Executing Court but also by the impugned order on merits. Firstly, the Executing Court cannot go behind the judgment and decree, and which are Awards in these cases. The Executing Court by arriving at a total perverse EX.F.A. No.11/2012, EX.F.A. No.14/2012 & EX.F.A. No.15/2012 Page 4 of 5 finding, to say the least, has held that Executing Court can go behind the Award because the Award is without jurisdiction inasmuch as no disputes existed. This line of reasoning is unheard of, if I may say so. Secondly, the execution petitions were dismissed even without issuing notices to the respondents in the cases. Finally, if there are non-payment of dues by the principal borrowers and the guarantors because of which arbitration proceedings are initiated, and which thereafter results in passing of the Awards after issuing due notices to the respondents in the proceedings, it cannot be said that such Awards are without jurisdiction for the Executing Court to hold the same to be without jurisdiction allegedly because no disputes exist inasmuch as non-payment of dues is very much a dispute.
6. Appeals are accepted and the impugned orders are set aside.
7. Since the impugned orders are totally perverse and have absolutely no basis in law, let copies of the impugned orders and a copy of today's order be sent by the Registry to the Committee of Inspecting Judges of the concerned ADJ.
VALMIKI J. MEHTA, J APRIL 13, 2012 ak EX.F.A. No.11/2012, EX.F.A. No.14/2012 & EX.F.A. No.15/2012 Page 5 of 5