The High Court of Calcutta, while dismissing a petition filed under section 37 of the Arbitration and Conciliation Act, 1996 preferred against an interim order passed by the learned Arbitrator under Section 17 of the said Act, held that all the parties in a proceeding of a civil nature, including an appeal, are bound by the decision of a competent court/forum.
Brief Facts:
The arbitral proceedings were initiated by respondent no.1, one of the partners of a Limited Liability Partnership (LLP), the proforma respondent herein, against the other partners, who are the appellants before this Court. One of the reliefs sought in the statement of claim was the induction of the claimant/responder no.1 as a partner in the LLP, which has been rendered infructuous in view of such induction having taken place in the meantime. The claimant has sought a further award setting aside the financial statement for the financial years 2019-2020 and 2020-2021. Two separate appeals were filed under Section 37, one by the LLP and the present by the respondents in the arbitral proceeding, that is, the other partners than the claimant. The LLP’s appeal bearing APO 65 of 2023 was dismissed by a judgment and order dated November 24, 2023, passed by a co-ordinate Bench of this Court. In the said appeal, the present appellants were impleaded as respondents.
Contentions of the Petitioner:
The learned counsel appearing on behalf of the Petitioner submitted that the said judgment does not debar the appellants from moving the present challenge. He argued that the other appeal bearing APO 65 of 2023 was preferred by the LLP, which is a separate juristic entity under the Limited Liability Partnership Act, 2008.
Contentions of the Respondent:
The learned counsel appearing on behalf of the Respondent submitted since Section 34 contemplates a challenge against the final award in an arbitral proceeding, an interlocutory challenge under Section 37 cannot be of wider scope than such a final challenge. He argued that the present appellants are barred by the principle of res judicata in view of the dismissal of the previous appeal of the LLP.
Observations of the court:
The court noted that there cannot be any manner of doubt on the legal proposition that an LLP, in law, is an independent and separate juristic entity than its individual partners. The LLP Act itself provides so. The question here is whether, even if the partners are taken to be completely independent and separate entities from the LLP, the dismissal of the LLP’s appeal operates as a bar.
The Court observed that the co-ordinate Bench while deciding APO 65 of 2023, was fully aware of the fact that there was a different appeal (the present one) pending at the behest of the partners in their individual capacity. Despite having such knowledge, the court consciously took a decision to direct the present appellants to be added as respondents to the previous appeal and to decide the same first. The Court said that all the parties in a proceeding of a civil nature, including an appeal, are bound by the decision of a competent court/forum. The present appellants, who were specifically impleaded as respondents in APO 65 of 2023, had very well available to them the right to join in with the appellant-LLP and ventilate their grievances.
The decision of the Court:
The Calcutta High Court, dismissing the petition, held that it would be a travesty of justice and an abuse of the process of court if the self-same issues which were conclusively decided in APO 65 of 2023 are reopened by this Court, sitting in coordinate jurisdiction.
Case Title: Gaurav Churiwal v Concrete Developers LLP & Ors.
Coram: Hon’ble Justice Sabyasachi Bhattacharyya
Case No.: EC/283/2023
Advocate for the Petitioner: Mr. Ratnanko Banerji
Advocate for the Respondent: Mr. Sabyasachi Chaudhury
Read Judgment @LatestLaws.com
Picture Source :
