Bombay High Court
Manoj Javeri Stock Broking ... vs Gopika S. Mehta on 14 June, 2016
Bench: Anoop V. Mohta
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m.IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 209 OF 2016
IN
NOTICE OF MOTION NO. 689 OF 2015
IN
ARBITRATION PETITION (L) NO. 1124 OF 2015
Manoj Javeri Stock Broking Pvt. Ltd.
A Company incorporated under the provisions
of The Companies Act, 1956 and having its
office at 1117, P.J. Towers,
Dalal Street, Fort, Mumbai 400 001. ...Appellant.
(Orig. Petitioner)
Vs.
Gopika S.Mehta
of Mumbai, Indian inhabitant,
residing at Arham, Suit # 2, Ground Floor,
Plot No. 266, Near Gandhi Market,
Sion (East),
Mumbai-400 022. ...Respondent.
Mr. Simil Purohit i/b M/s. Purohit & Co for Appellant.
Mr.Mayur Khandeparkar a/w Mr. Biswadeep Chakravorty i/b M/s.
Dave & Girish & Co. for Respondent.
CORAM: ANOOP V.MOHTA &
G.S.KULKARNI,JJ.
DATE: 14TH JUNE, 2016
ORAL JUDGMENT (PER ANOOP V. MOHTA, J.):-
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This Appeal is filed by the Appellant-Original Petitioner
against the rejection of Petition under Section 34 of the Arbitration
and Conciliation Act 1996, (for short, "the Arbitration Act"), on the
ground of delay and not on merits.
2 The events show as under-
On 04.02.2011, the Respondent filed Arbitration
Reference before the Arbitral Tribunal, Bombay Stock Exchange,
against the Appellant for delivery of 213,333 shares of Wipro Ltd.
along with all accruals etc. On 17.09.2013, the Arbitral Tribunal
passed an award directing the Appellant to pay to the Respondent.
Respondent filed an Appeal.
3 On 04.04.2014, the Appellate Tribunal passed an award
directing the Appellant to pay to the Respondent an amount of
Rs.6,99,68,957,34 with interest. On 09.04.2014, the impugned
Award was served upon the Appellant. On 18.07.14, the Arbitration
Petition (L) No.1124 of 20134 was filed under section 34 of the
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Arbitration Act by the Appellant after three months had elapsed from
the date of receipt of the arbitral award with a delay of 9 days.
4 The Petition was served by the Appellant on the
Respondent only on 08.07.2015 i.e. after almost one year. On
11.11.2014, Execution Application No. 575 of 2015, filed by the
Respondent in respect of the impugned award and served upon the
Appellant on 07.07.2015. On 31.03.2015, after period of more than
8 months from the date of lodging and non-removal of objections by
the Appellant, the Prothonotary and Senior Master, passed a
conditional order under Rule 986 of the Rules. On 28.04.2015, the
Appellant filed Notice of Motion No. 689 of 2015 in Arbitration
Petition (L) No.1124 of 2014 for condonation of delay in filing the
Petition. On 30.09.2015, affidavit-in-reply to the Notice of Motion
filed by the Respondent. By order dated 12.10.2015, this Court
dismissed the Notice of Motion and the Petition. Application of
Appellant for stay of impugned order dated 12.10.2015 was also
rejected. On 31.10.2015, a certified copy of the order was delivered
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to the Appellant. This Appeal was filed on 06.11.2015 under Section
37 of the Arbitration Act against the impugned order.
5 Admittedly, the Application under Section 34 of the
Arbitration Act was filed on 18.07.2014. The date of impugned
award is 09.04.2014. There was a delay of 9 days in filing Section
34 Petition. Considering the scheme of Section 34 (3) of the
Arbitration Act, Notice of Motion for condonation of delay was not
filed. The Petition was kept pending under objection and time was
granted from time to time for removal of the office objections, by the
learned Prothonotary and Senior Master. Ultimately, the Petitioner
has filed Notice of Motion for condonation of delay in filing Section
34 Petition. This is admittedly after a period of more than 8 months
from the date of lodging of Section 34 Petition. This Notice of
Motion for condonation of delay, as taken out by the Appellant, was
opposed by the Respondent.
6 The learned Single Judge, after hearing the parties, by
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impugned order dated 12.10.2015, declined to condone the delay,
which resulted into the rejection of Section 34 Petition. That itself
means, Award dated 09.04.2014 passed by the learned Arbitrator for
an amount of Rs.6,99,68,957.34 and interest thereon, has attained
finality.
7 The learned counsel appearing for the Respondent
resisted the contentions so raised by learned counsel appearing for
the Appellant to condone the delay as the Notice of Motion was filed
beyond the statutory period of 120 days (i.e. 90+30 days), though
Section 34 Petition was filed within the statutory period as referred
above. The main contention, so raised is that, in view of Section 34
(3) of the Arbitration Act, there would be no Petition under Section
34 of the Arbitration Act in the absence of the Notice of
Motion/Application for condonation being filed within 120 days of
the award. That itself is sufficient for the Respondent to proceed and
file Execution Application. If there is a delay to file Petition within
90 days, in view of the provisions itself, then the Application should
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have been filed with averments about sufficient reasons for
condonation of delay and/or reasons for not filing the Application
within time. Therefore, such filing of Notice of Motion after a period
of eight months, itself amounts to non-filing of Section 34 Petition
within the period so prescribed. It is admittedly beyond 120 days.
Therefore, considering the scope and purpose of the Arbitration Act,
the submission that such delayed Application under Section 34, as
rejected by the learned Judge, need not be interfered with.
8 We have considered the scheme, as well as, the object of
the Arbitration Act. There is substance in the contentions so raised
by the learned counsel for the Respondent that in filing such petition
and keeping it under objection for so many months itself would
definitely defeat the purpose of the Award which was after hearing
both the parties by the authorities/Arbitrator. By filing such a
petition and keeping it pending amounts to deliberate attempt to
delay execution proceedings arising out of the Award in question.
However, a plain reading of the section itself shows that the
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application need to be filed by the aggrieved party against the Award
within a period of 90 days and if sufficient cause is made out and the
Court is satisfied about the same, such an application may be
entertained within a further period of 30 days but not thereafter. In
the present case, as noted the application so filed is within the period
of 120 days but definitely beyond a period of 90 days. Therefore, it
is not the case that no application was filed within the statutory
period of 120 days. The delay of 9 days in filing the application
therefore is required to be considered by the Court to entertain the
application as filed.
9 Considering the averments so made and reasons so set
out, so far as delay of nine days is concerned, we see that there is no
reason not to accept the same in the interest of justice as the
appellant will have no other remedy under the law to challenge the
Award.
10 It is settled that Section 5 of the Limitation Act is not
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applicable under Section 34 (3) for condoning delay, once the
mandatory 120 days are crossed. The sufficient reason for delay
between three months and further 30 days is governed by the same
provisions. Section 34 is in the nature of a summary proceedings.
The future course of action for execution of Arbitration award
depends upon the final decision on this Application. The issue of
condoning delay between three months 30 days and the exercise of
power under Section 34 is settled in by the Supreme Court (Three
Judges Bench) in Union of India Vs. Tecco Trichy Engineers &
Contractors 1 and further followed in State of Himachal Pradesh &
Anr. Vs. Himachal Techno Engineers & Anr. 2
11 It is therefore, an important legal right available to
challenge the award and its effect. The rejection of this application
even on the ground of delay, would definitely result in confirming
the award being available to a party for its execution. The next
remedy is only an Appeal under Section 37, as would be against the
1 (2005) 4 SCC 239
2 (2010) 12 SCC 210
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rejection of Section 34 Petition, being rejected on the ground of
delay. The decision on merit or on ground of delay itself, without
touching the challenges to the award, the result is same for the
awardee; one who would suffer the award.
12 So far as delay of nine months and odd in not
taking steps and keeping the petition pending for admission and/or
for not removing office objections this in our view, is an
unacceptable approach. It is necessary for the Office/Department to
consider the purpose of Arbitration and Conciliation Act, 1996 and
the efficacy thereof while granting time to remove office objections.
A reasonable time is expected to be granted to remove such office
objections but instead extending of time to this unreasonable extent
would definitely and indirectly amount to hurdle in the execution of
the Award which was admittedly filed by the petitioner.
13 We are inclined to observe that Office may take
appropriate steps in such matters and grant a reasonable time to
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remove office objections. This Court has already directed the Office
to take appropriate steps in such matters to restrict time and grant a
reasonable time. It affects the rights of the parties though there is
Award in their favour. This is also in the background of The
Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts Act, 2015 which also mandates expeditious
disposal of cases. Grant of such extensions therefore for want of
removal of office objections definitely cause injustice and hardship
apart from breach of the basic provisions of the Act in question.
14 However, considering the facts and circumstances, we
are not inclined to accept the case of the respondent that there was a
further delay of more than 8 months in taking out this notice of
motion which needed to be considered and thus not to condone the
delay. As admittedly noted, the appeal under section 34 of the Act
was filed within the statutory period of 120 days. Therefore, in the
interest of justice and to grant one more opportunity to enable the
appellant to contest the application so raised, we are inclined to
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condone the delay.
15 However, considering the totality of the matter and as we
are inclined to pass an order for condoning the delay in filing the
petition it shall be subject to payment of costs of Rs.1,00,000/-
(Rupees One Lac) to the respondents. This is in the background that
the agreement between the parties was definitely a commercial
agreement knowing the law and its position though the First
Appellate Tribunal maintained the Award against the appellant to
the extent of Rs.6,99,68,957.34 yet application was filed beyond a
period of 90 days and was kept under objection and definitely was
not filed along with a notice of motion for condonation of delay of
nine days. Thereafter, the office objections were not removed for
more than 15 months which definitely resulted in delaying the
proceedings and in obstructing the execution of the Award so passed
in view of the section 34 petition being filed and pending. This
aspect of delay in our view, needs to be taken note of while
condoning the delay in such matters and therefore we are imposing
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costs of Rs.1,00,000,/- herein above.
16 Resultantly, the following order:-
ORDER
a) Appeal is allowed.
b) Impugned Award dated 9th April, 2014 is quashed
and set aside.
c) The delay in filing the Application under Section 34
of the Arbitration Act is condoned, subject to the
costs of Rs.1,00,000/- to be paid by the Appellant to
the Respondent.
d) Petition under Section 34 of the Arbitration Act is
restored to file, subject to office objections to be
removed by the Appellant within a period of four
weeks from today and be listed before the learned
Single Judge for admission and hearing.
e) Costs to be paid directly to the Respondent within a
period of two weeks from today.
(G.S.KULKARNI, J.) (ANOOP V. MOHTA, J.)
