Calcutta High Court

Sambhu Nath Ghosh & Co vs State Of West Bengal & Anr on 20 August, 2025

Author: Shampa Sarkar

Bench: Shampa Sarkar

OD-2

                                ORDER SHEET

                   IN THE HIGH COURT AT CALCUTTA
                 ORDINARY ORIGINAL CIVIL JURISDICTION
                            ORIGINAL SIDE

                                AC/2/2010
                        SAMBHU NATH GHOSH & CO.
                                   VS
                       STATE OF WEST BENGAL & ANR

BEFORE:
THE HON'BLE JUSTICE SHAMPA SARKAR
Date : 20th August, 2025.

                                                                      Appearance:
                                                        Ms. Noelle Banerjee, Adv.
                                                      Ms. Nairanjana Ghosh, Adv.
                                                           ... for the award holder

                                                       Ms. Nilanjana Adhya, Adv.
                                                        Mr. Paritosh Sinha, Adv.
                                                       Mr. Arindam Mandal, Adv.
                                                         Mr. Altamash Alim, Adv.
                                                        Ms. Swagata Ghosh, Adv.
                                                           ...for the award debtor


          The Court : Ms. Adhya, learned advocate for the award debtor

submits that the award debtor is in the process of challenging the order

dated July 17, 2025 passed in APO 108 of 2024 and AP 654 of 2011.

          The Hon'ble Division Bench had dismissed the appeal from the

order refusing to set aside the award. The award holders have pressed

hard for an order to draw up the decree, in view of the dismissal of the

appeal.

          It is submitted that the law has been well-settled by various court,

to the effect that, pendency of an appeal before a superior forum should

not be a deterrent for the Court to pass judgment and direct drawing up
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of the decree in terms of the award, in exercise of power under Section 17

of the Arbitration Act, 1940.

       Reliance has been placed on the following decisions:

       P. C. Ray and Co.(India) Pvt. Ltd. Vs. Union of India reported in

AIR 1971 Cal 512, Union of India Vs. N. P. Singh reported in AIR

1963 Cal 1, Jaykumar Jain and others V. Om Prakash and another

reported in ILR 1972 Madhya Pradesh 173, Bharat Petroleum

Corporation Ltd. V. Reliance Industries Ltd. reported in 2006 (5) Mh.

L.J. 624.

       In P. C. Ray and Co. (supra) the Hon'ble Division Bench of this

Court in paragraph 13 held that, although under Section 17 of the

Arbitration Act, no appeal could be preferred against the judgment and

decree passed in terms of the award except for the reasons mentioned

therein, but in the event an appeal against the order of dismissal of an

application for setting aside the award was allowed, the award would be

set aside automatically as a consequence thereof.

       In Union of India Vs. N.P Singh (supra), the Division Bench of

the Calcutta High Court observed that if an award was set aside on an

application under section 39 of the Arbitration Act or in an appeal

therefrom, the decree which was directed to be passed and carried into

effect remained operative. Even if the decree remained there technically,

nothing was left for execution under such a decree. If a decree of such

nature was attempted to be executed, it would always remain subject to

the objection that the award on which it was passed had been set aside

and nothing was left to be executed.
                                      3


       In Jaykumar Jain and others V. Om Prakash and another

reported in ILR 1972 Madhya Pradesh 173, it was held that the fact

that a decree had been passed would not preclude an appeal against the

order refusing to set aside the award. If an order refusing to set aside the

award was ultimately set aside in appeal, the consequence would be that

the decree would lapse. Thus, there was no bar to preferring an appeal in

case a decree is passed in terms of an award. The decision of Bharat

Petroleum Corporation Ltd. V. Reliance Industries Ltd. reported in

2006 (5) Mh. L.J. 624 also clarifies the position of law. The relevant

paragraphs are quoted below:

        "6. The petition was resisted by Mr. Gupte on behalf of the
        respondent, only on the ground that the petitioner's Appeal

against the said award is pending in the Supreme Court of India.

7. The above facts demonstrate three things. The respondent's challenge to the award failed before the learned Single Judge and the Appeal Court of this Court. Secondly, an application for stay of the execution of the award was obviously made on behalf of the respondent before the Appeal Court, which was disposed of by the Appeal Court, granting the respondent six weeks time to comply with the award. Thirdly, the application to continue that stay though made, was not pressed before the Supreme Court.

8. There is no dispute about the fact that the petitioner would normally be entitled to a decree in terms of the award. The only question is whether the pendency of the Appeal in the Supreme Court debars this Court from making the award a rule of this Court and passing a decree in terms thereof ?

9. Section 17 of the Arbitration Act reads as under:

"17. Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award."

10. In Madan Lal vs. Sunder Lal and anr., AIR 1967 SC 1233, after considering the scheme of the Act and setting out section 17, the Supreme Court held as under:

"(7). This analysis of the relevant provisions of the Act contained in Chapter II which apply mutatis mutandis to arbitrations of the other two types shows that the Court has to pronounce judgment in accordance with the award if it sees no cause to remit the award or any of the matters referred to arbitration for reconsideration, or if it sees no cause 10 set aside the award. The Court has to wait for the time given to a party to make an application for setting aside the award and where such an application has been made (to) the Court has to decide it first and if it rejects it the Court proceeds to pronounce judgment according to the award. It is clear, therefore, from section 17 that an application to set aside the award is contemplated therein and it is only when no such application has been made within the time allowed or if such an application has been made within the time allowed or if such an application has been filed and has been rejected that the Court proceeds to pronounce judgment in terms of the award." (emphasis supplied)

11. The Supreme Court has expressly held that the Court "has to"

pronounce judgment in accordance with the award if it sees no cause to remit or set aside the same. It does not permit the Court any discretion in the matter.

12. In Scottish Union and National Insurance Co. vs. Smt. Saraswati Sajnani, AIR 1960 Calcutta, 22, the Calcutta High Court held:

"(4)....................................................................................

.............................................. The scheme of the Act is that after the award is made it has to be filed in Court. When it is filed in Court, the Court dealing with the award is given power to remit or to set it aside and when it sees no reason to remit or to set it aside, it is directed to proceed to pass judgment on award. All these things under the Act are to be done by the Court dealing with the award. The Court is either to remit or set aside the award and in case when the Court finds no reason to do either, to pass a judgment in terms of the award. The Court is not called upon, in my judgment, under the Act, to wait and find out whether its order refusing to remit or to set aside the award has become final and unassailable in the sense that the time for appeal is gone or that the appeal if taken is dismissed in order to assume jurisdiction to proceed to pronounce judgment in accordance with the award. The Court dealing with the award is not required to look beyond itself and proceed to deal with the matter on the footing that so far as it is concerned there is an order of refusal irrespective of the fact that an appeal might be taken or has been taken against the order or that the order passed by the Court might be set aside."

'(5).................................................................................... ............................................. The language of section 17 of the Act does not indicate any intention that judgment upon

award can only be pronounced after the order refusing to set aside the award has become final. The language on the other hand indicates that the next step to be taken by the Court after refusing to set aside the award is to pass a judgment in terms of the award and to give and extremely artificial construction to as to prevent the Court from making the award a rule of the Court for an indefinite period of time." The judgment of the Calcutta High Court is consistent with the ratio of the judgment in Madan Lal vs. Sunder Lal (supra).

Under such circumstances, Ms. Adhya's apprehension that once

the decree is drawn up, the right of the award debtor to prefer an Special

Leave Petition perishes, is unfounded. The position has been adequately

clarified by judicial authorities which have been discussed hereinabove.

The right to challenge the order of the Hon'ble Division Bench, is not

curtailed by the passing of the decree. The special Leave Petition is yet to

be filed, and the award debtors need not have to wait for an unending

period.

Accordingly, I pass judgment on the award and direct a decree to

be drawn up in accordance with the award dated October 23, 2010.

AC/2/2010 is disposed of.

(SHAMPA SARKAR, J.)