Vindhya Telelinks Ltd. vs Bharat Sanchar Nigam Ltd. And Anr.
2003 Latest Caselaw 105 Del

JUDGMENT

S. Mukerjee, J.

1. This execution petition involves an interesting point of law.

2. M/s Vindhya Telelinks Ltd. filed an execution petition in relation to the Award dated 25th September, 2001, seeking execution thereof in the manner of a decree.

3. Under the Arbitration Act, 1996 it is provided in Section 36, that an Award may be enforced as a decree only in either of the two eventualities referred to below :-

   

 
 (a) When time for making an application   to set aside the arbitral award under   Section  34 has expired, or  
 

 
 (b) When such application having been     made, same has been refused.  
 

 
4. In the present case admittedly no application for setting aside the Award has been made up to the relevant time, and as such no question arises of the same having been refused. 
 

 
5. As such it has to be considered whether the statutorily prescribed time for making of such an application (Objections), has expired or not. 
 

 
6. Reference may be made to Section 34(3) of the Arbitration Act, 1996, which reads as under :- 

"Section 34(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the Arbitral Award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the Arbitral Tribunal."

7. As a perusal of the above quoted provisions of Section 34(3) will reveal, the time for filing of objections would expire upon either of the following stages:

"1. Three months from the date of receipt of the arbitral award;

2. Three months from the date of disposal of the application if any filed under Section 33 of the Act."

8. Since a reference has come to Section 33 of the Act, it may be useful to set out the provisions thereof for the convenience of reference:-

"33. Correction and interpretation of award: additional ward.-(1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties-

(a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award;

(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.

(2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award.

(3) The arbitral tribunal may correct any error of the type referred to in clause (a) of sub-Section (1), on its own initiative, within thirty days from the date of the arbitral award.

(4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award.

(5)If the arbitral tribunal considers the request made under sub-Section (4) to be justified, it shall make the additional arbitral award within sixty days from the receipt of such request.

(6)The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, given an interpretation or make an additional arbitral award under sub-Section (2) or sub-section (5).

(7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral award made under this Section."

9. As facts transpired in the present case, the Award dated 25th September, 2001 was received by the respondent on 27th October, 2001 viz within thirty days thereof. The respondent claims to have filed an application under Section 33 of the Act, seeking inter-alia interpretation of the Award, and praying for an additional Award.

10. The contention of the respondent is that having filed an application under Section 33, as such till the disposal thereof is not communicated by the Arbitrator, the period of 3 months as contemplated by contingency (ii) in para 7 above, would not commence. The further corollary of this contention, is that if the time itself does not commence, then in terms of contingency (a) in para 4 above, the time of making application to set aside the Arbitral Award, has not expired, and as such the Award itself has not attained the status of being enforced as a decree, and therefore the execution petition is premature.

11. The contention of Shri Neeraj Kaul, Ld. Senior Counsel for the petitioner, is that by its inherent nature, the power under Section 33 is a discretionary power vested in the Arbitrator who need not therefore pass any formal order or even to communicate the same. In case the Arbitrator chooses to take no cognizance of the application filed under Section 33, or when the period of 30 days from the date of moving such an application expires, the applicant/ party against whom the award is rendered, should thereupon immediately assume that the application has been declined, or has been not entertained, and must proceed to file his objections accordingly.

12. There appears to be considerable merit in the said contention of the Learned Senior Counsel for the decree holder, that simply by filing an application under Section 33, the entire intention of Parliament in having a new Statute in the form of the Arbitration and Conciliation Act, 1996, cannot be set at naught or rendered ineffective.

13. Equally there appears to be substance in the contention of the judgment-debtor that the clear language of the Statute, has to be given effect to and the specific provisions of the Statute cannot be negated on the basis of what is perceived to be intention of the Legislature in implementing the Arbitration and Conciliation Act, 1996. The judgment debtor relies upon the phrase "three months ....... from the date on which that request (under Section 33), has been disposed of by the Arbitaral Tribunal."

14. The Ld. Counsel for Judgment Debtor also relies upon the provisions of sub-Section (2), (4), (5), (6) and (7) of Section 33 of the Arbitration and Conciliation Act, 1996. The contention of the respondent is that having made an application under Section 33, in which there is a prayer not only for correction but for making of an additional Award, and having heard nothing from the Arbitrator on the subject, the party concerned (in this case the respondent), was entitled to presume that the Arbitral Tribunal has, for the purposes of consideration of the application, extended the time within which it is to make the correction, or to give the interpretation. The legitimate impression of the respondent according to him, is also supported by the language of the statute itself requiring the application to be disposed of, and Section 33(7) requiring that a correction or interpretation or additional Arbitral Award, is to be made in writing, and is to be signed by the Arbitrator with signed copy thereof being delivered to each of the parties.

15. To my mind, we have to follow the age old established rule of interpretation viz that where the language of the Statute is clear and unambiguous, the same would have to be given effect to, on its plain language without going into any other aspects as to the intention of the Legislature or the mischief which the provision was intended to set right. This is more so in the present context, in view of the judgment of the Supreme Court in the case of Union of India Vs. Popular Construction Company; 2002(3) ALR page 345, wherein it has been held that the provisions of Section 5 of the Limitation Act, 1963, would not be applicable to an objection petition which is filed beyond the period of limitation provided under Section 34 of the Act, 1996, keeping in view the words "but not thereafter used in the said provision".

16. Once the Apex Court had held that there is no power available with the Courts to condone any delay or grant any extension of time, thereupon the provisions of Section 34 have to be interpreted in a manner, which is in line with the plain language, and also warranted to avoid the otherwise drastic consequence of the remedy of objections, being totally shut out to the party desirous of availing the remedy, simply because the Arbitrator, to whom an application under Section 33 has been under, may, in a case, choose to sit on the application without conveying any disposal or decision thereupon for several months, and ultimately may clarify that his power was discretionary, and he has found the case not a fit one for either correction or interpretation or for an additional Award, thereby leaving the party remediless.

17. For the purposes of inter-play of the Statutory provisions referred to above, I do not propose to go into the facts and circumstances of the present case viz whether application under Section 33 was well merited or otherwise, because that decision of the Arbitrator has not been challenged before me and also the legal position has to be decided de-hors the individual facts and circumstances of a particular case.

18. Apart from the above circumstance of the party being rendered without remedy on account of omission or any action on the part of the Arbitrator, there is a further aspect to be noted. Once the statutory provisions of Section 34(3) specify that the period of 3 months, will in the case of a party having moved an application under Section 33, run from the date on which that request is disposed of by the Arbtral Tribunal. Disposal in the case of such a request, in terms of Section 33(7) has to be in the manner similar to that of an Arbitral Award. As such the disposal would require a certain formality about it. It will have to be in writing and to be signed by the members of the Arbitral Tribunal. It shall have to state the reasons on which it is based. It shall have to contain the date and place where that decision regarding disposal has been taken, and it shall be delivered to each of the parties in the form of a signed copy.

19. In this view of the matter, the submission of learned Senior Counsel for the decree holder, though attractive and well-articulated, and perhaps quite in line with the intention of the Legislature which wanted an Award to be enforced in the same manner as a decree of the Court has to yet fail on the plain language of provisions of Section 34(3) as relied upon by the Judgment Debtor and also on the consideration that such an interpretation should be adopted, which gives meaning to the words of the entire Statute, and does not render otiose certain words which have been used by the Legislature, even while it was conscious of the need to give early finality to an award as evident from use of the words "but not thereafter" in the proviso to Section 34 of the Act.

20. I may mention here, and also as was agreed by learned counsel for both parties, I am not dealing at present with the objection petition or the application under Section 34 which will be heard and decided on its on merits. What is before me is a petition for execution, in which it is claimed on behalf of the Decree Holder that the period for moving an application/objections under Section 34, having expired therefore the Award should be treated to be a decree, and should be enforced by making recovery there under.

21. As already explained herein above, on a conspectus of the interplay of all the Statutory provisions referred to above, including in particular Section 34(3) read with Sections 33(2), (5), (6) and (7), it has to be held that the period of filing of objections for setting aside an Arbitral Award, in a case such as the present case where recourse has been made to Section 33 will not expire till a period of 3 months from 24.9.2002 viz from the date of the communication issued by the Arbitrator in this case after receiving the directions of this Court, and conveying in writing under his signatures, that he has found the present case to be not a fit case for correction or interpretation, or for passing of additional Award. This communication can be deemed rejection of the Judgment Debtor's application under Section 33.

22. Resultantly the execution proceedings are pre-mature, and have to be disposed of as such.

23. While concluding I may mention that the concerned authorities should certainly take note of this anomalous situation arising from the above said interplay of the provisions, whereunder, in a given case, it is possible that a party by taking the benefit of the silence of the Arbitrator (which may be due to negligence or apathy of the Arbitrator, or sometime active collusion) can defeat by inordinate delay or give a go-by to the entire statutory scheme of an Award becoming enforceable unless objected to within a period of 3 months plus maximum 30 days further condonable time.

24. This Court has to interpret the provisions, as they stand on the clear language thereof, and therefore is constrained to confine itself only to bringing it to the attention of the concerned authorities, that there exists an anomaly of the nature referred to above, which is compouned by the fact that there appears to be no provision for enabling the other party to apply for any directions under any specific provision of the Arbitration & Conciliation Act, 1996 for the Court to compulsorily require the Arbitral Tribunal to render a decision one way or the other, within any stipulated period of time.

25. With these observations, the execution petition is dismissed as premature, but with no order as to costs.