M/S Mecon Ltd. vs M/S Pyro Engineers (P) Ltd.
2013 Latest Caselaw 5911 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Order delivered on: December 20, 2013

+                         EX.F.A. 28/2013

       M/S MECON LTD.                                    ..... Appellant
                    Through            Mr.D.P.Mukherjee, Adv. with
                                       Mrs. Nandini Sen, Adv.

                          versus

       M/S PYRO ENGINEERS (P) LTD.               ..... Respondent
                    Through    Mr.Chayan Sarkar, Adv. with
                               Mr. Karan Bindra, Mr. Kumar Ankur,
                               Advs.

       CORAM:
       HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. Dispute arose between the parties. These were referred for Arbitration. After recording the evidence and argument, Arbitral Tribunal rendered the Award on 15th June, 2012 in favour of the respondent. Operative portion of the Award passed in para 33 reads as under :

"33. Accordingly, we hold that the claimant is entitled to receive the sum of Rs.12,64,414/- from the respondent as balance amount due to it on account of the final bill. We may point out that the respondent had raised a plea that SCOPE is a necessary party as the respondent had entered into contract with the claimant on behalf of SCOPE. We had decided this issue by our order dated 14.10.2010. We may add that since the contract was entered into by and between the claimant and the respondent, it shall be the liability of the respondent to make the payment of the awarded sum to the claimant."

2. With regard to deficiency of stamp duty, in para 35 the following order was passed :

"35. Before parting with award it needs to be pointed out that the claimant was not asked to furnish e-stamp of the requisite value for the purpose of rendering the award as such an intimation makes the parties aware of the outcome of the proceedings before the award is pronounced. It is desirable that the parties should have no inkling of the result before the award is rendered. Keeping this in view, the first page of the award is engrossed on a non-judicial stamp paper of Rs.100 secured by the tribunal. The deficiency in the stamp duty shall be made good by the claimant by producing e-stamp of the requisite value within 10 days. The Award will be effective only when the e-stamp of requisite value is filed by the claimant."

3. The Award was challenged by the appellant by filing of an objection under Section 34 of Arbitration and Conciliation Act, 1996. The same were dismissed with following orders :

"1. This is a petition filed under Section 34 of the Arbitration & Conciliation Act, 1996 (in short the 1996 Act) to challenge the award dated 15.06.2012. Learned counsel for the petitioner says that the objections were filed for the first time in this court on 13.05.2013. The delay in filing the award beyond the time prescribed under Section 34(3) of the 1996 Act is sought to be explained by learned counsel for the petitioner by referring to the last paragraph of the award which reads as follows:

"....35. Before parting with award it needs to be pointed out that the claimant was not asked to furnish e-stamp of the requisite value for the purpose of rendering the award as such an intimation makes the parties aware of the outcome of the proceedings before the award is pronounced. It is desirable that the parties should have no linking of the result before the award is rendered. Keeping this in view, the first page of the award is engrossed on a non-judicial stamp paper of Rs. 100 secured by the tribunal. The

deficiency in the stamp duty shall be made good by the claimant by producing e-stamp of the requisite value within 10 days. The award will be effective only when the e-stamp of requisite value is filed by the claimant..."

2. It is contended by learned counsel for the petitioner that the stamp duty is deficient even today and therefore the award is non-est in law. It is in fact Ms Sen's submission that since the requisite stamp duty was not filed within ten days, this defect cannot be cured at all. Ms Sen further submits that the petitioner became aware of the award on 08.04.2013 when the bailiff visited the premises of the petitioner to execute the award. It is in these circumstances that the delay is sought to be explained. As a matter of fact, the contention of the counsel for the petitioner is that there is no delay and that the objections have been filed within time.

3. On the other hand, learned counsel for the respondent submits that a perusal of the award would show that the respondent was supplied with a signed copy of the award on 15.06.2012. He also draws my attention to the last page of the award which gives the date as 15.12.2012. It is the submission of the learned counsel for the respondent that, either way, the objections are beyond time.

4. I have asked the learned counsel for the petitioner to explain the difference in dates. Ms Sen is not able to tell me as to how on the last page the date of receipt of award is shown as 15.12.2012. However, as correctly submitted by the learned counsel for the respondent, it would not make much of a difference in so far as the limitation prescribed under Section 34(3) of the 1996 Act, is concerned.

5. There can be no doubt that in terms of the judgment of the Supreme Court in UOI vs Popular Construction (2001) 8 SCC 470, Section 5 of the Limitation Act, 1963 has no application. The award is required to be assailed within the time prescribed in sub-section (3) of Section 34. Accordingly, the objections are required to be lodged within 3 months with a further period of 30 days given to the objector to lodge a

petition under Section 34 on a sufficient cause being shown qua delay beyond 3 months. Beyond the said period, objections cannot be entertained by the court as Section 5 of the 1963 Act is not applicable to the present proceedings.

Therefore, in the given circumstances, if regard is had even to the latter date, which is, 15.12.2012, the objections are beyond limitation. The argument of Ms Sen that the award is non-est in law as requisite stamp duty was not filed, is squarely answered by the Supreme Court in two judgments rendered in the case of Dr. Chiranji Lal (D) by LRs. Vs Hari Das (D) by LRs. (2005) 10 SCC 746 and M. Anasuya Devi & Anr. vs M. Manik Reddy & Ors. (2003) 8 SCC 565. The sum and substance of these judgments is that payment or affixation of stamp duty is a fiscal act which may render an award or an instrument unexecutable but it would not take away the legal efficacy of the award in so far as the challenge under Section 34 of the 1996 Act, is concerned.

Having regard to the ratio of the judgments referred to above, in my view, this argument cannot be entertained and hence is rejected. In that view of the matter, the captioned objections would have to be rejected. It is ordered accordingly."

4. Thereafter, the respondent filed execution under Section 36 of the Act read with Order 21 Rule 1 CPC for execution of the award alongwith an objection under Section 5 of Limitation Act for condonation of 10 days delay to pay the stamp duty stipulated by the Arbitral Tribunal.

5. The said application was allowed by the Executing Court by order dated 23rd February, 2013. The same reads as under :

"I have perused the Nazir report. The execution petition is accompanied by an application u/s 5 of Limitation Act for condonation of delay in filing appropriate stamp duty within 10 days to as stipulated by the Arbitral Tribunal. Considering the averments of the application, the application is allowed.

Issue warrants of attachment against the JD on PF and on filing of list of properties for 14.05.13.

The DH shall appear before Ld. ACJ (South) on 05.04.13 at 2 pm."

6. By the impugned order Ex No.178/2012 was decided on 14 th August, 2013 and the objections raised by the appellant were also considered in para 4 and 5 of the order. The same are reproduced as under :

"4. Today the decree holder has filed an application u/s 151 of CPC. It is stated in the application that award has been duly stamped and the stamp duty has been duly paid. It is further stated that arbitral award has been engrossed on the stamp paper of Rs.100/-. The relevant rates of stamp duty in Delhi are being annexed with the application as Annexure B and the calculation of detail stamp duty paid by the Decree holder is shown in the table Annexure C filed with the application. Decree holder has also annexed a copy of the treasury challan showing the payment of regular stamp duty.

5. Objection that the award is un-executable as the regular stamp duty has not been paid by the Decree holder does not survive in view of the payment of stamp duty by the Decree holder evidenced by Annexure A filed with the application. Accordingly it is held that the award dated 15.06.2012 has become executable award after the payment of stamp duty by the Decree holder.

Issue warrant of attachment against the Judgment Debtor on filing of PF for 04.10.2013. Decree holder shall appear before the Ld. ACJ (South East) on 19.09.2013 at 2 pm."

7. The said order was challenged by the appellant before this Court. by order dated 4th October, 2013 the appellants were directed to deposit the decreetal amount which has been deposited. The respondent prayed for release of said amount on 8th November, 2013 the respondent was allowed to withdraw the said amount subject to furnishing a security.

8. The said amount was not withdrawn by the respondent. Counsel for respondent submits that since the security could not arranged, therefore, the amount could not be withdrawn. He stated that since the matter is fixed for hearing thus, the respondent would wait till final decision of the matter.

9. I have heard learned counsel for both the parties. I am of the considered opinion that the submission of the appellants are without any substance and force. Thus, the present petition is liable to dismissed on the following reasons :

a) That after dismissal of the objection filed by the appellant under Section 34 of the Act, the said order becomes final between the parties as it was not challenged by the appellant.

b) It is the admitted fact that the appellant on filing of objection under Section 34 of the Act had taken the same very plea which are raised in the present matter with regard to non payment of stamp papers in time. The said plea was decided by this Court while dismissing the objection under Section 34 of the Act.

c) No doubt, there were 10 days delay in filing the stamp duty. But the same was condoned by the Executing Court by order dated 23rd February, 2013 by allowing the application under Section 5 of the Limitation Act. The said order was not challenged by the appellant. The same attains finality. Thus, the plea raised by the appellant has no consequence.

10. Thus, there is nothing in the matter. The appeal was filed by the appellant in order to delay in making the payment. The same is dismissed with costs of `10,000/-. The decreetal amount deposited by the appellant in

terms of Order dated 4th October, 2013 shall be released to the respondent by the Registry forthwith. Since the matter has been finally decided, there is no need to furnish any security against that amount as directed earlier in the order dated 8th November, 2013.

11. The present petition as well as pending applications are dismissed.

(MANMOHAN SINGH) JUDGE DECEMBER 20, 2013