Himachal Pradesh High Court
Reserved On: 18.10.2024 vs Kuldip Dogra on 13 November, 2024
2024:HHC:11227
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Civil Revision No. 149 of 2019
Reserved on: 18.10.2024
Date of Decision: 13.11.2024
___________________________________________________
Oriental Insurance Company .....Petitioner...
Versus
Kuldip Dogra .....Respondent...
Coram
Hon'ble Mr. Justice Bipin Chander Negi, Judge.
Whether approved for reporting?1
For the petitioner: Mr. Ashwani K. Sharma, Senior
Advocate with Mr. Ishan, Advocate.
For the respondent: Mr. Shrawan Dogra and Mr.
T.S.Bhogal, Senior Advocates with Mr.
Tejasvi Dogra and Ms. Swati Verma,
Advocates.
._____________________________________________________
Bipin Chander Negi, Judge
The present petition has been filed laying challenge
to the impugned judgment dated 23.08.2019, whereby objections
filed by the present petitioner/judgment debtor against the
execution filed by the present respondent/decree holder have
been dismissed.
2. I have heard learned counsel for the parties and
perused the record.
Whether reporters of Local Papers may be allowed to see the judgment?
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3. Brief facts giving rise, to the present petition, are that
in an arbitration proceeding inter-se the parties, an award was
passed by learned Arbitrator against the present petitioner on
05.09.2002. The aforesaid award was challenged by way of an
application under Section 34 of the Arbitration and Conciliation
Act 1996 (herein after for the purpose of brevity referred to as the
'Act') by the present petitioner.
4. The aforesaid application filed under Section 34 of
the Act came up for consideration before a Co-ordinate Bench of
this Court on 19.12.2002. On the said date, the execution of the
award dated 05.09.2002 was stayed subject to the deposit of the
entire amount in terms of the award. As per the order passed by
the Court on 19.12.2002, the award amount had to be deposited
on or before 28.02.2003. The aforesaid order was passed in
OMP bearing number 500 of 2003.
5. In terms of order dated 19.12.2002, on 18.02.2003
vide cheque bearing No. 884036 dated 21.01.2003 for a sum of
Rs. 14,33,025/- drawn on State Bank of India, Shimla the
awarded amount was deposited in the Registry of this Court. On
12.03.2003, the Registry of the High Court issued requisite
necessary directions to keep the amount, so deposited, in a
Fixed Deposit. The Fixed Deposit, in the case at hand, was made
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at State Bank of India on 10.04.2003. Initially the date of the
maturity of the same was 20.06.2003, which was regularly
renewed.
6. In the meanwhile, in the application filed under
Section 34 of the Act, reply was filed by the present respondent
on 22.04.2003. In the reply, so filed, a specific objection qua
pecuniary jurisdiction of the Hon'ble Court was taken.
Subsequent thereto, on 27.06.2003, when the matter was listed
before the Court, the application filed for grant of interim order
(OMP No. 500 of 2002) was held to be mis-conceived in view of
the provisions of Section 36 of the Act which provides that an
award can only be enforced after objections filed under Section
34 of the Act are disposed of.
7. Thereafter, on 27.08.2003, learned Counsel for the
petitioner on account of non-maintainability (lack of pecuniary
jurisdiction) of the application under Section 34 of the Act before
the Hon'ble High Court sought return of the same for filing the
application under section 34 of the Act before the appropriate
forum. The prayer was allowed subject to endorsement as is
contemplated under Order 7 Rule 10 CPC.
8. The section 34 application was thereafter heard and
dismissed by the court of competent jurisdiction. Subsequent
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thereto, an execution petition was filed by the present
respondent. In the said execution objections were filed by the
present petitioner. A specific objection was taken therein qua the
execution being not maintainable as the entire awarded amount
had been deposited in the Registry of the Court in pursuance to
order dated 19.12.2002 passed in OMP No. 500 of 2002 while
the application under section 34 of the Act was pending
adjudication before this court.
9. Learned Trial Court after hearing both the parties and
after going through the record by placing reliance on provision of
Order 21 dismissed the objections filed by the present petitioner.
Other than the aforesaid, the learned Trial Court while rejecting
the objections held that deposit made in the High Court, in the
case at hand in pursuance to order dated 19.12.2002, passed in
OMP No. 500 of 2002 had been made in a proceeding, which
was void, ab initio and without jurisdiction.
10. The question that arises for determination, whether
deposit of the entire award amount by the petitioner on
18.02.2003 in the High Court amounts to payment to the
respondent and the petitioner's liability to pay interest @
prescribed rate p.a. from the date of the award ceased from that
date.
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11. The main contention of the petitioner in the case at
hand is that deposit of the award amount into the court in the
case at hand is nothing but a payment to the credit of the decree-
holder. The learned senior counsel has drawn my attention to
Section 31(7)(b) of the Act and specifically to the word "payment"
contained therein. According to the learned senior counsel, it
means extinguishment of the liability arising under the award.
Further it is contended that deposit of the award amount into the
court is nothing but a payment to the credit of the decree-holder.
In order to support his contention reliance has been placed on
case reported as H.P. Housing & Urban Development
Authority v. Ranjit Singh Rana, (2012) 4 SCC 505.
12. Next learned senior counsel for the petitioner
submitted that the Arbitration Act is a self-contained Act. Mere
reference to Civil Procedure Code in the said Section 36 cannot
be construed in such a manner that it takes away the power
conferred in the main statute (i.e. the Arbitration Act) itself. It is
to be taken as a general guideline, which will not make the main
provision of the Arbitration Act inapplicable. The provisions of
CPC are to be followed as a guidance, whereas the provisions of
the Arbitration Act are essentially to be first applied. The
provisions of CPC will apply only insofar as the same are not
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inconsistent with the spirit and provisions of the Arbitration Act. In
order to support the aforesaid contention, attention is invited by
the learned Senior counsel to Section 36 of the Act and case
reported as Pam Developments (P) Ltd. v. State of W.B.,
(2019) 8 SCC 112.
13. Per contra the respondents have placed reliance on
Punjab State Civil Supplies Corpn. Ltd. v. Atwal Rice &
General Mills, (2017) 8 SCC 116. ORDER XXI CPC, which
deals with EXECUTION OF DECREES AND ORDERS
especially Payment under a decree and ORDER XXIV which
deals with PAYMENT INTO COURT.
14. In H.P. Housing & Urban Development Authority
the award was passed on 14-2-2001. The appellants filed
objections against the award dated 14-2-2001. They also
deposited the entire amount due under the award before the
High Court on 24-5-2001.
15. The High Court considered the diverse provisions of
the Act including Sections 31(7)(a) and (b) of the Act and few
decisions of the apex Court and ultimately held that the
respondent was entitled to post-award interest @ 18% p.a. from
the date of the award till the date of the Actual payment. The said
order was assailed before the apex Court.
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16. The question that arose for determination before the
apex Court, whether deposit of the entire award amount by the
appellants on 24-5-2001 into the High Court amounts to payment
to the respondent and the appellants' liability to pay interest @
18% p.a. from the date of the award ceased from that date.
Reversing the judgment of the High Court the question posed
was answered as follows;
"15. The word "payment" may have different meaning
in different context but in the context of Section 31(7)(b);
it means extinguishment of the liability arising under the
award. It signifies satisfaction of the award. The deposit of
the award amount into the court is nothing but a payment
to the credit of the decree-holder. In this view, once the
award amount was deposited by the appellants before the
High Court on 24-5-2001, the liability of post-award
interest from 24-5-2001 ceased. The High Court, thus, was
not right in directing the appellants to pay the interest @
18% p.a. beyond 24-5-2001."
17. In my considered view the ratio of H.P. Housing &
Urban Development Authority squarely applies to the Acts of
the case at hand. H.P. Housing & Urban Development
Authority has been subsequently followed in Union of India v.
M.P. Trading & Investment Rac. Corpn. Ltd., (2016) 16 SCC
699. Moreso the deposit made in terms of the order of the Court
did not place the same out of the reach of the respondent as
while passing the order the Court did not qualify in the order that
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the money deposited could only be withdrawn on furnishing a
security.
18. In so far as the second contention of the learned
Senior counsel which deals with the applicability of the CPC to
arbitration matters is concerned a reference to certain provisions
of the Act would be necessary. Prior to substitution by Arbitration
and Conciliation (Amendment) Act, 2015 (3 of 2016), Section 36
read as follows:
Section 36. Enforcement
36. Enforcement.--Where the time for making an application
to set aside the arbitral award under Section 34 has expired,
or such application having been made, it has been refused,
the award shall be enforced under the Code of Civil
Procedure, 1908 (V of 1908) in the same manner as if it
were a decree of the Court.
19. After amendment w.e.f 23.10.2015 Section 36 reads
as follows:-
36. Enforcement.--(1) Where the time for making an application
to set aside the arbitral award under Section 34 has expired, then,
subject to the provisions of sub-section (2), such award shall be
enforced in accordance with the provisions of the Code of
Civil Procedure, 1908 (5 of 1908), in the same manner as if it
were a decree of the court.
(2) Where an application to set aside the arbitral award has been
filed in the court under Section 34, the filing of such an application
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shall not by itself render that award unenforceable, unless the
court grants an order of stay of the operation of the said arbitral
award in accordance with the provisions of sub-section (3), on a
separate application made for that purpose.
(3) Upon filing of an application under sub-section (2) for stay of
the operation of the arbitral award, the court may, subject to such
conditions as it may deem fit, grant stay of the operation of such
award for reasons to be recorded in writing:
Provided that the court shall, while considering the application for
grant of stay in the case of an arbitral award for payment of
money, have due regard to the provisions for grant of stay of
a money decree under the provisions of the Code of Civil
Procedure, 1908 (5 of 1908).
20. Section 36(1) of the Arbitration Act which deals with
enforcement of an award provides that an award shall be
enforced "in accordance with" the provisions of the Code of
Civil Procedure, 1908. Whereas Section 36(3) of the Arbitration
Act which deals with staying of the operation of an arbitral award
uses the expression "have regard to the provisions". In order
to understand the aforesaid two expressions reference can be
made to case reported as Pam Developments (P) Ltd. v. State
of W.B., (2019) 8 SCC 112, relevant extract whereof is being
reproduced hereinbelow;
"18. The backbone of the submissions on behalf of the
respondent State of West Bengal is that under the provisions of
Order 27 Rule 8-A CPC, no security shall be required from the
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Government in case of there being a money decree passed
against the Government, and the execution of which is prayed
for. If such submission of the respondent is accepted then the
same would mean that mere filing of an objection under Section
34 of the Arbitration Act by a Government shall render the
award unenforceable as the stay order would be passed in a
mechanical manner and as a matter of course, without imposing
any condition against the Government, judgment-debtor. If the
contention is accepted, the effect would be that insofar as the
Government is concerned, the unamended provision of Section
36 of the Arbitration Act would automatically come into force.
19. In this backdrop, we have now to consider the effect of
Section 36 of the Arbitration Act, vis-à-vis the provisions of
Order 27 Rule 8-A CPC. Sub-section (3) of Section 36 of the
Arbitration Act mandates that while considering an application
for stay filed along with or after filing of objection under Section
34 of the Arbitration Act, if stay is to be granted then it shall be
subject to such conditions as may be deemed fit. The said sub-
section clearly mandates that the grant of stay of the operation
of the award is to be for reasons to be recorded in writing
"subject to such conditions as it may deem fit". The proviso
makes it clear that the Court has to "have due regard to the
provisions for grant of stay of a money decree under the
provisions of the Code of Civil Procedure". The phrase "have
due regard to" would only mean that the provisions of CPC are
to be taken into consideration, and not that they are mandatory.
While considering the phrase "having regard to", this Court in
Shri Sitaram Sugar Co. Ltd. v. Union of India has held that:
(SCC p. 245, para 30)
"30. The words "having regard to" in sub-section are the
legislative instruction for the general guidance of the
Government in determining the price of sugar. They are
not strictly mandatory, but in essence directory".
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20. In our view, in the present context, the phrase used is
"having regard to" the provisions of CPC and not "in
accordance with" the provisions of CPC. In the latter case, it
would have been mandatory, but in the form as mentioned in
Rule 36(3) of the Arbitration Act, it would only be directory or
as a guiding factor. Mere reference to CPC in the said Section
36 cannot be construed in such a manner that it takes away
the power conferred in the main statute (i.e. the Arbitration Act)
itself. It is to be taken as a general guideline, which will not
make the main provision of the Arbitration Act inapplicable.
The provisions of CPC are to be followed as a guidance,
whereas the provisions of the Arbitration Act are essentially to
be first applied. Since, the Arbitration Act is a self-contained
Act, the provisions of CPC will apply only insofar as the same
are not inconsistent with the spirit and provisions of the
Arbitration Act."
21. Hence the use of the expression "having regard to
the provisions of CPC" in Section 36 and in the form as
mentioned in Section 36(3) of the Arbitration Act, the applicability
of CPC would only be directory, whereas the provisions of the
Arbitration Act are essentially to be first applied. The Arbitration
Act is a self-contained Act. The provisions of CPC will apply only
insofar as the same are not inconsistent with the spirit and
provisions of the Arbitration Act. Whereas in terms of section
36(1) of the Arbitration Act wherein the expression used is "in
accordance with" the provisions of CPC, the applicability of the
CPC has been held to be mandatory.
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22. Per contra the respondents have placed reliance on
Punjab State Civil Supplies Corpn. Ltd. v. Atwal Rice &
General Mills, (2017) 8 SCC 116. In the same on 1-6-2001, the
arbitrator delivered a reasoned award. The arbitrator allowed the
appellant's claim in part and accordingly passed a money award
for Rs 10,24,847.15 with interest payable @ 21% w.e.f. 1-1-1999
till realization in the appellant's favour and against the
respondents. The award was challenged under Section 34 of the
Act by the respondents before the Additional District Judge but
the challenge failed vide order dated 3-11-2012 of the Additional
District Judge, Jalandhar. Order dated 3-11-2012 attained finality
as the matter was not pursued further in appeal to the High
Court. The award acquired the status of a decree of the Civil
Court by virtue of Section 36 of the Act.
23. The respondents did not pay the awarded amount to
the appellant and, therefore, the appellant filed Execution
Petition under Section 36 of the Act before the Additional District
Judge, Jalandhar for enforcement of the award against the
respondents. Objections thereto were filed.
24. However therein the executing Court did not decide
any of the objections (nine) set out but confined its inquiry to
one statement of accounts filed by the respondents, which
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according to them, was given to them by the appellant. The
executing Court, on perusal of the account statement, held that
a sum of Rs 3,37,885 was paid by the respondents to the
appellant on 29-8-2011 which, as per the statement, was
credited in the appellant's account and hence such payment
having been made has resulted in fully satisfying the decree in
question and, therefore, the respondents are not liable to pay
any amount towards decree in question. It is essentially with this
factual finding, the executing Court came to a conclusion that
the award/decree stood fully satisfied and hence no recovery of
any awarded amount can be made and, therefore, dismissed
the appellant's execution application.
25. One of the questions which came up for
consideration before the apex Court in Punjab State Civil
Supplies Corpn. Ltd was whether the payment made therein
by the respondents to the appellant is in conformity with the
requirements of either Rule 1 or Rule 2 of Order 21 of CPC.
26. The factual finding was held to be perverse by the
apex Court. Further keeping in view the mandatory requirements
of Order 21 Rules 1 and 2 relating to payment of decreetal dues
made by the judgment-debtor and applying the said provisions
to the undisputed facts of the case the apex Court held that no
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amount was paid by the judgment-debtor to the decree-holder
pursuant to the award/decree so as to enable the executing
Court to record its full satisfaction in accordance with the
provisions of Order 21 Rules 1 and 2 of CPC.
27. On facts the aforesaid Judgment is distinguishable
as herein on 1-6-2001, the arbitrator delivered the award.
Challenge under Section 34 of the Act by the respondents
before the Additional District Judge failed vide order dated 3-11-
2012. Order dated 3-11-2012 attained finality as the matter was
not pursued further in appeal to the High Court. The award
acquired the status of a decree of the civil Court by virtue of
Section 36 of the Act. Prior to 23-10-2015 in terms of Section 36
of the Act, an award shall be enforced when the time for making
an application to set aside the arbitral award under Section 34
has expired, or such application having been made, it has been
refused. The awarded amount in Punjab State Civil Supplies
Corpn. Ltd was not deposited, hence the execution and detailed
reference to Order 21 Rules 1 and 2 CPC.
28. Whereas in the case at hand payment was made in
terms of Section 31 (7)(b) of the Act while the Section 34
application was pending adjudication. As was the case in H.P.
Housing & Urban Development Authority v. Ranjit Singh
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Rana, (2012) 4 SCC 505. The deposit in the case at hand can
be equated to a payment of money in an appeal made against a
money decree by the appellant, within such time as the
Appellate Court may allow in terms of provisions of Order 41
Rule 1 sub-rule 3 CPC. Order 41 Rule 1 sub-rule 3 CPC reads
as follows;
"ORDER XLI
APPEALS FROM ORIGINAL DECREES
(3) Where the appeal is against a decree for payment
of money, the appellant shall, within such time as the
Appellate Court may allow, deposit the amount
disputed in the appeal or furnish such security in
respect thereof as the Court may think fit."
29. Order 21 Rule 1 sub-rule 2 CPC cannot be invoked
in the case at hand as the payment in the case at hand was not
deposited in the executing Court after the award had attained
finality in terms of section 36 of the Act. Award amount in the
case at hand was deposited while the Section 34 application
made for setting aside the award was pending adjudication and
the application had been filed within the prescribed period of
limitation. In the case at hand, the award attained finality in
terms of section 36 of the Act as it than existed after the Section
34 application had been dismissed. It is than that it became
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enforceable like a decree. Prior to 23.10.2015 filing of an
application under Section 34 of the Act for setting aside an
award was sufficient to stay the execution of the award. Despite
the same, in the case at hand, the award amount was deposited
in terms of the order of the Court while the section 34 application
for setting aside the award was pending adjudication. Order 21
Rule 1 CPC which deals with the Modes of paying money under
decree reads as follows;
"ORDER XXI
EXECUTION OF DECREES AND ORDERS
Payment under decree
1. Modes of paying money under decree.-- (1) All money, payable
under a decree shall be paid as follows, namely:
(a) by deposit into the Court whose duty it is to execute the decree, or
sent to that Court by postal money order or through a bank; or
(b) out of Court, to the decree-holder by postal money order or
through a bank or by any other mode wherein payment is evidenced
in writing; or
(c) otherwise, as the Court which made the decree, directs.
(2) Where any payment is made under clause (a) or clause (c) of
sub-rule (1), the judgment-debtor shall give notice thereof to the
decree-holder either through the Court or directly to him by
registered post, acknowledgment due."
30. Similarly order 24 CPC would also not be applicable
as the payment in question had not been deposited before the
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arbitral tribunal while the arbitration proceedings were on. Order
24 which deals with the deposit by a defendant of amount in
satisfaction of a claim at any stage of the suit reads as follows;
"ORDER XXIV
PAYMENT INTO COURT
1. Deposit by defendant of amount in satisfaction of claim. The
defendant in any suit to recover a debt or damages may, at any
stage of the suit, deposit in Court such sum of money as he
considers a satisfaction in full of the claim.
2. Notice of deposit. Notice of the deposit shall be given
through the Court by the defendant to the plaintiff, and the
amount of the deposit shall (unless the Court otherwise directs)
be paid to the plaintiff on his application."
31. Conceptually, revision jurisdiction is a part of
appellate jurisdiction but it is not vice versa. Both, appellate
jurisdiction and revisional jurisdiction are creatures of statutes.
No party to the proceeding has an inherent right of appeal or
revision. An appeal is continuation of suit or original proceeding,
as the case may be. The power of the appellate Court is
coextensive with that of the trial Court. Ordinarily, appellate
jurisdiction involves rehearing on facts and law but such
jurisdiction may be limited by the statute itself that provides for
the appellate jurisdiction. On the other hand, revisional
jurisdiction, though, is a part of appellate jurisdiction but
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ordinarily it cannot be equated with that of a full-fledged appeal.
In other words, revision is not continuation of suit or of original
proceeding. When the aid of Revisional Court is invoked on the
revisional side, it can interfere within the permissible parameters
provided in the statute. It goes without saying that if a revision is
provided against an order passed by the Tribunal/appellate
authority, the decision of the Revisional Court is the operative
decision in law. As regards the extent of appellate or revisional
jurisdiction, much would, however, depend on the language
employed by the statute conferring appellate jurisdiction and
revisional jurisdiction.( Hindustan Petroleum Corpn. Ltd. v.
Dilbahar Singh, (2014) 9 SCC 78).
32. In the case at hand, the trial Court had the
jurisdiction but in exercising jurisdiction the Court has Acted
illegally, (a) in breach of Section 31(7)(b) of the Arbitration Act
and (b) in referring to provisions of Order 21 CPC it has taken
into account provisions which were not applicable to the facts of
the case at hand. ( M.L. Sethi v. R.P. Kapur, (1972) 2 SCC 427,
at page 433). For the said reasons the present revision petition
is maintainable.
33. Other than the aforesaid, the learned Trial Court has
illegally held while rejecting the objections that the deposit made
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in the High Court, in the case at hand in pursuance to order
dated 19.12.2002, passed in OMP No. 500 of 2002 had been
made in a proceeding which were void ab initio and without
jurisdiction. In fact it was not a case of an inherent lack of
jurisdiction rather this court at that stage only lacked the
pecuniary jurisdiction. Deposit in the case at hand had been
made in terms of the order of the Court dated 19.12.2002. Even
when OMP No. 500 of 2002 was dismissed on 27.06.2003,
being mis-conceived in view of the provisions of Section 36 of
the Act which provides that an award can only be enforced after
objections filed under Section 34 of the Act are disposed of, no
order for return of amount deposited in pursuance thereof was
passed. Even otherwise after having actively participated in the
proceedings, the respondent cannot be permitted to plead
ignorance qua orders, deposit passed and made in the
proceedings respectively. The proceedings in which the deposit
had been made was at best irregular on account of lack of
pecuniary jurisdiction and not void on account of lack of inherent
jurisdiction. The conduct of the respondent in the facts and
attending circumstances of the case at hand precludes the
respondent from objecting to the deposit made by the petitioner
in pursuance to the order dated 19.12.2002 passed by this
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Court. Waiver, estoppel could not have been raised against the
respondent had the proceedings been void on account of lack of
inherent jurisdiction. Reference in this respect can be made to
Indira Bai v. Nand Kishore, (1990) 4 SCC 668, at page
671/672, Ashok Leyland Ltd. v. State of T.N., (2004) 3 SCC 1,
at page 44 . For the said reason also, the present revision
petition is maintainable.
34. The expression "as it thinks fit" appearing in section
115 CPC confers a very wide jurisdiction enabling a revisional
Court to take an entirely different view on the same set of facts.
The expression "as it thinks fit" has the same connotation,
unless context otherwise indicates, "as he deems fit" and the
latter expression was interpreted by the apex Court in Raja Ram
Mahadev Paranjype v. Aba Maruti Mali AIR 1962 SC 753 to
mean to make an order in terms of the statute, an order which
would give effect to a right which the Act has elsewhere
conferred. (Babulal Nagar v. Shree Synthetics Ltd., 1984
Supp SCC 128). Hence, the power/justification to setting aside
the impugned order and passing the present judgment.
For the reasons stated herein above, the revision
petition is allowed. The impugned judgment dated 23.08.2019,
whereby objections filed by the present petitioner/judgment debtor
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against the execution filed by the present respondent/decree
holder have been dismissed is quashed and set-aside. The
present respondent/decree holder is free to moving an appropriate
application for withdrawing money lying deposited in terms of
order dated19.12.2002 passed in OMP No. 500 of 2002 along with
interest accrued thereupon subject to proper verification.
All pending applications are disposed off.
(Bipin Chander Negi)
Judge
November 13th, 2024.
(vs/Nisha)
