National Aluminium Company Ltd vs Ubv Infrastructure Ltd
2021 Latest Caselaw 12126 Ori

                 IN THE HIGH COURT OF ORISSA AT CUTTACK

                            W.P.(C) No.31938 of 2021
                             (Through hybrid mode)

            National Aluminium Company Ltd.          ....           Petitioner

                                                    Mrs.Pami Rath, Advocate
                                        -versus-

            UBV Infrastructure Ltd.                  ....      Opposite Party
                                                                      None


                      CORAM: JUSTICE ARINDAM SINHA
                                       ORDER

24.11.2021 Order No.

03. 1. Mrs. Rath, learned advocate appears on behalf of petitioner and files print-out of service of order dated 15th November, 2021 to the e-mail i.d. of opposite party, where earlier e-mail notice was sent, consequent to which opposite party appeared in Court below, to oppose prayer for stay operation of the award made by her client under section 36 of Arbitration and Conciliation Act, 1996. She hands up another e- mail print showing dispatch of earlier notice on 17th August, 2021 at 2.42 P.M. She points out from orders dated 20th, 23rd and 27th October, 2021, last being impugned order, opposite party was represented on such notice.

2. Reasons for Court being satisfied on the service is required to be recorded. In order dated 15th November, 2021, inter alia, following was said.

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"1. Ms. Rath, learned advocate appears on behalf of petitioner. She submits her client has challenged order dated 27th August, 2021 passed by Commercial Court, Bhubaneswar, whereby her client's application under section 36 in Arbitration and Conciliation Act, 1996 was rejected. She submits further, her clients have good ground for setting aside the award. Petition for setting aside award (ARBP no.66 of 2019) is pending, wherein award holder's address given in the reference was used to implead it as opposite party. Service could not be made at that address. Later on, her client was informed that opposite party had filed Execution Case no.92 of 2019 before District Judge, Angul giving address of its registered office at House no.32, Golden Homes, Khamardih, Shankar Nagar, Raipur, Chhatishgarh. Service through Court at that address has come back with remark 'insufficient address'.

2. On query from Court she submits, e-mail address of opposite party is available. Petitioner will send by electronic mail, this order to opposite party."

Print-out filed shows service by e-mail on 17th November, 2021 at 2.10 A.M. On query from Court, Mrs. Rath submits, mail service website did not give notice of failure of service. Opposite party continues to go unrepresented.

3. Mrs. Rath relies on judgment dated 6th January, 2021 of Supreme Court in Civil Appeal no.14665 of 2015 (Bhaven Construction v. Executive Engineer Sardar Sarovar Narmada Nigam Ltd.) in particular, paragraphs 10 and 17. A passage in paragraph 17 is extracted and reproduced below:

"xx xx It is therefore, prudent for a Judge to not exercise discretion to allow judicial interference beyond the procedure established under the enactment. This power needs to be exercised in exceptional rarity, wherein one party is left remediless under the statute or a clear 'bad faith' shown by one of the parties. This high

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standard set by this Court is in terms of the legislative intention to make the arbitration fair and efficient."

On query from Court, Mrs. Rath submits, her client is ready to put in security as Court will direct. Submission to that effect was made before the Court below.

4. The Court below has rejected prayer for stay of operation of the award on following reasons, extracted and reproduced below:

"xx xx xx Furthermore, the petitioner would not suffer irreparable loss if the enforcement of the arbitration award is not stayed, because, if the petitioner succeeds in his challenge; he is entitled, by way of the remedy of restitution to recover any amount paid to the decree holder/op. The decisions relied upon on behalf of the petitioner are not squarely applicable to the facts and circumstances of this case. Hence, the petition to stay the enforcement of the arbitration award being not maintainable stands rejected."

There is no record in said order that security was required of petitioner but petitioner refused to put in the same.

5. Rule 5 in order XLI, Code of Civil Procedure gives conditions for grant of stay. Furnishing security is one of the conditions to be fulfilled for Court to be satisfied in granting the stay. Impugned order does not mention about the conditions not having been fulfilled. Instead what has been said is, in event there is execution and petitioner succeeds, it can apply for restitution to recover the amount paid. This procedure adopted by the Court below in making impugned order suffers from material irregularity and is illegal.

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6. The Supreme Court in Bhaven Construction (supra) had said interference in writ jurisdiction will only be in exceptional rarity, where one party is remediless under the statute or clear bad faith is shown by one of the parties. Here, both contingencies appear to have happened. An illegal order made by the Court hearing the application for stay of operation of the award is not appealable under the Act of 1996. On the other hand, opposite party having chosen to stay away and move for execution with different address than given in the reference, has shown bad faith.

7. Impugned order is set aside and quashed. The application under section 36 (3) is restored. The Court below is to expeditiously hear and dispose of the same in accordance with law.

8. The writ petition is disposed of.

(Arindam Sinha) Judge RKS