THE HIGH COURT OF SIKKIM : GANGTOK
(Civil Jurisdiction)
DATED : 28th July, 2022
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DIVISION BENCH : THE HON'BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
THE HON'BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE
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Review Pet.(C) No.01 of 2022
Petitioners : Sikkim Power Development Corporation and Another
versus
Respondents : M/s. Amalgamated Transpower (India) Ltd.
Application under Order XLVII Rule 1
of the Code of Civil Procedure, 1908
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Appearance
Mr. Tarun Johri, Advocate with Ms. Tamannna Chettri and Mr.
Tenzing Thinlay Lepcha, Advocates for the Petitioners.
Mr. Prateek K. Chadha, Advocate with Ms. Rachana Rai, Advocate
for the Respondent.
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ORDER
Meenakshi Madan Rai, J.
1. The Petitioners/Appellants have filed an application
under Order XLVII Rule 1 of the Code of Civil Procedure, 1908 (for
short, the "CPC"), dated 01-02-2022, seeking a review of the Order
dated 07-10-2021 passed in I.A. No.1 of 2020 in Arb.A. No.1 of
2020, on grounds that the Order suffers from an error apparent on
the face of it.
2(i). For clarity in the matter, it is essential to recapitulate
that the Petitioners/Appellants under Section 34 of the Arbitration
and Conciliation Act, 1996 (for short, the "Arbitration Act") had
challenged the Award dated 30-09-2017 of the sole Arbitrator
before the Learned Commercial Court, East Sikkim, at Gangtok, in
Arbitration Case No.05 of 2017 [Sikkim Power Development Review Pet.(C) No.01 of 2022 2
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
Corporation Ltd. (SPDCL) and Another vs. Amalgamated
Transpower (India) Ltd. (ATPIL)]. The Arbitral Tribunal had
allowed the claim filed by the Respondent and dismissed the
counter-claims filed by the Petitioners/Appellants. A decree of
specific performance of the Agreement dated 21-12-2002 was
passed in favour of the Respondent with damages against the
Appellants. The Learned Commercial Court, East Sikkim, at
Gangtok, partly upheld the Arbitral Award dated 30-09-2017 vide
its impugned Order dated 26-12-2019. An Appeal being Arb.A.
No.01 of 2020 against the finding of the Learned Commercial Court
was filed by the Petitioners herein.
(ii) Notice was issued on 22-06-2020 to the Respondent on
I.A. No.01 of 2020 supra the application filed by the Appellants
seeking a Stay of the impugned Judgment of the Learned
Commercial Court. In the interregnum, the Learned Single Judge
of this Court granted ex parte ad interim stay of the impugned
Judgment until further orders.
(iii) After hearing the rival submissions of Learned Counsel
for the parties, the ex parte ad interim order of stay was confirmed
vide Order dated 07-10-2021. The directions of this Court in the
said Order were inter alia as follows;
"8.(i) In view of the rival contentions put forth, we are of the considered opinion that Learned Counsel for the Appellants has made out a case for grant of Stay of the operation of the Arbitral Award till further orders of this Court.
(ii) Consequently, the ex parte ad interim Order of Stay granted by this Court vide Order, dated 22.06.2020, stands confirmed until further orders.
(iii) However, considering the submissions of Learned Counsel for the Respondent as reflected supra, whereby his specific prayer is for deposit of the amounts as granted in Prayer "G‟ and Prayer „I‟, the Appellants are directed to deposit two Bank Drafts, Review Pet.(C) No.01 of 2022 3
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
one for a sum of Rs.85,43,11,904/- (Rupees eighty five crores, forty three lakhs, eleven thousand, nine hundred and four) only, (i.e. Rs.47,13,53,405/- + Rs.38,29,58,499/-) and another for a sum of Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and ten lakhs) only, within sixteen weeks from today.
............................................................................."
3. The Appellants filed the instant Review Petition on 01-
02-2022 as stated supra seeking a review of the Order dated 07-
10-2021, along with I.A. No.01 of 2022 an application under
Section 5 of the Limitation Act, 1963, seeking condonation of 76
days delay in filing the Review Petition, while placing reliance on
the Order of the Hon‟ble Supreme Court dated 10-01-2022 in In Re
: Cognizance for Extension of Limitation [Miscellaneous Application No.21
of 2022 in Miscellaneous Application No.665 of 2021 in Suo Motu
Writ Petition (C) No.03 of 2020]. Contesting the aforementioned
delay, the Respondent on 21-02-2022 filed I.A. No.05 of 2022 in
Arb.A. No.01 of 2020 and averred inter alia as follows therein;
"18. That, in addition to the Review Petition, the Appellants have also filed an Application of Condonation of delay of 76 days (i.e. from 06.11.2021 to 20.01.2020) sighting (sic) Hon‟ble Supreme Court of India‟s suo-motu cognizance of situation arising from COVID. But, as per the records of this Hon‟ble Court, the Appellants had submitted their detail arguments in Virtual Court on 25.10.2021, 26.10.2021; have done physical filing of Documents in Ist/2nd week of Nov.2021;
appeared through V.C on 10.11.2021 and appeared physically before this Hon‟ble Court during court proceeding on 24.11.2021."
Learned Counsel for the parties were heard on the delay
petition (supra) and in consideration of the Order of the Hon‟ble
Supreme Court, the delay was condoned and the Review Petition
taken up for hearing. A reply dated 01-06-2022 was filed on
behalf of the Respondent to the Review Petition dated 01-02-2022. Review Pet.(C) No.01 of 2022 4
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
4. Prior in time, on 21-02-2022, an application being I.A.
No.5 of 2022 came to be filed by the Respondent under Section
151 of the CPC along with an affidavit inter alia submitting that the
non-depositing of the amount by the Appellants despite the Order
of this Court dated 07-10-2021, under the guise of a frivolous
Review Petition along with a frivolous petition for condonation of
delay is also an epitome of dodging payment of the amount
ordered. Reply was filed by the Appellants to this application supra
on 20-04-2022.
5. Learned Counsel for the Petitioners contended that an
error apparent on the face of the Order dated 07-10-2021 passed
in I.A. No.01 of 2020 in Arb.A. No.01 of 2020 existed for the
reasons enumerated hereinbelow; that, the Petitioners/Appellants
under Section 151 of the CPC had filed an application for Stay,
being I.A. No.01 of 2020 in Arb.A. No.01 of 2020 on 06-03-2020.
Reply to which was filed by the Respondent on 22-03-2021 and a
rejoinder thereof by the Appellants on 23-04-2021. That, the
Respondent in its reply dated 22-03-2021 to the application for
Stay had inter alia stated as under;
"19. The amount which is due to be deposited by the Appellants in view of the operation of the 2015, Act and the settled law, an amount of Rs.131,56,40,332/- (Due as on 30.09.2020) has already become final and binding in terms of Section 36 of the Arbitration and Conciliation Act with respect to Prayer G and Prayer K of the Award. For this the Respondent has already filed an Execution Petition before the Hon‟ble District Judge, East Sikkim, registered as Civil Execution Case No.15 of 2020. Therefore the remaining amount which is further liable to be deposited the Appellants are mentioned in the TABLE below.
Findings in Whether Amount payable to
the interfered by the Respondent/
Arbitral the Commercial Applicant
Award Court U/s 34?
Review Pet.(C) No.01 of 2022 5
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
The No Rs.265.10 Crores
Tribunal with post award
awarded interest of 18%
Rs.265.10 (Refer Para 813 @
Crores Page 425 of the
towards Award)
Prayer 1 approximating to
(Loss Rs.431,00,17,589/-
toward (Upto 23.3.2021)
Cost
Escalation)
(Para 803
@ Pg. 419)
Total Rs.431,00,17,589/-
20. The Respondent having filed a separate Appeal under Section 37, before this Hon‟ble Court as Arb. A/80/2020, seeking for an alternate claim of damage as granted by the Arbitral Tribunal the above mentioned amount in the table has not been pressed for execution."
[emphasis supplied]
6. That, in view of the reply supra, the Respondent had
thus admitted that as far as the amount of Rs.265,10,00,000/-
(Rupees two hundred and sixty five crores and ten lakhs) only, was
concerned the Respondent was not pressing for its execution as
they had preferred a separate Appeal before this Court seeking an
alternate claim for damages. It was further submitted that,
contrary to the aforestated averments, the Respondent during the
course of arguments on the Stay application prayed for the deposit
of the amount of Rs.265,10,00,000/- (Rupees two hundred and
sixty five crores and ten lakhs) only. That, despite the above
averments in the reply of the Respondent to the Stay application at
Paragraphs 19 and 20, extracted supra, while confirming the
interim Order dated 22-06-2020, this Court in its Order dated 07-
10-2021 directed the Appellants to deposit two Bank Drafts in the
Registry of this High Court for an amount of Rs.85,43,11,904/-
(Rupees eighty five crores, forty three lakhs, eleven thousand, nine
hundred and four) only, [i.e. Rs.47,13,53,405/- (Rupees forty
seven crores, thirteen lakhs, fifty three thousand, four hundred and Review Pet.(C) No.01 of 2022 6
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
five) + Rs.38,29,58,499/- (Rupees thirty eight crores, twenty nine
lakhs, fifty eight thousand, four hundred and ninety nine] and
another Bank Draft of an amount of Rs.265,10,00,000/- (Rupees
two hundred and sixty five crores and ten lakhs) only, within 16
(sixteen) weeks from 07-10-2021. That, the Order consequently
suffers from an error apparent on the face of it as it failed to take
into consideration the submissions of the Respondent that they
were not pressing for execution of the awarded amount of
Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and
ten lakhs) only. That, this Court had also failed to take into
consideration that the Respondent had consciously not pressed for
execution of the said amount. That, in the light of the stand of the
Respondent the direction for deposit of the said amount of
Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and
ten lakhs) only, is erroneous. It was also stated that the Court
erred in directing the Appellants to deposit the balance Bond
amount in Court and failed to take into consideration that when the
Respondent had itself breached its obligation to submit the Bank
Guarantee to the Petitioners, then the Petitioners could not have
been legally called upon to deposit the amount of the balance Bond
amount. Hence, the grounds submitted are sufficient for this Court
to review its Order dated 07-10-2021 thereby deleting/modifying
the direction to the Appellants to deposit the Bank Draft of
Rs.85,43,11,904/- (Rupees eighty five crores, forty three lakhs,
eleven thousand, nine hundred and four) only and
Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and
ten lakhs) only.
Review Pet.(C) No.01 of 2022 7
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
7(i). Per contra, it was contended by Learned Counsel for
the Respondent that firstly the Arbitration Act, as amended, is a
complete Code in which there is no provision for a Review and
hence, the Appellants could not file a Review Petition under Order
XLVII Rule 1 of the CPC seeking a review of its Order. That, in the
absence of any such provision, any Order in review, if passed
would be ultra vires, illegal and without jurisdiction. That, this
Court in its Order dated 07-10-2021 has directed deposit of the
amount in terms of the provisions of Section 36 of the Arbitration
Act, as amended in 2015, and under binding precedents of the
Hon‟ble Supreme Court which the Petitioners are seeking an
alteration by claiming a review, which is wholly impermissible.
That, in fact the Petitioners have under the guise of a Review
Petition filed an Appeal assailing the Order of this Court, which can
only be filed through an appropriate appeal before the higher Court
and not through a Review Petition. It was next urged that in
prescribing the amount to be deposited under Section 36 of the
Arbitration Act, as amended in 2015, the Court does not consider
whether any Execution Petition towards any particular claim is filed
or not. The Court is only to consider the awarded amount or what
is the amount concurrently upheld by the Court under Section 34
of the Arbitration Act as in the instant case. That, the claim of the
Petitioners that the Order to deposit Rs.265,10,00,000/- (Rupees
two hundred and sixty five crores and ten lakhs) only, is erroneous
in light of Paragraphs 19 and 20 of the reply of the Respondent
dated 22-03-2021, to the Stay application, is totally false. That,
the directions of this Court to the Appellants to deposit the two
Bank Drafts within 16 (sixteen) weeks‟ period ended on 27-01- Review Pet.(C) No.01 of 2022 8
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
2022 despite which the Appellants failed to make the deposits and
instead filed the Review Petition. That, whether Execution Petition
is to be filed or not is the discretion of the Respondent. That,
Section 36 of the Arbitration Act, as amended in 2015, expressly
provides for deposit of the awarded amount for grant of stay, it
does not state the relevance of filing or non-filing of Execution
Petition by the award holder.
(ii). That, the Petitioners‟ interpretation that as the
Respondent had not pressed for execution meant that they would
not press for execution of the claim is bizarre. That, as soon as the
Respondent noticed that the Petitioners had not deposited the two
Bank Drafts as per the Order of this Court dated 07-10-2021, the
Respondent filed an Execution Petition for Prayer 1 for
Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and
ten lakhs) only, before the Commercial Court on 19-02-2022 which
is registered as Execution Petition (C) No.05 of 2022. That, in fact,
the Petitioners have not even deposited a separate Bank Draft of
Rs.85,43,11,904/- (Rupees eighty five crores, forty three lakhs,
eleven thousand, nine hundred and four) only, for which they have
not sought any extension, establishing a deliberate defiance of the
Order of this Court. Hence, in light of the above mentioned facts
and circumstances, this Court be pleased to dismiss the Review
Petition with exemplary costs.
8. Learned Counsel for the Appellants in rebuttal
contended that the Appellants had legally and validly invoked the
grounds permissible under Law for review of the Order and also on
the basis of facts as applicable to the case in question. It was
reiterated that the Respondent itself had stated that it was not Review Pet.(C) No.01 of 2022 9
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
pressing for execution of Order relating to the award of the amount
of Rs.265,10,00,000/- (Rupees two hundred and sixty five crores
and ten lakhs) only. This being a material fact it had a legal
bearing on the exercise of discretion by this Court while deciding
the application of Stay of the arbitral award preferred by the
Appellants. It is denied that Sections 34 and 37 of the Arbitration
Act mandates that the hearing of objection petition/appeal on
merits can be taken up only on the amount which was directed by
the Court being deposited by the Appellants/Objectors, hence the
Petition filed by the Respondent under Section 151 of the CPC be
dismissed.
9. The rival contentions were heard at length and given
due consideration. While addressing the arguments of Learned
Counsel for the Respondent that the Arbitration Act is a self-
contained Act which provides for no review, in ITI Ltd. vs. Siemens 1 Public Communications Network Ltd. the Supreme Court held as
hereunder;
"19. Revisional jurisdiction of a superior court cannot be taken as excluded simply because subordinate courts exercise a special jurisdiction under a special Act. The reason is that when a special Act on matters governed by that Act confers a jurisdiction on an established court, as distinguished from a persona designata, without any words of limitation, then the ordinary incident of procedure of that court including right of appeal or revision against its decision is attracted. The right of second appeal to the High Court has been expressly taken away by sub-section (3) of Section 37 of the Act, but for that reason it cannot be held that the right of revision has also been taken away. .........................."
The Supreme Court in Mahanagar Telephone Nigam Limited vs. 2 Applied Electronics Limited held that;
1
(2002) 5 SCC 510 2 (2017) 2 SCC 37 Review Pet.(C) No.01 of 2022 10
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
"27. Section 5 which commences with a non obstante clause clearly stipulates that no judicial authority shall interfere except where so provided in Part I of the 1996 Act. As we perceive, the 1996 Act is a complete code and Section 5 in categorical terms along with other provisions, lead to a definite conclusion that no other provision can be attracted. Thus, the application of CPC is not conceived of and, therefore, as a natural corollary, the cross-objection cannot be entertained. Though we express our view in the present manner, the judgment rendered in ITI Ltd. [ITI Ltd. v. Siemens Public Communications Network Ltd., (2002) 5 SCC 510] is a binding precedent. The three-Judge Bench decision in International Security & Intelligence Agency Ltd. [MCD v. International Security & Intelligence Agency Ltd., (2004) 3 SCC 250] can be distinguished as that is under the 1940 Act which has Section 41 which clearly states that the procedure of CPC would be applicable to appeals. The analysis made in ITI Ltd. [ITI Ltd. v. Siemens Public Communications Network Ltd., (2002) 5 SCC 510] to the effect that merely because the 1996 Act does not provide CPC to be applicable, it should not be inferred that the Code is inapplicable seems to be incorrect, for the scheme of the 1996 Act clearly envisages otherwise and the legislative intendment also so postulates.
28. As we are unable to follow the view expressed in ITI Ltd. [ITI Ltd. v. Siemens Public Communications Network Ltd., (2002) 5 SCC 510] and we are of the considered opinion that the said decision deserves to be reconsidered by a larger Bench. Let the papers be placed before the Hon'ble the Chief Justice of India for constitution of an appropriate larger Bench."
[emphasis supplied]
However, later in time in Municipal Corporation of Greater
Mumbai and Another vs. Pratibha Industries Limited and Others3 a two
Judge Bench of the Hon‟ble Supreme Court expounded as follows;
"10. Insofar as the High Courts' jurisdiction to recall its own order is concerned, the High Courts are courts of record, set up under Article 215 of the Constitution of India. Article 215 of the Constitution of India reads as under:
"215. High Courts to be courts of record.--Every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself."
It is clear that these constitutional courts, being courts of record, the jurisdiction to recall their own orders is inherent by virtue of the fact that they are superior courts of record. This has been recognised in several of our judgments." [emphasis supplied]
3 (2019) 3 SCC 203 Review Pet.(C) No.01 of 2022 11
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
The extract in Municipal Corporation of Greater Mumbai (supra)
being self-explanatory with regard to the powers of review no
further elucidation is necessitated on this point.
10. Now to consider what an error apparent on the face of
the record is, the Hon‟ble Supreme Court has observed in a
plethora of Judgments as to what such an error consists of. In
Satyanarayan Laxminarayan Hegde vs. Mallikarjun Bhavanappa
4 Tirumale , it was held as follows;
"17. ............. An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. As the above discussions of the rival contentions show the alleged error in the present case is far from self- evident and if it can be established, it has to be established, by lengthy and complicated arguments. We do not think such an error can be cured by a writ of certiorari according to the rule governing the powers of the superior court to issue such a writ. In our opinion the High Court was wrong in thinking that the alleged error in the judgment of the Bombay Revenue Tribunal viz., that an order for possession should not be made unless a previous notice had been given was an error apparent on the face of the record so as to be capable of being corrected by a writ of certiorari." [emphasis supplied]
11. It is relevant to note that Learned Counsel for the
Appellants in his arguments on the Stay application, which were
recorded by this Court and reflected in the Order dated 07-10-2021
nowhere put forth the plea that under Paragraphs 19 and 20 of the
reply dated 22-03-2021 of the Respondent to the application for
Stay, the Respondent had not pressed for deposit of the amount of
Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and
ten lakhs) only. In fact, it was the specific argument of Learned
Counsel for the Appellants that the amount awarded is a large
amount sans a submission seeking exemption from payment of
4 AIR 1960 SC 137 Review Pet.(C) No.01 of 2022 12
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and
ten lakhs) only, on the ground that the amount of
Rs.265,10,00,000/- (Rupees two hundred and sixty five crores and
ten lakhs) only, has not been pressed in execution. This Court in
Paragraph 5(i) to Paragraph 7 of the Order dated 07-10-2021
observed as follows;
5.(i) The rival submissions having been heard in extenso, it may appropriately be mentioned that the Stay granted vide Order, dated 22.06.2020, was an ex parte ad interim relief and hence the matter was taken up for hearing on 28.09.2021. While considering the requirements of the provisions of Section 36 of the Arbitration Act and Order XLI Rules 5 and 6 of the CPC, it is apposite to notice that in Manish vs. Godawari Marathwada Irrigation Development Corporation (supra), the Hon‟ble Supreme Court, while disagreeing with the decision of the Bombay High Court which had ordered 60% deposit, pending the Section 37 Appeal, observed inter alia as follows;
"...... since these are money decrees there should be 100% deposit, with the respondent being entitled to withdraw the amount deposited and furnish solvent security to the satisfaction of the High Court."
The impugned Order of the High Court was set aside.
(ii) In Pam Developments Private Limited (supra), the grant of unconditional Stay to Government with respect to proceedings under Section 34 of the Arbitration Act, 1996, by invoking the provisions of Order XXVII Rule 8-A of the CPC were being considered. The Hon‟ble Supreme Court observed that the invocation of Order XXVII Rule 8-A of the CPC by the High Court for the grant of the unconditional Stay to Government with respect to Arbitral Award passed against it was not proper. It was held inter alia thus;
"28. Section 36 of the Arbitration Act also does not provide for any special treatment to the Government while dealing with grant of stay in an application under proceedings of Section 34 of the Arbitration Act. Keeping the aforesaid in consideration and also the provisions of Section 18 providing for equal treatment of parties, it would, in our view, make it clear that there is no exceptional treatment to be given to the Government while considering the application for stay under Section 36 filed by the Government in proceedings under Section 34 of the Arbitration Act.
29. Although we are of the firm view that the archaic Rule 8-A of Order 27 CPC Review Pet.(C) No.01 of 2022 13
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
has no application or reference in the present times, we may only add that even if it is assumed that the provisions of Order 27 Rule 8-A CPC are to be applied, the same would only exempt the Government from furnishing security, whereas under Order 41 Rule 5 CPC, the Court has the power to direct for full or part deposit and/or to furnish security of the decretal amount. Rule 8-A only provides exemption from furnishing security, which would not restrict the Court from directing deposit of the awarded amount and part thereof.
30. For the foregoing reasons, we are of the opinion that the impugned order passed by the Calcutta High Court granting unconditional stay of the arbitration award dated 21-1-2010, cannot be sustained in the eye of the law. ...................................."
(iii) In Board of Control for Cricket in India (supra), Section 34 Applications under the Arbitration and Conciliation Act, 1996, were all filed prior to the coming into force of the Amendment Act w.e.f. 23.10.2015. In the four Appeals, the Section 34 Applications were filed after the Amendment Act came into force. The Court went into a detailed discussion about the pre-amended Section 36 and amended Section 36 of the Arbitration Act. The 246th Law Commission Report which led to the Amendment Act was also discussed in the ratio, wherein the reason for proposing to replace Section 36 of the Arbitration Act of 1996 was considered and it was observed therein that the unamended Section 36 of the Act made it clear that an Arbitral Award became enforceable as a Decree only after the time for filing a Petition under Section 34 had expired, or after the Section 34 Petition was dismissed. In other words, the pendency of a Section 34 Petition rendered an Arbitral Award unenforceable, hence the admission of a Section 34 Petition virtually paralysed the process for the Winning Party/Award Creditor. The Report also observed that the Hon‟ble Supreme Court in National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd.
had criticized the said situation in the [(2004) 1 SCC 540] following words;
"44. .......................... '11. However, we do notice that this automatic suspension of the execution of the award, the moment an application challenging the said award is filed under Section 34 of the Act leaving no discretion in the court to put the parties on terms, in our opinion, defeats the very objective of the alternate dispute resolution system to which arbitration belongs. We do find that there is a recommendation made by the Ministry concerned to Parliament to amend Section 34 with a proposal to empower the civil court to pass suitable interim orders in such cases.
In view of the urgency of such amendment, we sincerely hope that necessary steps would be taken by the authorities concerned Review Pet.(C) No.01 of 2022 14
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
at the earliest to bring about the required change in law.‟ "
[Emphasis supplied]
That, the Amendment in Section 36 was to ensure that mere filing of an Application under Section 34 does not operate as an automatic Stay on the enforcement of the Award. It was held inter alia as follows;
"60. This brings us to the manner of enforcement of a decree under CPC. A decree is enforced under CPC only through the execution process (see Order 21 of the Code of Civil Procedure). Also, Section 36(3), as amended, refers to the provisions of the Code of Civil Procedure for grant of stay of a money decree. This, in turn, has reference to Order 41 Rule 5 of the Code of Civil Procedure, which appears under the Chapter heading, "Stay of Proceedings and of Execution". This being so, it is clear that Section 36 refers to the execution of an award as if it were a decree, attracting the provisions of Order 21 and Order 41 Rule 5 of the Code of Civil Procedure and would, therefore, be a provision dealing with the execution of arbitral awards. ............"
6. In light of the ratiocinations referred to hereinabove, it is evident that in terms of Section 36(2) and (3) of the Arbitration Act, which came into effect from 23.10.2015, in order to obtain a Stay of operation of the Arbitral Award, the party assailing the Award may file an application seeking such relief from the Court. The Court, in turn, has the discretion to consider the prayer and grant Stay of operation of the Arbitral Award, subject to conditions that it may impose as deemed fit. As per Section 36(3) of the Arbitration Act, however, when the party seeks Stay of the operation of the Arbitral Award for payment of money, the Court is to consider the provisions for grant of Stay of a Money Decree under the provisions of Order XLI of the CPC. The argument of Learned Counsel for the Appellants that the Court is only to be guided by the provisions of the CPC and there is no mandate that the Code is to be complied with cannot be countenanced, in view of the specific direction of the Hon‟ble Supreme Court as laid down in Manish vs. Godawari Marathwada Irrigation Development Corporation supra and the discussions that have emanated in Board of Control for Cricket in India supra. Thus, while considering the prayer of the Appellants for grant of Stay of the operation of the Arbitral Award made against them for payment of money, this Court is required to follow the provisions of Order XLI Rule 5 of the CPC.
7. In consideration of the discussions that have emanated supra and the law laid down by the Hon‟ble Supreme Court, it is not necessary to delve into a prolix discussion of the provisions of Section 36 of the Arbitration Act and Order XLI Rules 5 and 6 of the CPC. Suffice it to state that when Stay is to be Review Pet.(C) No.01 of 2022 15
Sikkim Power Development Corporation and Another vs. M/s. Amalgamated Transpower (India) Ltd.
granted, a deposit is to be made by the party seeking Stay of the operation of the Arbitral Award."
12. In view of the Order extracted hereinabove, we are of
the considered opinion that the Petitioners have indeed failed to
demonstrate any error manifest on the face of the Order, which is
in fact in due compliance of the statutory provisions and the law
laid down by the Hon‟ble Supreme Court on this facet. The
intention of the Appellants is evidently to stall executing the Order
of this Court by filing this facetious Petition which is more in the
nature of an Appeal than a Review Petition. The Petitioners ought
to be mindful that the Order which is sought to be reviewed is an
order granting a stay and not an order for execution of a Decree.
13. Hence, the Review Petition deserves to be and is
accordingly dismissed. The amount directed to be deposited vide
Order of this Court dated 07-10-2021 be made good within four
weeks from today failing which necessary steps as per law will
follow.
14. Costs of Rs.20,000/- (Rupees twenty thousand) only,
are imposed on the Petitioners who are to deposit the amount in
the Sikkim State Legal Services Authority within a week from the
date of this Order, to be utilized for the senior citizens in "Lee Al
Old Age Home", Tintek, East Sikkim.
15. Consequently, the Review Pet.(C) No.01 of 2022 and
I.A. No.05 of 2022 in Arb.A. No.01 of 2020, both stand disposed of.
( Bhaskar Raj Pradhan ) ( Meenakshi Madan Rai )
Judge Judge
28-07-2022 28-07-2022
Approved for reporting : Yes
ds/sdl
