Dismissed

Lakhwinder Singh Bhinder v. Mukesh Verma and Another

Punjab & Haryana HC3 Nov 2014CR/7399/2014

Case brief

AI extract

What is this about?

The High Court dismissed a revision petition challenging an order dismissing objections to the execution of an arbitral award. The Court held that since the petitioner failed to file an application under Section 34 of the Arbitration Act to set aside the award, jurisdiction under Article 227 cannot be exercised to interfere with the executing court's order.

What did the court decide?

The revision petition was dismissed, and the impugned order was upheld.

Lakhwinder Singh Bhinder Vs Mukesh Verma and Another — Arbitration | Punjab & Haryana HC (2014)

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C.R. No. 7399 of 2014

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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C.R. No. 7399 of 2014 Date of decision: 03.11.2014

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Lakhwinder Singh Bhinder

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....Petitioner(s)

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Versus

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Mukesh Verma and another

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...Respondent(s)

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CORAM: HON'BLE MR. JUSTICE G.S.SANDHAWALIA

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Present: Mr. Atul Lakhanpal, Sr. Advocate, with Mr. Jasmeet Singh, Advocate, for the petitioner.

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G.S.SANDHAWALIA, J.

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Challenge in the present revision petition filed under Article 227 of the Constitution of India is to the order dated 04.08.2014 whereby, the objections filed by the petitioner have been dismissed and warrants of possession have been issued.

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It is not disputed inter se that a partnership was entered between the petitioner and respondent no. 1 on 25.04.2006 and they were to carry on the trading of beer, liquor and wine in the name and style of M/s. M.R. Trade Links. As per clause 18 of the partnership deed, an arbitration clause was provided and the controversy arising out of the deed or relating to the contract or breach thereof was to be settled by arbitration and the award was to be binding on all the partners. Respondent no. 1 made a request to one Capt. Arun Sharma for adjudicating upon the matter and on the said claim, ex parte award dated 17.11.2011 (Annexure P-4) was passed.

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The petitioner did not file any proceedings under Section 34 of the SHIVANI GUPTA 2015.03.02 11:35 I attest to the accuracy and integrity of this document Chandigarh

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C.R. No. 7399 of 2014

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Arbitration and Conciliation Act, 1996 (in short 'the Act'). When execution of the award in question was filed by respondent no. 1, the objections were filed taking various pleas that the petitioner was not liable for the amount and he had never been served in a proper way in the matter. The said objections were contested by filing reply on the ground that the Award was valid and fully enforceable and no appeal had been filed against the said award and the judgment debtor had been properly served and after that the Award had been passed. The plea that the FIR had been lodged against one M/s. International Breweries (P) Ltd. was also taken into consideration and rejected since the same was not against the claimant-respondent no. 1. It was accordingly held that since the petitioner opted not to appear before the Arbitrator and had not filed any appeal against the said Award, the present objections were not maintainable on the ground that the Award was a result of fraud and some material facts had been concealed. It was accordingly held that the Executing Court was bound to execute the decree and it could not go beyond the Award on the basis of which execution petition had been filed. Resultantly, the warrant of possession had been issued.

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Counsel for the petitioner has vehemently submitted that if the Award is passed on the basis of concealment, then the Executing Court has powers to set aside the same. He has placed reliance upon the judgment of the Apex Court in A.V. Papayya Sastry and others vs. Government of Andhra Pradesh and others, AIR 2007 SC 1546.

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After hearing counsel for the petitioner, this Court is of the opinion that the said submission is without any basis. The Act has been set up for the purpose to provide for redressing the disputes inter se the persons who have an agreement and after a dispute has arisen for an appointment of

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C.R. No. 7399 of 2014

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an independent person to go into the dispute inter se the parties for the purposes to ensure that the dispute is settled at the earliest. The Act provides that once the Award is passed, recourse for setting aside the arbitration award can be only made by resorting to filing an application under Section 34 of the Act which provides for a limited intervention. One of the grounds on which the Court can set aside the Award is that a party was not given proper notice of the arbitration proceedings or otherwise was unable to present his case. Sections 34 and 36 of the Act reads thus:-

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“34 Application for setting aside arbitral award .

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(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and subsection (3).

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(2) An arbitral award may be set aside by the Court only if—

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(a) the party making the application furnishes proof that—

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(i) a party was under some incapacity, or

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(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

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(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

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(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

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Provided that, if the decisions on matters submitted to arbitration can be separated from those

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C.R. No. 7399 of 2014

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not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

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(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

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(b) the Court finds that—

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(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

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(ii) the arbitral award is in conflict with the public policy of India.

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Explanation. —Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.

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(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:

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Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

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(4) On receipt of an application under subsection (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings

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C.R. No. 7399 of 2014

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for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

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35. xxx xxx xxx

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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 (5 of 1908) in the same manner as if it were a decree of the Court.”

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Sub-section (3) further provides that an application for setting aside cannot be made after 3 months from the date of which the party making that application had received the arbitral award. Under Section 36, if no application is filed to set aside the Award, the same can be enforced under the Code of Civil Procedure in the same manner as if it was a decree of Court. The earlier provision of getting the award executed has also been done away. Thus, the whole purpose is that a person can execute the award at the earliest without getting into the rigamarole of getting it made a rule of Court.

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In the present case, as noticed, the Award was passed on 17.11.2011. Specific observations have been made that registered notices were sent to the petitioner in person. The petitioner did not appear for filing any reply/counter in spite of receiving the copy of the claim and was proceeded ex parte on 28.10.2011. The petitioner thus, chose not to contest the said Award. Even after the Award was passed, he did not approach the Court under Section 34 of the Act for setting aside on the ground that he was not served and now he cannot submit that his objections are liable to be

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C.R. No. 7399 of 2014

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allowed on the ground of fraud. As such, it was his case that he had not been served under Section 34(2)(iii) of the Act. He could have got the award set aside on the ground that he had not been heard but he chose not to exercise his remedy which is provided under law. Now, to submit that his objections have been wrongly dismissed on the ground that there was some fraud and concealment is without any basis. The said submissions had to be raised before the competent Court as provided under Section 34(2)(iii) of the Act. The reference which has now been made to the judgment of the Apex Court in A.V. Papayya Sastry's case (supra) is without any basis since the judgment in question only lays down the principle that any judgment passed by any Authority can always be reviewed if an order has been obtained by a party by playing fraud.

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In the present case, as noticed, a specific remedy has been provided under the provisions of the Act for setting aside of the awards on the grounds mentioned. The Apex Court has also further held that once there is an alternative remedy provided under the Law, the jurisdiction under Article 227 of the Constitution of India is not to be resorted to. Reference can be made to the judgment in Shalini Shyam Shetty and another vs. Rajendra Shankar Patil, 2010 (8) SCC 329 . The relevant observations read thus:-

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“62. On an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court's jurisdiction under Article 227 of the Constitution may be formulated:

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(a) A petition under Article 226 of the Constitution is different from a petition under Article 227. The mode of exercise of power by High Court under these two Articles is also different.

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C.R. No. 7399 of 2014

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(b) In any event, a petition under Article 227 cannot be called a writ petition. The history of the conferment of writ jurisdiction on High Courts is substantially different from the history of conferment of the power of Superintendence on the High Courts under Article 227 and have been discussed above.

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(c) High Courts cannot, on the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders of tribunals or Courts inferior to it. Nor can it, in exercise of this power, act as a Court of appeal over the orders of Court or tribunal subordinate to it. In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the High Court.”

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The Trial Court has also noticed that the FIR in question was not against the claimant but was against M/s. International Breweries (P) Ltd., into which, a subsequent contract had been entered into by the partners. Thus in such circumstances, even if there is any dispute inter se the parties regarding the partnership, the matter had to be resolved before the Arbitrator and not before the Executing Court.

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In view of the above, the impugned order does not suffer from any infirmity which would warrant interference under Article 227 of the Constitution of India and the present revision petition is accordingly dismissed.

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03.11.2014 (G.S. SANDHAWALIA) shivani JUDGE

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Lakhwinder Singh Bhinder v. Mukesh Verma and Another

Case brief

What is this about?

What did the court decide?

Lakhwinder Singh Bhinder v. Mukesh Verma and Another

Case brief

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