G.A. 1572 of 2015 and E.C. No. 125 of 2015. Case: Shri Jaichandlal Ashok Kumar & Co. Pvt. Ltd. Vs Nawab Yossuf and Ors.. High Court of Calcutta (India)
| Case Number | G.A. 1572 of 2015 and E.C. No. 125 of 2015 |
| Counsel | For Appellant: Ajay Krishna Chatterjee, Sr. Adv., Srinik Singhvi, Sabyasachi Chowdhury, Sananda Ganguli and Shubradip Ray, Advs. and For Respondents: Ranjan Deb, Surajit Nath Mitra, Sr. Advs., Arindam Roy and Deepak Jain, Advs. |
| Judges | Soumen Sen, J. |
| Issue | Code of Civil Procedure, 1908 (CPC) - Order XLVII Rule 1; Section 47; Constitution of India - Articles 136, 141; Limitation Act, 1963 - Section 3 |
| Judgement Date | February 21, 2017 |
| Court | High Court of Calcutta (India) |
Judgment:
Soumen Sen, J.
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The judgment debtor is the applicant.
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The judgment debtor has filed this application under Section 47 of the Code of Civil Procedure challenging the executability of a decree passed by the appellate court on 22nd August, 2013.
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The appellate court granted a decree for specific performance which the arbitrator as well as the trial court had declined.
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The arbitrator although had arrived at a finding that the claimant/decree-holder is ready and willing to perform its obligation and would be otherwise entitled to specific performance of the development agreement but had declined to exercise discretion in favour of the claimant/decree-holder. In an application for setting aside of the award, the trial court declined to interfere with the award and upheld the discretion exercised by the arbitrator. However, the appellate court interfered with the award and the relevant portion of the order of the appellate court reads:-
"On a close look to the decisions cited at the at the bar and discussed above, we feel, in a contract of the like nature, once the arbitrator was satisfied the developer was entitled to specific performance the relief could not be denied on the grounds mentioned therein. The arbitrator categorically held, the developer was ready and willing to perform their obligation. They had the capacity to do so. The sentimental or emotional reason cannot create any impediment in performing the same. The arbitrator talked about non-cooperation on the part of the owner. Mr. Deb rightly contended in case owner would not demolish the developer would demolish the same with the Court's supervision. We fully agree with Mr. Bachawat, on the plea of Natural Justice, the arbitrator should not have allowed the developer to submit a chart at the fag end of the arbitration. In any event, the arbitrator recorded, she did not rely on the said chart. ON the top of it, at the time of hearing, Mr. Deb categorically made it clear. The developer was not interested in pecuniary damage. Hence, such issue would be academic.
While giving reply, Mr. Bachawat relied upon Yeshwantrao ganpatrao (Supra), the paragraph relied on by him quoted (Supra) would not be of any assistance to us. The Division Bench observed, the Court considering the award could not travel beyond the award. It had no jurisdiction to attach list to its decree that was not attached to the original award. We fail to appreciate. The developer approached the arbitrator with the principal prayer for specific performance of the agreement dated January 28, 1989. If we look to page-215 (Volume-III) we would find the same appearing in the statement of claim. The learned arbitrator declined to grant such relief, learned Judge while considering the award also declined. The Court of appeal being an extension of the original proceeding would certainly be competent to examine the award as to whether the arbitrator committed any illegality in not granting the said relief. The scope of judicial scrutiny on this score is limited however, it would not be right to say, this Court would not be competent to consider such prayer. We reject the contention of Mr. Bachawat on that score.
On the scope of the Court's power to set aside the award under the old law we are of the view, once the arbitrator considered the issue, applied her mind, analyze the evidence and came to final conclusion, the developer was not at fault such definite finding would not be available for judicial scrutiny. It could neither be called as perverse nor devoid of cogent evidence. The Court, while considering an application for setting aside of the award, is not entitled to substitute their own reasoning. The Court could only interfere when the award was a product of miscarriage of Justice shocking the conscience of the Court. Such is not the case here."
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The order of the appellate court was unsuccessfully challenged before the Hon'ble Supreme Court. The special leave petition preferred by the judgment-debtors was dismissed on 27th January, 2014 by a one line order "the Special Leave Petitions are dismissed".
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The executability of the said appellate decree is now being challenged by the judgment-debtors in this proceeding.
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Mr. Ajoy Krishna Chatterjee, the learned Senior Counsel appearing with Mr. Sabyasachi Chowdhury, Advocate, appearing for the decree-holder submits that the appellate decree is inexecutable in view of the fact that the appellate court has exercised a power not vested in it under the law, the appellate decree is a nullity.
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It is submitted that a Court while considering the validity of an award under the old Act of 1940 can do any of the following:-
(a) Affirm the award.
(b) Set aside the award.
(c) Modify the award.
(d) Remit the award.
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Apart from the aforesaid, the Court does not have any power in relation to an award. The appellate court was not competent to pass an appellate decree. The appellate court having not followed any of the aforesaid four courses open to it has acted without jurisdiction resulting in a void decree which is unenforceable.
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The learned Senior Counsel has referred to a Single Bench decision of this Court in Mahendranath Khundu vs. Suresh Chandra Pramanik reported at AIR 1925 Cal. 332 and Union of India v. Badridas Kedia reported at AIR 1981 Cal. 341, M/s. All India Institute of Medical Sciences, New Delhi, Vs. M/s. American Refrigeration Co. Ltd., New Delhi & Anr. reported at AIR 1982 Del 275 and The Upper Ganges Valley Electricity Supply Co. Ltd. Vs. The U.P. Electricity Board reported at AIR 1973 SC 683 to argue that it has been judicially recognized by the judicial decisions on various High Courts including the Supreme Court that the Court does not have any jurisdiction to pass a decree.
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The learned Senior Counsel has referred to the observation of Justice Mookerjee in Mahendranath Khundu (supra) which reads:-
But even then the Court had no power to rectify or correct the award unless the award was imperfect in form or the obvious error was of such a character that it could be amended without affecting the decision of the arbitrator. It is well settled that a Court acts without jurisdiction if it modifies an award because it takes a view different from that held by the arbitrator.
as well as the observation of the Delhi High Court in American Refrigeration (supra) Paragraph 23 which reads:-
23. There remains the question of amending the award. In this case the learned judge amended the award. He awarded a sum of Rs. 2,56,787.50 to the contractor himself. Can this be done by a Court? The Court can either set aside the award or sustain the award. Or it can remit the award. Or act on the principle of severability. But it cannot amend the award and Substitute its own decision in lieu of the arbitrator's decision. The learned judge relied upon Upper Gangas Valley Electricity Supply Co. Ltd. v. U.P. Electricity Board and said that in similar circumstances the Supreme Court had amended the award. This is a mis-reading of that case. Upper Ganges Valley was a decision on special facts. That was a case of a speaking award. There was a mistake in calculation. The Supreme Court amended the award in the special circumstances of the case. They decided the point of law and themselves calculated the compensation instead of remitting the award to the arbitrator. The Court expressly said that normally the award should have been remitted to the arbitrator.
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The learned Senior Counsel referring to Paragraph 26 in The Upper Ganges (supra) submits that it would appear from the said Paragraph that on concession the award was amended and it cannot be contended that the Court, in fact, has passed an award in supersession of the available courses that are open to the Court. The said Paragraph 26 reads:-
26. Normally, we would have remitted the award for a decision in the light of our judgment but that is likely to involve undue delay and expense in a dispute which is pending since 1959. Learned counsel for the appellant was agreeable that we should ourselves amend the award. Learned counsel for the respondent demurred but-he was unable to indicate any cogent reason why we should not adopt a course which far from causing any prejudice to the parties, was clearly in the interests of justice.
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It is submitted that in a proceeding under Section 47 of the Code of Civil Procedure, the Court can always go into the question of executability of the decree and in this regard has referred to a Single Bench decision in M/s. Saraswat Trading Agency v. Union of India & Ors. reported at AIR 2004 Cal. 267 Paragraph 8 in which it was held that the Court in a proceeding under Section 47 of the Code of Civil Procedure can consider whether the resultant award is a product of an invalid reference. The paragraph 8 on which reliance has been place is:-
8. On the basis of the authorities cited at the bar, I find substantial force in Mr. Chatterjee's submission. It was held in Prabartak Commercial Corporation's case that an award made by the Arbitrator on the basis of an invalid reference would be null and void. That means, if the reference is bad, then the award also becomes bad, irrespective of whether the parties participate in the arbitral proceeding or not. The validity of Clauses 24(b) and 32(a) of the contract have not been questioned before me. It is true that in M/s. A.K. Pal's case (unreported decision) Aloke Chakrabarti, J was pleased to sustain the validity of an identical clause in a contract. But then, in the present case, in the absence of any challenge to the validity of the two clauses, I find no necessity to examine their validity. The decree-holder has accepted the terms and conditions in the contract to be correct. In Popular Builders's case, the Supreme Court allowed the Union of India (that suffered the award made by the Arbitrator) to raise the question of validity of the reference for the first time in the Supreme Court. It was...
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