C.R. No. 2306 of 2006 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Revision No. 2306 of 2006 (O&M) Date of decision: January 29, 2009 M/s Ghai Rice Mills .. Petitioner v. Punjab State Civil Supplies Corporation Limited and others .. Respondents CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL Present: Mr. Vikas Bahl, Advocate for the petitioner. Mr. H.N.S. Gill, Advocate for respondents No. 1 and 2. ... Rajesh Bindal J. Challenge in the present petition is to the order dated 30.3.2006, passed by learned Additional District Judge, Nawanshahr, whereby the objections filed by the petitioner in the execution of the award passed in favour of respondent No. 1, were dismissed. Briefly, the facts are that on account of dispute arisen between the parties, an Arbitrator was appointed by respondent No. 1 whereby a claim of Rs. 1,25,288/- along with interest was made against the petitioner. The petitioner while filing reply to the claim made by respondent No. 1, also filed counter claim of Rs. 59,533.29 on account of milling charges recoverable by the petitioner from respondent No. 1. The Arbitrator vide his award dated 23.11.2001 accepted the claim made by respondent No. 1 which is sought to be executed by respondent No. 1 in the execution proceedings in which the petitioner filed objections. Having raised the plea that the application filed by the petitioner before the Arbitrator praying for passing of additional award regarding the counter claim under Section 33(4) of the Arbitration and Conciliation Act, 1996 (for short, `the Act') was still pending and till such time the same is not decided, the petitioner cannot be forced to execute the award as the same has not attained finality. However, the objections were dismissed and the execution proceedings were sought to be proceeded. C.R. No. 2306 of 2006 [2] Learned counsel for the petitioner referred to Sections 33, 34 and 36 of the Act to submit that the award pronounced by the Arbitrator becomes enforceable only when the time prescribed for filing an application for setting aside of award under Section 34 of the Act had expired. Referring to Section 34 of the Act, it is submitted that sub-section (3) thereof provides that an application can be made within three months from the date of receipt of arbitral award or in case a request has been made under Section 33 of the Act to the Arbitrator within three months from the date of the disposal of the application by the arbitral Tribunal. Against the award of the Arbitrator announced on 23.11.2001, an application was filed by the petitioner under Section 33(4) of the Act for additional award on 21.12.2001 on which after considering the matter, the Arbitrator had issued notice to respondent No. 1. During the pendency of proceedings, the Arbitrator expired. The petitioner moved application to respondent No. 1 for appointment of another Arbitrator in terms of the agreement. However, the same was not appointed and execution proceedings were sought to be pursued. As the objections filed by the petitioner under Section 33 of the Act had not yet been decided, there was no cause to the petitioner to file petition under Section 34 of the Act against the award to the court and till such time the same is decided, the award of the Arbitrator will not become enforceable under Section 36 of the Act. The submission is that the learned court below has totally gone wrong in going into the merits of the application pending before the Arbitrator under Section 33 of the Act as that was within the jurisdiction of the Arbitrator. On the other hand, learned counsel for respondents No.1 and 2 submitted that the conduct of the petitioner shows that he wants to delay the proceedings only. During the pendency of the proceedings before the Arbitrator, he never appeared before him. The petitioner did not file any affidavit in defence in the claim made by respondent No. 1 against him. He did not even file any affidavit in support of his counter claim. Seeing his conduct, no illegality has been committed by the learned court below even in going into the merits of the application filed by the petitioner before the Arbitrator under Section 33 of the Act which itself was not maintainable as rehearing of the matter was sought. Heard learned counsel for the parties and perused the record. Before the respective contentions raised by learned counsel for the parties are considered, I deem it appropriate to extract the relevant provisions of the Act. Sections 33(4), 34(1) and (3), 35 and 36 of the Act are extracted below: C.R. No. 2306 of 2006 [3] “33. Correction and interpretation of award; additional award- (1) to (3) xx xx xx (4) Unless otherwise agreed by the parties, a party with notice to the other party,may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award. 34. Application for setting aside arbitral award.- (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 sub-section (3), (2) xx xx xx (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: 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. xx xx xx 35. Finality of arbitral awards.- Subject to this Part an arbitral award shall be final and binding on the parties and persons claiming under them respectively. 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.” The scheme, which emerges from the aforesaid provisions of the Act is that after the Arbitrator pronounces his award, the same can be enforced under the Code of Civil Procedure in the same manner as if it is a decree of the Court. However, the same can be done only after the time to file an application for setting aside of award under Section 34 of the Act has expired or such an application having been made has been rejected. Section 34 of the Act is an enabling provision providing right to either of the parties to the arbitration proceedings to move an C.R. No. 2306 of 2006 [4] application to the Court for setting aside of the award. Such an application can be made within a period of 3 months from the date of receipt of arbitral award or if a request had been made under Section 33, within three months from the date of disposal thereof by the Arbitrator. Section 33 of the Act provides for correction and interpretation of award; additional award. Sub-section (4) thereof provides that a party to the arbitration proceedings can request to the Arbitrator within 30 days from the receipt of the arbitral award to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award. Now the claim of the parties in the present case is to be considered in the light of aforesaid scheme of the Act. In the present case, the Arbitrator announced the award on 23.11.2001 with respect to the claim made by respondent No. 1. The petitioner, besides filing objections to the claim made by respondent No. 1, had even filed a counter claim. Though the petitioner did not appear before the Arbitrator during the arbitral proceedings, still when the final award was passed, the counter claim made by the petitioner was not even referred to or discussed, as it was only the claim made by respondent No. 1, which was discussed and allowed. Immediately after the receipt of the award, the petitioner moved application before the Arbitrator who, finding prima facie merit in the submissions made by the petitioner, issued notice to respondent No. 1. During the pendency of the proceedings, the Arbitrator expired. The petitioner immediately moved respondent No. 1 for appointment of a new Arbitrator in terms of the agreement between the parties. However, no action was taken thereon. Rather, respondent No. 1 continued to proceed with the execution of the original award of the Arbitrator. In terms of the provisions of Section 36 of the Act, an award can be enforced as a decree of the court only after the period for filing application under Section 34 of the Act had expired or if such an application had been filed, the same is rejected. An application under Section 34 of the Act could be filed either within 3 months from the date of receipt of the award of the Arbitrator or from the date a request under Section 33 of the Act is disposed of by the Arbitrator. It is not in dispute that the request made by the petitioner under Section 33(4) is pending before the Arbitrator, meaning thereby that even the time limit, which is prescribed for filing objections in the Court against the award of the Arbitrator, has not expired. Once the time has not expired, the provisions of Section 36 of the Act will not come to the rescue of respondent No. 1 to enable it to execute the award of the Arbitrator as decree of the Court. Accordingly, in my view, the learned court below had gone wrong in C.R. No. 2306 of 2006 [5] rejecting the objections raised by the petitioner in the proceedings for execution of the award. Further, in my opinion, the court below has exceeded its jurisdiction in dealing with the application filed by the petitioner under Section 33(4) of the Act before the Arbitrator. The same was to be dealt with by the Arbitrator and not the Court. The respondents could very well appoint a new Arbitrator on account of the death of the earlier Arbitrator and get the issue settled early instead of proceeding with the execution by adopting a procedure, which is not in conformity with law. For the reasons mentioned above, the present petition is allowed. The impugned order passed by the learned court below is set aside. (Rajesh Bindal) Judge 29.1.2009 mk (Refer to Reporter)