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Ved Prakash and ors. Vs. Ram Narian Goel and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberElection Appeal No. 33 of 1976
Judge
Reported in13(1977)DLT298
ActsArbitration Act, 1940 - Sections 133
AppellantVed Prakash and ors.
RespondentRam Narian Goel and ors.
Advocates: B.S. Charya and; B.S.C. Singh, Advs
Cases ReferredBasant Lal v. Surendra Prasad
Excerpt:
- - 33of 1976 which has been filed in the suit itself by way of an application on behalfof respondents 2 to 5 only purporting to be under section 32 of the arbitration act, but really under section 33 of the arbitration act for determiningthe scope of arbitration agreement and the award pursuant thereto as well asfor quashing the award, if any and the consequential proceedings. 3. in the present application though he was one of the persons representing the firm as well as thecompany. the objections under section 33 are independent objections and their scope is much wider than the objections under section 30. the argument further proceeded like this;.....settlement on behalf of the firm was signed by two of the partners,respondents nos. 1 and 2 in the present application, but was not signed by thethird partner, shri shiv narain goya, respondent no. 3. in the present application though he was one of the persons representing the firm as well as thecompany. in view of the arbitration clause, the disputes were referred to thesole arbitration named in the agreement. the arbitration gave a non-speakingaward, specifying the amounts payable to each of the plaintiff-petitioners in the suit totalling rs. 95,124.99. the award having been given by the arbitrator, the plaintiff-petitioners filed a petition under sections 14 and 17 of. the arbitration act for directing the arbitrator to file the award in court and for making it a rule of the court......
Judgment:

Yogeshwar Dayal, J.

(1) This order will dispose of L.A.33Of 1976 which has been filed in the suit itself by way of an application on behalfof respondents 2 to 5 only purporting to be under Section 32 of the Arbitration Act, but really under Section 33 of the Arbitration Act for determiningthe scope of Arbitration agreement and the Award pursuant thereto as well asfor quashing the Award, if any and the consequential proceedings.

(2) The main question which is involved in the petition is whether any petition under Section 33 of the Arbitration Act is at all maintainable after theAward being made by the Arbitrator and it being filed in court and after noticebeing given to all the parties to the arbitration agreement and the Award andafter the Award being made a rule of the Court as per consent of allthe parties.

(3) The question as aforestated has arisen in the following circumstances :It appears that a tripartite agreement described as memorandum ofSettlement was entered into between the parties, the plaintiff petitioners in the suit, respondent No. 5, M/s. R.S. Madhoram & Sons (NB) hereinafter referred to as 'the firm', respondent No. 4, M/s. Madhosons Stores & Services Pvt. Ltd..hereinafter referred to as 'the Company'. The settlement contained anarbitration clause for referring certain disputes to the named sole Arbitrator.The settlement on behalf of the firm was signed by two of the partners,respondents Nos. 1 and 2 in the present application, but was not signed by thethird partner, Shri Shiv Narain Goya, respondent No. 3. in the present application though he was one of the persons representing the firm as well as theCompany. In view of the arbitration clause, the disputes were referred to thesole Arbitration named in the agreement. The Arbitration gave a non-speakingAward, specifying the amounts payable to each of the plaintiff-petitioners in the suit totalling Rs. 95,124.99. The Award having been given by the Arbitrator, the plaintiff-petitioners filed a petition under Sections 14 and 17 of. the Arbitration Act for directing the Arbitrator to file the Award in Court and for making it a rule of the court. This was registered as Suit No. 164-A of 1975. Thepresent E.A. 33 of 1976 has been filed in this suit. On statement on behalf of all the parties to the arbitration agreement and the Award and the suit, the Award was made a rule of the Court in terms of the compromise and decreewas passed in terms of the compromise on 25/08/1975, In spite of theconsent decree neither the Firm nor the Company nor the other judgment debtors, who are respondents 1 to 5, and the applicants in the present application,made any payment and accordingly the plaintiff petitioners in the suit who weredecree-holders filed the Execution application in this Court (execution No. 69of 1975). On the filing of the Execution application, Shri Harish Chandra,Advocate appeared on behalf of judgment debtors 1 to 5 out of whom, thepresent application has been filed by judgment-debtors 2 to 5. Shri HarishChandra tendered a cheque for Rs. 20,000.00 inpart satisfaction of the decreeholders' dues on behalf of judgment debtors including the applicant-respondents.but the cheque was dishonoured. Thereafter, some of the goods were attachedThe applicant-respondent filed objections under Section 47 of the Code ofCivil Procedure as to the executability of the decree on the ground that it waspassed by a court lacking inherent jurisdiction to pass the decree. Those objections were the subject-matter of E.A 32 of 1976 and have been disposed of bya separate judgment. What is to be noticed is that the present respondent-applicants to the present application which purports to be an application under section 32 of the Act but is really an application under Section 33 of the Actwere parties to the consent decree and were not exparte at the stage of thepassing of the decree.

(4) Some of the grounds on the basis of which the applicants desire to challenge the existence or validity of the arbitration agreement of the Award or to have the effect of either of them determined were urged in support of the objections under Section 47 of the Code of Civil Procedure for having thedecree declared as a nullity. There are some other objections also pressed fordecision of the present application which are stated in the application.

(5) It was urged on behalf of the applicants that when the applicantsaccepted the Award and got the decree passed by consent all that they gave up was their objections, if any, under Section 30 of the Arbitration Act. The objections under Section 33 are independent objections and their scope is much wider than the objections under section 30. The argument further proceeded like this; it was submitted that when notice was received of the filing of the Award the objections could have been filed under Section 30 and 33 of the Arbitration Act. The limitation for filling objections under Section 30 was 30 days from the date of the service of the notice of the filling of the Award andlimitation for objections under Section 33, if any, had not expired by then and,therefore, even though the applicant-respondents suffered consent decree they ; are not debarred from taking objections which are open to them under Section 33 of the Arbitration Act and have the question of existence or validity of the Arbitration agreement of the Award or their effect determined subsequently.

(6) I am afraid, I will not be able to agree with this submission. If a party suffers a consent decree or suffers a decree after contest, he can no longer havethe effect of the Arbitration agreement or the Award determined or challengeits existence. The scheme of the Arbitration Act is that so long as the awardhas not become a decree after contest or consent, any parly to the arbitrationagreement can have various reliefs as provided under section 30 and/or Section 33 of the Arbitration Act. Till the Award becomes rule of the court the partycan have the exstence or validity of arbitration agreement determined by apetition under section 33. Even alter the Award is made, any party to thearbitration agreement can have both the existence or validity of the arbitrationagreement or the Award determined, but after the Award, in pursuance ofarbitration agreement, is made a rule of the court by consent and/or by contest,no party to the arbitration agreement or the Award can challenge its existenceand/or validity by way of an application in the suit or independently under section 33 of the Arbitration Act, If, the decree is a nullity in the sense thatit was passed by a Court without inherent jurisdiction it may be possible tohave it challenged under the provisions of Section 47 of the Code of CivilProcedure whenever and wherever it is sought to be enforced against the party.But where the decree is passed after consent or contest, based on an Award,by a Court, no application under Section 33 of the Arbitration Act iscompetent.

(7) Learned counsel for the applicants relied on the division Bench judgment of Patna High Court in Basant Lal v. Surendra Prasad : AIR1957Pat417 . The basic point of distinction of that case with the present case is thatthere the judgment-debtor was throughout exparte and the decree was passedneither on consent not after contest and, thereforee, the observations in thesaid case are of no help to the present applicant respondents.

(8) The other case relied upon by the learned counsel was Waverly Jute Mills Co. Ltd. and (mothers x. Reymon and Co. (India) Pvt. Ltd. : [1963]3SCR209 . This case, again, has got no relevance whatsoever to the maintainability of Section 33 petition after consent decree is passed.

(9) For all those reasons, it must be held that the present application iswholly misconceived and is not maintainable after consent decree having beenpassed. The application is accordingly dismissed with costs. Counsel feeRs. 300.00.


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