Hindustan Steel Work Construction vs D.B. Rathore and Company

I.M. Quddusi, J.—Heard learned Counsel appearing for the Appellant as well as learned Counsel appearing for the Respondent.

By means of this appeal, the Appellant seeks following relief:

(i) That the judgment dated 8-2-2010 passed by the District Judge, Durg in MJC No. 27/2009 and order dated 19-12-2007 is bad in law and therefore liable to be set aside/quashed.

(ii) That to hold that the award dated 12-9-1998 passed by the arbitrator in dispute between the Appellant and Respondents is arbitrary, unjustified bad in law.

This appeal has been filed against the impugned order dated 8-2-2010, passed u/s 39 of the Arbitration Act, 1940, dismissing the application of the Appellant, filed u/s 5 of the Limitation Act, for condonation of delay in filing the application under Sections 30 and 33 of the Arbitration Act, 1940.

The brief facts, in nutshell, are that the Respondent filed an application u/s 14 read with Section 17 of the Arbitration Act, for grant of decree in regard to the award dated 12-9-1998 (Annexure A/2), passed by the joint Arbitrator. That application was registered as Civil Suit No. 10-A/2004 (M/s. D.B. Rathore & Company v. Hindustan Steel Works Construction Ltd.).

The present Appellant also filed an application dated 9-9-2005 (Annexure A/5) before the District Judge, Durg, for setting aside the award dated 12-9-1998 and objection to convert the same into the rule of award.

Both the petitions were decided by the District Judge, Durg vide composite judgment/order dated 19-12-2007 (Annexure A/6), refusing to set aside the award and granted decree converting the same into the rule of award.

It is apparent that the Appellant did not mention as to under which section they had filed the application dated 9-9-2005 (Annexure A/5), therefore, the District Judge, Durg, relying on various decisions of Hon''ble Supreme Court, in para 6 of the judgment/order dated 19-12-2007, the award passed by the Arbitrator can be challenged only under the provisions of Section 30 of the Arbitration Act.

The petition filed by the Appellant, in fact, was under Sections 30 and 33 of the Arbitration Act, 1940, though the Sections were not mentioned therein but it would not effect the fact that the same was filed under these sections. Therefore, the judgment /order dated 19-12-2007, passed by the learned District Judge, Durg, refusing to set aside the award and at the same time making the award rule of the Court, was a composite order; hence the same was appealable against the refusal to set aside the award.

In this regard there is a catena of decisions. In the matter of Raja Brijendra Singh Vs. Buti Saha and Others, , a Division Bench in para 4 has held that an order refusing to set aside an award is appealable u/s 39 of the Arbitration Act, but a decree based on the award is not. Where an order of the Court is composite which on one hand dismissing the objection of a party of the award and on the other hand pronounced the judgment on the basis of the award then such an order should be treated as an order following Section 39 and an appeal is maintainable against it.

In an earlier decision in the matter of Sheoramprasad Ram Narayanlal Bania Vs. Gopalprasad Parmeshwardayal Shukla and Others, , a Division Bench, presided by Hon''ble Justice M. Hidayatullah, Chief Justice (as he then was), in para 7 has held that in the case of a composite order by which a Court refuses to set aside an award and also passes a decree in accordance with its terms, the order refusing to set aside the award and the decree are both appealable, as Sections 17 and 39 are not mutually exclusive. Therefore, the fact that a decree has been passed does not preclude an appeal against the order refusing to set aside the award. If the order is set aside, the decree which is founded on it would lapse, and consequently it cannot operate as a bar to the appeal against the order.

Similar view was taken by the Madhya Pradesh High Court in the case of Jay Kumar Jain and Others Vs. Om Prakash and Another, in which it has been held that in a case of a composite order by which a Court refuses to set aside an award and also passes a decree in accordance with its terms the order refusing to set aside the award and the decree are both appealable as the provisions contained in Sections 17 and 39 are not mutually exclusive. Therefore, the fact that a decree has been passed does not preclude an appeal against the order refusing to set aside the award. If the order is set aside, the decree which is founded on it would lapse and consequently it cannot operate as a bar to the appeal against the order. A fortiori the making of two separate orders does not, take away the right of appeal given u/s 39(1)(vi) to a person aggrieved by an order setting aside or refusing to set aside an award. A similar view was taken by a single Bench of the Orissa High Court in the case of Pravakar Baral Vs. Lakhimidhar Naik and Others, .

In view of the above, the fact that the objections/petition for setting aside the award was decided by the composite order dated 19-12-2007, refusing to set aside the award, making the award as rule of the Court, the same was appealable and hence the appeal filed by the instant Appellant before this Court, which was registered as Arbitration Appeal No. 20 of 2008 was maintainable and subsequent application filed by the Appellant under Sections 30 and 33 of the Arbitration Act before the District Judge on 6-4-2009, which was registered as Civil MJC No. 27/2009, in which the impugned order dated 8-2-2010 has been passed, was not maintainable at all, because once an application and objection for setting aside the award was entertained by the Court and the Court refused to set aside the award earlier by order dated 19-12-2007, no second application in that regard was maintainable. Learned District Judge, Durg, has committed illegality in rejecting the application u/s 5 of the Limitation Act and dismissed the petition under Sections 30 and 33 of the Arbitration Act in M. J. C. No. 27/2009, refusing to set aside the award so passed on the petition which was not maintainable. The District Judge, Durg, should have dismissed the application u/s 5 of the Limitation Act and the petition under Sections 30 and 33 of the Arbitration Act, as not maintainable, instead of deciding the same on merits.

In view of what has been stated above, since the application under Sections 30 and 33 of the Arbitration Act, which was registered as M. J. C. No. 27/2008 was not maintainable, as the appeal could have been filed against the judgment /order dated 19-12-2007, passed in Civil Suit No. 10-A/2004, the instant appeal is also not maintainable.

Therefore, the appeal is dismissed as such. No order as to costs.