Madhya Pradesh State Electricity Board vs Rama Steels Tubes Limited

A.K. Shrivastava, J.

By this petition under Article 227 of the Constitution of India, the Petitioner has sought following reliefs:

In the facts of the case, the Petitioner humbly prays that this Hon''ble Court may be kind enough to quash the entire execution proceeding in execution case No. 04/2009 pending in the court of XVI Ith Additional District Judge (Fast Track Court), Jabalpur and set aside the orders dated 21.10.2009 and 08.11.2010. Any other order/orders deemed expedient in the circumstances obtaining in the case may also kindly be passed.

The contention of learned Counsel for the Petitioner is that on account of certain disputes between the parties, the matter was referred to the Arbitrator in terms of arbitration agreement to resolve the dispute under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ''Act''). The Arbitrator passed award on 21.5.2009 (Annexure P/1). The said award was challenged by the Petitioner before the Civil Court vide Annexure P/2 on various grounds u/s 34 of the said Act.

The contention of learned Counsel for the Petitioner is that during the pendency of the proceedings u/s 34 of the Act, the Respondent submitted execution to get the arbitral award executed. Learned Counsel submits that in terms of Section 36 of the said Act, since the award has been challenged by filing proceedings u/s 34 of the Act, the arbitral award cannot be enforced. In support of his contention, learned Counsel has placed reliance on two decisions of the Supreme Court, they are National Aluminium Co. Ltd. Vs. Pressteel and Fabrications Pvt. Ltd. and Another, and National Buildings Construction Corporation Ltd. v. Lloyds Insulation India Ltd (2005) 2 SCC 367. Hence, it has been contended by learned Counsel that the arbitral award cannot be executed in terms of Section 34 and 36 of the Act till the matter is finally decided by the Court.

Combating the aforesaid submission of learned Counsel for the Petitioner, it has been submitted by Shri Rajput, learned Counsel for the Respondent that Section 34(3) as well as Section 36 of the Act would not come into play for the simple reason that proceedings u/s 34 of the Act is barred by the prescribed period of limitation since it has not been filed within three months from the date of award and if that would be the position since there is no bar to get the award enforced, therefore, the Petitioner is not entitled for the relief as claimed in the petition. To bolster his contention, learned Counsel for the Respondent has placed heavy reliance on the two decisions of the Supreme Court, they are State of Arunachal Pradesh Vs. Damani Construction, and Union of India Vs. M/s Popular Construction Co.,

Having heard learned Counsel for the parties, I am of the view that this petition deserves to be allowed.

Undisputedly, an application u/s 33 was submitted by the Respondent before the Arbitrator on 19.6.09 for computational error in respect of calculation of loss. It is also not disputed that vide order dated 4.7.09, the Arbitrator rejected the said application of the Respondent. Hence, according to me, in terms of Section 34(3) of the Act, the application to set aside the arbitral award would commence within three months from the date of order i.e. 4.7.09 when the application of computational error filed by the Respondent before the Arbitrator was disposed of.

At this juncture, it would be profitable to read Section 33 of the said Act which lays down that within 30 days from the receipt of the arbitral award, a party can submit an application to the Arbitration Tribunal to correct any computational errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award.

Since admittedly, by invoking the powers conferred u/s 33, an application was moved by the Respondent for correction of the computational error in respect of calculation of loss which was decided on 4.7.09, therefore, the application u/s 34 of the Act which was submitted on 22.9.09 was well within time since it was filed within 90 days from the date of disposal of the application u/s 33 before the Arbitration Tribunal. In this view of the matter, the decisions in case of National Aluminium Co. Ltd(supra) and National Buildings Construction Corporation Ltd.(supra) placed reliance by learned Counsel for the Petitioner are squarely applicable in the present case. Hence, I have no scintilla of doubt in holding that the application of the Petitioner u/s 34 of the Act to set aside the award is well within limitation which is being adjudicated by the Civil Court. The decisions in case of Damani Construction Co. (supra) and Union of India (supra) placed reliance by learned Counsel for the Respondent are not applicable in the present factual scenario for the simple reason that in those cases, the application was not in the nature of Section 33 although it was filed under this provision. In this context, Para 8 of Damani Construction Co. (supra) may be taken note of wherein it has been specifically held by the Apex Court that although application has been filed u/s 33 of the Act but the said application was not filed to correct the clerical or typographical error or any computational error.

However, in the present case, situation is entirely different. Indeed, the Respondent itself submitted an application u/s 33 for correction of computational error and if that would be the position, the provisions of Section 34 and 36 are applicable in the case and, therefore, I am of the view that execution of the award cannot take place till the decision of the application filed u/s 34 of the Act by the Petitioner.

For the reasons stated hereinabove, this petition succeeds and is hereby allowed. No order as to costs.