Ved Prakash and Others vs Ram Narian Goel and Others

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 behalf of respondents 2 to 5 only purporting to be u/s 32 of the Arbitration Act, but really u/s 33 of the Arbitration Act for determining the scope of Arbitration agreement and the Award pursuant thereto as well as for quashing the Award, if any and the consequential proceedings.

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

(3) The question as aforestated has arisen in the following circumstances :It appears that a tripartite agreement described as memorandum of Settlement 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 an arbitration 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 the third 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 the Company. In view of the arbitration clause, the disputes were referred to the sole Arbitration named in the agreement. The Arbitration gave a non-speaking Award, 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. The present 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 decree was passed in terms of the compromise on 25/08/1975, In spite of the consent 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 were decree-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, the present application has been filed by judgment-debtors 2 to 5. Shri HarishChandra tendered a cheque for Rs. 20,000.00 in part satisfaction of the decree holders dues on behalf of judgment debtors including the applicant-respondent but the cheque was dishonoured. Thereafter, some of the goods were attached. The applicant-respondent filed objections u/s 47 of the CPC as to the executability of the decree on the ground that it was passed 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 u/s 32 of the Act but is really an application u/s 33 of the Act were parties to the consent decree and were not exparte at the stage of the passing 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 u/s 47 of the CPC for having the decree declared as a nullity. There are some other objections also pressed for decision of the present application which are stated in the application.

(5) It was urged on behalf of the applicants that when the applicants accepted the Award and got the decree passed by consent all that they gave up was their objections, if any, u/s 30 of the Arbitration Act. The objections u/s 33 are independent objections and their scope is much wider than the objections u/s 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 u/s 30 and 33 of the Arbitration Act. The limitation for filling objections u/s 30 was 30 days from the date of the service of the notice of the filling of the Award and limitation for objections u/s 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 u/s 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 have the effect of the Arbitration agreement or the Award determined or challenge its existence. The scheme of the Arbitration Act is that so long as the award has not become a decree after contest or consent, any party to the arbitration agreement can have various reliefs as provided u/s 30 and/or Section 33 of the Arbitration Act. Till the Award becomes rule of the court the party can have the existence or validity of arbitration agreement determined by a petition u/s 33. Even alter the Award is made, any party to the arbitration agreement can have both the existence or validity of the arbitration agreement or the Award determined, but after the Award, in pursuance of arbitration 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 existence and/or validity by way of an application in the suit or independently u/s 33 of the Arbitration Act, ? If, the decree is a nullity in the sense that it was passed by a Court without inherent jurisdiction it may be possible to have it challenged under the provisions of Section 47 of the CPC 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 u/s 33 of the Arbitration Act is competent.

(7) Learned counsel for the applicants relied on the division Bench judgment of Patna High Court in Basant Lal Vs. Surendra Prasad and Others, . The basic point of distinction of that case with the present case is that there the judgment-debtor was throughout exparte and the decree was passed neither on consent not after contest and, Therefore, the observations in the said 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. Vs. Raymon and Co. (India) Private Ltd., . 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 is wholly misconceived and is not maintainable after consent decree having been passed .The application is accordingly dismissed with costs. Counsel fee Rs. 300.00.