Skip to content


North Eastern Electrical Power Corp. Ltd. Vs. Hindustan Const. Company and anr. - Court Judgment

SooperKanoon Citation
Subject;Constitution;Arbitration
CourtGuwahati High Court
Decided On
Case NumberWP(C) No. 236 (SH) of 2004
Judge
ActsConstitution of India - Article 227; Arbitration and Conciliation Act, 1996 - Sections 34(3)
AppellantNorth Eastern Electrical Power Corp. Ltd.
RespondentHindustan Const. Company and anr.
Appellant AdvocateV.K. Jindal and L. Lyngdoh, Advs.
Respondent AdvocateS.B. Mukherjee and S.P. Mahanta, Advs. for the respondent No. 1
DispositionPetition dismissed
Prior history
I.A. Ansari, J.
1. By an Arbitral award, dated 21.8.2001, the petitioner-Corporation was directed to pay to the respondent-Company a sum of Rs. 102.55 lakhs with simple interest thereon at the rate of 19.5% on and from 3.4.1993. The petitioner-Corporation filed, on 21.3.2002, an application Under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') along with an application Under Section 5 of the Limitation Act seeking condonation of delay in
Excerpt:
.....even so, for some inexplicable reason, the respondent chose to prefer a special civil application under article 227 of the constitution and vaidya j entertained the special civil application and granted relief to the respondent, casting to the winds the well settled principle that the high court does not ordinarily, in exercise of its discretion, entertain a special civil application under article 227 of the constitution where an adequate alternative legal remedy is available to the applicant. it must be realised that the jurisdiction under article 227 of the constitution is an extraordinary jurisdiction which is to be exercised sparingly and in appropriate cases and it is not to be exercised as if it were an appellate jurisdiction or as if it gave unfettered and..........corporation (who was opposite party in the said revision), has, now, with the help of this writ application made under article 227 of the constitution of india read with section 115 of the code of civil procedure, approached this court seeking to get the arbitral award, dated 21.8.2001, aforementioned set aside on the ground that on account of the vague advice given by their counsel, they were prevented from making application for setting aside the said award within the period of limitation mentioned in the proviso to sub-section (3) of section 34 thereof. the writ application has, thus, been filed, as the writ petition itself reflects, as an abundant caution, apprehending that the said revision might succeed.3. the said revision has been heard and the same has already been.....
Judgment:

I.A. Ansari, J.

1. By an Arbitral award, dated 21.8.2001, the petitioner-Corporation was directed to pay to the respondent-Company a sum of Rs. 102.55 lakhs with simple interest thereon at the rate of 19.5% on and from 3.4.1993. The petitioner-Corporation filed, on 21.3.2002, an application Under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') along with an application Under Section 5 of the Limitation Act seeking condonation of delay in filing the application Under Section 34. On 17.5.2002 Money Execution case No. 7(T) 2003 was registered in the Court of the learned Assistant to the Deputy Commissioner, at Shillong, on the basis of an application for execution of the award made by the respondent-Company. By the impugned Order, dated 13.5.2003, passed in Misc Arbitration Case No. 14(T)02, the learned Assistant to the Deputy Commissioner, at Shillong, allowed the application Under Section 5 of the Limitation Act made by the petitioner-Corporation. Aggrieved by this order, the respondent-Company impugned the same in the Civil Revision (P) No. 14(SH)2003 in terms of Rule 36A of the Rules for the Administration of Justice and Police in the Khasi and Jaintia Hills, 1937, read with Section 115 of the Code of Civil Procedure.

2. Pending disposal of the said revision, the present petitioner Corporation (who was opposite party in the said revision), has, now, with the help of this writ application made under Article 227 of the Constitution of India read with section 115 of the Code of Civil Procedure, approached this Court seeking to get the arbitral award, dated 21.8.2001, aforementioned set aside on the ground that on account of the vague advice given by their counsel, they were prevented from making application for setting aside the said award within the period of limitation mentioned in the proviso to Sub-section (3) of Section 34 thereof. The writ application has, thus, been filed, as the writ petition itself reflects, as an abundant caution, apprehending that the said revision might succeed.

3. The said revision has been heard and the same has already been allowed today, i.e., 10.9.2004, and the impugned Order, dated 13.05.2003 aforementioned, passed in Misc. Arbitration case No. 14(T)2002 aforementioned, has been set aside on the ground that by taking recourse to Sub-section (5) of the Limitation Act, the limitation for filing an application Under Section 34 of the Act of 1996 cannot be extended inasmuch as Section 5 of the Limitation Act is not applicable to an application Under Section 34 of the Act of 1996.

4. The relevant portion of the order disposing of the revision aforesaid is quoted hereinbelow :-

'5. The short question, which, as already indicated hereinabove, raised in the present Revision is this : whether the provisions of Section 5 of the Limitation Act, 1963, are applicable to an application made Under Section 34 of the Act of 1996 for setting aside an award?

6. The answer to the above question is fully covered by the decision of the Apex Court in Union of India v. Popular Construction Co reported in (2002) 8 SCC 470, wherein the Court has laid down that the language used in the Proviso to Sub-section (3) of Section 34 of the Act of 1996 excludes the application of Section 5 of the Limitation Act.

7. Section 34 of the Act of 1996 lays down that an application for setting aside an award may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award. The Proviso to Sub-section (3) of Section 34 stated 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'. The expression 'but not thereafter', as mentioned in the case of Union of India v. Popular Construction Co (supra), indicates that no application Under Section 34 of the Arbitration Act for setting aside an award can be made after lapse of a period of three months, as contemplated under Sub-section (3) of Section 34, and the further grace period of thirty days given by the proviso to Sub-section (3) of Section 34.

8. Turning to the facts of the present case, I find that it is not in dispute that the application for setting aside the award Under Section 34 was made by the opposite party beyond the period of limitation prescribed under the proviso to Sub-section (3) of Section 34. Hence, by taking resort to the provisions of Section 5 of the Limitation Act, the delay in making the application Under Section 34 of the Act of 1996 could not have been condoned. Contrary, however, to this position of law, the learned Court below has, by the impugned Order dated 13.5.2003, condoned the delay in making the application Under Section 34. The impugned order is, therefore, contrary to the expressed provisions of law and cannot be allowed to stand good on record.'

5. The revision has accordingly been dismissed. In this backdrop, I am, now required to deal with the present writ petition.

6. Heard Mr. VK Jindal, learned senior counsel assisted by Mr. L. Lyngdoh, learned counsel, for the petitioner, and Mr. SB Mukherjee, a learned senior counsel assisted by Mr. SP Mahanta, learned counsel, for the respondent No. 1.

7. This writ petition has been resisted, at its very threshold, on behalf of the respondent No. 1 on the ground that there was an alternative efficacious remedy available Under Section 34 of the Act of 1996 and the writ petitioner, having already availed the said remedy, cannot fall back upon the writ jurisdiction of this Court to seek the same very reliefs, which they were found not entitled to receive in the said revision. It is, alternatively, submitted, on behalf of the respondent No. 1 that the entire scheme of the Act of 1996 shows that the only way to get an arbitral award set aside is by making application for setting aside the award as has been provided Under Section 34 of the Act of 1996. For the acts of commission or omission, on the part of the writ petitioner, the writ petitioner has not availed, points out Mr. Mukherjee, the remedy provided Under Section 34 and in such a situation, the petitioner cannot, now, attempt to invoke the writ jurisdiction of this Court under Article 227. Referring to the decision in Miss Maneck Gustedji Burjarji v. Sarafazali Nawabli Mirza, reported in (1977) 1 SCC 227, Mr. Mukherjee has submitted that the Apex Court has made it very clear that when there is an adequate alternative legal remedy available, the High Court shall not, ordinarily, exercise its jurisdiction under Article 227. In the case at hand, reiterated Mr. Mukherjee, the remedy provided Under Section 34 is an alternative adequate remedy and since the petitioner-Corporation did not, on account of their own laches, avail that remedy, it cannot seek to invoke the jurisdiction of this Court under Article 227.

8. Controverting the submissions made on behalf of the respondent-company, Mr. VK Jindal has submitted that the writ petitioner could not avail the remedy provided Under Section 34 of the Act of 1996 on account of contrary advises given by their advocate inasmuch as while the advocate concerned advised, on the one hand, that the petitioner Corporation should satisfy the award, he, at the same time and on the other hand, also commented that the award was not based upon any positive evidence on record and the petitioner-Corporation may take its own decision whether to file or not to file any petition for setting aside the impugned award. In the process of determining as to whether the award should be challenged or not, the petitioner-Corporation, point out Mr. Jindal, took some time and in the meanwhile, the limitation prescribed under the proviso of Sub-section (3) of Section 34 of the Act of 1996 expired. Hence for no fault of the petitioner-Corporation, submits Mr. Jindal, the remedy provided for against an arbitral award could not be availed by the writ petitioner. In such a situation, the extraordinary jurisdiction given to the High Court under Article 227 of the Constitution of India may, pleads Mr. Jindal, be invoked to set aside the said award.

9. Before entering into the question of maintainability of the present writ petitioner, it is important to bear in mind that the Act of 1996 has been enacted, as the preamble to the Act of 1996 indicates, on the basis of the UNCITRAL (United Nations Commission on International Trade Law) Model Law on International Commercial Arbitration, which was recommended by the General Assembly of the United Nations Organisation as the model law of arbitration for all countries. Thus, the Act of 1996 deals with both National Commercial Arbitration as well International Commercial Conciliation.

10. Section 5 of the Act of 1996, which falls in Part I thereof and deals with the extent of judicial intervention with the arbitral awards and proceedings, makes it clear that notwithstanding anything contained in any other law for the time being in force, no judicial authority shall intervene in any matter covered by the Act of 1996 except as provided in Part I.

11. There is no dispute before me that it is only Section 34 of the Act of 1996, which contains the remedy to get an arbitral award set aside. The relevant portion of Section 34 is quoted hereinbelow :

'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) An arbitral award may be set aside by the Court only if-

**** **** ****

(3) an application for setting aside may not be made after three months have elapsed from the date on which the party making the application had received the arbitral award or, if a 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.' (emphasis is supplied)

12. A careful reading of Section 34 will show that an arbitral award made under the Act of 1996 can be set aside only on the grounds and in the manner as provided in Section 34. Section 34, as already indicated in the case of Popular Construction Company (supra), does not permit any Court to entertain an application made Under Section 34 for setting aside an award beyond the period of three months as prescribed under Sub-section (3) of Section 34 coupled with the further grace period of 30 days as the proviso to Sub-section (3) of Section 34 grants.

13. Though it is, no doubt, true that by making a statute, the Legislature cannot take away the Extra-Ordinary Jurisdiction of the High Court conferred by Article 227 of the Constitution of India, the fact remains that the powers under Article 227 cannot be exercised in such a manner as to defeat the very object with which an Act has been enacted unless the virus of the Act itself is under challenge nor can the powers under Article 227 be involved to override an enactment or set at naught an enactment, the virus whereof is not under challenge.

14. Section 34 lays down specific grounds for setting aside an arbitral award. The scope of the remedy provided to a person aggrieved by an arbitral award cannot be expanded by invoking the jurisdiction under Article 227. The remedy for setting aside the award, which Section 34 provides, is alternative adequate remedy. The remedy, so provided to an aggrieved party, is, rather, comprehensive in nature. This remedy was open to the petitioner corporation but the petitioner Corporation has not been able to avail the same on account of statutory bar imposed by the proviso to Sub-section (3) of Section 34. By taking recourse to Article 227, the bar imposed by the proviso to Sub-section (3) of the Section 34 cannot be removed, for, doing so will amount to overriding the proviso to Sub-section (3) of Section 34 and making the same redundant. This in turn, will defeat the very object with which the Act of 1996 was enacted inasmuch as the Act of 1996 is based, as already indicated hereinabove, on the said Model law recommended by the UNO.

15. In the case of Miss Maneck Gustedji Burjarji (supra), the Apex Court has laid down as follows :

'6. It is very difficult to appreciate the reasoning behind the order made by the High Court. It is to say the least an extraordinary order which flies in the face of law and judicial procedure. The respondent had clearly a legal remedy available to him by way of an appeal against the decree of , the City Civil Court and this remedy was not only adequate but more comprehensive that the one under Article 227 of Constitution. Even so, for some inexplicable reason, the respondent chose to prefer a special civil application under Article 227 of the Constitution and Vaidya J entertained the special civil application and granted relief to the respondent, casting to the winds the well settled principle that the High Court does not ordinarily, in exercise of its discretion, entertain a special civil application under Article 227 of the Constitution where an adequate alternative legal remedy is available to the applicant. It is true that this principle is not rigid and inflexible and there can be extraordinary circumstances where, despite the existence of an alternative legal remedy, the High Court may interfere in favour an applicant but this was certainly not one of such extraordinary cases. It is indeed difficult to see how the learned Judge could entertain a special civil application against a decree passed by a subordinate Court when the procedural law allows and appeal against it and that appeal lies to the High Court itself. It must be realised that the jurisdiction under Article 227 of the Constitution is an extraordinary jurisdiction which is to be exercised sparingly and in appropriate cases and it is not to be exercised as if it were an appellate jurisdiction or as if it gave unfettered and unrestricted power to the High Court to do whatever it liked.'

16. From the above observation made in Miss Maneck Gustedji Burjarji (supra), it is clear that though it is not rigid and inflexible rule that the High Court cannot, in any circumstances, exercise its discretion under Article 227 if adequate alternative remedy is available, the fact remains that when the legality of the alternative remedy provided under the Act of 1996 is not under challenge, the High Court cannot, by invoking the jurisdiction under Article 227, grant to a person relief, which such person seeks if granting of such relief will be tantamount to enlarging the scope of the statutory remedy provided for by the legislature unless the legislative enactment itself is under challenge. In the case at hand, the virus of the Act of 1996 and/or any provision thereof is not under challenge. If the delay in making of the application by the petitioner-Corporation for setting aside the award Under Section 34 of the Act of 1996 is, now, condoned by setting aside the impugned Order, dated 13.05.2003, passed in Misc. Arbitration case 14(T)/2002, it will override the proviso to Sub-section (3) of Section 34 and make thereby the whole object of the expression 'but not thereafter', occurring in the proviso to Sub-section (3) of Section 34 meaningless, redundant and otiose.

17. For what have been discussed and pointed out hereinabove, this Court is firmly of the view that the present case is not one of such cases, wherein this Court shall exercise its discretion to entertain the writ petition by invoking the provisions of Article 227 of the Constitution of India.

18. In the result and for the reasons discussed above, this writ petition is hereby held to be not maintainable in law and it is accordingly dismissed at the motion stage itself.

19. Considering the facts an circumstances of the case, I, however, leave the parties to bear their own costs.


Save Judgments// Add Notes // Store Search Result sets // Organize Client Files //