Case Name: State of Tripura v. Ashes Deb

Case Citation: 41 CRP 85 of 2022 and CRP 86 of 2022

Court: The High Court of Tripura

Coram: S.G. Chattopadhyay, J.

Date: 21st December 2022

Keywords: Section 47 of Code of Civil Procedure, 1908 (the ‘CPC’), Section 34 of Arbitration and Conciliation Act, 1996 (the ‘A&C Act’ ), Section 36 of the A&C Act, non-obstante clause

Overview

The High Court of Tripura (“High Court”) rejected the objections raised against the enforcement of the arbitral awards under Section 47 of CPC on the ground that an arbitral award passed by the arbitrator is final and binding on the parties and can only be challenged on the grounds prescribed under Section 34 of the A&C Act. An application made under Section 47 of CPC in a proceeding under Section 36 of the A&C Act, for enforcement of the Arbitral Award would make Section 34 of the A&C Act redundant.

Facts

Two different disputes had arisen between Shri Ashes Deb, the contractor and the Executive Engineer, Longthorai Division, Public Works Department (R & B) (O.P.), for which two orders were passed in favour of Shri Ashes Deb by Justice S.C. Das, former Judge of the High Court of Tripura (the sole arbitrator) on 29th January 2021.

Shri Ashes Deb being the award holder, approached the Commercial Court, seeking enforcement of the two awards in terms of Section 36 of the A&C Act by registering the applications as case No. Ex (M) 30 of 2021 and Ex (M) 29 of 2021, arising from work orders dated 11th December 2019 and 05th August 2013, respectively. The State against whom the arbitral awards were passed raised objections against the enforcement of both arbitral awards under Section 47 of CPC. The District Commercial Court, West Tripura, Agartala, however, rejected the two applications registered by the State through an impugned common order dated 20th August 2022, and the State was directed to pay the whole amount of the award to the award holder. The Court also held that an arbitral award passed by the arbitrator is final and binding on the parties and can be challenged only on the grounds prescribed under Section 34 of the A&C Act and the application made under Section 47 of CPC in a proceeding under Section 36 of the Act for enforcement of the Arbitral Award would make Section 34 of the A&C Act redundant.

The State, thus, moved to the High Court by filing two Civil Revision Petitions directed against the common order passed by the District Commercial Court.

Issue

Whether the application of Section 47 CPC, in a proceeding under Section 36 of the A&C Act, render Section 34 of the A&C Act redundant?

Analysis

The State, being the Petitioner in this appeal, contended that the District Commercial Court’s decision was erroneous, by stating that an objection raised under Section 47 of the CPC is applicable against the enforcement of an arbitral award since such an award would be treated as a decree of the Court and it would be executed in the same manner as if it were a decree of the Court. The Respondent (Shri Ashes Deb), on the other hand, argued that the only recourse available to the party aggrieved by the arbitral award is to approach the Court under Section 34 of the A&C Act and since no application was filed for setting aside an arbitral award under this provision within three months as provided under sub-section (3) of Section 34 (which is extendable to a further period of 30 days, provided, if the Court is satisfied that a sufficient cause prevented the applicant from making the application within the said period of three months), there is no scope under the law to entertain any challenge against the enforcement of an award under Section 36 of the A&C Act. Furthermore, the counsel appearing for the Respondent contended that Section 5 begins with a non-obstante clause and clearly restricts judicial intervention insofar as matters governed by Part I of the Act are concerned.

The High Court dismissed the Petitions on the grounds that a challenge against an arbitral award can be made only by taking recourse to Section 34 of the A&C Act and that too on the grounds set out under Sub-Section (2-A) of Section 34 of the Act. Once the time prescribed for filing such an application has expired, the Court cannot intervene on the grounds of Section 5 of the A&C Act, which stipulates that in matters governed by the respective Part, no judicial authority shall intervene except where so provided in that Part. Thus, in view of the prohibition imposed by Section 5 of the A&C Act, any objection except under Section 34 of the Act cannot be entertained.

Conclusion

Section 47 of the CPC is essentially a remedy to raise an objection against the execution, discharge or satisfaction of any decree between two or more parties or their representatives. As mentioned in the judgment of Pam Developments Private Limited v. State of West Bengal, the A&C Act is a self-contained code that comprehensively deals with all aspects of the Arbitration and simultaneously does not envisage the application of the whole gamut of CPC.

The decision by the High Court deals with a similar and broader issue of the extent of the applicability of the CPC in a case governed by the Arbitration Act. The High Court’s view that the application of Section 47 of the CPC for the enforcement of the Arbitral Award would leave Section 34 of the A&C Act redundant and that it would be inconsistent with the scheme of the A&C Act, reaffirms the stance of Supreme Court in the case of Pam Developments Private Limited v. State of West Bengal.

[This case note has been authored by Kaushiki Singh, an Editor at Mapping ADR.]