In my
view, even if there was any calculation error according to the respondent, the
second reference for determining such dispute was not permissible.
The
respondent not having challenged the award dated 31st March, 2005 could not filed
successive reference for interpretation of the said award dated 31st March, 2005. If
the respondent wanted to seek interpretation of the award or correction thereof, the
respondent could have invoked provisions under Section 33 of the Arbitration and
Conciliation Act, 1996 within the time prescribed therein and could not have filed
successive reference for the same. In my view, the award dated 31st March, 2005
was in force and was binding upon the respondent and thus second reference was
barred by principles of res-judicata.
CIVIL APPELLATE JURISDICTION
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ARBITRATION APPEAL NO. 13 OF 2012
The Nashik Merchant’s Co-op. Bank Ltd.
v
Dhananjay Shriram Daga,
CORAM : R.D. DHANUKA, J.
DATED : 4th JANUARY, 2013
Citation; 2014(1) ALLMR 343 Bom
By this appeal filed under Section 37 of the Arbitration and Conciliation Act,
1996, appellant seeks to challenge an order dated 1st December, 2011 passed by the
Principal District Judge, Nashik rejecting application filed by the appellant under
Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Case No. 28
of 2007).
None appeared for the respondents though served.
3. On 20th January, 2001, the appellant bank had granted cash credit loan of Rs.
2.
50,000/- to the 1st respondent. The 1st respondent committed default in making
payment. The appellant therefore filed proceedings under section 84(4) of the
Multi State Co-operative Societies Act, 2002. The learned arbitrator made an
award on 31st March, 2005. The learned arbitrator recorded the findings that the 1st
respondent had admitted the claim made by the appellant. After recording the
finding that the appellant was entitled to recover an amount of Rs. 63,002/- jointly
from respondent nos. 1 to 3 alongwith future interest at the rate of 14% per annum,
at the request of the respondent, the learned arbitrator allowed the respondent to
make payment in installments. It was made clear that in case the respondent fails
to pay any two installments, the appellant shall be at liberty to recover the entire
amount at once. It was also provided in the award that if the respondent fail to pay
any two installments, they shall be liable to pay penal interest at the rate of 2% per
annum over and above the rate of interest granted in the said award from the date
of default.
4.
It is not in dispute that the respondent has not challenged the said award. It
is the case of the appellants that though the respondent made some payment in
implementation of the said award, however committed default in making payment.
ig
as directed in the said award. The appellants have therefore already filed execution
appropriate court.
After filing of the execution application by the appellants, the respondent
5.
application for execution of the said award dated 31st March, 2005 in the
invoked arbitration clause again and the respondent applied for appointment of
arbitrator on the basis that the respondents were not liable to make payment as
demanded by the appellant and there was computation error in the amount claimed
by the appellant. Based on those allegations, the learned arbitrator was appointed.
The appellant bank raised objection in respect of the maintainability of the claim
before the learned arbitrator on the ground that the earlier award was not
implemented by the respondent fully and execution application for execution of the
same was already filed by the appellant is pending. The appellant raised objection
that for interpretation of an award, a separate reference is not permissible. Inspite
of such objection raised by the appellant and without considering the same in
proper direction, the learned arbitrator delivered another award on 10th February,
2007 allowing the application filed by the respondent and declared that respondent
was liable to pay amount of Rs.66,972/- to the appellant bank as on 31st January
2007 as against the claim amount of the appellant at Rs.92,962/- at the relevant
6.
time.
The said award dated 10th February, 2007 was challenged by the appellant
under Section 34 of the Arbitration Act before the Principal District Judge, Nashik
who dismissed the said application under Section 34 by passing an order dated 1st
7.
December, 2011.
The learned counsel appearing for the appellant submits that the second
reference initiated by the respondent for arbitration was not permissible and was
barred by principles of res-judicata. The appellant has filed execution application
which is pending before the appropriate court. The District Judge, however, did
not consider this aspect in proper direction and has rendered a perverse finding that
the second reference was not barred by res judicata.
8.
From perusal of the award dated 31st March, 2005 (first award), it is clear
that the said award was declared on merits. The learned arbitrator has recorded the
finding that the respondents were jointly and severally liable to pay the amount of
Rs. 63,002/- with interest to the appellants from 1st June, 2002 till the recovery of
the said award. The said award also provided for future interest in the event of
respondent committing default. It is not in dispute that the said award has not been
challenged by the respondent. Part of the awarded amount has been paid by the
respondent in implementation of the said award dated 31st March, 2005. In my
view, even if there was any calculation error according to the respondent, the
second reference for determining such dispute was not permissible.
The
respondent not having challenged the award dated 31st March, 2005 could not filed
successive reference for interpretation of the said award dated 31st March, 2005. If
the respondent wanted to seek interpretation of the award or correction thereof, the
respondent could have invoked provisions under Section 33 of the Arbitration and
Conciliation Act, 1996 within the time prescribed therein and could not have filed
successive reference for the same. In my view, the award dated 31st March, 2005
was in force and was binding upon the respondent and thus second reference was
barred by principles of res-judicata. In my view, the finding recorded by the
Learned District Judge that by the second award, the learned arbitrator has only
corrected the mathematical calculation and is not barred by principles of res-
judicata is perverse and deserves to be set aside.
I, therefore, pass the following order :-
9.
Appeal is allowed.
(b) Impugned order dated 1st December, 2011
(a)
passed by the Learned Principal District Judge is
set aside.
Arbitration Case No. 28 of 2007 filed by the
(c)
ig
appellant is allowed. The impugned award is set
aside.
It is made clear that if the respondent seeks
(d)
to raise any issue about calculation in respect of
the amount awarded or what is already paid, he
would be free to agitate the said issue before the
executing court in the application filed by the
appellant. If any such objection is raised, the same
shall be decided by the executing court in
accordance with law.
(e)
No order as to costs.
[R.D. DHANUKA, J.]
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