Amit Malik v. Kamlesh Malik & Anr.

S.N Aggarwal, J.—These are three appeals and have been filed against two orders dated 14.12.2005 and 13.2.2006 passed in two execution petition Nos. 35 and 36/2004

2. The facts necessary for the disposal of these appeals are as follows:

Shri Amit Malik and Shri Anurag Malik are two real brothers.

Smt. Kamlesh Malik is their mother. The family owned following four properties:

(i) Property bearing No. A/20, Mahendru Enclave, New Delhi.

(ii) Flat at Apna Villa.

(iii) Godown at Sadar Bazar.

(iv) Shop at Sadar Bazar—M/s Malik Light House.

3. There was a dispute between the parties regarding their share in the aforesaid properties. The said dispute was referred by them for arbitration to Shri B.M Khurana who was an elder of their family. Shri B.M Khurana, Sole Arbitrator after hearing the parties gave his award on 3.6.2001 Material portion of the arbitral award reads as under:

“PROPERTY BEARING No. A/20, MAHENDRU ENCLAVE, NEW DELHI.

11. Smt. Kamlesh Malik shall execute necessary documents of transfer in favour of Shri Anurag Malik in respect of basement, first and second floor with roof except ground floor which shall remain in the possession of Smt. Kamlesh Malik.

12. Similarly Shri Amit Malik and Shri Anurag Malik shall execute documents of transfer in favour of Smt. Kamlesh Malik in respect to the Godown at Sadar Bazar and also the flat at Apna Villa.

SHOP AT SADAR BAZAR, M/s MALIK LIGHT HOUSE.

13. Similarly Smt. Kamlesh Malik and Shri Anurag Malik shall execute documents of transfer in favour of Shri Amit Malik.

14. Further the value of assets, stock, creditors, cash in hand in respect of M/s. Malik Light House, Export firm in India and abroad along with debtors, loans, interest to be paid shall be divided equally amongst the three partners on the finalization and distribution.”

4. Two execution petitions (Execution Petition No. 35 and 36/2004) were filed by Shri Anurag Malik and Smt. Kamlesh Malik both for execution of the arbitral award dated 3.6.2001 The objections against the arbitral award were filed in the execution proceedings by Shri Amit Malik (appellant herein). The objections of Shri Amit Malik against the arbitral award in question are to the following effect:

(i) No copy of the award which has been registered was served on the respondent and thus the occasion to file any objection under Section 34 of the Act did not arise;

(ii) The original award is the award which has not been registered and thus it is not permissible in law to register a copy of the said award. Thus the defect of non registration of the award cannot be cured by the subsequent stamping and registration of a copy of the award.

(iii) The registration of the award is not in accordance with law as the award is not within the period stipulated under Section 23 of the Registration Act, 1908 (hereinafter referred to as ‘the Registration Act’) providing for a four months' period of time for its execution. Section 25 of the Registration Act further stipulates an extension of four months in case of non-presentation due to urgent necessity or unavoidable accident on payment of fine.

(i v) The award is not stamped in accordance with the Stamp Act, 1899 (hereinafter referred to as ‘the Stamp Act’) since it is an award partitioning the properties and thus was liable for payment of stamp duty at ad valorem rates in terms of Entry 45 of Schedule 1 of the Stamp Act as an instrument of partition includes an award within the meaning of Section 2(15) of the Stamp Act. When the document is not properly stamped, procedure prescribed in Chapter IV of the Stamp Act must be followed and the document must be impounded and sent to the Collector of Stamps in terms of Section 33 of the Stamp Act and such a document would be inadmissible in evidence in view of provisions of Section 35 of the Stamp Act.

5. The above objections against the arbitral award dated 3.6.2001 filed by the appellant Shri Amit Malik were dismissed by a detailed order running into 22 pages passed by the learned Single Judge on 14.12.2005 On that day, while dismissing the objections the learned Single Judge gave one month's time to the appellant to execute the documents failing which it was directed that coercive process would have to be taken.

6. The appellant did not comply with the order of the learned Single Judge dated 14.12.2005 and consequently on 31.1.2006, an officer of the Court was appointed to execute the necessary documents in terms of the arbitral award and the Bailiff was also appointed for attachment of the goods for recovery of the amount due. Thereafter, the appellant filed additional objections by way of a miscellaneous application being EA No. 75/2006 in execution petition No. 35/2004 which stood dismissed with costs of Rs. 10,000/- vide order passed by the learned Single Judge on 13.2.2006 While dismissing the additional objections, the learned Single Judge made the following observations:

“In my considered view attempts on behalf of the judgment debtor to frustrate execution of the decree by filing frivolous objections must be nipped in the bud. It is a well known fact that a second round of litigation starts when a decree has to be executed. Attempts are made to prolong the execution on one pretext or the other so that the successful party is not able to enjoy the benefits of the decree. The present is one such attempt. It is not open to a party to keep on filing indefinite objections. It was incumbent on the decree to have filed comprehensive objections at the initial stage. The said objections were dismissed and have already been adjudicated upon. There can be no question of now filing some additional objections.”

7. It may be seen from the above that all these three appeals have arisen from a common arbitral award dated 03.06.2001 and can, therefore, be conveniently disposed of by one common order as they involve identical questions of facts and law.

8. We have gone through both the orders dated 14.12.2005 and 13.2.2006 impugned in these appeals and on a perusal of the same, we have noticed that the learned Single Judge has given cogent reasons for dismissing the objections and additional objections filed by the appellant against the arbitral award dated 3.6.2001 All the contentions raised by the appellant before us have been aptly dealt with by the learned Single Judge in the impugned orders and we are in general agreement with the reasonings contained therein.

9. The learned Senior Counsel for the appellant has contended before us that as the copy of the registered award was not served upon the appellant, the occasion to file objections against the said award under Section 34 of the Act did not arise. He has further argued that as the award was not registered within the period stipulated under Section 23 of the Registration Act, 1908, the said award according to him cannot be enforced. He also raised a contention that the award was inadequately stamped as it requires payment of ad valrem stamp duty in terms of Entry 45 of Schedule I of the Stamp Act and for that reason also the award is not enforceable in law. The learned Counsel also contended that by the arbitral award only a preliminary decree was passed, such an award which does not decide the dispute finally cannot be enforced in law.

10. The contention of the appellant's learned Counsel that the arbitral award in question is not enforceable as the copy of the award which was got registered has not been supplied to the appellant has no merit. The learned Single Judge dispelled the aforesaid contention of the appellant and noted in para 10 of the impugned judgment dated 14.12.2005 as follows:

“The factum of objector signing on a copy of the award is admitted. It may be noticed at this stage that the objector did try to make out a case that a number of blank documents were signed and the copy of the award is actually one such blank document which was signed by the objector. This plea is difficult to accept for the reason that the award is a typed award and is signed at appropriate places. Not only that the objector is not an uneducated person who would sign documents without realising the consequences thereof or would be expected to sign such blank papers. The objector here also acted in pursuance to the award as explained later on. The practice of the presentation of the original award for registration and taking endorsement on copies thereof cannot be said to be an unusual practice which would create doubt on the award itself. It has also to be kept in mind that the nature of proceedings relate to a family dispute wherein an elder of the family was put in as an arbitrator to arrive at a settlement between the mother and the sons.”

11. We have gone through the arbitral award dated 3.6.2001 and we are in complete agreement with the above reasonings given by the learned Single Judge regarding supply of copy of the said award to the appellant. The appellant has not disputed that the arbitral award dated 3.6.2001 bears his signatures. This shows the knowledge of the appellant about the contents of the award. He has nowhere whispered that he was not supplied with the copy of the award dated 3.6.2001 which admittedly bears his signatures. Admittedly, the objections against the arbitral award dated 3.6.2001 were filed by the appellant in 2004 when the other side applied for execution of the said award. Here the question that confront us is whether the objections filed by the appellant against the arbitral award dated 3.6.2001 in execution proceedings initiated in 2004 were legally maintainable? Limitation for filing of objections against the arbitral award is governed by the provisions of section 34(3) of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred as ‘the Act of 1996’). A bare reading of the Act of 1996 would show that an application for setting aside the award can be filed within three months from the date of receiving the copy of the award. However, proviso to Section 34(3) empowers the Court to entertain an application within a further period of 30 days on showing sufficient cause by the applicant. The expression ‘entertain the application within a further period of 30 days but not thereafter’ used in the proviso to Section 34(3) is couched in the negative which clearly shows that the same is mandatory in character.

12. provisions of section 34(3) came to be interpreted in the decision of Supreme Court in Union Of India v. Popular Construction Co.., (2001) 8 SCC 470. In the said decision, the Supreme Court held that the Arbitration and Conciliation Act, 1996 being a ‘special law’ and the provisions of section 34 providing for a period of limitation different from that prescribed under the Limitation Act, the said provisions would govern the period of limitation and not any provisions of the Limitation Act. It was held by the Supreme Court that by virtue of Section 34(1) of the Act, recourse to a Court against an arbitral award cannot be made beyond the period prescribed in Sub-section (3). We are of the view that Section 34 of the Act of 1996 is a complete code with regard to scope, parameters and the grounds on the basis of which an application to challenge an award can be filed. The law laid down by the Supreme Court in Popular Construction Company's case (supra) is binding on this Court and, therefore, the facts of the present case are to be scrutinized in the backdrop of the aforesaid legal position.

13. In the present case, the arbitral award was made and published on 3.6.2001 This award bears the signatures of both the parties. The appellant has not disputed that the copy of the award dated 3.6.2001 which bears his signatures was supplied to him. What he has disputed is that the copy of the award which was got registered on 10.1.2002 was not supplied to him. This, in our view, is a hyper-technical objection and is not sustainable in law. Since the appellant had got copy of the arbitral award dated 3.6.2001, the limitation for filing of objections against the said award commenced from that date. Admittedly, no objections against the award were filed by the appellant for more than 2 years and thereby he allowed the limitation to expire. Section 36 of the Act of 1996 provides that an arbitral award is enforceable before the Court as a decree of the Court. Since limitation for filing of objections against the arbitral award in question had expired long back prior to the filing of execution petitions by the respondents, neither the objections nor the additional objections were maintainable in execution proceedings. This is in consonance with the objective to be achieved by getting the dispute resolved through an alternative mechanism of arbitration which is a forum of the choice of the parties. If the objections against the arbitral award are entertained beyond the period prescribed in Section 34(3) of the Act of 1996, then it would frustrate the very object for which which this Act has been enacted. Hence, we are of the view that the objections against the arbitral award in question filed by the appellant before the learned Single Judge in execution proceedings were hopelessly barred by limitation.

14. A perusal of the impugned order dated 14.12.2005 would show that the objections filed by the appellant against the arbitral award have been considered by the learned Single Judge on merits though they were barred by limitation provided in Section 34(3) of the Act of 1996. The learned Single Judge has given cogent reasons for dismissing the objections. The objection of the appellant that the award was not presented for registration within the time stipulated in Section 23 of the Registration Act, 1908 is of no consequence as we find that the award was got registered within the statutory time period reckoned from the date when the award became final. The objection of the appellant that only a preliminary decree has been passed by the arbitral award and therefore it cannot be enforced, also has no merit in it. The disputes between the parties regarding their shares in the family properties have been finally adjudicated upon by the sole arbitrator who was none else but an elder of their own family and now no further decision is required to be taken in so far as the shares of the parties are concerned in the said properties. Hence, it cannot be said that only a preliminary decree has been passed by the arbitral award challenged before the learned Single Judge.

15. Before parting with this judgment, we would like to note that the appellant has already taken benefit of the award and has acted in pursuance thereof in as much as the documents in respect of one of the properties i.e a shop at Sadar Bazar that has fallen to his share as per arbitral award has already been got transferred by him in his favour. Appellant having taken advantage of the arbitral award can otherwise be not allowed to challenge the rest of the award.

16. In view of the above, we find no merit in these appeals.

17. Dismissed. No order as to costs.

Appeals dismissed.