TMI Blog2020 (12) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... ; thus, refusal to set aside an award on the ground of the said time bar, would be a refusal within the meaning of Section 37 and appealable under Section 37. There is also merit in the contention of Mr. Rajshekhar Rao, Advocate for the appellant that refusal to condone the delay also entails affirmation of the underlying order. By reading Section 37 as not permitting an appeal against refusal to condone the delay in applying for setting aside of the award, the persons aggrieved by the award are left with no remedy but to approach the Supreme Court by way of a petition under Article 136 of the Constitution of India. The refusal to set aside the award may not necessarily be by the Commercial Division of the High Court but may also be by the Commercial Courts of the country. No other remedy would be available to the persons aggrieved by the award, against the decision of any Commercial Court in the country refusing to condone the delay in applying for setting aside of the award, leaving such persons either with the option of accepting/remaining bound by the award even if having excellent grounds for setting aside of the same or of approaching the Supreme Court under Article 136 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral award having force of the decree, subject matter of the appeal. On 22nd July, 2020, CM No. 15906/2020 of the respondent seeking a direction to the appellant to deposit the award amount with upto date interest in the Court, came up before the Court and pleadings thereon also ordered to be completed. Thereafter the matter was adjourned from time to time, for completion of pleadings. 4. On 5th November, 2020, when the matter came up before this Bench, on learning of the order/judgment in appeal, we drew the attention of the counsels to BGS SGS Soma JV Vs. NHPC Ltd. (2020) 4 SCC 234, inter alia holding that the appeals in arbitration matters are maintainable only under Section 37 of the Arbitration Act and not under Order XLIII Rule 1 or under Section 10 of the Delhi High Court Act, 1966 and further holding that refusal to set aside the arbitral award under Section 34, to be appealable under Section 37, must be after the grounds set out in Section 34 have been applied to the arbitral award in question and after the Court has turned down such grounds. However during the hearing on 5th November, 2020, we further observed as under: 5. Though in the present case the grounds set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the case in BGS SGS Soma JV supra or on the ground of limitation, as is the case here; and, (ix) if it is held that, refusal to set aside the award on the ground of the application therefor having not been filed within the prescribed time, is appealable, the same will result in the outcome of refusal to condone the delay, resulting in an appealable order but the outcome of condoning the delay, conferring no right to appeal; the right to appeal cannot be dependent on the outcome, with the order condoning the delay not conferring right to appeal and the order refusing to condone the delay conferring a right to appeal. 6. At this stage, we halted the arguments of the counsel for the respondent and drew his attention to other situations viz. of an application for leave to defend under Order XXXVII Rule 5 of the Code of Civil Procedure, 1908 (CPC); while refusing leave to defend results in an appealable decree, allowing the application is not appealable. 7. The counsel for the respondent then did not press the said argument further. 8 . Mr. Gaurav Mitra, Advocate for the respondent, continuing with his arguments, drew our attention to paragraphs no. 13 to 17 of BGS SGS Som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds set out in Section 34 must have been applied to the arbitral award; (i) when there is no adjudication under Section 34 of the Arbitration Act and the petition under Section 34 of the Act is simply returned on the ground that the court had no territorial jurisdiction, there is no application of grounds under Section 34; and, (j) the appeal against the said order does not fall within the ambit of Section 37 of the Arbitration Act and is not maintainable. 10. A Co-ordinate Bench of this Court in Harmanprit Singh Sidhu supra, was concerned with an appeal against an order of the Commercial Division of this Court condoning the delay in filing an application for setting aside of the award. It was the contention of the appellant therein that the Commercial Division ought not to have condoned the delay. Holding the appeal to be not maintainable, it was reasoned, that (i) Section 8 of the Commercial Courts Act relied upon by the counsel for the appellant therein had no application because it relates to an interlocutory order of a 'Commercial Court'; a Commercial Court, by definition as per Section 2(1)(b) read with Section 3(1) of the Commercial Courts Act, is a Court at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prefer an appeal under Section 37, on merits as also on the ground that the delay ought not to have been condoned; (xi) this was also in line with the scheme of the Arbitration and Conciliation Act inasmuch as entertaining an appeal would stall the consideration whether the award should be set aside or not; and, (xii) the remedy against the order condoning the delay was only deferred till the stage of decision, whether the award were to be set aside or not. 11. Mr. Gaurav Mitra, Advocate for the respondent thus argued that since this Court in Harmanprit Singh Sidhu supra has held the appeal to be not maintainable against the order condoning the delay, it conversely follows that the appeal is not maintainable also against the order refusing to condone the delay. 12. As far as Ramdas Construction Co. supra referred to by the counsel for the respondent is concerned, the Division Bench of the High Court of Bombay therein was concerned with an appeal against an order of rejection of an application for condonation of delay in applying for setting aside of the award. Holding the appeal to be not maintainable, it was reasoned, that (i) the impugned order had not dealt with the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d; (ix) Section 37 does not refer to the proceedings preceding the enquiry in relation to the issue of setting aside or refusing to set aside an arbitral award; (x) the subject matter of delay in filing an application and the condonation thereof relates to the proceedings preceding the enquiry for setting aside or refusing to set aside an arbitral award; (xi) once it is clear that Section 37(1)(b) does not contemplate any order passed in such proceeding relating to matter preceding the enquiry in relation to setting aside or refusing to set aside an arbitral award, such an order cannot be considered as an appealable order within the meaning of Section 37; (xii) vide the order impugned therein, the application under Section 34 was rejected as barred by time as a consequence of the refusal to condone the delay and the Court had not dealt with the application for setting aside of the award on merits; (xiii) the appealable order which is contemplated for the purpose of exercise of appellate jurisdiction is the one which deals with the merits of the case in relation to the claim for setting aside of the arbitral award; (xiv) the jurisdiction of the Court to entertain an application to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot go into the aspect of maintainability of an appeal under Section 37(1)(b) against an order refusing to condone the delay for filing an application for setting aside of the award, but having not found in favour of the appellants therein on the issue of refusal to condone the delay, dismissed the appeal. 15. Mr. Rajshekhar Rao, Advocate for the appellant, seeking to distinguish BGS SGS Soma JV supra has contended, that while refusal of an application under Section 34(1) on the ground of territorial jurisdiction leaves open to the person aggrieved by the arbitral award, the remedy of approaching the correct Court of territorial jurisdiction, the refusal to condone the delay, has an element of finality, leaving no remedy open to the person aggrieved by the arbitral award. It was argued, that this vital difference makes the law laid down in BGS SGS Soma JV supra inapplicable to appeals against orders refusing to condone the delay in applying under Section 34(1). Attention in this regard was also drawn to Harmanprit Singh Sidhu supra, expressly holding that the remedy of the person aggrieved from the order of condonation of delay is only deferred till the decision on the applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal under Section 37 can be made. Reliance was also placed on Jayshri Ginning Spinning (P) Ltd. Vs. C.A. Galiakotwala Company Pvt. Ltd. (DB), also taking a different view from that taken in Ramdas Construction Co. supra and holding an appeal against the order refusing to condone the delay in applying for setting aside of the award to be maintainable. 17. Mr. Gaurav Mitra, Advocate for the respondent contended that while Chief Engineer, BPDP/REO, Ranchi supra is a judgment of the two Judge Bench and refers and relies upon the judgments under the Indian Arbitration Act, 1940, from which the 1996 Act materially differs, the order of dismissal of the appeal arising from the dicta of the Bombay High Court in Ramdas Construction Co. supra is of a three Judge Bench and in the context of 1996 Act itself. He has further contended that Chief Engineer, BPDP/REO, Ranchi supra does not independently decide the issue and merely refers to the judgments under the 1940 Act. He has, matching the quality of arguments, hearing which is always a pleasure, further argued that Section 34, which is a complete code for recourse against the arbitral award, comprises of three distinct Sub-Sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vested in Court to condone the delay beyond thirty days, the same also creates a ground of time bar for refusing to set aside the award and is part of the self-contained code for setting aside of the award; thus, refusal to set aside an award on the ground of the said time bar, would be a refusal within the meaning of Section 37 and appealable under Section 37. There is also merit in the contention of Mr. Rajshekhar Rao, Advocate for the appellant that refusal to condone the delay also entails affirmation of the underlying order. Mention in this regard may be made of Section 27 of the Limitation Act, 1963 which, though in the context of suit for possession of any property, extinguishes the right to property at the determination of the period prescribed for instituting the suit for possession thereof. However we need not discuss further since, as aforesaid, we are bound by the dicta in BGS SGS Soma JV and Ramdas Construction Co. supra. 20. We may also consider another aspect. By reading Section 37 as not permitting an appeal against refusal to condone the delay in applying for setting aside of the award, the persons aggrieved by the award are left with no remedy but to approach ..... X X X X Extracts X X X X X X X X Extracts X X X X
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