State Trading Corporation of India Limited v. Prestige Food Limited & Ors.

1. Whether reporters of local papers may be allowed to see the Judgment? No

2. To be referred to the Reporter or not? No

3. Whether the Judgment should be reported in the Digest? No VIKRAMAJIT SEN, J.

1. This Appeal assails the Order of the learned Single Judge dated 21.2.2007 dismissing Objections under Sections 30 and 33 of the Arbitration Act, 1940 (for short „Act‟) for nonprosecution. Thereafter, the learned Single Judge has opined that there is nothing apparent on the face of the Award which can be objected to; the Award has been made Rule of the Court.

2. In the hearings of the Appeal, a sum of Rupees 12,86,985.70/- has been deposited in the name of the Registrar 2010:DHC:1002-DB of this Court. Since this deposit covered only the principal sum, the Appellant was permitted to deposit the interest component within fifteen days, viz., on or before 23.1.2010. As is evident, the entire decreetal amount in terms of the Award has left the coffers of the Appellant.

3. On 23.11.2006, the learned Single Judge had disposed of OMP Nos.82/1993 and 60/1994 between the parties hereto on the premise that CS(OS) No.1508-A/1998 from which the present Appeal arises “which go to the root of jurisdiction of the arbitrator appointed would be decided as raised in the Objections to the Award”. The present matter, which was also listed on 23.11.2006, was ordered to be listed in the category of “Finals” in the week commencing 1.1.2007. The Appellant has asseverated that instead of noting the said date the Clerk of the counsel for the Appellant had inadvertently merely recorded that the case would be listed in the category of “Finals”. It was in these circumstances that on 9.1.2007 and 21.2.2007, there was no appearance for either of the parties before the learned Single Judge; the matter was, however, dismissed.

4. Learned counsel for the Respondent has contended before us that an Appeal is not maintainable under the Act, with which contention we do not agree. As has been noted, the Objections of the Appellant under Sections 30 and 33 of the Act had been dismissed. Section 39(1)(vi) of the Act postulates that an Appeal lies against an Order setting aside or refusing to set aside an Award. Sub-section(2) thereof, however, stipulates and clarifies that nothing shall affect or take away any right to appeal to the Supreme Court.

5. An issue somewhat similar to the present one has been considered by a Division Bench of this Court in Shivnath Rai Harnarain India Company –vs- Glencore Grain Rotterdam, 2009 X AD (Delhi) 357, of which one of us (Vikramajit Sen, J.) was a member. We had also occasion to deliberate and decide a similar conundrum in FAO(OS) No.122/2006 titled Wee Aar Constructive Builders –vs- Simplex Concrete Piles (India) Ltd. decided on 1.2.2010.

6. On the dialectic dictated by this Bench in these two matters, it may be argued that the dismissal of Objections for non-prosecution are barred from further challenge before the Division Bench. However, the impugned Order is a composite one, inasmuch as it also records that there is nothing apparent on the face of the Award which can be objected to and/or which would result in the Court declining to make the Award the Rule of the Court. In doing so, the action of the learned Single Judge, in its capacity as the first Appellate Court, tantamounts to “refusing to set aside the Award” in the language of Section 39(1)(v) of the Act. Furthermore, where objections have been dismissed for default of appearance or for their non-prosecution, the position that obtains is the same. The Appeal is, therefore, maintainable.

7. In the conspectus of the case, we are of the view that the Appeal deserves to be allowed by setting aside the impugned Order and remanding the matter to the learned Single Judge to pass judgment/orders after affording the Appellant one further and last opportunity to address arguments on the Objections already filed by it. This shall be subject to payment of costs of Rupees Twenty Thousand. However, keeping in perspective the fact that the decreetal amount stands deposited with this Court, in the event that the Appellant is desirous and is advised to impart a quietus to the matter at this stage itself by opting not to press its Objections, these costs shall not be payable.

8. Appeal is allowed in these terms. Pending application stands disposed of. ( VIKRAMAJIT SEN ) JUDGE ( MANMOHAN SINGH ) February 19, 2010 JUDGE tp