Arbitration act 1996
rajasekaran
(Querist) 13 December 2011
This query is : Resolved
For an application/appeal under 19 of MSMED Act read with section 34 of Arbitration and conciliation Act 1996 pre-deposit of 75% of award is mandated. Are the Courts entitled to condone delay beyond three months and 30 days in filling application with 75% pre-deposit? . If so under which provision of law representation delay/ filling delay is condonable?
rajasekaran
ajay sethi
(Expert) 13 December 2011
repeated query
rajasekaran
(Querist) 13 December 2011
SIR SEC 34(3) IN FACT PROHIBITS.
The dictum of Apex Court in the case of Union Of India vs M/s Popular Construction Co. on 5 October, 2001 is applicable –
i. “12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are 'but not thereafter' used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the Court could entertain an application to set aside the Award beyond the extended period under the proviso, would render the phrase 'but not thereafter' wholly otiose. No principle of interpretation would justify such a result.”
ii. 15. Furthermore, section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award "in accordance with" sub Section 2 and sub Section 3. Sub Section 2 relates to grounds for setting aside an award and is not relevant for our purposes. But an application field beyond the period mentioned in Section 34, sub-section (3) would not be an application "in accordance with" that sub section. Consequently by virtue of Section 34(1), recourse to the court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasised by the provisions of Section 36 which provide that "where the time for making an application to set aside the arbitral award under Section 34 has expired...the award shall be enforced and the Code of Civil Procedure 1908 in the same manner as if it were a decree of a court". This is a significant departure form the provisions of the Arbitration Act, 1940.
M V Gupta
(Expert) 17 December 2011
Dear Shri Rajasekharan, you seem to know the authority. Then why this query. The Apex court decision is very clear that delay beyond the prescribed period of 3 months cannot be condoned.
rajasekaran
(Querist) 18 December 2011
The query i repeat is for the following reasons;
1. The authority is clear on filing within three months and 30 days, but the issue is the application has been filed within time, returned and represented after seven months, without compliance of section 19 of MSMED Act 2006 mandating 75% predeposit of award..
The query 1 is whether representation delay can be condoned.
The query 2 in section 19 of MSMED Act the word "entertained", does it mean not to be entertained at "filling" stage or the "adjudicated upon" stage;
19. Application for setting aside decree, award or order.- No application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council, shall be entertained by any court unless the appellant (not being a supplier) has deposited with it seventy- five per cent of the amount in terms of the decree, award or, as the case may be, the other order in the manner directed by such court:
Provided that pending disposal of the application to set aside the decree, award or order, the court shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers reasonable under the circumstances of the case subject to such conditions as it deems necessary to impose.
rajasekaran
(Querist) 18 December 2011
varied authorities on “entertained” which would help to resolve whether application u/s section 34 Arbitration Act, can be entertained when filed in time , returned and represented after seven months without compliance of condition precedent of predeposit.
The dictionary meaning of word "entertain" is: either to deal with it or admit to consideration; proceed to consider on merits or adjudicate upon; "receive" or "accept"; "file" or "receive" by the Court and may not mean hearing on merit.
In Kundan Lal v. Jagannath Sharma, AIR 1962 All 547 and Dhoom Chand Jain v. Chaman Lal Gupta, AIR 1962 the Allahabad High Court opined that "entertain" means: hearing the matter on merit and it does not include "filing of an application."
In Hindustan Commercial Bank Ltd. v. Punnu Sahu. AIR 1970 SC 1384 the Apex Court held that in the context of the Code of Civil Procedure, 1908 the expression "entertain" means "adjudicate upon" or "proceed to consider on merit." Thus, in such a case, an appeal or revision may be entertained, but the Court may not be able to decide it on merit owing to some difficulty, not in Jurisdiction but in procedure.
In Martin and Harris Ltd. v. VIth Additional District Judge, AIR 1998 SC 492 while interpreting the provisions of the U.P. Urban Buildings (Regulation of Letting. Rent and Eviction) Act, 1972 the Supreme Court held that the word "entertain" means "admit for consideration."
Similar view had been reiterated in Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner (Judicial), Sales Tax, AIR 1968 SC 488.
In Anandilal Bhanwarlal v. Smt. Kasturi Devi Generiwala, AIR 1985 SC 376; the word "institute" was found to be synonymous with the word "entertain."
In Lala Ram v. Hari Ram, AIR 1970 SC 1093 the Apex Court held that in the context of Section 417(3) of the Code of Criminal Procedure, the word "entertain" means 'file or receive by the High Court' and It has no reference to actual hearing of the application for leave to appeal.
In Rajasthan State Road Transport Corporation v. Santosh, AIR 1995 Rajasthan held that mere filing of an appeal and stay application by the applicant under Section 173 of the Motor Vehicles Act, 1988 will not be entertained by the Court unless the mandatory provisions contemplated in the aforesaid section are complied with.
The word "entertain" has been considered by the Hon'ble Supreme Court in Anant Mill's case (AIR 1975 SC 1234) wherein it was held that it should be construed in the context of subject.
The word "entertain" was also explained by their Lordships of the Supreme Court in Samarth Transport Co. (P) Ltd. v. Regional Transport Authority, Nagpur, AIR 1961 SC 93 held; The word 'entertain' may mean 'to receive on file or keep on file', and in that sense the Authority may refuse to keep an application on its file by rejecting it either at the time it is filed or thereafter. It does not connote any time but only describes the scope of the duty under that clause. It can only mean that the Authority cannot dispose of the application on merits but can reject it as not maintainable".
Lakshmi Rattan Engineering Works ... vs Asstt.Commr.Sales Tax, Kanpur & ... on 12 September, 1967
In a single bench decision of the same court reported in Bawan Ram v. Kunj Beharilal, one of us (Bhargava J.) had to consider the same rule. There the deposit had not been made within the period of limitation and the question had arisen whether the court could entertain the application or not. It was decided that the application could not be entertained because proviso (b) debarred the court from entertaining an objection unless the requirement of depositing the amount or furnishing security was complied with within the time prescribed. In that case the word 'entertain' is not interpreted but it is held that the court cannot proceed to consider the application in the absence of deposit made within the time allowed by law. This case turned on the fact that the deposit was made out of time.
