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Maharashtra Industries Development Corporation, Mahakali Caves Road, Andheri (East), Mumbai v/s Govardhani Constructions Company, 60-61, Prabhat Center, Near Fire Station, Sector-6, C.B.D., New Bombay

    APPEAL NO.903 OF 2006 IN ARBITRATION PETITION NO.159 OF 2006

    Decided On, 07 March 2007

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE MR. JUSTICE R.M.S. KHANDEPARKAR & THE HONOURABLE DR. JUSTICE D.Y. CHANDRACHUD

    For the Appellant : C.J. Sawant, Sr. Advocate, with P.P. Chavan, Advocate i/b M/s. Little & Co. For the Respondent: Harendor Toor and S.R. Pawar i/b S.K. Legal Associates.



Judgment Text

R.M.S. Khandeparkar, J.


1. Heard. A preliminary objection is sought to be raised on behalf of the respondent about deficit court fee being paid on the appeal by the appellant. It is the contention of the respondent that the appellant is liable to pay court fee in terms of Article 1 of Schedule I of the Bombay Court Fees Act, 1959, hereinafter called as "the said Act", and not in terms of Article 13(c) of Schedule II thereof. In the alternative, it is sought to be contended that the appellant is liable to pay court fee at least in terms of Article 3 of Schedule I of the said Act. The appellant having paid the court fee in terms of Article 13 of Schedule II of the said Act, the appeal is liable to be rejected in limine. On the other hand, the appellant insists that the provisions of law as regards the payment of court fees, which are attracted in the matter, are essentially those comprised under Article 13 of Schedule II of the said Act and none other.


2. The learned advocate for the respondent has drawn our attention to the decision of the Learned Single Judge of this court in Sumitradevi Mahipal Kureel v. State of Maharashtra & Ors., reported in (2005)4 Mh.L.J. 133 whereas learned counsel appearing for the appellant has placed reliance in the decisions in the matters of Taxing Officer, High Court, Appellate Side v. Jamnadas Dharamdas & Ors., reported in AIR 1956 Bombay 563, State Bank Viram Co-op. Housing Soc., Ahmedabad v. M/s.Pankaj & Co. & Anr., reported in 1979 (Vol.XX) Gujarat Law Reporter 118 and Paramjeet Singh Patheja v. ICDS Ltd., reported in JT 2006 (10) SC 41.


3. This appeal arises from the judgment dated 20th September, 2006 passed by the Learned Single Judge in Arbitration Petition No.159 of 2006. By the impugned judgment, the Learned Single Judge has dismissed the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, while holding that there is no case for interference in the award passed by the Arbitrator. Obviously, the appeal has been filed in terms of the provisions of law comprised under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996.


4. Section 5 of the said Act deals with the fees to be paid on documents to be filed in the Courts. It is to be found in Chapter III of the said Act which deals with the subject of "Computation of Fees". Sub-section (1) of Section 5 provides that no document of any of the kinds specified as chargeable in the first or second Schedule to the said Act annexed shall be filed, exhibited or recorded in any Court of Justice, or shall be received or furnished by any public officer, unless in respect of such document there has been paid a fee of an amount not less than that indicated by either of the said Schedules as the proper fee for such document. Schedule I deals with "Ad valorem fees" whereas Schedule II provides for "fixed fees". Article 1 of Schedule I prescribes the fees for plaint or memorandum of appeal not otherwise provided in the said Act or of cross-objection presented to any Civil or Revenue Court. Undoubtedly, therefore, any appeal filed, for which no other provision is made in relation to the payment of court fees in the said Act will have to be accompanied by the court fee as prescribed under Article 1 of Schedule I of the said Act.


5. Article 13 of Schedule II of the said Act provides that memorandum of appeal when the appeal is not from a decree or an order having the force of a decree and is presented to any Civil Court other than the High Court, or to any Revenue Court or Executive Officer other than the High Court or Chief Controlling Revenue or Executive Authority, shall be accompanied by the court fee of Rs.5/-, when it is presented to the Chief Controlling Executive or Revenue Authority, it should be accompanied by Rs.10/- and when it is presented to High Court, it should be accompanied by Rs.25/-. Apparently, Article 13 of Schedule II of the said Act will apply to the appeals arising from an order which is not in the form of a decree or which has no force of a decree. In other words, when an order is in the form of a decree or has the force of a decree then the provisions under Article 13 of Schedule II of the said Act would not be attracted.


6. Under Article 3 of Schedule I, a plaint, application or petition including memorandum of appeal to set aside or modify any award otherwise than under the Arbitration Act, 1940, has to be accompanied by a court fee on the amount or value of the award sought to be set aside or modified according to the scale prescribed under Article 1 of Schedule I of the said Act.


7. Plain reading of the above provisions of law in the said Act would therefore disclose that any award which is not passed or declared under the Arbitration Act, 1940 if challenged by way of petition or appeal with an intention to get it set aside or modified, the petitioner or the appellant will have to pay the court fee to be calculated on the amount or value of the award sought to be set aside or modified according to the scale prescribed under Article 1 of Schedule I of the said Act. However, the contention which is sought to be raised on behalf of the appellant is that the challenge is not to the award but to the order passed under Section 34 of the Arbitration and Conciliation Act, 1996 and the said order is being challenged in the appeal under Section 37(1)(b). The order passed by the Learned Single Judge can neither be said to be a decree nor is in the form of a decree nor can have the force of a decree. On the contrary, drawing attention to Section 36 of the Arbitration and Conciliation Act, 1996, it is sought to be contended that such an award or an order passed under Section 34 would be enforceable "as if it were a decree of the Court" meaning thereby that though such an award or an order passed under Section 34 cannot be said to be a decree, yet the same will have the force of a decree, and in that regard, attention is drawn to the decision of the Apex Court in Paramjeet Singh Patheja?s case (supra).


8. In Paramjeet Singh Patheja?s case (supra), the Apex Court, after taking into consideration the various earlier decisions, has held that "it is settled by decisions of this Court that the words ?as if? in fact show the distinction between two things and such words are used for a limited purpose. They further show that a legal fiction must be limited to the purpose for which it was created." The Apex Court therein with reference to Section 36 of the Arbitration and Conciliation Act, 1996, has ruled that "the words ?as if? demonstrate that the award and decree or order are two different things. The legal fiction created is for the limited purpose of enforcement as a decree. The fiction is not intended to make it a decree for all purposes under all statutes, whether State or Central", and having held so, it was ruled as under:-


"i) .........................


ii) .........................


iii) .........................


iv) An arbitration award is neither a decree nor an Order for payment within the meaning of Section 9(2).


The expression "decree" in the Court Fees Act, 1870 is liable to be construed with reference to its definition in the CPC and held that there are essential conditions for a "decree".


(a) That the adjudication must be given in a suit,


(b) That the suit must start with a plaint and culminate in a decree, and


(c) That the adjudication must be formal and final and must be given by a civil or revenue court.


v) An award does not satisfy any of the requirements of a decree. It is not rendered in a suit nor is an arbitral proceeding commenced by the institution of a plaint.


vi) A legal fiction ought not to be extended beyond its legitimate field. As such, an award rendered under the provisions of the Arbitration Act, 1996 cannot be construed to be a "decree" for the purpose of Section 9(2) of the Insolvency Act.


...................................


................................."


Apparently, therefore, the point that the award or an order passed in relation to the award made under the Arbitration and Conciliation Act, 1996 cannot be a decree is well settled. The expression "as if" merely creates a fiction in relation to the award or order for the purpose of its enforcement as if it were a decree of the Court and that by itself does not transform it into a decree, nevertheless it will have force of a decree.


9. Considering Section 36 of the Arbitration and Conciliation Act, 1996, it would be clear that such an award or order will have the force of a decree and consequently, it will not attract Article 13 of Schedule II as the said provision excludes its applicability not only to a decree but even to an order having force of a decree. At the same time, as observed above, Article 3 of Schedule I specifically deals with the petitions and appeals which are filed to get an award set aside or modified, albeit, when an award is passed under an Act other than the Arbitration Act, 1940. When one compares the provisions of law under Article 3 of Schedule I with those of Article 13 of Schedule II of the said Act, it is, at once, clear that the former deals specifically with the matter arising out of an award passed in a proceeding otherwise than under Arbitration Act, 1940 whereas the latter is a residuary provision in relation to the appeals arising from an order which is neither a decree nor has a force of decree. It is settled principle of law that when there is a specific provision dealing with a particular situation, resort cannot be had to a residuary provision. Bearing in mind this principle of law, and considering the fact that the matter arises on account of dispute sought to be raised out of an award to get the same set aside or modified, obviously, the provisions of Article 3 of Schedule I of the said Act will apply and will have overriding effect on the provisions comprised under Article 13 of Schedule II of the said Act in relation to the matter in issue.


10. It was also sought to be contended that in the Article 3 of Schedule I of the said Act, the Legislature in its wisdom has excluded the award passed under Arbitration Act, 1940 and the same principle should apply in case of award passed under the Arbitration and Conciliation Act, 1996. We are afraid, the contention cannot be accepted for the simple reason that the Arbitration and Conciliation Act came into force in the year 1996, specifically w.e.f. 22nd August, 1996. Prior to that, the Arbitration and Conciliation Ordinance, 1996 was promulgated on 16th January, 1996. The Arbitration and Conciliation Act, 1996 replaced the said Ordinance and the Arbitration Act, 1940. Yet no amendment has been made since 1996 till this date to Article 3 of Schedule I of the said Act which clearly restricts the exclusion from its applicability the award under the Arbitration Act, 1940. In other words, the award passed under the Arbitration and Conciliation Act, 1999 is not excluded under Article 3 of Schedule I and for the same reason, the said Article which specifically deals with the subject matter of setting aside or modifying any award either at the original stage by filing an application or a petition in that regard, and also at the appellate stage by presenting memorandum of appeal, would naturally be applicable to all such proceedings. Needless to say that the appeal is a continuation of the proceedings at the original stage. The provision under Article 3 of Schedule I clearly speaks of plaint, application or petition including memorandum of appeal to set aside or modify any award. A memorandum of appeal to set aside or modify any award spoken of under Article 3 of Schedule I is obviously in relation to an order passed on an application or a petition to set aside or modify an award. The Arbitration and Conciliation Act, 1996 nowhere provides any appeal against the award itself. On the contrary, it specifically provides for a petition under Section 34 for setting aside the arbitral award and Section 37(1)(b) entitles the aggrieved party to file an appeal against the order passed under Section 34 either to set aside or to refuse to set aside the arbitral award. Once it is apparent that Article 3 of Schedule I nowhere excludes from its applicability any award passed under any other statutes including the Arbitration and Conciliation Act, 1996 and further it relates to a petition as well as an appeal to set aside or modify "any award", it would obviously include an award passed under the Arbitration and Conciliation Act, 1996 or any order in relation thereto. In our considered view, therefore, the appellant is liable to pay court fee on the appeal in hand in terms of Article 3 of Schedule I of the said Act.


11. The decision in Sumitradevi Mahipal Kureel?s case (supra) was in relation to the appeal filed under Section 23 of the Railway Claims Tribunal Act, 1987. As regards the decision of Gujarat High Court in supra) M/s. Pankaj & Co.?s case (supra), the point which arose therein was as to what should be appropriate court fee which should be paid by a party not only challenging the decree made in terms of the award under Section 17 of the Arbitration Act, 1940 but also challenging the order of the trial Court refusing to set aside the award under Section 39 of the Arbitration Act, 1940. So also the decision in Jamnadas Dharamdas?s case (supra) is in relation to the appeal filed under Displaced Persons (Debts Adjustment) Act, 1951 wherein it was held that the proceeding under the Act being not a suit, the memorandum of appeal was nothing more than an application and consequently it could be subjected to the Court fee of eight annas only under Article 1 clause (b)(2) of Schedule II of the Court Fees Act, 1870. All these decisions are of no help to decide the matter in issue in the case in hand.


12. For the reasons stated above, therefore, the appellant has to pay court fees on the present appeal in terms of Article 3 of Schedule I of the said Act and not in terms of Article 13 of Schedule II thereof. We are, however, unable to accept the contention on behalf of the respondent that on account of deficit court fees,

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the appeal is liable to be dismissed in limine. It is settled principle of law that in case there is any deficit in payment of court fee, the appellant can always be allowed to cure deficiency by paying difference in the court fee within the time specified and only in case of failure to pay the deficit court fee as ordered, the appeal can be dismissed. Section 149 of the Code of Civil Procedure is very clear in that regard. It provides that where the whole or any part of any fee prescribed for any document by the law for the time being in force relating to Court-fees has not been paid, the Court may, in its discretion, at any stage, allow the person, by whom such fee is payable, to pay the whole or part, as the case may be, of such Court-fee; and upon such payment the document, in respect of which such fee is payable, shall have the same force and effect as if such fee had been paid in the first instance. 13. In the result, therefore, while upholding the contention on behalf of the respondent that the appeal is liable to be subjected to payment of court fee in terms of Article 3 of Schedule I of the said Act, the appellant is directed to pay deficit court fee within a period of four weeks from today, failing which, the appeal shall stand dismissed for non prosecution without being referred to the Court. In case the court fee is paid within the specified time, the appeal shall proceed in accordance with the provisions of law. The contention on behalf of the respondent that on account of deficit court fee the appeal should be dismissed in limine, is rejected. Order accordingly.
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