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Ushadevi & Another v/s Cotton Corporation of India Ltd. & Another

    Misc. Petition No. 6029 of 2018

    Decided On, 28 February 2019

    At, High Court of Madhya Pradesh Bench at Indore

    By, THE HONOURABLE MR. JUSTICE VIVEK RUSIA

    For the Appellants: A.K.Sethi, learned Senior Counsel with S.P. Joshi, Advocate. For the Respondents: P.J. Mehta, Advocate.



Judgment Text

The petitioners have filed the present petition being aggrieved by the order dated 01.11.2018 passed by the XVth Additional District Judge (Executing Court), Indore rejecting application filed under section 151 of the CPC.

2. Facts of the case, in short, are as under :-

(a) The Respondent No.1 filed the claim of Rs. 3,18,851-00 against the Respondent No.2. The dispute was referred to the sole Arbitrator Shri G. R. Pandya, District & Sessions Judge (Retd.). Vide award dated 26.09.2001, the claim was allowed and the Respondent No.2 was directed to pay the amount of Rs. 3,59,644-00 along with interest @ 15% per annum from 26.09.2001 till its realization.

(b) The Respondent No.2 filed an application under section 34 of the Arbitration and Conciliation Act, 1996 before the District Judge and the same was registered as Arbitration Case No.34/2001.

(c) During pendency of the aforesaid case, the sole Proprietor of the Respondent No.2 firm Shri Radheshyam Agrawal expired on 22.02.2010. Thereafter the present petitioners were bought on record as legal heirs. Vide order dated 05.11.2012, the 7th Additional District Judge, Indore had dismissed the application filed under section 34 of the Arbitration and Conciliation Act, 1996.

(d) After passing of the aforesaid order, the Respondent No.1 filed an execution case before the Executing Court on 07.01.2018 against the Respondent No.2 and the petitioners.

(e) After receipt of the summons of execution case, the present petitioners appeared and filed an application under Section 151 of the Code for rejection of execution case. The said application was opposed by the Respondent No.1 by filing reply and vide order dated 01.11.2018 the said application has been rejected, hence the present petition before this Court.

3. Shri A.K.Sethi, learned Senior Counsel appearing for the petitioners submits that the Respondent No.1 filed the claim case against the Respondent No.2 alone without impleading the Proprietor i.e. Shri Radheshyam Agrawal as co-defendant. The award was passed in the year 2001 and thereafter the present execution case is filed in the year 2018, therefore, the same is barred under Article 136 of the Limitation Act, 1963. He further submits that under section 36 of the Arbitration and Conciliation Act, 1996, the award becomes enforceable only after expiry of period of limitation for filing objection under section 34 of the Arbitration and Conciliation Act, 1996. There was no stay by the District Judge in Arbitration Case No.34/2001. The Respondent No.1 did not file executing proceedings for more than 12 years, therefore, the present proceedings are barred under Article 136 of the Limitation Act, 1963.

4. Shri Sethi further submits that Radheshyam Agrawal was not party to the award as well as the in proceedings under section 34 of the Arbitration and Conciliation Act, 1996, therefore, the award cannot be executed against the present petitioners who are legal heirs of Radheshyam Agrawal. The present petitioners were brought on record as legal representatives under the provisions of Order 22, Rule 3 of the CPC only to pursue the pending lis between the parties but whether they are liable to satisfy the award or the execution proceedings can be initiated against them is a debatable question which is required to be answered by this Court. He further submits that the Executing Court cannot go behind the decree which is a settled principle of law. The award was passed against the Respondent No.2 and same cannot be enforced against the present petitioners.

5. Per contra, Shri P.J.Mehta, learned counsel for the Respondent No.1 submits that the Respondent No.2 was the sole Proprietor Firm and before the Arbitrator Shri Radheshyam Agrawal contested the case on behalf of the firm. He has referred the provisions of Order 30, Rule 10 of the CPC under which the suit is maintainable against any person who is carrying on business in the name or style other than his name or in the name of HUF or in the name of firm. He has placed reliance over the judgment passed by the Apex Court in the case of Raghu Lakshminarayanan v. Fine Tubes reported in (2007) 5 SCC 103 in which the Apex Court has held that a partnership firm differs from a proprietary concern owned by an individual. A proprietary concern is only the business name in which the Proprietor of the business carries on the business. A suit by or against the proprietary concern is by or against the Proprietor of the business.

6. So far as the issue of limitation of filing the execution proceedings is concerned, Shri Mehta submits that the District Judge dismissed the Arbitration Case No.34/2001 on 05.11.2012. Thereafter the Respondent No.1 filed an execution proceedings and as per Article 136 of the Limitation Act, 1963, the limitation is 12 years from the date when the decree becomes enforceable. He has placed reliance over the judgment passed by the Apex Court in the case of BCCI v. Kochi Cricket (P) Ltd. Reported in (2018) 6 SCC 287 = AIR 2018 SC 1549 in which the Apex Court has held that prior to amendment in Section 36, the award was not enforceable or executable till decision of the proceedings pending under section 34 of the Arbitration and Conciliation Act, 1996 and after amendment there is no automatic stay of the award and decree as was the case under unamended section 36 of the Arbitration and Conciliation Act, 1996.

7. Shri Mehta has referred letter dated 26.07.2017 written by Municipal Corporation, Indore to the Respondent No.1 certifying that the property of Respondent No.2 has been registered in the name of petitioner No.1 as Service No.731010844. Therefore, in view of the above, the Executing Court has not committed any error of law while rejecting the application filed under section 151 of the CPC.

8. That the Respondent No.1 filed a claim case against the Respondent No.2. The Respondent No.2 was a Proprietorship Firm owned by Late Shri Radheshyam Agrawal, who contested the arbitration proceedings before the Arbitrator. Thereafter Respondent No.2 filed an application under section 34 of the Arbitration and Conciliation Act, 1996 before the District Judge. During pendency of the proceedings he expired and present petitioners were brought on record as legal heirs and they continued with the proceedings without any objection in regards to their names in the pending proceedings. They filed an application before the Additional District Judge in Arbitration Case No.34/2001 that under section 40 of the Arbitration and Conciliation Act, 1996 their name be not placed on record in place of Radheshyam Agrawal because they are not Proprietors of the firm. By order dated 28.04.2011 the learned District Judge had dismissed the application on the ground that the Respondent No.2 filed an application under section 34 of the Arbitration and Conciliation Act, 1996 through Late Radheshyam Agrawal and after his death, there is no question of abatement of award as well as the proceedings. The petitioners did not challenge the said order also and continued to participate in the proceedings. Vide order dated 05.11.2012 the learned Additional District Judge had dismissed the application filed under section 34 of the Arbitration and Conciliation Act, 1996.

9. Order 30, Rule 10 of the CPC clearly provides that any person carrying on a business in a name of other then his name or in the name of HUF and the firm, he may be sued in such name. The provisions is reproduced below :-

"10. Suit against person carrying on business in name other than his own.-- Any person carrying on business in a name or style other than his own name, or a Hindu undivided family carrying on business under any name, may be sued in such name or style as if it were a firm name, and, in so far as the nature of such case permits, all rules under this Order shall apply accordingly."

10. The Apex Court in the case of Fine Tubes (supra) has confirmed that the suit by or against the proprietary concern is by or against the Proprietor of the business. Para 13 of the judgment is reproduced below :-

"13. The distinction between partnership firm and a proprietary concern is well known. It is evident from Order 30, Rule 1 and Order 30, Rule 10 of the Code of Civil Procedure. The question came up for consideration also before this Court in M/s. Ashok Transport Agency v. Awadhesh Kumar and another [(1998) 5 SCC 567] wherein this Court stated the law in the following terms:-

"6. A partnership firm differs from a proprietary concern owned by an individual. A partnership is governed by the provisions of the Indian Partnership Act, 1932. Though a partnership is not a juristic person but Order 30, Rule 1, CPC enables the partners of a partnership firm to sue or to be sued in the name of the firm. A proprietary concern is only the business name in which the proprietor of the business carries on the business. A suit by or against a proprietary concern is by or against the proprietor of the business. In the event of the death of the proprietor of a proprietary concern, it is the legal representatives of the proprietor who alone can sue or be sued in respect of the dealings of the proprietary business. The provisions of Rule 10 of Order 30, which make applicable the provisions of Order 30 to a proprietary concern enable the proprietor of a proprietary business to be sued in the business names of his proprietary concern. The real party who is being sued is the proprietor of the said business. The said provision does not have the effect of converting the proprietary business into a partnership firm. The provisions of Rule 4 of Order 30 have no application to such a suit as by virtue of Order 30, Rule 10 the other provisions of Order 30 are applicable to a suit against the proprietor of proprietary business "in sofar as the nature of such case permits." This means that only those provisions of Order 30 can be made applicable to proprietary concern which can be so made applicable keeping in view the nature of the case." "

11. Therefore, the objection of the petitioners that the execution proceedings are not maintainable against them is not tenable, mis-conceived, hence rightly been rejected by the Executing Court.

12. So far as the issue of limitation is concerned, Article 136 of the Limitation Act, 1963 provides the limitation of 12 years from the date when decree becomes enforceable. Before amendment in section 36 of the Arbitration and Conciliation Act, 1996, the award would becomes enforceable after expiry of the time for making an application to set-aside the arbitral award under Section 34 and dismissed or such application has not been made, the award shall be en

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forced under the CPC in the same manner as if it were a decree of the Court. The Respondent No.1 initiated the executing proceedings after dismissal of the application filed under section 34 of the Arbitration and Conciliation Act, 1996. section 36 of the Arbitration and Conciliation Act, 1996 undergone substantial amendment w.e.f. 31.12.2015 and before that there was an automatic stay of an enforcement of the award, the moment application under section 34 of the Arbitration and Conciliation Act, 1996 is filed. The aforesaid view has been confirmed by the Apex Court in the case of Kochi Cricket (P) Ltd. (supra). Therefore, the objection of the petitioners that the execution proceedings has become time barred is also not tenable, hence liable to be dismissed. 13. So far as the document Annexure R/1/4 is concerned, Shri Sethi submits that the petitioners have already filed an application before the Executing Court contending that the property under execution is a sole earned property of the petitioners and not the property of firm. Therefore, he has not argued on this point. 14. I do not find any substance in this petition. The petition is accordingly dismissed.
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