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2024 Supreme(Cal) 108

IN THE HIGH COURT AT CALCUTTA
MOUSHUMI BHATTACHARYA, J.
Mintech Global Private Limited – Award Holder
Versus
Kesoram Industries Limited – Award Debtor
I.A. No. GA 1 of 2023, EC No. 335 of 2023
Decided On : 20-02-2024

Advocates:
Advocate Appeared:
For the Award Holder : Kalyan Bandopadhyay, Sirsanya Bandopadhyay, Avishek Guha, Rahul Kr. Singh, Subhajit Das.
For the Award Debtor : Anirudh Goyal, Mainak Bose, Debjyoti Saha.
For the Special Officers : Anima Das Chakraborty, Mohuya Dutta Biswas.

IMPORTANT POINT
The main legal point established is that the provisions of Order VI Rule 15-A of the CPC, as amended by the Commercial Courts Act, do not apply to execution proceedings arising from an arbitral award, and the absence of a Statement of Truth in the execution proceeding does not warrant striking out of pleadings or dismissal of the execution case.

Headnote:

Commercial Dispute - Execution Proceedings - The Arbitration and Conciliation Act, 1996, The Commercial Courts Act, 2015 - Order VI Rule 15-A of The Code of Civil Procedure (CPC), 1908 - Appendix I to the Schedule - Section 36 of The Arbitration and Conciliation Act, 1996

Fact of the Case:

The award-debtor sought stay of execution proceedings pending the outcome of the award-holder's application to set aside the award under section 34 of The Arbitration and Conciliation Act, 1996. The award-debtor raised objections regarding the form and verification of pleadings in the execution case.

Finding of the Court:

The Court rejected the award-debtor's objections, ruling that the provisions of Order VI Rule 15-A of the CPC, as amended by the Commercial Courts Act, do not apply to execution proceedings arising from an arbitral award. The Court emphasized the distinction between original proceedings and execution proceedings, and held that the absence of a Statement of Truth in the execution proceeding did not warrant striking out of pleadings or dismissal of the execution case.

Issues: The key issue was whether the provisions of Order VI Rule 15-A of the CPC, pertaining to verification of pleadings in commercial disputes, applied to execution proceedings arising from an arbitral award.

Ratio Decidendi: The Court held that the requirements of Order VI Rule 15-A, including the verification by a Statement of Truth, were not applicable to execution proceedings arising from an arbitral award. The Court emphasized the distinction between original proceedings and execution proceedings, and the limited scope of Order VI Rule 15-A to pleadings defined under Order VI Rule 1, i.e., plaint and written statement.

Final Decision: The Court dismissed the award-debtor's application for stay of execution proceedings and allowed the execution case to continue. The award-holder was given liberty to correct typographical errors in the pleadings.

JUDGMENT :

MOUSHUMI BHATTACHARYA, J.

1. The award-debtor has filed the present application for stay of the Execution proceedings till the outcome of the application made by the award-holder for setting aside of the award under section 34 of The Arbitration and Conciliation Act, 1996. Both the parties have sought for setting aside of the award. The award-debtor in AP No. 396 of 2023 (which is the award-holder’s setting aside application) has taken a point of the execution proceedings not being filed in proper form under the provisions of The Commercial Courts Act, 2015. The award-debtor accordingly seeks striking out of pleadings in the Execution Case and other consequential orders against the award-holder.

2. To streamline the argument made on behalf of the award-debtor, according to learned counsel, the tabular statement of the Execution Case mentions “Original Side” instead of “Commercial Division.” The other argument is that the affidavit in support of the Tabular Statement is not accompanied by a Statement of Truth as required under Order VI Rule 15A of The Code of Civil Procedure, 1908, (CPC) as amended by The Commercial Courts Act, 2015. Counsel submits that the award-holder should not be permitted to rely on the pleadings made in the affidavit in support of the tabular statement and that the pleadings should also be struck out under the mandate of Order VI Rule 15A(5) of the CPC.

3. Learned counsel appearing for the award-holder resists the preliminary objection taken on behalf of the award-debtor by placing several provisions of The CPC as amended by the Commercial Courts Act. Counsel seeks to urge that the alleged procedural lapses are curable and do not go the root of the matter. Counsel seeks to limit the application of Order VI Rule 15A of the CPC to “pleadings” as defined under Order VI of the CPC. Counsel further submits that the words “Original Side” is a result of a typographical error which cannot cause any prejudice to the award-debtor who should be given an opportunity to correct the same.

4. The issue which is germane for consideration is whether it is mandatory to affirm and verify the affidavit-in-support of the tabular statement in compliance with Order VI Rule 15-A of The Code of Civil Procedure (CPC), 1908 as amended by the Commercial Courts Act, 2015.

5. The Commercial Courts Act, 2015 amended the First Schedule to the CPC by inserting Rule 15-A under Order VI which pertains to verification of pleadings in a commercial dispute. The relevant sub-rules of Order VI Rule 15-A are set out below:

    “15-A. (1) Notwithstanding anything contained in Rule 15, every pleading in a commercial dispute shall be verified by an affidavit in the manner and form prescribed in the Appendix to this schedule.

.........

(3) Where a pleading is amended, the amendments must be verified in the form and manner referred to in sub-rule (1) unless the Court orders otherwise.

(4) Where a pleading is not verified in the manner provided under sub-rule (1), the party shall not be permitted to rely on such pleading as evidence or any of the matters set out therein.

(5) The Court may strike out a pleading which is not verified by a Statement of Truth, namely, the affidavit set out in the Appendix to this Schedule.”

6. Appendix I to the Schedule was inserted in 2018, with retrospective effect from 23.10.2015 and sets out the “Statement of Truth.” The Statement of Truth specifically refers to Order VI Rule 15-A and Order XI Rule 3 and provides the particulars of the affirmation and declaration of a deponent. The Statement of Truth is also required to bear the signature of the deponent with the place and date.

7. A careful reading of Order VI Rule 15-A would show that every pleading in a commercial dispute is to be verified by an affidavit in the form prescribed in Appendix I to the Schedule independent of Order VI Rule 15 which contains four requirements in relation to verification of pleadings. It is interesting to note that Order 6 Rule 15(4), which w

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