Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2007 Supreme(Mad) 1542

Before the Madurai Bench of Madras High Court
THE HONOURABLE MR. JUSTICE S. MANIKUMAR
Srikumar Textiles (P) Ltd., G1, Industrial Estate, Madurai-7 and Others
Versus
Sundaram Finance Ltd., No. 21, Pattulos Road, Chennai
C.M.A. No. 111 of 2007C.M.A. No. 112 of 2007C.M.A. No. 113 of 2007C.M.A. No. 114 of 2007C.M.A. No. 115 of 2007C.M.A. No. 116 of 2007C.M.A. No. 117 of 2007C.M.A. No. 118 of 2007
Decided On : 31-05-2007

Advocates Appeared:
B. S. Gnanadesigan, for Appellant.
A. R. M. Ramesh, for Respondent.

If defaulting party offers sufficient cause for his absence, application for restoration is maintainable in law.

Headnote:CIVIL PROCEDURE CODE, 1908 - ORDER 9 - RULE 9 - ARBITRATION AND CONCILATION ACT 1996 - Arbitration proceedings posted for 10.10.2004 before District Judge for filing objections - Matter passed over till after noon - Respondent (appellant) absent when called - Petition dismissed for default - Restoration petition filed after 6 days under order 9 Rule 9 and Sec.15t of C.P.C. - dismissed - C.M.A. preferred - Extent of judicial intervention - See 2(2) of Arbitration Act defining "court" - (Para 3) HELD: No undue delay in filing application - Track record of official does not indicate deliberate delay of proceedings before Civil Court - Imposing conditions for restoring application not necessary - (Para 32)
       HELD FURTHER : When there is no express exclusion in Arbitration Act, it cannot be inferred that CPC is not applicable to proceedings arising out of an order passed under provisions of Arbitration Act - AIR 2002 SC 2308, followed - In the absence of specific exclusion and express bar against application of CPC to proceedings of Arbitration Act before Civil Court, once matter goes out of hands of Arbitration Tribunal, to Civil Court, provisions of CPC are applicable to all proceedings - Since proceedings before Civil Court are of civil Nature, procedure applicable and followed for other civil proceedings equally apply to proceedings arising out of orders passed U/ss. 9, 27, 34, 36, & 37 of Arbitration Act (Para 28, 29, 30)
       Non obstante clause in Sec 5 of Arbitration Act does not take away powers of Principal Court (i.e.) original jurisdiction in a District of the High Court in applying CPC, while deciding matters arising out of Act - As regards decision made by Arbitration Tribunal, any party aggrieved by decision can apply to civil court U/s. 34 of Arbitration Act to set aside award - Judicial intervention is permissible in any matters arising out of Ss. 9, 27, 34, 36, & 37 in part - I of Act - Provisions of CPC are applicable to such proceedings (para 30) - Once court defined U/s. 2(e) of Arbitration Act, exercise powers of Civil Court, it is not a person’s non designate powers of Civil Court are not curtailed by non obstante clause in Sec. 5 of Act, except so provided in part - 1 of the Act (Para 31)
       If the defaulting party offers sufficient cause - Court’s Directions - for his absence, application for restoration is maintainable in law, as it is a proceeding emanating from orders passed u/s. 34 - Restoration application U/order 9 R. 9 of C.P.C. held maintainable - Order of District Judge set aside in C.M.A. (Para 31)

Judgment :

S. MANIKUMAR, J.

The appeals are preferred against the orders, dismissing the petitions filed under Order 9Rule 9 read with Section 151 of Code of Civil Procedure, to restore the arbitration original petitions, which were dismissed for default, on 13.10.2004.

2. Since the appeals involve common question of law and facts, they are taken up together and disposed of by common judgment.

3. Brief facts leading to the appeals are as follows: The first appellant is an industrial Textiles Mill registered as a Private limited company under Indian Companies Act. The appellants 2 and 3, wife and husband are the Directors and Guarantors to the first appellant company. They borrowed money from Sundaram Finance Ltd., the respondent herein. On the applications filed by the finance company/respondent, the Arbitrator passed a common award. Aggrieved by the award, the appellants filed Arbitration original petitions before the Principal Sub Judge, Madurai under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) read with Section 151 of Code of Civil Procedure, to set aside the common award passed by the Arbitrator dated

4. On 13.10.2004, when the matters were posted, on the request of the respondents counsel for filing written objections, the matters were passed over till afternoon. When the matters were taken up in the evening, learned counsel for the appellants was absent, and therefore the Arbitration original petitions were dismissed for default. Thereafter, the appellants filed applications under Order 9Rule 9 read with Section 151 Code of Civil Procedure, to restore the Arbitration original petitions which were dismissed for default on 13.10.2004.

5. The respondent herein filed counter affidavit and contended that appellants advocate had filed to represent his case, when the matters were called in the morning and the same was passed over till afternoon and in the absence of representation from appellants 2 and 3, the petitions were dismissed for default. The respondent further submitted that the reasons stated by the appellants for their absence in the interlocutory petitions are not properly explained and hence, prayed for dismissal of the applications.

6. Learned Principal District judge, Madurai, on evaluation of pleadings, dismissed the applications filed for restoration on the ground that the restoration applications lack merits and there is no provision for filing application under Order 9Rule 9 read with Section 151 of Code of Civil Procedure. The learned judge further observed that though the Arbitration Original petitions were dismissed on 13.10.2004, the appellants could have filed the Applications for restoration on the same day or the next day, if the advocate clerk was present in the Court, Whereas, the application s for restoration were filed only on 19.10.2004. Though it is stated that the second appellant had gone to Thiruchendur, no reasons were assigned for the absence of the third appellant and therefore, there is no proper explanation. The other reason assigned by the lower Court for the dismissal of the restoration applications is that though, it was stated in the affidavit, that the applications for restoration under Order 9Rule 9 read with Section 151 of Code of Civil Procedure, are maintainable, the appellants have failed to satisfy the Court, with reference to legal provisions in law.

7. Aggrieved by the orders dismissing the petitions filed for restoration, the appellants have preferred the above appeals.

8. Mr. B.S. Gnanadesigan, learned counsel for the appellants raised an important issue as to whether the provisions of Code of Civil Procedure, are applicable to the proceedings arising out of an arbitration award or any order passed by an Arbitrator, and challenged before the Court under Section 34 of the Act. By referring to the provisions of the Act, learned counsel for the appellants submitted that whenever orders of the Arbitral Tribunal or any proceed

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