Back
2021 Supreme(Mad) 1846
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
M/s. Kwality Spinning Mills Ltd., Rep. by its Managing Director, Meyyappan - Appellant
Versus
The Cotton Corporation of India Ltd., Coimbatore & Another - Respondent
CMA No. 2492 of 2011 & MP No. 1 of 2011
Decided on : 20-09-2021
For the Appellant :T.S. Baskaran, Advocate
For the Respondent:Anirudh Krishnan for M/s. Sarvabhauman Associates, Advocates
Headnote:
Arbitration and Conciliation Act, 1996 - Section 37(1) (b) - Civil Procedure Code, 1908 - Section 151 - Sick Industrial and Companies (Special Provisions) Act, 1985 - Section 22 - Suspension of legal proceedings, contracts, etc - Arbitration Award - Challenged - Appealable orders - Appellant-Company and 1st respondent-Company had entered into a Contract - Under said Contract, 1st respondent sold 600 bales of cotton to Appellant - According to 1st respondent, Appellant had committed breach of contract by not lifting 200 bales out of 600 bales sold to it - Held, The wording of Section 22(1) of SICA and the above decisions of this Court that proceedings covered under Section 22 are proceedings of coercive nature, be that legal or otherwise, which would come within the purview of expression `proceedings’ as mentioned in Section but it would not cover all proceedings. Section 22 (1) incorporated certain types of proceedings which would fall within its ambit and which are proceedings for winding up of industrial company or proceedings for execution and distress against any of properties of industrial company or the proceedings for appointment of a Receiver in respect of properties of the industrial company - Scope for interference to Arbitral Award under Section 34 of Act, 1996 is very limited - Appellant has not satisfied any of requirements as laid down under said Section - Grounds raised by Appellant does not deserve any merit as 2nd respondent/Arbitrator has passed a well reasoned Arbitral Award giving due consideration to contentions raised by Appellant - Learned I Additional District Judge has rightly dismissed application filed by Appellant under Section 34 of Arbitration and Conciliation Act - No merit - Appeal is dismissed.
JUDGMENT :
(Prayer: Civil Miscellaneous Appeal filed under Section 37(1) (b) of Arbitration and Conciliation Act, 1996 R/w Section 151 of Civil Procedure Code against the fair order and decreetal order dated 25.02.2010 made in AOP No.376 of 2005 on the file of the 1st Additional District Court, Coimbatore confirming the Arbitration Award dated 14.08.2000 made in A.P. No.10 of 1997 passed by the Sole Arbitrator 2nd respondent.)
1. This appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996 challenging the order dated 25.02.2010 passed by the I Additional District Court, Coimbatore in AOP No.376 of 2005 under Section 34 of the Arbitration and Conciliation Act dismissing the application filed by the appellant challenging the Arbitral Award passed against them on 14.08.2000 in AP No.10 of 1997 by the 2nd respondent /Arbitrator.
Brief facts leading to the filing of this appeal under Section 37 of the Arbitration and Conciliation Act, 1996:
2. The Appellant-Company and the 1st respondent-Company had entered into a Contract on 23.03.1995. Under the said Contract, the 1st respondent sold 600 bales of cotton to the Appellant. According to the 1st respondent, the Appellant had committed breach of contract by not lifting 200 bales out of 600 bales sold to it. Exercising the power conferred under the Contract, the 1st respondent caused a re-sale of those 200 bales. According to the 1st respondent by such re-sale, they had suffered a loss of Rs.14,55,193.89 as on 30.09.1997 after giving credit to the amount lying to the credit of the Appellant. There is an Arbitration clause under the contract and in accordance with the Arbitration clause, the 1st respondent has initiated Arbitration for the recovery of Rs.14,55,193.89 together with interest and costs from the Appellant. Before the 2nd respondent/Arbitrator, the Appellant had filed a Memo stating that the Appellant- Company was declared as a Sick Industrial Company by an order dated 06.03.1998 passed by the Board for Industrial and Financial Reconstruction (BIFR) and requested the 2nd respondent /Arbitrator to stay further proceedings in the Arbitration. The 2nd respondent /Arbitrator by his order dated 28.01.1999 granted suspension of the Arbitral proceedings after recording the Memo filed by the Appellant. Thereafter, another Memo was filed by the 1st respondent before the 2nd respondent/Arbitrator stating that under Section 22 of the Sick Industrial and Companies (Special Provisions) Act, 1985 (hereinafter referred to as SICA), the stay will be in force only for a period of two years and the two years period having got expired, the Arbitral proceedings should continue. Thereafter, the 2nd respondent/Arbitrator by his order dated 23.06.2000 after hearing both the parties re-called the earlier order granting suspension of Arbitral proceedings and proceeded to continue with the Arbitration.
3. It is the case of the Appellant that it could not take further part in the enquiry and the 2nd respondent/Arbitrator passed an Arbitral Award dated 14.08.2000 in favour of the 1st respondent against the appellant in AP No.10 of 1997, directing the Appellant to pay the 1st respondent a sum of Rs.14,55,193.89 together with interest at 18% p.a. from 01.10.1997 till the date of realisation and also pay costs of Rs.25,000/-.
4. Aggrieved by the Arbitral Award, dated 14.08.2000 passed in AP No.10 of 1997, the Appellant filed an application under Section 34 of the Arbitration and Conciliation Act before the I Additional District Court, Coimbatore in Arbitration OP No.376 of 2005.
5. By order dated 25.02.2010, the learned I Additional District Judge, Coimbatore dismissed the Arbitration Original Petition No.377 of 2005 on the ground that the Appellant has not challenged before the 2nd respondent/ Arbitrator the order vacating the suspension of the Arbitral proceedings passed by the Arbitral Tribunal and also holding that pendency of proceedings before the BIFR will not stay the Arbitra
