Absence Of Express Liberty In Withdrawal Order To File Fresh Execution Petition Does Not Deny Benefit U/S 14 Of Limitation Act: Calcutta HC

The Calcutta High Court bench of Justice Bibhas Ranjan De has held that withdrawal of an execution petition for enforcement of an arbitral award on the ground of lack of jurisdiction, when such ground is clearly stated in the withdrawal application, does not bar the petitioner from refiling before the appropriate forum, even if the court's order does not expressly grant liberty to refile. Accordingly, the benefit of Section 14 of the Limitation Act, 1963 (Limitation Act) cannot be denied. Brief Facts: Radha Krishan Poddar, the original award holder, initiated Execution Case No. 9 of 2002 to enforce an arbitral award dated 22.12.2001. After his death on 24.08.2014, his legal heirs were substituted by court order dated 30.10.2014. In 2018, upon realizing the Civil Judge lacked jurisdiction, they withdrew the case and filed Arbitration Execution Case No. 535 of 2018 before the District Judge, Alipore. The case was then transferred to the 15th Court and later to the 6th Court of the Additional District Judge, Alipore. During the pendency of the execution proceeding, the decree holder filed an application under Order 21 Rules 37 and 38 read with Section 151 of Civil Procedure Code, 1908 (CPC). In response, the petitioners filed an application under Section 47 CPC challenging the execution. However, the Executing Court dismissed the petitioners' application, holding that it could not go beyond the decree. Against the above order, the present petition has been filed. Contentions: The Petitioner submitted that the withdrawal of an execution application without obtaining proper leave amounts to complete disposal of legal proceedings.Consequence of defective filing is knowledge and is of no consequence and the petitioner is not entitled to benefit of initial filing or after curing the defect. Per contra, the Respondent submitted that the application under Section 47 of the CPC was filed challenging the appointment of arbitrator and also executability of the decree. Appointment of arbitrator cannot be challenged at the time of execution of the award without re-coursing the steps under Section 16 of the Arbitration and conciliation Act, 1996 (Arbitration Act). It was further submitted that the time spent before the Court without jurisdiction shall be excluded from the period of limitation as per section 14 of the Limitation Act which is executable without losing its enforceability. Observations: The court noted that the Supreme Court in Delhi Development Authority vs. M/s Durga Construction Co. held that Cases of delay in re-filing differ from those of initial filing, as the party has already demonstrated intent to seek legal remedies by taking preliminary steps. Thus, it cannot be presumed that they have abandoned their right to legal recourse. The Apex Court further held that however, if the initial filing is grossly inadequate or contains fundamental defects, it may be treated as nonest, with no legal effect. In such instances, only the date on which defects are rectified would be considered the actual date of filing. It further observed that initially title execution case no. 09 of 2002 was filed admittedly before a wrong forum. Subsequently, arbitration execution no. 535 of 2018 was filed. Title execution petition cannot be dealt with by a Court in an execution of arbitral award under the provision of the Arbitration Act. The court further opined that in the present case, the withdrawal petition dated 07.09.2018 explicitly sought withdrawal on the ground of lack of jurisdiction. Notably, in paragraph 15, the decree holder specifically prayed for withdrawal to refile before the appropriate forum. Based on the above, it held that therefore, the absence of an express grant of liberty in the order does not affect the computation of limitation, as the intent to refile due to jurisdictional defect was clearly stated. Moreover, the Learned Judge did not reject the prayer to file before the appropriate forum in the order dated 29.09.2018 in Title Execution No. 09 of 2002. The Supreme Court in Vidya Drolia and others vs. Durga Trading Corporation held that the issue of non-arbitrability can arise at three stages: (i) before the court under Sections 8 or 11 of the Arbitration Act, (ii) before the arbitral tribunal during proceedings, and (iii) before the court at the stage of award challenge or enforcement. The Apex Court also held that the question of “who decides non-arbitrability” is a jurisdictional issue and remains unsettled due to conflicting case laws. Its determination depends on the scope of the arbitration agreement, the nature of the dispute, and the jurisdiction conferred upon courts and arbitrators at various stages. Based on the above, the court observed that under the Arbitration Act, the existence or validity of an arbitration agreement can be challenged at multiple stages. Section 8 ...

Absence Of Express Liberty In Withdrawal Order To File Fresh Execution Petition Does Not Deny Benefit U/S 14 Of Limitation Act: Calcutta HC

Mohd Malik Chauhan

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