Multiple Remand Orders U/S 37 A&C Act “Unworkable” Without Reversing Findings On Merits: Madras High Court

The Madras High Court held that multiple remand orders issued by courts under section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) without disturbing or reversing the findings on merits recorded by earlier Single Judges were incapable of implementation. The court found the situation unprecedented and unusual holding that the statutory scheme of the Civil Procedure Code (CPC) does not permit a wholesale de novo remand unless the appellate court first reverses the findings on merits which the court observed did not happen in any of the connected cases. Justice N. Anand Venkatesh held that “where the appellate court does not enter into the merits of the matter and orders re-trial the order of remand would be, apart from being wholly illegal, completely unworkable since the findings on merits would remain and is not vacated so as to allow the trial court to examine the issue afresh by way of a re-trial.” The Six Petitions under section 34 of the Arbitration Act arising out of arbitral awards in ELCOT, IRCON, AAI, URC Construction, and Chennai Port Trust had been placed before the court after the Division Benches had remanded the matters back for fresh consideration. The reason for remand was that the Single Judges had modified the arbitral awards which could not be done in view of settled law in M. Hakeem case. Since the matter in M. Hakeem was referred to a larger bench, the Division Benches remanded the matters by consent without addressing the merits of the awards or orders passed under section 34. The court observed that the remand is strictly governed by Order 41 Rules 23, 23A and 25 of the CPC. It held that “Before a Civil Court, the scope of remand is confined to the provisions of Order 41 Rule 23, 23-A and 25 of the Code of Civil Procedure, 1908. The power of remand is confined to these three provisions and there exists no inherent power of remand as was held by the Supreme Court in P. Purushottam Reddy v. Pratap Steels Ltd. It further held that “where the appellate court does not enter into the merits of the matter and orders re-trial the order of remand would be, apart from being wholly illegal, completely unworkable since the findings on merits would remain and is not vacated so as to allow the trial court to examine the issue afresh by way of a re-trial.” Based on the above, it held that since the Division Benches did enter into merits at all, the findings recorded under section 34 still stand. The court further held that doctrine of merger will not be applicable when the Appellate court did not examine or reverse the findings on merits. It held that “the doctrine of merger would not apply where the appellate court does not affirm/reverse or modify the decree on merits. If the Division Bench had vacated the findings on merits, and then remanded the case for fresh disposal, the doctrine of merger would apply and the Section 34 Court would be free to decide the cases afresh.” The court observed that the learned judges whose orders were remanded had examined record in detail, heard the matters at length and delivered reasoned judgments. It further held that at a time when judicial resources are severely strained, remanding matter back for fresh consideration that too when the findings in the original orders were not reversed would amount to an unnecessary and wasteful duplication of judicial efforts. On M. Hakeem, the court held that “the Division Bench ought to have either applied Hakeem and set aside the modification, if the same was erroneous or awaited the outcome of the reference. It did neither. In the interregnum, Hakeem has been overruled and the question of severability has been answered holding that a partial modification is permissible.” Accordingly, the court granted liberty to approach the Division Bench seeking review of the orders by filing respective applications. Case Title: Electronics Corporation of Tamil Nadu Limited. Versus ICMC Corporation LimitedCitation: 2025 LiveLaw (Mad) 424 Case Number: Original Petition Nos.821 of 2019, 145 of 2017, 454 & 1068 of 2018, 108 of 2019 & OP.No.400 of 2020 Judgment Date: 17/11/2025 Click Here To Read/Download The Order

Multiple Remand Orders U/S 37 A&C Act “Unworkable” Without Reversing Findings On Merits: Madras High Court

Mohd Malik Chauhan

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