L AND T FINANCE LTD Vs. BRAHAM PAL

JUDGEMENT

(1.) These three appeals are being disposed of by this common order as the challenge is to the identical orders of the Executing Court. By the impugned orders dated 9.2.2012, the Executing Court has dismissed the execution petitions filed for execution of the Awards passed in favour of the appellant/Finance Company. The Execution petitions were dismissed without even issuing notices to the respondents. Executing Court has dismissed the execution petitions by holding that since no disputes had arisen, the Arbitrator could not have entered into the reference and passed the Awards. It has been held that since the Awards were passed without disputes existing, the Awards were null and void/without jurisdiction, and hence the Executing Court could not implement such Awards. The Executing Court has held that merely because one person asserts a right and which is repudiated by another is not a difference, i.e. merely because the appellant/Finance Company sought payment, and which could not be paid by the borrowers, there is no dispute or difference by mere non-payment and therefore the Awards could not be passed. The Executing Court has relied upon two judgments in the cases of Dilip Construction Company vs. Hindustan Steel Ltd., 1973 AIR(MP) 261 and M/s Pearl Hosiery Mills Ludhiana Vs. Union of India and Anr.

(2.) So far as the judgment in the case of M/s Pearl Hosiery is concerned, the said judgment was passed under the Arbitration Act, 1940 wherein an application was filed under Section 34 of the Act to stay the suit on account of the fact that the parties were governed by an Arbitration Agreement and therefore the disputes ought to be referred to the Arbitration. It was held by a learned Single Judge of this Court in the case of M/s. Pearl Hosiery that since what were the disputes which were sought to be referred to Arbitrator had not been stated in application under Section 34 of the Arbitration Act, 1940, therefore, the application did not lie. This judgment has therefore no application in the facts of the case where Award has been passed after issuing notices to the respondents in the cases who were the principle borrowers and the guarantors..

(3.) So far as the judgment in the case of Dilip Construction Company is concerned, the said judgment holds that there is a want of inherent jurisdiction in Umpire unless there is reference by both sides and Award can be challenged at any stage even in collateral proceedings. It was also held in the judgment of the Dilip Construction Company that the parties who appear before the Arbitrator after objecting to his jurisdiction cannot said to have waived their rights to challenge the Award on the ground of Award being passed by the Arbitrator/Umpire without authority. This judgment also therefore has no application in the facts of the cases where Awards have been passed after notices were issued to the principal borrowers and guarantors who failed to appear after due service, resulting in passing of the Awards.