PARIKH RATILAL CHANDULAL AND CO Vs. RAMANBHAI RANCHHODBHAI

JUDGEMENT

(1.) This Revision Application raises only one question which is required to be determined. The question is whether ad valorem court fees are required to be paid when an application to set aside an award under Arbitration Act 1940 is filed in the Court.

(2.) The learned Civil Judge (S.D.) Bharuch by an order dated 12 passed in Miscellaneous Civil Application No. 30 of 1975 came to the conclusion that such an application requires ad valorem court fees to be paid. As a result an order was passed that an amount of Rs. 72.00 may be paid as court fees. The amount is a small amount but it raises a question of importance and therefore Revision Application was filed and our brother Judge S. B. Majmudar has by a detailed order placed this matter before the Division Bench for deciding this controversy. That is how this matter is before us.

(3.) For the purpose of deciding this question Articles 3 and 7 of Schedule I of the Bombay Court Fees Act 1959 are required to be considered. They are as under : _________________________________________________________________________________ No. Proper fee 1 2 3 __________________________________________________________________________________ 3 Plaint application of petition (includ A fee on the amount or value of the ing memorandum of appeal) to set aside award sought of be set aside or modi- or modify any award otherwise than fied according to the take scale prescribed under the Arbitration Act 1910 under Article 1. 7 Any other plaint application or petit A fee on the amount of monetary ion (including memorandum of appeal) gain or loss of be prevented according to obtain substantive relief capable of to the scale prescribed under Article 1. being valued in terms of monetary gain or prevention of monetary loss including cases wherein application or petition is either treated as a plaint or is described as the mode of obtaining the relief as aforesaid. ___________________________________________________________________________ Now it is agreed that the case does not fall under Article 3. On behalf of the State the learned Advocate Mr. M. B. Shah laid great stress on Article 7 and it was submitted that when an application is submitted to the Court for setting aside the award monetary loss is sought to be prevented. It was submitted that if such an application succeeds the decree in terms of the award is not passed but if such an application fails a decree in terms of the award is passed and therefore what the defendant by submitting such an application desires is that he wants prevention of monetary loss to him. That is a substantive relief capable of being valued in terms of monetary gain and therefore according to the learned Asstt. Govt. Pleader Mr. M. B. Shah Article 7 would be attracted and ad valorem fees are required to be paid. In our view such a reading of Article 7 would not be proper. The reason is that it would be reading too much in that Article. Firstly when an application to set aside an award succeeds it would never mean that the litigation has come to an end. What happens is that there could be two types of awards. An award may be as a result of arbitration outside the court or an award may be an award pending the suit. In a case where parties enter into an arbitration agreement while the suit is pending and an award is passed and an application is submitted to set aside that award and that application succeeds it may happen because of various reasons and the result may be that another arbitrator may be appointed or that the Court may decide the suit on its merits. When an award is passed which is not the subject matter of the suit and the award is set aside by such application there also parties can enter into an agreement of arbitration and another arbitrator can be appointed. Also it might happen that the parties may not choose to enter into an arbitration agreement and ultimately on the original cause of action a new suit can be filed. Therefore be merely filing an application to set aside an award and succeeding in it there is not a result which directly follows which prevents any monetary loss.