NIRFABRICS LIMITED Vs. NIRLON LIMITED

JUDGEMENT

(1.) ADMIT. Respondents waive service. By consent heard forthwith.

(2.) THE short, but interesting question that arises in this petition is whether the Notification issued under section 4 of the Bombay Relief Undertakings (Special Provisions) Act, 1958, has the effect of suspending proceedings pending before any Court, or Tribunal, Officer or Authority or the remedy for enforcement by the undertaking in respect of any right, privilege, obligation or liability accrued or incurred.

(3.) THE question arises thus :- The respondents are admittedly a relief undertaking having been so notified by the State of Maharashtra under section 3 of the Bombay Relief Undertakings (Special Provisions) Act, 1958 (hereinafter referred to as the Relief Act ). The respondents had a claim against the petitioners. There being a provision for arbitration, the Arbitration Clause was invoked and reference was made to an Arbitrator. The reference was made in March, 1996. During the course of the proceedings the Notification issued under the Relief Act came to an end by efflux of time. The award was declared and notified on 6th July, 1998. A fresh notification under the Relief Act was published on 11th August, 1998. On merits the Arbitrator found in favour of the respondents. The Arbitrator rejected the counterclaim raised by the petitioners. On the interpretation of law, however, the Arbitrator held that the Relief Act not only applies against rights and privileges against the undertaking, but also claims by undertaking against 3rd parties like the petitioners herein. The petitioners in the present petition have impugned the said award. It is their contention that the fresh notification having been issued the Award cannot be enforced. It is their contention that on account of the subsequent event namely the fresh notification under the Relief Act, the Award cannot be given effect to. Though in the prayer Clause the relief prayed is to set aside the impugned award dated 6th July, 1998 it is pointed out that in terms of section 36 of the Arbitration and Conciliation Act, 1996 the respondents would be entitled to execute the award as if it was a decree in the event the Award was not challenged within the period prescribed or if the challenge is rejected. It is further contended that it is not open to the respondents to contend in the petition filed by the petitioners that the Award in so far as a application of law is concerned, proceeded on a wrong proposition. Petitioners have relied on a judgment of the Division Bench of the Gujarat High Court in the case of (D. S. Patel and Co. v. Gujarat State Textile Corporation Ltd. and others), 41 Company Cases 1098 to contend that on issuance of notification the remedy of the undertaking to proceed before a Court or Tribunal, etc. , it also suspended.