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arbitration award

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Service matter – whether once a charge-sheet has been issued for imposition of a major penalty under Regulation 7 of the Haryana State Electricity Board Employees (Punishment & Appeal) Regulations, 1990 [for short “the Regulations 1990”], is it obligatory on the part of the Disciplinary Authority to conduct a full fledged departmental inquiry even if, after considering the reply of the delinquent, the authority decides to impose a minor penalty, for which no departmental inquiry is provided under the Regulations.= Sub-regulation 8 of Regulation 7, which reads as follows: “7(8). Where an employee has been charge-sheeted under this regulation and the Competent Authority, on receipt of his reply to the charge sheet is of the opinion that no major punishment as laid down in Regulation-4 (vi to x) is called for, it may dispense with the holding of enquiry and inflict straight-away any of the minor penalties as laid down in Clause (i) to (v) of the ibid Regulation by a speaking order.” 12. Above referred regulations, especially Regulation 7(8) clearly indicates that the competent authority has got the power to dispense with the procedure for holding a departmental inquiry, even though it had contemplated major penalty proceedings, on being satisfied with the reply submitted by the delinquent officer. In such a case, it can always follow the procedure for imposing minor penalty. Minor penalty, as per the Regulation, can be inflicted without holding any departmental inquiry, by giving only a show-cause-notice and a reasonable opportunity to make a representation to the show-cause-notice. Personal hearing can also be afforded and also can be dispensed with by a speaking order.= The delinquent officer was given an opportunity to submit his reply to the show-cause-notice which was considered and the Board took a conscious decision to impose only a minor penalty, i.e. barring one increment without cumulative effect, for which no full-fledged departmental inquiry is contemplated. Learned District Judge as well as the High Court, in our view, has committed a grave error in interfering with the punishment imposed by the Board which, in our view, is perfectly legal, going by the regulations referred to herein before. Consequently, the appeal is allowed and the judgment of the learned District Judge as well as that of the High Court is set aside. 15. Learned counsel for the respondent submits that, by virtue of the punishment imposed, he has not been given his due promotion. We are of the view that if imposition of a minor penalty is not a bar in granting promotion to the respondent, due promotion be granted to him in accordance with the Rules and Regulations applicable to him.

   published in     http://judis.nic.in/supremecourt/imgst.aspx?filename=40611 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6150 OF 2013 [Arising out of SLP (C) No. 5230 of 2013] D.H.B.V.N.L. Vidyut Nagar, Hisar & Others .. Appellants Versus Yashvir Singh Gulia .. Respondent J U D G M E N T K. S. Radhakrishnan, … Continue reading

Arbitration and Conciliation Act, 1996; Ss. 35-36/Presidency Towns-Insolvency Act, 1909; S. 9 and 9(2): Arbitration award-Nature of-Issuance of an insolvency notice in pursuance of an award-Correctness of-Held: Since 1909 Act is a statute weighed down with grave consequence of civil death for a person adjudged as an insolvent, it has to be construed strictly-Since an arbitration is not an adjudication, an award is not a decree/order for payment-Therefore, it could not be enforced as a decree-Issuance of Notice under the Insolvency Act is fraught with serious consequences-Such a notice, therefore, could be issued in pursuance of decree/order for payment of money passed by a Court/Judicial organ established for dispensation of justice-Notice under 1909 Act is not a mode of enforcing debt-Enforcement could be done in terms of provisions of CPC-No insolvency notice could be issued under Section 9(2) of the 1909 Act on the basis of an Arbitration Award-Hence, notice so issued and order passed by the Division Bench of the High Court in Notice of motion set aside-Code of Civil Procedure, 1908-S. 2(2) and 2(14)-Indian Arbitration Act, 1899-Ss. 4(a), 11 & 15. Words and Phrases: ‘Decree’, ‘order’ and ‘an award’-Distinction between. ‘Courts’, ‘tribunal’ and ‘arbitrator’-Distinction between. Words ‘Litigation’, ‘as if-Meaning of. The questions which arose for determination in this appeal were as to whether an arbitration award is a “decree” for the purpose of section 9 of the Presidency Towns Insolvency Act, 1909 and as to whether an insolvency notice could be issued under section 9(2) of the 1909 Act in pursuance of an arbitration award. Appellants contended that the Presidency Towns Insolvency Act (PTI Act) is a statute fraught with the grave consequence of ‘civil death’ for a person sought to be adjudged an insolvent, therefore, it has to be construed strictly; that it is impermissible to enlarge or restrict the language of the Act having regard to supposed notions of convenience, equity or justice; that the Indian Arbitration Act, 1899 clearly draws the distinction between Courts and Arbitrators; that only for the purpose of enforcement of the award, it is treated as if it were a decree of the Court; that issuance of a notice under the Insolvency or Bankruptcy statutes is not a mode of enforcement of a decree; that it is settled law that where the arbitration is governed by the Arbitration Act, 1899, the Second Schedule will not apply thereto; that PTI Act does not define ‘decree’ or ‘order’ for the simple reason that the meaning of these terms had been well-known since the enactment of Civil Procedure Code; that the words ‘suit or other proceeding in which the decree or order was made’ mean a suit in which a decree is made or a proceeding under the CPC which results in an order by a Civil Court which is not a decree; that the word ‘proceeding’ does not refer to arbitrations because they do not result in an ‘order’ but an ‘award’, much less an order of a Civil Court; that the ‘proceeding’ means a proceeding such as appellate or execution proceedings or applications under the CPC during the pendency of the suit or appeal; that the words ‘or other proceedings’ were added not for covering arbitrations but by way of abundant caution to make it clear that other proceedings in relation to or arising out of suits were to be included; that “Litigation” has been held to mean “a legal action, including all proceedings therein, initiated in a court of law”; that Arbitrators are not tribunals set up by the State to deal with special matters as they are not part of the judiciary exercising the judicial power of the State; that the legislative intendment was that only if a debt found due by the Courts and was not paid in spite of notice, it would amount to an act of insolvency; that the Legislatures never contemplated that a mere award given by persons chosen by parties to resolve their disputes should lead to an act of insolvency; that it is impermissible to substitute the word ‘Court’ with ‘arbitrators’ and the words ‘decree’ or ‘order’; that the Insolency Notice shall be in Form 1-B; that Form 1-B unambiguously points to the fact that the decree or order has been obtained from a Court in a suit or proceeding; that since the Parliament has amended the Act of 1909 in 1978 on the lines of the Bombay Amendment, it has expressly provided that the Notice ‘shall’ be in the prescribed form; and that there is no room left for the argument that variations according to circumstances can bring in arbitrators and awards when the form uses the words Court, decree and order. Respondents submitted that if an Award rendered under the Arbitration and Conciliation Act, 1996 is not challenged within the requisite period, the same becomes final and binding as provided under Section 35 of the Act, thereafter, the same can be enforced as a Decree as it is as binding and conclusive as provided under Section 36 of the Act; that there exists no distinction between an Award and a Decree, in view thereof, there is no impediment in taking out Insolvency Notice as contemplated under Section 9(2) of the Presidency Towns Insolvency Act; that the provisions of Section 9(2) to 9(5) of the PTI Act which are brought in by the amending Act of 1978 in the Presidency Towns Insolvency Act have to be viewed in the light of the statement of objects and reasons; that an Insolvency Notice by itself does not lead to the adjudication of the Debtor as Insolvent but the non-compliance thereof only results in an act of Insolvency, which enable the creditor to file an Insolvency Petition against the Debtor for having him adjudicated Insolvent; that any order, which has become final and enforceable, irrespective of whether passed by any Court, judicial authority, quasi-judicial authority, Tribunal etc. could be the basis of an Insolvency Notice under Section 9(2) of the said Act; that in Section 9(1) clauses (c) and (h), the legislature has used the phraseology “Decree of any Court” in Section 9(2), the legislature has consciously omitted the prefix “of Court” and has added the words “or Order”. Thus the legislative intent being to make it necessary to have a Decree of Court for the purpose of conferring Act of Insolvency under Clause (e) and (h) of Section 9(1) of the said Act, that when two words of different import are used in a statute in two consecutive provisions, it would be difficult to maintain that they are used in the same sequence; that it will be doing injury/offence to the legislative intent if even for the purpose of taking out Insolvency Notice under Section 9(2) of the said Act “a Decree of Court” is made necessary; and that it will be a misconception to borrow the definition of “Decree” or “Order” from the provisions of Civil Procedure Code, while interpreting and giving effect to the provisions of PTI Act, in particular Sections 9(2) to (5) of the Act. Allowing the appeal, the Court HELD:1.1. The Presidency Towns Insolvency Act, 1909 is a statute weighed down with the grave consequence of ‘civil death’ for a person sought to be adjudged an insolvent and therefore the Act has to be construed strictly. The Arbitration Act was in force when the PTIA came into operation. Therefore there can be seen that the law makers were conscious of what a ‘decree’, ‘order’ and an ‘award’ are. Also the fundamental difference between ‘Courts’ and ‘arbitrators’ were also clear as back as in 1909. [195-d-e] 1.2. The Indian Arbitration Act, 1899 clearly draws the distinction between Courts and Arbitrators. The preamble of the Act shows that it is an Act for dealing with ‘arbitration by agreement without the intervention of a Court of Justice’. It is only for the purpose of enforcement of the award, the arbitration award is treated as if it were a decree of the Court. [195-e-f] 2.1. The words ‘Court’, ‘adjudication’ and ‘suit’ conclusively show that only a Court can pass a decree and that too only in suit commenced by a plaint and after adjudication of a dispute by a judgment pronounced by the Court. It is obvious that an arbitrator is not a Court, an arbitration is not an adjudication and, therefore, an award is not a decree. [196-e-f] Tribhuvandas Kalidas v. Jiwan Chand, (1911) 35 Bombay 196, Manilal v. The Bharat Spinning & Weaving (35) Bom. L.R. 941; Ramshai v. Joylal , AIR (1928) Calcutta 840 and Ghulam Hussein v. Shahban AIR (1938) Sindh 220, referred to. 2.2. Section 36 of the Arbitration & Conciliation Act, 1996 makes it clear that enforceability is only to be under the CPC. It rules out any argument that enforceability as a decree can be sought under any other law or that initiating insolvency proceeding is a manner of enforcing a decree under the Code of Civil Procedure. [199-f] 2.3. The fact that the Bombay Amendment and later the Central Amendment intended to refer only to decrees and orders as defined in the CPC is clear from the Statement of Objects and Reasons of the Central Amendment Act No. 28 of 1978 which introduced sub-sections (2) to (5) in Section 9 of the Presidency Towns Insolvency Act. [199-g-h] 2.4. The words ‘litigant’, ‘money decree’, judgment-debtor’, ‘decretal amount’ and ‘decree-holder’ plainly show that Parliament intended to deal with litigants who do not pay amounts decreed by Civil Courts. [201-e] 2.5. “Litigation” has been held to mean “a legal action, including all proceedings therein, initiated in a court of law”. Obviously therefore Parliament had in mind debts due to ‘litigants’. It is well settled that Courts, unlike arbitrators or arbitral tribunals, are the third great organ under the Constitution: legislative, executive and judicial. Courts are institutions set up by the State in the exercise of the judicial power of the State. [201-f-g] 2.6. It is clear that litigation is very different from arbitration. The former is a legal action in a Court of law where judges are appointed by the State; the latter is the resolution of a dispute between two contracting parties by persons chosen by them to be arbitrators. These persons need not even necessarily be qualified trained judges or lawyers. [203-a-b] Engineering Mazdoor Sabha & Anr. v. Hind Cycles Ltd., AIR (1963) SC 874 and Collector, Varanasi v. Gauri Shankar Misra & Ors., AIR (1968) SC 384, relied on. 2.7. All tribunals are not courts, though all courts are tribunals. The word ‘courts’ is used to designate those tribunals which are set up in an organized State for the administration of justice. [202-g] 2.8. Arbitrators are persons chosen by parties to adjudge their disputes. They are not Courts and they do not pass orders or decrees for the payment of money; they make awards. [203-g-h] 3.1. The Insolvency Act of 1909 was amended by the Bombay Amendment of 1939 and also by Parliament in 1978 when two laws, namely, the Arbitration Act, 1899 and the Civil Procedure Code, 1908 were on the statute book. Parliament and the Bombay Legislature were well aware of the difference between awards on the one hand and decrees and orders on the other and they chose to eschew the use of the word ‘award’ for the purposes of the Insolvency Act. [204-a-b] 3.2. Section 15 of the Arbitration Act, 1899 provides for ‘enforcing’ the award as if it were a decree. Thus a final award, without actually being followed by a decree (as was later provided by Section 17 of the Arbitration Act of 1940), could be enforced, i.e. executed in the same manner as a decree. For this limited purpose of enforcement, the provisions of CPC were made available for realizing the money awarded. However, the award remained an award and did not become a decree either as defined in the CPC and much less so far the purposes of an entirely different statute such as the Insolvency Act. [204-b-c-d] 4.1. Issuance of a notice under the Insolvency Act is fraught with serious consequences: it is intended to bring about a drastic change in the status of the person against whom a notice is issued viz. to declare him an insolvent with all the attendant disabilities. Therefore, firstly, such a notice was intended to be issued only after a regularly constituted court, a component of judicial organ established for the dispensation of justice, has passed a decree or order for the payment of money. Secondly, a notice under the Insolvency Act is not a mode of enforcing a debt; enforcement is done by taking steps for execution available under the CPC for realizing moneys. [204-e-f] 4.2. The words “as if” demonstrate that award and decree or order are two different things. The legal fiction created is for the limited purpose of enforcement as a decree. The fiction is not intended to make it a decree for all purposes under all statutes, whether State or Central. [204-g] 4.3. No insolvency notice can be issued under Section 9(2) of the Presidency Towns Insolvency Act, 1909 on the basis of an Arbitration Award; an insolvency notice should be in strict compliance with the requirements in Section 9(3) and the Rules made thereunder. Hence, the Insolvency Notice issued under section 9(2) of P.T.I. Act cannot be sustained on the basis of arbitral award which has been passed under the Arbitration & Conciliation Act, 1996. [204-h; 205-a; 205-f; 206-b-c] V.A. Bobde, Shrikant Shah, Mahesh Agrawal and E.C. Agarwala, for the Appellant. L.Nageswara Rao,Subramonium Prasad, Kishore P. Jain, Raghavendra S. Srivastava, Gaurang P. Mehta, Vijay Sondhi and Karun Mehta for the Respondents.

CASE NO.: Appeal (civil) 4130 of 2006 PETITIONER: Paramjeet Singh Patheja RESPONDENT: ICDS Ltd. DATE OF JUDGMENT: 31/10/2006 BENCH: Dr. AR. Lakshmanan & Lokeshwar Singh Panta JUDGMENT: J U D G M E N T Dr. AR. Lakshmanan, J. This appeal was filed against the impugned interlocutory judgment and order dated 19.3.2003 passed in Notice … Continue reading

Arbitration and Conciliation Act, 1996; Ss. 35-36/Presidency Towns-Insolvency Act, 1909; S. 9 and 9(2): Arbitration award-Nature of-Issuance of an insolvency notice in pursuance of an award-Correctness of-Held: Since 1909 Act is a statute weighed down with grave consequence of civil death for a person adjudged as an insolvent, it has to be construed strictly-Since an arbitration is not an adjudication, an award is not a decree/order for payment-Therefore, it could not be enforced as a decree-Issuance of Notice under the Insolvency Act is fraught with serious consequences-Such a notice, therefore, could be issued in pursuance of decree/order for payment of money passed by a Court/Judicial organ established for dispensation of justice-Notice under 1909 Act is not a mode of enforcing debt-Enforcement could be done in terms of provisions of CPC-No insolvency notice could be issued under Section 9(2) of the 1909 Act on the basis of an Arbitration Award-Hence, notice so issued and order passed by the Division Bench of the High Court in Notice of motion set aside-Code of Civil Procedure, 1908-S. 2(2) and 2(14)-Indian Arbitration Act, 1899-Ss. 4(a), 11 & 15. Words and Phrases: ‘Decree’, ‘order’ and ‘an award’-Distinction between. ‘Courts’, ‘tribunal’ and ‘arbitrator’-Distinction between. Words ‘Litigation’, ‘as if-Meaning of. The questions which arose for determination in this appeal were as to whether an arbitration award is a “decree” for the purpose of section 9 of the Presidency Towns Insolvency Act, 1909 and as to whether an insolvency notice could be issued under section 9(2) of the 1909 Act in pursuance of an arbitration award. Appellants contended that the Presidency Towns Insolvency Act (PTI Act) is a statute fraught with the grave consequence of ‘civil death’ for a person sought to be adjudged an insolvent, therefore, it has to be construed strictly; that it is impermissible to enlarge or restrict the language of the Act having regard to supposed notions of convenience, equity or justice; that the Indian Arbitration Act, 1899 clearly draws the distinction between Courts and Arbitrators; that only for the purpose of enforcement of the award, it is treated as if it were a decree of the Court; that issuance of a notice under the Insolvency or Bankruptcy statutes is not a mode of enforcement of a decree; that it is settled law that where the arbitration is governed by the Arbitration Act, 1899, the Second Schedule will not apply thereto; that PTI Act does not define ‘decree’ or ‘order’ for the simple reason that the meaning of these terms had been well-known since the enactment of Civil Procedure Code; that the words ‘suit or other proceeding in which the decree or order was made’ mean a suit in which a decree is made or a proceeding under the CPC which results in an order by a Civil Court which is not a decree; that the word ‘proceeding’ does not refer to arbitrations because they do not result in an ‘order’ but an ‘award’, much less an order of a Civil Court; that the ‘proceeding’ means a proceeding such as appellate or execution proceedings or applications under the CPC during the pendency of the suit or appeal; that the words ‘or other proceedings’ were added not for covering arbitrations but by way of abundant caution to make it clear that other proceedings in relation to or arising out of suits were to be included; that “Litigation” has been held to mean “a legal action, including all proceedings therein, initiated in a court of law”; that Arbitrators are not tribunals set up by the State to deal with special matters as they are not part of the judiciary exercising the judicial power of the State; that the legislative intendment was that only if a debt found due by the Courts and was not paid in spite of notice, it would amount to an act of insolvency; that the Legislatures never contemplated that a mere award given by persons chosen by parties to resolve their disputes should lead to an act of insolvency; that it is impermissible to substitute the word ‘Court’ with ‘arbitrators’ and the words ‘decree’ or ‘order’; that the Insolency Notice shall be in Form 1-B; that Form 1-B unambiguously points to the fact that the decree or order has been obtained from a Court in a suit or proceeding; that since the Parliament has amended the Act of 1909 in 1978 on the lines of the Bombay Amendment, it has expressly provided that the Notice ‘shall’ be in the prescribed form; and that there is no room left for the argument that variations according to circumstances can bring in arbitrators and awards when the form uses the words Court, decree and order. Respondents submitted that if an Award rendered under the Arbitration and Conciliation Act, 1996 is not challenged within the requisite period, the same becomes final and binding as provided under Section 35 of the Act, thereafter, the same can be enforced as a Decree as it is as binding and conclusive as provided under Section 36 of the Act; that there exists no distinction between an Award and a Decree, in view thereof, there is no impediment in taking out Insolvency Notice as contemplated under Section 9(2) of the Presidency Towns Insolvency Act; that the provisions of Section 9(2) to 9(5) of the PTI Act which are brought in by the amending Act of 1978 in the Presidency Towns Insolvency Act have to be viewed in the light of the statement of objects and reasons; that an Insolvency Notice by itself does not lead to the adjudication of the Debtor as Insolvent but the non-compliance thereof only results in an act of Insolvency, which enable the creditor to file an Insolvency Petition against the Debtor for having him adjudicated Insolvent; that any order, which has become final and enforceable, irrespective of whether passed by any Court, judicial authority, quasi-judicial authority, Tribunal etc. could be the basis of an Insolvency Notice under Section 9(2) of the said Act; that in Section 9(1) clauses (c) and (h), the legislature has used the phraseology “Decree of any Court” in Section 9(2), the legislature has consciously omitted the prefix “of Court” and has added the words “or Order”. Thus the legislative intent being to make it necessary to have a Decree of Court for the purpose of conferring Act of Insolvency under Clause (e) and (h) of Section 9(1) of the said Act, that when two words of different import are used in a statute in two consecutive provisions, it would be difficult to maintain that they are used in the same sequence; that it will be doing injury/offence to the legislative intent if even for the purpose of taking out Insolvency Notice under Section 9(2) of the said Act “a Decree of Court” is made necessary; and that it will be a misconception to borrow the definition of “Decree” or “Order” from the provisions of Civil Procedure Code, while interpreting and giving effect to the provisions of PTI Act, in particular Sections 9(2) to (5) of the Act.

CASE NO.: Appeal (civil) 4130 of 2006 PETITIONER: Paramjeet Singh Patheja RESPONDENT: ICDS Ltd. DATE OF JUDGMENT: 31/10/2006 BENCH: Dr. AR. Lakshmanan & Lokeshwar Singh Panta JUDGMENT: J U D G M E N T Dr. AR. Lakshmanan, J. This appeal was filed against the impugned interlocutory judgment and order dated 19.3.2003 passed in Notice … Continue reading

SPECIFIC PERFOMANCE OF CONTRACT, ARBITRATION AGREEMENT, FRAUD ON COURT TO AVOID STAMP DUTY AND REGISTRATION – The appellants – two brothers, are the co-owners with equal shares, in lands measuring in all 98 Kanals and 19 marlas situated in village Udana, Tehsil Indri, District Karnal. They entered into an agreement to sell the said lands to the sons of Furu Ram and Kalu Ram (brothers) the respective first respondent in these two appeals, on 18.10.1991 for a consideration of . 2 Rs.14,22,000/- and received Rs.1,00,000 as earnest money. As per the terms of the agreement, the balance was to be paid by the purchasers at the time of registration of the sale deed and the sale was to be completed by 31.1.1992.

AWARD – REGISTRATION COMPULSORY. “So  in  express   words   it  purports  to  create  rights  in  immovable  property         worth   above   Rs.100/-   in   favour   of   the   appellant.   It   would   accordingly         require registration under S.17, Registration Act. As it is unregistered, … Continue reading

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