Full Judgment Text
1 arbp1383.10.sxw
ssm
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 1383 OF 2010
WITH
CHAMBER SUMMONS NO. 1091 OF 2010
Saraswat Cooperative Bank Ltd. ....Petitioner.
Vs.
Fariruddin Quereshi N. & 2006 Ors. ....Respondents.
Mr. F.E. D’vitre, Sr. Counsel with Mr. Yashesh V. Pajwani a/w Mr. Y.R.
Naik for the Petitioner.
Mr. V.A. Thorat, Sr. Counsel with Mr. Vaibhav Sugdare with Mr. M. G.
Gawde for Respondent Nos. , 2003, 2004 and 2006.
Mr. Chetan Kapadia with Mr. Ishwar Nankani with I.J. Nankani a/w
Mr. H.S. Khokawala i/by M/s. Nankani & Associates for Respondent
Nos. 2005.
CORAM : ANOOP V. MOHTA, J.
th
ORDER RESERVED ON : 11 FEBRUARY, 2011
th
ORDER PRONOUNCED ON : 25 FEBRUARY, 2011.
P.C.:
::: Downloaded on - 26/06/2024 07:31:52 :::
2 arbp1383.10.sxw
ssm
The PetitionerBank has challenged a common award dated
06/10/2009, passed by the Arbitrator, appointed under Section 84 of
the MultiState Cooperative Societies Act, 2002 (for short, MSCS Act)
by a petition under Section 34 of the Arbitration and Conciliation Act,
1996 (for short, the Arbitration Act). This common award resulted
into the dismissal of all the claims against all 2006 Respondents.
2 In the Petition, the parties are: the PetitionerBank is the
Claimant in all the matters; Respondent Nos. 1 to 2000 are original
respective Opponent No. 1; Respondent No. 2002 is a Cooperative
Society of cobblers which was original Opponent No. 2; Respondent
No. 2001 is the Arbitrator; Respondent No. 2003 is a partnership firm
of the Sadruddin Daya family; Respondent Nos. 2004 and 2006 are
its partners. These Respondents were original Opponent Nos. 3 to 6 in
all matters.
2A) Two preliminary issues have been raised by the contesting
Respondents.
Whether a common/composite petition under Section 34 of the
Arbitration Act, is maintainable against the common award after
::: Downloaded on - 26/06/2024 07:31:52 :::
3 arbp1383.10.sxw
ssm
consolidation of claim petitions by consent and whereby all claim
petitions have been dismissed in toto, and;
Whether the Original Claimant (PetitionerBank) is liable to pay
advalorem Court fees as per Scheduled I, Article 3A or a fixed Court
fee, as per Schedule II, Article 1 (f) (iii) of the Bombay Court Fees Act,
1959 (for short, BCF Act) on application under Section 34 of the
Arbitration Act to set aside the common award whereby 2000 claim
petitions have been dismissed in toto and not awarded any monetary
claim by the arbitrator.
The basic events are as under:
3 On 16/06/1970, Respondent No. 2002, the Society (Opponent
No.2) was registered under the Maharashtra Cooperative Societies
Act (for short, MCS Act). It had more than 3000 cobbler members,
manufacturing leather goods which were supplied to Respondent No.
2003 (Opponent No.3).
4 On 15/09/1985, the Multi State Cooperative Societies Act,
1984 (for short, MSCS Act, 1984) came into force. Now
::: Downloaded on - 26/06/2024 07:31:52 :::
4 arbp1383.10.sxw
ssm
amended/substituted by MSCS Act w.e.f. 19/08/2002. This society
was taken over by Respondent Nos. 2003, 2004 and 2006 (Opponent
Nos. 3, 4 and 6) some time in the year 1987.
5 On 08/04/1988, the Society sought on and behalf of its 300
members a loan of Rs.75 lakhs from the PetitionerBank (disputant).
Each members was given a loan of Rs.25,000/. Each members had
given a writing to credit his loan amount in the account of the
Society. For the said loans Respondent Nos. 2002 to 2004 (Opponent
Nos. 2 to 4) were sureties. The said loan accounts were closed, having
fully repaid the loans.
6 On 07/05/1990, 04/12/1990, 10/09/1991, 16/07/1993 and
24/06/1993, the Society (Respondent No. 2002) again approached
the PetitionerBank for and on behalf of 5 batches of 400 cobbler
members for a separate loan of Rs.100 lakhs i.e. 500 lakhs. The loan
was sanctioned and duly disbursed to the cobblers of respective
batches, through the Society. In respect of the said transactions also
Respondent Nos. 2002, 2003 and 2004 were a sureties. A collective
guarantees were also given by Respondent Nos. 2003 and 2004
separately.
::: Downloaded on - 26/06/2024 07:31:52 :::
5 arbp1383.10.sxw
ssm
7 In the year 1996, the PetitionerBank filed 2000 disputes/claim
Petitions in the Cooperative Court for recovery of the balance amount
due from each of the Principal borrower (Opponent No.1) on the basis
of guarantees, etc. They had also sought interim orders of attachment
before judgment and injunction which were granted.
8 The Respondent Nos. 2003 to 2006 (Opponent Nos.3 to 6)
challenged the jurisdiction of the Cooperative Court, which was
upheld by the Cooperative Appellate Court. The Hon’ble High Court
admitted the Petitions against this order and ultimately by order dated
09/05/2008 directed that the disputes be refiled before the
Arbitrator, appointed under Section 84 of the MSCS Act.
9 On 14/03/2007, the Arbitrator applied for nominal membership
of the Petitioner which was granted. The wife of Arbitrator applied
for shareholder membership which was also granted, but resigned
from membership on 11/09/2009.
10 In the month of July, 2008, present 2000 disputes filed before
the Arbitrator. Those were numbered separately. The Arbitrator
::: Downloaded on - 26/06/2024 07:31:52 :::
6 arbp1383.10.sxw
ssm
issues separate notices to the Respondents to adjudicate the unpaid
loan amount with 18% interest from 01/10/1996.
11 On 03/09/2009, Respondent Nos. 2003 and 2004 as well as,
Respondent No. 2006 filed the separate claim affidavits in lieu of oral
evidence. The Arbitrator permitted the opposite parties to cross
examine the witness and the evidence was recorded. The parties had
filed the written arguments also.
12 On 06/10/2009, the common Award was passed.
13 Following are the undisputed position on record:
(i) The Petitioner Bank has filed 2000 disputes on
06/11/1996 before the Cooperative Court, Mumbai,
constituted under the Maharashtra Cooperative
Societies Act, 1961 (for short, Cooperative Societies
Act.)
(ii) Opponent No.1 in each disputes was named
individually, who was a member and a shareholder
::: Downloaded on - 26/06/2024 07:31:52 :::
7 arbp1383.10.sxw
ssm
of the Society and of the PetitionerBank. Where,
Respondent No. 2002 to 2006 were the same.
Opponent Nos. 3 to 6 were promoted by the Society.
(iii) Opponent Nos. 3, 4 and 6 were the guarantors for
the loans disbursed to the Society for being paid in
turn to Opponent No.1, in each case. Admittedly,
separate and individual documents have been
signed, with regard to the individual loans of
respective Opponent No.1, of 2000 cobbler
members. The terms and conditions were identical.
The total loan of Rs.5 crores were disbursed. (Rs.
25,000/ x 2000 cobblers = Rs. 500,00,000) from
the Petitioner Bank. Each cobbler, in the result, got
the loan of Rs. 25,000/.
(iv) On 31/03/1996, the balance amount due from the
2000 cobblers was Rs.3.27 crores. The interest was
claimed at 18% p.a. on the said amount from
01/10/1996.
::: Downloaded on - 26/06/2024 07:31:52 :::
8 arbp1383.10.sxw
ssm
(v) By order dated 05/12/2000, the Maharashtra State
Cooperative Appellate Court found that the Co
operative Court, Mumbai, had no jurisdiction to
decide the disputes, and therefore, returned the
Petitions to the PetitionerBank for filing in the
appropriate Court.
(vi) As all 2000 disputes were identical and as the
common issues and the similar documents were
involved, apart from common Opponent Nos. 2 to 6,
the sureties and the guarantors and the Petitioner
bank and as agreed, the common evidence was
submitted. Therefore, all the matters were clubbed
and heard together accordingly, that resulted into
the common judgment/ award in question.
(vii) By order dated 06/05/2008, the PetitionerBank
withdrew Writ Petition No. 752 of 2001, whereby the
challenge was made to the order passed by the
Maharashtra State Cooperative Appellate Court. In
view of the enactment of MSCS Act, the Petition was
::: Downloaded on - 26/06/2024 07:31:52 :::
9 arbp1383.10.sxw
ssm
accordingly disposed of as withdrawn with liberty to
adopt appropriate remedies. In the mean time,
pending the Writ Petition, by a notification dated
rd
23 January, 2003, the Registrar under the MSCS
Act, has appointed the Arbitrator for all the disputes
concerning the PetitionerBank.
(viii) The Petitioner, therefore, resubmitted all these
Applications/Petitions before the Arbitrator. The
Arbitrator has allotted separate case numbers to each
Application as “Case No. ARB/SCB/401 to
2400/2008”.
(ix) The contents of the Applications along with the
Claims, originally raised in the year 1996, remained
unchanged, when it was refiled before the
Arbitrator.
(x) Before the Arbitrator, all the original borrowers were
not traceable though served by substituted service.
::: Downloaded on - 26/06/2024 07:31:52 :::
10 arbp1383.10.sxw
ssm
(xi) The common written statement filed by Respondent
No. 2003, 2004 and 2006 (original Opponent Nos. 3,
4 and 6). Respondent No. 2005 (Original Opponent
No.5) also filed the common written statement. The
common affidavit of evidence was filed by the
PetitionerBank. The common affidavit was filed by
Opponent Nos. 3,4, 5 and 6 separately.
(xii) Opponent Nos. 3 and 4 gave the separate guarantees
as well as, five composite guarantees for Rs.1 crore
each. These are identical and common to all 2000
Disputes/Petitions.
By consent such consolidation and the common award is
permissible:
14 All these 2000 disputes were consolidated and proceeded by the
common evidence and arguments as the parties have agreed and
consented for such consolidation and the arbitrator proceeded
accordingly. There is no legal bar for such consolidation. The
common award so passed by the Arbitrator though separate
::: Downloaded on - 26/06/2024 07:31:52 :::
11 arbp1383.10.sxw
ssm
disputes/Petitions were filed/referred under the MSCS Act, is well
within the framework of law. Prem Lala Nahata & Anr. Vs. Chandi
1
Prasad Sikaria . Such consolidation and the common award by the
Arbitrator under MSCS Act and/or under the Arbitration Act, is
permissible.
15 The Arbitration Act provides that parties can determine their
own rules of procedure while conducting the Arbitration proceedings.
The Arbitral Tribunal may not be bound by the strict principles of the
Civil Procedure Code (CPC) and Indian Evidence Act as contemplated
in Section 19 of the Arbitration Act. In the present case, admittedly
the parties have agreed and consented and proceeded accordingly and
the Arbitrator in view of consolidation of all these disputes has passed
the common award and thereby dismissed/rejected all 2000
claims/petitions filed by the disputant bank. The procedure,
therefore, so adopted by the parties in Arbitration Proceedings though
it arise out of MSCS Act, still as noted above, the provisions of
Arbitration Act apply in all respects.
16 Having once adopted this procedure and proceeded accordingly,
1 (2007) 2 S.C.C. 551
::: Downloaded on - 26/06/2024 07:31:52 :::
12 arbp1383.10.sxw
ssm
and as there is no bar of any kind under any law, the common order
so passed by the Arbitrator after consolidation of all these
proceedings, in no way cause any hardship, injustice or prejudice to
any parties. In my view, no fault can be found with this procedure so
adopted by the parties, which even otherwise, permissible under the
Arbitration Act.
17 Still the issue is whether it can be treated as a single award for
the purpose of Section 34 of the Arbitration Act and/or for the
purpose of the Court fees, under the BCF Act.
Object of consolidations of Arbitration Proceedings and the
Common Award:
18 Admittedly, 2000 claim proceedings/Petitions, were filed by the
PetitionerBank but by consent, all the proceedings were consolidated
and proceeded accordingly and that resulted into the common award.
That itself, is not sufficient to treat the impugned award as only one
award as contended by the learned Senior counsel appearing for the
Petitioner. In my view, though common award is passed, it is
admittedly passed in 2000 Arbitration Proceedings. The award itself
::: Downloaded on - 26/06/2024 07:31:52 :::
13 arbp1383.10.sxw
ssm
shows the details of the notified claims raised by the PetitionerBank
against all 2000 borrowers and common guarantors and the amount
so awarded by the Arbitrator against the individual Respondents.
Therefore, for the reasons recorded above, as common question of law
and/or facts arose out of the similar transactions and/or connected
series of transactions and the basic contents of all the Petitions and
documents are quite common/similar and as the parties accordingly
lead common evidence, that itself, in my view is not sufficient to say
that all 2000 claims/petitions has no independent existence and/or to
be regarded as one legal proceeding.
19 It is necessary to note the operative part of the award which is as
under:
“The present claim put up by the Saraswat CoOperative
Bank Ltd., against Opponent No.5 in each of the above
mentioned cases stand dismissed with cost.
It is further declared that the Opponent No. 2 namely
Jeevan Vikas Coop. Leather Industries Ltd., has not been
joined properly as Opponent No.2 in each of the present
proceedings and hence said society is discharged from its
guarantee obligations.
It is further ordered that The Saraswat Coop. Bank Ltd., is
not entitle to recover any amount from the respective
principal borrowers who are the Opponent Nos. 1 in each
of the above 2000 dispute cases.
::: Downloaded on - 26/06/2024 07:31:52 :::
14 arbp1383.10.sxw
ssm
It is further ordered that Opponent Nos. 3 and 4 stands
discharged from their guarantee obligations, and hence
order of attachment of their properties below Exh. 1 stand
vacated.
Consequently, the present action against Opponent Nos. 6
stands dismissed with costs.
The Bank to bear the Arbitration fees in all maters and
shall also bear its administrative costs.
Annexure hereto be treated as part of this Award.”
The Schedule/Annexure to the award shows the names of the
opponent and Case No. ARB/SCB, Case No. of Cooperative Court.
th
As per the statement the total claim amount as on 30 September,
th
1996 is Rs.32840799.04/ and as on 30 April, 2008 is Rs.
247459985.19/.
20 The submission of the learned Senior counsel appearing for the
1
Petitioner revolving around Saraswatibai Vs. Durga Sahai is
untenable. The facts and circumstances are totally distinct and
distinguishable. In my view also an order of consolidation of
proceedings to facilitate joint trial has limited effect of common
parties; evidence; proceedings; documents; and arguments. The
common award so passed by the Arbitrator, cannot be treated as one
1 AIR 1982 M.P. 147.
::: Downloaded on - 26/06/2024 07:31:52 :::
15 arbp1383.10.sxw
ssm
award by overlooking the admitted position that it disposed off 2000
independent/ separate proceedings refiled by the PetitionerBank
before the Arbitrator. The same were registered and numbered
separately. Therefore, to say that it is a one award/Judgment for all
the purposes, is unacceptable. Such submission if accepted, bound to
frustrate the object of any consolidation of Suits/Petitions. This is a
multiple awards in view of the undisputed position on record that the
Arbitrator dismissed all the claims of the Petitionerbank by a common
award in question.
An unexecutable Arbitral common award:
21 The other facet is that the common award whereby, the learned
Arbitrator has dismissed all the disputant bank’s 2000 Claim
Applications, this itself means it is unexecutable award as
contemplated under the Arbitration Act.
22 There is no dispute that in view of Sections 84 and 94 of MSCS
Act and Rule 30 made thereunder, the Provisions of the Arbitration
Act are applicable in all respect, including for the challenge to the
award under the MSCS Act.
::: Downloaded on - 26/06/2024 07:31:52 :::
16 arbp1383.10.sxw
ssm
23 Any award passed by the Arbitrator is enforceable subject to the
finality, as provided under Sections 35, 36 and 37 of the Arbitration
Act. It is also clear that, therefore, the common award is not a single
award and cannot be stated to be as an enforceable Award/decree as
contemplated under the Code of Civil Procedure (for short, the CPC),
read with Section 36 of the Arbitration Act.
24 Under the Arbitration Act, Section 34 contemplates for setting
aside the Arbitral Award and Appeal is also contemplated under
Section 37 of the Arbitration Act against the setting aside or refusing
to set aside the Arbitral Award.
25 The Court, therefore, while dealing with such Section 34
Application, is either set aside the Arbitral Award or refused to set
aside the Arbitral Award. There is no provision whereby, the Court
even based upon the admitted position on record and/or otherwise,
can grant and/or award the claim for the first time under Section 34
of the Act. Any Application for modification of the award which is
otherwise permissible but now reiterated by the Full Bench in M/s.
::: Downloaded on - 26/06/2024 07:31:52 :::
17 arbp1383.10.sxw
ssm
1
R.S.Jiwani , Mumbai Vs. Ircon International Ltd., Mumbai, , the
party in a given case may restrict the particular claim or claims. The
Court, therefore, in view of above two circumstances will pass
appropriate order and modify the award but in no case the Court can
pass award as contemplated under the Act, either interim or final.
Therefore, also, the award so passed by the Arbitrator dismissing all
the claims of the disputant bank, in no way can be stated to be
enforceable award or decree. In the present case there is no award
for any prior or past adjustment of any amount.
26 The Apex Court in Prem Lata (Supra), in paragraph No. 18, has
observed as under:
“18. It cannot be disputed that the court has power to
consolidate suits in appropriate cases. Consolidation is a
process by which two or more causes or matters are by
order of the court combined or united and treated as one
cause or matter. The main purpose of consolidation is
therefore to save costs, time and effort and to make the
conduct of several actions more convenient by treating
them as one action. The jurisdiction to consolidate arises
where there are two or more matters or causes pending in
the court and it appears to the court that some common
question of law or fact arises in both or all the suits or that
the rights to relief claimed in the suits are in respect of or
arise out of the same transaction or series of transactions;
or that for some other reason it is desirable to make an
1 2010(1) Mh.L.J. 547
::: Downloaded on - 26/06/2024 07:31:52 :::
18 arbp1383.10.sxw
ssm
order consolidating the suits.”
27 In view of above clear dictum and in the present facts and
circumstances as referred above, there is nothing wrong if such
Petition under Section 34 of the Arbitration Act as filed by the
Petitioner, apart from above observations, it is also in the interest of
all the parties, and to avoid multiplication of proceedings such
common petition so filed need to be accepted. There is no prejudice,
as such will cause if such composite Petition is permitted/ filed and
proceeded accordingly.
28 Normally, a separate petition ought to have been filed though
there is a common award but specially in view of the fact that by such
award, 2000 claims/petitions of the disputant bank have been
dismissed, that resulted into the dismissal of 2000 cases by common
award. But considering the fact as recorded above, and as basic
parties, cause of actions, documents, contents and pleadings are
common, and as the parties have already adopted the procedure
before the Arbitral Tribunal, I see there is no reason that the same
should not be permitted before this Court and even under Section 34
of the Arbitration Act. There is no bar whatsoever under any provision
::: Downloaded on - 26/06/2024 07:31:52 :::
19 arbp1383.10.sxw
ssm
under the Arbitration Act, MSCS Act and/or CPC to file such
Petition. In view of above, therefore, I am not inclined to accept,
that such consolidated Petition under Section 34 of the Act is not
maintainable. However, it is definitely subject to the requisite Court
fees treating the same as the dismissal of 2000 claim/petitions. The
Petition, therefore, though maintainable but it is subject to the
requisite Court fees under the BCF Act.
Advalorem or fixed Court fees
29 Now, the next issue is whether the Petitioner is bound to pay the
Court Fees as per Schedule I, (Ad valorem Fees) Article 3A, as
st
amended by 1 September, 2009.
3A. Application or petition
(including memorandum of
appeal) to set aside or modify
arbitral award under the
Arbitration and Conciliation
Act, 1996 (26 of 1996)
A fee of onehalf of the
ad valorem fee on the
amount or value of the
award sought to be set
aside or modified,
according to the scale
prescribed under
Article 1.
Or, Schedule II, (Fixed Fees) Article1 (f)(iii)
::: Downloaded on - 26/06/2024 07:31:52 :::
20 arbp1383.10.sxw
ssm
1.Application
or petition
(f) When presented to the
High Court
(i).......
(ii)......
(iii) in any other case not
otherwise provided for by
this Act.
4(Twenty rupees)
30 A Division Bench (Anoop V. Mohta, J), referred an issue to the
larger Bench, by dealing with the provisions of the BCF Act and the
aspect of the Court Fees referring to the Arbitration Act, 1940, and the
Arbitration and Conciliation Act, 1996, prior to the above
amendment, in Arbitration Appeal No. 1 of 2009 and Civil
th
Application No. 6279 of 2008, dated 18 September, 2008, Shri
Harjinder Singh S/o. Balwant Singh Osan Vs. Paramjeet Singh S/o
Balwant Singh Osan , observed as under:
“26. It is clear that the BCF Act is enacted to collect
revenue for the benefit of the State and not to arm a
contesting party with a weapon of defence to obstruct
proceedings. (Rathna Varmaraja Vs. Smt. Vimla : AIR
1961 SC 1299). In State of Maharashtra Vs. Mishrilal
Tarachand Lodha and Others : AIR 1964 SC 457 , the
Supreme Court has observed in paragraph 9 as under:
“........The Act is a taxing statute and its
provisions therefore have to be construed strictly,
in favour of the subjectlitigant. The other
provisions are for the purpose of allowing the
party feeling aggrieved against the decision of the
High Court to take up his case to the next higher
Court, the Privy Council and therefore the
::: Downloaded on - 26/06/2024 07:31:52 :::
21 arbp1383.10.sxw
ssm
relevant provisions in that regard had to be given
a liberal construction.”
It is relevant to note the following observations also as
made in Gujarat State Financial Corporation Vs.
Natson Manufacturing Company Private Limited and
others : (1979) 1 SCC 193 in paragraph no. 15:
“15. When dealing with a question of court fee,
the perspective should be informed by the spirit of
the magna carta and of equal access to justice
which suggests that a heavy price tag on relief in
Court should be regarded as unpalatable.”
31 In view of conflict of opinion on the issue regarding payment of
Court fees, the Full Bench of this Court in Harjinder Singh Balwant
1
Singh Osan & Ors. Vs. Paramjeet singh Balwant Singh Osan & Ors.
has considered and observed as under:
“2. For the reasons recorded by us in our order passed
in Writ Petition No. 4064 of 2008 along with Arbitration
No. 340 of 2007 and other connected matters, we hold
that Article 3 of Schedule I of the Bombay Court Fees Act
is not applicable to a petition filed under section 34 or for
a memorandum of appeal filed under section 37 of the
1996 Act. When a memorandum of appeal is filed under
section 37 of the Bombay Court Fees Act challenging an
order passed in a petition filed under section 34 of the
1996 Act before this Court, payment of Court fees will be
governed by Article 13 of Schedule II of the Bombay Court
Fees Act. The issue referred, therefore, is accordingly
answered. The matter, therefore, now be placed before the
appropriate Division Bench for further orders.”
1 2008(6) Bom.C.R. 565
::: Downloaded on - 26/06/2024 07:31:52 :::
22 arbp1383.10.sxw
ssm
32 However, w.e.f. 01/09/2009, by the Maharashtra Ordinance XII
of 2009, an amendment has been incorporated by replacing the
earlier Article 3 to 3A in schedule I. This new Article contemplates
that on the plaint, application or petition, to set aside or modify any
Arbitral Award under the Act; the advalorem fee or proper fee
payable is one half of the advalorem fee on the amount or value of
the award sought to be set aside or modified, according to the scale
prescribed under Article 1 of Schedule I. Article 1 prescribed, plaint
or memorandum of appeal (not otherwise provided for in this Act) or,
of cross objection presented to any Civil or Revenue Court, based
upon the amount or value of the subject matter in dispute as
prescribed. The amount of Court fees payable depend on the amount
or value of the award and not by any other method.
33 The judicial notice of following legal principles and citations can
be taken note of by the Court though not cited by the parties.
(a) When the meaning is plain, the Court cannot enlarge
scope of it. Express words need to be respected. The
object and intention of the Act cannot prevail over express
provisions. [Snehadeep Structures Private Limited Vs.
::: Downloaded on - 26/06/2024 07:31:52 :::
23 arbp1383.10.sxw
ssm
Maharashtra SmallScale Industries Development
1
Corporation Limited]
(b) It is necessary to consider all the provisions of a
concerned Act/Rules/Schedules. It cannot be read in
isolation.
(c) If there is any doubt or ambiguity, the benefit should
go in favour of a litigant.
(d) The concept of “Court fee” cannot be equated with
the concept of “Tax”. The Court fee cannot be intended to
collect and/or generate to be a revenue except to collect
the cost of administration of civil justice. [ (1973) 1 SCC
162 The Secretary, Government of Madras, Home
Department & anr. v. Zenith Lamp and Electrical Ltd.,
(1996) 1 SCC 345 – Secretary to Government of Madras
& anr vs. P.R.Sriramulu & anr. ]
34 If there is lacuna in the Court Fees Act, the Court cannot
1 (2010) 3 S.C.C. 34
::: Downloaded on - 26/06/2024 07:31:52 :::
24 arbp1383.10.sxw
ssm
interpret the existing provision to bring in the present case under the
ambit of Court Fee Act. There is nothing pointed out that Suit
Valuation Act and the Court Fee Act applies to the value of the
arbitration also, which is not plaint, both for the purposes of
jurisdiction and the Court fee. There is no practice of paying any
court fee at the time of filing petitions, irrespective of the claim
amount, before the Arbitrator under the Act and/or even under
Section 89 of Code of Civil Procedure (CPC). The direction to refund
of court fee on reference to Alternative Dispute Resolution (ADR)
under Section 89 of CPC cannot be overlooked as it covers arbitration
proceedings also. [ Salem Advocate Bar Association T.N. vs. Union of
1
India] The purpose and object of Arbitration Act also play an
important role while interpreting the provisions in question.
35 Therefore, on a plain and simple reading of this provision,
whosoever wants to file Application or Petition and/or appeal to set
aside the award or modify the Arbitral Award, need to pay one half of
the advalorem fees on the amount or value of the amount of award
sought to be set aside or modified. This, in my view, contemplates
that there is a monetary award passed against the party, which the
1 (2005) 6 SCC 344
::: Downloaded on - 26/06/2024 07:31:52 :::
25 arbp1383.10.sxw
ssm
aggrieved party wants to challenge by such application or petition or
by appeal to set aside or modify the said award under the Arbitration
Act, which is subject to ad valorem Court fees as prescribed in Article
3A of Schedule I and not otherwise.
36 In the present case, the situation is quite different. Here by the
common order, the Arbitral Tribunal has dismissed all the claims of
the disputant bank, therefore, there is no amount awarded by the
award which needs to be set aside or modified by application under
Section 34 of the Arbitration Act. The submission that the valuation
or the amount so involved or referred in the claim Petition by the
disputant bank, should be the basis for calculating the advalorem fees
as per Article 3A, in my view is untenable.
37 Under the Arbitration Act, whosoever filed a claim Petition
for whatsoever amount, against the Respondent/opponent need
not pay any court fees for want of specific provisions under the
BCF Act and/or under the Arbitration Act. Therefore, Article 3A
which deals with Arbitration Act, cannot be invoked for charging
the Court fees on the basis of such submission. The Court fees just
cannot be charged unless it is specifically provided. There is no
::: Downloaded on - 26/06/2024 07:31:52 :::
26 arbp1383.10.sxw
ssm
question of any interpretation and/or reading such clauses/articles,
in favour of charging the court fees in such cases. In the present case,
there is a total rejection of claims. The Petition under Section 34 as
filed, to set aside or modify the award, no advalorem Court fees as
contemplated under Article 3A, for want of any amount and/or
valuation of the award, is payable. There is no clear charging
provision. No Court fee is therefore, payable if there is challenge to
the finding given in the award, unless it is subject to grant of
monetary claim or adjustment of any amount.
38 Here another factor is that pursuance to the order passed by the
Hon’ble High Court and as permitted the disputant bank refiled all the
claim Petitions before the Arbitrator, who was appointed under the
MSCS Act as contemplated under Section 84, and the matter
proceeded accordingly. The statement is made by the learned Senior
counsel appearing for the Petitioner that at the relevant time when
they preferred the claim petitions before the Cooperative Court, they
paid the requisite Court fees. Under MSCS Act also there is no
provision to pay Court fees on such claim petitions. There is no such
express provisions for Court fees in such circumstances for the
purpose of claim Petition under this MSCS Act is available even under
::: Downloaded on - 26/06/2024 07:31:52 :::
27 arbp1383.10.sxw
ssm
the BCF Act. Therefore, if the Court fee is not payable by the claimant
either under the Arbitration Act and/or MSCS Act at the time of filing
of claim petition. Therefore, to say that they are liable to pay Court
fees on the basis of valuation of the plaint or claim so raised, in my
view, is also unacceptable.
39 It is relevant to note that Article 3A contemplates the Arbitration
Act. There is no reference made to the MSCS Act for the purpose of
Court fees. However, in view of the fact that Section 84 of the MSCS
Act itself provides and therefore, Arbitration Act to be adopted and
followed to set aside the Arbitral award and also the further
proceedings, but still in view of above, in the present facts and
circumstances of the case, and as Article 3A of the Schedule I cannot
be extended to charge ad valorem fees. Under Section 34 of the
Arbitration Act, the Court cannot grant any decree and/or pass any
award first time in the Court, as claimed. Therefore, also and for
want of clear provisions under the BCF Act, no question of ad valorem
Court fees to be paid by the Petitioner on the basis of amount so
claimed in the claim Petitions. Therefore, in view of the present facts
and circumstances of the case, I am of the view that the Petitioner is
liable to pay Court fees under Schedule II Item 1 (f) (iii) i.e. Rs. 20/
::: Downloaded on - 26/06/2024 07:31:52 :::
28 arbp1383.10.sxw
ssm
on the Applications. However, as noted above, though there is a
common award, by which 2000 claim Petitions filed by the disputant
bank have been dismissed, therefore, though such common
consolidated Application under Section 34 of the Arbitration Act is
maintainable, the Petitioner is liable to pay Court fees by treating the
same as 2000 separate award and therefore, 2000 separate
Applications under Section 34 of the Arbitration Act. The submission
that they are liable to pay only Rs.20/ on such consolidated or
common Application under Section 34, is unacceptable.
40 The submission is also raised by the learned senior counsel
appearing for the Respondents by relying on Snehadeep Structures
Private Limited (Supra) that Application under Section 34 of the
Arbitration Act needs to be treated as Appeal as contemplated under
the CPC and therefore, such consolidated Application is also not
maintainable and even if it is maintainable being Appellate
proceedings, it should be subject to the Court fees as contemplated
under the BCF Act. The law with regard to the scope and purpose of
Section 34 is well settled. The Petition under Section 34 of the Act, in
no way can be equated by the Appeal as contemplated under the
CPC”. The purpose and scope of Section 34 has been elaborated by
::: Downloaded on - 26/06/2024 07:31:52 :::
29 arbp1383.10.sxw
ssm
the Apex Court in many cases. It is made clear, in para 40 and 43, by
the Supreme Court in Snehadeep Structures Private Limited
(Supra) that the “appeal” as explained is for the purpose of Section 7
of Interest Act and not for the purpose of CPC and/or for the
Arbitration Act. The Judgment and the facts are distinct and
distinguishable in every aspect.
41 In view of above peculiarity of the present case and considering
the scope and purpose of Arbitration Act and MSCS Act, the
submission so raised by the learned Senior counsel appearing on
behalf of the Respondents, revolving around the provisions of Order I
Rule 3/6 and Order II Rule 3, Sections 2 (a), 96 and 100 of the CPC
are of no assistance to support their contention with regard to the
preliminary issues so raised about maintainability of the consolidated
Petition under Section 34 and even for the Court fees. Section 4 and
149, O41 R1 of CPC just cannot be overlooked. There is no question
of challenge to 2000 decrees and/or any execution of such
award/decrees as submitted. There is also no question of
crystallization of any rights and liabilities of any parties under
substantive law applicable to the borrowers or to the guarantors as
contemplated under the Indian Contract Act, 1872. It is made clear
::: Downloaded on - 26/06/2024 07:31:52 :::
30 arbp1383.10.sxw
ssm
that the present award no way deal with the merits of the matter.
42 The Petitionerbank has filed the common composite application
under Section 34 of the Arbitration Act, within a limitation from the
date of award. Therefore, now to direct the Petitioner to file separate
2000 petitions after lapse of limitation period on the date of order will
further cause complications than solving it, therefore, this is also one
of the reason that the Petition so filed at the relevant time, within the
limitation needs to be maintained.
The office Report
th
43 Pursuant to the order passed by this Court dated 14 January,
2011, the office has reported as under:
th
“Pursuant to the order dated 14 January, 2011
passed by Your Lordship in the aforesaid matter, Office was
directed to endorse and report regarding Court fees liable to
be paid by the Petitioner.
In this regard, I respectfully submit that when the
aforesaid matters assigned for scrutiny Objection was
raised by the officer for filling separate Petition by each
petitioner and payment of Court Fees as per amended
provision. Instead of complying office objection the
Advocate for the Petitioner has put a remark that “because
of one common order by the Arbitrator and in view of
Order I Rule VI of CPC Petitioner is entitled to file one
::: Downloaded on - 26/06/2024 07:31:52 :::
31 arbp1383.10.sxw
ssm
petition and maximum Court Fees of Rs. 1,50,000/ is
paid. Hence, no further fees is payable also it is not
necessary to pay court fees on each arbitration dispute
and satisfy the Honourable Court” . In the circumstances
the aforesaid petition was numbered subject to the
undertaking given by the Advocate for the Petitioner.
I further respectfully submit that in view of the
directions of Your Lordship if each claim is to be treated
separately and petition to be filed separately then the total
Court Fees payable is Rs. 67,25,910/
And if one petition is filed then maximum payable
court fees is Rs.1,50,000/ which is paid by the Petitioner.”
44 The office has treated each claim/petition separately but charge
Court fees under Section 3A to the extent of Rs.67,25,910/ based
upon the calculation made referring to the statement of claims of
amount as on 30/04/2008, of 2000 cases. However, as observed
above, the PetitionerBank is not liable to pay Court fees as per Article
3A of the BCF Act and are liable to pay Court fees as per schedule II
Article 1 (f) (iii). There is no question of payment of Court fees as
claimed/assessed by the office. The Petitioner has already paid
maximum fees of Rs.1,50,000/. The excess amount of Court fee is
liable to be refunded.
45 The PetitionerBank has averred in paragraph No. 15 of the
::: Downloaded on - 26/06/2024 07:31:52 :::
32 arbp1383.10.sxw
ssm
Plaint as under:
“15. The Petitioners have filed one common petition in
respect of the 2000 disputes which were referred for
Arbitration. The first Respondent in each of the 2000
disputes has now been shown as Respondent Nos. 1 to
2000. The Respondent Nos. 2002 to 2006 are common in
all the disputes. They were Opponent Nos. 2 to 6 in the
original disputes. The Petitioners have paid Court fees on
the basis of 2000 Arbitration disputes i.e. 2000 x 20 = Rs.
40,000/ on the present petition.”
46 The Petitioner, therefore, throughout considered these 2000
separate Petitions and accordingly paid fixed Court fee as
contemplated under Schedule II Article I (f)(iii) i.e. 2000 x Rs. 20 =
Rs.40,000/. In view of above observations, this calculation/
averments so made is correct. The PetitionerBank is liable to pay this
much amount only. The excess Court fees even if collected/paid, need
to be refunded in accordance with law. The office order therefore,
accordingly modified to the above extent.
47 Resultantly, the issues are answered accordingly.
(a) The consolidated common Petition under Section 34
of the Arbitration Act, 1996 so filed against the
::: Downloaded on - 26/06/2024 07:31:52 :::
33 arbp1383.10.sxw
ssm
common award in the present case is maintainable.
(b) The PetitionerBank is liable to pay Court fees as per
Schedule Schedule II, Article 1 (f)(iii) and not as per
Article 3A of the BCF Act.
(c) The office order is accordingly modified, with further
directions to refund the Court fees, if paid, in excess
of the amount of Rs. 40000/ (2000x20) as per
Schedule II Article 1 (f) (iii).
(d) The parties to take necessary steps accordingly and
the matter be placed for admission.
(ANOOP V. MOHTA, J.)
::: Downloaded on - 26/06/2024 07:31:52 :::
ssm
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 1383 OF 2010
WITH
CHAMBER SUMMONS NO. 1091 OF 2010
Saraswat Cooperative Bank Ltd. ....Petitioner.
Vs.
Fariruddin Quereshi N. & 2006 Ors. ....Respondents.
Mr. F.E. D’vitre, Sr. Counsel with Mr. Yashesh V. Pajwani a/w Mr. Y.R.
Naik for the Petitioner.
Mr. V.A. Thorat, Sr. Counsel with Mr. Vaibhav Sugdare with Mr. M. G.
Gawde for Respondent Nos. , 2003, 2004 and 2006.
Mr. Chetan Kapadia with Mr. Ishwar Nankani with I.J. Nankani a/w
Mr. H.S. Khokawala i/by M/s. Nankani & Associates for Respondent
Nos. 2005.
CORAM : ANOOP V. MOHTA, J.
th
ORDER RESERVED ON : 11 FEBRUARY, 2011
th
ORDER PRONOUNCED ON : 25 FEBRUARY, 2011.
P.C.:
::: Downloaded on - 26/06/2024 07:31:52 :::
2 arbp1383.10.sxw
ssm
The PetitionerBank has challenged a common award dated
06/10/2009, passed by the Arbitrator, appointed under Section 84 of
the MultiState Cooperative Societies Act, 2002 (for short, MSCS Act)
by a petition under Section 34 of the Arbitration and Conciliation Act,
1996 (for short, the Arbitration Act). This common award resulted
into the dismissal of all the claims against all 2006 Respondents.
2 In the Petition, the parties are: the PetitionerBank is the
Claimant in all the matters; Respondent Nos. 1 to 2000 are original
respective Opponent No. 1; Respondent No. 2002 is a Cooperative
Society of cobblers which was original Opponent No. 2; Respondent
No. 2001 is the Arbitrator; Respondent No. 2003 is a partnership firm
of the Sadruddin Daya family; Respondent Nos. 2004 and 2006 are
its partners. These Respondents were original Opponent Nos. 3 to 6 in
all matters.
2A) Two preliminary issues have been raised by the contesting
Respondents.
Whether a common/composite petition under Section 34 of the
Arbitration Act, is maintainable against the common award after
::: Downloaded on - 26/06/2024 07:31:52 :::
3 arbp1383.10.sxw
ssm
consolidation of claim petitions by consent and whereby all claim
petitions have been dismissed in toto, and;
Whether the Original Claimant (PetitionerBank) is liable to pay
advalorem Court fees as per Scheduled I, Article 3A or a fixed Court
fee, as per Schedule II, Article 1 (f) (iii) of the Bombay Court Fees Act,
1959 (for short, BCF Act) on application under Section 34 of the
Arbitration Act to set aside the common award whereby 2000 claim
petitions have been dismissed in toto and not awarded any monetary
claim by the arbitrator.
The basic events are as under:
3 On 16/06/1970, Respondent No. 2002, the Society (Opponent
No.2) was registered under the Maharashtra Cooperative Societies
Act (for short, MCS Act). It had more than 3000 cobbler members,
manufacturing leather goods which were supplied to Respondent No.
2003 (Opponent No.3).
4 On 15/09/1985, the Multi State Cooperative Societies Act,
1984 (for short, MSCS Act, 1984) came into force. Now
::: Downloaded on - 26/06/2024 07:31:52 :::
4 arbp1383.10.sxw
ssm
amended/substituted by MSCS Act w.e.f. 19/08/2002. This society
was taken over by Respondent Nos. 2003, 2004 and 2006 (Opponent
Nos. 3, 4 and 6) some time in the year 1987.
5 On 08/04/1988, the Society sought on and behalf of its 300
members a loan of Rs.75 lakhs from the PetitionerBank (disputant).
Each members was given a loan of Rs.25,000/. Each members had
given a writing to credit his loan amount in the account of the
Society. For the said loans Respondent Nos. 2002 to 2004 (Opponent
Nos. 2 to 4) were sureties. The said loan accounts were closed, having
fully repaid the loans.
6 On 07/05/1990, 04/12/1990, 10/09/1991, 16/07/1993 and
24/06/1993, the Society (Respondent No. 2002) again approached
the PetitionerBank for and on behalf of 5 batches of 400 cobbler
members for a separate loan of Rs.100 lakhs i.e. 500 lakhs. The loan
was sanctioned and duly disbursed to the cobblers of respective
batches, through the Society. In respect of the said transactions also
Respondent Nos. 2002, 2003 and 2004 were a sureties. A collective
guarantees were also given by Respondent Nos. 2003 and 2004
separately.
::: Downloaded on - 26/06/2024 07:31:52 :::
5 arbp1383.10.sxw
ssm
7 In the year 1996, the PetitionerBank filed 2000 disputes/claim
Petitions in the Cooperative Court for recovery of the balance amount
due from each of the Principal borrower (Opponent No.1) on the basis
of guarantees, etc. They had also sought interim orders of attachment
before judgment and injunction which were granted.
8 The Respondent Nos. 2003 to 2006 (Opponent Nos.3 to 6)
challenged the jurisdiction of the Cooperative Court, which was
upheld by the Cooperative Appellate Court. The Hon’ble High Court
admitted the Petitions against this order and ultimately by order dated
09/05/2008 directed that the disputes be refiled before the
Arbitrator, appointed under Section 84 of the MSCS Act.
9 On 14/03/2007, the Arbitrator applied for nominal membership
of the Petitioner which was granted. The wife of Arbitrator applied
for shareholder membership which was also granted, but resigned
from membership on 11/09/2009.
10 In the month of July, 2008, present 2000 disputes filed before
the Arbitrator. Those were numbered separately. The Arbitrator
::: Downloaded on - 26/06/2024 07:31:52 :::
6 arbp1383.10.sxw
ssm
issues separate notices to the Respondents to adjudicate the unpaid
loan amount with 18% interest from 01/10/1996.
11 On 03/09/2009, Respondent Nos. 2003 and 2004 as well as,
Respondent No. 2006 filed the separate claim affidavits in lieu of oral
evidence. The Arbitrator permitted the opposite parties to cross
examine the witness and the evidence was recorded. The parties had
filed the written arguments also.
12 On 06/10/2009, the common Award was passed.
13 Following are the undisputed position on record:
(i) The Petitioner Bank has filed 2000 disputes on
06/11/1996 before the Cooperative Court, Mumbai,
constituted under the Maharashtra Cooperative
Societies Act, 1961 (for short, Cooperative Societies
Act.)
(ii) Opponent No.1 in each disputes was named
individually, who was a member and a shareholder
::: Downloaded on - 26/06/2024 07:31:52 :::
7 arbp1383.10.sxw
ssm
of the Society and of the PetitionerBank. Where,
Respondent No. 2002 to 2006 were the same.
Opponent Nos. 3 to 6 were promoted by the Society.
(iii) Opponent Nos. 3, 4 and 6 were the guarantors for
the loans disbursed to the Society for being paid in
turn to Opponent No.1, in each case. Admittedly,
separate and individual documents have been
signed, with regard to the individual loans of
respective Opponent No.1, of 2000 cobbler
members. The terms and conditions were identical.
The total loan of Rs.5 crores were disbursed. (Rs.
25,000/ x 2000 cobblers = Rs. 500,00,000) from
the Petitioner Bank. Each cobbler, in the result, got
the loan of Rs. 25,000/.
(iv) On 31/03/1996, the balance amount due from the
2000 cobblers was Rs.3.27 crores. The interest was
claimed at 18% p.a. on the said amount from
01/10/1996.
::: Downloaded on - 26/06/2024 07:31:52 :::
8 arbp1383.10.sxw
ssm
(v) By order dated 05/12/2000, the Maharashtra State
Cooperative Appellate Court found that the Co
operative Court, Mumbai, had no jurisdiction to
decide the disputes, and therefore, returned the
Petitions to the PetitionerBank for filing in the
appropriate Court.
(vi) As all 2000 disputes were identical and as the
common issues and the similar documents were
involved, apart from common Opponent Nos. 2 to 6,
the sureties and the guarantors and the Petitioner
bank and as agreed, the common evidence was
submitted. Therefore, all the matters were clubbed
and heard together accordingly, that resulted into
the common judgment/ award in question.
(vii) By order dated 06/05/2008, the PetitionerBank
withdrew Writ Petition No. 752 of 2001, whereby the
challenge was made to the order passed by the
Maharashtra State Cooperative Appellate Court. In
view of the enactment of MSCS Act, the Petition was
::: Downloaded on - 26/06/2024 07:31:52 :::
9 arbp1383.10.sxw
ssm
accordingly disposed of as withdrawn with liberty to
adopt appropriate remedies. In the mean time,
pending the Writ Petition, by a notification dated
rd
23 January, 2003, the Registrar under the MSCS
Act, has appointed the Arbitrator for all the disputes
concerning the PetitionerBank.
(viii) The Petitioner, therefore, resubmitted all these
Applications/Petitions before the Arbitrator. The
Arbitrator has allotted separate case numbers to each
Application as “Case No. ARB/SCB/401 to
2400/2008”.
(ix) The contents of the Applications along with the
Claims, originally raised in the year 1996, remained
unchanged, when it was refiled before the
Arbitrator.
(x) Before the Arbitrator, all the original borrowers were
not traceable though served by substituted service.
::: Downloaded on - 26/06/2024 07:31:52 :::
10 arbp1383.10.sxw
ssm
(xi) The common written statement filed by Respondent
No. 2003, 2004 and 2006 (original Opponent Nos. 3,
4 and 6). Respondent No. 2005 (Original Opponent
No.5) also filed the common written statement. The
common affidavit of evidence was filed by the
PetitionerBank. The common affidavit was filed by
Opponent Nos. 3,4, 5 and 6 separately.
(xii) Opponent Nos. 3 and 4 gave the separate guarantees
as well as, five composite guarantees for Rs.1 crore
each. These are identical and common to all 2000
Disputes/Petitions.
By consent such consolidation and the common award is
permissible:
14 All these 2000 disputes were consolidated and proceeded by the
common evidence and arguments as the parties have agreed and
consented for such consolidation and the arbitrator proceeded
accordingly. There is no legal bar for such consolidation. The
common award so passed by the Arbitrator though separate
::: Downloaded on - 26/06/2024 07:31:52 :::
11 arbp1383.10.sxw
ssm
disputes/Petitions were filed/referred under the MSCS Act, is well
within the framework of law. Prem Lala Nahata & Anr. Vs. Chandi
1
Prasad Sikaria . Such consolidation and the common award by the
Arbitrator under MSCS Act and/or under the Arbitration Act, is
permissible.
15 The Arbitration Act provides that parties can determine their
own rules of procedure while conducting the Arbitration proceedings.
The Arbitral Tribunal may not be bound by the strict principles of the
Civil Procedure Code (CPC) and Indian Evidence Act as contemplated
in Section 19 of the Arbitration Act. In the present case, admittedly
the parties have agreed and consented and proceeded accordingly and
the Arbitrator in view of consolidation of all these disputes has passed
the common award and thereby dismissed/rejected all 2000
claims/petitions filed by the disputant bank. The procedure,
therefore, so adopted by the parties in Arbitration Proceedings though
it arise out of MSCS Act, still as noted above, the provisions of
Arbitration Act apply in all respects.
16 Having once adopted this procedure and proceeded accordingly,
1 (2007) 2 S.C.C. 551
::: Downloaded on - 26/06/2024 07:31:52 :::
12 arbp1383.10.sxw
ssm
and as there is no bar of any kind under any law, the common order
so passed by the Arbitrator after consolidation of all these
proceedings, in no way cause any hardship, injustice or prejudice to
any parties. In my view, no fault can be found with this procedure so
adopted by the parties, which even otherwise, permissible under the
Arbitration Act.
17 Still the issue is whether it can be treated as a single award for
the purpose of Section 34 of the Arbitration Act and/or for the
purpose of the Court fees, under the BCF Act.
Object of consolidations of Arbitration Proceedings and the
Common Award:
18 Admittedly, 2000 claim proceedings/Petitions, were filed by the
PetitionerBank but by consent, all the proceedings were consolidated
and proceeded accordingly and that resulted into the common award.
That itself, is not sufficient to treat the impugned award as only one
award as contended by the learned Senior counsel appearing for the
Petitioner. In my view, though common award is passed, it is
admittedly passed in 2000 Arbitration Proceedings. The award itself
::: Downloaded on - 26/06/2024 07:31:52 :::
13 arbp1383.10.sxw
ssm
shows the details of the notified claims raised by the PetitionerBank
against all 2000 borrowers and common guarantors and the amount
so awarded by the Arbitrator against the individual Respondents.
Therefore, for the reasons recorded above, as common question of law
and/or facts arose out of the similar transactions and/or connected
series of transactions and the basic contents of all the Petitions and
documents are quite common/similar and as the parties accordingly
lead common evidence, that itself, in my view is not sufficient to say
that all 2000 claims/petitions has no independent existence and/or to
be regarded as one legal proceeding.
19 It is necessary to note the operative part of the award which is as
under:
“The present claim put up by the Saraswat CoOperative
Bank Ltd., against Opponent No.5 in each of the above
mentioned cases stand dismissed with cost.
It is further declared that the Opponent No. 2 namely
Jeevan Vikas Coop. Leather Industries Ltd., has not been
joined properly as Opponent No.2 in each of the present
proceedings and hence said society is discharged from its
guarantee obligations.
It is further ordered that The Saraswat Coop. Bank Ltd., is
not entitle to recover any amount from the respective
principal borrowers who are the Opponent Nos. 1 in each
of the above 2000 dispute cases.
::: Downloaded on - 26/06/2024 07:31:52 :::
14 arbp1383.10.sxw
ssm
It is further ordered that Opponent Nos. 3 and 4 stands
discharged from their guarantee obligations, and hence
order of attachment of their properties below Exh. 1 stand
vacated.
Consequently, the present action against Opponent Nos. 6
stands dismissed with costs.
The Bank to bear the Arbitration fees in all maters and
shall also bear its administrative costs.
Annexure hereto be treated as part of this Award.”
The Schedule/Annexure to the award shows the names of the
opponent and Case No. ARB/SCB, Case No. of Cooperative Court.
th
As per the statement the total claim amount as on 30 September,
th
1996 is Rs.32840799.04/ and as on 30 April, 2008 is Rs.
247459985.19/.
20 The submission of the learned Senior counsel appearing for the
1
Petitioner revolving around Saraswatibai Vs. Durga Sahai is
untenable. The facts and circumstances are totally distinct and
distinguishable. In my view also an order of consolidation of
proceedings to facilitate joint trial has limited effect of common
parties; evidence; proceedings; documents; and arguments. The
common award so passed by the Arbitrator, cannot be treated as one
1 AIR 1982 M.P. 147.
::: Downloaded on - 26/06/2024 07:31:52 :::
15 arbp1383.10.sxw
ssm
award by overlooking the admitted position that it disposed off 2000
independent/ separate proceedings refiled by the PetitionerBank
before the Arbitrator. The same were registered and numbered
separately. Therefore, to say that it is a one award/Judgment for all
the purposes, is unacceptable. Such submission if accepted, bound to
frustrate the object of any consolidation of Suits/Petitions. This is a
multiple awards in view of the undisputed position on record that the
Arbitrator dismissed all the claims of the Petitionerbank by a common
award in question.
An unexecutable Arbitral common award:
21 The other facet is that the common award whereby, the learned
Arbitrator has dismissed all the disputant bank’s 2000 Claim
Applications, this itself means it is unexecutable award as
contemplated under the Arbitration Act.
22 There is no dispute that in view of Sections 84 and 94 of MSCS
Act and Rule 30 made thereunder, the Provisions of the Arbitration
Act are applicable in all respect, including for the challenge to the
award under the MSCS Act.
::: Downloaded on - 26/06/2024 07:31:52 :::
16 arbp1383.10.sxw
ssm
23 Any award passed by the Arbitrator is enforceable subject to the
finality, as provided under Sections 35, 36 and 37 of the Arbitration
Act. It is also clear that, therefore, the common award is not a single
award and cannot be stated to be as an enforceable Award/decree as
contemplated under the Code of Civil Procedure (for short, the CPC),
read with Section 36 of the Arbitration Act.
24 Under the Arbitration Act, Section 34 contemplates for setting
aside the Arbitral Award and Appeal is also contemplated under
Section 37 of the Arbitration Act against the setting aside or refusing
to set aside the Arbitral Award.
25 The Court, therefore, while dealing with such Section 34
Application, is either set aside the Arbitral Award or refused to set
aside the Arbitral Award. There is no provision whereby, the Court
even based upon the admitted position on record and/or otherwise,
can grant and/or award the claim for the first time under Section 34
of the Act. Any Application for modification of the award which is
otherwise permissible but now reiterated by the Full Bench in M/s.
::: Downloaded on - 26/06/2024 07:31:52 :::
17 arbp1383.10.sxw
ssm
1
R.S.Jiwani , Mumbai Vs. Ircon International Ltd., Mumbai, , the
party in a given case may restrict the particular claim or claims. The
Court, therefore, in view of above two circumstances will pass
appropriate order and modify the award but in no case the Court can
pass award as contemplated under the Act, either interim or final.
Therefore, also, the award so passed by the Arbitrator dismissing all
the claims of the disputant bank, in no way can be stated to be
enforceable award or decree. In the present case there is no award
for any prior or past adjustment of any amount.
26 The Apex Court in Prem Lata (Supra), in paragraph No. 18, has
observed as under:
“18. It cannot be disputed that the court has power to
consolidate suits in appropriate cases. Consolidation is a
process by which two or more causes or matters are by
order of the court combined or united and treated as one
cause or matter. The main purpose of consolidation is
therefore to save costs, time and effort and to make the
conduct of several actions more convenient by treating
them as one action. The jurisdiction to consolidate arises
where there are two or more matters or causes pending in
the court and it appears to the court that some common
question of law or fact arises in both or all the suits or that
the rights to relief claimed in the suits are in respect of or
arise out of the same transaction or series of transactions;
or that for some other reason it is desirable to make an
1 2010(1) Mh.L.J. 547
::: Downloaded on - 26/06/2024 07:31:52 :::
18 arbp1383.10.sxw
ssm
order consolidating the suits.”
27 In view of above clear dictum and in the present facts and
circumstances as referred above, there is nothing wrong if such
Petition under Section 34 of the Arbitration Act as filed by the
Petitioner, apart from above observations, it is also in the interest of
all the parties, and to avoid multiplication of proceedings such
common petition so filed need to be accepted. There is no prejudice,
as such will cause if such composite Petition is permitted/ filed and
proceeded accordingly.
28 Normally, a separate petition ought to have been filed though
there is a common award but specially in view of the fact that by such
award, 2000 claims/petitions of the disputant bank have been
dismissed, that resulted into the dismissal of 2000 cases by common
award. But considering the fact as recorded above, and as basic
parties, cause of actions, documents, contents and pleadings are
common, and as the parties have already adopted the procedure
before the Arbitral Tribunal, I see there is no reason that the same
should not be permitted before this Court and even under Section 34
of the Arbitration Act. There is no bar whatsoever under any provision
::: Downloaded on - 26/06/2024 07:31:52 :::
19 arbp1383.10.sxw
ssm
under the Arbitration Act, MSCS Act and/or CPC to file such
Petition. In view of above, therefore, I am not inclined to accept,
that such consolidated Petition under Section 34 of the Act is not
maintainable. However, it is definitely subject to the requisite Court
fees treating the same as the dismissal of 2000 claim/petitions. The
Petition, therefore, though maintainable but it is subject to the
requisite Court fees under the BCF Act.
Advalorem or fixed Court fees
29 Now, the next issue is whether the Petitioner is bound to pay the
Court Fees as per Schedule I, (Ad valorem Fees) Article 3A, as
st
amended by 1 September, 2009.
3A. Application or petition
(including memorandum of
appeal) to set aside or modify
arbitral award under the
Arbitration and Conciliation
Act, 1996 (26 of 1996)
A fee of onehalf of the
ad valorem fee on the
amount or value of the
award sought to be set
aside or modified,
according to the scale
prescribed under
Article 1.
Or, Schedule II, (Fixed Fees) Article1 (f)(iii)
::: Downloaded on - 26/06/2024 07:31:52 :::
20 arbp1383.10.sxw
ssm
1.Application
or petition
(f) When presented to the
High Court
(i).......
(ii)......
(iii) in any other case not
otherwise provided for by
this Act.
4(Twenty rupees)
30 A Division Bench (Anoop V. Mohta, J), referred an issue to the
larger Bench, by dealing with the provisions of the BCF Act and the
aspect of the Court Fees referring to the Arbitration Act, 1940, and the
Arbitration and Conciliation Act, 1996, prior to the above
amendment, in Arbitration Appeal No. 1 of 2009 and Civil
th
Application No. 6279 of 2008, dated 18 September, 2008, Shri
Harjinder Singh S/o. Balwant Singh Osan Vs. Paramjeet Singh S/o
Balwant Singh Osan , observed as under:
“26. It is clear that the BCF Act is enacted to collect
revenue for the benefit of the State and not to arm a
contesting party with a weapon of defence to obstruct
proceedings. (Rathna Varmaraja Vs. Smt. Vimla : AIR
1961 SC 1299). In State of Maharashtra Vs. Mishrilal
Tarachand Lodha and Others : AIR 1964 SC 457 , the
Supreme Court has observed in paragraph 9 as under:
“........The Act is a taxing statute and its
provisions therefore have to be construed strictly,
in favour of the subjectlitigant. The other
provisions are for the purpose of allowing the
party feeling aggrieved against the decision of the
High Court to take up his case to the next higher
Court, the Privy Council and therefore the
::: Downloaded on - 26/06/2024 07:31:52 :::
21 arbp1383.10.sxw
ssm
relevant provisions in that regard had to be given
a liberal construction.”
It is relevant to note the following observations also as
made in Gujarat State Financial Corporation Vs.
Natson Manufacturing Company Private Limited and
others : (1979) 1 SCC 193 in paragraph no. 15:
“15. When dealing with a question of court fee,
the perspective should be informed by the spirit of
the magna carta and of equal access to justice
which suggests that a heavy price tag on relief in
Court should be regarded as unpalatable.”
31 In view of conflict of opinion on the issue regarding payment of
Court fees, the Full Bench of this Court in Harjinder Singh Balwant
1
Singh Osan & Ors. Vs. Paramjeet singh Balwant Singh Osan & Ors.
has considered and observed as under:
“2. For the reasons recorded by us in our order passed
in Writ Petition No. 4064 of 2008 along with Arbitration
No. 340 of 2007 and other connected matters, we hold
that Article 3 of Schedule I of the Bombay Court Fees Act
is not applicable to a petition filed under section 34 or for
a memorandum of appeal filed under section 37 of the
1996 Act. When a memorandum of appeal is filed under
section 37 of the Bombay Court Fees Act challenging an
order passed in a petition filed under section 34 of the
1996 Act before this Court, payment of Court fees will be
governed by Article 13 of Schedule II of the Bombay Court
Fees Act. The issue referred, therefore, is accordingly
answered. The matter, therefore, now be placed before the
appropriate Division Bench for further orders.”
1 2008(6) Bom.C.R. 565
::: Downloaded on - 26/06/2024 07:31:52 :::
22 arbp1383.10.sxw
ssm
32 However, w.e.f. 01/09/2009, by the Maharashtra Ordinance XII
of 2009, an amendment has been incorporated by replacing the
earlier Article 3 to 3A in schedule I. This new Article contemplates
that on the plaint, application or petition, to set aside or modify any
Arbitral Award under the Act; the advalorem fee or proper fee
payable is one half of the advalorem fee on the amount or value of
the award sought to be set aside or modified, according to the scale
prescribed under Article 1 of Schedule I. Article 1 prescribed, plaint
or memorandum of appeal (not otherwise provided for in this Act) or,
of cross objection presented to any Civil or Revenue Court, based
upon the amount or value of the subject matter in dispute as
prescribed. The amount of Court fees payable depend on the amount
or value of the award and not by any other method.
33 The judicial notice of following legal principles and citations can
be taken note of by the Court though not cited by the parties.
(a) When the meaning is plain, the Court cannot enlarge
scope of it. Express words need to be respected. The
object and intention of the Act cannot prevail over express
provisions. [Snehadeep Structures Private Limited Vs.
::: Downloaded on - 26/06/2024 07:31:52 :::
23 arbp1383.10.sxw
ssm
Maharashtra SmallScale Industries Development
1
Corporation Limited]
(b) It is necessary to consider all the provisions of a
concerned Act/Rules/Schedules. It cannot be read in
isolation.
(c) If there is any doubt or ambiguity, the benefit should
go in favour of a litigant.
(d) The concept of “Court fee” cannot be equated with
the concept of “Tax”. The Court fee cannot be intended to
collect and/or generate to be a revenue except to collect
the cost of administration of civil justice. [ (1973) 1 SCC
162 The Secretary, Government of Madras, Home
Department & anr. v. Zenith Lamp and Electrical Ltd.,
(1996) 1 SCC 345 – Secretary to Government of Madras
& anr vs. P.R.Sriramulu & anr. ]
34 If there is lacuna in the Court Fees Act, the Court cannot
1 (2010) 3 S.C.C. 34
::: Downloaded on - 26/06/2024 07:31:52 :::
24 arbp1383.10.sxw
ssm
interpret the existing provision to bring in the present case under the
ambit of Court Fee Act. There is nothing pointed out that Suit
Valuation Act and the Court Fee Act applies to the value of the
arbitration also, which is not plaint, both for the purposes of
jurisdiction and the Court fee. There is no practice of paying any
court fee at the time of filing petitions, irrespective of the claim
amount, before the Arbitrator under the Act and/or even under
Section 89 of Code of Civil Procedure (CPC). The direction to refund
of court fee on reference to Alternative Dispute Resolution (ADR)
under Section 89 of CPC cannot be overlooked as it covers arbitration
proceedings also. [ Salem Advocate Bar Association T.N. vs. Union of
1
India] The purpose and object of Arbitration Act also play an
important role while interpreting the provisions in question.
35 Therefore, on a plain and simple reading of this provision,
whosoever wants to file Application or Petition and/or appeal to set
aside the award or modify the Arbitral Award, need to pay one half of
the advalorem fees on the amount or value of the amount of award
sought to be set aside or modified. This, in my view, contemplates
that there is a monetary award passed against the party, which the
1 (2005) 6 SCC 344
::: Downloaded on - 26/06/2024 07:31:52 :::
25 arbp1383.10.sxw
ssm
aggrieved party wants to challenge by such application or petition or
by appeal to set aside or modify the said award under the Arbitration
Act, which is subject to ad valorem Court fees as prescribed in Article
3A of Schedule I and not otherwise.
36 In the present case, the situation is quite different. Here by the
common order, the Arbitral Tribunal has dismissed all the claims of
the disputant bank, therefore, there is no amount awarded by the
award which needs to be set aside or modified by application under
Section 34 of the Arbitration Act. The submission that the valuation
or the amount so involved or referred in the claim Petition by the
disputant bank, should be the basis for calculating the advalorem fees
as per Article 3A, in my view is untenable.
37 Under the Arbitration Act, whosoever filed a claim Petition
for whatsoever amount, against the Respondent/opponent need
not pay any court fees for want of specific provisions under the
BCF Act and/or under the Arbitration Act. Therefore, Article 3A
which deals with Arbitration Act, cannot be invoked for charging
the Court fees on the basis of such submission. The Court fees just
cannot be charged unless it is specifically provided. There is no
::: Downloaded on - 26/06/2024 07:31:52 :::
26 arbp1383.10.sxw
ssm
question of any interpretation and/or reading such clauses/articles,
in favour of charging the court fees in such cases. In the present case,
there is a total rejection of claims. The Petition under Section 34 as
filed, to set aside or modify the award, no advalorem Court fees as
contemplated under Article 3A, for want of any amount and/or
valuation of the award, is payable. There is no clear charging
provision. No Court fee is therefore, payable if there is challenge to
the finding given in the award, unless it is subject to grant of
monetary claim or adjustment of any amount.
38 Here another factor is that pursuance to the order passed by the
Hon’ble High Court and as permitted the disputant bank refiled all the
claim Petitions before the Arbitrator, who was appointed under the
MSCS Act as contemplated under Section 84, and the matter
proceeded accordingly. The statement is made by the learned Senior
counsel appearing for the Petitioner that at the relevant time when
they preferred the claim petitions before the Cooperative Court, they
paid the requisite Court fees. Under MSCS Act also there is no
provision to pay Court fees on such claim petitions. There is no such
express provisions for Court fees in such circumstances for the
purpose of claim Petition under this MSCS Act is available even under
::: Downloaded on - 26/06/2024 07:31:52 :::
27 arbp1383.10.sxw
ssm
the BCF Act. Therefore, if the Court fee is not payable by the claimant
either under the Arbitration Act and/or MSCS Act at the time of filing
of claim petition. Therefore, to say that they are liable to pay Court
fees on the basis of valuation of the plaint or claim so raised, in my
view, is also unacceptable.
39 It is relevant to note that Article 3A contemplates the Arbitration
Act. There is no reference made to the MSCS Act for the purpose of
Court fees. However, in view of the fact that Section 84 of the MSCS
Act itself provides and therefore, Arbitration Act to be adopted and
followed to set aside the Arbitral award and also the further
proceedings, but still in view of above, in the present facts and
circumstances of the case, and as Article 3A of the Schedule I cannot
be extended to charge ad valorem fees. Under Section 34 of the
Arbitration Act, the Court cannot grant any decree and/or pass any
award first time in the Court, as claimed. Therefore, also and for
want of clear provisions under the BCF Act, no question of ad valorem
Court fees to be paid by the Petitioner on the basis of amount so
claimed in the claim Petitions. Therefore, in view of the present facts
and circumstances of the case, I am of the view that the Petitioner is
liable to pay Court fees under Schedule II Item 1 (f) (iii) i.e. Rs. 20/
::: Downloaded on - 26/06/2024 07:31:52 :::
28 arbp1383.10.sxw
ssm
on the Applications. However, as noted above, though there is a
common award, by which 2000 claim Petitions filed by the disputant
bank have been dismissed, therefore, though such common
consolidated Application under Section 34 of the Arbitration Act is
maintainable, the Petitioner is liable to pay Court fees by treating the
same as 2000 separate award and therefore, 2000 separate
Applications under Section 34 of the Arbitration Act. The submission
that they are liable to pay only Rs.20/ on such consolidated or
common Application under Section 34, is unacceptable.
40 The submission is also raised by the learned senior counsel
appearing for the Respondents by relying on Snehadeep Structures
Private Limited (Supra) that Application under Section 34 of the
Arbitration Act needs to be treated as Appeal as contemplated under
the CPC and therefore, such consolidated Application is also not
maintainable and even if it is maintainable being Appellate
proceedings, it should be subject to the Court fees as contemplated
under the BCF Act. The law with regard to the scope and purpose of
Section 34 is well settled. The Petition under Section 34 of the Act, in
no way can be equated by the Appeal as contemplated under the
CPC”. The purpose and scope of Section 34 has been elaborated by
::: Downloaded on - 26/06/2024 07:31:52 :::
29 arbp1383.10.sxw
ssm
the Apex Court in many cases. It is made clear, in para 40 and 43, by
the Supreme Court in Snehadeep Structures Private Limited
(Supra) that the “appeal” as explained is for the purpose of Section 7
of Interest Act and not for the purpose of CPC and/or for the
Arbitration Act. The Judgment and the facts are distinct and
distinguishable in every aspect.
41 In view of above peculiarity of the present case and considering
the scope and purpose of Arbitration Act and MSCS Act, the
submission so raised by the learned Senior counsel appearing on
behalf of the Respondents, revolving around the provisions of Order I
Rule 3/6 and Order II Rule 3, Sections 2 (a), 96 and 100 of the CPC
are of no assistance to support their contention with regard to the
preliminary issues so raised about maintainability of the consolidated
Petition under Section 34 and even for the Court fees. Section 4 and
149, O41 R1 of CPC just cannot be overlooked. There is no question
of challenge to 2000 decrees and/or any execution of such
award/decrees as submitted. There is also no question of
crystallization of any rights and liabilities of any parties under
substantive law applicable to the borrowers or to the guarantors as
contemplated under the Indian Contract Act, 1872. It is made clear
::: Downloaded on - 26/06/2024 07:31:52 :::
30 arbp1383.10.sxw
ssm
that the present award no way deal with the merits of the matter.
42 The Petitionerbank has filed the common composite application
under Section 34 of the Arbitration Act, within a limitation from the
date of award. Therefore, now to direct the Petitioner to file separate
2000 petitions after lapse of limitation period on the date of order will
further cause complications than solving it, therefore, this is also one
of the reason that the Petition so filed at the relevant time, within the
limitation needs to be maintained.
The office Report
th
43 Pursuant to the order passed by this Court dated 14 January,
2011, the office has reported as under:
th
“Pursuant to the order dated 14 January, 2011
passed by Your Lordship in the aforesaid matter, Office was
directed to endorse and report regarding Court fees liable to
be paid by the Petitioner.
In this regard, I respectfully submit that when the
aforesaid matters assigned for scrutiny Objection was
raised by the officer for filling separate Petition by each
petitioner and payment of Court Fees as per amended
provision. Instead of complying office objection the
Advocate for the Petitioner has put a remark that “because
of one common order by the Arbitrator and in view of
Order I Rule VI of CPC Petitioner is entitled to file one
::: Downloaded on - 26/06/2024 07:31:52 :::
31 arbp1383.10.sxw
ssm
petition and maximum Court Fees of Rs. 1,50,000/ is
paid. Hence, no further fees is payable also it is not
necessary to pay court fees on each arbitration dispute
and satisfy the Honourable Court” . In the circumstances
the aforesaid petition was numbered subject to the
undertaking given by the Advocate for the Petitioner.
I further respectfully submit that in view of the
directions of Your Lordship if each claim is to be treated
separately and petition to be filed separately then the total
Court Fees payable is Rs. 67,25,910/
And if one petition is filed then maximum payable
court fees is Rs.1,50,000/ which is paid by the Petitioner.”
44 The office has treated each claim/petition separately but charge
Court fees under Section 3A to the extent of Rs.67,25,910/ based
upon the calculation made referring to the statement of claims of
amount as on 30/04/2008, of 2000 cases. However, as observed
above, the PetitionerBank is not liable to pay Court fees as per Article
3A of the BCF Act and are liable to pay Court fees as per schedule II
Article 1 (f) (iii). There is no question of payment of Court fees as
claimed/assessed by the office. The Petitioner has already paid
maximum fees of Rs.1,50,000/. The excess amount of Court fee is
liable to be refunded.
45 The PetitionerBank has averred in paragraph No. 15 of the
::: Downloaded on - 26/06/2024 07:31:52 :::
32 arbp1383.10.sxw
ssm
Plaint as under:
“15. The Petitioners have filed one common petition in
respect of the 2000 disputes which were referred for
Arbitration. The first Respondent in each of the 2000
disputes has now been shown as Respondent Nos. 1 to
2000. The Respondent Nos. 2002 to 2006 are common in
all the disputes. They were Opponent Nos. 2 to 6 in the
original disputes. The Petitioners have paid Court fees on
the basis of 2000 Arbitration disputes i.e. 2000 x 20 = Rs.
40,000/ on the present petition.”
46 The Petitioner, therefore, throughout considered these 2000
separate Petitions and accordingly paid fixed Court fee as
contemplated under Schedule II Article I (f)(iii) i.e. 2000 x Rs. 20 =
Rs.40,000/. In view of above observations, this calculation/
averments so made is correct. The PetitionerBank is liable to pay this
much amount only. The excess Court fees even if collected/paid, need
to be refunded in accordance with law. The office order therefore,
accordingly modified to the above extent.
47 Resultantly, the issues are answered accordingly.
(a) The consolidated common Petition under Section 34
of the Arbitration Act, 1996 so filed against the
::: Downloaded on - 26/06/2024 07:31:52 :::
33 arbp1383.10.sxw
ssm
common award in the present case is maintainable.
(b) The PetitionerBank is liable to pay Court fees as per
Schedule Schedule II, Article 1 (f)(iii) and not as per
Article 3A of the BCF Act.
(c) The office order is accordingly modified, with further
directions to refund the Court fees, if paid, in excess
of the amount of Rs. 40000/ (2000x20) as per
Schedule II Article 1 (f) (iii).
(d) The parties to take necessary steps accordingly and
the matter be placed for admission.
(ANOOP V. MOHTA, J.)
::: Downloaded on - 26/06/2024 07:31:52 :::