KANPUR JAL SANSTHAN & ANOTHER versus M/S. BAPU CONSTRUCTION

Citation: [2014] 1 S.C.R. 64 · Decided: 03-01-2014 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Disposed off

Judgment (excerpt)

A 
B 
[2014] 1 S.C.R. 64 
KANPUR JAL SANSTHAN & ANOTHER 
v. 
M/S. BAPU CONSTRUCTION 
(Civil Appeal No. 26 of 2014) 
JANUARY 03, 2014. 
[ANIL R. DAVE AND DIPAK MISRA, JJ.] 
ARBITRATION AND CONG/LIA T/ON ACT, 1996: 
c 
s. 37 - Appeal against order rejecting objection uls 34 -
Applicability of Code of Civil Procedure - Held: Award has 
the potentiality of enforcement -
Therefore, when an appeal 
is filed against rejection of objection preferred uls 34, 
enforceability of award gains absolute ground -
When it is 
0 
challenged in an appeal u/s 37, the underlying principle of 
Code of Civil Procedure is applicable -
Code of Civil 
Procedure, 190B - 0. 41, r. 5. 
CODE OF CIVIL PROCEDURE, 190B: 
E 
0. 27, r. BB and r BA rlw 0. 41, r. 5 -
'Government' -
Connotation of -
Appeal by Jal Sansthan against order 
rejecting objection u/s 34 of Arbitration and Conciliation Act 
- High Court, on an application for stay, directing appellant 
to deposit entire award amount - Plea that such a condition 
F could not have been imposed on government organization 
like appellant - Held: Legislature has defined the term 
"Government" so as not to allow any room for interpretation 
and speculation -
If means either a Central Government or 
a State Government and in certain cases public officer in the 
G service of a State -
Legislature has deliberately used a 
restrictive definition and its scope cannot be expanded to 
cover an agency or instrumentality of State by interpretative 
process -It cannot be accepted that appellant Jal Sansthan 
would come within the extended wing of the Government -
H 
64 
KANPUR JAL SANSTHAN v. BAPU CONSTRUCTION 
65 
However, order of High Court modified and appellant directed 
A 
to furnish security for entire award amount -
Interpretation of 
statutes - Restrictive construction - Constitution of India, 1950 
-Art. 12. 
The appellant-Jal Sansthan filed an appeal before the 
8 
High Court challenging the order of the District Judge 
whereby he rejected its objection u/s 34 of the Arbitration 
and Conciliation Act, 1996. The appellant filed an appeal 
before the High Court. In the application for stay, the High 
Court directed the Jal Sansthan to deposit the entire C 
amount awarded by the arbitrator permitting the claimant-
respondent to withdraw half of the said amount without 
furnishing security and remaining half on furnishing 
security. 
In the instant' appeal filed by the Jal Sansthan, it was 
D 
contended for the appellant that the High Court fell into 
error by directing deposit of entire award amount and 
release of the same in favour of the claimant-respondent 
applying the principle of 0. 41, r. 5 of the Code of Civil 
Procedure, 1908, though the said principle was not E 
applicable to the appellant which was an extended wing 
of the State. It was submitted that the principle of 0. 41, 
r. 5, CPC were to be read in harmony with 0. 27, r. SA, 
CPC and on such harmonious reading it would be clear 
that such a condition could not have been imposed on a 
F 
governmental organization. 
Disposing the appeal, the Court 
HELD: 1.1. Sections 35 and 36 of the Arbitration and 
Conciliation Act, 1996, make it clear that the award G 
becomes enforceable when the time for making the 
application to set aside the arbitral award has expired or 
having been filed it has been refused and further that it 
is enforceable in the same manner as if it were a decree 
of the court. Thus, the award has the potentiality of H 
66 
SUPREME COURT REPORTS 
[2014] 1 S.C.R. 
A enforcement. Therefore, when an appeal is filed against 
the rejection of the objection preferred u/s 34 of the Act, 
the enforceability of the award gains absolute ground. If 
an application for stay has to be filed, it has to be filed 
relating to stay of the operation of the award passed by 
e the arbitrator. The court rejecting the objection only 
refuses to entertain the objection and thereafter, the 
award becomes enforceable as if it were a decree. 
Whatever may be the status of the award under the Act, 
in respect of any other statute, but when it is challenged 
c in an appeal u/s 37 of the Act, the underlying principle of 
the Code of Civil Procedure is applicable. [Para 9 and 14] 
[72-D-G; 75-E] 
D 
Paramjeet Singh Patheja v. /CDS Ltd. 2006 (8) Suppl. 
SCR 178 = (2006) 13 SCC 322 - referred to. 
1.2. 0.41, r. 5, CPC is applicable to an appeal 
preferred before the High Court, for there is no provision 
in the Act prohibiting the appellate court not to 

Excerpt shown. Read the full judgment & AI analysis in Lexace.