JUDGMENT
Permod Kohli, J.
1. Legality, propriety and validity of the order dated 6.3.2006 passed by Additional District Judge, Faridabad declining to execute an award dated 15.1.2004 passed by the Arbitrator has been questioned, in the present Revision Petition by invoking superintending jurisdiction of this Hon’ble Court under Article 227 of the Constitution of India.
2. Admitted facts leading to the filing of the present revision petition are that Naresh Kumar, petitioner herein, entered into an agreement to sell dated 2.1.1996 with respondent No. 1 – Nanak Chand for the purchase of shop/plot No. 41 measuring 20 x 125 situated in New Anaj Mandi Ballabgarh, District Faridabad for a consideration of Rs. 45,000/-. Entire sale consideration was paid through cheque and the possession of the property was also delivered to Naresh Kumar-Vendee by Nanak Chand – Vendor. Admittedly, no sale deed was executed for a considerable period of time. Naresh Kumar alleged that Nanak Chand is demanding additional amount for execution of the sale deed. The agreement to sell dated 2.1.1996 contained an arbitration clause which provides for reference of the dispute to the Arbitrator in the event of dispute between the parties. Parties entered into another agreement dated 20.12.2003 and Raj Kumar, respondent No. 2 herein was appointed as the Arbitrator and the parties referred their dispute to him in furtherance to the Arbitration Clause in the original agreement to sell dated 2.1.1996. The Arbitrator, so appointed, entered upon the reference. Nanak Chand – respondent No. 1 appeared before the Arbitrator and admitted entire claim of petitioner – Naresh Kumar which resulted in passing of the arbitral award dated 15.1.2004 by Raj Kumar, Arbitrator. The Arbitrator directed the vendor-Nanak Chand to execute and obtain registration of the sale deed with respect to the shop/plot in dispute.
3. It is admitted case of the parties that none of the parties challenged the award by initiating proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 (herein after referred to as “the Act”). Decree-holder – Naresh Kumar filed a petition for enforcement of the award dated 15.1.2004. Nanak Chand-respondent No. 1 appeared before the Additional District Judge, Faridabad, the Executing Court and admitted the claim of the petitioner-decree holder, as is evident from the impugned order itself. He also admitted the existence and validity of the two agreements and the award dated 15.1.2004. Additional District Judge, Faridabad i.e. Executing Court, however, declared the award dated 15.1.2004 not enforceable, having been passed on the basis of time barred claim and consequently, dismissed the petition for enforcement of the award by his order dated 6.3.2006, impugned herein.
4. Before dealing with the question of legality and validity of the impugned order, I deem it appropriate to notice the Scheme of the Act which is relevant for the purposes of decision of the present petition. As is evident from the Preamble of the Act. The Act was enacted to consolidate the law relating to domestic arbitration, international arbitration, commercial arbitration etc. Arbitration agreement is defined under Section 7 of the Act whereas Section 11 deals with the appointment of Arbitrator. Jurisdiction and competence of the Arbitral Tribunal can be challenged by adopting procedure provided under Section 13 and on existence of one or more grounds specified under Section 12. Section 16 deals with the competence of Arbitral Tribunal to rule on its jurisdiction. Chapter V of the Act deals with the conduct of arbitral proceedings, whereas Chapter VI deals with the making of arbitral award and termination of proceedings. Chapter VII provides for the procedure and the basis for setting aside arbitral award, whereas Chapter VIII deals with the finality and enforcement of arbitral award. Section 4 of the Act deals with the waiver of right to object. For the purposes of convenience, relevant provisions/extract of Sections 4, 11, 16, 34, 35 and 36 are reproduced herein below:
4. Waiver of right to object – A party who knows that-
(a) any provision of this Part from which the parties may derogate, or
(b) any requirement under the arbitration agreement,
has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object.
XXX XXX XXX XXX
11. Appointment of arbitrators.- (1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
(2)Subject to Sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.
16. Comptence of arbitral Tribunal to rule on its jurisdiction.- (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,-
(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms’of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
34. Application for setting aside arbitral award.- (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with Sub-section (2) and Sub-section (3).
…
(3) An application for setting aside may not be made after three, months have elapsed from the date on which the party making mat application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
35. Finality of arbitral awards.- Subject to this part an arbitral award shall be final and binding on the parties and persons claiming under them respectively.
36. Enforcement.- Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court.
5. It is pertinent to mention here that at the time of hearing, learned Counsel appearing for respondent No. 1 has not been able to defend the impugned order in any manner. None of the parties questioned the existence and validity of the Arbitration Agreement dated 2.1.1996 and subsequent agreement dated 20.12.2003 whereby the Arbitral Tribunal was appointed and dispute referred. Sub-section (2) of Section 11 of the Act empower the parties to an arbitration agreement to agree on a procedure for appointing the Arbitrator (Arbitral Tribunal). In the present case, parties had agreed for appointment of Raj Kumar, as Arbitral Tribunal and also referred dispute to him vide agreement dated 20.12.2003. Therefore, the appointment of the Arbitral Tribunal was/is in consonance with the provisions of law. None of the parties raised any objection in regard to the validity of agreements, reference, appointment of Arbitral Tribunal as also the competence of the arbitral Tribunal to adjudicate upon the issue referred to it either on account of limitation or on any other count. The Arbitral Tribunal accordingly passed award dated 15.1.2004 in terms of Section 31 of the Act. After the award is made and published in terms of Section 31, its validity can only be questioned in accordance with the procedure prescribed under Section 34 of the Act. Sub-section (1) of Section 34 categorically provides that making of an application is sine quo non for setting aside the aside the arbitral award and this is the “only” recourse available to a person against the arbitral award. The word “only” in Sub-section (1) of Section 34 signifies that no other procedure is available against the arbitral award. It is not in dispute that the arbitral award dated 15.1.2004 passed by respondent No. 2 – Raj Kumar, Arbitrator (Arbitral Tribunal) remained unchallenged. No application in terms of Section 34 on any of the grounds provided under Sub-section (2) was ever filed in the competent court, assailing the award. Section 35 of the Act clothes the award, after the same is made by the Arbitral Tribunal, with finality and makes it binding on the parties and person claiming under them. Section 36 of the Act makes an award enforceable as a decree under the Code of Civil Procedure where the time for making an application to set aside an award under Section 34 of the Act has expired or on such an application having been made it has been refused. Undisputedly, no application under Section 34 of the Act to challenge the award on any of the specified/available grounds was ever made within the prescribed period of three months as provided under Sub-section (3) of Section 34 of the Act. Therefore, the award not only attained finality, but also became enforceable as a decree of the court. Court of Additional District Judge, Faridabad, while exercising jurisdiction under Section 36 of the Act was acting as an Executing Court. It had absolutely no jurisdiction and competence to consider the validity of the arbitral award on any ground whatsoever much less the ground on which it has refused to enforce the award. It is settled law that Executing Court cannot go beyond the decree, particularly, when the legality and validity of the decree is not challenged by any of the parties to the decree or even an objector. What prompted Executing Court to suo moto go into the question of validity of reference and rule on the same is itself a mistery. Such an approach itself not only renders the order illegal, improper and void in law, but also smacks arbitrariness, and total lack of legal concept on the part of the Executing Court.
6. Even otherwise, under the Arbitration and Conciliation Act, 1996, no period of limitation is prescribed for reference of dispute to the Arbitrator, unlike Arbitration Act, 1940 (10 of 1940), wherein Section 37 provides for period of limitation in respect of the claims to be adjudicated upon by the Arbitrator. In absence of there being any such provision, I am afraid, the question of limitation would have been gone into. Apart from above, the limitation in a suit for specific performance commences from the date the parties agreed to perform. It is not revealed from the impugned order as to whether any date for performance was incorporated in the agreement to sell dated 2.1.1996 and if no such date was enacted whether any of the parties had called upon the other party to perform. In the absence of these details, the commencement of the period of limitation cannot be ascertained. Hence on merits also, the impugned order is not sustainable. There is another added reason which is against the sustainability of the impugned order. Section 4 of the Act clearly provides for waiver of right to object. In terms of this Section, if a party who knows that any requirement under the Arbitration agreement has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object. As noticed by the Executing Court, Nanak Chand never objected to the arbitration proceedings on any ground whatsoever and allowed the Arbitral Tribunal to pass the arbitral award and even thereafter neither of the parties challenged the same nor objected the enforceability or the execution of the award. Suo motto exercise by the Executing Court is totally unwarranted, uncalled for and illegal, rendering the impugned order invalid.
7. In view of the above, impugned order dated 6.3.2006 passed by Shri Krishan Kumar Bali, Additional District Judge, Faridabad is hereby set aside and the Executing Court is directed to enforce the award dated 15.1.2004, forthwith.
8. No order as to costs.