Case Note & Summary
The appellant, Bhiwandi Nizampur City Municipal Corporation, entered into a contract with the respondent, M/s. Antony Waste Handling Cell Pvt. Ltd., for waste collection and transportation. The contract was terminated by the appellant on 1st October 2011, leading to disputes. The respondent challenged the termination in a writ petition, and the court referred the disputes to arbitration. The arbitrator passed an award on 16th September 2019. Both parties filed petitions under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the award. During the pendency of these petitions, the parties attempted to settle the matter. On 21st January 2020, the respondent made a compromise proposal, which was accepted by the Standing Committee of the appellant through Resolution No.190 on 18th February 2020. The respondent then filed an interim application under Order XXIII Rules 1 & 3 of the Code of Civil Procedure, 1908, seeking to record the compromise. The learned Single Judge allowed the application and disposed of the Section 34 petitions in terms of the settlement. The appellant filed the present appeal challenging the consent order. The court held that a consent order is binding and cannot be appealed against unless vitiated by fraud or coercion. The appeal was dismissed as devoid of merit.
Headnote
A) Arbitration - Challenge to Award - Settlement during Section 34 proceedings - The parties entered into a compromise during the pendency of petitions under Section 34 of the Arbitration and Conciliation Act, 1996. The learned Single Judge allowed an interim application under Order XXIII Rules 1 & 3 CPC and disposed of the petitions recording the settlement. The appellant sought to challenge this consent order. Held that a consent order is binding on the parties and cannot be appealed against unless vitiated by fraud or coercion. The appeal was dismissed. (Paras 1-5)
B) Civil Procedure - Compromise - Order XXIII Rules 1 & 3 CPC - Once a court records a compromise and passes a decree or order in terms thereof, the parties are estopped from challenging it. The appellant had voluntarily agreed to the settlement and the resolution of its Standing Committee. There was no allegation of fraud or misrepresentation. The appeal was devoid of merit. (Paras 2-5)
Issue of Consideration
Whether an appeal lies against a consent order passed by a Single Judge recording a compromise between the parties under Order XXIII Rules 1 & 3 of the Code of Civil Procedure, 1908, in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The appeal is dismissed. The consent order passed by the learned Single Judge recording the compromise is upheld. No order as to costs.
Law Points
- Consent order
- binding nature of compromise
- Order XXIII Rules 1 & 3 CPC
- Section 34 Arbitration and Conciliation Act
- 1996
- withdrawal of petition
- settlement recorded by court
- no appeal against consent order
Case Details
2021 LawText (BOM) (03) 59
Commercial Arbitration Appeal (L) No.3634 of 2020
S.J. Kathawalla, R.I. Chagla
Mr. Ram S. Apte, Senior Advocate with Mr. N.R. Bubna, for Appellant. Mr. N.H. Seervai, Senior Advocate with Mr. Prateek Seksaria with Ms. Gulnar Mistry, Mr. Saket Mone, Mr. Vishesh Kalra, Mr. Subit Chakrabarty, Mr. Abhishek Salian, Mr. Shantam Mandhyan i/by Vidhii Partners, for Respondent.
Bhiwandi Nizampur City Municipal Corporation
M/s. Antony Waste Handling Cell Pvt. Ltd.
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Nature of Litigation
Appeal against a consent order passed by a Single Judge recording a compromise between the parties in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996.
Remedy Sought
The appellant sought to challenge the impugned order dated 3rd July 2020 passed by the learned Single Judge allowing an interim application under Order XXIII Rules 1 & 3 CPC and disposing of the Section 34 petitions in terms of the settlement.
Filing Reason
The appellant contended that the consent order was not binding and that the appeal was maintainable.
Previous Decisions
The learned Single Judge had allowed the interim application and disposed of Commercial Arbitration Petition Nos.1600 of 2019 and (L) No.71 of 2020 recording the compromise.
Issues
Whether an appeal lies against a consent order recording a compromise under Order XXIII Rules 1 & 3 CPC in Section 34 proceedings.
Whether the appellant can resile from the settlement voluntarily entered into.
Submissions/Arguments
The appellant argued that the consent order was not binding and that the appeal should be heard on merits.
The respondent contended that the consent order was final and binding, and no appeal lies against it.
Ratio Decidendi
A consent order passed by a court recording a compromise between the parties is binding and cannot be appealed against unless vitiated by fraud or coercion. The parties are estopped from challenging the settlement once it has been recorded under Order XXIII Rules 1 & 3 CPC.
Judgment Excerpts
In the present Appeal, the Appellant has purported to challenge the impugned Judgment and Order dated 3rd July, 2020 (‘the impugned Order’) passed by the learned Single Judge of this Court.
The impugned order disposed of two Petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996 (‘the Act’) challenging an Award dated 16th September, 2020 (‘the impugned Award’).
The impugned Judgment and Order was passed on an Interim Application made by the Respondent in the said Petitions under Section 34 of the Act on premises analogous to Order XXIII Rules 1 & 3 of the Code of Civil Procedure, 1908 (‘CPC, 1908’) to record the compromise/settlement arrived at between the parties.
Procedural History
The parties entered into a contract on 15th October 2005. The contract was terminated on 1st October 2011. The respondent challenged the termination in Writ Petition No.8272 of 2011, and the court referred disputes to arbitration on 22nd July 2014. The arbitrator passed an award on 16th September 2019. Both parties filed petitions under Section 34 of the Arbitration and Conciliation Act, 1996. During the pendency of these petitions, the parties settled the matter, and the respondent filed an interim application under Order XXIII Rules 1 & 3 CPC. The learned Single Judge allowed the application and disposed of the petitions on 3rd July 2020. The appellant filed the present appeal against that order.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
- Code of Civil Procedure, 1908: Order XXIII Rules 1 & 3
