Calcutta High Court Rules ₹120 Court Fee Applicable For Section 34 Applications Challenging Arbitral Awards, Higher Fees Under Entry No. 1(10) Not Applicable

Calcutta High Court Rules ₹120 Court Fee Applicable For Section 34 Applications Challenging Arbitral Awards, Higher Fees Under Entry No. 1(10) Not Applicable

Justice Sabyasachi Bhattacharyya of the Calcutta High Court has determined that the principal application under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award, is governed by Entry No. 2(c) of Schedule II of the Court Fees Act. This entry, a residuary provision, prescribes a court fee of Rs. 120 for original applications before the High Court when no other specific provision applies.

The bench clarified that Entry No. 1(10) of the Court Fees Act, which imposes higher fees for applications related to the direction for filing an award, an order for filing an agreement, or for enforcing foreign awards, does not apply to principal applications under Section 34.

The dispute involved an objection by SREI Equipment Finance Limited (Respondent) against an application filed by Sajarul Rahaman (Petitioner) under Section 34 of the Arbitration and Conciliation Act, 1996. The Respondent argued that the application was time-barred due to insufficient court fees paid at the time of filing. They claimed that the applicable fee, according to Serial No. 1(10) of Schedule II of the West Bengal Court Fees Act, 1970, was Rs. 5,000.

The Respondent highlighted that Section 34(3) of the Arbitration Act sets a three-month limitation period from the date of receiving the arbitral award, with an additional thirty days allowed if the applicant shows sufficient cause for the delay. Since the Petitioner received the award on December 31, 2022, the initial period expired on March 31, 2023, and the additional thirty days expired on April 30, 2023. The Petitioner filed the application on April 27, 2023, with a court fee of Rs. 130 instead of the required Rs. 5,000, arguing that the application should be dismissed as time-barred.

The Respondent referred to Section 4 of the Court Fees Act, which mandates payment of the prescribed fee for any document chargeable under the Act before it can be filed or recorded. They contended that Section 4(2), which allows for curing defects in court fees for plaints or memoranda of appeal, does not apply to Section 34 applications, which do not involve such documents.

The High Court analyzed the Court Fees Act provisions to ascertain the applicable court fees for an application under Section 34 of the Arbitration Act. It reviewed four relevant entries in Schedule II of the Court Fees Act.

Firstly, Entry No. 2(c) provides a court fee of Rs. 120 for original petitions before the High Court when no specific provision applies. This entry acts as a residuary clause.

The Court then considered Entry No. 14, which relates to memoranda of appeal under Sections 37 and 50 of the Arbitration Act, but noted that an application under Section 34 does not fall under these sections.

Entry No. 17(iv) pertains to plaints or memoranda of appeal to set aside awards other than arbitral awards. The Court found this entry excludes challenges to arbitral awards.

The most debated provision was Entry No. 1(10), which covers applications under Section 12 or Section 34 of the Arbitration Act, including those for directions or orders for filing awards and enforcing foreign awards. The Court noted that while application under Section 12 or Section 34 and application for enforcing foreign awards were explicitly stated, the phrases for a direction for filing an award and for an order for filing an agreement were not directly related to principal applications under Section 34. The Court interpreted the lack of the word application before these phrases to mean they were qualifiers for applications under Sections 12 and 34, not separate categories.

The Respondent's argument that commas in Entry No. 1(10) denoted distinct ideas was dismissed by the Court, which held that these commas indicated sub-parts of a general idea rather than independent categories. Thus, Entry No. 1(10) did not apply to principal applications under Section 34.

Consequently, the Court determined that Entry No. 2(c) of Schedule II, the residuary provision, was the correct reference for court fees for such applications, setting the fee at Rs. 120.

The Court also reviewed judgments from the Madras High Court concerning the Tamil Nadu Court Fees Act, which permits curing defects in court fees. However, it clarified that the issue of deficit fees was governed by the West Bengal Court Fees Act, not the Arbitration Act. Sections 42 and 46 of the West Bengal Act allow for curing defects and extending time for fee payments.

The Court noted that the Petitioner had paid the court fees as assessed by the Stamp Reporter. Even if there was a deficit, Sections 42 and 46 would permit curing the defect and condoning any delay. The Court concluded that the bar under Section 4 of the Court Fees Act was not absolute and allowed the application to be accepted with the deficit paid later.

The High Court thus held that the application under Section 34 was maintainable, the court fees paid were sufficient, and the delay in filing was excused, as the Petitioner provided adequate justification for the delay within the permitted period.