Mahindra & Mahindra Financial Services Ltd. v. Kana Singh
2018-03-15
DHARAM CHAND CHAUDHARY
body2018
DigiLaw.ai
JUDGMENT : DHARAM CHAND CHAUDHARY, J. 1. Heard. 2. Order dated 21.2.2015 passed by learned District Judge, Shimla in execution proceedings registered as Arbitration Case No. 40-S/X of 2014 is under challenge in this petition. The petitioner herein is the decree holder as learned Arbitrator has made the award in its favour and against the respondents judgment debtors. Respondent No.1-judgment debtor though is duly served, however, no one has put in appearance on his behalf on the previous date and even before that also. Today also, there is no appearance on his behalf. Respondent No.2, however, has already been ordered to be deleted. 3. The petitioner-decree holder has initiated proceedings in the Court below for execution of the award passed in its favour in terms of Section 36 of the Arbitration and Conciliation Act. In the matter of the execution of the award the same has to be executed in the same manner as the decree passed by the Court. Learned District Judge has placed reliance on the judgment of the Hon’ble Apex Court in Swastik Gases Private Limited versus Indian Oil Corporation Limited (2013) 9 Supreme Court cases 32 and arrived at a conclusion that for want of jurisdiction, the award cannot be executed. The execution petition, as such, has been ordered to be returned to the petitioner-decree holder for presentation before the competent Court having the territorial jurisdiction to entertain and try the same. The view of the matter so taken by learned District Judge is not legally sustainable as at this stage it is well settled that the arbitral proceedings stands terminated on the announcement of the award. Although in the matter of execution of the award the same procedure as in the case of the execution of a decree passed by the Court had to be followed yet the award cannot be treated to be a decree within the meaning of Section 38 of the Code of Civil Procedure. 4. Being so, the execution of the award can be sought by initiating the execution proceedings at any place in the country where the same can be executed. Neither the execution proceedings need to be transferred nor any percept obtained as is required in the matter of execution of the decree passed by a civil Court.
4. Being so, the execution of the award can be sought by initiating the execution proceedings at any place in the country where the same can be executed. Neither the execution proceedings need to be transferred nor any percept obtained as is required in the matter of execution of the decree passed by a civil Court. Support in this regard can be drawn from a recent judgment of the Apex Court in Civil Appeal No 1650 of 2018, titled Sundaram Finance Limited versus Abdul Samad & anr., decided on 15th February, 2018. The relevant portion of this judgment reads as follows: “19. The aforesaid provision provides for arbitral proceedings to be terminated by the final arbitral award. Thus, when an award is already made, of which execution is sought, the arbitral proceedings already stand terminated on the making of the final award. Thus, it is not appreciated how Section 42 of the said Act, which deals with the jurisdiction issue in respect of arbitral proceedings, would have any relevance. It does appear that the provisions of the said Code and the said Act have been mixed up. 20. It is in the aforesaid context that the view adopted by the Delhi High Court in Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd. records that Section 42 of the Act would not supra apply to an execution application, which is not an arbitral proceeding and that Section 38 of the Code would apply to a decree passed by the Court, while in the case of an award no court has passed the decree. 21. The Madras High Court in Kotak Mahindra Bank Ltd. v. Sivakama Sundari & Ors. referred to Section 46 of the said Code, which spoke of precepts but stopped at that. In the context of the Code, thus, the view adopted is that the decree of a civil court is liable to be executed primarily by the Court, which passes the decree where an execution application has to be filed at the first instance. An award under Section 36 of the said Act, is equated to a decree of the Court for the purposes of execution and only for that purpose.
An award under Section 36 of the said Act, is equated to a decree of the Court for the purposes of execution and only for that purpose. Thus, it was rightly observed that while an award passed by the arbitral tribunal is deemed to be a decree under Section 36 of the said Act, there was no deeming fiction anywhere to hold that the Court within whose jurisdiction the arbitral award was passed should be taken to be the Court, which passed the decree. The said Act actually transcends all territorial barriers. Conclusion: 13 supra. 22. We are, thus, unhesitatingly of the view that the enforcement of an award through its execution can be filed anywhere in the country where such decree can be executed and there is no requirement for obtaining a transfer of the decree from the Court, which would have jurisdiction over the arbitral proceedings.” 5. Such being the position of law, the impugned order being not legally sustainable is quashed and set aside. The present petition is allowed. The Court below is directed to proceed further in the pending execution proceedings in accordance with law. 6. The petition is accordingly disposed of. Pending application(s), if any, shall also stand disposed of.