It is a settled law vide para (16) of the judgment of the Full Bench of this Court in M/s. Fountain Head Developers & etc. etc. v. Mrs. Maria Arcangela Sequeira deceased by L.Rs. & Ors., etc. (AIR 2007 Bombay 149) that the District Judge in a District alone is the principal Civil Court of original jurisdiction and does not include any Court subordinate to him. The word "Court" must, therefore, be given the same meaning wherever it appears in Part I of the Arbitration and Conciliation Act, 1996. Thus, the word "Court" occurring in Section 36 must be held to be a Court of District Judge also for the purpose of enforcement of the award.
Bombay High Court
The Akola Janata Commercial vs And District Akola on 23 December, 2010
Heard. Admit. Heard finally with consent of learned Counsel for the parties.
2) This letters patent appeal is filed against the judgment dated 22.3.2010 passed by the learned Single Judge of this Court dismissing the writ petition of the appellant. The appellant had challenged the order dated 21/7/2009 in Special Darkhast No.36/2010 by which the Court of Civil Judge, Senior Division, Akola recalled the warrant issued under Order XXI Rule 66 of the Code of Civil Procedure in execution proceedings filed by the appellant Bank.
3) A dispute in relation to recovery of loan from the respondents herein was referred to an Arbitrator under Section 3
84 of the Multi State Cooperative Societies Act, 2002. The Arbitrator passed an Award in favour of the appellant Bank. The appellant Bank then levied execution in the Court of Civil Judge, Senior Division, Akola. The respondents filed an application praying for dismissal of the execution on the ground of jurisdiction. The executing Court upheld the objection of the respondents in view of the judgment of this Court in Rajashree Shrinivas Joshi vs. Omega Information Systems (2009 (3) Mh.L.J. 303). Thus, the only reason given by the Executing Court for recalling the warrant is the judgment of this Court in Rajashree's case (supra) where the learned Single Judge of this Court has held that a Civil Judge, Senior Division cannot entertain the execution proceedings since the only Court entitled to execute an award is the District Court, which is the principal Court under Section 2(1)(e) of the Arbitration and Conciliation Act, 1996. 4) By the judgment in appeal, the learned Single Judge has upheld the order of the Civil Judge, Senior Division that the Civil Judge, Senior Division has no jurisdiction to entertain and proceed with execution of an award by virtue of the provisions of Arbitration and Conciliation Act, 1996 since the only Court empowered to entertain execution proceedings is the District Court. Before the learned Single Judge, the main contention on 4
behalf of the appellant was that the Arbitrator is invested with all the powers of the Civil Court including the power of execution in view of Section 97 of the Multi State Cooperative Societies Act, 2002, which reads as follows :
"Section 97 - Central Registrar or arbitrator or person authorised to be Civil Court for certain purposes - The Central Registrar or the arbitrator or any person authorised by him in writing in this behalf shall be deemed, when exercising any powers under this Act for the recovery of any amount by the attachment and sale or by sale without attachment of any property, or when passing any orders on any application made to him for such recovery or for taking a step-in-aid of such recovery, to be a Civil Court for the purposes of Article 136 of the Schedule to the Limitation Act, 1963 (36 of 1963)." The learned Single Judge has rightly rejected this contention since the limited purpose for which Arbitrator or other persons referred to therein are deemed to be Civil Court is Article 136 of the Schedule to the Limitation Act, which provides limitation of twelve years for execution of a decree. It would not be permissible to extend the deeming fiction for any purpose other than the purpose intended by the Parliament and we see no reason to disturb this finding of the learned Single Judge. 5) It was next contended by Shri Khapre, learned 5
Counsel for the appellant, that the Court of Civil Judge, Senior Division, Akola is also a Court within the meaning of Section 36 of the Arbitration and Conciliation Act, 1996, at any rate for the purpose of execution. According to the learned Counsel, though "Court" has been defined by Section 2(1)(e) of the Arbitration and Conciliation Act, 1996 to mean principal Civil Court of original jurisdiction in the District, that definition is for the purpose of the adjudication of various matters meant to be adjudicated upon by the Court as specified in the Act and not necessarily for execution; the proceedings being different in nature. According to the learned Counsel, in Section 36, the word "Court" will include any Court before which execution can be levied under the Code of Civil Procedure including the District Court since it is the intention of the Parliament that awards should be executed in the same manner as decrees under the Code of Civil Procedure. Section 36 of the Arbitration and Conciliation Act, 1996 reads as follows : "Section 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." 6
The provision prescribes the conditions under which an award becomes executable and the manner in which it may be executed. In clear terms, the Section states that an award shall be enforced in the same manner as if it were a decree of a Court. It is true that Section prescribes that the manner of enforcement of the award as a decree of the Court shall be under the Code of Civil Procedure. That is, however, no reason for inferring that decree representing the award shall be enforced under the Code of Civil Procedure like all other decrees. What the Section specifically provides is that the award shall be enforced "as if it were a decree of the Court". The "Court" has been defined for the purpose of Part I of the Arbitration and Conciliation Act, 1996 in which Section 36 occurs as follows :
"Section 2 : Definitions - (1) In this Part, unless the context otherwise requires -
(a) .......
(b) .......
(c) .......
(d) .......
(e) "Court" means the principal civil Court of original jurisdiction in a district, and includes the High Court in 7
exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, but does not include any civil Court of a grade inferior to such principal civil Court or any Court of Small Causes."
It is a settled law vide para (16) of the judgment of the Full Bench of this Court in M/s. Fountain Head Developers & etc. etc. v. Mrs. Maria Arcangela Sequeira deceased by L.Rs. & Ors., etc. (AIR 2007 Bombay 149) that the District Judge in a District alone is the principal Civil Court of original jurisdiction and does not include any Court subordinate to him. The word "Court" must, therefore, be given the same meaning wherever it appears in Part I of the Arbitration and Conciliation Act, 1996. Thus, the word "Court" occurring in Section 36 must be held to be a Court of District Judge also for the purpose of enforcement of the award.
6) The manner of enforcement of an award as a decree of the Court is governed by the Code of Civil Procedure. Sections 37, 38 and 39 of the Code of Civil Procedure read as follows :
8
"Section 37 - Definition of Court which passed a decree - The expression "Court which passed a decree", or words to that effect, shall, in relation to the execution of decrees, unless there is anything repugnant in the subject or context be deemed to include -
(a) where the decree to be executed has been passed in the exercise of appellate jurisdiction, the Court of first instance, and
(b) where the Court of first instance has ceased to exist or to have jurisdiction to execute it, the Court which, if the suit wherein the decree was passed was instituted at the time of making the application for the execution of the decree, would have jurisdiction to try such suit. Explanation - The Court of first instance does not cease to have jurisdiction to execute a decree merely on the ground that after the institution of the suit wherein the decree was passed or after the passing of the decree, any area has been transferred from the jurisdiction of that Court to the jurisdiction of any other Court; but, in every such case, such other Court shall also have jurisdiction to execute the decree, if at the time of making the application for execution of the decree it would have jurisdiction to try the said suit."
9
"Section 38 - Court by which decree may be executed - A decree may be executed either by the Court, which passed it, or by the Court to which it is sent for execution."
"Section 39 - Transfer of decree - (1) The Court which passed a decree may, on the application of the decree holder, send it for execution to another Court of competent jurisdiction -
(a) if the person against whom the decree is passed actually and voluntarily resides or carries on business, or personally works for gain, within the local limits of the jurisdiction of such other Court, or
(b) if such person has no property within the local limits of the jurisdiction of the Court which passed the decree sufficient to satisfy such decree and has property within the local limits of the jurisdiction of such other Court, or (c) if the decree directs the sale or delivery of immovable property situate outside the local limits of the jurisdiction of the Court which passed it, or
(d) if the Court which passed the decree considers for any other reason, which it shall record in writing, that the 10
decree should be executed by such other Court. (2) The Court which passed a decree may of its own motion send it for execution to any subordinate Court of competent jurisdiction.
(3) For the purposes of this Section, a Court shall be deemed to be a Court of competent jurisdiction if, at the time of making the application for the transfer of decree to it, such Court would have jurisdiction to try the suit in which such decree was passed.
(4) Nothing in this Section shall be deemed to authorise the Court which passed a decree to execute such decree against any person or property outside the local limits of its jurisdiction."
From a conjoint reading of these provisions, it is clear that an award must be treated as a decree passed by the District Judge and, therefore, it may be executed either by the District Judge himself or by any Court to which it may be sent by such District Judge for execution vide Section 38 of the Code of Civil Procedure. The transfer of decree by the District Judge would be 11
governed by Section 39 of the Code of Civil Procedure. Thus, a decree holder must apply for execution of an award to the Court of District Judge, who may either execute the award as a decree himself or send it for execution to another Court including a subordinate Court of competent jurisdiction. Thus, we are in agreement with the views of the learned Single Judge in Rajashree's case (supra) and we see no reason to allow this appeal.
7) We are informed by Shri Khapre, learned Counsel for the appellant, that hundred of such applications for execution have been made in the Court of Civil Judge, Senior Division, Akola by the appellant Bank and those applications would have to be returned or would have to be withdrawn and re-presented to the District Judge, Akola. We do not think it necessary that such an exercise must be undertaken. In the circumstances, we consider it appropriate to direct that all applications for execution of awards made to the Civil Judge, Senior Division, Akola shall be placed before the District Judge, Akola, who may either execute the awards as decrees himself or send them for execution, by way of transfer, to subordinate Courts under Section 38 read with Section 39(2) of the Code of Civil Procedure. The District Judge, Akola shall have regard to the 12
territorial and pecuniary jurisdiction of the subordinate Courts to which the applications for execution of awards are proposed to be sent. Hereafter, the same procedure shall be followed in respect of fresh application. Appeals shall lie from the orders of the subordinate Courts in execution, if any, to the appellate Court - whether the District Court or this Court, in accordance with law.
8) With the above directions, the letters patent appeal is dismissed. No order as to costs.
JUDGE JUDGE khj
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