The Allahabad High Court allowed a writ petition filed under Article 227 of the Constitution of India assailing the order dated 12.08.2021 passed by Commercial Court, directing the petitioner to take back the application for execution of the award dated 22.9.2020 within seven days to be presented before the Court having jurisdiction.
The court observed that filing of execution case by the petitioner at the place where respondent No.2 resides is within the territorial jurisdiction as provided under the Act and the order passed by Commercial Court refusing to entertain execution application is totally erroneous.
Brief Facts:
The petitioner is a private limited company registered under the provisions of the Companies Act, 1956. It is engaged in the business of readymade garments having its principal place of business at Jhansi. The petitioner is a supplier and respondent No.2 is a buyer. When the dispute arose between the parties, a reference/claim petition was filed by the petitioner before Facilitation Council. An award was made by the Facilitation Council on 29.09.2020, allowing the claim of the petitioner; the award became final.
An execution application was moved by the petitioner under Section 36 of the Act of 1996 before Commercial Court. An objection was raised by the Munsarim of Commercial Court, Jhansi as to the maintainability of execution proceedings and an objection was invited on 30.07.2021 to which a reply/objection was filed by the petitioner.
The Commercial Court, after hearing the parties on 12.8.2021 found that the Court at Jhansi did not have territorial jurisdiction to decide the matter and returned the case under Order VII Rule 10 CPC to be presented before the appropriate Court within seven days. Thereafter, the Commercial Court on 21.8.2021 found that the time for withdrawing the execution application to be filed before the appropriate Court was till 19.08.2021 which the petitioner had failed to do so, and hence dismissed the execution case under the provision of Order VII Rule 11 (d) and (f) CPC. Hence, this writ petition.
Contentions of the Petitioner:
The learned counsel for the petitioner contended that Section 36 mandates that execution proceedings under Section 36 of the Act of 1996 can be made at any place where a decree can be executed. According to him, the Court was not correct to pass the orders impugned dated 12.8.2021 and 21.8.2021. He argued that as the defendant resides at Jhansi, the execution proceedings were launched at Jhansi.
Contentions of the Respondent:
The learned counsel for the Respondent submitted that though the initial order passed by Commercial Court, Jhansi on 12.8.2021 was against the mandate of the Apex Court rendered in Sundaram Finance Limited vs. Abdul Samad & Anr. (2018) 3 SCC 622 but thereafter the Commercial Court proceeded to dismiss the application as the order dated 12.8.2021 did not comply in view of Order VII Rule 11 (d) and (f) C.P.C., which amounts to the decree, as defined in Section 2(2) C.P.C. and thus is an appealable order under Section 96 C.P.C. According to him, the order dated 21.8.2021 is an appealable order and no writ petition lies under Article 227 of the Constitution against the said order.
Observations of the Court:
The Court observed that the order passed by the Commercial Court on 12.8.2021 returning back the execution application to be filed before the Court at Kanpur where the Facilitation Council is situated and the award made was totally against the dictum of the Apex Court in Sundaram Finance Limited.
Further, the Court said that once it is found that the execution application itself was maintainable before the Court at Jhansi, the order passed by Commercial Court on 12.8.2021 returning back the case invoking the provision of Order VII, Rule 10 C.P.C. is patently wrong and is set aside. Filing of the execution case by the petitioner at the place where respondent No.2 resides is within the territorial jurisdiction as provided under the Act and the order passed by Commercial Court refusing to entertain the execution application is totally erroneous.
The decision of the Court:
The Allahabad High Court, allowing the petition, held that both the orders dated 12.08.2021 and 21.08.2021 are totally illegal and without jurisdiction and against the mandate of the Apex Court and are thus hereby set aside.
Case Title: M/S Imagine Fashion Apparels Pvt. Ltd. v Presiding Officer Commercial Court & Anr.
Coram: Hon’ble Justice Rohit Ranjan Agarwal
Case no.: MATTERS UNDER ARTICLE 227 No. - 6736 of 2021
Advocate for the Petitioner: Mr. Puneet Arun
Advocate for the Respondent: Mr. Tarun Agrawal, and Mr. Rishabh Agarwal
Read Judgment @LatestLaws.com:
Picture Source :
