Bombay High Court
51 Years vs Raju Natthuji Badhe on 23 December, 2010
Bench: S.A. Bobde, P. D. Kode
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
LETTERS PATENT APPEAL NO.229 OF 2010
The Akola Janata Commercial
Cooperative Bank Ltd., A Multi
State Cooperative Scheduled
Bank, Main Branch, through its
Branch Manager, Pradeep
Ramchandra Goenka, aged about
51 years, occupation : service,
old Cotton Market, Akola,
Taluq and District Akola. ... Appellant
- Versus -
1) Raju Natthuji Badhe,
aged adult, occupation :
business, Prop. Of Shree
Ganesh Traders Shop No.8,
A.P.M.C. Market Akola, Taluq
and District Akola.
2) Rambhau D. Khedkar, aged
adult, occupation : business,
Prop. Of Kulswamini Trading
Company, Shop No.49,
A.P.M.C. Market, Akola,
Taluq and District Akola.
3) Santosh Punjaji Pohare,
aged adult, occupation :
business, Prop. Of M/s. Santosh
Punjaji Pohare, Shop No.5,
A.P.M.C. Market, Akola.
4) Nandkishor Natthuji Badhe,
aged adult, occupation :
business, r/o "Rukhmini"
Sadan, Opp. Netra Hospital,
Ramdaspeth, Akola, Taluq
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and District Akola. ... Respondents
-----------------
Shri R.L. Khapre, Advocate for appellant.
Shri H.R. Gadhia, Advocate h/f Shri A.M. Ghare, Advocate for
respondents.
----------------
CORAM : S.A. BOBDE AND P.D. KODE, JJ.
DATED : DECEMBER 22 & 23, 2010
ORAL JUDGMENT (PER S.A. BOBDE J.) :
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
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
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
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."
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
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 :
"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."
"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
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
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
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
