Bombay High Court
L And T Finance Ltd vs Mr. Kajal Kumar Das And Anr on 3 December, 2014
Bench: R.S. Dalvi
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO.195 OF 2013
IN
EXECUTION APPLICATION NO.1898 OF 2011
IN
ARBITRATION NO.561 OF 2008
L & T Finance Ltd. ... Plaintiffs
Vs.
Mr.Kajal Kumar Das & Anr ... Defendants
Ms. S I Joshi, Adv. i/b. S I Joshi & Co. for plaintiffs.
A S Pal, Adv. i/b. Mausam Mehta, Adv. for the defendants.
CORAM : MRS. ROSHAN DALVI, J.
DATE OF RESERVING THE ORDER : 15th November, 2014
DATE OF PRONOUNCING THE ORDER : 3rd December, 2014
O R D E R
1. This Chamber Summons is taken out by the applicant /
award creditor for the deposit of the decretal amount, for ordering
particulars of properties, assets and means of the award debtor, for
further orders under Order 21 Rule 41 of the CPC upon non
compliance of the order of disclosure, for arrest of the award debtor,
for issue of a precept for attaching the properties belonging to the
award debtor which are outside this Court's territorial jurisdiction and
such other reliefs.
2. The award debtors reside and carry on business in
Hooghly, West Bengal. Their properties are in the state of West
Bengal. The applicants / award creditor had applied under Section 9
of the Arbitration and Conciliation Act, 1996 (the Act) for obtaining
certain interim reliefs pending the arbitration in the Court in Calcutta.
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The amount of loan granted by the award creditor was paid in
Mumbai and was repayable in Mumbai. The parties agreed to have
their arbitration in Mumbai. The arbitration has been held and
concluded in Mumbai and the award has been passed in Mumbai.
Mumbai Court, as a District Court, would have jurisdiction to execute
that decree as the Court passing the decree. Even if the properties of
the award debtors are outside the territorial limits of this Court's
jurisdiction, this Court, would transfer the decree for a execution to
another Court upon the application of the award creditor. Until such
time as that is done it would therefore be the executing Court.
3.
Upon these admitted facts the challenge to the territorial
jurisdiction of this Court by the award debtor would have to be
considered. Counsel on behalf of the award debtor claimed that
though the decree may be otherwise executable in Mumbai, under
Section 42 of the Act the award creditor having made the earlier
application for interim reliefs under Section 9 of the Act, all other
proceedings including the proceedings in execution can be taken out
by the award creditor in the same Court and hence this application is
not maintainable in this Court.
4. The parties have relied upon diverse judgments in this
respect. The judgments consider the definition of Court under Section
2(1) (e) of the Arbitration and Conciliation Act, 1996 (the Act), the
enforceability of awards under Section 36 of the Act, the Court which
passed the decree and the Court to which the decree is transferred
under Sections 37, 38 & 39 of the CPC.
5. In the earliest of the decision relied upon by counsel on
behalf of the award debtor, the Single judge of this Court in the case
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of Kotak Mahindra Finance Ltd. Vs. T. Thomas Educational Trust
& Ors., 2003(5) Bom C R 579 considered the Court's territorial
jurisdiction in an arbitration. That aspect is not much in dispute. It is
held that the place of arbitration does not confer jurisdiction on the
Court. The test to be applied is whether the suit could have been
instituted before this Court and the jurisdiction has been considered
in respect of the subject matter and not the pecuniary jurisdiction.
6. In the case of Akola Janata Commercial Co-Op. Bank
Ltd. Vs. Raju Natthuji Badhe, 2011(2) Mh L J 427 the Division
Bench of this Court considered the definition of a Court under Section
2(1) (e) of the Act and the definition of an executing Court and the
Court to which the decree is transferred under Sections 37, 38 and 39
of the CPC. Under section 36 of the Act the award can be enforced
under the CPC in the same manner as if it were a decree. This would
be by the Court defined under Section 2 (1) (e) as the Court having
jurisdiction to decide questions forming the subject matter of the
arbitration. In this case it would undoubtedly be this Court. Since
the award has been passed in Mumbai this Court would be the Court
which must be taken to be the "the Court which passed the decree"
under Section 37 of the CPC. Consequently under Section 38 of the
CPC the decree would be executed by this Court which passed it or
the Court to which it sent for execution. Under Section 39 the Court
would send the decree for execution to another court where it would
have to be executed upon the application of the decree holder ( in this
case the award holder). It is held in that judgment that the award
must be treated as the decree passed by the District Judge and
therefore, it may be executed either by the District Judge himself or
by the Court to which it may be transferred for execution under
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Section 39 of the CPC. There is not much dispute with this provision
also.
7. The case of Konkola Copper Mines (PLC) Vs. Stewarts
and Lloyds of India Ltd., in Appeal (L.)No.199 of 2013 in
Arbitration Petition No.160 of 2013 in Notice of Motion (L.)
No.915 of 2013 considers the venue of arbitration and the place of
arbitration with which we are not much concerned in this case. In
that case the arbitration was held in Delhi that the place of arbitration
was in Delhi. Mumbai was accepted later by the parties as the place
of arbitration. Courts in Mumbai were held competent to grant relief
under Section 9. In this case, however, the cause of action has also
arisen in Mumbai the amount having been paid to judgment debtor
under the loan of judgment creditor in Mumbai and it being payable
in Mumbai. This judgment considered the case of Bharat
Alluminium Co. Vs. Kaiser Alluminium Technical Services Inc.
(BALCO). The case of BALCO held that Court at the place of the seat
of arbitration process would have supervisory control over the
arbitration and consequently an appeal that was filed from an order
passed under Section 17 of the Act would lie in that Court.
8. The case of Eskay Engineers Mumbai Vs. Bharat Sanchar
Nigam Ltd, 2009 (5) Mh L J is most material for this dispute. In that
case though the award was passed outside Mumbai it was challenged
in Mumbai by the judgment debtor. The Court held that under
Section 42 of the Act all other proceedings could be in Mumbai and
hence execution levied in Mumbai could not be challenged by the
award debtor. What the judgment conveys is that in view of Section
42 of the Act the same party cannot apply in two different Courts at
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different stages of the arbitration. Hence when recourse is taken to a
certain Court, all further proceedings must be taken out in that Court
alone. (Of course, if the award debtor challenged the award in a
Court not having jurisdiction at all, it would, therefore, not bind the
award creditor to proceed with the execution in such Court not having
jurisdiction.)
9. The judgment debtor essentially relies upon Section 42 of
the Act to claim that this Court's territorial jurisdiction could be
barred. It would be material to see Section 42 of the Act.
42. Jurisdiction. - Notwithstanding anything contained
elsewhere in this Part or in any other law for the time being
in force, where with respect to any arbitration agreement any
application under this Part has been made in a Court, that
Court alone shall have jurisdiction over the arbitral
proceedings and all subsequent applications arising out of
that agreement and the arbitral proceedings shall be made in
that Court and in no other Court.
10. Hence the Court where any application under part I of the
Act is made would alone have jurisdiction over the arbitration
proceedings and all subsequent applications arising out of that
agreement and arbitration proceedings would be in that Court. The
Court considered with special emphasis upon
"all subsequent applications arising out of arbitration proceedings"
The Court held that that expression must be read in a
comprehensive manner to include recourse to execution proceedings
and that it must be given its full with in interpretation.
11. In this case the award creditor itself applied under Section
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9 for interim relief in Calcutta Court. Though the arbitration was held
in the Mumbai because the parties agreed to have their arbitration in
Mumbai and Mumbai would be the Court which passed the award
(decree) and can execute it, only in view of the fact that the award
creditor itself had taken out a proceeding earlier in the Calcutta Court
for interim relief all subsequent applications including the application
for execution must be in that Court.
12. Counsel on behalf of the award creditor has relied upon an
unreported judgment of the learned Single Judge of this Court in the
case of L & T Finance Ltd. Vs. Pravin Pandurang Patil in Chamber
Summons No.1765 of 2010 in Execution Application (L.) No.1391
of 2010 in Arbitration Case No.137 of 2009 dated 19th December,
2011 in that case exception to the territorial jurisdiction of the Court
in a similar execution proceeding was taken on the ground that the
Court had no territorial jurisdiction. The Court held that an
application of this nature is under Order 21 Rule 11 of the CPC. The
award creditor was in doubt as to what were the properties to be
attached which belonged to judgment debtor and hence an
application for disclosure of properties, assets and means was taken
out. The Court was abreast of the fact that further applications after
disclosure of the assets would not be made in this Court, as this Court
could not attach and could not order arrest of the award debtor.
However, the Court observed that all that the Chamber Summons
directs was to make an affidavit stating the particulars of the assets of
the judgment debtor. The Court observed that under Order 21 Rule
41(2) of the CPC the very Court which directed the making of the
affidavit could compel the judgment debtor with consequences for not
making it. The Court observed that in other cases where the
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judgment debtor either resided or carried on business outside the
territorial limits of this Court's jurisdiction, he would not be amenable
to an application of that kind under Order 21 Rule 41 of the CPC.
13. This application is not only for furnishing of particulars. It
is also for consequences of non furnishing of the particulars and other
reliefs. It would not be possible for this Court to grant several of the
reliefs in this Chamber Summons.
14. In view of the fact that an application for interim relief
under Section 9 of the Act was made by award creditor itself in
another Court all other proceedings must follow there.
15. Therefore, even after considering all the aforesaid
judgments it is seen that the judgment in the case Eskay Engineer
(Supra) would hold the field in view of the particular facts of this
case. The Court would, therefore, not exercise its jurisdiction in
calling upon the award debtor to furnish particulars also to the award
creditor in this application. Consequently this Court cannot grant any
of the reliefs in this Chamber Summons.
16. Consequently there shall be no order in the Chamber
Summons. The award creditor shall be at liberty to take out a similar
Chamber Summons in the Calcutta Court where the initial application
is made.
17. The decree / award obtained by the plaintiff / award
creditor is transferred to the City Civil Court or any other competent
Court in Kolkata.
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18. Chamber Summons is disposed off accordingly.
( ROSHAN DALVI, J. )
