Delhi High Court
M/S S.K. Brothers vs Delhi Development Authority on 2 July, 2008
Author: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Ex.P. 234/2008 & Ex.P. 235/2008
% Date of decision : 02.07.2008
M/S S.K. Brothers ....... Decree Holder
Through: Mr S.K. Jain, Advocate
Versus
DELHI DEVELOPMENT AUTHORITY ....... Judgment Debtor
Through : Nemo
AND
M/S ASHOK KUMAR & CO. ....... Decree Holder
Through: Mr S.K. Jain, Advocate
Versus
DELHI DEVELOPMENT AUTHORITY ....... Judgment Debtor
Through : Nemo
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.
Whether reporters of Local papers may
be allowed to see the judgment? YES
2. To be referred to the reporter or not? YES
3. Whether the judgment should be reported YES
in the Digest?
RAJIV SAHAI ENDLAW, J (ORAL)
1. The execution petition 234/2008 has been filed for execution of
the arbitral award dated 16th January, 2008 and in para 7 of the
execution application "amount of suit alongwith interest as per decree
or any other relief granted by the decree" is stated to be Rs
15,80,833.61 with interest at 18 % per annum from 2nd July, 2008 till
Ex.P. 234/08 & 235/08 Page no. 1 of 6
the date of realization of the amount. The arbitral award is engrossed
on stamp paper of Rs 500/-.
2. Execution petition 235/2008 has been filed for execution of an
arbitral award dated 20th December, 2007. In para 7 of the
application the "amount of suit alongwith interest as per decree or
any other relief granted by the decree" is stated to be Rs 19,02,725/-
with interest at 18% per annum from 2nd July, 2008 till the date of
realisation of the amount. The arbitral award is engrossed on stamp
paper of Rs 800/-.
3. Both the execution petitions came up before the court first on 1st
July, 2008. It was pointed out to the counsel for the decree holder
that since the amount in both the executions is less than Rs 20 lacs,
the execution petitions would not lie before this court and would lie
before the District Court. It was further pointed out that the award
did not appear to be duly stamped. The counsel sought time to satisfy
on the two aspects.
4. The counsel for the decree holders has sought to justify the
jurisdiction of this court to entertain the execution petitions for the
reason of this court, in both the cases having exercised the
jurisdiction under Section 11(6) of the Arbitration and Conciliation
Act, 1996 (Act) and further for the reason of this court having again
exercised jurisdiction (again in both the cases) under Section 15(2) of
the Act for substituting the arbitrator appointed earlier. The counsel
for the decree holders has submitted that since the petitions under
Ex.P. 234/08 & 235/08 Page no. 2 of 6
Sections 11(6) and 15(2) of the Act had been made to this court,
under Section 42 of the Act, notwithstanding the value of the
pecuniary jurisdiction in both the cases being below the minimum
pecuniary jurisdiction of this court, this court would have exclusive
jurisdiction to entertain the execution applications. Reliance in this
regard was placed on a judgment of a single Bench of this court in
Damayanti Builders v Union of India reported as 2003 (3) Arb. LR
530. Undoubtedly it was held in the said judgment that the
application under Section 34 of the Arbitration Act would lie before
this court only, for the reason of this court having exercised
jurisdiction under Section 11(6) of the Act. Reliance was also placed
on certain observations to the same effect in order dated 13.12.2004
of another Single Bench of this court in OMP 418/2004.
5. However, I find that the aforesaid judgment of the Single Judge
of this court is no longer good law. A contrary view has been taken by
the Apex Court in Rodemadan India Ltd v International Trade
Expo Centre Ltd (2006) 11 SCC 651. It was held in the said
judgment in para 8 that the power under Section 11(6) of the Act is
the power of a designate referred to under the section and not that of
the (Supreme) Court, albeit that it has now been held to have judicial
characteristics by reason of the judgment in SBP & Co v Patel Engg
Ltd (2005) 8 SCC 618. It was further held in para 25 of the judgment
that neither the Chief Justice nor his designate under Section 11(6) is
a "Court" as contemplated under Section 2(1)(e) of the Act and
further that the bar of jurisdiction under Section 42 is only intended
to apply to a "court" as defined in Section 2(1)(e).
Ex.P. 234/08 & 235/08 Page no. 3 of 6
6. The said judgment of the Apex Court was followed by another
Single Judge of this Court in Union of India v S.R. Constructions
Company and Another 144(2007) DLT 580 and it was held that the
mere passing of an order under Section 11(6) of the Act by this court
would not vest this court with the exclusive jurisdiction under Section
42 of the Act to entertain the objections under Section 34 of the Act, if
otherwise this court did not have the pecuniary jurisdiction to
entertain the said objections.
7. The Apex Court in Pandey & Co Builders (P) Ltd v State of
Bihar and Another (2007) 1 SCC 467 has further held that Section
42 only applies to applications and not to appeals under Section 37 of
the Act. Applying the same reasoning, Section 42 would also not
apply to execution applications. The execution application is not
"arbitral proceedings" within the meaning of Section 42 of the Act
and is not a subsequent application arising out of the agreement and
the arbitral proceedings. In fact, the arbitral proceedings come to an
end when the time for making an application to set aside the arbitral
award expires and the execution application is an enforcement of the
award which takes the colour of a decree under the CPC, by virtue of
the provisions of Section 36 of the Act.
8. So, the execution applications do not lie before this court for the
reason propounded by the decree holders. The exercise of jurisdiction
by this court u/s 15(2) of the Act, being in continuation of exercise of
power u/s 11(6) of the act, would also not attract Section 42.
Ex.P. 234/08 & 235/08 Page no. 4 of 6
9. It has otherwise been held by this court in Kinetic Capital
Finance Limited v Anil Kumar Misra 87 (2000) DLT 405 :
"9. The words used in the definition of `Court', "having
jurisdiction to decide the question forming the subject
matter of the arbitration if the same had been the
subject matter of a suit" and the expression used in
Section 36, "award shall be enforced under the Code of
Civil Procedure in the same manner as if it were a
decree of the Court" have also relevance for the
purpose or deciding the issue arising before me. Taking
notice of the ratio laid down by the aforesaid decisions
and the words used in the definition of `Court' and in
the provision of Section 36 of the Act it appears that an
award made under the provisions of the Arbitration and
conciliation Act, 1996 could be enforced under the Code
of Civil Procedure in the same manner as if it were a
decree of the Court. A civil Judge is competent to pass
a decree for an amount not exceeding Rs 1 lac. Such a
decree passed by the Civil Court for an amount not
exceeding Rs 1 lac could therefore, be enforced in the
same Court, i.e. in the Court of Civil Judge. Therefore,
for the purpose of a suit/proceeding the subject matter
of which does not exceed Rs 1 lac the Principal Civil
Court or original jurisdiction in the district would be the
Court of the Civil Judge. In arriving at the aforesaid
conclusion I am fortified by the decision of this Court in
Bakshi Lochan Singh's case (supra)."
10. Applying the aforesaid principles, the subject matter of both the
executions being less than Rs 20 lacs which is the minimum pecuniary
jurisdiction of this court, the executions ought to have been preferred
before the court of minimum pecuniary jurisdiction within the
meaning of the Code of Civil Procedure and which is the court of the
District Judge, Delhi.
11. It has been held by the Apex Court in M. Anasuya Devi v M
Manik Reddy 2003 (9) SCALE 12 that the objection as to
non-stamping of the Award are to be dealt with at the stage of
enforcement of the arbitral award, and not at the stage of objections
Ex.P. 234/08 & 235/08 Page no. 5 of 6
under Section 34 of the Act. The award, under Article 12 of the
Schedule 1A as applicable to Delhi, of the Stamp Act, attracts stamp
duty of 0.1% of the value of the property to which the Award relates.
The Awards in both the cases did not appear to be duly stamped. It
was the submission of the counsel for the decree holders that the
arbitral award was duly stamped according to the principal amount
awarded. I am, however, refraining from dealing with the said
subject, having held that these execution petitions lie before the
District Judge and not before this court.
12. The execution applications are accordingly held to be not
maintainable before this court and are ordered to be returned to the
decree holder for filing before the appropriate court. If the decree
holder so desires, the original awards in both the cases filed before
this court may also be returned to the decree holder in accordance
with law.
RAJIV SAHAI ENDLAW
(JUDGE)
July 02, 2008
M
Ex.P. 234/08 & 235/08 Page no. 6 of 6
