Delhi High Court
Kartike Enterprises vs Delhi Jal Board on 15 March, 2021
$~54
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 15.03.2021
+ CM(M) 222/2021
KARTIKE ENTERPRISES ..... Petitioner
Through Mr.A.K. Singh, Adv.
versus
DELHI JAL BOARD ..... Respondent
Through Ms.Nandita Rao, ASC
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
CM No.10098/2021 (Exemption)
Allowed, subject to all just exceptions.
CM(M) 222/2021
1. This petition has been filed by the petitioner challenging the
order dated 17.02.2021 passed by the learned District Judge
(Commercial Court), North West District in Execution Civil
No.352/2020, Kartike Enterprises v. Chief Executive Officer, Delhi
Jal Board, dismissing the application of the petitioner filed under
Section 36 of the Arbitration and Conciliation Act, 1996 (hereinafter
referred to as „the Act‟) on the ground that as objections to the Arbitral
Award under Section 34 of the Act have been filed by the respondent
CM(M)222/2021 Page 1
are pending before the learned District Judge (Commercial Court),
South East District, the execution petition filed later on cannot be
entertained by the Court at North West District.
2. The learned counsel for the petitioner has placed reliance on the
judgment of the Supreme Court in Sundaram Finance Limited v.
Abdul Samad and Anr., (2018) 3 SCC 622 and of this Court in
Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd., 2009 SCC
OnLine Del 579 and on the Order dated 21.01.2021 in
EFA(OS)(Comm) 01/2021 titled Union of India v. Atlanta Ltd. &
Anr., to submit that the view taken by the learned District Judge in the
Impugned Order cannot be sustained. He further places reliance on the
judgment of the Calcutta High Court in BLA Projects Pvt. Ltd. v.
Asansol Durgapur Development Authority, 2019 SCC OnLine Cal
1868 in support of his contention that Section 42 of the Act will have
no application to the Execution Petition filed under Section 36 of the
Act.
3. On the other hand, the learned counsel for the respondent has
placed reliance on the judgment of the Supreme Court in State of West
Bengal and Ors. v. Associated Contractors, (2015) 1 SCC 32 and
submits that the Supreme Court has held that Section 42 of the Act
would be applicable to any application filed even post the termination
of the arbitral proceedings. She submits that an application under
Section 36 of the Act being one under Part I of the Act, Section 42
would clearly be applicable to such proceedings. She further submits
that the judgment of the Supreme Court in Sundaram Finance
CM(M)222/2021 Page 2
Limited (supra) has not taken note of the earlier binding precedent in
Associated Contractors (supra) inasmuch as Sundaram Finance
Limited (supra) holds that Section 42 would not have any application
post termination of the arbitral proceedings, which is contrary to what
has been held in Associated Contractor (supra).
4. She further sought to distinguish the judgments of this Court on
similar lines as also by submitting that in those cases, the application
under Section 34 of the Act was not pending before any Court.
5. I have considered the submissions made by the learned counsels
for the parties.
6. Section 42 of the Act reads as under:
"42. Jurisdiction. -- Notwithstanding anything
contained elsewhere in this Part or in any other law
for the time being in force, where with respect to an
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."
7. On the other hand, Section 36 of the Act provides that an
arbitral award shall be enforced in accordance with the provisions of
the Code of Civil Procedure, 1908 in the same manner as if it were a
decree of the Court.
8. In Sundaram Finance Limited (supra), the Supreme Court held
that while an award passed by the Arbitral Tribunal is deemed to be a
CM(M)222/2021 Page 3
decree under Section 36 of the Act, there is no deeming fiction
anywhere to hold that the Court within whose jurisdiction the arbitral
award was passed should be taken to be the Court which passed the
decree. It was held that therefore, for seeking the enforcement of an
award execution can be filed anywhere in the country where such
decree can be executed and there is no requirement for obtaining a
transfer of the decree from the Court, "which would have jurisdiction
over the arbitral proceedings".
9. The Supreme Court expressly affirmed the judgment of this
Court in Daelim Industrial Co. Ltd. (supra), which in turn has held as
under:
"16. 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. Thus the place of filing of
the execution application need not be the place of the
filing of the application under Section 34 of the Act for
the reason of Section 42 of the Act.
xxx
26. The Senior Counsel for the judgment debtor also does
not dispute that the award would be executable by this
Court by attachment of the properties/monies of the
judgment debtor at Delhi. However, he insists upon the
same being done only after obtaining a transfer of the
decree from the Courts at Guwahati/Golaghat to this
CM(M)222/2021 Page 4
Court. But what will that Court transfer. There is no
decree of that Court which it can transfer. The Court
after disposing of application/petition under Section 34 is
not required to and does not pass any decree in terms of
the award, as under the 1940 Act. Moreover, the question
of such transfer would arise only if it were to be held that
the power to execute and transfer is of that Court only.
27. Such power as aforesaid is only in relation to decrees
passed by that Court and no in relation to the arbitral
awards which are deemed to be decree for the purpose of
enforcement/execution. Without the fetter of Section 38
the Courts of the place where the property/money against
which the decree is sought to be enforced is situated
would have inherent jurisdiction to entertain the
execution.
xxx
29. For the reasons aforesaid I find myself unable to
concur with the view taken by the Madhya Pradesh High
Court. In that case, there does not appear to have been
any application within the meaning of Section 42 of the
Act. The court proceeded on the premise that the Court of
the place where award is passed is the Court within the
meaning of Section 2(1)(e). That premise in my view is
not correct."
10. The Division Bench of this Court in Atlanta Ltd. (supra) again
took note of the judgment in Daelim Industrial Co. Ltd. (supra) and
observed as under:
"7. The ASG, after again going through Sundaram
Finance Ltd. supra, confirms that the view taken by
this Court in Daelim Industrial Co. Ltd. supra has
been approved. The said view has since also been
consistently followed in other dicta of this Court.
CM(M)222/2021 Page 5
Reference may be made to Religare Finvest Ltd. Vs.
Ranjit Singh Chouhan MANU/DE/2330/2012, The
State Trading Corporation of India Ltd. Vs. Global
Steel Holdings Ltd. AIR 2015 Del 100, ICI-SOMA JV
Vs. Simplex Infrastructures Ltd.
MANU/DE/2773/2016, Mukesh Sharma Vs. Roger
Shashoua 231 (2016) DLT 14 and Dr. S.C. Jain Vs.
Sahny Securities Pvt. Ltd. 2018 SCC OnLine Del
13202."
11. I have no reasons to not follow the judgments mentioned
hereinabove.
12. The contention of the learned counsel for the respondent that
the judgments/order in Sundaram Finance Ltd. (supra), Daelim
Industrial Co. Ltd. (supra) and Atlanta Ltd. (supra) run counter to the
earlier judgment of Supreme Court in Associate Contractors (supra),
can also not be of any help to the respondent. In Sundaram Finance
(supra), the Supreme Court gave additional reasons for the non-
applicability of Section 42 of the Act to the proceedings seeking
enforcement of the Arbitral Award. As noted in the above judgments,
an application under Section 36 of the Act is an application under the
Code of Civil Procedures, 1908 and therefore, Section 42 of the Act
will have no application to the same.
13. As far as the submission of the learned counsel for the
respondent that the above cases are distinguishable on the fact that an
application under Section 34 of the Act is still pending adjudication, in
my view, again cannot be accepted. Section 42 of the Act does not
CM(M)222/2021 Page 6
make any distinction on the pendency or disposal of the earlier
application. It, in fact, provides that once an application is made with
respect to an arbitration agreement in a Court, that Court alone shall
have jurisdiction over the arbitral proceedings. Therefore, if it was to
be held that Section 42 of the Act applies to such proceedings, the
pendency or disposal of the earlier application would lose all
significance. However, as it has been held that Section 42 of the Act
itself has no application to the proceedings seeking enforcement of the
Arbitral Award, the pendency of the application under Section 34 of
the Act can come to no avail to the respondent.
14. Accordingly, the Impugned Order dated 17.02.2021 has
proceeded on an erroneous understanding of law and is accordingly,
set aside. The execution application is restored to its original number.
The parties shall appear before the learned District Court (Commercial
Court), North West District on 12th April, 2021.
15. Needless to say, this Court has only considered the
maintainability of the execution application before the Court and has
not expressed any opinion on the merit of the same. There shall be no
order as to cost.
NAVIN CHAWLA, J
MARCH 15, 2021/Arya
CM(M)222/2021 Page 7
