Karnataka High Court
Mr Manel Vaman Nayak vs Mr Manel Venkatraya Nayak on 31 October, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 16.09.2025
Pronounced on : 31.10.2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF OCTOBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.21547 OF 2025 (GM - CPC)
BETWEEN:
MR.MANEL VAMAN NAYAK
S/O M.VITTAL NAYAK,
AGED ABOUT 80 YEARS,
R/AT NO.6/18/703,
VITTAL NAYAK COMPOUND
MATADAKANI ROAD,
GANDHINAGAR,
MANGALURU - 575 003
DAKSHINA KANNADA.
... PETITIONER
(BY SRI D.VIJAYA CHANDRA REDDY, ADVOCATE)
AND:
Digitally signed 1 . MR.MANEL VENKATRAYA NAYAK
by RAKESH S
HARIHAR S/O M. VITTAL NAYAK,
Location: High
Court of AGED ABOUT 69 YEARS,
Karnataka,
Dharwad Bench,
R/AT FLAT NO. 002
Dharwad CLASSIC MANOR APARTMENTS
ARYA SAMAJ ROAD,
2
MANGALURU - 575 003.
DAKSHINA KANNADA.
2 . MR. MANEL PURUSHOTHAM NAYAK,
S/O M. VITTAL NAYAK,
AGED ABOUT 77 YEARS,
R/AT GANDHINAGAR,
MANGALURU - 575 003.
DAKSHINA KANNADA.
3 . SMT. VASANTHA BALIGA,
W/O MADHAVA BALIGA,
CLOTH MERCHANT,
AGED ABOUT 88 YEARS,
R/AT BANTWAL
DAKSHINA KANNADA DISTRICT.
4 . SMT. POORNIMA PAI,
W/O DR. KASHINATH PAI,
AGED ABOUT 71 YEARS,
R/AT GANGOLI,
KUNDAPURA TALUK,
UDUPI DISTRICT.
... RESPONDENTS
(BY SRI O.SHIVARAMA BHAT, ADVOCATE FOR R-1;
SRI M.VINOD KUMAR, ADVOCATE FOR R-2;
SRI M.SUDHAKAR PAI, ADVOCATE FOR IMPLEADING
APPLICANT IN I.A.NO.1/25)
THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED
ORDER IN EX.P.NO.31/2017 DATED 28.11.2024 AN
APPLICATION/OBJECTION FILED U/S.47 R/W. S.151 OF CPC BY THE
3
LEARNED 1ST ADDITIONAL DISTRICT JUDGE AND COMMERCIAL
COURT, D.K. MANGALURU PRODUCED HEREWITH AS ANENXURE -
A.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 16.09.2025, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-
CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
The petitioner/Judgment Debtor No.1 is at the doors of this
Court calling in question an order dated 28-11-2024 passed by the
concerned Court in Execution Case 31 of 2017.
2. Facts in brief, germane, are as follows:
2.1. The 1st respondent/Decree Holder, initiated arbitration
proceedings on a dispute that arose between the parties in A.P. 5 of
2001 against the petitioner and other respondents before the sole
arbitrator, a retired District and Sessions Judge in terms of the
4
provisions of the Arbitration Act, 1940. The arbitrator rendered his
award on 28-12-2004. The arbitral award dated 28-12-2004
resulted in a direction to auction the properties of the dissolved
partnership firm. The award so passed by the arbitrator comes to
be confirmed by the concerned Court by its judgment and decree
dated 11-03-2010. The Judgment Debtor, aggrieved by the said
judgment and decree dated 11-03-2010, preferred a Miscellaneous
First Appeal before this Court in MFA No. 4816 of 2010. The MFA
also comes to be dismissed, thereby affirming the award passed by
the Arbitrator on 28-12-2004.
2.2. Subsequent to the dismissal of the MFA in MFA No. 4816
of 2010, the 1st respondent/Decree Holder files Execution Petition in
Execution Petition 31 of 2017 seeking execution of the arbitral
award. In the said Execution Petition, the petitioner files an
application under Section 47 r/w 151 of the CPC challenging the
maintainability of the Execution Petition. The concerned Court, in
terms of the order impugned, rejects the said contention of the
petitioner/Judgment Debtor No.1, against which the petitioner is
before this Court in the subject petition.
5
3. Heard Sri D Vijaya Chandra Reddy, learned counsel for
petitioner, Sri O Shivarama Bhat, learned counsel for respondent
No.1, Sri M Vinod Kumar, learned counsel for respondent No.2 and
Sri M Sudhakar Pai, learned counsel appearing for impleading
applicant.
4. The learned counsel appearing for the petitioner would
vehemently contend that the new Arbitration and Conciliation Act,
1996, is not applicable to the arbitral proceedings which
commenced under the old Act i.e., the old Arbitration Act, 1940.
The judgment relied on by the trial Court in ILR 2003 KAR 4343
was misplaced. The order was passed placing reliance upon the
judgments of the Apex Court and other High Courts, which would
not become applicable to the impugned proceedings. The learned
counsel submits that the proceedings before the Executing Court
was not even maintainable, as the judgment and decree that was
passed was not executable. He would further contend that the
arbitral award passed was barred by limitation, since the order of
appointment of an Arbitrator under Section 8 of the Arbitration and
Conciliation Act was passed after the expiry of 3 years from the
6
date of cause of action i.e., of dissolution of the partnership firm, in
terms of Article 5 of the Limitation Act. The proceedings itself could
not have been initiated. The arbitral award cannot be executed
straightaway, by resorting to Section 36 of the new Act, as the
subject matter of the award was passed in pursuance of the
proceedings commenced under the old Act and therefore, unless
the award is made as a decree of the Court under Section 17 of the
old Act, it becomes an unexecutable award.
5. Per-contra, the learned counsel representing the
respondents would submit that this Court held that the new Act,
1996 would become applicable in relation to arbitral proceedings
commenced under the old Act. The arbitral award is not a decree
and objections under Section 47 of the CPC would not be
maintainable against the arbitral award. In terms of Section 36 of
the new Act, the award passed under the new Act is required to be
construed to be a decree only for the purpose of the enforcement of
the same and not to open or invoke Section 47 of the CPC before
the Executing Court. The learned counsel would further contend
that the petitioner challenged the award twice, by filing an
7
application under Section 34 and an appeal under Section 37 of the
new Act, which have come to an end, confirming the award and
now cannot go back to the Executing Court invoking Section 47 of
the CPC. The respondents would contend that the impleading
applicant being a bona fide purchaser of the subject property in an
auction conducted by the Court, has deposited the entire amount of
Rs.4,18,45,000/- and is now neither here nor there. He would seek
dismissal of the petition.
6. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record. In furtherance whereof, the issues that fall for
consideration are:
(i) Can an arbitral award which is sought to be executed
under Section 36 of the Arbitration and Conciliation Act,
1996 be objected to, or challenged in the execution
proceedings under Section 47 of the CPC?
(ii) Can an arbitral award be passed under the new
Arbitration and Conciliation Act, for arbitration
8
proceedings which had commenced under the old
Arbitration Act, 1940?
(iii) Whether the partnership firm dissolved in correct
procedure, as is laid down under the Indian Partnership
Act, 1932?
ISSUE NO.1:
Can an arbitral award which is sought to be executed under
Section 36 of the Arbitration and Conciliation Act, 1996 be objected
to, or challenged in the execution proceedings under Section 47 of
the CPC?
7.1. Facts in brief need to be reiterated for consideration of
the issue so raised. The partnership firm was established by
entering into a partnership deed, which was again reconstituted on
several occasions due to retirement of partners. On 26-12-1985 the
partnership firm stood dissolved, which led to the genesis of the
arbitral dispute for apportionment of shares of the dissolution of the
partnership firm, of which the petitioner and the respondents were
partners. In 1996, an application is made before the Civil Judge,
9
Senior Division, for appointment of an arbitrator in Arbitration Case
No. 4 of 1996 in terms of the partnership deed, which sought to
resolve the dispute by way of appointment of an arbitrator to
adjudicate the dispute between the parties. Accordingly, on
20-09-2001 the sole arbitrator H. Umesh Shetty was appointed as
an arbitrator to resolve the dispute between the parties. Therefore,
he was appointed as an arbitrator under the provisions of the
Arbitration Act, 1940. The arbitration proceedings commence. An
arbitral award is passed by the arbitrator on 28-12-2004. The
award resulted in several actions against the Judgment Debtors, the
details of the award are as follows:
"All the assets of the dissolved firm-M/s.Sri Krishnas
Novelty House in Door No. 13-4-538 along with the land and
premises comprised in R.S.No.601/1A, T.S.No. 187/1A
measuring 2.41 cents (97-54 sq meters) situate in market Road
in Mangalore Town including the stock-in-trade in Sri Krishna
Stores shall be sold preferably to such of the parties to this
proceedings offering the highest price. If this method is found to
be not feasible, then, the above mentioned assets shall be sold
by public auction by the executing court in execution of this
Award.
The parties to this Award will be at Liberty to participate
in the Auction and to set of their proportionate shares in the
partnership. The net sale proceeds after deducting the expenses
and costs of the auction shall be distributed between the
petitioner and respondents 1 and 2 in the proportion of their
shares of 15%, 40% and 35% respectively. The amount falling
to the share of the deceased 3rd respondent shall be distributed
10
equally between all the legal representatives of deceased
respondent No. 3.
Respondents 1 and 2 shall render accounts of business of
both firms from period from 26.12.1985, the date of dissolution
till the end of the year 1998 and for the period sub-sequent to
that till the date of sale of assets of the firm by respondent No.
1. The profits, if any, earned by both these firms from
26.12.1985 till the date of sale of assets also shall be distributed
between the parties in the proportion of their shares.
From out of Rs.30,000/- being the remuneration of
Arbitrator Rs.15,000/- have been paid by petitioner and
respondents 1 and 2 Rs.5,000/each.
Petitioner and respondents 1 and 2 shall bear their
respective costs of Arbitration.
Requisite Stamp Duty on this Award shall be paid under
Article 39(a)(1)(c) of Karnataka Stamp Act by the parties."
7.2. The Arbitral Award was challenged by the Judgment
Debtor No.1 before the I Additional District Judge, Mangalore who
by a judgment and decree dated 11-03-2010, confirmed the award
of the Arbitrator in an application filed under Section 34 of the
Arbitration and Conciliation Act, 1996. After the confirmation of the
award by the concerned Court on 11-03-2010, the petitioner
challenges the said judgment and decree in MFA No. 4816 of 2010
invoking Section 37 of the Arbitration and Conciliation Act, 1996,
which also comes to be dismissed on 15-06-2016. Thus, three
11
proceedings go against the Judgment Debtor. The first is, suffering
of an arbitral award on 28-12-2004, the next is, the order passed
by the Additional District Judge rejecting the application filed under
Section 34 under the Act of 1996 and the challenge to the
judgment and decree dated 11-03-2010 by the present petitioner
before this Court, invoking Section 37 of the Act of 1996. Therefore,
the arbitral award stood confirmed by two judicial fora.
7.3. The 1st respondent/Decree Holder seeking to execute the
arbitral award, files an execution petition in Execution Petition No.
31 of 2017 seeking execution, by auctioning the assets of the
dissolved partnership firm. The petitioner/Judgment Debtor No.1
files his objections to the execution of the arbitral award,
challenging the maintainability of the execution proceedings, on the
plea that the execution proceedings were barred by limitation and
suffered from jurisdictional issues. The concerned Court, rejects the
application so filed challenging the maintainability of the execution
proceedings, with costs. The concerned Court holds that the petition
under Section 34 and an appeal under Section 37 of the Act of 1996
had become final. The Judgment Debtor No.1/petitioner herein
12
never projected any of the grounds that are now sought to be
projected with regard to maintainability of the execution
proceedings. The Executing Court holds that it is maintainable and
rejects the application. The issue now as observed hereinabove
would be, whether there could be a challenge to the arbitral award,
in the executing Court, on an application filed under Section 47 of
the CPC.
7.4. To consider the said issue this Court need not delve deep
into the matter, as this Court has itself, on an identical
circumstance, in a judgment reported in the case of KARNATAKA
STATE MEDICAL SUPPLIES CORPORATION LIMITED, v.
PLASTIC SURGE INDUSTRIES PVT. LTD1, has held as follows:
".... .... ....
14. What the petitioner now seeks to contend is that
award was obtained by fraud. It is not the case of the petitioner
that it was placed ex parte or not afforded adequate
opportunity. The plea of fraud and several factors are for the
first time placed before the Executing Court, that too when the
coordinate Bench reserved liberty to file statement of
objections. It is trite law that what should have been done
as grounds under Section 34 of the Act cannot be raised
in execution proceedings. Jurisprudence is replete with
several High Courts taking the view that what should
1
2025 SCC OnLine KAR 18501
13
have been urged under Section 34, cannot be raised in
execution proceedings.
14.1. The High Court of Delhi in the case of ANGLO-
AMERICAN METALLURGICAL COAL PRIVATE LIMITED v.
MMTC LIMITED (2025) SCC OnLine Del.3201) has held
as follows:
".... .... ....
53. The legislature by using the phrase "such
award shall be enforced in accordance with the
provisions of the Civil Procedure Code" only intends
to "enforce" an award in the same manner and
procedure as contemplated in CPC without altering
the nature and character of an award. The provisions
of the CPC are only applicable to the extent of
"enforcement" of an award such as attachment, sale,
auction, detention, etc. which are reflected in Order
21 CPC. The legislature did not intend to permit a
challenge to an award during enforcement
proceedings again on merits as this would be contrary
to the objectives of the 1996 Act which aim to ensure
finality and limited judicial interference. The
challenge to an award is only to be made under
Section 34 of the 1996 Act. Once the award passes
the scrutiny under Section 34 or the period to
challenge an award under Section 34 lapses, the
award becomes final and binding to the parties
therein by virtue of Section 35 of the 1996 Act.
54. If the objections under Section 47 CPC are
allowed to be entertained during the enforcement
proceedings of an award, it would effectively open a
second round for challenging the award which the
legislature did not intend to do as the same would
undermine the provision of Section 34 i.e. challenge
to award on limited grounds available as mentioned
therein and render the finality granted by Section 35,
meaningless. Further, if such interpretation is allowed, the
same would defeat the purpose of the 1996 Act which is to
streamline arbitration and reduce the prolonged litigation.
In addition, allowing objections would not only delay the
finality of disputes but would also nullify the basic contours
of the 1996 Act. Any particular provision of a statute has to
14
be harmoniously construed so as not to render any other
provisions of the statue otiose/inconsistent with the other
provisions.
... ... ...
70. As observed above, I have already held that
Section 5 of the 1996 Act aims limited judicial interference.
The legal fiction created by Section 36 of the 1996 Act,
allowing an award to be enforced "as if it were a decree," is
limited solely to its "enforcement" and does not equate an
award with a decree in substance. Further, the arbitral
proceedings are distinct from civil suits/proceedings. The
use of CPC provisions is confined to enforcement
mechanisms under Order 21 and does not allow a re-
challenge to the award on merits, which is exclusively
governed by Section 34 of the 1996 Act. In this backdrop,
the award cannot be termed as a decree as the same is not
passed by a court. Also, the AT is not a "court" and an
award does not satisfy any conditions of
Section 2(2) CPC which defines a "decree". For the said
reasons and relying on the observations of Shaukat Hussain
case, it is clear that the award which is sought to be
enforced as a decree and is not a "decree" passed by this
Court where the suit is pending. Hence, on this ground,
Order 21 Rule 29 CPC is not applicable."
(Emphasis supplied)
The High Court of Delhi holds that arbitral proceedings
are distinct from civil proceedings. A challenge to the
arbitral award can be made only under Section 34 of the
Act. Once the award passes the scrutiny or the period to
challenge the award under Section 34 lapses, then the
award becomes final and binding. Challenging the award
in execution is impermissible in law.
14.2. The High Court of Allahabad in the case of LARSEN
& TOUBRO LIMITED v. MAHARAJI EDUCATIONAL
TRUST)(2010) SCC OnLine All 1866) has held as follows:
".... .... ....
22. The issue that an award made in arbitral
proceedings is not a decree within the meaning of
CPC having been settled by the aforesaid
pronouncement by the Hon'ble Apex Court, the
15
provisions of Section 47 CPC cannot be available to
obstruct the execution of the award.
... ...
...
25. Apart from above, the extent of judicial
intervention has been circumscribed by Section 5 of the Act.
In other words, judicial interpretation is prohibited except
as provided under the Act. Section 5 of the Act reads as
under :
"Section 5. Extent of judicial intervention.
Notwithstanding anything contained in any other law for the
time being in force, in matters governed by this Part, no
judicial authority shall intervene except where so provided in
this Part. Section 5 of the Act falls under Part-I which includes
within its ambit Section 2 to Section 43 of the Act. Thus,
Sections 34 and 36 are also included in Part-I of the Act. The
judicial intervention having been limited by the legislature, the
Court cannot interfere at any and every stage on a ground
other than those available in the Act itself. Thus, once stage of
Section 34 is over and the award becomes final under Section
35, judicial intervention in the execution of the award under
Section 36 cannot be held to be permissible on any ground,
whatsoever, in view of the limitation imposed by Section 5 of
the Act.
26. Thus, having regard to the provisions of
Sections 5, 12, 13, 16, 34, 35 and 36 of the Act, the
irresistible conclusion is only grounds which can be
pressed into service for challenge to an award is
within the ambit and scope of Section 34 of the Act.
Once the stage of section 34 is over and the questions
that were raised or could have been raised at that
stage cannot be allowed to be raised again and again
by pressing into service section 47 of the Civil
Procedure Code at the time of execution of award
under Section 36 of the Act."
(Emphasis supplied)
The Allahabad High Court holds that an arbitral
award is to be enforced like a decree, but it is not a
decree as defined under the CPC.
14.3. The Allahabad High Court, again, in the case of
SANJAY AGARWAL v. RAHUL AGARWAL(2024 SCC OnLine
All 149) has held as follows:
".... .... ....
29. The applicability of Section 47CPC have been
considered by this Court in Larsen & Toubro Ltd. v. Maharaji
Educational Trust [Larsen & Toubro Ltd. v. Maharaji
Educational Trust, 2010 SCC OnLine All 1866] where it was
held: (SCC OnLine All para 13)
"The aforesaid scheme of the Act go to show that
Section 34 of the Act prescribes the ground under which
arbitral award can be challenged. If no application is made
under Section 34 within the prescribed period of limitation or
the application is refused the award becomes final under
Section 35 of the Act and enforceable in terms of Section 36.
Section 34 of the Act enumerates specific grounds on which an
application for setting aside an award can be made. Intention
of legislature is a guiding factor for interpreting the provision
of a Statute and the same is to be gathered from the words
used in various provisions and the scheme of the Statute.
Under the 1996 Act, the grounds of challenge having been
specified by the legislature by enacting Section 34 of the Act
and finality having been attached under Section 35, the
legislature obviously did not intend to either enlarge the scope
of grounds of challenge or to provide another opportunity of
challenge after the stage of Section 34 is over. Thus, the
objection to the award on the grounds enumerated in Section
34 of the Act once adjudicated cannot be allowed to be raised
or reagitated by permitting to raise objection during the
execution proceedings under Section 36 by pressing Section
47CPC in service as the same would render the provisions of
Sections 34 and 35 of the Act virtually redundant.
The use of words 'the award shall be enforced under
the Civil Procedure Code, 1908 in the same manner as if it
were a decree of the court' in Section 36 of the Act would
not mean that the provisions of the Code of Civil procedure
with regard to execution of decree would become applicable
in the execution of the award. Section 36 only creates a
fiction that an award would be enforceable as if it were a
decree of the court within the scope of Order 21 CPC. This
enforcement of the award under Order 21 CPC would not
attract the application of Section 47CPC simply by use of
the expression 'shall be enforceable as a decree' in Section
36 nor Section 36 can be read independent of other
provisions contained in the Act itself. The provisions of the
Act are to be reconciled with each other. Section 36 cannot
be read out of context and independent of the scheme of
the Act. Reference to another statute does not attract
application of such other statute to the referring statute
unless expressly provided. A reference in a statute to
another statute cannot be read in a manner to invite
inconsistency in the referring statute. Any such reference, if
made, has to be interpreted in the context in which the
reference is made so as not to make inconsistent the
provisions of the referring statute itself. If it brings
inconsistency, then the same is to be avoided. If Section
47CPC is to be attracted, then the restrictions provided in
Section 34 of the Act and finality to arbitral award by virtue
of Section 35 of the Act would be redundant. Section 36
cannot be interpreted in the manner inconsistent with the
provisions contained in the other part of the Act. That apart
the finality of the decree under the Code is reached after
the decision under Section 47CPC, if raised. But the
legislature in its wisdom thought it fit to incorporate the
scope similar to Section 47CPC in Section 34 of the Act in
order to bring finality before the award becomes
executable. Same procedure cannot be expected to be
incorporated in a statute twice. Legislature can never be
interpreted to intend repetition. At the same time, the object
of the Act is directed towards speedy and hazard free finality with
a view to avoid long drawn proceeding based on technicalities.
Therefore, having regard to the provisions of Sections 13, 16, 34,
35 and 36 cannot be interpreted in a manner inconsistent with any
of the provisions of the Act to attract the provisions contained in
the Code in its entirety. Therefore, while considering the
application filed under Section 36 of the Act for the execution of an
award, the court cannot overlook the scope and ambit within which
the court is to execute the award taking aid of the provisions for
execution contained in the CPC not inconsistent with the provisions
contained in the 1996 Act. Therefore, in my view, Section 47CPC
cannot be attracted despite the words 'in the same manner as if it
were a decree of the court' used in Section 36 when the award is
sought to be executed thereunder.
The matter can be viewed from another angle. Section
47CPC provides for questions to be determined by the court
executing the decree. The said section reads as under:
'47.Questions to be determined by the court
executing decree.--(1) All questions arising between the parties
to the suit in which the decree was passed, or their
representatives, and relating to the execution, discharge or
satisfaction of the decree, shall be determined by the court
executing the decree and not by a separate suit.
(2) Omitted by the Code of Civil Procedure (Amendment)
Act, 1976, Section 20 (w.e.f. 1-2-1977)
(3) Where a question arises as to whether any person is
or is not the representative of a party, such question shall, for the
purposes of this section, be determined by the court.
Explanation I.--For the purposes of this section, a
plaintiff whose suit has been dismissed and a defendant against
whom a suit has been dismissed are parties to the suit.
Explanation II.--(a) for the purposes of this section, a
purchaser of property at a sale in execution of a decree shall be
deemed to be a party to the suit in which the decree is passed;
and
(b) all questions relating to the delivery of possession of
such property to such purchaser or his representative shall be
deemed to be questions relating to the execution, discharge or
satisfaction of the decree within the meaning of this section.'
It is, thus, clear that in order to invoke Section
47CPC, there must be a decree. Section 2(2)CPC defines the
decree. For a decision or determination to be a decree, it
must necessarily fall within the four-corners of the
language used in the definition. Section 2(2)CPC defines
decree to mean 'formal expression of an adjudication
which, so far as regards the court expressing it,
conclusively determines the rights of the parties with
regard to all or any of the matters in controversy in the suit
and may be either preliminary or final. It shall be deemed
to include the rejection of a plaint and the determination of
any question within Section 144, but shall not include-- (a)
any adjudication from which an appeal lies as an appeal
from an order, or (b) any order of dismissal for
default'. Explanation.--A decree is preliminary when further
proceedings have to be taken before the suit can be
completely disposed of. It is final when such adjudication
completely disposes of the suit. It may be partly
preliminary and partly final.
The use of words 'adjudication' and 'suit' used by
legislature clearly goes to show that it is only a court which
can pass a decree in a suit commenced by plaint
adjudicating the dispute between the parties by means of a
judgment pronounced by the court. The Hon'ble Supreme
Court in Paramjeet Singh Patheja v. ICDS Ltd. [Paramjeet
Singh Patheja v. ICDS Ltd., (2006) 13 SCC 322 : AIR 2007
SC 168] after considering the definition of decree as
contained in CPC in para 29 has held that 'it is obvious that
an arbitrator is not a court, an arbitration is not an
adjudication and, therefore, an award is not a decree'.
Again in para 31, it has been held that words 'decision', and
'civil court' unambiguously rule out an award by arbitrators
to be a decree. In the said case, the Hon'ble Supreme Court
while considering the question as to whether an insolvency
notice under Section 9 of the Presidency Town Insolvency
Act, 1909 can be issued on the basis of an arbitration
award, held that such notice cannot be issued for the
reason the arbitration award is neither a decree nor an
order for payment within the meaning of Section 9(2) of the
Insolvency Act and it is not rendered in a suit. Thus, the
award not being covered under the definition of a decree,
objection with respect to its validity can only be raised as
provided under Section 34 of the Act and not by taking
resort to Section 47CPC.
In Paramjeet Singh Patheja case [Paramjeet Singh
Patheja v. ICDS Ltd., (2006) 13 SCC 322 : AIR 2007 SC 168] , the
Hon'ble Supreme Court has interpreted the words 'as if' used in
Section 36 of the Act as under:
'The words "as if" demonstrate that award and
decree or order are two different things. Legal fiction is
created for limited purpose of enforcement as a decree. The
fiction is not intended to make a decree for all purposes
under all statutes, whether State or Central.'
While comparing the provisions of Section 15 of the
Arbitration Act, 1899 which also provided for enforcing the award
as a decree with Section 36 of the Arbitration and Conciliation Act,
1996, the Hon'ble Supreme Court has observed in paras 56 and 57
as under: (Paramjeet Singh Patheja case [Paramjeet Singh
Patheja v. ICDS Ltd., (2006) 13 SCC 322 : AIR 2007 SC 168] ,
SCC p. 345, paras 39 and 40)
'39. Section 15 of the Arbitration Act, 1899 provides for
"enforcing" the award as if it were a decree. Thus a final
award, without actually being followed by the decree (as
was later provided by Section 17 of the Arbitration Act of
1940), could be enforced i.e. executed in the same manner
as a decree. For this limited purpose of enforcement, the
provisions of CPC were made available for realising the
money awarded. However, the award remained an award
and did not become a decree either as defined in the CPC
and much less so far purposes of an entirely different
statute such as the Insolvency Act'
'40. Section 36 of the Arbitration and Conciliation Act of 1996
brings back the same situation as it existed from 1899 to 1940.
Only under the Arbitration Act, 1940, the award was required to
be made a rule of court i.e. required a judgment followed by a
decree of court.'
The issue that an award made in arbitral
proceedings is not a decree within the meaning of CPC
having been settled by the aforesaid pronouncement by the
Hon'ble Supreme Court, the provisions of Section 47CPC
cannot be available to obstruct the execution of the award.
Much emphasis has been laid by the learned counsel for
the applicant on the decision of the Hon'ble Supreme Court
in Dharma Prathishthanam v. Madhok Construction (P)
Ltd. [Dharma Prathishthanam v. Madhok Construction (P)
Ltd., (2005) 9 SCC 686] wherein it has been held that in the event
of appointment of an arbitrator and reference of disputes to him
being void ab initio as totally incompetent or invalid the award
shall be void and liable to be set aside in any appropriate
proceedings when sought to be enforced or acted upon. However,
the said case relied upon by the learned counsel for the applicant
is distinguishable and will have no application in the facts of the
present case. In the said case when the award was filed in the
court for making rule of the court under the 1940 Act, objections
were filed by the judgment-debtor under Section 30 of the said Act
which were dismissed on the ground that they were filed beyond
the prescribed period of limitation. The intra-court appeal
preferred against the said order was also dismissed by the Division
Bench against which appeal by special leave was filed. The dispute
being under the 1940 Act, the question of interpretation of
Sections 35 and 36 of the Act and applicability of Section 47CPC to
the execution of an award was not under consideration before the
Hon'ble Supreme Court. The Hon'ble Supreme Court was
considering the validity of the objection filed under Section 30 of
the 1940 Act and having found that since the appointment of
arbitrator and reference of dispute was void and as such the award
was also void and the fact that application was filed beyond the
period of limitation was not of much significance and delay was
liable to be condoned. The same can be inferred from the following
observations made in para 32 of the judgment: (SCC p. 701, para
32)
'32. In the present case, we find that far from submitting
to the jurisdiction of the arbitrator and conceding to the
appointment of and reference to the arbitrator Shri Swami Dayal,
the appellant did raise an objection to the invalidity of the entire
proceedings beginning from the appointment till the giving of the
award though the objection was belated. In ordinary course, we
would have after setting aside the impugned judgments of the
High Court remanded the matter back for hearing and decision
afresh by the learned Single Judge of the High Court so as to
record a finding if the award is a nullity and if so then set aside
the same without regard to the fact that the objection petition
under Section 30 of the Act filed by the appellant was beyond the
period of limitation prescribed by Article 119(b) of the Limitation
Act, 1963. However, in the facts and circumstances of the case,
we consider such a course to follow as a futile exercise resulting in
needless waste of public time. On the admitted and undisputed
facts, we are satisfied, as already indicated hereinabove, that the
impugned award is a nullity and hence liable to be set aside and
that is what we declare and also do hereby, obviating the need for
remand.'
In the present case, the situation is quite different. The
applicant invoking Section 34 of the Act filed their objection
challenging the validity of the award which were dismissed as
barred by limitation. The judgment came to be affirmed by the
Hon'ble Supreme Court on dismissal of the special leave petition.
The grounds of challenge to the arbitral award which were
dismissed as barred by limitation, were much before the Hon'ble
Supreme Court but it did not find it fit to condone the delay and to
consider grounds of challenge on merit, itself or remand back the
proceedings for the said purpose. Hon'ble Supreme Court rather
chose to affirm the orders passed by the District Judge and this
Court dismissing the objection as barred by limitation. Thus, the
reliance placed by the learned counsel for the applicant on the
aforesaid pronouncement of the Hon'ble Supreme Court is totally
misfounded.
Apart from above, the extent of judicial intervention
has been circumscribed by Section 5 of the Act. In other
words, judicial interpretation is prohibited except as
provided under the Act. Section 5 of the Act reads as under:
'5.Extent of judicial intervention.--Notwithstanding
anything contained in any other law for the time being in force, in
matters governed by this part, no judicial authority shall intervene
except where so provided in this part.' Section 5 of the Act falls
under Part I which includes within its ambit Section 2 to Section
43 of the Act. Thus, Sections 34 and 36 are also included in Part I
of the Act. The judicial intervention having been limited by the
legislature, the court cannot interfere at any and every stage on a
ground other than those available in the Act itself. Thus, once
stage of Section 34 is over and the award becomes final under
Section 35, judicial intervention in the execution of the award
under Section 36 cannot be held to be permissible on any ground,
whatsoever, in view of the limitation imposed by Section 5 of the
Act.
Thus, having regard to the provisions of Sections 5,
12, 13, 16, 34, 35 and 36 of the Act, the irresistible
conclusion is only grounds which can be pressed into
service for challenge to an award is within the ambit and
scope of Section 34 of the Act. Once the stage of Section 34
is over and the questions that were raised or could have
been raised at that stage cannot be allowed to be raised
again and again by pressing into service Section 47 of the
Code of Civil Procedure at the time of execution of award
under Section 36 of the Act."
(Emphasis supplied)
On a blend of the judgments rendered by the High Courts
of Delhi and Allahabad, to which I am in respectful
agreement of, what the petitioner has lost to be done
directly is wanting to be done indirectly. The challenge
now is to the execution proceedings having lost the
opportunity to challenge the arbitral award. Therefore,
the challenge raised now is, on the face of it, untenable
and is sans countenance."
(Emphasis supplied)
7.5. Further, it becomes germane to notice the judgment of
the Allahabad High Court reported in the case of STATE OF U.P. v.
SHRI RAJ VEER SINGH2, wherein the Allahabad High Court has
held as follows:
".... .... ....
9. Through various judicial pronouncements, the
Supreme Court has underscored that while the executing
court has authority to decide all questions arising
between the parties, its jurisdiction is confined to
matters pertaining to the execution of the decree. An
executing court cannot delve in the validity of a decree
unless it lacks jurisdiction. This principle is crucial in
maintaining the finality of decrees. Powers of the
executing court are inherently limited compared to
appellate or Revisional Courts. As elucidated by the
Supreme Court in Dhurandhar Prasad Singh v. Jai
Prakash University [Dhurandhar Prasad Singh v. Jai
Prakash University, (2001) 6 SCC 534] (Coram: G.B.
Pattanaik and B.N. Agrawal, JJ.) the executing court's
role is akin to "a microscopic inspection hole" focusing
solely on the executability of the decree.
.... .... ....
13. Having dealt with the scope of Section 47 CPC, 1908,
this Court will now deal with the applicability of Section 47 CPC,
1908 to execution of arbitral awards under Section 36 of the
Act.
14. Section 36 of the Act which governs the execution of
the arbitral awards is extracted below for ease of reference:
"36.Enforcement.--(1) Where the time for
making an application to set aside the arbitral award
2024 SCC OnLine All 1094
under Section 34 has expired, then, subject to the
provisions of sub-section (2), such award shall be
enforced in accordance with the provisions of the Civil
Procedure Code, 1908 (5 of 1908), in the same manner
as if it were a decree of the court.
(2) Where an application to set aside the arbitral
award has been filed in the court under Section 34, the
filing of such an application shall not by itself render that
award unenforceable, unless the court grants an order of
stay of the operation of the said arbitral award in
accordance with the provisions of sub-section (3), on a
separate application made for that purpose.
(3) Upon filing of an application under sub-
section (2) for stay of the operation of the arbitral
award, the court may, subject to such conditions as it
may deem fit, grant stay of the operation of such award
for reasons to be recorded in writing:
Provided that the court shall, while considering
the application for grant of stay in the case of an arbitral
award for payment of money, have due regard to the
provisions for grant of stay of a money decree under the
provisions of the Civil Procedure Code, 1908 (5 of
1908):
[Provided further that where the court is satisfied
that a prima facie case is made out that,
(a) the arbitration agreement or contract which is
the basis of the award; or
(b) the making of the award, was induced or
effected by fraud or corruption, it shall stay the award
unconditionally pending disposal of the challenge under
Section 34 to the award.
Explanation.--For the removal of doubts, it is
hereby clarified that the above proviso shall apply to all
court cases arising out of or in relation to arbitral
proceedings, irrespective of whether the arbitral or court
proceedings were commenced prior to or after the
commencement of the Arbitration and Conciliation
(Amendment) Act, 2015.]"
15. The phrase that lies at the centre of the instant
dispute is the one which provides that an arbitral award
will be "enforced in accordance with the provisions of the
Civil Procedure Code, 1908 (5 of 1908), in the same
manner as if it were a decree of the court." The question
which arises is that although Section 36 of the Act,
provides for the execution of arbitral awards as if they
were a decree of the court, do they acquire the similar
status as that of a decree passed by a civil court?
16. The language of a statute serves as the
cornerstone of statutory interpretation, providing the
framework within which courts must construe and apply
the law. It is through the words and phrases used in a
statute that the legislature communicates its intentions.
The principle that the language of a statute is the
determinative factor of legislative intent reflects the
fundamental tenet of statutory interpretation that courts
must give effect to the plain meaning of the statutory
language. This principle is rooted in the doctrine of
legislative supremacy, which holds that the legislature is
the supreme authority in the enactment of laws. As such,
courts are obligated to interpret statutes in accordance
with the ordinary and natural meaning of the words used,
absent clear evidence of legislative intent to the contrary.
17. Moreover, the plain meaning rule serves to safeguard
the separation of powers and preserve the integrity of the
legislative process. By respecting the language chosen by the
legislature, courts refrain from encroaching upon the legislative
domain and usurping the role of the legislature. Instead, they
defer to the democratic process and give effect to the will of the
legislature as expressed through the text of the statute.
18. In Nagar Palika Nigam v. Krishi Upaj Mandi Samiti
[Nagar Palika Nigam v. Krishi Upaj Mandi Samiti, (2008) 12 SCC
364] (Coram: Dr Arijit Pasayat, P. Sathasivam and Aftab Alam,
JJ.) the Supreme Court propounded that the intention of the
legislature is to be gauged from the language used in a statute
and attention must be paid to what has been said and also to
what has not been said. Relevant portion from the aforesaid
judgment is extracted below: (SCC pp. 369-371, paras 17-24)
"17. Words and phrases are symbols that
stimulate mental references to referents. The object of
interpreting a statute is to ascertain the intention of the
legislature enacting it. (See ICAI v. Price Waterhouse
[ICAI v. Price Waterhouse, (1997) 6 SCC 312 : (1997)
90 Comp Cas 113 : AIR 1998 SC 74] .) The intention of
the legislature is primarily to be gathered from the
language used, which means that attention should be
paid to what has been said as also to what has not been
said. As a consequence, a construction which requires
for its support, addition or substitution of words or which
results in rejection of words as meaningless has to be
avoided. As observed in Robert Wigram Crawford v.
Richard Spooner [Robert Wigram Crawford v. Richard
Spooner, 1846 SCC OnLine PC 7 : (1846) 6 Moo PC 1 :
13 ER 582] , courts cannot aid the legislatures' defective
phrasing of an Act, we cannot add or mend, and by
construction make up deficiencies which are left there.
(See State of Gujarat v. Dilipbhai Nathjibhai Patel [State
of Gujarat v. Dilipbhai Nathjibhai Patel, (1998) 3 SCC
234 : 1998 SCC (Cri) 737 : JT (1998) 2 SC 253] .) It is
contrary to all rules of construction to read words into
an Act unless it is absolutely necessary to do so. [See
Stock v. Frank Jones (Tipton) Ltd. [Stock v. Frank Jones
(Tipton) Ltd., [1978] 1 WLR 231 : (1978) 1 All ER 9487]
] Rules of interpretation do not permit courts to do so,
unless the provision as it stands is meaningless or of
doubtful meaning. Courts are not entitled to read words
into an Act of Parliament unless clear reason for it is to
be found within the four corners of the Act itself. (Per
Lord Loreburn, L.C. in Vickers Sons & Maxim Ltd. v.
Evans [Vickers Sons & Maxim Ltd. v. Evans, [1910] A.C.
444] quoted in Jumma Masjid v. Kodimaniandra Deviah
[Jumma Masjid v. Kodimaniandra Deviah, 1962 SCC
OnLine SC 157 : AIR 1962 SC 847] .)
18. The question is not what may be supposed
and has been intended but what has been said. 'Statutes
should be construed, not as theorems of Euclid', Judge
learned Hand said, 'but words must be construed with
some imagination of the purposes which lie behind
them'. (See Lenigh Valley Coal Co. v. Yensavage [Lenigh
Valley Coal Co. v. Yensavage, 218 FR 547] .) The view
was reiterated in Union of India v. Filip Tiago De Gama
[Union of India v. Filip Tiago De Gama, (1990) 1 SCC
277 : AIR 1990 SC 981] (SCC p. 284, para 16).
19. In D.R. Venkatachalam v. T.N. RTC [D.R.
Venkatachalam v. T.N. RTC, (1977) 2 SCC 273 : AIR
1977 SC 842] it was observed that courts must avoid
the danger of a priori determination of the meaning of a
provision based on their own preconceived notions of
ideological structure or scheme into which the provision
to be interpreted is somewhat fitted. They are not
entitled to usurp legislative function under the disguise
of interpretation.
20. While interpreting a provision the court only
interprets the law and cannot legislate it. If a provision
of law is misused and subjected to the abuse of the
process of law, it is for the legislature to amend, modify
or repeal it, if deemed necessary. (See CST v. Popular
Trading Co. [CST v. Popular Trading Co., (2000) 5 SCC
511 : (2000) 118 STC 379] ) The legislative casus
omissus cannot be supplied by judicial interpretative
process.
21. Two principles of construction -- one relating
to casus omissus and the other in regard to reading the
statute as a whole -- appear to be well-settled. Under
the first principle a casus omissus cannot be supplied by
the court except in the case of clear necessity and when
reason for it is found in the four corners of the statute
itself but at the same time a casus omissus should not
be readily inferred and for that purpose all the parts of a
statute or section must be construed together and every
clause of a section should be construed with reference to
the context and other clauses thereof so that the
construction to be put on a particular provision makes a
consistent enactment of the whole statute. This would
be more so if literal construction of a particular clause
leads to manifestly absurd or anomalous results which
could not have been intended by the legislature. 'An
intention to produce an unreasonable result', said
Danckwerts, L.J., in Artemiou v. Procopiou [Artemiou v.
Procopiou, (1966) 1 QB 878 : (1965) 3 WLR 1011 :
(1965) 3 All ER 539] (All ER p. 544 I), 'is not to be
imputed to a statute if there is some other construction
available'. Where to apply words literally would 'defeat
the obvious intention of the legislation and produce a
wholly unreasonable result', we must 'do some violence
to the words' and so achieve that obvious intention and
produce a rational construction. [Per Lord Reid in Luke
v. Inland Revenue Commr. [Luke v. Inland Revenue
Commr., [1963] A.C. 557 : (1963) 2 WLR 559 : (1963)
1 All ER 655] where at AC p. 577 he also observed (All
ER p. 664 I): 'this is not a new problem, though our
standard of drafting is such that it rarely emerges.']
22. It is then true that,
'when the words of a law extend not to an
inconvenience rarely happening, but due to those which
often happen, it is good reason not to strain the words
further than they reach, by saying it is casus omissus, and
that the law intended quae frequentius accidunt'. 'But', on
the other hand, 'it is no reason, when the words of a law
do enough extend to an inconvenience seldom happening,
that they should not extend to it as well as if it happened
more frequently, because it happens but seldom' (see
Fenton v. Hampton [Fenton v. Hampton, (1858) 11 Moo
PC 347 : 14 ER 727] ).
A casus omissus ought not to be created by
interpretation, save in some case of strong necessity.
Where, however, a casus omissus does really occur, either
through the inadvertence of the legislature, or on the
principle quod semel aut bis existit proetereunt
legislatores, the rule is that the particular case, thus left
unprovided for, must be disposed of according to the law
as it existed before such statute -- casus omissus et
oblivioni datus dispositioni communis juris relinquitur; 'a
casus omissus', observed Buller, J. in Jones v. Smart
[Jones v. Smart, (1785) 1 TR 44 : 99 ER 963] (ER p. 967),
'can in no case be supplied by a court of law, for that
would be to make laws'.
23. The golden rule for construing wills, statutes,
and, in fact, all written instruments has been thus
stated:
'... the grammatical and ordinary sense of the
words is to be adhered to, unless that would lead to
some absurdity or some repugnance or inconsistency
with the rest of the instrument, in which case the
grammatical and ordinary sense of the words may be
modified so as to avoid that absurdity or
inconsistency, but no further.' (See Grey v. Pearson
[Grey v. Pearson, [1843-60] All ER 21 : [1857] 6
H.L. Cas 61] , All ER p. 36 H-I.)
The latter part of this 'golden rule' must,
however, be applied with much caution. 'If',
remarked Jervis, C.J., 'the precise words used are
plain and unambiguous, in our judgment, we are
bound to construe them in their ordinary sense, even
though it do lead, in our view of the case, to an
absurdity or manifest injustice. Words may be
modified or varied, where their import is doubtful or
obscure. But we assume the functions of legislators
when we depart from the ordinary meaning of the
precise words used, merely because we see, or fancy
we see, an absurdity or manifest injustice from an
adherence to their literal meaning'. (See Abley v.
Dale [Abley v. Dale, (1851) 11 CB 378 : 138 ER 519]
, ER p. 525.)
24. At this juncture, it would be necessary to
take note of a maxim 'ad ea quae frequentius accidunt
jura adaptantur' (the laws are adapted to those cases
which more frequently occur).
The above position was highlighted in
Maulavi Hussein Haji Abraham Umarji v. State of
Gujarat [Maulavi Hussein Haji Abraham Umarji v.
State of Gujarat, (2004) 6 SCC 672 : 2004 SCC (Cri)
1815] (SCC pp. 679-82, paras 10-24)."
19. While the plain meaning rule provides a starting
point for statutory interpretation, it is not an absolute
principle and must be applied judiciously in light of the
broader context and purpose of the statute. As Justice
Oliver Wendell Holmes famously remarked, "A word is
not a crystal, transparent and unchanged; it is the skin of
a living thought and may vary greatly in colour and
content according to the circumstances and the time in
which it is used."
20. To conclude, while the language of a statute
serves as the primary means by which legislative intent is
communicated and realised, this principle must be
applied judiciously in light of the broader context and
purpose of the statute, recognising that statutes are part
of a larger legal framework shaped by legislative purpose
and policy objectives.
21. The phrase "as if it were a decree of the court"
occurring in Section 36 of the Act needs to be interpreted
in light of the principles discussed above. The phrase "as
if it were" is a construction used in language to suggest a
hypothetical scenario or condition, implying that
something is being treated or considered in a manner
akin to a particular situation, even if it is not actually the
case. It is often employed to convey a comparison or
analogy between two different States or circumstances.
When used in legal or formal contexts, "as if it were"
indicates that a particular statement or action is being
treated as if it were true, even though it may not be
factually accurate. This can be useful in scenarios where
a hypothetical situation needs to be imagined or
simulated for analytical or augmentative purposes. The
phrase "as if it were" might be used to establish a legal
fiction or presumption, where a certain condition or event
is deemed to exist for the purpose of legal analysis, even
if it does not actually exist in reality.
22. Under Section 36 of the Act, the phrase "as if it
were" conveys the idea of treating the arbitral award in a
manner analogous to a court decree, despite the fact that
it is not actually a decree issued by a court. By employing
this language, Section 36 of the Act establishes a legal
fiction or presumption, whereby the arbitral award is
deemed to possess certain characteristics and legal
effects akin to those of a court decree. Essentially, it
means that once the time-limit for challenging the
arbitral award has expired, the award is to be enforced
through the same procedures and mechanisms as a court
decree under the CPC, 1908. This includes the execution
of the award through the court's enforcement powers,
such as attachment of property, or other coercive
measures. By equating the arbitral award with a court
decree, "as if it were" one, Section 36 of the Act extends
certain privileges and protections afforded to court
decrees to arbitral awards. For example, the arbitral
award becomes immune from collateral attack or
challenge on the grounds that could have been raised
during the arbitration proceedings or in a subsequent
application to set aside the arbitral award under Section
34 of the Act. By affording arbitral awards a status akin
to court decrees for enforcement purposes, Section 36 of
the Act encourages parties to arbitration agreements to
abide by the arbitration process and accept the resulting
awards as binding an enforceable.
23. In India Oil Corpn. Ltd. v. Commercial Court [India
Oil Corpn. Ltd. v. Commercial Court, 2023 SCC OnLine All 809]
(Coram: Neeraj Tiwari, J.) this Court held that an arbitral award
is not a decree and objections under Section 47CPC, 1908 would
not be maintainable against an arbitral award. Relevant paras
have been extracted herein: (SCC OnLine All paras 46-48)
"46. Again the very same issue of filing of
objection under Section 47CPC came before this Court
in Bharat Pumps and Compressors Ltd. v. Chopra
Fabricators & Manufacture (P) Ltd. [Bharat Pumps and
Compressors Ltd. v. Chopra Fabricators & Manufacture (P)
Ltd., 2022 SCC OnLine All 1477] and court following the
ratio of law laid down by this Court in L&T Ltd. v. Maharaji
Educational Trust [L&T Ltd. v. Maharaji Educational Trust,
2010 SCC OnLine All 1866] has held as follows: (Bharat
Pumps and Compressors Ltd. case [Bharat Pumps and
Compressors Ltd. v. Chopra Fabricators & Manufacture (P)
Ltd., 2022 SCC OnLine All 1477] , SCC OnLine All paras 22
and 23)
'22. The Arbitration Act, 1940 is self-
contained, complete code and Section 17 thereof
is in pari materia with Section 36 of the
Arbitration and Conciliation Act, 1996. Section 20
thereof, provides for challenging the
appointment of an arbitrator. The revisionist
never challenged appointment of the arbitrator
under Section 20 thereof. Sections 30/33 and 37
of the Arbitration Act, 1940, read with Article
119 of the Limitation Act, give provision for an
application to be filed within 30 days of notice of
award; however, no such application within the
said period was filed by the revisionist.
23. The arbitration award by way of
friction is executed as decree, but it is not a
decree as defined under Section 2(2)CPC and
therefore, the objection under Section 47CPC,
which was filed only in execution of decree (as
defined under Section 2(2)CPC), is not
maintainable in the proceedings seeking
execution of award.'
47. This Court has again taken view that arbitral award
is not a decree under Section 2(2)CPC, therefore,
objection filed under Section 47CPC is not maintainable.
48. To conclude this point on the basis of undisputed
fact, objection under Section 47CPC filed against the
arbitral award is not maintainable as the same is not a
decree under Section 2(2)CPC. Further, arbitral award can
be executed invoking Section 36 of the new Act, 1996
along with the provisions of CPC in the same manner as if
it is decree of the court."
24. In Hindustan Zinc Ltd. v. National Research
Development Corpn. [Hindustan Zinc Ltd. v. National Research
Development Corpn., 2023 SCC OnLine Del 330] (Coram:
Yashwant Varma, J.) the Delhi High Court held that since
objections under Section 47CPC, 1908 are not available in
proceedings under Section 36 of the Act, challenge to an arbitral
award on its merits cannot be permitted under Section 36 of the
Act: (SCC OnLine Del paras 20-23)
"20. Mahanagar telephone, assumes significance
in light of the emphasis which was laid by the Supreme
Court on Section 5 of the Act and the enactment itself
being liable to be construed and understood as being a
comprehensive legislation governing all aspects of
arbitral proceedings. The court deems it apposite to
lay emphasis on the above since the acceptance of
the contention as advanced by learned counsel for
the objector would essentially amount to
recognising a right inhering in the objector to
challenge or question the award on its merits in
proceedings which stand restricted to enforcement
and execution. That cannot possibly be permitted
in light of the plain command of Section 36 of the
Act. It would be pertinent to note that the Act
envisages a challenge to an arbitral award being
mounted solely within the contours of Section 34.
Section 34 not only constructs the forum but also
creates the right to question an arbitral award on
grounds specified in that provision itself. This is
manifest from the use of the expression 'only if....'
as occurring in Section 34(2). Accepting the
contention of learned counsel for the objector that
a challenge to the award on merits would also be
permissible in proceedings referable to Section 36
would clearly amount to recognising the same
being an avenue available to be invoked in
addition to the limited right which stands
conferred by Section 34. Bearing in mind the
principal objectives of the Act as well as the
legislative policy underlying Sections 34 and 36,
the court finds itself unable to countenance the
submission as addressed at the behest of the
objector.
21. It would be pertinent to note that Order
21 of the Code compendiously deals with the
subject relating to execution of decrees. Those
provisions extend from attachment of properties
to sale and auction thereof. It also envisages the
trial of questions that may arise in the course of
execution as would be evident from the various
provisions contained in that chapter such as Order
21 Rule 46-C as well as Rules 58 to 63 and 101. As
this Court reads those provisions, they clearly appear to
be restricted to questions that would be indelibly
connected with actions and steps that may be taken by
a court in the course of execution of a decree. Even
those provisions cannot possibly be construed as
extending to a challenge to the validity or correctness of
the original judgment and decree that may be rendered.
While it may be open the court to draw sustenance
and guidance from the principles underlying the
provisions contained in Order 21 in the course of
enforcement of an arbitral award, it would be
wholly incorrect to understand or interpret Section
36 as envisaging the adoption of its various
provisions. The principles which inform the various
provisions of Order 21 can at best only act as a
guide for the trial of various questions that may
arise in the span of enforcement of an arbitral
award.
22. In summation, it must be held that a
challenge to an award on the ground that it is a
'nullity' or is otherwise illegal can be addressed
only in proceedings that may be initiated in
accordance with Section 34 of the Act. The
grounds on which an award can possibly be
assailed are comprehensively set out in Section
34(2). A challenge mounted on those lines in
proceedings duly instituted under Section 34 alone
can be recognised to be the remedy available to a
judgment-debtor. The Act neither envisages nor
sanctions a dual or independent challenge to an
award based on the various facets of nullity as
legally recognised being laid in enforcement
proceedings. The conclusion of the court in this
respect stands fortified from a conjoint reading of
Sections 5, 35 and 36 of the Act as well as the
precedents noticed hereinabove. The aforesaid
statement of the law would necessarily be subject
to the caveat which is liable to be entered in
respect of foreign awards and which are governed
by Part II of the Act. Insofar as enforcement
proceedings are concerned, while the court would
be obliged to deal with all questions that may
relate to or arise out of steps that may be taken in
the course of execution, it would be wholly
incorrect to understand the scope of those
proceedings as extending to the trial of questions
touching upon the merits of the award.
23. Accordingly, and for all the aforesaid reasons,
the court comes to conclude that the challenge to the
award on merits as is sought to be raised by
learned counsel for the objector cannot be
countenanced in these enforcement proceedings in
light of the observations as made hereinabove.
The objection to the enforcement of the arbitral
award on that score is consequently negated."
25. Recently, in Sanjay Agarwal v. Rahul Agarwal [Sanjay
Agarwal v. Rahul Agarwal, (2024) 1 HCC (All) 68] (Coram: Alok
Mathur, J.) this Court reiterated that a party aggrieved by an
arbitral award is barred in law to challenge the validity or
legality of the award at the stage of execution under
Section 36 of the Act. Relevant paras are extracted
below: (SCC OnLine All para 31)
"31. Analysing the above decisions, it is now
well-settled that once an award is passed by the
arbitrator, any party aggrieved by the award is
required to challenge the award in accordance
with the procedure provided under the Act of 1996
including the issue relating to the jurisdiction of
the arbitrator, which such issue however, should
be raised before the arbitrator under Section 16 of
the Act, 1996. Therefore, a party, aggrieved by the
award, not having taken any of the measures
provided in the Act, 1996, is barred in law to
challenge the validity or legality of the award at
the execution stage when such award is put into
execution under Section 36 of the Act, 1996. Thus,
the application filed by the opposite party under
Section 47 of the Code of Civil Procedure
challenging the legality and/or validity of the
award on diverse grounds, was not maintainable,
and thus the District Judge did not commit any
illegality by rejecting the same."
26. In Bellary Nirmithi Kendra v. Capital Metal
Industries [Bellary Nirmithi Kendra v. Capital Metal
Industries, 2024 SCC OnLine Kar 51] (Coram: C.M.
Poonacha, J.) the Kerala (sic Karnataka) High Court held
that recourse to Section 47CPC, 1908 cannot be taken in
execution proceedings under Section 36 of the Act.
Relevant paras are extracted below: (SCC OnLine Kar
para 30)
"30. Although it is the vehement contention
of the learned counsel for the petitioner that
having regard to Section 36 of the Act of 1996 the
award passed under the provisions of the Act of
1996 is to be treated as a decree and Section
47CPC could be invoked, it is relevant to note that
having regard to Section 36(1) of the Act of 1996,
the award passed under the provisions of the said
Act is required to be construed as a decree only for
the purpose of enforcement of the same and it is
not open to the petitioner to invoke Section 47CPC
before the executing court.
31. Having regard to the judgments of the
Supreme Court in Paramjeet Singh Patheja case
[Paramjeet Singh Patheja v. ICDS Ltd., (2006) 13
SCC 322] , Morgan Securities & Credit (P) Ltd. v.
Modi Rubber Ltd. [Morgan Securities & Credit (P)
Ltd. v. Modi Rubber Ltd., (2006) 12 SCC 642] ,
Vedanta Ltd. case [Union of India v. Vedanta Ltd.,
(2020) 10 SCC 1] , this Court is in complete
agreement with the view expressed in L&T Ltd.
case [L&T Ltd. v. Maharaji Educational Trust, 2010
SCC OnLine All 1866] as well as State of Tripura
and in view of the said authoritative
pronouncements, it is clear that the petitioner
cannot take recourse of Section 47CPC in the
execution proceedings initiated by the
respondent."
27. In Cholamandalam Investment and Finance Co.
Ltd. v. Amrapali Enterprises, I had outlined that there is
no scope for adverse interference with an arbitral award
under Section 36 of the Act. Relevant para reads as
under: (SCC OnLine Cal para 18)
"18. ... There is no denying the fact that the
Act is a complete code in itself and at the same
time, it is equally true that Section 36 provides no
scope of adverse interference with an arbitral
award except executing it as a decree of the court.
While Section 47 of the Civil Procedure Code, 1908
(hereinafter referred to as the 'CPC') governs the
challenge to a court decree at the execution stage,
there is no such similar provision provided in the
Act...."
What emerges from the aforesaid judgments is that
an arbitral award is not a decree as defined under Section
2(2)CPC, 1908. Therefore, objections under Section
47CPC, 1908 which are specifically applicable to
execution of decrees, are not maintainable against
arbitral awards. The courts have constantly emphasised
the self-contained nature of the Act, which provides a
comprehensive framework for challenging arbitral
awards, including provisions for challenging the
appointment of arbitrators. Section 36 of the Act deals
with enforcement and does not provide for challenges to
the merits of the arbitral awards. Challenges on the
grounds of nullity or illegality can only be raised in
proceedings under Section 34 of the Act, which sets forth
specific grounds for challenging arbitral awards. Allowing
challenges on the merits in enforcement proceedings
would undermine the legislative intent and the
procedural framework established by the Act. Any party
aggrieved by an arbitral award is required to challenge
the arbitral award within the framework provided by the
Act, including raising jurisdictional issues before the
arbitrator under Section 16 of the Act.
28. Though, the legal fiction of equating arbitral
awards to court decrees serves pragmatic purposes, it is
important to acknowledge that, it does not alter the
fundamental nature or origin of arbitral awards. Arbitral
awards are distinct from court judgments in that they
arise from private contractual agreements between the
parties and are issued by private arbitrators rather than
State appointed Judges. Moreover, while arbitral awards
are enforceable "as if they were" court decrees, they are
not actually court decrees. Execution of an arbitral
award, although happens in a manner "as if they were"
court decrees, they are subject to specific limitations
under the Act.
29. Therefore, to conclude, it can be said, that
objections available under Section 47 of the Civil
Procedure Code, 1908 will not be available under Section
36 of the Act since an arbitral award is not in reality a
decree of the court but is merely treated as one for the
limited purpose of enforcement. The key distinction
between court decrees and arbitral awards lies in their
origin and nature. Court decrees are orders or judgments
issued by a court of law, following adversarial
proceedings and adjudication by a Judge. They carry the
imprimatur of the State and are enforceable as such
through the coercive powers of the court. In contrast,
arbitral awards are decisions rendered by private
arbitrators chosen by the parties to a dispute, pursuant to
an arbitration agreement. They arise from contractual
agreements between the parties and are not issued by a
court of law. While they may have the same legal effect
as court decrees once enforced, they are fundamentally
different in origin and nature.
30. Allowing objections under Section 47CPC, 1908
to be raised against arbitral awards would undermine the
finality and binding nature of arbitration awards. It would
subject arbitral awards to same procedural complexities
and delays associated with court proceedings, defeating
the purpose of choosing arbitration as an alternative
dispute resolution mechanism.
31. Accordingly, this Court holds that the objections
which were sought to be raised by the petitioners under
Section 47CPC, 1908 before the Commercial Court,
Moradabad were not maintainable and the rejection of
the petitioners' objections filed under Section 47CPC,
1908 by the Commercial Court, Moradabad on grounds of
maintainability warrants no interference by this Court."
(Emphasis supplied)
The High Court of Allahabad holds that in matters pertaining to
execution of a decree, the powers of the Court under Article 227 of
the Constitution of India is limited. The validity of a decree cannot
be looked into by the Executing Court, unless the decree suffers
from inherent lack of jurisdiction. Objections that would become
available under Section 47 of the CPC will not be available under
Section 36 of the new Act, since the Arbitral award is not a decree
of a Court, but is treated as one for the limited purpose of
enforcement of the award. Further, the jurisdictional issues should
be challenged before the arbitrator under Section 16 of the new
Act, by the aggrieved party to the award.
7.6. Later, a Division Bench of the Telangana High Court, in a
judgment rendered in the case of HYDERABAD METROPOLITAN
DEVELOPMENT AUTHORITY v. CYBERABAD EXPRESSWAY
LIMITED3, has held as follows:
".... .... ....
19. The legality of the impugned order dated 09.12.2024
must be assessed in the light of the undisputed facts as stated
above. The Commercial Court gave the following reasons for
dismissing the petitioners' application under section 47 of the
CPC for stay of the execution of the Award:
i. The petitioners failed in each and every application
for challenge to the Award and for stay of execution
of the Award. Multiple applications filed by the
petitioners were rejected at all levels of the judicial
hierarchy i.e., by the Commercial Court, the High
Court and thereafter by the Supreme Court.
application is pending before the High Court.
iii. The petitioners failed to deposit 50% of the awarded
amount within the timeframe fixed by the High Court in
the order dated 17.10.2023, as a condition for stay of the
Award.
iv. The petitioners filed an application under section 47
of the CPC on the same facts and grounds as were
narrated in the Commercial Court Appeal instead of
pursuing the recourse available under the 1996 Act.
v. The petitioners filed a COP challenging the legality
of the Award when the Award was put into
execution under section 36 of the 1996 Act.
vi. Section 47 of the CPC does not apply to the facts of
this case since the Award is not a decree as defined
under section 2(2) of the CPC.
2025 SCC OnLine TS 256
vii. The petitioners failed to demonstrate any subsequent
events after dismissal of the SLP by the Supreme Court
on 09.04.2024 which would justify maintaining the
section 47 application.
20. We find the above reasons to be fully within the
framework of law i.e., The Arbitration and Conciliation
Act, 1996 and judicial precedents. The Commercial Court
considered both the relevant facts as well as the
provisions of the 1996 Act in support of its decision to
reject the petitioners' application under section 47 of the
CPC.
21. The Arbitration and Conciliation Act, 1996, is a
complete code in itself as it envisages and provides for a
comprehensive mechanism for parties to settle their
disputes before an Arbitral Tribunal. The mechanism
covers the entire gamut of proceedings from invocation
of the arbitration clause → nomination of the Arbitrator/s
→ conduct of the arbitration proceedings including the
determination of the seat and venue → regulation of the
procedure within prescribed time limits → challenge to
the jurisdiction of the arbitrator → interim measures →
termination of the proceedings → determination of the
form and content of the award and ends into termination
of the arbitration process.
22. The 1996 Act also encompasses the post-award
stage providing for recourse against the award and an
appeal from that decision. Further, the Act provides for
stay of the award pending consideration of an application
for setting aside of the award. The mechanism aims to
protect the rights of an Award holder through
enforcement of the award ensuring that the Award-
debtor complies with the terms and conditions imposed
by the Court for obtaining stay of the Award.
23. Section 36 of the 1996 Act refers to the Code of
Civil Procedure to the extent of enforcement of the
arbitral award in accordance with the provisions of the
CPC. The first proviso to section 36(3) of the 1996 Act
authorises the Court to impose conditions for stay of
operation of the Award, having due regard to the
provisions for grant of stay of a money decree under the
CPC.
24. A careful reading of Section 36 of the Act would
make it clear that the CPC only has a limited role in the
matter of enforcement and stay of the Award. The
language of section 36(1) emphasizes that the Award
shall be enforced in accordance with the provisions of the
CPC in the same manner as if it were a decree of the
Court. Section 36(1) of the 1996 Act is set out below:
"36. Enforcement.--(1) Where the time for
making an application to set aside the arbitral
award under section 34 has expired, then, subject
to the provisions of subsection (2), such award
shall be enforced in accordance with the
provisions of the Civil Procedure Code, 1908 (5 of
1908), in the same manner as if it were a decree
of the court."
25. The section itself demarcates the terrain of an
award as opposed to the mode of its
execution/enforcement. The reference to the CPC is
restricted to the manner in which the award is to be
enforced. The reference to the CPC does not spill over to
the award itself for the purpose of equating the award
with a decree as defined under section 2(2) of the CPC.
The remaining part of section 36 sheds further light on
this issue by diverging from the CPC route and
establishing a specific mechanism under the 1996 Act for
stay of enforcement of the award. Section 36(3) provides
the only means of pausing the execution of the award by
conferring the Court with discretion to decide the issue of
stay and impose conditions in accordance with the CPC in
case of money awards. Therefore, the distinction drawn
by the Trial Court between an award and the procedure
for enforcement thereof fits with the statutory framework
of the 1996 Act.
26. We hence do not find any reason to interfere with the
findings of the Commercial Court. We also agree with the views
expressed by the Commercial Court that the petitioners have
not given any justification under the law for pursuing an
alternative route for challenging the legality of the Award,
without exhausting their rights under the pending Appeal under
section 37 of the 1996 Act.
27. We find the conduct of the petitioners not only to be
in blatant disregard of the law but also evincing desperation to
avoid the processes of law by pushing back their obligation to
make payment to the Award-holder by filing one vexatious
proceeding after another. The petitioners' selective reliance
on the CPC for mounting a challenge to the Award under
section 47 of the CPC is contrary to law. In fact, the
petitioners have no explanation for suddenly switching
from the main line to a chord line for reaching the same
distinction i.e., for nullifying the Award.
28. In essence, the objections/grounds available to
a judgment-debtor under section 47 of the CPC are
distinct from those available to an Award-Debtor under
section 36 of the 1996 Act. A judgment passed by a Court
of law and an award made by an Arbitral Tribunal arise
from different sources of conflict, procedures and the
parties' willingness to adjudicate their dispute in a forum
of their choice (culminating in an award).
29. Moreover, The Arbitration and Conciliation Act,
1996 is a special statute which consolidates the law
relating to domestic and international commercial
arbitrations and enforcement of awards under both these
categories. The Act draws upon the provisions of the CPC
for limited purposes and circumstances. These
circumstances are expressly stated in the Act and are not
to be inferred or invoked based on the convenience of a
party. That would be undermining the finality and binding
nature of Arbitral Awards, as declared under section 35 of
the Act."
(Emphasis supplied)
The Division Bench holds that Section 47 of the CPC cannot be used
as an alternative to Section 37 of the new Act, for unsettling the
arbitration award. In the light of the unequivocal elucidation of law
by different High Courts and that of this Court, what would
unmistakably emerge is, the non-interference with the order passed
by the concerned Court, rejecting the application filed by the
petitioner under Section 47 of the CPC, contending that the
execution petition is not maintainable. The issue No.1 is answered
accordingly.
8. In the light of the first issue as to whether the execution
proceedings could be interdicted or obliterated owing to Section 47
of the CPC being answered against the petitioner, holding the
execution petition to be maintainable, the other two issues with
regard to the award being passed under the new Act for a
proceeding that began under the old Act and whether the
partnership firm was dissolved in the correct procedure as laid
down under the Partnership Act, 1932 need not be gone into, as
those submissions if considered, would be touching upon the merit
of the arbitral award and entertaining a petition which indirectly
seeks to touch upon the award on its merit.
9. Therefore, finding no merit in the petition, the petition
stands rejected. Interim order of any kind subsisting stands
dissolved.
Pending applications if any, also stand disposed.
Sd/-
(M.NAGAPRASANNA)
JUDGE
bkp
CT:MJ
