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TMI Blog2005 (4) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... pay ₹ 5 lakhs out of ₹ 14 lakhs due on or before 29-10-2004. ( 2. ) Heard Mr. R. Krishnamurthy, learned senior counsel for appellants and Mr. Vasudevan for respondent. ( 3. ) The respondent herein, namely, M/s. Tata Finance limited obtained an award for ₹ 10,89,782/- as compensation on arrears of monthly hire charges being contract balance at 18 per cent per annum on the said principal amount of ₹ 6,97,540/- with effect from 18-10-2000 and also ₹ 17,250/- towards arbitration cost and fees by an arbitration award dated 24-7-2001. It is their claim that the said debtors have not paid any amount towards the award dated 24-7-2001 to the petitioning creditor. According to the petitioning creditor, as on 10-11-2003, a sum of ₹ 14,91,615-42 was due from the debtors jointly and severally. It is also stated that there is no application filed to set aside the award dated 24-7-2001 to the knowledge of the petitioning creditors. Therefore, the petitioning creditor prayed to issue Insolvency Notice to the debtors under Section 9 (2) of Presidency Town Insolvency Act and Form No. 14 (a) of the Insolvency Rules. Questioning the said Insolvency Notice, the deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Bombay High Court on 17-8-2004. The award dated 24-7-2001 is, therefore, become final. Hence the application making allegations against the arbitration is not maintainable. The debtors have not furnished sufficient ground as contemplated under Section 9 (5) of the Act to set aside the Insolvency Notice No. 183 of 2003. ( 5. ) I Mr. R. Krishnamurthy, learned senior counsel for the debtors/appellants would argue that the award under arbitration proceedings cannot be construed as a decree or order passed by the Court; hence the invocation of insolvency proceedings under the Presidency Towns Insolvency Act is not maintainable and before deciding the said issue, the learned Judge has committed an error in imposing a condition by directing the debtors for payment of ₹ 5 lakhs. (ii) On the other hand, Mr. Vasudevan, learned counsel appearing for the respondent-petitioning creditor, would submit that inasmuch as the arbitration proceedings has reached its finality and in view of Section 36 of the Arbitration and Conciliation Act, 1996 and in the light of default committed by the debtors, the petitioning creditor is fully justified in invoking the insolvency jurisdiction and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t; As per Section 35 an arbitral award shall be final and binding on the parties and persons claiming under them respectively. We have already found that the arbitration award dated 24-7-2001 has reached its finality, since the same has been confirmed up-to the level of the Division Bench of the Bombay High Court. In such a circumstance, as per Section 36 of the Arbitration and Conciliation Act, the award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a decree of the Court. In the light of the above mentioned provisions, we hold that the Insolvency Notice I. N. No. 183/2003 dated 11-12-2003 is valid and reject the objection regarding invocation of the insolvency proceedings. ( 8. ) Mr . R. Krishnamurthy, learned senior counsel for the debtors, by relying on a decision of the Bombay High Court in In Re: Siddharth Srivastava, reported in AIR 2002 Bombay 494, would submit that the award of arbitration is not a decree for the purpose of Section 9 (2) even though it may be enforceable as if it were decree. It is true that in that decision, the learned Single Judge of the Bombay High Court, after referring to Section 2 (2) of the Code of Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st be formal and final and must be given by a civil or revenue Court. By Section 2 (14) the expression 'order' is defined to mean the formal expression of any decision of a Civil Court which is not a decree. ( 9. ) In the light of these principles, if we consider the provisions of subsection (2) of Section 9 of the Insolvency Act, the essential condition is that the creditor must have obtained a decree or order against the debtor for the payment of money and that decree or order must be final and of which execution has not been stayed. Under the Arbitration Act, 1940 an award of the Arbitrator could not be enforced unless it was made rule of the Court. Under the new Act an arbitral award becomes enforceable as if it were a decree of the Court on expiry of the time for making an application to set it aside under Section 34, or where any such application has been made, on the same being refused. In construing the words "as if it were a decree of the Court", the Court must be guided by the substance of the matter and not merely form. The substance of the matter is that when an award is made it is enforceable in exactly the same manner as a decree and is as binding a ..... 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