TMI Blog2017 (3) TMI 1927X X X X Extracts X X X X X X X X Extracts X X X X ..... assed the decree had no jurisdiction to pass the same can be taken in execution proceedings only if it appears on the face of the record and does not require any determination of facts, not otherwise. Whether the said law applies to proceedings for execution of arbitral awards also particularly in the light of observations in MSP Infrastructure Ltd. and Bharti Cellular Ltd. [ 2012 (9) TMI 1239 - DELHI HIGH COURT] ? - HELD THAT:- The observations MSP Infrastructure Ltd. and Bharti Cellular Ltd. supra to the effect that the judgments of civil law would not apply to a proceeding under special law as the Arbitration Act, apply to only the proceedings provided for under the Arbitration Act and cannot be extended to the proceedings for execution of an Arbitral Award, as if it were a decree of the Court. Once the Arbitration Act, 1996 itself has conferred on the Arbitral Award the status of a decree of the Civil Court and made the same executable in accordance with the provisions of CPC, there are no reason to apply the aforesaid observations made in an entirely different context i.e. to execution proceedings - the observations aforesaid in MSP Infrastructure Ltd. and Bharti Cellul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a decree is sought of an Arbitral Award dated 21st December, 2006 of Mr. Ram Bhaj Mittal, sole Arbitrator, Paper Merchants Association (Regd.), Delhi, of recovery of Rs. 3,44,28,861/- with interest @ 12% per annum from the date of the Award till the date of realisation, in favour of Khanna Traders and against Scholar Publishing House Pvt. Ltd. and others . 2. In the execution petition, besides Scholar Publishing House Pvt. Ltd., Mr. Ramesh Ranade, Mr. Rajesh Ranade, Mr. Satish Ranade and Mr. Inderjit Sharma have been impleaded as judgement debtors (JDs). 3. Notice of the execution petition was issued. 4. EA No. 39/2014 has been filed by the decree holder (DH) Khanna Traders under Order XXI Rule 41 of the Code of Civil Procedure, 1908 (CPC) seeking a direction to the JDs to file affidavits of their income tax, assets, debts, bank lockers etc. 5. EA No. 40/2014 has been filed by the DH for arrest of the JDs No. 2 to 5. 6. These applications came up before the Court on 17th January, 2014 when inter alia the following order was passed: ...... A perusal of the award shows that the same does not address the issue as to how judgment debtor Nos. 2 to 5 have been mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n DH and JD No. 1 and JDs No. 2 to 5 could not have been made liable for the debts of JD No. 1. Reliance in the said reply itself is placed on Saraswat Trading Agency v. Union of India AIR 2004 Cal 267 to contend that a decree which is a nullity in the eyes of law is no decree. Reference in the reply itself is also made to Section 47(1) of CPC. 10. No rejoinder is found to have been filed to the reply aforesaid. 11. It was the contention of the senior counsel for JDs No. 2 to 5, (a) that the Arbitral Award as a decree is liable to be set aside on the ground of fraud and collusion; (b) that the Arbitrator had no jurisdiction against JDs No. 2 to 5; (c) that reference also to arbitration was not sought against JDs No. 2 to 5; (d) attention was invited to the letter dated 28th July, 2006 of DH to the General Secretary, Paper Merchants Association (Regd.) invoking arbitration against JD No. 1 only and in which no reference was made to JDs No. 2 to 5; (e) attention was similarly invited to the letter dated 29th July, 2006 of the Paper Merchants Association (Regd.) to DH appointing Mr. Ram Bhaj Mittal as the Arbitrator to settle the dispute; (f) that there was no basis before the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted; (D) Housing Urban Development Corporation Ltd. v. Leela Hotels Ltd. ILR (2010) I Delhi 76 which is also not found to be of any relevance to the controversy at hand; (E) State Bank of India v. M/s. Indexport Registered (1992) 3 SCC 159 where, while holding that if the decree as per its tenor was executable simultaneously against all the judgment debtors, the Executing Court cannot interpret otherwise, it was observed that the Executing Court cannot go beyond the decree and the objection that the decree was first liable to be executed against the principal debtor ought to have been taken in the suit; (F) Bhawarlal Bhandari v. Universal Heavy Mechanical Lifting Enterprises (1999) 1 SCC 558 where, while holding that the objection that the Arbitral Award was filed in the Court of Arbitrator four years after being passed and was barred by limitation and thus a nullity, having not been taken by way of Section 30 of the Arbitration Act, 1940, cannot be taken in execution of the award; it was again observed that Executing Court cannot go behind the decree, unless it is shown that it was passed by a Court inherently lacking jurisdiction and thus was a nullity; it was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found to have any relevance to the present controversy; (M) M/s. MSP Infrastructure Ltd. v. M.P. Road Devl. Corp. Ltd. holding that though a party is entitled under the law to raise an objection at any stage as to the absence of jurisdiction of the Court which decided the matter since the order of such a Court is a nullity but it must be remembered that this position of law has been well settled in relation to civil disputes in Courts and not in relation to arbitrations under the Arbitration Act, 1996; Parliament has the undoubted power to enact a special rule of law to deal with arbitrations and in fact, has done so; Parliament, in its wisdom, must be deemed to have had knowledge of the entire existing law on the subject and if it chose to enact a provision contrary to the general law on the subject, its wisdom cannot be doubted; accordingly, contention that a party to an arbitration proceedings is entitled to raise objections under Section 34 of the Arbitration Act, 1996 with regard to the jurisdiction of the Arbitral Tribunal, after the stage of submission of the written statement, was rejected; (N) Gas Authority of India Ltd. v. Keti Construction (I) Ltd. (2007) 5 SCC 38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for DH. 16. Though the observations in both judgments supra to the effect that Parliament has enacted special rule of law to deal with arbitrations and contrary to general law on the subject, the said rule does not entitle an objection of jurisdiction to be taken at any time and that an objection as to jurisdiction cannot be permitted to be taken beyond the time prescribed therefor under Section 34 of the Arbitration Act, 1996, are of a very wide ambit but in my opinion are to be understood in the context of the facts in which they were made. The context in MSP Infrastructure Ltd. was, whether petition under Section 34 of the Arbitration Act, 1996 on the ground of lack of jurisdiction can be preferred, even before the Arbitral Award has been announced and during the pendency of the arbitral proceedings and immediately after such an objection has been raised before the Arbitral Tribunal and in Bharti Cellular Ltd. was whether a plea of Arbitral Tribunal not having jurisdiction can be taken after the time prescribed for filing a petition under Section 34 and by way of amendment thereto. In both cases, objection of lack of jurisdiction in Arbitral Tribunal was sought to be tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Bharti Cellular Ltd. have to be harmonised with Jagat Ram Trehan supra which is a judgment on the proposition that a plea of lack of jurisdiction of the Arbitral Tribunal even if not taken by way of opposition to making the same rule of the Court, can be taken under Section 47 of the CPC in proceedings for execution thereof. 20. I thus hold that the objection of the JDs No. 2 to 5, if falls within the confines of Section 47 of the CPC, is entitled to be considered in accordance with the judgments cited by the senior counsel for the JDs No. 2 to 5 and Vasudev Dhanjibhai Modi supra cited by the counsel for DH. 21. I find a Co-ordinate Bench of this Court in Bijendra Kumar v. Pradeep Kumar to have also held that if an arbitral award is based on an illegal and void agreement, objection in that regard can be taken in proceedings for execution thereof, if not decided in proceedings under Section 34 of the Arbitration Act, 1996 and if the Executing Court finds merit therein, can dismiss the execution proceedings. 22. There appears to be a divergence of opinion in the High Court of Bombay in this respect. While in I.T.C. Ltd. v. Hanuman Vitamin Food Ltd. 1999 (2) LJ 345 and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned by the Director and confirmed by the defendants ; and, (xi) that the JDs had never taken any objection with regard to the bills/invoices. 25. DH has also filed before this Court the letters dated 28th July, 2006 and 29th July, 2006 which also bear out that the reference sought by the DH to arbitration was against JD No. 1 only and not JDs No. 2 to 5 and the reference made by Paper Merchants Association (Regd.) to sole arbitration of Shri Ram Bhaj Mittal was of disputes of DH against JD No. 1 only and not against JDs No. 2 to 5. 26. DH has also filed before this Court the claim petition filed after the appointment of the sole Arbitrator by the Paper Merchants Association (Regd.) and in which besides JD No. 1, JDs No. 2 to 5 were impleaded as respondents No. 2 to 5. In the said claim petition, JD No. 1 is described as a private limited company in the business of publishing of school text books and the DH is described as a sole proprietorship of Mr. Chiman Lal Khanna carrying on business of supply of paper; a long business association has been claimed of supply and sale of paper for publishing the books; reference is also made to a complaint under Section 138 of the Negoti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
