Bombay High Court
Shriram Chits (Mah) Ltd vs Verma Balkrisha And 2 Ors on 24 June, 2024
Author: Abhay Ahuja
Bench: Abhay Ahuja
2024:BHC-OS:9384
912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
EXECUTION APPLICATION NO.1114 OF 2011
SHRIRAM CHITS (MAH) LIMITED )...APPLICANT/CLAIMANT
V/s.
MR. VIJAY MARUTI PATIL AND ORS. )...RESPONDENTS/
JUDGMENT DEBTORS
WITH
CHAMBER SUMMONS (L) NO.835 OF 2012
IN
EXECUTION APPLICATION NO.1114 OF 2011
AND
EXECUTION APPLICATION NO.315 OF 2016
WITH
NOTICE NO.19 OF 2019
IN
EXECUTION APPLICATION NO.315 OF 2016
AND
EXECUTION APPLICATION NO.317 OF 2016
WITH
NOTICE NO.42 OF 2019
IN
EXECUTION APPLICATION NO.317 OF 2016
AND
EXECUTION APPLICATION 366 OF 2016
WITH
NOTICE NO.45 OF 2019
IN
EXECUTION APPLICATION NO.366 OF 2016
AND
EXECUTION APPLICATION NO.369 OF 2016
WITH
NOTICE NO.315 OF 2018
IN
EXECUTION APPLICATION NO.369 OF 2016
AND
EXECUTION APPLICATION 375 OF 2016
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WITH
NOTICE NO.32 OF 2019
IN
EXECUTION APPLICATION NO.375 OF 2016
AND
EXECUTION APPLICATION NO.413 OF 2016
WITH
NOTICE NO.35 OF 2019
IN
EXECUTION APPLICATION NO.413 OF 2016
AND
EXECUTION APPLICATION NO.420 OF 2016
WITH
NOTICE NO.18 OF 2019
IN
EXECUTION APPLICATION NO.420 OF 2016
AND
EXECUTION APPLICATION NO.421 OF 2016
WITH
NOTICE NO.34 OF 2019
IN
EXECUTION APPLICATION NO.421 OF 2016
AND
EXECUTION APPLICATION NO.423 OF 2016
WITH
NOTICE NO.17 OF 2019
IN
EXECUTION APPLICATION NO.423 OF 2016
AND
EXECUTION APPLICATION NO.427 OF 2016
WITH
NOTICE NO.41 OF 2019
IN
EXECUTION APPLICATION NO.427 OF 2016
AND
EXECUTION APPLICATION NO.429 OF 2016
WITH
NOTICE NO.46 OF 2019
IN
EXECUTION APPLICATION NO.429 OF 2016
AND
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EXECUTION APPLICATION NO.432 OF 2016
WITH
NOTICE NO.44 OF 2019
IN
EXECUTION APPLICATION NO.432 OF 2016
AND
EXECUTION APPLICATION NO.435 OF 2016
WITH
NOTICE NO.29 OF 2019
IN
EXECUTION APPLICATION NO.435 OF 2016
AND
EXECUTION APPLICATION NO.657 OF 2016
WITH
NOTICE NO.248 OF 2018
IN
EXECUTION APPLICATION NO.657 OF 2016
AND
EXECUTION APPLICATION NO.1284 OF 2017
WITH
CHAMBER SUMMONS NO.203 OF 2018
IN
EXECUTION APPLICATION NO.1284 OF 2017
AND
EXECUTION APPLICATION NO.1285 OF 2017
AND
EXECUTION APPLICATION NO.1286 OF 2017
AND
EXECUTION APPLICATION NO.1287 OF 2017
AND
EXECUTION APPLICATION NO.1288 OF 2017
AND
EXECUTION APPLICATION NO.1289 OF 2017
AND
EXECUTION APPLICATION NO.1290 OF 2017
AND
EXECUTION APPLICATION NO.1291 OF 2017
AND
EXECUTION APPLICATION NO.1292 OF 2017
AND
EXECUTION APPLICATION NO.1293 OF 2017
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AND
EXECUTION APPLICATION NO.1294 OF 2017
AND
EXECUTION APPLICATION NO.1136 OF 2018
AND
EXECUTION APPLICATION NO.1138 OF 2018
AND
EXECUTION APPLICATION NO.1139 OF 2018
AND
EXECUTION APPLICATION NO.1380 OF 2018
AND
EXECUTION APPLICATION NO.1394 OF 2018
AND
EXECUTION APPLICATION NO.1396 OF 2018
AND
EXECUTION APPLICATION NO.1397 OF 2018
AND
EXECUTION APPLICATION NO.1420 OF 2018
AND
EXECUTION APPLICATION NO.1422 OF 2018
AND
EXECUTION APPLICATION NO.1460 OF 2018
AND
EXECUTION APPLICATION NO.1461 OF 2018
AND
EXECUTION APPLICATION NO.1464 OF 2018
AND
EXECUTION APPLICATION NO.1615 OF 2018
AND
EXECUTION APPLICATION NO.1616 OF 2018
AND
EXECUTION APPLICATION NO.1618 OF 2018
AND
EXECUTION APPLICATION NO.1619 OF 2018
AND
EXECUTION APPLICATION NO.1621 OF 2018
AND
EXECUTION APPLICATION NO.1626 OF 2018
AND
EXECUTION APPLICATION NO.143 OF 2021
AND
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EXECUTION APPLICATION NO.186 OF 2021
WITH
NOTICE (L) NO.11876 OF 2022
IN
EXECUTION APPLICATION NO.186 OF 2021
AND
EXECUTION APPLICATION NO.188 OF 2021
WITH
NOTICE (L) NO.26006 OF 2021
IN
EXECUTION APPLICATION NO.188 OF 2021
AND
EXECUTION APPLICATION NO.262 OF 2021
WITH
NOTICE (L) NO.25110 OF 2021
IN
EXECUTION APPLICATION NO.262 OF 2021
AND
EXECUTION APPLICATION NO.263 OF 2021
AND
EXECUTION APPLICATION NO.265 OF 2021
WITH
NOTICE (L) NO.26002 OF 2021
IN
EXECUTION APPLICATION NO.265 OF 2021
AND
EXECUTION APPLICATION NO.266 OF 2021
WITH
NOTICE (L) NO.25116 OF 2021
IN
EXECUTION APPLICATION NO.266 OF 2021
AND
EXECUTION APPLICATION NO.267 OF 2021
AND
EXECUTION APPLICATION NO.268 OF 2021
WITH
NOTICE (L) NO.25112 OF 2021
IN
EXECUTION APPLICATION NO.268 OF 2021
AND
EXECUTION APPLICATION NO.270 OF 2021
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WITH
NOTICE (L) NO.26007 OF 2021
IN
EXECUTION APPLICATION NO.270 OF 2021
AND
EXECUTION APPLICATION NO.272 OF 2021
AND
EXECUTION APPLICATION NO.275 OF 2021
AND
EXECUTION APPLICATION NO.277 OF 2021
WITH
NOTICE (L) NO.26004 OF 2021
IN
EXECUTION APPLICATION NO.277 OF 2021
AND
EXECUTION APPLICATION NO.279 OF 2021
WITH
NOTICE (L) NO.11885 OF 2022
IN
EXECUTION APPLICATION NO.279 OF 2021
WITH
NOTICE (L) NO.11883 OF 2022
IN
EXECUTION APPLICATION NO.279 OF 2021
AND
EXECUTION APPLICATION (L) NO.399 OF 2021
AND
EXECUTION APPLICATION NO.402 OF 2021
WITH
NOTICE (L) NO.13563 OF 2022
IN
EXECUTION APPLICATION NO.402 OF 2021
AND
EXECUTION APPLICATION NO.409 OF 2021
WITH
NOTICE (L) NO.11878 OF 2022
IN
EXECUTION APPLICATION NO.409 OF 2021
AND
EXECUTION APPLICATION (L) NO.2204 OF 2021
AND
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EXECUTION APPLICATION NO.390 OF 2022
WITH
NOTICE (L) NO.37036 OF 2022
IN
EXECUTION APPLICATION NO.390 OF 2022
AND
EXECUTION APPLICATION NO.391 OF 2022
WITH
NOTICE (L) NO.37039 OF 2022
IN
EXECUTION APPLICATION NO.391 OF 2022
AND
EXECUTION APPLICATION NO.392 OF 2022
WITH
NOTICE (L) NO.37080 OF 2022
IN
EXECUTION APPLICATION NO.392 OF 2022
AND
EXECUTION APPLICATION NO.156 OF 2023
AND
EXECUTION APPLICATION NO.157 OF 2023
AND
EXECUTION APPLICATION NO.331 OF 2023
AND
EXECUTION APPLICATION NO.332 OF 2023
AND
EXECUTION APPLICATION NO.371 OF 2023
AND
EXECUTION APPLICATION NO.372 OF 2023
AND
EXECUTION APPLICATION NO.373 OF 2023
Mr. Mohan Raut h/f Dr. Saikumar Pathrudum, Advocate for the
Applicant.
Mr. Aditya Thakkar-Amicus Curiae is present in Court.
CORAM : ABHAY AHUJA, J.
DATE : 24th JUNE 2024 avk 7/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc P.C. :
1. This group of Execution Applications have been listed today for consideration of the submissions made by Mr.Aditya Thakkar, learned amicus curiae, appointed in the matter.
2. Mr.Raut, learned Counsel, appearing for the Applicant in these matters, submits that he has perused the note by Mr.Thakkar and submits to the orders of this Court.
3. The Applicant has sought withdrawal of these Execution Applications to be filed before the Bombay City Civil Court. The question, however, that has arisen before this Court is whether the awards that have been passed by the Joint Registrar of Chit Funds, Maharashtra, Mumbai, under the Chit Funds Act, 1982 (the "said Act") are awards to which the Arbitration and Conciliation Act, 1996, would apply, or Sections 37 to 39 of the Code of Civil Procedure, 1908 (CPC) would apply.
4. There are 72 Execution Applications of which one Execution Application being Execution Application No.1114 of 2011 has been filed in 2011, while all the other Execution Applications have been filed avk 8/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc in or after 2015. In all these matters, execution of awards passed under Section 69 of the said Act is being sought. The amounts claimed and the amounts awarded in all these Execution Applications, except one, are both less than Rs.1 Crore. In Execution Application No.1114 of 2011, the award is dated 23 rd March 2009 whereby on a claim of Rs.3,56,812/- an amount of Rs.2,36,500/- has been awarded.
5. It is not in dispute that, the said Act as well as the Maharashtra Chit Funds Rules, 2004 (the "said Rules") apply to these awards passed under Section 69 of the said Act.
6. A perusal of Sections 3, 64, 65, 66, 67, 68, 69, 70 and 71 of the said Act and Chapter VI and Chapter VII of the said Rules, which pertain to disputes and arbitration and hearing of the appeal, clearly indicate that the nature of enquiry, proceeding which takes place under the said Act is in the nature of arbitration which results in passing of an award. Under Section 64 of the said Act, the dispute is referred to arbitration, then the Registrar or his nominee is the arbitrator and conduct the proceedings as per Section 66 of the said Act read with Rule 33 of the said Rules. An opportunity of hearing is afforded as also for leading evidence, pursuant to Section 69 read with Rule 34, and avk 9/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc finally an award is passed under Section 69 of the said Act which can be appealed under Section 70. The award under Section 69 or the order in appeal under Section 70, if not carried out, on a certificate issued by the Registrar under Section 71, is deemed to be a decree of a Civil Court and shall be executed in the same manner as a decree of such Court.
7. Sections 3, 64 and 71 are usefully quoted as under :
"3. Act to override other laws, memorandum, articles, etc -- Save as otherwise expressly provided in this Act,--
(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in any other law for the time being in force or in the memorandum or articles of association or bye-laws or in any agreement or resolution whether the same be registered, executed or passed, as the case may be, before or after the commencement in this Act; and
(b) any provision contained in the memorandum, articles, bye-laws agreement or resolution aforesaid, shall, to the extent to which it is repugnant to the provisions of this Act, become null or be void, as the case may be.
64. Disputes relating to chit business.-- (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the management of chit business shall be referred by any of the parties to the dispute, to the Registrar for arbitration if each party thereto is one or the other of the following, namely:--
(a) a foreman, a prized subscriber or a non-prized subscriber, including a defaulting subscriber, past subscriber or avk 10/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc a person claiming through a subscriber, or a deceased subscriber to a chit;
(b) a surety of a subscriber, past subscriber, or a deceased subscriber.
Explanation.-- For the purposes of this sub-section, a dispute touching the management of a chit business shall include--
(i) a claim by or against a foreman for any debt or demand due to him from a subscriber, or due from him to a subscriber, past subscriber whether such debt or demand is admitted or not;
(ii) a claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a foreman and recovered from the surety owing to the default of the principal borrower, whether such sum or demand is admitted or not; and
(iii) a refusal or failure by a subscriber, past subscriber or the nominee, heir or legal representative of a deceased subscriber to deliver possession to a foreman of land or any other asset resumed by him for breach of conditions of the assignment. (2) Where any question arises as to whether any matter referred to for the award of the Registrar is a dispute or not for the purposes of sub-section (1), the same shall be decided by the Registrar whose decision thereon shall be final. (3) No Civil Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub-section (1).
71. Money how recovered. -- Every order passed by the Registrar or the nominee under section 68 or section 69 and every order passed by the State Government in appeal under section 70 for payment of any money shall, if not carried out,-
(a) on a certificate issued by the Registrar, be deemed to be a decree of a Civil Court, and shall be executed in the same manner as a decree of such Court, or avk 11/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc
(b) be executed in accordance with the provisions of any law for the time being in force for the recovery of amounts as arrears of land revenue:
Provided that no application for execution under clause (b) shall be made after the expiry of three years from the date fixed in the order, and if no such date is fixed, from the date of the order."
8. It emerges that Section 3 of the said Act gives an overriding effect to the provisions of the said Act. Section 64(3) bars a Civil Court from entertaining suit or other proceedings in respect of any dispute referred to in Section 64(1) of the said Act. That an award passed under the said Act in proceedings which are in the nature of arbitral proceedings, is sought to be enforced in a Civil Court by virtue of the deeming fiction provided in Section 71.
9. It would now therefore also be pertinent to examine whether the award passed under the said Act would be amenable to the provisions of the Arbitration and Conciliation Act.
10. In this connection, it would be pertinent to refer to the definition of Court under Section 2(1)(e) of the Arbitration and Conciliation Act, 1996, which reads thus :
"2(1)(e) "Court" means -
(i) in the case of an arbitration other than international avk 12/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of Courts subordinate to that High Court."
11. Can it be said that Section 2(1)(e) applies to execution proceedings pursuant to an award / deemed decree under Section 71 of the said Act.
12. Sections 2(4) and 2(5) of the Arbitration and Conciliation Act, 1996, provide that the provisions of Part I apply to all arbitrations including statutory arbitrations mentioned therein. However, Section 2(4) itself clarifies that the provisions of Part I of the Arbitration and Conciliation Act, 1996 would apply, except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder.
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13. Sections 2(4) and 2(5) of the Arbitration and Conciliation Act, 1996, are usefully quoted as under :
"2(4) This Part except sub-section (1) of section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were in arbitration agreement, except insofar as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder.
2(5) Subject to the provisions of sub-section (4), and save insofar as is otherwise provided by any law for the time being in force or in any agreement in force between India and any other country or countries, this Part shall apply to all arbitrations and to all proceedings relating thereto."
14. From a plain reading of the said Sections, Section 71 of the said Act and Section 2(4) of the Arbitration and Conciliation Act, 1996, appear to be inconsistent. The said Act was enacted in 1982, at which point in time, the Arbitration Act, 1940, held the field with respect to arbitrations. The Arbitration Act, 1940, did not provide for an award being deemed decree but required the same to be filed in Court and then a judgment was rendered thereon in terms of Section 17 which would be executable as a decree, whereas, that is not the case under Section 71 of the said Act. The Parliament was deemed to be aware of Sections 46 and 47 of the Arbitration Act, 1940, which are similar to avk 14/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc the present Sections 2(4) and 2(5) of the Arbitration and Conciliation Act, 1996 and in express departure inserted Section 71 in the said Act, which is in contradistinction with the mechanism then available under the law for arbitrations in relation to enforcement of awards. The intent of Parliament is clear that the Arbitration and Conciliation Act, 1996, would not alter this position. Sections 2(4) and 2(5) of the Arbitration and Conciliation Act would, therefore, not apply to awards under the said Act. Ergo, Section 2(1)(e) defining a Court under the Arbitration and Conciliation Act, 1996, would not apply to the proceedings under the said Act.
15. It has been observed by this Court in the case of Dinesh Jaya Poojary vs. Malvika Chits India Pvt. Ltd.1 that the said Act and the said Rules are self contained Code and the provisions of the Arbitration and Conciliation Act would not apply to disputes relating to chit business.
Under Section 64(3) of the said Act, a Civil Court is barred from entertaining any suit or other proceedings in respect of any dispute referred to in sub-section (1) of Section 64 of the said Act. Paragraphs 29 and 37 of the said decision are usefully quoted as under :
"29. A plain reading of Section 64 clearly indicates that Subsection (1) of Section 64 provides for non obstante 1 2019 SCC Online Bom 1121 avk 15/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc provision i.e. notwithstanding anything contained in any other law for the time being in force, any dispute touching the management of chit business shall be referred by any of the parties to the dispute, to the Registrar for arbitration if each party thereto is one or the other of the parties mentioned in Section 64(1)(a) and (b). The expression "any dispute touching the management of chit business" is explained in the explanation to the said Section 64(1). Section 64(1)(b) clearly refers to a surety of a subscriber, past subscriber or a deceased subscriber. It is thus clear beyond reasonable doubt that even if the said Harish Pujary was considered as past subscriber, surety of such past subscriber or a foreman or vice-versa could be referred only to the Registrar for Arbitration.
37. A conjoint reading of the aforesaid provisions clearly indicates that the said Chit Funds Act, 1982 is a self-contained Code. The provisions of the Arbitration and Conciliation Act, 1996 thus would not apply to the disputes relating to the chit business. Under Sub-section (3) of Section 64 of the said Chit Funds Act, a Civil Court is barred from entertaining any suit or other proceedings in respect of any dispute referred in Sub- section (1) in Section 64 of the said Chit Funds Act. This provision also clearly indicates that if a Civil Court is barred from entertaining any suit or other proceedings, arbitral proceedings initiated by the respondent for recovery of the amount arising out of disputes relating to chit business touching the management of chit business also cannot be entertained. Such disputes could be referred only to the Registrar for Arbitration provided in Section 64 of the said Chit Funds Act. The judgment of the Madras High Court in the case of Vimala (supra) relied upon by Mr. Purohit, learned counsel for the petition would assist the case of the petitioner."
(emphasis supplied) avk 16/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc
16. Also in the case of Mohammed Kader Hassan vs. Shree Gokulam Chit and Finance Company (P) Ltd.2 this Court has observed as under :
"12. This court in the said judgment of Dinesh Poojary (supra) has categorically held that Section 64 of the Chit Funds Act, 1982, clearly indicates that Sub-section (1) of Section 64 provides for a non obstante provision. The expression "any dispute touching the management of chit business" is explained in the explanation to the said Section 64(1). The Respondent has not disputed in this case that the Petitioner was subscriber and the Respondent was a foreman, under Section 2(r) and Section 2(j), respectively. In the said judgment, it was held that the disputes between the parties related to the chit business. Statement of claim filed by the Respondent was for resolution of disputes arising out of the chit business, which was touching the management of chit business and thus provisions of the Chit Funds Act, 1982, were clearly attracted to the facts of that case. Filing of a claim for recovery of dues under the provisions of the Chit Funds Act, 1982 by a foreman amounts to dispute touching the management of chit business. This Court in the said judgment held that the provisions clearly indicates that the Chit Funds Act, 1982 being a self-contained Code, the provisions of the Arbitration and Conciliation Act, 1996, were not applicable to the disputes relating to the chit business. Under Sub-section (3) of Section 64 of the Chit Funds Act, 1982, a Civil Court is barred from entertaining any suit or other proceedings in respect of any dispute referred in Sub- section (1) of Section 64 of the said Chit Funds Act. This Court held that disputes could be referred only to the Registrar for arbitration as provided in Section 64 of the said Chit Funds Act.
13. This Court held that the said agreement referred to in the arbitration agreement between the parties was contrary to 2 2019 SCC Online Bom 1285 avk 17/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc Section 64 read with Section 3 of the said Chit Funds Act, 1982. The exclusive remedy of the arbitration before the Registrar under Section 64 of the Chit Funds Act, 1982, being statutory arbitration in nature cannot be varied by an agreement of the parties by referring the dispute to private arbitral forum contrary to Section 3 of the Chit Funds Act, 1982. This Court in the said judgment accordingly, has set aside the order passed by the learned Arbitrator rejecting the application under Section 16 of the Arbitration and Conciliation Act, 1996 filed by the Petitioner and also set aside the impugned award. This Court declared that the learned Arbitrator had no jurisdiction to entertain, try and adjudicate the disputes filed by the Respondent. It is however, made clear that the Respondent would be at liberty to file appropriate proceedings for recovery of amount according to law. In my view, the said judgment in case of Dinesh Poojary (supra) of this Court is clearly applicable to the facts of the present case. Mr. Patil, learned Counsel for the Respondent could not distinguish any part of the judgment.
14. Insofar as submissions of Mr. Patil, learned Counsel appearing Chittewan 12/15 ARBPs 556-17 & 557-17 .doc for the Respondent that Arbitration and Conciliation Act, 1996 having been enacted in later point of time than the Chit Funds Act, 1982 and thus provisions of Arbitration and Conciliation Act, 1996 are applicable are concerned, in my view, there is no substance in this submission. This Court has already held in the judgment of Dinesh Poojary (supra) that provisions of Arbitration and Conciliation Act, 1996 are not applicable to the transactions carried out under the provisions of the Chit Funds Act, 1982.
17. A perusal of Statement of Objects and Reasons of the Chit Funds Act, 1982 indicates that the said Act has been enacted as a Central legislation, as a step, besides ensuring uniformity in the provisions applicable to chit fund institutions avk 18/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc throughout the country to prevent such institutions from taking advantage either of the absence of any law governing chit funds in any State or exploit the benefit of any lacuna or relaxation in any State Law by extending their activities in such States. The scheme of the Act and the provisions made therein largely follow the pattern of chit fund legislations in force in some of the States and includes certain new provisions such as minimum capital requirements for companies conducting chit business, prohibiting chit fund companies from doing any other business, placing a ceiling on the aggregate chit amounts of chits that are being conducted by chit fund institutions, providing for a self-contained machinery for the settlement of the disputes between a foreman and the subscribers by means of an arbitration. In my view, the legislative intent is clear that a self-contained machinery for the settlement of the disputes between a foreman and the subscribers by means of arbitration is prescribed under the provisions of the said Chit Funds Act, 1982 and thus could not be varied by a private agreement between the parties."
(emphasis supplied)
17. In view of the above position in law, and as Section 71 of the said Act provides that an award or order shall be executed in the same manner as a decree of a Civil Court, then what becomes relevant is the execution under the CPC. But to appreciate that, it would be pertinent to appreciate the provisions relating to Courts by which decrees may be executed.
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18. Sections 37 to 39 of the CPC and Rule 10 of Order XXI are relevant and are usefully quoted as under :
"37. Definition of Court which passed a decree. --The expression "Court which passed a decree", or words to that effect, shall, in relation to the execution of decrees, unless there is anything repugnant in the subject or context, be deemed to include, --
(a) where the decree to be executed has been passed in the exercise of appellate jurisdiction, the Court of first instance, and
(b) where the Court of first instance has ceased to exist or to have jurisdiction to execute it, the Court which, if the suit wherein the decree was passed was instituted at the time of making the application for the execution of the decree, would have jurisdiction to try such suit.
Explanation.--The Court of first instance does not cease to have jurisdiction to execute a decree merely on the ground that after the institution of the suit wherein the decree was passed or after passing of the decree, any area has been transferred from the jurisdiction of that Court to the jurisdiction of any other Court; but, in every such case, such other Court shall also have jurisdiction to execute the decree, if at the time of making the application for execution of the decree it would have jurisdiction to try the said suit.
38. Court by which decree may be executed -- A decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution.
39. Transfer of decree. --(1) The court which passed a decree may, on the application of the decree-holder, send it for execution to another Court of competent jurisdiction,--
(a) if the person against whom the decree is passed actually and voluntarily resides or carries on business, or personally avk 20/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc works for gain, within the local limits of the jurisdiction of such other Court, or
(b) if such person has not property within the local limits of the jurisdiction of the Court which passed the decree sufficient to satisfy such decree and has property within the local limits of the jurisdiction of such other Court, or
(c) if the decree directs the sale or delivery of immovable property situate outside the local limits of the jurisdiction of the Court which passed it, or
(d) if the Court which passed the decree considers for any other reason, which it shall record in writing, that the decree should be executed by such other Court.
(2) The Court which passed a decree may of its own motion send it for execution to any subordinate Court of competent jurisdiction.
(3) For the purposes of this section, a Court shall be deemed to be a Court of competent jurisdiction if, at the time of making the application for the transfer of decree to it, such Court would have jurisdiction to try the suit in which such decree was passed.
(4) Nothing in this section shall be deemed to authorise the Court which passed a decree to execute such decree against any person or property outside the local limits its jurisdiction.
Order XXI Rule 10 Application for execution. -- Where the holder of a decree desires to execute it, he shall apply to the Court which passed the decree or to the officer (if any) appointed in this behalf, or if the decree has been sent under the provisions hereinbefore contained to another Court, then to such Court or to the proper officer thereof."
19. The Court, therefore, which passed the decree, is one of the Courts that may execute a decree. In the case of an award passed avk 21/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc under the said Act, it is passed by a Registrar or his nominee. By deeming fiction, such an order or award is deemed to be decree of a Civil Court and executable as such. These are deemed decrees and the Court which could pass an award would be the Court which could execute the decree in such cases. As can be deciphered from Section 37(b) of the CPC that where the Court of first instance has ceased to exist or to have jurisdiction to execute it, the Court which, if the suit wherein the decree was passed was instituted at the time of making the application for the execution of the decree, would have jurisdiction to try such suit.
20. Therefore, the aspect that would have to be considered in the present group of matters is, the Court which would have jurisdiction to execute the decree.
21. This Court in Vishwanath Keshav Joshi vs. Sukhadwala3 has observed as under :
3 1948 SCC Online Bom 94 avk 22/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc "1.The matter comes up before me for trial of issue as to the jurisdiction of this Court to entertain proceedings in execution of a decree passed by this Court, the decree being for an amount above Rs. 2,000 and below Rs. 10,000. The decree was passed in the suit on April 2, 1948, and this application for execution was made by the judgment-creditor on September 22, 1948.
2. A point was raised as to whether in view of the passing of the Bombay City Civil Court Act, XL of 1048, this Court had jurisdiction to entertain this application for execution of the decree. The Bombay Act XL of 1948 was enacted by the Legislature and received the assent of the Governor General on May 10, 1948. It came into force by a notification in the official Gazette from August 16, 1948. Section 3 of that Act provided that notwithstanding anything contained in any law, the Bombay City Civil Court was to have jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding Rs. 10,000 in value and arising within the Greater Bombay, except for certain exceptions therein laid down which are not relevant for the determination of the present issue before me. Section 12 of the Act provided that notwithstanding anything contained in any law, the High Court shall not have jurisdiction to try suits and proceedings cognizable by the City Court. Section 18 of the Act further provided that all suits and proceedings cognizable by the City Court and pending in the High Court, in which issues had not been settled or evidence had not been recorded on or before the date of the coming into force of this Act shall be transferred to the City Court and shall be heard and disposed of by the City Court and the City Court shall have all the powers and jurisdiction thereof as if they had been originally instituted in that Court. These are the relevant provisions of this Act which have got to be borne in mind for the purposes of the determination of this issue.avk 23/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 :::
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3. The jurisdiction of the Bombay City Civil Court was to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding Rs. 10,000 in value. The ban of the jurisdiction of the High Court also was in respect of the trial of suits and proceedings cognizable by the City Court, and what had got to be transferred to the City Civil Court were also suits and proceedings cognizable by the City Court and pending in the High Court in which issues had not been settled or evidence recorded on or before August 16, 1948. The question, therefore, which has to be determined is what is included in the suits and proceedings cognizable by the City Court; and the whole difficulty in this particular matter has arisen because the suit has been already determined, a decree has been passed therein, and what is sought to be done is the execution of that decree. The question, therefore, which arises is whether an application for execution of the decree already passed by the High Court having had jurisdiction to do the same, can be said to be proceedings cognizable by the City Court, because the suit has certainly ended in so far as it has resulted in a decree being passed in favour of the plaintiff................
5. My attention was also drawn to the provisions of Section 37 of the CPC where the expression "Court which passed a decree" or words to that effect are in relation to the execution of decrees deemed to include, where the Court of first instance has ceased to exist or to have jurisdiction to execute it, the Court which, if the suit wherein the decree was passed was instituted at the time of making the application for the execution of the decree, would have jurisdiction to try such suit. It was pointed out that in those cases where pecuniary jurisdiction was curtailed subsequent to a decree passed by a Court, the jurisdiction to execute the decree was not lost and that in spite of the curtailment of the pecuniary jurisdiction in that manner the Court would continue to have jurisdiction to execute the decree. There is no question here of the Court avk 24/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc having ceased to exist. The only question which arises is whether by reason of the pecuniary jurisdiction of this Court being altered in the manner provided in the Bombay City Civil Court Act it can be said that this Court has lost the jurisdiction to execute a decree which has already been passed by it. Reliance was placed in support of this contention on a decision reported in Abdus Sattar v. Mohini Mohan Das 37 C.W.N. 679 and the note in Mulla''s CPC at p.
162. This decision, however, runs counter to a decision of the Calcutta High Court itself which is subsequently reported in Masrab Khanv Deb Nath Mali [1942] 1 Cal. 289 where the effect of Section 37(6) of the CPC is laid down as substituting the Court in which the jurisdiction was subsequently invested as the only Court which can be considered to be the Court which passed the decree for the purposes of this section. Mr. B.J. Diwan also drew my attention to a decision of our High Court reported in Gaushha v. Abdul Kopkha ILR (1892) 17 Bom. 162 where it is laid down that there is no distinction which can be drawn between the nature of the causes which put an end to jurisdiction, so far as the terms of Section 37(6) arc concerned. What one has got to have regard to are the plain terms of Section 37(b) themselves which lay down that where the Court of first instance has ceased to exist or to have jurisdiction to execute it, the Court which passed the decree or words to that effect shall in relation to the execution of decrees be deemed to include the Court which would have jurisdiction to try such suit, if the suit wherein the decree was passed was instituted at the time of making the application for execution. Here by reason of the enactment of the Bombay City Civil Court Act the jurisdiction in respect of suits and proceedings of a civil nature exceeding Rs. 2,000 and not exceeding Rs. 10,000 in value was invested in the Bombay City Civil Court. If the suit had come to be filed after August 15, 1948, which is the relevant date (and the application for execution in this case as I have stated before was made on avk 25/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc September 22, 1948), it would have had to be filed in the Bombay City Civil Court.
6. That was the Court which was substituted for the High Court according to the terms of Section 37(6) of the Civil Procedure Code, and it is that Court which can be said to be "the Court which passed a decree" in relation to the execution of this decree which was passed by the High Court. I am, therefore, of opinion that in respect of these proceedings for execution of the decree "the Court which passes a decree"
should be deemed to include the Bombay City Civil Court which would have jurisdiction to try the suit if it had been filed on September 22, 1948, which was the date of the application for execution. There is no cogent reason urged on behalf of the judgment-creditor which can make me hold that this Court has in spite of the provisions of the Bombay City Civil Court Act which I have mentioned above retained the jurisdiction to execute the decrees which have been already passed by it in those cases where the claim was exceeding Rs. 2,000 and not exceeding Rs. 10,000 in value.
7. I have therefore come to the conclusion that this application for execution does not lie in this Court and must be dismissed...."
(emphasis supplied)
22. In Mahendra Shah vs. Canara Bank4 this Court has observed as under :
"1. By this application, filed under Section 24 of the Civil Procedure Code, the applicant has sought transfer of the Execution Application No.733 of 2013 with all papers and proceedings of the Chamber Summons, Notices of Motion, etc. from Bombay City Civil Court to the High Court of Judicature at Bombay.
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3. The claim in the suit was less than Rs.1 Crore and in view of the enhancement of the pecuniary jurisdiction of the City Civil Court, Bombay upto Rs.1 crore, the execution application along with all other proceedings were transferred to the City Civil Court, Bombay.
4. Mr. Madhav Jamdar, learned counsel for the applicant contends that the execution application was filed in the year 1983 which was much prior to the amendment of section 3 and insertion of section 4(a) to the City Civil Court Act, 1948 and hence, this application could not have been transferred to the City Civil Court, Bombay based on the monetary claim involved in the original suit. In support of the said contention, he has relied upon the judgment of the Single Judge of this Court in Execution Application No.539/2012 in Suit No.3279/1987 in the case of Anant Narayan Kajrolkar v/s. Neeta Madhukar Kajrolkar and ors. Relying upon the said decision, he contends that it is only the High Court, Bombay that has jurisdiction to decide the Execution Application No.733/2013 (High Court Execution Application No.65/1983) and hence, the said application needs to be transferred from City Civil Court, Bombay to the High Court, Bombay.
8. It is not in dispute that the claim in Suit No.398/1974 was less than Rs.1 Crore. By virtue of the amendment to the Bombay City Civil Court Act, the Execution Application in Suit No.398 of 1974 along with several other execution applications pending before this Court, with pecuniary jurisdiction of less than Rs.1 Crore were transferred to the City Civil Court.
9. The petitioner having participated in the execution proceedings for over five years, has now filed the application for transfer by invoking provisions of Section 37(1)(b) of the Civil Procedure Code. Relying on the judgment in Anant Narayan Kajrolkar (supra), the learned counsel for the applicant has sought to contend that this Court has jurisdiction avk 27/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc to execute the decree as the question in the above cited decision is not applicable to the case in hand. It is not about the jurisdiction of this Court but is about the jurisdiction of the City Civil Court to execute the decree. In view of increased in pecuniary jurisdiction of the City Civil Court by virtue of amendment to the Bombay City Civil Court Act, the City Civil Court has jurisdiction to execute the decree.
10. The application has no merits and is accordingly dismissed."
(emphasis supplied)
23. Therefore, the Execution Applications would have to be filed before the Civil Court having jurisdiction, which would have to be determined inter alia on the basis of the pecuniary jurisdiction. The issue of pecuniary jurisdiction gains significance since there does not appear to be any dispute as regards the territorial jurisdiction of this Hon'ble High Court or the Bombay City Civil Court in relation to these Execution Applications.
24. In the context of the present discussion, it would be pertinent to referto a Division Bench decision of the Hyderabad Court where in the case of Shriram Chits Private Limited vs. B. Durga Prasad Rao 5 the Hon'ble Court considering similar submissions, as in the facts of this case, inter alia held as under :
"4. The petitioner, a Chit Fund Company, has raised a dispute bearing No.260 of 2013 before the Deputy Registrar of Chits/Arbitrator under the Chit Funds Act, 1982, against the respondents for recovery of an amount of Rs.2,14,240/- with future interest @ 18% per annum. Despite publication of notice in the newspaper, the respondents did not appear before the Deputy Registrar of Chits/Arbitrator. Therefore, they were set ex parte by the Deputy Registrar of Chits / Arbitrator on 21.02.2013 and an award was passed on 05.11.2014 in favour 5 2016 SCC Online Hyd 353 avk 28/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc of the petitioner for Rs.2,14,240/- with future interest @ 12% per annum besides levy of costs. Based on the said award, a recovery certificate was issued by the Deputy Registrar of Chits/Arbitrator. As the respondents failed to pay the amount under the award, the petitioner has filed E.P.No.178 of 2015 against them for recovery of Rs.2,65,200/- under Order XXI Rule 48 C.P.C. By order dated 06.07.2015, the Additional Junior Civil Judge, Kukatpally, Ranga Reddy District, has issued salary attachment warrants against the respondents and posted the case to 20.08.2015 for filing compliance report. At that stage, the respondents have filed E.A.No.186 of 2015 purportedly under Order XXI Rule 26 C.P.C. for stay of all further proceedings in E.P. and for recall of salary attachment warrants. The lower Court has allowed the said E.A based on a Division Bench judgment of this Court in Potlabathuni Srikanth v. Shriram City Union Finance Ltd., and another.
5. From the perusal of the order of the lower Court, it would appear that the respondents have raised the objection relating to the jurisdiction of the lower Court in entertaining the E.P by placing reliance on the judgment in Potlabathuni Srikanth (supra). The lower Court, without adjudicating as to whether it has jurisdiction to entertain the E.P, allowed the E.A filed for staying the E.P proceedings. In our opinion, when the issue of jurisdiction was raised, the lower Court was under the obligation to decide the said issue instead of staying the execution proceedings.
6. Be that as it may, as rightly argued by Mr. Kuncham Maheswara Rao, learned counsel for the petitioner, the judgment in Potlabathuni Srikanth (supra) has no bearing on the case on hand. One of us (ASNJ) spoke for the Division Bench in Potlabathuni Srikanth (supra). That was a case, which arose out of the execution proceedings instituted before the Senior Civil Judge, Mangalagiri, for execution of an award passed under the Arbitration and Conciliation Act, 1996, (for short the Act). The judgment debtor-respondent in the E.P avk 29/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc raised objection to the jurisdiction of the Senior Civil Judge, Mangalagiri, based on the definition of Court under Section 2(1)(e) of the Act. In that context, the Division Bench held that as per the definition of Court under the said provision, the Principal Civil Court of original jurisdiction in a district i.e., the District Court alone has jurisdiction to entertain the Execution Proceedings and that therefore, the Senior Civil Judge, Mangalagiri, had no jurisdiction to entertain the E.P.
7. Indisputably, in the present case, the award was passed under Section 69 of the Chit Funds Act, 1982. Under Section 71 thereof, every order passed by the Registrar or the nominee under Section 68 or Section 69 and every order passed by the State Government in appeal under Section 70 for payment of money can be executed on a certificate issued by the Registrar which is deemed to be a decree of a Civil Court and shall be executed in the same manner as a decree of such Court.
8. In view of the fact that the Execution Petition was filed by the petitioner before the lower Court under Section 71(a) of the Chit Funds Act, 1982 and not under the provisions of the Arbitration and Conciliation Act, placing on reliance by the lower Court on the judgment in Potlabathuni Srikanth (supra) is wholly misplaced. It is not in dispute that if the petitioner has obtained a decree from a Civil Court, having regard to the pecuniary value of the decree, it is only the lower Court which has jurisdiction to entertain the E.P. Therefore, under Section 71(a) of the Chit Funds Act, 1982, it is only the Court below i.e., Additional Junior Civil Judge, Kukatpally, which has jurisdiction to entertain the E.P and adjudicate the same."
(emphasis supplied)
25. In the light of the above discussion, I am of the view that since the pecuniary jurisdiction of the Bombay City Civil Court was enhanced to Rs.1 Crore in the year 2012 by Notification dated 23 rd August 2012 avk 30/31 ::: Uploaded on - 28/06/2024 ::: Downloaded on - 14/07/2024 04:50:42 ::: 912-983-EXA-1114-2011-CHSL-835-2012@CONNECTED MATTERS.doc and 1st September 2012, all of the above Execution Applications except one viz. Execution Application No.1114 of 2011 would have to be allowed to be withdrawn to be filed before the Bombay City Civil Court.
Accordingly, all of the above applications except Execution Application No.1114 of 2011 are allowed to be withdrawn and disposed as such.
26. As far as the Execution Application No.1114 of 2011 filed on 17 th October 2011, which seeks to enforce the award dated 23 rd March 2009 for an amount of Rs.2,36,500/- is concerned, in view of Section 37 of the CPC, the same may be continued to be prosecuted before this Court as the pecuniary jurisdiction of the Bombay City Civil Court in the year 2011 was Rs.50,000/-. Accordingly, list Execution Application No.1114 of 2011 on 10th July, 2024 on the Supplementary board.
27. This Court wishes to place on record its appreciation for the services rendered by Mr.Aditya Thakkar, learned Counsel of this Court as amicus curiae in the matter.
(ABHAY AHUJA, J.)
Digitally
signed by
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ARTI
ARTI VILAS
VILAS KHATATE
KHATATE Date:
2024.06.28
19:34:22
+0530
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