Andhra HC (Pre-Telangana)
N.V. Chowdary, E-1 vs Hindustan Steel Works Constructions ... on 24 July, 2001
Equivalent citations: 2001(5)ALD728, 2001(6)ALT89
Author: S.B. Sinha
Bench: S.B. Sinha
JUDGMENT S.B. Sinha, C.J.
1. A question seemingly of some importance as to what would be the proper forum for enforcing a decree from an award is in question in this application.
2. The parties entered into an arbitration agreement. The decree holder initiated proceedings under Section 8 of the Arbitration Act, 1940 as regards appointment of an umpire as no consensus could be arrived at. The said application was marked as OP No.96 of 1984 on the file of the I Additional Subordinate Judge, Visakhapatnam, Sri Justice C. Kondaiah, a former Judge of this Court was appointed as an arbitrator. The aforementioned order was subject-matter of a civil revision petition before this Court at the instance of the company herein which was marked as CRP No. 3414 of 1984. Instead and place of Justice Kondaiah, Justice Koka Ramachandra Rao was appointed as an arbitrator. The said learned arbitrator passed an award on 24-6-1997. An application purported to be under Section 14 of the Arbitration Act, 1940 was tiled by the decree holder which was marked as OP No.2 of 1997. The judgment-debtor also filed an application for setting aside the award under Section 30 of the said Act which was marked as OP No.4 of 1998. A question arose as to whether this Court has jurisdiction to entertain the said application. But having regard to the decision of the Apex. Court in M/s. Guru Nanak Foundation v. M/s. Rattan Singh and Sons, , the same was entertained. By a common order dated 25-10-2000, OP No.2 of 1997 was allowed whereas OP No.4 of 1997 was dismissed. An application was filed for transmission of decree to the District Court which was, however, withdrawn whereafter the present application has been filed. An objection to the maintainability of the said application having been taken a learned single Judge of this Court referred the question to a Division Bench.
3. Mr. G. Krishna Murthy, the learned Counsel appearing on behalf of the decree holder submitted that having regard to the fact that this Court entertained the petitions filed under Section 30 as also under Section 14 of the Act, it is this Court alone which has to pass the decree. According to the learned Counsel as this Court had passed the decree, this is the appropriate Court where the execution petition should be filed. Strong reliance in this connection has been placed on Union of India v. Surjet Singh Atwal, , State of M.P. v. S&S Ltd., and M/s. Guru Nanak Foundation (supra). The learned Counsel would contend that even in relation to award of costs by this Court in exercise of its original jurisdiction, an execution petition would be maintainable before this Court. Strong reliance in this connection has been placed on G. Agamiah v. Military Estate Officer, 1987 (1) APLJ 150. Our attention in this connection has also been drawn to the provisions of Section 31(4) of the Arbitration Act, 1940.
4. Mr. T. Veerabhadrayya, the learned Counsel appearing on behalf of the respondent on the other hand would urge that as no procedure has been prescribed for execution of the decree by this Court it can only be executed as a decree of the civil Court and in that view of the matter the I Addl. Subordinate Judge will have the requisite jurisdiction to entertain the execution petition having regard to the fact that the proceedings were initiated in that regard. The learned Counsel would contend, so far as the subsequent applications under the Arbitration Act are concerned, in view of the decision of the Apex Court alone the same were maintainable before this Court but that does not mean that even an execution petition would be maintainable having regard to the provisions of Sections 37 and 38 of the Code of Civil Procedure, he would submit that this Court in appeal may pass a decree but by reason thereof no execution petition would be maintainable. In any event, having regard to the fact that this Court has no machinery to execute a decree, the execution petition should not be entertained by this Court.
5. Section 2(c) of the Act defines 'Court' to mean:
A civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of the arbitration proceedings under Section 21, include Small Cause Court.
6. An application filed under Sections 8 or 20 of the Arbitration Act, 1940 would not be a suit although an application under Section 20 may be registered as a suit.
7. It is not in dispute that such an application having been filed before the civil Court at Visakhapatnam, this Court merely exercises its revisional jurisdiction. While disposing of the said civil revision petition this Court did not exercise its original jurisdiction or exercise an appellate jurisdiction. In Union of India v. Surjet Singh Atwal, , it has been held that while an application filed under Sections 8 or 20 of the Arbitration Act, 1940 would not be a suit although an application under Section 20 may be registered as a suit. It has been held that the Court while exercising its jurisdiction under Section 115 of the Code of Civil Procedure indeed exercises appellate jurisdiction.
8. This Court did not appoint umpire for the first time but merely substituted one umpire by the other.
9. Section 17 of the Arbitration Act, 1940 reads thus:
Judgment in terms of award :--Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon, the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in exercise of, or not otherwise in accordance with, the award.
When a judgment is pronounced a decree has to be passed automatically. Sections 37 and 38 of the Code read thus:
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 the 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.
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.
10. By reason of the said provisions a legal fiction has been created.
11. We may also notice that Section 15 of the Code of Civil Procedure provides that every suit shall be instituted in the lowest Court competent to try it.
12. The Arbitration Act does not provide for the mode and manner in which a decree is to be executed for an obvious reason that the provisions of the Code of Civil Procedure shall apply in relation to such a decree. Section 37, in our opinion is absolutely clear and unambiguous.
13. The decisions of the Apex Court in Surjet Singh Atwal (supra), M/s. Guru Nanak Foundation (supra) and State of M,P. (supra) whereupon Mr. G. Krishna Murthy has relied cannot be said to have any application whatsoever. It is one thing to say that it is in terms of sub-section (4) of Section 31 of the Act, all applications under that Act shall be filed before that Court which had appointed the arbitrator. But the same does not mean that an application for execution shall also be filed for enforcing a decree passed in terms of a judgment making the award a rule of Court also before the said Court inasmuch as execution of a decree must be made in terms of the provisions of the Code and not under the provisions of the Arbitration Act. Section 31(4) will thus have no application whatsoever. It is now well settled that when a legal fiction is created the same must be given its full effect. In East End Dwellings Co. v. Finsbury B.C., 1951 (2) All.ER 587, Lord Asquith J., stated the law thus:
If one is bidden to treat an imaginary state of affairs as real, one must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that one must imagine a certain state of affairs. It does not say that, having done so, one must cause or permit one's imagination to boggle when it comes to the inevitable corollaries of that State of affairs. As some of my noble and learned friends have pointed out, if Parliament had intended the meaning contended for by the respondents, nothing would have been easier than to provide that the value should be assessed as if no war damage had occurred. Even, however, if the meaning of the words to be construed were not plain and the "policy" of the legislation could legitimately be invoked as an interpretative factor, I am far from subscribing to the view that the policy in question is that for which the respondents contend, or that its importation would produce the result which they desire.
14. In M. Venugopal v. Divisional Manager, , the aforementioned decision was followed holding thus:
The effect of a deeming clause is well-known. Legislature can introduce a statutory fiction and Courts have to proceed on the assumption that such state of affairs exists on the relevant date.
15. In any event, having regard to the provisions of Section 38 this Court can also transfer the decree to the Court below for execution.
16. For the reasons aforementioned, we are of the opinion that this Court has no jurisdiction to entertain an execution petition. The Registry is directed to return the petition for presentation before the concerned principal civil Court.