Delhi District Court
By This Order I Will Dispose Off The ... vs Chhennagani Radha & Anr on 5 June, 2015
IN THE COURT OF SH. ARUN KUMAR GARG: CIVIL JUDGE:
SOUTH WEST DISTRICT: DWARKA COURT: NEW DELHI
Ex. No: 140/15
Unique case ID No: 02405C0013732015
IN THE MATTER OF
M/s India Bulls Housing Finance Ltd.
(Formerly Indiabulls Financial Services Limited)
M6263, 1st Floor Connaught Place
New Delhi 110001 ... Decree Holder
Versus
1. Mrs. Chhennagani Radha
W/o Sh. Hussain
R/o 270, Alinapuram,
Neredcherla, Nalgonda,
Andhra Pradesh 508001
2. Sh. Chhennagani Hussain
S/o Sh. Narsadah
R/o 270, Alinapuram,
Neredcherla, Nalgonda,
Andhra Pradesh 508001
3. Sh. Mukkapati Nageswara Rao
S/o Sh. Sarvadah
R/o 337, Alinapuram,
Neredcherla, Nalgonda,
Andhra Pradesh 508001 ... Judgment Debtors
Ex. No. 140/15
M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 1 of 16
ORDER
1. By this order I will dispose off the execution petition filed by the petitioner M/s Indiabulls Housing Finance Ltd. under Order 21 Rule 11 read with Section 151 CPC seeking transfer of Award dated 12.08.2014 passed by Ld. Arbitral Tribunal in Arbitration Case no. AIB/517/2014. Perusal of the execution petition shows that none of the JDs are residing within the territorial jurisdiction of this court nor any property movable or immovable of the JDs have been alleged to be lying within the territorial jurisdiction of this court. It has been submitted by the counsel for petitioner that only this court is competent to issue a Transfer Certificate since the arbitration proceedings have taken place within the territorial jurisdiction of this court. It is further submitted by counsel for decree holder that since the seat of the arbitrator who had passed the arbitration award dated 12.08.2014 is within the territorial jurisdiction of this court, this court alone has jurisdiction to issue the Transfer Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 2 of 16 Certificate in respect of the aforesaid award which is executable as a decree before the competent court within the jurisdiction of which the judgment debtor are having movable/ immovable property and in the absence of such a Transfer Certificate, the court at such places cannot execute the said award. Learned counsel for Decree Holder has relied upon the following judgments in support of his aforesaid submissions :
i. Computer Sciences Corporation India Pvt Ltd Vs Harishchandra Lodwal & Another AIR 2006 Madhya Pradesh 34.
ii. Citi Financial Consumer Finance India Ltd Vs Daulat Baburao Dhende & Another Ex. P No.30/2009 dated 18.02.2009 (Delhi High Court).
iii. ION Exchange (India) Ltd Vs Panasonic Electric Works Co. Ltd 208 (2014) DLT 597 (DB).
2. Learned counsel for petitioner has further relied upon the following judgments in support of his submissions that in cases where the award amount is not exceeding Rs. 3 lakhs, the court Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 3 of 16 of Civil Judge has the pecuniary jurisdiction to entertain the execution petition as well as to issue the Transfer Certificate being the principal court of original civil jurisdiction:
i. Kinetic Capital Finance Limited Vs. Anil Kumar Misra 87(2000) Delhi Law Times 405.
ii. Rahisuddin Vs. Gambit Leasing & Finance Pvt. Ltd. & Anr in CRP no. 73/2008 decided on 15.01.2010
3. The sole issue which arises for consideration before this court is whether this court has got the requisite jurisdiction to issue the Transfer Certificate in respect of arbitration award in question merely because seat of arbitral tribunal is situated within its jurisdiction despite the fact that neither of the judgment debtors are stated to be residing nor the movable or immovable properties belonging to the judgment debtors are situated within the jurisdiction of this court.
4. In my considered opinion, the issue is no longer res integra in view of authoritative pronouncement of Hon'ble Delhi High Court in Daelim Industrial Co. Ltd. Vs. Numaligarh Refinary Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 4 of 16 Ltd. EA no. 105/2009 in Execution no. 242/2008 decided on 13.03.2009 . In the aforesaid case, decree holder had filed an execution petition before the Hon'ble Delhi High Court of an award which was passed by the Arbitral Tribunal at Calcutta and the award was subsequently challenged by the judgment debtor under Section 34 of the Arbitration and Conciliation Act, 1996 before the District Court of Golaghat (Assam). The execution petition was filed by the petitioner before the Hon'ble Delhi High Court on the ground that the movable and immovable properties of the judgment debtor were situated within the jurisdiction of Hon'ble Delhi High Court. Under the aforesaid circumstances, an objection as to the jurisdiction of Hon'ble Delhi High Court was raised by the JDs on the ground that the Hon'ble Delhi High Court does not have any jurisdiction to entertain the execution petition in the absence of Transfer Certificate issued by the District Court of Golaghat or Calcutta. Learned counsel for the judgment debtors had placed Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 5 of 16 reliance on the judgment of Hon'ble Madhya Pradesh High Court in Computer Sciences Corporation Indian Pvt. Ltd. (supra) which has been relied upon by the learned counsel for the petitioner in the present case. Hon'ble Delhi High Court while dealing with the aforesaid judgment has expressed its disagreement with the view taken by the Hon'ble Madhya Pradesh High Court in this regard and the premise of the aforesaid judgment of Hon'ble Madhya Pradesh High Court was held to be incorrect by Hon'ble Delhi High Court. The following observations of the Hon'ble Delhi High Court in the aforesaid judgment dated 13.03.2009 are worth quoting:
" 25. In this regard the addition of subsection (4) to Section 39 vide CPC Amendment Act 2002 is relevant. It provides that nothing in Section 39 shall be deemed to authorize the court which passed a decree to execute such decree against any person or property outside the local limits of its jurisdiction. The legislative intent appears to be that the decree should be executed by the court within whose territorial jurisdiction the person or the property of the judgment debtor is situated. That is logical also. The purpose of execution is realization of money from the property or the property of the Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 6 of 16 judgment debtor. Thus while territorial jurisdiction for suits is determined by place of occurrence of cause of action, residence of defendant, locus of property etc., the territorial jurisdiction for execution is determined only by locus of judgment debtor or the property. The agreement between the parties restricting jurisdiction of one, amongst many courts also does not extend to execution and is applicable to the court which will adjudicate the lis. I do not see any reason, why where an award has been made executable as a decree, the execution cannot lie at a place where the property against which the decree is sought to be enforced is situated. That court in my view would have inherent jurisdiction to execute the decree and in the absence of applicability of mandate of Section 38 of CPC, pedantic insistence on first applying for execution to one court, merely to obtain transfer would be also contrary to intent of expedition in the 1996 Act.
26. The senior counsel for the judgment debtor also does not dispute that the award would be executable by this court by attachment of the properties/ monies of the judgment debtor at Delhi. However, he insists upon the same being done only after obtaining a transfer of the decree from the courts at Guwahati/ Golaghat to this court. But what will that court transfer. There is no decree of that court which it can transfer. The court after disposing of application/ petition under Section 34 is not required to and does not pass decree in terms of the award, as under the 1940 Act. Moreover, the question of such transfer would arise only if it were to be held that the power to execute and transfer is of that court only. Such power as aforesaid is only in relation to decrees passed by Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 7 of 16 that court and not in relations to the arbitral awards which are deemed to be decree for the purpose of enforcement/ execution. Without the fetter of Section 38 the court of the place where the property/ money against which the decree is sought to be enforced is situated would have inherent jurisdiction to entertain the execution."(Emphasis mine)
5. Thus in view of the aforesaid authoritative pronouncement of our own High Court, in my considered opinion, the reliance by learned counsel for the petitioner on judgment of Hon'ble Madhya Pradesh High Court in Computer Sciences Corporation India Pvt Ltd (supra) is highly misplaced. It may further be noted that the aforesaid judgment of Hon'ble Delhi High Court was quoted with approval by Hon'ble Madras High Court in Kotak Mahindra Bank Vs. Sivakama Sundari S Narayana S.B. Murthy CRP (NPD) No. 574/2011decided on 26.08.2011 wherein the Hon'ble Madras High Court was dealing with a Civil Revision Petition arising out of an order passed by Assistant Judge, City Civil Court, Chennai directing the petitioner in an execution petition to get the arbitration Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 8 of 16 award transmitted from the appropriate court in as much as in the aforesaid case, the seat of the arbitrator was at Mumbai.
While dealing with the aforesaid revision petition, it was observed by Hon'ble Madras High Court as follows:
"5. It appears that there has been a great deal of confusion about the question of transmission of awards. It has come to light that hundreds of execution petitions are filed in various courts in the State, with a request to transfer them to other courts for execution. Even the original side of this court is no exception to this malady. The statistics on the original side of this court reveal that a total of about 2363 execution petitions were filed between January to June 2011, only with a request to transmit the awards to various other courts, either within the State or outside the State, for execution. Interestingly, the total number of execution petitions filed in the Original Side of this court seeking the actual execution of the decrees passed by this court are only 39 in number (for the entire period from January to June 2011). But, the number of execution petitions filed with a prayer for transmission of the awards were 2362. The statistics is extracted as follows:
Months Total E.Ps Transmit E.Ps.
Other E.Ps.
January February March April May June total
6. It appears that the practice of filing execution Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 9 of 16 petitions (arising out of arbitral awards) in one court and seeking their transmission to other courts, has caught up with the community of lawyers, on account of a misconception that the court within whose jurisdiction the Arbitral proceedings took place and the award passed, is the court which passed the decree. If the arbitral proceedings had taken place in Chennai and the judgment debtor resides or carried on business in Bangalore, the execution is laid in the court of Chennai with a request to transmit it to Bangalore, on a misconception that the Chennai court is to be taken to the the court which passed the decree. But there is no basis in law for such a presumption. Therefore, it is high time the controversy is to be put to rest. To do so, it is necessary to have a detailed analysis of the provisions relating to execution contained in the Civil Procedure Code and the provisions relating to execution contained in the Arbitration Act 1940, and the Arbitration and Conciliation Act, 1996".
6. Subsequently after referring to the provisions of Section 38 to Section 45 of the CPC and Section 36, 58 and Section 19 of the Arbitration and Conciliation Act, 1996 and after making a comparative analysis of provisions of Arbitration Act 1940 and the Arbitration and Conciliation Act, 1996, it was observed by Hon'ble Madras High Court as follows:
Ex. No. 140/15
M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 10 of 16 "17. Once it is seen that an Award of the Arbitral Tribunal is deemed to be a decree, by virtue of Section 36 of the 1996 Act, it follows as a corollary that the Arbitral Tribunal is in the position of a court which passed the decree (though it may not be the same).
But, no application for execution can be presented to an Arbitrator, by the holder of an award, under Order XXI, Rule 10, on the ground that the Arbitral Tribunal is the court which passed the decree. Therefore, the provisions of Section 38 and Order XXI, Rules 5,6 and 10 of the Code of Civil Procedure cannot be applied to an Arbitral Tribunal. To put it differently, it is only when an award holder is entitled to file an execution petition before the Arbitral Tribunal itself under Order XXI, Rule 10, (treating it as a court which passed the decree) that the provisions of Order XXI, Rules 5 and 6 would come to play.
18. If no application for execution can be filed before the Arbitral Tribunal, by treating the Arbitral Tribunal as the court which passed the decree, the Arbitral Tribunal cannot also order the transfer of the decree ( or award) to any other court for its execution. Similarly, there is no provision either in the Code or anywhere else, to treat a court, within whose jurisdiction the Arbitral proceedings took place, as the court which passed the decree. It is only when a court within whose jurisdiction the arbitral award was passed, is taken to be the court which passed the decree within the meaning of Section 37 and Order XXI Rule 10 of the Code that the award holder would be entitled to seek transmission from that court.
19. While the award passed by an arbitral tribunal is deemed to be a decree of a civil court under Section Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 11 of 16 36 of the 1996 Act, there is no deeming fiction anywhere to hold that the court within whose jurisdiction the arbitral award was passed, should be taken to be the court which passed the decree. Therefore, the whole procedure of filing an execution petition before the court within whose jurisdiction the arbitral award was passed, as though it the court which passed the decree, is pathetically misconceived." (emphasis mine)
7. The legal position was aptly summarized by Hon'ble Madras High Court in para no. 25 of the aforesaid judgment in the following words:
25. In the absence of any provisions in the 1996 Act, requiring a Court to pass a decree in terms of the award (except in terms of Section 34) and in the absence of any provision in the 1996 Act making the Arbitral Tribunal a court which passed the decree and in the absence of any provision anywhere making the court within whose jurisdiction an award was passed as the court which passed the decree, it is not open for any executing Court (i) either to demand transmission from any other court; (ii) or to order transmission to any other court. (emphasis mine)
8. While relying upon the judgment of Hon'ble Delhi High Court in Daelim Industrial Co. Ltd. case (supra) and the judgment of Hon'ble Madras High Court in Kotak Mahindra Bank Ltd. Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 12 of 16 (supra), Hon'ble Delhi High Court has once again in execution petition no. 67/12 titled as M/s Religare Finvest Limited Vs. Ranjit Singh Chauhan & Anr. decided on 28.02.2012 has declined the prayer of the petitioner for transfer of the execution petition to the court of Ld. District Judge, Bangalore, Karnataka in a similar fact situation holding that it will be open to the decree holder to approach the competent court in Karnataka for execution of the award in accordance with law.
9. Legal proposition laid down in all the aforesaid three judgments has further been followed by Hon'ble Delhi High Court in a very recent judgment dated 09.03.2015 in execution petition no. 337/2014 titled as State Trading Corporation of India Limited Vs. Global Steel Holiday Limited and others.
10. Thus a bare perusal of the aforesaid judgments would shows that in the absence of any provision in the 1996 Act requiring a court to pass a decree in terms of award (except in terms of Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 13 of 16 Section 34) and in the absence of any provision in the 1996 Act making the Arbitral Tribunal the court which passed the decree and in the absence of any provision anywhere making the court within whose jurisdiction an award was passed as the court which passed the decree, it is not open for any executing court either to demand transmission from any other court or to order transmission to any other court.
11. With utmost respect to the Hon'ble Judge deciding the Execution Petition 30/09 in Citi Financial Consumer Finance India Limited case (supra) vide order dated 18.02.2009 which has been relied upon by the learned counsel for the decree holder, in my considered opinion, the aforesaid order does not lay down any law to the effect that in all cases where the seat of Arbitrator is within the jurisdiction of a particular court such court shall have the jurisdiction to issue a Transfer Certificate in respect of the Arbitration Award to the court within the jurisdiction of which either the JD is situated or any movable or Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 14 of 16 immovable property belonging to the JD are situated in as much as neither any arguments were advanced before the Hon'ble High Court on the aforesaid issue nor the issue was examined by the Hon'ble Judge in the said case in the light of relevant provisions of law as has been done by Hon'ble Delhi High Court in its judgment in Daelim Industrial Co. Ltd. (supra), M/s Religare Finvest Ltd. (supra) and State Trading Corporation of India Limited and by Hon'ble Madras High Court in M/s Kotak Mahindra Bank Ltd. (supra). In view of the legal position discussed hereinabove, it is amply clear that this court has no jurisdiction to issue the transfer certificate prayed for by the petitioner irrespective of the fact whether or not this court is the principle Civil Court of original jurisdiction in respect of awards wherein award amount is less than Rs. 3 lakhs. Thus there is no need to discuss the decisions relied upon by the decree holder on the said issue.
12.Thus, in view of the law laid down by Hon'ble High Courts in Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 15 of 16 Daelim Industrial Co. Ltd. (supra), M/s Religare Finvest Ltd. (supra), State Trading Corporation of India Limited and M/s Kotak Mahindra Bank Ltd. (supra), the prayer of the petitioner for issuance of Transfer Certificate in respect of the award is hereby declined.
13. The execution petition is accordingly dismissed. Announced in the open court on this 05th day of June, 2015 This order consists of sixteen signed pages.
(Arun Kumar Garg) Civil Judge(SW)/Dwarka Courts New Delhi/05.06.2015 (akn) Ex. No. 140/15 M/s Indiabulls Housing Vs. Chhennagani Radha & Anr. .
Judgment dated 05.06.2015 Page no. 16 of 16