Telangana High Court
M/S. M.S.R. Enterprises vs M/S. Pooja Enterprises on 28 April, 2022
Author: P.Naveen Rao
Bench: P.Naveen Rao, G.Radha Rani
HIGH COURT FOR THE STATE OF TELANGANA
********
HONOURABLE SRI JUSTICE P.NAVEEN RAO
&
HONOURABLE Dr. JUSTICE G.RADHA RANI
CIVIL REVISION PETITION NO.1571 OF 2021
Date: 28.04.2022
Between:
M/s. M.S.R. Enterprises, a registered Partnership
Firm, represented by its Managing Partner
Sri Mikkilineni Seetharamaiah, s/o.late M.Satyanarayana,
Aged 78 years, Managing Partner M/s.M.S.R. Enterprises,
having its Registered Office at H.No.6-2-78, Kakji Colony,
Hanamkonda, Warangal, Warangal District, r/o.H.No.1-7-153,
Advocates Colony, Hanamkonda.
.... Petitioner /
Respondent No.1/
Judgment Debtor
and
M/s.Pooja Enterprises, a Registered Partnership Firm,
Rep.by its Proprietor Smt. Ch.Radha Devi, w/o.Ch.L.Surender
Reddy, having its Registered office at 1-9-1239/7/3,
Sahakar Nagar, Hunter Road, Hanamkonda, Warangal
Urban District, rep.by her authorized GPA Holder
Ch.L.Surender Reddy, s/o. Raji Reddy, Aged 58 years,
Occu:Business, presently residing at H.No.23-6-69/6/1,
Shayampet Hunter road, Hanamkonda, Warangal district.
.... Respondent/petitioner/
Decree Holder
Southern Power Distribution Company of Telangana
Limited, H.No.6-1-50, Corporate Office, Mint Compound,
Hyderabad, rep.by its Chairman and Managing Director
and others. .... Respondents/
Respondents 2 to 5/
Judgment Debtors
DATE OF JUDGMENT PRONOUNCED : 28.04.2022
HONOURABLE SRI JUSTICE P.NAVEEN RAO
&
HONOURABLE Dr. JUSTICE G.RADHA RANI
1. Whether Reporters of Local Newspapers : No
may be allowed to see the Judgments ?
2. Whether the copies of judgment may be : Yes
marked to Law Reporters/Journals
3. Whether Their Lordship wish to : No
see the fair copy of the Judgment ?
PNR,J & Dr.GRR,J
CRP No.1571 of 2021
2
* HONOURABLE SRI JUSTICE P.NAVEEN RAO
&
HONOURABLE Dr. JUSTICE G.RADHA RANI
+ CIVIL REVISION PETITION NO.1571 OF 2021
% 28.04.2022
# M/s. M.S.R. Enterprises, a registered Partnership
Firm, represented by its Managing Partner
Sri Mikkilineni Seetharamaiah, s/o.late M.Satyanarayana,
Aged 78 years, Managing Partner M/s.M.S.R. Enterprises,
having its Registered Office at H.No.6-2-78, Kakji Colony,
Hanamkonda, Warangal, Warangal District, r/o.H.No.1-7-153,
Advocates Colony, Hanamkonda.
.... Petitioner /
Respondent No.1/
Judgment Debtor
Vs.
$ A M/s.Pooja Enterprises, a Registered Partnership Firm,
Rep.by its Proprietor Smt. Ch.Radha Devi, w/o.Ch.L.Surender
Reddy, having its Registered office at 1-9-1239/7/3,
Sahakar Nagar, Hunter Road, Hanamkonda, Warangal
Urban District, rep.by her authorized GPA Holder
Ch.L.Surender Reddy, s/o. Raji Reddy, Aged 58 years,
Occu:Business, presently residing at H.No.23-6-69/6/1,
Shayampet Hunter road, Hanamkonda, Warangal district.
.... Respondent/petitioner/
Decree Holder
Southern Power Distribution Company of Telangana
Limited, H.No.6-1-50, Corporate Office, Mint Compound,
Hyderabad, rep.by its Chairman and Managing Director
and others. .... Respondents/
Respondents 2 to 5/
Judgment Debtors
!Counsel for the petitioner : Smt. Manjari Ganu learned counsel appearing for
Sri Sunil B.Ganu, learned counsel for petitioner
Counsel for the Respondents : Sri A.Sudarshan Reddy, learned senior counsel
appearing for Sri A.Prabhakar Rao learned counsel for
respondent No.1,
Sri R.Vinod Reddy, learned standing counsel for
TR TRANSCO for respondents 2 to 5.
<Gist :
>Head Note:
? Cases referred:
2010(1) ALD 522; 2010(1) ALD 153; AIR 2016 AP 73; (2017) 8 SCC 116; (2018) 18 SCC 165; (2019) 5 SCC 302; (2018) 6 SCC 287;
AIR 2020 SC 4550; (2018) 14 SCC 715; (2019) 8 SCC 112; (2002) 5 SCC 510
PNR,J & Dr.GRR,J
CRP No.1571 of 2021
3
HONOURABLE SRI JUSTICE P.NAVEEN RAO
&
HONOURABLE Dr. JUSTICE G.RADHA RANI
CIVIL REVISION PETITION NO.1571 OF 2021
ORDER:(Per Hon'ble Sri Justice P.Naveen Rao) The facts on record disclose that the petitioner is a Partnership Firm involved in execution of Sub-Stations, fixing of electricity consumption meters etc. It appears, in the year, 2015 it was awarded contract to erect five 33/11 KV Sub-stations at various locations and other works concerning electricity supply by the Southern Power Distribution Company Limited. The petitioner and the first respondent entered into sub-contract on 22.04.2017 for execution of erection of 33/11 KV Sub-stations, construction of KV lines, 11 KV & LT Lines for distribution, transformers and extension of supply to BPL Households etc. According to first respondent, the entire work was executed as agreed upon by 20.03.2020 and raised bills and requested the petitioner several times to settle his bills. But, the petitioner dodged from complying with the agreement.
2. To resolve the dispute, the parties requested their elders to arbitrate on the dispute. As part of the settlement arrived at between the parties before the Arbitrators, the petitioner agreed to pay 2.65 crores and the first respondent agreed to confine his claim to said amount as full and final settlement. Accordingly, an award was passed on 15.09.2020.
PNR,J & Dr.GRR,J CRP No.1571 of 2021 4
3. In spite of settlement of dispute and agreement on amount payable to the first respondent, the amount was not settled. Hence, the first respondent filed E.P.No.213 of 2021 on the file of VII Additional District Judge, Warangal, for execution of the award.
4. In the said E.P., first respondent filed E.A.No.115 of 2021 under Order XXI Rule 46-A read with Section 151 of Code of Civil Procedure, 1908 (CPC), to direct garnishees, respondents 2 to 5, to withhold the award amount of 2,65,00,400/- by not disbursing the same to the petitioner. By order dated 30.06.2021, the Court below allowed the petition and directed the respondents 2 to 5 to withhold an amount of 2,65,00,400/- and credit the amount to the account of the E.P. Aggrieved thereby, this revision is filed.
5. Heard Smt. Manjari S Ganu, learned counsel appearing for Sri Sunil B.Ganu learned counsel for petitioner and Sri A.Sudarshan Reddy learned senior counsel appearing for Sri A.Prabhakar Rao, for respondent no.1, and Sri R.Vinod Reddy learned standing counsel for TS TRANSCO for respondents 2 to 5.
6.1. Learned counsel Smt. Manjari S Ganu contended that the Court below has no power to issue garnishee order and grossly erred in issuing garnishee order.
6.2. According to the learned counsel, the award is forged and fabricated and, therefore, not binding on the petitioner. She would PNR,J & Dr.GRR,J CRP No.1571 of 2021 5 submit that the petitioner has serious objection on the manner in which the award was passed. Therefore, the petitioner filed application to set aside the award on the ground of fraud. In an application seeking to enforce an award, the Execution Court is bound by the provisions of the CPC. As required by Section 47 of CPC, the Execution Court ought to have decided in the first instance validity of the award before seeking its enforcement. The Execution Court grossly erred in passing garnishee order without first deciding the objections filed, as required by Section 47 of CPC.
6.3. She would further submit that as the decree-holder and followers manhandled and threatened the petitioner on many occasions, petitioner filed private complaint before the Court and the same was referred to Subedari Police Station and registered as Crime No.359 of 2021. Petitioner also filed another complaint bearing Crime No.388 of 2020 in Hanamkonda Police Station. No action is taken on the complaints filed by him.
6.4. She would further submit that in fact, petitioner never went back on making payments, but what is claimed by the decree-holder is exorbitant and, therefore, petitioner has been asking to furnish true accounts and actual works executed by the decree-holder, whereas no such information is furnished.
6.5. She would further submit that if the garnishee order is implemented, it would be difficulty for the petitioner to recover the PNR,J & Dr.GRR,J CRP No.1571 of 2021 6 amount, in the event of success in the petition filed under Section 34, and, therefore, it is not just and proper to direct the recovery of the amount even before the issue is decided in the petition filed by the petitioner under Section 34 of the Act and without deciding the validity of the award.
6.6. Learned counsel placed reliance on the following decisions:
i) Bhoomatha Para Boiled Rice and Oil Mill vs. Maheshwari Trading Company and Ors.1;
ii) Lakhamraju Sujatha vs. Yuvaraj Finance Pvt.Ltd. and Ors.2;
iii) Potlabathuni Srikanth and others vs. Shriram City Union Finance Limited and others3.
7.1. In response, learned senior counsel Sri. A.Sudarshan Reddy submitted that Execution Court has limited jurisdiction under Section 36 of the Act. It is only required to enforce the award already passed and Execution Court cannot go into the legality and validity of the award. Unless award is set aside or a stay is granted in the application filed under Section 34, it is competent for a person to seek enforcement of the award passed in his favour. Since the award was passed in favour of the respondents, by securing garnishee order, the respondents are only safeguarding the interest for enforcement of the award. Admittedly, in a petition filed under Section 34, no stay is granted. 1 2010(1) ALD 522 2 2010(1) ALD 153 3 AIR 2016 AP 73 PNR,J & Dr.GRR,J CRP No.1571 of 2021 7 7.2. He would further submit that in proceeding under Arbitration Act, Section 47 is not attracted. The Execution Court cannot travel beyond the award nor can it decide the validity or legality of an award. 7.3. Learned senior counsel placed reliance on the following decisions:
i) Punjab State Civil Supplies Corporation Limited and another vs. Atwal Rice and General Mills, rep.by its Partners4;
ii) Kohinoor Transporters vs. State of Uttar Pradesh5;
iii) LMJ International Limited vs. Sleepwell Industries Company Limited6;
iv) Board of Control for Cricket in India vs. Rochi Cricket Private Limited and others7;
v) Govt. of India v. (1) Vedanta Limited (Formerly Cairn India Ltd.) (2) Ravva Oil (Singapore) Pvt.Ltd. (3) Videocon Industries Limited8; and
vi) Kandla Export Corporation and another vs. OCI Corporation and another9.
8. In reply, learned counsel for petitioner contended that decision of the Hon'ble Supreme Court in Kohinoor Transporters (supra) is not applicable to the facts of this case. She has also distinguished the other judgments relied by the learned senior counsel. She would submit that jurisdictional aspect can still be gone into even at E.P. stage while seeking enforcement of the award. She would further submit that as evident from the counter-affidavit, bills are not settled so far by the respondents 2 to 5 and therefore there was no hurry to pass garnishee order. The interest of respondents is sufficiently safeguarded. 4 (2017) 8 SCC 116 5 (2018) 18 SCC 165 6 (2019) 5 SCC 302 7 (2018) 6 SCC 287 8 AIR 2020 SC 4550 9 (2018) 14 SCC 715 PNR,J & Dr.GRR,J CRP No.1571 of 2021 8 On the contrary, garnishee order causes severe hardship and suffering to the petitioner.
9. Issue for consideration is whether the court below erred in issuing garnishee order in execution petition filed under Section 36 of the Arbitration Act ?
9. To appreciate the submissions, the relevant provisions of the Arbitration and Conciliation Act, 1996 (Act, 1996) and the Andhra Pradesh Arbitration Rules, 2000 (Rules) that require consideration are:
Sections 34 10 , 35 11 and 36 12 of the Act, 1996, and Rule 12 13 of the Rules.
10 Section 34. Application for setting aside arbitral awards.
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-
section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if--
(a) the party making the application 1[establishes on the basis of the record of the arbitral tribunal that]--
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1.--For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,--
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.--For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.
(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.
(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.
PNR,J & Dr.GRR,J CRP No.1571 of 2021 9
10. Section 34 prescribes grounds under which an arbitral award can be challenged. The consideration on validity of an award by the Civil Court is circumscribed by the contours of Section 34. The primary requirement is patent illegality. Subject to parameters set out in Section 34, an award passed by the Arbitrator is final and binding on the parties.
11. If the terms of award are not complied, the party in whose favour award was passed can seek its enforcement under Section 36. If no application is made under Section 34 within the prescribed period of limitation or the Section 34 application is rejected or no stay is granted by the Court in a petition challenging the validity of the award, the award is enforceable in terms of Section 36. Section 36 does not 11 Section 35. Finality of arbitral awards. Subject to this Part an arbitral award shall be final and binding on the parties and persons claiming under them respectively .
12 Section 36. Enforcement--(1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court. (2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose. (3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing:
Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).
Provided further that where the Court is satisfied that a Prima facie case is made out that,--
(a) the arbitration agreement or contract which is the basis of the award; or
(b) the making of the award, was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award.
Explanation.--For the removal of doubts, it is hereby clarified that the above proviso shall apply to all court cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral or court proceedings were commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 (3 of 2016). 13 Rule 12. (1) Save as other wise expressly provided in the Act or these Rules the following provisions of the Code of Civil Procedure, 1908 (V of 1908) shall apply to the proceedings before a Court in so far as they may be applicable thereto; namely;
(i) Sections 28. 31, 35, 35-A. 35-B, 107, 133, 135, 144, 148-A, 149, 151 & 152 and
(ii) Orders III, V, VI, IX, XIII, XIV to XIX, XXIV and XLI. (2) (a) For the purpose of facilitating the application of the provisions referred to under sub-section (1) the Court may construe them with such alterations, into affecting the substance, as may be necessary or proper to adapt the the matters before it; and
(b) The Court may, for sufficient reasons, proceed other wise than in accordance with the said provisions if it is satisfied that the interests of the parties will not thereby be prejudiced.
PNR,J & Dr.GRR,J CRP No.1571 of 2021 10 envisage leave to a party to arbitration proceedings to raise pleas on maintainability of the award once the award has become final or in an application filed under Section 34, no restraint order is passed. The whole gamit of CPC in proceedings for execution of decree in a civil suit are not attracted. The Execution Court is tasked only to enforce the award and nothing more. It must be noted here that revision petitioner failed to file objections within prescribed time period and uses his age and health as grounds instead for raising objections during the execution proceedings.
12. The term 'in accordance with the CPC' employed in Section 36 cannot be read out of context or inconsistent with the rest of the sections of the Act. Accepting the plea on application of Section 4714 CPC would leave Section 34 of the Act, 1996 redundant and be inconsistent with or independent of scheme of the Act. Under CPC finality of a decree is reached after decision under Section 47 (when raised), but as evident from Section 34 in arbitration proceedings, finality to the award is brought out even before execution proceedings are set in motion. This signals the intention of the legislature to ensure alternate dispute resolution is actually effective via self-contained law. 14 S.47. Questions to be determined by the Court executing decree.--(1) All questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit.
(2) xxx (3) Where a question arises as to whether any person is or is not the representative of a party, such question shall, for the purposes of this section, be determined by the Court.
Explanation 1.--For the purposes of this section, a plaintiff whose suit has been dismissed and a defendant against whom a suit has been dismissed are parties to the suit.
Explanation II.--(a) For the purposes of this section, a purchaser of property at a sale in execution of a decree shall be deemed to be a party to the suit in which the decree is passed; and (b) all questions relating to the delivery of possession of such property to such purchaser or his representative shall be deemed to be questions relating to the execution, discharge or satisfaction of the decree within the meaning of this section.
PNR,J & Dr.GRR,J CRP No.1571 of 2021 11 Additionally, Sections 34, 35 and 36 of the Act, 1996 have to be interpreted bearing in mind Sections 12 and 13 of the Act that prescribe grounds for challenge to the appointment of Arbitrator and the challenge on procedure to be decided, respectively.
13. In Kochi Cricket (P) Limited (supra), scope of Section 36 was considered at length. Hon'ble Supreme Court held:
"62. ..... Since it is clear that execution of a decree pertains to the realm of procedure, and that there is no substantive vested right in a judgment-debtor to resist execution, Section 36, as substituted, would apply even to pending Section 34 applications on the date of commencement of the Amendment Act.
xxx
69. .....In the present case, it is clear that "enforcement" in Section 36 is to treat the award as if it were a decree and enforce it as such under CPC, which would only mean that such decree has to be executed in the manner indicated. Also, a stray sentence in a judgment in a particular context cannot be torn out of such context and applied in a situation where it has been argued that enforcement and execution are one and the same, at least for the purpose of the 1996 Act.
71. .... As a matter of fact, the Court held that unless a distinction was made between execution and enforcement, the result in that case would lead to an "utter absurdity". The Court held : (Hameed Joharan case [Hameed Joharan v. Abdul Salam, (2001) 7 SCC 573] , SCC p. 594, para 38) "38....Absurdity cannot be the outcome of an interpretation of a court order and wherever there is even a possibility of such absurdity, it would be a plain exercise of judicial power to repeal the same rather than encouraging it."
14. In Punjab State Civil Supplies Corpn.Ltd., (supra) scope of Section 47 and the enforcement under Act, 1996 was considered. Hon'ble Supreme Court held:
"27.1. In the first place, none of the objections (nine) raised by the respondents were decided by the executing court or/and the High Court. Indeed, they were not even referred to in the orders. If the objections had been raised by the judgment-debtor under Section 47 of the Code challenging the decree then it was necessary for the executing court to deal with the objections and record its finding one way or other in accordance with law.
PNR,J & Dr.GRR,J CRP No.1571 of 2021 12 27.2. Secondly, assuming that these objections were to be decided then also, in our opinion, none of them had any merit whatsoever and they simply deserved rejection at the outset.
27.3. Thirdly, all the objections referred above ought to have been raised by the respondents before the arbitrator or/and the Additional District Judge under Section 34 of the Act but certainly none of them could be allowed to be raised in execution once the award became final and attained finality as decree of the civil court. In other words, having regard to the nature of objections, it is clear that such objections were not capable of being tried in execution proceedings to challenge the award. It is for the reason that they were on facts and pertained to the merits of the controversy, which stood decided by the arbitrator resulting in passing of an award. None of the objections were in relation to the jurisdiction of the court affecting the root of the very passing of the decree. If the executing court had probed these objections then it would have travelled behind the decree, which was not permissible in law. An inquiry into facts, which ought to have been done in a suit or in an appeal arising out of the suit or in proceedings under Section 34 of the Act, cannot be held in execution proceedings in relation to such award/decree." (emphasis supplied)
15. In Pam Developments Private Limited vs. State of West Bengal 15 , opposing application filed under Section 36 of the Act to enforce arbitral award and order of attachment it was urged for the State of West Bengal that application under Section 34 is pending and in view of provision in Order XXVII Rule 8-A of CPC the State need not be compelled to pre-deposit as a condition precedent to avail the remedy of appeal/application and, therefore, order of attachment was illegal. To answer the said plea, the Hon'ble Supreme Court considered the issue of applicability of CPC to proceedings arising out of Act, 1996.
15.1. Hon'ble Supreme Court held as under:
"20. In our view, in the present context, the phrase used is "having regard to"
the provisions of CPC and not "in accordance with" the provisions of CPC. In the latter case, it would have been mandatory, but in the form as mentioned in Rule 36(3) of the Arbitration Act, it would only be directory or as a guiding factor. Mere reference to CPC in the said Section 36 cannot be construed in such a manner that it takes away the power conferred in the main statute (i.e. the Arbitration Act) itself. It is to be taken as a general guideline, which will not make the main provision of the Arbitration Act inapplicable. The provisions of CPC are to be followed as a guidance, whereas the provisions of the Arbitration Act are essentially to be first applied. Since, the Arbitration Act is a self-contained 15 (2019) 8 SCC 112 PNR,J & Dr.GRR,J CRP No.1571 of 2021 13 Act, the provisions of CPC will apply only insofar as the same are not inconsistent with the spirit and provisions of the Arbitration Act. xxxx
26. Arbitration proceedings are essentially alternate dispute redressal system meant for early/quick resolution of disputes and in case a money decree -- award as passed by the arbitrator against the Government is allowed to be automatically stayed, the very purpose of quick resolution of dispute through arbitration would be defeated as the decree-holder would be fully deprived of the fruits of the award on mere filing of objection under Section 34 of the Arbitration Act. The Arbitration Act is a special Act which provides for quick resolution of disputes between the parties and Section 18 of the Act makes it clear that the parties shall be treated with equality. Once the Act mandates so, there cannot be any special treatment given to the Government as a party. As such, under the scheme of the Arbitration Act, no distinction is made nor any differential treatment is to be given to the Government, while considering an application for grant of stay of a money decree in proceedings under Section 34 of the Arbitration Act. As we have already mentioned above, the reference to CPC in Section 36 of the Arbitration Act is only to guide the court as to what conditions can be imposed, and the same have to be consistent with the provisions of the Arbitration Act." (Emphasis supplied)
16. Further, from Rule 12 of the Rules, 2000, formulated by the High Court under the Act, 1996, it is apparent that whole gamut of CPC is not extended to arbitration proceedings, but only few provisions are made applicable. Reading Rule 12(2) makes the scheme very clear. It vests complete discretion in the Court to suitably modify the requirements of provisions of CPC adopted by Sub-Rule (1) or to ignore them and proceed otherwise. Only requirement to proceed otherwise is Court must assign reasons. Further, a party complaining lack of notice, opportunity and that procedural formalities were not observed by the opposite party/by the lower Court, must satisfy the appellate Court how prejudice is caused to him.
17. Thus, the scheme of the Act and the Rules make it apparent that the Act is self-contained Code; that they comprehensively deal with all aspects of arbitration; that the Act and the Rules do not envisage PNR,J & Dr.GRR,J CRP No.1571 of 2021 14 application of whole gamut of CPC; that CPC is applicable only to a limited extent as provided in Rule 12 of the Rules; that CPC can only guide the Court in dealing with applications with complete discretion to adopt its own procedure; and that at the stage of enforcement of award of Arbitrator, the Court cannot go into merits of the claims and should only deal with enforcement of award, treating the finality of the award as such.
18. For the aforesaid reasons, we do not see any error in the discretion exercised by the Court below in issuing garnishee order warranting our interference. The Civil Revision Petition is dismissed. Pending miscellaneous petitions if any shall stand closed.
______________________ P.NAVEEN RAO, J ______________________ DR. G.RADHA RANI, J Date: 28.04.2022 KKM Note: L.R.copy to be marked: Yes PNR,J & Dr.GRR,J CRP No.1571 of 2021 15 HON'BLE SRI JUSTICE P.NAVEEN RAO & HON'BLE DR. JUSTICE G.RADHA RANI CIVIL REVISION PETITION NO.1571 OF 2021 Date: 28.04.2022 KKM