Karnataka High Court
Abraham Memorial Edcucation Trust vs Prodigy Development Institution Pvt ... on 10 June, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 06.06.2025
Pronounced on : 10.06.2025 R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.9659 OF 2025 (GM-CPC)
BETWEEN:
ABRAHAM MEMORIAL EDCUCATION TRUST
REGISTRED UNDER THE
INDIAN TRUSTS ACT 1882
HAVING ITS OFFICE AT:
SINGENA AGRAHARA ROAD
VIA HUSKUR ROAD, APMC YARD
HUSKUR PO., ELECTRONIC CITY
BENGALURU - 560 099
REP. BY ITS MANAGING TRUSTEE
... PETITIONER
(BY SRI K.G.RAGHAVAN, SENIOR ADVOCATE FOR
SRI PINAZ MEHTA, ADVOCATE)
AND:
PRODIGY DEVELOPMENT INSTITUTION PVT. LTD.,
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
B4/232, SAFDARJUNG ENCLAVE
SOUTH DELHI, NEW DELHI - 110 029
2
REPRESENTED BY ITS DIRECTOR
... RESPONDENT
(BY SRI DHANANJAY V.JOSHI, SENIOR ADVOCATE A/W., SRI CHETAN C., ADVOCATE FOR C/R) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR RECORDS WITH RESPECT TO COMM.EX.PETITION NO. 180/2024 PENDING ON THE FILES OF THE XI ADDL. DISTRICT AND SESSIONS JUDGE, (DEDICATED COMMERCIAL COURT), BENGALURU RURAL DISTRICT, BENGALURU.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 06.06.2025, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA CAV ORDER The petitioner/judgment debtor is at the doors of this Court calling in question an order dated 07-03-2025 passed by the XI Additional District and Sessions Judge (Dedicated Commercial Court), Bengaluru in Commercial Execution Petition No.180 of 2024 holding that the commercial execution petition is maintainable before the concerned Court.3
2. Heard Sri K.G. Raghavan, learned senior counsel appearing for the petitioner and Sri Dhananjay V.Joshi, learned senior counsel along with Sri C. Chetan, learned counsel appearing for the respondent/caveator.
3. Facts, in brief, germane are as follows: -
A term sheet comes to be executed between the petitioner and Global India Holdings Private Limited for acquisition of an educational institution operated by the petitioner in Bengaluru along with all its assets and liabilities. Pursuant to the drawal of term sheet, an agreement to sell is executed between the petitioner and the respondent for sale of 29 school buses for a total consideration of ₹2,70,00,000/- with an initial deposit of ₹2.50 crores paid by the respondent to the petitioner. The agreement to sell was terminated by the respondent and alleging unilateral termination, the petitioner is said to have issued notice invoking arbitration clause as found in the agreement to sell. The arbitration proceedings are continued.
An arbitral award is passed on 19-11-2019 directing the petitioner to refund ₹2.50 crores along with applicable interest. Challenging 4 the arbitral award, the petitioner files proceedings invoking Section 34 of the Arbitration and Conciliation Act, 1996 ('the 1996 Act' for short) before the High Court of Delhi in O.M.P.(COMM) No.391 of 2020. The High Court of Delhi is said to have allowed Section 34 petition and sets aside the arbitral award. At the instance of parties, a fresh Arbitral Tribunal is constituted on the day the High Court allowed Section 34 petition. Thereafter arbitration proceedings are held and the impugned arbitral award is passed by the newly constituted Arbitral Tribunal again directing refund of ₹2.50 crores, interest of ₹4,01,05,479.45, future interest of ₹1,05,63,141.08 and costs of ₹7,22,813/- aggregating to ₹7,63,91,433.53/-. The petitioner again institutes proceedings invoking Section 34 of the 1996 Act before the High Court of Delhi challenging the later Arbitral Award in O.M.P. (COMM) No.243 of 2023 along with an application seeking stay of operation of impugned arbitral award.
4. During the pendency of the aforesaid proceedings, the respondent files an application before the High Court of Delhi seeking a direction to the petitioner to deposit the award amount.
No order is passed on the said application. During the pendency of 5 proceedings before the High Court of Delhi, the respondent institutes impugned proceedings before concerned Court at Bengaluru seeking execution of arbitral award. On receipt of notice, it appears, the petitioner files objections questioning jurisdiction and maintainability of impugned execution proceedings.
The respondent then files an application in the execution proceedings seeking disclosure of assets both movable and immovables owned or held by the petitioner. The concerned Court by the impugned order dated 07-03-2025, holds that the execution petition filed by the respondent in lieu of arbitral award is maintainable and directs production of assets and liabilities statement as sought. Feeling aggrieved by the action of the concerned Court in entertaining the execution petition, the petitioner/judgment debtor is before this Court.
5. The learned senior counsel Sri K.G. Raghavan would vehemently contend that the arbitral award should be executed in the same manner in which any decree of a civil Court can be executed. He would submit that the execution petition preferred by the decree-holder before the Commercial Court should not be 6 permitted to be entertained for reasons more than one. The learned senior counsel submits that the statute i.e., Section 10 of the Commercial Courts Act, 2015 ('the Act' for short) does not permit filing of an execution petition before the Commercial Court which does not have the powers to get the arbitral award executed. A separate execution petition invoking Order XXI of the CPC is the only way an arbitral award can be executed. He would contend that if the present course is permitted, it would clog Commercial Courts as is held by the Apex Court in plethora of judgments. He would seek to place reliance upon three judgments rendered by different High Courts contending that different High Courts have taken different view with regard to maintainability of execution petition before the Commercial Court to execute an arbitral award.
6. Per contra, the learned senior counsel Sri Dhananjay V. Joshi and Sri C.Chetan appearing for the respondent/caveator would contend that the Commercial Courts do have jurisdiction to entertain execution petitions seeking to execute arbitral awards.
The Act itself provides all the procedures stipulated in the Code of Civil Procedure wherever there is no provision made under the Act.
7They would further contend that the judgments relied on by the learned senior counsel for the petitioner are rendered by learned single Judges of different High Courts. But, Division Benches of different High Courts have considered this very aspect and held that execution petition is maintainable. Against those orders of Division Benches in two of the cases, Special Leave Petitions filed have been rejected. Therefore, they would form followable precedent, than what is relied on by the learned senior counsel for the petitioner.
They would seek dismissal of the petition.
7. I have given my anxious consideration to the submissions made by the respective learned senior counsel and have perused the material on record. In furtherance whereof, the only issue that falls for consideration is, as to whether, an execution petition seeking to execute arbitral award is maintainable before the Commercial Court under the Act?
8. The afore-narrated facts are not in dispute. To answer the issue that has arisen for consideration, it is necessary to notice 8 certain provisions of two enactments i.e., the Act and the 1996 Act.
Section 10 of the Act reads as follows:
"10. Jurisdiction in respect of arbitration matters.--Where the subject-matter of an arbitration is a commercial dispute of a specified value and--
(1) If such arbitration is an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) that have been filed in a High Court, shall be heard and disposed of by the Commercial Division where such Commercial Division has been constituted in such High Court.
(2) If such arbitration is other than an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) that have been filed on the original side of the High Court, shall be heard and disposed of by the Commercial Division where such Commercial Division has been constituted in such High Court.
(3) If such arbitration is other than an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) that would ordinarily lie before any principal civil court of original jurisdiction in a district (not being a High Court) shall be filed in, and heard and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration where such Commercial Court has been constituted."
(Emphasis supplied) Section 10 deals with jurisdiction in respect of arbitration matters.
Sub-section (3) of Section 10 permits filing of applications or appeals arising out of arbitration under the provisions of 1996 Act 9 that would ordinarily lie before any Principal Civil Court of original jurisdiction. Section 16 of the Act reads as follows:
"16. Amendments to the Code of Civil Procedure, 1908 in its application to commercial disputes.--(1) The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall, in their application to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedule.
(2) The Commercial Division and Commercial Court shall follow the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, in the trial of a suit in respect of a commercial dispute of a Specified Value.
(3) Where any provision of any Rule of the jurisdictional High Court or any amendment to the Code of Civil Procedure, 1908 (5 of 1908), by the State Government is in conflict with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, the provisions of the Code of Civil Procedure as amended by this Act shall prevail."
Section 16 makes amendments to the Code of Civil Procedure in its application to commercial disputes.
9. Section 34 of 1996 Act is germane to be noticed. Section 34 reads as follows:
"34. Application for setting aside arbitral award.--(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).10
(2) An arbitral award may be set aside by the Court only if--
(a) the party making the application establishes on the basis of the record of the arbitral tribunal that--
(i) a party was under some incapacity; or
(ii) 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 11
(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.
(2-A) 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.12
(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."
Section 36 of the Act reads as follows:
"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:13
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):] 50 [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.
Section 34 deals with recourse against arbitral awards which also permits making an application to execute the award. Section 36 deals with enforcement of arbitral awards and speaks of submission of an application before the Court for enforcing the award. The purport of the afore-quoted enactments qua the provisions noted hereinabove would not require a deeper delving into the matter, as several High Courts in the country have taken a certain view and 14 few of the High Court have taken a divergent view. The coalesce of those judicial elucidations is what is necessary to be steered out in the case at hand.
10. At the outset, I deem it appropriate to notice the judgments relied on by the learned senior counsel for the petitioner. Heavy reliance is placed upon two judgments rendered by the High Court of Kerala. The High Court of Kerala in the case of SHAJI AUGUSTINE v. CHITHRA WOODS MANORS WELFARE ASSOCIATION1 has held as follows:
".... .... .....
22. The next interesting question is whether the District Court is divested of its power to 25 execute arbitral awards after the introduction of the Commercial Courts Act. Section 2(e) of the Arbitration Act defines 'Court' to be the principal Civil Court of original jurisdiction in the District and excludes civil courts of grade inferior to such Principal Civil Court. Interpreting the provision the Honourable Supreme Court in Atlanta Limited (supra) held as follows;
"24.2. Secondly, the provisions of the Arbitration Act, leave no room for any doubt, that it is the superior- most court exercising original civil jurisdiction, which had been chosen to adjudicate disputes arising out of arbitration agreements, arbitral proceedings and arbitral awards. Undoubtedly, a "Principal Civil Court of Original Jurisdiction in a district", is the superior-most court exercising original civil jurisdiction in the district over which its jurisdiction extends. It is clear that Section 2(1)(e) of the Arbitration Act having vested jurisdiction 1 2021 SCC OnLine Ker 9840 15 in the "Principal Civil Court of Original Jurisdiction in a district", did not rest the choice of jurisdiction on courts subordinate to that of the District Judge. Likewise, "the High Court in exercise of its ordinary original jurisdiction", is the superior-most court exercising original civil jurisdiction, within the ambit of its original civil jurisdiction. On the same analogy and for the same reasons, the choice of jurisdiction will clearly fall in the realm of the High Court, wherever a High Court exercises "ordinary original civil jurisdiction".
23. Inasmuch as the High Court of Kerala is not vested with ordinary original civil jurisdiction, the District Court is the jurisdictional court to deal with matters arising out of arbitration. As per Section 10(3) of the Commercial Courts Act, applications or appeal arising out of an arbitration under the provisions of the Arbitration and Conciliation Act would ordinarily lie before any Principal Civil Court of original jurisdiction in a District and shall be filed and heard and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration. Section 15(2) stipulates that all suits and applications, including applications under the Arbitration and Conciliation Act relating to a commercial dispute of a specified value pending in any civil court in any District or area in respect of which a commercial court has been constituted, shall be transferred to such commercial court. For easy reference, Section 15 is extracted below;
"15. Transfer of pending cases.--(1) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division.
(2) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a specified value pending in any civil court in any district or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court:16
Provided that no suit or application where the final judgment has been reserved by the court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub- section (1) or sub-section (2).
(3) Where any suit or application, including an application under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of specified value shall stand transferred to the Commercial Division or Commercial Court under subsection (1) or sub-section (2), the provisions of this Act shall apply to those procedures that were not complete at the time of transfer.
(4) The Commercial Division or Commercial Court, as the case may be, may hold case management hearings in respect of such transferred suit or application in order to prescribe new timelines or issue such further directions as may be necessary for a speedy and efficacious disposal of such suit or application in accordance 22[with Order XV-A] of the Civil Procedure Code, 1908 (5 of 1908):
Provided that the proviso to sub-rule (1) of Rule 1 of Order V of the Civil Procedure Code, 1908 (5 of 1908) shall not apply to such transferred suit or application and the court may, in its discretion, prescribe a new time period within which the written statement shall be filed.
(5) In the event that such suit or application is not transferred in the manner specified in sub-section (1), sub-section (2) or sub-section (3), the Commercial Appellate Division of the High Court may, on the application of any of the parties to the suit, withdraw such suit or application from the court before which it is pending and transfer the same for trial or disposal to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding."
24. The proviso to Section 15(2) makes it clear that no suit or application, where the final judgment has been reserved by the civil court prior to the constitution of a commercial court, need be transferred. As per sub-section 17 (3) of Section 15, once a suit or application is transferred to the commercial court, the provisions of the Commercial Courts Act will apply to the procedures that are incomplete. To understand the relevance of this provision reference ought to be made to Section 16 of the Act, which reads as under;
"16. Amendments to the Civil Procedure Code, 1908 in its application to commercial disputes.--(1) The provisions of the Civil Procedure Code, 1908 (5 of 1908) shall, in their application to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedule.
(2) The Commercial Division and Commercial Court shall follow the provisions of the Civil Procedure Code, 1908 (5 of 1908), as amended by this Act, in the trial of a suit in respect of a commercial dispute of a specified value.
(3) Where any provision of any Rule of the jurisdictional High Court or any amendment to the Civil Procedure Code, 1908, by the State Government is in conflict with the provisions of the Civil Procedure Code, 1908 (5 of 1908), as amended by this Act, the provisions of the Code of Civil Procedure as amended by this Act shall prevail."
25. Thus, the provisions of the Code of Civil Procedure have been amended in its application to suits in respect of commercial disputes, with the objective of speedy disposal of cases by the commercial courts. Interestingly, there is no amendment to the provisions under Order XXI CPC, dealing with execution of decrees. Therefore, as far as execution is concerned, litigants still have to resort to the cumbersome and time consuming process under Order XXI CPC.
26. In Josekutty Joseph (supra) the Division Bench interpreted the meaning, scope and ambit of Sections 8 and 18 of the Family Courts Act, Section 8 excludes the jurisdiction of all other courts in respect of suits or proceedings falling within the jurisdiction of Family Courts 18 under Section 7, and Section 18 stipulates that a decree or an order passed by a Family Court shall have the same force and effect as a decree or order of a civil court. The relevant paragraph of the judgment is extracted hereunder;
"7. It is true that by virtue of the provisions contained in Sec. 7(1)(a) of the Act, the Family Court shall have the power to exercise all the jurisdiction that was hitherto exercised by the Civil Court in respect of suits and proceedings of the nature referred to in the Explanation. This means that whatever powers (including execution) which the Civil Court could have exercised in respect of such suits or proceedings stand vested in the Family Court upon its establishment. But the Family Court can exercise such powers (including execution) only in respect of a suit or proceeding which comes before it either by way of a statutory transfer or by way of fresh institution as contemplated by Sec. 8 of the Act. When the suit or proceeding referred to in the Explanation to Section 7(1) of the Act can only be a suit or proceeding of an original nature instituted for the purpose of getting a decree, order or declaration as envisaged therein and which cannot necessarily include an execution petition, there cannot be a transfer under Section 8(c)(i) of the Act of a petition for executing a decree pending before the Civil Court on the date of establishment of the Family Court. It is one thing to say that the Family Court can exercise all the powers including execution in respect of such suit or proceeding by virtue of Section 7(1)(a) of the Act, but it is another thing to say that the statutory transfer under Sec. 8(c) of the Act takes within its sweep even petitions for execution of decrees already passed by the Civil Court and pending before such Civil Court on the date of establishment of the Family Court for the area concerned. Section 18 of the Act pertains only to decrees or orders passed by the Family Court and subsection (1) thereof only enacts a fiction by which a decree or order passed by the Family Court is deemed to be one passed by the Civil Court for the purpose of execution. It is significant in this context to note that there is no corresponding provision in the Act treating the decree passed by the Civil Court as one passed by the Family Court. We are unable, in this connection, to accept the petitioner's contention that the deeming provision under Section 7(1)(b) of the Act is to treat the 19 Civil Courts' decrees as one passed by the Family Court. In our view, the deeming provision thereunder is only to enable the Family Court to exercise the jurisdiction in such manner as the Civil Court would have exercised in a suit or other proceeding of such nature. The deeming provision is intended to indicate the procedure to be followed while dealing with such suit or proceeding and nothing else. As along as the decree passed by the Civil Court prior to the establishment of the Family Court is not deemed to be one passed by the Family Court, Section 18 of the Act which only deals with the execution of the decrees and orders passed by the Family Court, cannot have any application. If so, the only provision which can be applied to such a decree passed by the Civil Court is Order 21, Rule 10, C.P.C. which reads as under:--
"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.
Thus, it is the Court which passed the decree which is to be approached for executing the decree. Indisputably, the Court which passed the decree in this case is the Subordinate Judges' Court. Pala where the execution petition (E.P. 19/1997) was pending on the date of establishment of the Family Court for the area. E.P. 19/1997 not being an original proceeding-does not attract the statutory transfer under Sec. 8(c) of the Act. Resultantly, the Sub Court, Pala continues to have jurisdiction to deal with E.P. 19/1997 and bring it to a logical conclusion, notwithstanding the establishment of the Family Court for the area."
27. As observed earlier, the procedure for execution is not mentioned anywhere in the Commercial Courts Act and there is nothing to indicate that the jurisdiction of other courts with respect to pending execution matters stands excluded. The absence of provision regarding execution or specific exclusion of jurisdiction of other courts with respect to execution procedures and the conscious omission to amend Order XXI CPC for hastening the process of execution can only lead to the conclusion that the 20 word "application" in Section 15(1) does not include an 'execution application/petition' and the words, 'those procedures that are not complete at the time of transfer' in Section 15(3) of the Commercial Courts Act does not take in procedure relating to execution of decrees/awards. For the aforementioned reasons, I respectfully disagree with the dictum laid down by the Gujarat High Court in Jagmohan Bel (supra), insofar as it holds that the commercial court at the District level constituted under sub-section (1) of Section 3 of the Commercial Courts Act would be the court competent to execute awards declared under Section 34 of the Arbitration Act.
... ... ...
29. Indisputably, the property, which is the subject matter of the dispute, is situated within the jurisdictional limits of the District Court, Thodupuzha. In Sundaram Finance Ltd. v. Abdul Samad, [(2018) 3 SCC 622], it has been categorically held that the enforcement of an award through its execution can be filed anywhere in the country where such decree can be executed and it is not necessary to obtain a transfer of the decree from the court which would have jurisdiction over the arbitral proceedings."
(Emphasis supplied) The High Court of Kerala, in a later judgment in the case of BETA EXIM LOGISTICS (P) LIMITED v. CENTRAL RAILSIDE WAREHOUSE CO., LIMITED2 has held as follows:
".... .... ....
16. I reminisce the observations of the Honourable Supreme Court in Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP [(2020) 15 SCC 585], while dealing with the C.C. Act, wherein it held thus:
22023 SCC OnLine Ker 1392 21 "36. A perusal of the Statement of Objects and Reasons of the Commercial Courts Act, 2015 and the various amendments to the Civil Procedure Code and insertion of new rules to the Code applicable to suits of commercial disputes show that it has been enacted for the purpose of providing an early disposal of high value commercial disputes. A purposive interpretation of the Statement of Objects and Reasons and various amendments to the Civil Procedure Code leaves no room for doubt that the provisions of the Act require to be strictly construed. If the provisions are given a liberal interpretation, the object behind constitution of Commercial Division of Courts viz. putting the matter on fast track and speedy resolution of commercial disputes, will be defeated. If we take a closer look at the Statement of Objects and Reasons, words such as "early" and "speedy" have been incorporated and reiterated. The object shall be fulfilled only if the provisions of the Act are interpreted in a narrow sense and not hampered by the usual procedural delays plaguing our traditional legal system".
17. Thus, if a more expansive interpretation is given to the word application falling under Section 15 of the C.C. Act, to include execution petitions also, then necessarily all the execution petitions pending before all the civil courts falling within the ken of the C.C. Act will have to be transferred to the Commercial Courts, which in turn will clog the special courts with such matters. Moreover, no practical purpose will be served by such transfer because the Special Courts are not conferred with any additional power than that of the Civil Courts, to speed track execution proceedings, as execution proceedings have been omitted in the schedule attached to the C.C. Act. Without a faster timeline provided under the C.C. Act, to enforce an award, it is immaterial whether the award is executed by the Civil Court or the Commercial Court.
.... .... ....
22. On a conspectus of the pleadings and materials on record, the law on the point and the findings rendered above, this Court is of the definite view that the impugned 22 order is erroneous and is liable to be interfered with by this Court under Article 227 of the Constitution of India, which I do."
(Emphasis supplied) Long before afore-quoted two judgments, the High Court of Chhattisgarh in the case of SOUTH EASTERN COAL FIELDS LIMITED v. M/s TIRUPATI CONSTRUCTION DISTRICT BURHAR3 has held as follows:
".... .... ....
6. In our considered opinion, in view of the proviso, to subsection (2) of Section 15, the execution application cannot be transferred to Commercial Court. The District Judge has not committed any illegality while rejecting the applicant's application for transfer of the execution case to the Commercial Court.
7. Accordingly, application is dismissed."
In all the three judgments, the High Courts of Kerala and Chhattisgarh would hold that, execution petition before Commercial Courts would not be maintainable. The arbitral awards are to be executed in a manner like the decree passed by a competent civil Court is executed under XXI of the CPC. The afore-quoted judgments base their elucidations on one solitary fact that Section 3 2018 SCC OnLine Chh 63 23 10 of the Act does not permit filing of an execution petition nor the procedure for execution. These are the judgments that held that execution petition would not be maintainable and these are the ones that are relied on by the learned senior counsel appearing for the petitioner.
11. The learned counsel for the respondent Sri C. Chetan relies on the judgments rendered by different High Courts, either single Judges or Division Benches. The High Court of Gujarat in the judgment rendered in the case of VIJAY COTTON AND FIBER COMPANY v. AGARWAL COTTON SPINNING PRIVATE LIMITED4 has held as follows:
".... .... ....
10. Having regard to Section 2(1)(b), commercial court would be the one constituted under sub-section (1) of Section 3 of the Commercial Courts Act. Sub-section (1) of Section 3 contemplates constitution of a commercial court at district level only and not at the hierarchy lower than that. Therefore, the contemplation of appointment of the experienced persons to be the Judge or Judges of a commercial Court either at the level of District Judge or a Court below the District Judge would only mean the appointment of a person to the commercial court constituted under sub-section (1) of Section 3 and not the commercial Court lower than that hierarchy. In other words, if Judge appointed to the commercial Court constituted under sub-
42019 SCC OnLine Guj 7075 24 section (1) of Section 3 belongs to the cadre below the District Judge, he would still be the constituent of the commercial Court at the district level.
... ... ...
13. Section 15 of the Commercial Courts Act contemplates the transfer of all suits and applications including applications under Arbitration and Conciliation Act, 1996 pending in the High Court where commercial division is constituted or pending in any civil court in any District or area in respect of which establishment of the commercial courts have been constituted; subject however to the proviso to sub-section (2) of section 15, to the commercial courts or commercial division, as the case may be.
14. By virtue of sub-section (3) of Section 15 procedures; in the case involving commercial disputes; which were incomplete, at the time of transfer of the cases would be replaced by the procedures under the Commercial Courts Act. Having regard to the provisions of the Commercial Courts Act, more particularly, section 10 which contemplates the jurisdiction of the commercial courts in relation to the arbitration other than international commercial arbitration with which this Court is concerned, as also having regard to Section 15of the Commercial Courts Act contemplating transfer of pending suits to commercial Courts/commercial divisions, the obvious necessary corollary insofar as execution petitions are concerned, would be that the commercial court of competent jurisdiction would be the Court competent to execute the decree and not the ordinary civil court constituted under Gujarat Civil Courts Act.
15. At the cost of repetition, it is required to be re- emphasized that even if the Judge of a lower hierarchy than the District Judge is posted in the commercial Court under sub-section (3) of section 3, the commercial Court would be of District level; without any lower level hierarchy under it and therefore, the question of transfer of an execution petition under Section 39 of the CPC to a court of lower hierarchy than the District level would not arise. No such question would arise even under Gujarat Civil Courts Act 25 since the Court established under Section 3 of Commercial Courts Act is not the Court constituted under the Gujarat Civil Courts Act. Therefore, in a case where the commercial Court of a district level is headed by the Judge lower than the hierarchy of District Judge, the District Judge under the Gujarat Civil Courts Act would have no authority to transfer the execution petition under Section 39 of the CPC to the Court of lower hierarchy.
... ... ...
17. The sum and substance of the above discussion is that in State of Gujarat where the commercial Courts are constituted at District level, the execution petition would be maintainable in that court; as contemplated in the notification referred herein above irrespective of its Judge being lower in hierarchy than the District Judge. Since the commercial court lower in hierarchy than the district level is not contemplated under subsection (1) of Section 3, there would be no question of institution of the execution petition with the District Judge and transfer by him under Section 39 of CPC to the Court lower in hierarchy than the such District Judge. The Principal Civil Court in the District Court as defined in Section 2(1)(e) of the Arbitration and Conciliation Act read with Section 3 of the Commercial Courts Act, in respect of the commercial disputes, would be the Commercial Court at the district level as constituted under sub-section (1) of Section 3 of the later Act and would be the court competent to execute awards declared under Section 34 of the Arbitration Act other than those relating to international arbitration. By virtue of the notification above- referred, as also by virtue of the provisions referred to herein above, the Court contemplated in the notification, irrespective of the designation of the Judge would be the commercial Court at district level; and in absence of contemplation of Commercial Court of the lower hierarchy than the District level, in the Commercial Court Act, it would execute the decree without transferring it under Section 39 of CPC."
(Emphasis supplied) 26 The High Court of Rajasthan in ESS KAY FINCORP LIMITED v.
SURESH CHOUDHARY5 has held as follows:
".... .... ....
16. Section 10(3) and 15(2) of the Commercial Courts Act both are relevant for deciding the controversy involved in the present matters and they are reproduced as under:
"10. Jurisdiction in respect of arbitration matters.- Where the subject-matter of an arbitration is a commercial dispute of a Specified Value and--
(1) xxxxx (2) xxxxx (3) If such arbitration is other than an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) that would ordinarily lie before any principal civil court of original jurisdiction in a district (not being a High Court) shall be filed in, and heard and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration where such Commercial Court has been constituted."
"15. Transfer of pending cases.-(1) xxxxxxxxxxx (2) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in any civil court in any district or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court:
Provided that no suit or application where the final judgment has been reserved by the Court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub- section (1) or sub-section (2).
(3) xxxxx (4) xxxxx (5) xxxxx"5
2019 SCC OnLine Raj 7770 27
17. A conjoint reading of Section 10(3) and 15(2) of the Commercial Courts Act makes it clear that an application under Section 36 of the Arbitration Act, seeking execution of award, satisfies the requirement of "being application arising out of such arbitration under the provisions of the Act of 1996". If such application is pending before any Principal Civil Court of original jurisdiction in a district, the same shall be transferred to Commercial Court exercising territorial jurisdiction over such arbitration where such Commercial Court has been constituted. In view of Section 10(3) of the Commercial Courts Act, since the awards in the present set of cases have been rendered in arbitral proceedings, their execution applications filed under Section 36 of the Arbitration Act having regard to provisions of Section 15(3) of the Commercial Courts Act, which contemplates transfer of all such pending applications to Commercial Court, as a legal corollary thereto, would also be liable to be filed and maintained before the Commercial Court and not the ordinary Civil Court/Principal Court of District Judge.
... ... ...
19. In view of above, we answer the question of law formulated in the beginning of this judgment in the terms that the Commercial Court constituted under Section 3(i) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, as defined in Section 2(b) of that Act, would be the only competent Court to execute an arbitral award on a "commercial dispute"
passed under the Arbitration and Conciliation Act, 1996 and not the Principal Civil Court having the original jurisdiction in the District i.e. the Court of District and Sessions Judge as defined under Section 2(1)(e) of the Arbitration and Conciliation Act, 1996."
(Emphasis supplied) 28 A little later, the High Court of Delhi in the case of DELHI CHEMICAL AND PHARMACEUTICAL WORKS PVT.LTD. v.
HIMGIRI REALTORS PVT.LTD.6 has held as follows:
".... .... ....
28. As far as the contention of the senior counsels for the judgment debtors, of proceedings for execution of an arbitral award as a decree being not within the jurisdiction of the Commercial Court/Commercial Division of this Court is concerned, Section 10 of the Commercial Courts Act inter alia provides that where the subject matter of an arbitration is a commercial dispute of a specified value, all applications or appeals arising out of such an arbitration under the provisions of the Arbitration Act that have been filed on the original side of the Court shall be heard and disposed of by the Commercial Division, where such Commercial Division has been constituted in the High Court. It is not in dispute that the subject matter of the arbitration, award whereof is under execution, was of the specified value. The arbitration concerned adjudication of rights and obligations arising between the decree holder and the judgment debtors from agreements entered into between them with respect to an industrial plot of land at Sahibabad. While it was the contention of the decree holder that it was an agreement for sale of the said land by the judgment debtors to the decree holder, the judgment debtors contended the agreement to be a Collaboration Agreement whereunder the decree holder had agreed to raise construction on the land of the judgment debtors for the consideration of sharing a portion of the constructed area. The arbitral award negates the contention of the decree holder, of the agreement being of sale and has held the decree holder to be only entitled to reimbursement of the amounts incurred pursuant to the agreement. Such a dispute, under clauses (vi) and (vii) of Section 2(1)(c) of the Commercial Courts Act read with Explanation (a) thereto, constitutes a commercial dispute. Thus the subject matter of 6 2021 SCC OnLine Del 3603 29 arbitration in the present case was a commercial dispute of a specified value, within the meaning of Section 10 of the Arbitration Act. To be fair to the senior counsels for the judgment debtors, they did not seriously controvert the aforesaid. Their contention however was that since this appeal does not arise out of arbitration under the provisions of the Arbitration Act, within the meaning of Section 10(2) of the Arbitration Act, the execution was not within the jurisdiction of the Commercial Division and the appeal thereagainst does not lie to the Commercial Appellate Division, under Section 13 of the Commercial Courts Act. It was further contended that the Arbitration Act is concerned only with the arbitration proceedings and challenge to the arbitral award and is not concerned with execution of the arbitral award, with the Act, in Section 36 merely providing for the award to be executed as a decree of the Civil Court in accordance with the provisions of the CPC. It was contended that the Execution Petition is thus not an application arising out of arbitration under the Arbitration Act, to be entertained by the Commercial Division of this Court.
29. Needless to state, this question also was not raised before and has not been considered by the Commercial Division in any of the orders in the subject execution proceedings.
30. Though in appeal, ordinarily we would not allow a new plea to be urged but finding the same to be of general importance, having application in a large number of cases, proceed to do so.
31. Section 2(1)(c) defines "commercial disputes" as a "dispute" arising out of agreements, transactions, relationships, of the nature specified in various clauses thereunder. Sections 6 and 7 of the Commercial Courts Act vest jurisdiction in the Commercial Court/Commercial Division, to try "all suits and applications relating to commercial disputes of a specified value".
32. According to the senior counsels for the judgment debtors, the jurisdiction of the Commercial Courts/Commercial Divisions is only over suits/arbitrations, subject matter whereof qualifies as a commercial dispute and 30 not over proceedings for execution of the decrees passed in the said suits or over enforcement of awards passed in the said arbitrations. The question which arises is, whether a claim made by one against the other and controverted by the other, on adjudication thereof, whether by the Court or by the Arbitrator, ceases to be a "dispute", for it to be said that the proceedings for execution of adjudication of a commercial dispute, whether by way of a decree or an arbitral award, do not qualify as a "dispute".
33. Section 2(1)(i) of the Commercial Courts Act defines "Specified Value" in relation to a commercial dispute, as the value of a subject matter in respect of a suit as determined in accordance with Section 12. Reference therein is thus expressly to a "suit", as distinct from an "execution". Section 12 however refers to the specified value of the subject matter of the commercial dispute in a suit, appeal or application. Thereby, the ambit of specified value is increased, from that in Section 2(1)(i), with reference to a "suit" alone, to an appeal or an application also. Finally, Sections 6 and 7, while prescribing the jurisdiction of Commercial Courts and Commercial Divisions, prescribe the said jurisdiction, to extend to try all suits and applications relating to a commercial dispute, again, vesting the jurisdiction in the Commercial Courts/Commercial Divisions, not only to try "suits" but also "applications".
34. The question which arises is, whether Execution Petitions are "applications" within the meaning of Sections 10, 12, 6 and 7 of the Commercial Courts Act.
35. "Dispute" is defined as a disagreement or argument between two people. "Application" is defined as a formal written request.
36. It is not as if, on adjudication of a dispute, resulting in a judgment/decree of a Court or award of an Arbitral Tribunal, the "dispute" between the parties comes to an end or nothing remains to be adjudicated between the parties. Section 47 of the CPC, in Part-II titled "Execution" itself, in this respect provides that all questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to execution, 31 discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit. It is evident therefrom that a judgment or a decree of the Court or the award of an Arbitral Tribunal, do not put an end to the "dispute" between the parties and it is not as if execution is merely an administrative task, with no adjudication involved. It would be incongruous to hold that the jurisdiction of the Commercial Courts/Commercial Divisions extends only to adjudication of commercial disputes till the stage of adjudication and not to adjudication of commercial disputes arising in the course of execution. Once it is so, the word "dispute" in Section 2(1)(c) would extend to adjudication of disputes arising during execution of arbitral awards subject whereof falls within the jurisdiction of the Commercial Courts Act and the Commercial Court and Commercial Division would also have jurisdiction over the applications for execution of arbitral awards of a specified value, subject matter whereof was a commercial dispute.
37. There is another aspect. A claimant in a dispute is not interested merely in adjudication thereof. The claimant is interested in delivery to him, of what he claims to be due and what has been adjudicated to be due to him from the opposite party. The Commercial Courts Act, as laid down in HPL (India) Ltd. supra also, was enacted to provide for speedy disposal of high value commercial disputes and their early resolution. The resolution of a commercial dispute is not complete, till the fruit thereof is in the hands of whosoever is found to be entitled thereto. Supreme Court also recently in Rahul S. Shah v. Jinendra Kumar Gandhi 2021 SCC OnLine SC 341 has lamented on the troubles of the decree holder, in not being able to enjoy the fruits of litigation on account of inordinate delay caused during the process of execution of the decree and has referred to the observations in a judgment of 1872 vintage of the Privy Council in the General Manager of the Raja Durbhunga v. Maharaja CoomarRamaput Singh 1872 SCC OnLine PC 16, that the actual difficulties of a litigant in India begin when he has obtained a decree. This being the state of affairs, to hold that the jurisdiction of the Commercial Courts/Commercial Division does not extend to execution but ends with adjudication, would defeat the very purpose and object of the Commercial Courts Act i.e. of speedy disposal 32 and resolution of commercial disputes of a specified value. To hold that the Commercial Courts/Commercial Divisions would not have jurisdiction over applications for execution of a judgment or decree or for enforcement of an arbitral award, subject matter whereof was a commercial dispute, would in our opinion sound the death knell for the objective behind setting up of the Commercial Courts and the Commercial Divisions."
(Emphasis supplied) The High Court of Andhra Pradesh in the case of OBULAPURAM MINING COMPANY PRIVATE LIMITED v. R.K. MINING PRIVATE LIMITED7has held as follows:
".... .... ....
20. In view of these contentions and the legal position, this Court is proposing to examine Section 15 of the Commercial Courts Act and Order 21 CPC. The contention urged by the petitioner is that the Commercial Court alone should execute a decree above the specified value while the contention of the respondent is that the civil court alone should execute such a decree as the Commercial Courts Act does not deal with Order 21 C.P.C,, at all. The meaning of the word "application" in Section 15 of the Act also assumes importance.
21. Section 15 (1) of the Act deals with the commercial disputes pending in High Court. It is stated that all the suits and applications shall be transferred to the Commercial Division. Section 15 (2) is as follows:
"15 (2) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in any civil court in any district 7 AIR 2024 AP 30 33 or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court:
Provided that no suit or application where the final judgment has been reserved by the Court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub- section (1) or sub-section (2)."
22. Section 15 (3) states that when suit or any application including an application under Arbitration and Conciliation Act, 1996 stands transferred to the Commercial Court the provisions of - "this Act shall apply to those procedures that were not completed at the time of transfer".
23. Section 6 is to the following effect -
"6. Jurisdiction of Commercial Court.--The Commercial Court shall have jurisdiction to try all suits and applications relating to a commercial dispute of a Specified Value arising out of the entire territory of the State over which it has been vested territorial jurisdiction."
24. Chapter-VI of the Commercial Court Act deals with the amendments to provisions of Code of Civil Procedure 1908. Section 16 (1) of the Act says that the provisions of CPC shall in their application to any suit be amended as specified in the schedule. Section 16 (2) of the Act states that Commercial Courts shall follow "the provisions of CPC as amended by this Court in the trial of a suit in respect of Commercial dispute". The Schedule, which is specified in the Act, in particular amends the 1st schedule of the CPC. In the Schedule of the Act, Clause 4 (A) deals with Order 5 of the CPC (Time for written statement). Clause 4 (B) deals with pleadings in a commercial dispute (Order 6). Clause 4 (C) deals with Order 7 Rule 2 (Again plaint). Clause 4 (D) deals with Order 8 (written statement); Order 7. is also suitably amended to deal with disclosure, discovery and inspection of documents in suits before the Commercial Division of a High court or a commercial Court. Order 11 Rule 1 deals with the plaintiffs list of documents etc. Order 11 Rule 7 deals with defendants list of documents and further deals with 34 discovery of interrogatories, inspection, admission and denial of documents. Order 13A dealing with summary judgment is also amended.
25. A reading of these sections and amendments in seriatim shows that the intention of the legislature was only to modify arid streamline the procedures and practices relating to suits and applications in suits etc., which are pending for disposal.
26. The heading of Chapter VI of the Act is -
"Amendments to the Provisions of the Code of Civil Procedure, 1908". The amendments to the CPC, refer to the 1st schedule and specifically to Orders 5, 6, 8, 11, 13 (A) of CPC etc., and in addition a newly incorporated Order 15(A) is brought into force. All of them deal with trial and disposal of a suit only. None of the other provisions of the CPC are touched or amended including Order 21 CPC.
27. In the opinion of this Court this deliberate silence by the legislature, in spite of the need for a law on the subject for quick and efficient disposal of the cases, including commercial disputes, being on everyone's mind makes it very clear that the legislature in its wisdom decided to speed up the trial and disposal of the cases in the commercial court alone. Time and again the Hon'ble Supreme Court of India and various courts have spoken about the need for quick disposal of domestic and' international commercial disputes. Hence a conscious effort was made by the Legislature to change the provisions of CPC regarding the trial and disposal of cases for a quicker disposal of the suits and applications. In this Court's opinion and as per settled law the assumption is that the legislature did not make a mistake. It did what it set out to do - to speed up trials. The silence or failure to refer to Order 21 does not mean that the Commercial Court cannot execute a decree. A purposive interpretation has to be given, to the provisions, of the Act. If it is not so interpreted the Commercial Courts will be powerless in many aspects. If the arguments of the learned senior counsel for the respondent are further extended and as other provisions of C.P.C. are also not touched upon/ referred to it would mean- that the Commercial Court cannot add or delete parties (Order-I); cannot bring on record the legal 35 representatives (Order 22); cannot grant injunctions (Order
39); order attachment or arrest before judgment (Order 38) and so on. These are a few illustrative aspects that are touched upon. This would virtually render the Commercial Courts non-effective and virtually defeat their purpose/objective. Can it be said that since Order 38 or Order 39 are not mentioned the Commercial Court cannot grant an interim order? This would lead to a collapse of these Courts.
28. The special purpose - namely the quick disposal of commercial cases- and the purpose behind the Actis also strengthened by the contents of Section 6 which states that the Commercial Court can be conferred jurisdiction over the entire State unlike the restriction in Section 15 to Section 20 of CPC etc. The appeals pending in the Commercial Appeal Division are also to be disposed within six months as per Sec 16 of the Act. The clear bar against the revision application or petition against interlocutory application notwithstanding anything to the contrary in law in Section 9 of the Act, further strengthens this Court's conclusions that the emphasis was on quick and early disposal of cases.
29) Section 16 of the Act is as follows "16. Amendments to the Code of Civil Procedure, 1908 in its application to commercial disputes'.--(1) The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall, in their application to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedule.
(2) The Commercial Division and Commercial Court shall follow the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, in the trial of a suit in respect of a commercial dispute of a Specified Value.
(3) Where any provision of any Rule of the jurisdictional High Court or any amendment to the Code of Civil Procedure, 1908 (5 of 1908), by the State Government is in conflict with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, 36 the provisions of the Code of Civil Procedure as amended by this Act shall prevail."
30. Section 16(3) makes it clear that the amendments to the CPC made by this Act shall "prevail" over amendments made by the State Government or over the jurisdictional High Courts Rules. This is again done to facilitate quick disposal of suits and applications. Even the High Court Rules have to give way to these amendments.
31) Further, in this Court's opinion the word 'application' occurring in Section 15 of the Act is also not limited to original applications only or to application in suits. Support can be drawn from the provisions, of Order 21 CPC itself dealing with execution. Order 21 Rule 10 starts with the words - "Application" for Execution. Rule 11 says an oral "application" is permissible. Order 21 Rule 11(2) talks of a written "application". Similarly Rules llA, 12, 13, 16 talk of "applications" for execution. The use of the words suits and applications including applications under the Arbitration Act 1996" make it clear that it is not merely limited to suits and arbitration applications only. An inclusive definition is given to include all "applications" under Section 15. The intention of the Legislature is also clear from a reading of Section 10 of the Commercial Courts Act, which deals with applications and appeals under the Arbitration Act. They are dealt with under this Section. This Court, therefore, holds that the word "application" in Section 15 includes execution applications also. The inclusive definition in Section 15(1) makes this clear.
32. Even with regard to enforcement and execution this Court feels that the Arbitration Act, 1996 made the issue clear since the CPC is not applicable per se to the proceedings before an Arbitration Tribunal. Section 36 of the Arbitration and Conciliation Act as it stood earlier was as follows: -
"36 Enforcement:- Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the 37 Code of Civil Procedure 1908 (Act 5 of 1908) in the same manner as if it were a decree of the Court."
33. Section 36 after amendment by Act 3 of 2016 is as follows:
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 24 Procedure, 1908 (5 of 19081, in the same manner as if it were a decree of the court.
In view of the non-applicability of C.P.C. to Arbitrations this clarity was given with respect to execution of Awards in a Civil Court. On the other hand this 2015 Act is called the Commercial Courts Act itself.
34. The purpose and intent of the Act is to provide for the constitution of Commercial Courts for Commercial disputes of specified value adjudicating and matters connected therewith and incidental thereto. Hence, a purposive and meaningful interpretation must be given which means that quick disposal, of commercial cases would include quick disposal of execution applications for enforcing the judgments. passed. The conclusions of the Hon'ble Supreme Court of India in Jaycee Housing Private limited case (5 supra) in para 10and 11 also supports this view.
"10. Thus, the Objects and' Reasons of Commercial Courts Act, 2015 is to provide for speedy disposal of the commercial disputes which includes the arbitration proceedings. To achieve the said Objects, the legislature in its wisdom has specifically conferred the jurisdiction in respect of arbitration matters as per Section 10 of the Act, 2015. At this stage, it is required to be noted that the Act, 2015 is the Act later in time and therefore when the Act, 2015 has been enacted, more particularly Sections 3 & 10, there was already a provision contained in Section 2(l)(e) of the Act, 1996. As per settled position of law, it is to be presumed that while enacting the subsequent law, the legislature is conscious of the provisions of the Act prior in time and therefore the later Act shall prevail. It is also required to be noted that 38 even as per Section 15 of the Act, 2015, all suits and applications including applications under the Act, 1996, relating to a commercial dispute of specified value shall have to be transferred to the Commercial Court. Even as per Section 21 of the Act, 2015, Act, 2015 shall have overriding effect. It provides that save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force.
11. Therefore, considering the afore-stated provisions of the Act, 2015 and the Objects and Reasons for which the Act, 2015 has been enacted and the Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts are established for speedy disposal of the commercial disputes including the arbitration disputes. Sections 3 & 10 of the Act, 2015 shall prevail and all applications or appeals arising out of arbitration under the provisions of Act, 1996, other than international commercial arbitration, shall be filed in and heard and disposed of by the Commercial Courts, exercising the territorial jurisdiction over such arbitration where such commercial courts have been constituted. If the submission on behalf of the Appellants that of Act, 1 civil other than the international commercial arbitration, shall lie before the principal civil Court of a district, in that case, not only the Objects and Reasons of enactment of Act, 2015 and establishment of commercial courts shall be frustrated, even Sections 3, 10 & 15 shall become otiose and nugatory. If the submission on behalf of the Appellants is accepted, in that case, though with respect to other commercial disputes, the applications or appeals shall lie before the commercial courts established and constituted Under Section 3 of Act, 2015, with respect to arbitration proceedings, the applications or appeals shall lie before the principal civil Court of a district. There cannot be two fora with respect to different commercial disputes.
Under the circumstances, notification issued by the State of Odisha issued in consultation with the High Court of Orissa to confer jurisdiction upon the court of learned Civil judge (Senior Division) designated as Commercial Court to decide the applications or appeals arising out of arbitration under the provisions of Act, 1996 cannot be said to be illegal and bad in law. On the contrary, the same can be said to be absolutely in 39 consonance with Sections 3 & 10 of Act, 2.015. We are in complete agreement with the view taken by the High Court holding so."
35. There cannot be two courts/fora:- one for the dispute resolution and one for execution of the decree passed.
36. Section 38 of C.P.C. clearly states that the decree may be executed by the Court that passed it or the Court to which it was sent for execution. Therefore, this Court holds that a. commercial court can execute a decree passed by itself or even execute a decree sent for execution under Section 15 of the Commercial Courts Act or by transfer from another Commercial Court.
37. For all the above mentioned reasons it is held that the Commercial Court has the jurisdiction to execute its own decree or a decree transferred/sent to it, where the value is above the specified limit.
38. This Court respectfully agrees with the views of the Kerala and Chhattisgarh High Courts and respectfully disagrees with the view taken by the other learned Judges of the Gujarat, Delhi and other High Courts.
39. In conclusion this Court would like to again rely upon para 35 of the Division Bench judgment of the Gujarat High Court reported in OCI Corporation case (11 supra). The question that was specifically raised in that matter was whether the Execution Petition would fall within the ambit of Section 15 (2) of the Commercial Courts Act and which court would have jurisdiction. This was ultimately answered by the Division Bench by considering the law on the subject. In para-10 the following question as posted and in para-11 the answer is given as follows:
"10. Now, next question posed for consideration of this Court is whether execution petitions pending before the concerned District Court as on 23.10.2015 which are filed for execution/enforcement of the foreign award are required to be transferred, and if yes, to which Court?40
11. The sum and substance of the above discussion would be, "(1) Where the subject matter of an arbitration is a commercial dispute of a specified value and if such arbitration is international commercial arbitration, all the applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 shall be heard, decided and disposed of by the Commercial Division where such commercial Division has been constituted in the High Court i.e. in the present case High Court of Gujarat.
(2) Where the subject matter of an arbitration is a commercial dispute but not of a specified value and if such arbitration is international commercial arbitration, considering the provisions of Arbitration and Conciliation (Amendment) Act, 2015 the same shall be heard, decided and disposed of by the concerned High Court.
(3) Where the subject matter of an arbitration is a commercial dispute of a specified value and if such arbitration is other than international arbitration, all the applications, or appeals arising, out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 shall be filed in and heard, decided and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration where such commercial court has been constituted."
Considering section 15 of the Commercial Courts Act, all the applications/appeals in. question under the Arbitration and Conciliation Act; 1996, therefore are required to be transferred to the concerned Commercial Division of the High Court of Gujarat or before the Gujarat High Court or before the concerned commercial court and as observed hereinabove and as the case may be."
40. The SEP filed against this judgment was also dismissed. The essence and ratio of this judgment is that arbitration Awards can be executed by the Commercial Court / Commercial Division of the High Court respectively. This view supports the conclusion of this Court."
41The Allahabad High Court in BHARAT PETROLEUM CORPORATION LIMITED v. ANOOP KUMAR MODI8 has held as follows:
".... ..... ...
7. The counsel for the petitioner places reliance on the judgment of the Kerala High Court in case of Beta Exim Logistics (P) Ltd. versus Central Railside Warehouse Co., Ltd. reported in 2023 SCC Online Ker 1392 as well as the judgment of the Supreme Court in the case of Sundaram Finance Limited versus Abdul Samad and another reported in (2018) 3 Supreme Court Cases 622 as also the judgement of the Supreme Court in the case of State of West Bengal versus Associated Contractors(2015) 1 SCC 32.
8. The counsel for the respondent, on the other hand, justifies the filing of the execution proceedings at Lucknow and argues that in view of the law laid down and clarified by the Supreme Court in the Case of Sundaram Finance Limited (supra) and in the case of Cheran Properties Limited versus Kasturi and sons limited reported in AIRONLINE 2018 SC 1229, it is the option of the award holder to file executions at any place of their choice. He also relies upon the judgement of this Court in the case Hasmukh Prajapati versus Jai Prakash Associates Ltd. reported in 2022 (3) ALJ 166.
... ... ...
11. The submission of the counsel for the petitioner that an execution petition which lies under Section 36 of the Arbitration and Conciliation Act would not fall within the phrase 'all applications or appeals arising out of such arbitration ' and as the legislature in its wisdom, did not specify the enforcement petition under Section 36 of the Arbitration and Conciliation Act while drafting the provisions of Section 10(3) of the Commercial Court Act, clearly the intent of the legislature was that the enforcement petition 8 Neutral Citation No.2023:AHC-LKO:68875 AFR 42 would lie before a ordinary civil court defined under Section 2(c) of the Arbitration and Conciliation Act, 1996 and not before a Commercial Court.
12. The distinction as proposed to be argued for enforcement provided under Section 36 is excluded from the use of word 'Application' referred to in Section 10(3) of the Commercial Court Act, is on the face of it not acceptable as on a plain reading of provisions contained in Section 10(3) as quoted hereinabove, it is provided that other than International Commercial Arbitration, all 'applications' or 'appeals' arising out of such arbitration under the provisions of the 1996 Act which would ordinarily lies before any Principal Civil Court or original jurisdiction in a district shall be filed in and heard and disposed of by the Commercial Court exercising the territorial jurisdiction.
13. The counsel for the petitioner, to buttress his submission on that point draws my attention to Section 16 of the Commercial Court Act to argue that the legislature deliberately, did not propose any amendment to the provisions of court of civil procedure with regard to order 21, which is the procedure prescribed for execution of degrees and this aspect of the legislature not prescribing any amendment in order 21, should crystallize the argument raised by the petitioner. The said argument of the counsel for the petitioner merits rejection for sole reason that Section 42 of the Arbitration Act clarifies that any application under this part has to be made in a court and thereafter that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out that agreement and arbitral proceedings shall be made in that court and to no other court. Although Section 32 of the Arbitration and Conciliation Act provides for termination of arbitral proceedings on the passing of the final award, however, the use of the phrase any application under this part used in Section 42 clearly refers to the filing of an application under Part-I of the Arbitration and Conciliation Act which includes Sections 36 under which the execution of award is provided for. Even otherwise, the execution of a decree is provided for and can be initiated by moving an application under Order 21 thus the word 'application', refers to in Section 10(3) would include the application for execution to be filed for execution 43 of an award in terms of mandate of Section 36 of the Arbitration and Conciliation Act. Thus, for the said reasoning, the first contention of the counsel for the petitioner merits rejection and is accordingly rejected.
... ... ...
16. As regards the judgment cited by the counsel for the petitioner in the case of Beta Exim Logistics (P) Ltd. versus Central Railside Warehouse Co., Ltd. reported in 2023 SCC Online Ker 1392, the Court while dealing with the issue although took notice of mandatory provision of the Commercial Court Act, however, recorded in paragraphs 17 and 20 as under:-
17. Thus, if a more expensive interpretation is given to the word application falling under Section 15 of the C.C. Act, to include execution petitions also, then necessarily all the execution petitions pending before all the civil courts falling within the ken of the C.C. Act will have to be transferred to the Commercial Courts, which in turn will clog the special courts with such matters. Moreover, no practical purpose will be served by such transfer because the Special Courts are not conferred with any additional power than that of the Civil Courts, to speed track execution proceedings, as execution proceedings have been omitted in the schedule attached to the C.C. Act. Without a faster timeline provided under the C.C. Act, to enforce an award, it is immaterial whether the award is executed by the Civil Court or the Commercial Court.
20. Therefore, the Court of the District Judge Ernakulam, had gone wrong in transferring the execution petition which was not a pending matter at the time of notifying the C.C. Act. Furthermore, the District Court has the jurisdiction to entertain the execution petition because the petitioner resides within the jurisdiction of the said Court and is a Court superior to the Commercial Court. Hence, no prejudice is caused to the respondent in the execution petition being decided by the District Court."
The High Court of Gujarat in the case of ARUN KUMAR JAGATRAMKA v. ULTRABULK A/S9 has held as follows:
92022 SCC OnLine Guj 2767 44 ".... .... ....
22. Proceeding to consider the issue on further merits, the question about jurisdiction of the Commercial Court to entertain the execution application has been answered in the reasoning and ratio of the decisions of the courts. Before the Division Bench of this Court in OCI Corporation v. Kandla Export Corporation, [(2017) 1 GLH 383: (AIR 2017 NOC 468 (Guj)], the issue was about transfer of execution petitions pending before the District Court, Gandhidham to the appropriate Commercial Court. It was the contention that the Parliament did not intend to apply provisions of Commercial Courts Act, 2015 to the execution of the foreign award which was sought to be executed in those cases. The execution proceedings were in relation to the arbitral award, and the contention was raised for with reference to the definition of the 'commercial dispute' contained in Section 2(c) of the Commercial Courts Act, that it cannot be said that there was any 'commercial dispute' pending at the execution stage in as much as commercial dispute which had arisen between the parties was already decided and adjudicated.
23. While summing up the final decision, the Division Bench inter alia held and directed that, [Para 63(3)] "Where the subject matter of an arbitration is a commercial dispute of a specified value and if such arbitration is other than international arbitration, all the application or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 shall be filed in and heard, decided and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration where such commercial court has been constituted."
24. In Vadodara MahanagarSevaSadan formally known as Municipal Corporation v. M.S. Khurana Engineering Limited, being Special Civil Application No. 13736 of 2018, the petitioner Corporation had challenged order of the Commercial Court in relation to the award of the arbitrator for which the execution petition was filed before the Commercial Court. The contention was raised on behalf of the petitioner that though the application for setting aside 45 the arbitral award may be pending before the Commercial Court, the execution petition of the contractor would not be competent as it was for the amount below Rs. 1 Crore.
25. The Division Bench stated and observed, "Section 37 of the CPC pertains to definition of Court which passed a decree and provides that 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 pr.
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. Section 38 of the CPC pertains to "Court by which decree may be executed" and provides that a decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution. In terms of Section 38 of the CPC, thus, a decree is executable by a Court which passed it."
26. It was observed that since the award was enforceable in terms of the Code of the Civil Procedure in the same manner as it was the decree of the Court, "the Court having jurisdiction over the subject matter could be the court competent to execute it as per the Section 38 of the CPC." It was concluded that, "Since in the present case, jurisdiction of the subject matter which was part of the arbitration proceedings ordinarily lies with the Commercial Court and it was because of this reason that the application for setting aside the arbitral award was transferred to the Commercial Court, it was the Commercial Court which was competent to enforce the arbitral award; as if it were a decree of that Court."
27. The decision of Delhi High Court in Bayer Intellectual Property GMBH v. Symed Laboratories, [2019 SCC OnLine Del 7410: (AIROnline 2019 Del 2648)], 46 addressed and answered the very question. The consent decree passed before the Commercial Court was sought to be executed. The High Court observed, (Para 28) "As far as the contention of the senior counsels for the judgment debtors, of proceedings for execution of an arbitral award as a decree being not within the jurisdiction of the Commercial Court/Commercial Division of this Court is concerned, Section 10 of the Commercial Courts Act inter alia provides that where the subject matter of an arbitration is a commercial dispute of a specified value, all applications or appeals arising out of such an arbitration under the provisions of the Arbitration Act that have been filed on the original side of the Court shall be heard and disposed of by the Commercial Division, where such Commercial Division has been constituted in the High Court. It is not in dispute that the subject matter of the arbitration, award whereof is under execution, was of the specified value."
28. It was the contention canvassed before the Delhi High Court on behalf of the judgment-debtor that the jurisdiction of the Commercial Courts or Commercial Divisions is only over suits or arbitrations, subject matter whereof qualifies as a commercial dispute and not over proceedings of decrees passed in the said suits over enforcement of awards passed in the arbitrations. The Delhi High Court stated, (Para 33) "Section 2(1)(i) of the Commercial Courts Act defines "Specified Value" in relation to a commercial dispute, as the value of a subject matter in respect of a suit as determined in accordance with Section 12. Reference therein is thus expressly to a "suit", as distinct from an "execution". Section 12 however refers to the specified value of the subject matter of the commercial dispute in a suit, appeal or application. Thereby, the ambit of specified value is increased, from that in Section 2(1)(i), with reference to a "suit" alone, to an appeal or an application also. Finally, Sections 6 and 7, while prescribing the jurisdiction of Commercial Courts and Commercial Divisions, prescribe the said jurisdiction, to extend to try all suits and applications relating to a commercial dispute, again, vesting the 47 jurisdiction in the Commercial Courts/Commercial Divisions, not only to try "suits" but also "applications."
29. The question dealt with by the Delhi High Court was also whether the execution proceedings are 'applications' within the meaning of Sections Nos. 6, 7, 10 and 12 of the Commercial Courts Act. The Court stated that 'dispute' is a set of disagreement or an argument between the two parties over an issue. An 'application' is formal written request madeto the court in relation to such issue under the dispute. It was further observed by the High Court, (Para 36) "It is not as if, on adjudication of a dispute, resulting in a judgment/decree of a Court or award of an Arbitral Tribunal, the "dispute" between the parties comes to an end or nothing remains to be adjudicated between the parties. Section 47 of the CPC, in Part-II titled "Execution" itself, in this respect provides that all questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit. It is evident therefrom that a judgment or a decree of the Court or the award of an Arbitral Tribunal, do not put an end to the "dispute" between the parties and it is not as if execution is merely an administrative task, with no adjudication involved."
30. The Delhi High Court rightly stated that an irreconcilable and incongruous situation would be obtained if it is held otherwise that Commercial Court does not have the powers to proceed with the execution. (Para 36) "It would be incongruous to hold that the jurisdiction of the Commercial Courts/Commercial Divisions extends only to adjudication of commercial disputes till the stage of adjudication and not to adjudication of commercial disputes arising in the course of execution. Once it is so, the word "dispute" in Section 2(1)(c) would extend to adjudication of disputes arising during execution of arbitral awards subject whereof falls within the jurisdiction of the Commercial Courts Act and the Commercial Court and Commercial Division would 48 also have jurisdiction over the applications for execution of arbitral awards of a specified value, subject matter whereof was a commercial dispute."
31. We fully concur with the reasons and decision of the Delhi High Court.
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38. The jurisdiction of the commercial court under Section 6 of the Commercial Courts Act extend to try all suits and applications relating to commercial dispute of specified value. The word 'specified value' has been defined under Section 2(i) of the Commercial Courts Act. The word 'applications' under Section 6 would include execution applications and also proceedings relating to commercial dispute of specified value. The jurisdiction of the commercial court therefore necessarily extends to the execution application arising from the judgment and decree of the commercial court.
39. There remains hardly any substance in the submission that since the provisions relating to execution were not amended while amending certain provisions of CPC as per the Section 16 of the Commercial Courts Act, the commercial court does not have the jurisdiction to try and decide the execution petitions. Merely because there is no amendment in relation to the execution provisions brought about and certain other provisions of CPC were amended to be applied to the commercial suits, it would not mean or imply that the commercial court does not have the power to execute."
One common factor that runs through all the judgments relied on by the learned counsel for the respondent/decree-holder is that most of them are by the Division Benches. The judgments of High Courts of Delhi, Gujarat, Andhra Pradesh and Rajasthan are all 49 rendered by Division Benches. Against judgments rendered by two High Courts i.e., High Courts of Rajasthan and Delhi, Special Leave Petition have been dismissed in limine.
12. On a coalesce of the judgments relied on by the learned senior counsel for the petitioner and that of the respondent, the unmistakable inference is, my respectful agreement with the judgments rendered by the Division Benches of various High Courts, in particular, the one that is rendered in ARUN KUMAR JAGATRAMKA supra which considers the entire spectrum of law and holds that Section 10 is clear that execution petition also can be filed to execute a decree i.e., arbitral award before the Commercial Court, as the characteristics of a commercial dispute is not lost. Same is that of the Division Benches of other High Courts.
In the light of unequivocal elucidation of law and the fact that elucidation of Gujarat High Court having become final, as the SLP preferred being dismissed, I deem it appropriate to follow the same. The unmistakable inference of all the narrations hereinabove is that the execution petition before the Commercial Court would become entertainable and maintainable. The submission that they 50 would clog commercial Courts, as held by the Apex Court in plethora of judgments; that would not sway the elucidation of law or out-weigh the elucidation of law the Division Benches of the several High Courts quoted supra.
13. For the aforesaid reasons, finding no merit in the challenge, the challenge is repelled and the petition is dismissed.
Interim order of any kind if operating, shall stand dissolved.
Sd/-
(M.NAGAPRASANNA) JUDGE bkp CT:SS