Calcutta High Court
Mechon Services vs Predominant Engineers & Contractors ... on 4 December, 2017
Equivalent citations: AIR 2018 (NOC) 242 (CAL.)
Author: Sahidullah Munshi
Bench: Jyotirmay Bhattacharya, Sahidullah Munshi
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
GA 2438 of 2016
APOT 285 of 2016
EC 407 of 2016
MECHON SERVICES
Versus
PREDOMINANT ENGINEERS & CONTRACTORS (P) LIMITED
BEFORE:
The Hon'ble ACTING CHIEF JUSTICE JYOTIRMAY BHATTACHARYA
The Hon'ble JUSTICE SAHIDULLAH MUNSHI
Date : 4th December, 2017.
Mr. Jishnu Chowdhury, Adv.
Mr. Jayanta Sengupta, Adv.
Mr. Sagnik Basu, Adv.
..for appelllant
Mr.Supratim Laha, Adv.
Mr. Balaji Chakaraborty, Adv.
..for respondent
The Court : This appeal is directed against an order dated 27th July, 2016 passed by a learned Single Judge of this Court refusing to entertain the execution case for lack of jurisdiction of this Court.
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The learned Single Judge held that the execution case has been unnecessarily carried to this Court without anything in the affidavit in support of the tabular statement justifying the matter being filed in this Court.
In this appeal a question has cropped up as to the Court which is competent to execute the award passed by the Arbitral Tribunal under the Arbitration and Conciliation Act, 1996.
Section 36 of the Arbitration and Conciliation Act, 1996 provides for enforcement of the award. The said provision makes it clear that 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 will 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. The confusion, which was there earlier, with regard to the selection of the forum for regulating arbitral proceeding arising out of the agreement between the parties, has now been dispelled by the Hon'ble Supreme Court in the case of Indus Mobile Distribution Pvt. Ltd. vs. Datawind Innovations (P) Ltd. and Ors., reported in [2017] 7 SCC 678, wherein it was held that seat of the arbitration is the determining factor for identifying the Court where the arbitral proceeding will be regulated. Paragraph 19 of the said judgment is quoted hereinbelow:
"A conspectus of all the aforesaid provisions shows that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. On the facts of the present case, it is clear that the seat of arbitration is Mumbai and 3 Clause 19 further makes it clear that jurisdiction exclusively vests in Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suit filed in courts, a reference to "seat" is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction - that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Sections 16 to 21 of the CPC be attracted. In arbitration law however, as has been held above, the moment "seat" is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties."
Here, the parties have chosen for resolution of their disputes through arbitration by the agreed arbitrator, namely, West Bengal State Micro and Small Enterprises Facilitation Council having its seat at New Secretariat Buildings (9th Floor), 1, Kiran Shankar Roy Road, Kolkata - 700 001. If the seat of arbitral tribunal is taken into consideration, then any order passed by such arbitrator is appealable under Section 37 of the Arbitration and Conciliation Act, 1996 before the Original Side of this Court; even an application for setting aside the award under Section 34 of the said Act will lie before the Original Side of this Court. As such, we have no hesitation to hold that the Original Side of this High Court is the Court where such award can be enforced with reference to the seat of the 4 arbitral tribunal which is within the jurisdiction of the Original Side of this Court.
Section 38 of the Code of Civil Procedure provides for that a decree may be executed either by the court, which passed it, or by the court to which it is sent for execution.
Section 39 of the Code of Civil Procedure provides for transfer of the decree for execution to the other court under certain circumstances.
Thus, when an execution of an award is levied in the Court within whose territorial jurisdiction the seat of arbitral tribunal situates, the award is deemed to have been sent to that Court for execution.
It is contended by the learned counsel appearing for the judgment debtor that neither the registered office of the judgement debtor company nor any of its Directors carries on business and/or resides within the territorial jurisdiction of the Original Side of this Court and as such, the execution of such an arbitral award cannot be levied before this Court.
Here is the case where we find that the decree-holder claimed that the judgement-debtor has asset and/or property and/or money payable within the jurisdiction of this Hon'ble Court. Such statement, however, was denied by the judgement-debtor in its affidavit.
Since the assertion, made by the decree-holder about the availability of the asset and/or property and/or money belonging to the judgment debtor within the jurisdiction of this Hon'ble Court, is denied by the judgment debtor, 5 the decree-holder has the right to examine the judgment-debtor for ascertaining as to whether any asset and/or property and/or money belonging to the judgment debtor lies within the jurisdiction of this Hon'ble Court or not. In the event after such examination it is found that any asset and/or property and/or money belonging to the judgment debtor is available within the jurisdiction of this Court, this Court certainly can proceed with the execution case for executing the award. However, it is equally true that in the event it is ultimately found after such examination of the judgment debtor that neither any asset nor any property nor any money belonging to the judgment debtor is available within the territorial jurisdiction of this Court, the Executing Court, by virtue of the provisions contained in Section 39 of the Code of Civil Procedure, can transmit the decree for execution to the Court where the property and/or asset and/or money belonging to the judgment debtor lies.
Since examination of the judgment debtor for ascertainment of the availability of the property and/or asset and/or money belonging to the judgment debtor is a step in aid of execution, this Court cannot at this stage decide the said issue, relating to lack of jurisdiction of this Court to entertain this execution proceeding, conclusively without examining the judgment debtor.
In this regard, we like to rely upon a Division Bench decision of this Court in the case of Shew Kumar Nopany vs. Grindlays Bank Ltd., reported in AIR 1986 Calcutta 328.
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As such, this Court cannot agree with the conclusion which was arrived at by the learned Executing Court in the order impugned.
We, thus, hold that the execution will lie before this Court subject to the above observations.
The impugned order is, thus, set aside with the observations. Therefore, both the appeal and the application are disposed of.
(JYOTIRMAY BHATTACHARYA, ACJ.) (SAHIDULLAH MUNSHI, J.) sm