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Issues: Whether an arbitral award that has become final and is enforceable under the Arbitration and Conciliation Act, 1996 can be treated as a decree or order for the purpose of issuing an insolvency notice under Section 9(2) of the Presidency Towns Insolvency Act, 1909.
Analysis: The award had attained finality after the challenge to it was rejected by the Bombay High Court and the Division Bench. The statutory scheme under Sections 35 and 36 of the Arbitration and Conciliation Act, 1996 treats a final award as binding and enforces it in the same manner as if it were a decree of the Court. Applying the substance of the matter, the Court held that there was no real distinction, for the purpose of Section 9(2) of the Presidency Towns Insolvency Act, 1909, between a court decree and a final arbitral award capable of enforcement as a decree. The objection that insolvency proceedings could not rest on the award was therefore rejected, and the view of the Bombay High Court decision relied upon by the appellants was not accepted.
Conclusion: A final arbitral award can constitute a valid for an insolvency notice under Section 9(2) of the Presidency Towns Insolvency Act, 1909, and the challenge to the notice failed.
Ratio Decidendi: Where an arbitral award has become final and is enforceable as if it were a decree of the Court, it may be treated as a decree or order for the purpose of Section 9(2) of the Presidency Towns Insolvency Act, 1909.
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