TaxTMI 
TaxTMI 
2018 (2) TMI 1131
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....llant claims that the first respondent approached the appellant for grant of a loan for purchase of a Tata Lorry-HCV 2005 model, which loan was granted by the appellant on the terms & conditions specified in the Loan Agreement dated 18.8.2005. Respondent No.2 is stated to have stood guarantee for the repayment of the loan by executing a separate guarantee letter of the same date. The loan had to be repaid in installments commencing 3.9.2005 to 3.1.2009. 3. The appellant alleges that respondent No.1 committed default in payment from the 20th installment onwards. The repossession, however, of the vehicle could not take place and in order to recover the loan, arbitration proceedings were initiated in terms of the arbitration clause contained in the Loan Agreement. Mr. S. Santhanakrishnan, Advocate was appointed as the sole arbitrator on 3.5.2011 and the claim statement was filed before the arbitrator but the respondents remained unserved. Notice was served through publication but since none appeared for the respondents, an ex parte arbitration award was made on 22.10.2011 for a sum of Rs. 12.69,420 with interest at 18 per cent per annum from 4.4.2011 till realization and costs. 4. T....
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....ced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court," it was observed that the same principle would apply as for enforcing of a decree. Since Section 37 of the Code defines the Court which passes the decree and Section 39 lays down the procedure for transfer of decree, it was opined that for execution of an award a transfer of the decree was mandatory. ii. Jasvinder Kaur & Anr. v. Tata Motor Finance Limited CMPMO No.56/2013 decided on 17.9.2013 of the High Court of Himachal Pradesh, Shimla - the learned single Judge took note of the fact that the arbitration proceedings were to be settled in Mumbai in accordance with the said Act and the award had been made in Mumbai. Thereafter the learned single Judge copiously extracted from the judgment of this Court in Swastik Gases Private Limited v. Indian Oil Corporation Limited JT 2013 (10) SC 35. The learned Judge then proceeded to, once again, copiously extract from the then prevailing view of the Karnataka High Court where a learned single Judge in I.C.D.S. Ltd. v. Mangala Builders Pvt. Ltd. & Ors. AIR 2001 Karnataka 364 had opined in favour of the aforesaid view. B. An award....
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....ct which speaks of precepts. In a nutshell the conclusion made was that every decree of a civil court was liable to be executed primarily by the court which passed the decree. On the other hand, in case of an award, the same is liable to be enforced under Section 36 of the said Act in the same manner as if it were a decree of the court and thus the award passed is equated to a decree of the court, only for purposes of execution. The execution of the award does not require a seal of approval by the civil court as distinct from the provisions under the Arbitration Act, 1940. The award cannot be executed through the arbitral tribunal which passed the award and, thus, there is no situation envisaged for the arbitral tribunal which passed the decree (or award) to transfer the decree to any other court for its execution. There was also no provision either in the Code or anywhere else to treat a court within whose jurisdiction the arbitral proceedings took place as the court which passed the decree. It was, thus, opined that: "19. While the award passed by an arbitral tribunal is deemed to be a decree of a civil court under section 36 of the 1996 Act, there is no deeming fiction anywhe....
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.... Part II of the said Code deals with execution proceedings. Section 37 of the said Code defines the 'Court', which passed the decree. Section 38 of the said Code provides as to by which court the decree would be executed and reads as under: "38. Court by which decree may be executed. - Adecree may be executed either by the Court which passed it, or by the Court to which it is sent for execution." 8. Section 39 of the said Code provides for transfer of decree and reads as under: "39. Transfer of decree. - (1)The Court which passed a decree may, on the application of the decree-holder, send it for execution to another Court [of competent jurisdiction],- (a) if the person against whom the decree is passed actually and voluntarily resides or carries on business, or personally works for gain, within the local limits of the jurisdiction of such other Court, or (b) if such person has no property within the local limits of the jurisdiction of the Court which passed the decree sufficient to satisfy such decree and has property within the local limits of the jurisdiction of such other Court, or (c) if the decree directs the sale or delivery of immovable property situate outside ....
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....fiction. The provisions of the said Act traverse a different path from the Arbitration Act, 1940, which required an award made to be filed in Court and a decree to be passed thereon whereupon it would be executable. 11.Now turning to the provisions of Order XXI of the said Code, which deals with execution of decrees and orders. In case a Court desires that its own decree is to be executed by another court, the manner for doing so is provided by Rule 6, which reads as under: "Order XXI - Execution of Decrees and Orders xxxx xxxx xxxx xxxx xxxx 6. Procedure where court desires that its own decree shall be executed by another court.- The court sending a decree for execution shall send- (a) a copy of the decree; (b) a certificate setting forth that satisfaction of the decree has not been obtained by execution within the jurisdiction of the court by which it was passed, or, where the decree has been executed in part, the extent to which satisfaction has been obtained and what part of the decree remains unsatisfied; and (c) a copy of any order for the execution of the decree, or, if no such order has been made, a certificate to that effect." 12.The manner of presentation of ....
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....ith the provisions of the Code of Civil Procedure, 1908 (5 to 1908), in the same manner as if it were a decree of the court." 15.The aforesaid provision would show that an award is to be enforced in accordance with the provisions of the said code in the same manner as if it were a decree. It is, thus, the enforcement mechanism, which is akin to the enforcement of a decree but the award itself is not a decree of the civil court as no decree whatsoever is passed by the civil court. It is the arbitral tribunal, which renders an award and the tribunal does not have the power of execution of a decree. For the purposes of execution of a decree the award is to be enforced in the same manner as if it was a decree under the said Code. 16.Section 2(e) of the said Act defines 'Court' as under: "2. Definitions. ......... xxxx xxxx xxxx xxxx xxxx [(e) "Court" means - (i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration....
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....rbitral proceedings." 19.The aforesaid provision provides for arbitral proceedings to be terminated by the final arbitral award. Thus, when an award is already made, of which execution is sought, the arbitral proceedings already stand terminated on the making of the final award. Thus, it is not appreciated how Section 42 of the said Act, which deals with the jurisdiction issue in respect of arbitral proceedings, would have any relevance. It does appear that the provisions of the said Code and the said Act have been mixed up. 20.It is in the aforesaid context that the view adopted by the Delhi High Court in Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd. supra records that Section 42 of the Act would not apply to an execution application, which is not an arbitral proceeding and that Section 38 of the Code would apply to a decree passed by the Court, while in the case of an award no court has passed the decree. 21.The Madras High Court in Kotak Mahindra Bank Ltd. v. Sivakama Sundari & Ors. Supra referred to Section 46 of the said Code, which spoke of precepts but stopped at that. In the context of the Code, thus, the view adopted is that the decree of a civil court is liabl....