Case Note & Summary
The petitioner, Shriram Transport Finance Company Limited, obtained an arbitral award on 09.04.2014 directing the respondents to pay Rs. 74,094/- with interest at 9% per annum from 03.02.2014 till 31.05.2015 along with future interest. On 24.06.2015, the petitioner filed Regular Darkhast No. 606/2015 under Section 36 of the Arbitration and Conciliation Act, 1996 for recovery of Rs. 82,985/- plus future interest. The Executing Court, by order dated 16.08.2019, rejected the execution application on the ground that the award was not a decree and the decree holder should have filed an application under Section 34 of the Act. The petitioner challenged this order by filing a writ petition under Articles 226 and 227 of the Constitution of India. The High Court observed that Section 36 of the Act clearly provides that an arbitral award shall be enforced in the same manner as if it were a decree of the court. The court held that the Executing Court has jurisdiction to execute the award and there is no requirement to file a separate application under Section 34. The impugned order was set aside and the Executing Court was directed to proceed with the execution in accordance with law. The petition was allowed with no order as to costs.
Headnote
A) Arbitration Law - Execution of Arbitral Award - Section 36 of Arbitration and Conciliation Act, 1996 - Executing Court's Power - The Executing Court rejected the execution application filed under Section 36 of the Act on the ground that the award was not a decree and the decree holder should have filed an application under Section 34 of the Act. The High Court held that Section 36 of the Act provides that an arbitral award shall be enforced in the same manner as if it were a decree of the court, and the Executing Court has jurisdiction to execute the award without requiring a separate application under Section 34. The impugned order was set aside and the Executing Court was directed to proceed with the execution in accordance with law. (Paras 1-8)
Issue of Consideration
Whether the Executing Court was justified in rejecting the execution application filed under Section 36 of the Arbitration and Conciliation Act, 1996 on the ground that the award was not a decree and required a separate application under Section 34?
Final Decision
The High Court allowed the writ petition, set aside the impugned order dated 16.08.2019 passed by the 11th District Judge, Aurangabad below Exhibit-1 in Regular Darkhast No. 606/2015, and directed the Executing Court to proceed with the execution in accordance with law. Rule made absolute with no order as to costs.
Law Points
- Execution of arbitral award
- Section 36 of Arbitration and Conciliation Act
- 1996
- Executing Court's jurisdiction
- Article 226 and 227 of Constitution of India
Case Details
2022 LawText (BOM) (07) 20
Writ Petition No. 6149 of 2021
Mr. M.D. Narwadkar for Petitioner, Mr. Y.G. Gujarathi AGP for Respondent-State, Mr. Ajit Kadethankar for Respondents No. 2 and 3
Shriram Transport Finance Company Limited Through Its Authorized Officer
The State of Maharashtra, The Registrar District & Sessions Court at Aurangabad, The Superintendent (Civil) District & Sessions Court at Aurangabad
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Nature of Litigation
Writ petition under Articles 226 and 227 of Constitution of India challenging order of Executing Court rejecting execution application for arbitral award.
Remedy Sought
Petitioner sought setting aside of the Executing Court's order dated 16.08.2019 and direction to proceed with execution of the arbitral award.
Filing Reason
Executing Court rejected the execution application filed under Section 36 of the Arbitration and Conciliation Act, 1996 on the ground that the award was not a decree and required a separate application under Section 34.
Previous Decisions
Executing Court passed order dated 16.08.2019 rejecting the execution application in Regular Darkhast No. 606/2015.
Issues
Whether the Executing Court was justified in rejecting the execution application filed under Section 36 of the Arbitration and Conciliation Act, 1996 on the ground that the award was not a decree and required a separate application under Section 34?
Submissions/Arguments
Petitioner argued that Section 36 of the Act provides that an arbitral award shall be enforced in the same manner as if it were a decree of the court, and the Executing Court has jurisdiction to execute the award without requiring a separate application under Section 34.
Ratio Decidendi
Section 36 of the Arbitration and Conciliation Act, 1996 provides that an arbitral award shall be enforced in the same manner as if it were a decree of the court. The Executing Court has jurisdiction to execute the award without requiring a separate application under Section 34 of the Act. The Executing Court's rejection of the execution application on the ground that the award was not a decree was erroneous.
Judgment Excerpts
Section 36 of the said Act provides that an arbitral award shall be enforced in the same manner as if it were a decree of the court.
The Executing Court has jurisdiction to execute the award and there is no requirement to file a separate application under Section 34.
Procedural History
Arbitral award passed on 09.04.2014 in favour of petitioner. Petitioner filed Regular Darkhast No. 606/2015 on 24.06.2015 under Section 36 of the Arbitration and Conciliation Act, 1996 for execution of the award. Executing Court passed order dated 16.08.2019 rejecting the execution application. Petitioner filed Writ Petition No. 6149 of 2021 under Articles 226 and 227 of Constitution of India challenging the order. High Court allowed the petition on 27.07.2022.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 36, 34
- Constitution of India: 226, 227
