Sudhir Kumar Saxena, J.:— Instant civil revision filed under, section 115 of the Code of Civil Procedure is against the order dated 3.7.2012 whereby District Judge, Lucknow has returned the execution application holding it to be not maintainable, for presentation before the proper Court.
2. I have heard Sri Siddharth Dhaon, learned Counsel for revisionist and Mohd. Saeed for opposite-parties. Briefly stated facts are that revisionist GE Money Financial Services Ltd. (decree-holder) entered into an agreement with Mohd. Azaz and Mohd. Ayaz, judgment-debtors and a loan of Rs. 4,85,000/- was paid by the judgment-debtor. When loan was not paid, an Arbitrator was appointed in terms of Clause 11.1 of the agreement. On 17.6.2010, an award for a sum of Rs. 1032,200.62/- was made along with interest. Decree-holder filed execution ap-plication seeking execution of the award dated 17.6.2010 before the District Judge, Lucknow who held that it is not maintainable and returned for presenta-tion before the proper Court. This very order has been challenged before this Court.
3. It is submitted by Sri Siddharth Dhaon, learned Counsel for revision-ist, that under the provisions of Arbitrations and Conciliation Act, 1996, it is open to the decree-holder to file award for execution anywhere at any place where property of judgment-debtor is situated or he resides. It is further sub-mitted that District Judge has committed error in not following the law as in-terpreted by various High Courts.
4. Sri Mohd. Saeed, learned Counsel for opposite-parties, submits that award has to be executed as a decree and it can be executed by the Court which passed the decree or by the Court where decree is transferred for the execution, as neither Arbitrator at Lucknow has given the award so as to make the District Judge, Lucknow competent to execute the decree nor the Lucknow Court has received decree by transfer for execution District Judge was justified in not entertaining the execution application.
5. Before adverting to the controversy involved in the petition, it is neces-sary to briefly mention the scheme of 1996 Act which is a clear departure from the scheme of Arbitration Act, 1940. In old Act, award was required to be made rule of the Court whereafter it was filed for execution. Under the new Act, award is not required to be made rule of Court. Under section 31 of the Act, 1996, arbitral award shall be made by the members of the Arbitral Tribunal. Copy of signed award will be given to the parties and under section 32 arbitral proceed-ings will be deemed to have ended once final award is given or Arbitrator passes specific order terminating the arbitration proceedings. Errors may be cor-rected within 30 days. Section 34 of the Act provides forum to challenge the award in Court of law which challenge can be made after three months from the date the party has received the copy of award or any order, if any, passed under section 33 of the Act making corrections in the award. This period of three months is extendible by a further period of 30 days. Under section 36 of the Act, after the expiry of the time provided under section 34 and if any order has been passed under section 34, award became capable of enforcement as a de-cree of civil Court. Section 36 of the Act is being reproduced below:—
“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 Code of Civil Procedure, 1908 (V of 1908) in the same manner as if it were a decree of the Court.”
6. Section 37 of the C.P.C defines the Court which passed the decree and will 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 juris-diction 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.”
7. It is thus apparent that section 37 makes a reference to the Court. Section 38, C.P.C relevant for the purpose of controversy involved in this Court is being reproduced below:
“A decree 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 C.P.C enables the Court which passed a decree on the application of the decree-holder to send it for execution to another Court.where either judgment-debtor resides or carries on business or his property exits within the jurisdiction of such Court etc. Similar provision for transfer of decree has been made under section 40 if decree is to be executed in another State. Under the Arbitration Act, 1996 Act, award will be treated as a decree of Court but arbitrator has not been treated to be a Court. Court has been defined under section 2(e) of the Act which definition is reproduced below:—
“Court” means 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 if the same had been the subject-matter of a suit, but does not include any civil Court of a grade inferior to such Principal Civil Court, or any Court of Small Causes;
9. Moreover, section 19 of the Act provides that. The arbitral Tribunal shall not be bound by the Code of Civil Procedure, 1908 (V of 1908) or the Indian Evidence Act, 1872 (1 of 1872) and the parties are free to agree on the procedure.
10. In these circumstances, arbitrator cannot be treated to be a Court al-though award made by him will be executed as decree of the Court. As Arbitrator is not a Court, hence sections 38 and 39 of the C.P.C would have no application. Since Arbitrator is not a Court, it cannot entertain any application for execution. Therefore, it cannot transfer the application for execution under section 39 of the C.P.C The question of transfer would arise only when award still remains unsatisfied even on execution by the Court where it is filed for ex-ecution. Position thus emerges is that an award can be filed in any Court for exe-cution as a decree of civil Court where judgment-debtor resides or carries on business or has property within the jurisdiction of the said Court. Execution Court cannot refuse to entertain the application on the ground that decree holder should first file the application for execution at a place where arbitra-tion award was given and then seek transfer from the said Court to any other Court.
11. District Judge has chosen to rely on the decision given by Madhya Pradesh High Court in the case of Computer Sciences Corporation India Pvt. Ltd. v. Harishchandra Lodwal,1 With reference to section 39 of C.P.C Madhya Pradesh High Court took the view that since award is passed at Indore therefore unless and until the Court at Indore transfers the decree to the Court at Delhi, it cannot be executed. Madhya Pradesh High Court pro-ceeded on the basis that the award having been given at Indore, execution ap-plication should first be filed at Indore. There is no basis to support this view.
12. Above position was considered in the case of Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd. by Delhi High Court. Justice Rajiv Sahai Endlaw drew the analogy from section 635(4) of Companies Act which enabled order of Company Law Board to be executed as a decree holding that sections 38 and 39 of C.P.C would have no application. Relying upon the decision given by Apex Court that mere production of certified copy is sufficient to confer jurisdic-tion for execution, in para 20 of the judgment, learned Judge observes that—
“I find that certain orders of the company law board are also enforce-able by a Court. Section 635(4) of the Companies Act, 1956 provides that where any order of the company law board is required to be enforced by a Court, a certified copy of the order shall be produced to the Court required to enforce the order which shall then be enforced in the same manner and to the same extent as applicable to an order made by a Court.
….. The agreement between the parties restricting jurisdiction of one, amongst many Courts also does not extend to execution and is applicable to the Court which will adjudicate the lis. I do not see any reason, why where an award has been made executable as a decree, the execution cannot lie at a place where the property against which the decree is sought to be en-forced is situated.
……. Without the fetter of section 38 the Courts of the place where the property/money against which the decree is sought to be enforced is situ-ated would have inherent jurisdiction to entertain the execution.”
13. Disagreeing with the view taken by Madhya Pradesh High Court (supra), Court holds as under:
“A money award, as in the present case, can be enforced through Courts of the place wheresoever the money or any property of the party liable to pay is situated.”
14. This decision was followed by Madras High Court earlier in Kotak Mahindra Bank Ltd. v. Sivakama Sundari, S. Narayana S.B Murthy . MANU/TN/3588/2011.. The Court examined in detail the matter and came to the conclusion that order of District Judge directing return of execution application was to be set aside.
15. High Court of Punjab and Haryana in Indusind Bank Ltd. v. Bhullar Transport Company . MANU/PH/2896/2012., also agreed with the view of Delhi High Court (supra). In paragraph 11 of the judgment, High Court observes as under.
“…….. There is no provision in the Act stipulating that the arbitra-tion award, which is treated as decree for the purpose of enforcement under section 36 of the Act, shall be deemed to be decree of the Court of the place where the award was passed. In the absence of any such provision, in the instant case, it cannot be said that since the award was passed at Chennai, it shall be deemed to be decree to have been passed by the Court at Chennai.
………Since respondents/judgment debtors are residing and are hold-ing property within territorial jurisdiction of the Court at Amritsar, the Court at Amritsar certainly has territorial jurisdiction to enforce the arbi-tration award. It does not require transmission by the Court at Chennai for its enforcement by the Court at Amritsar because it cannot be said that the award is deemed to be decree passed by the Court at Chennai. Even otherwise, the execution proceedings have to take place in Court at Amritsar within whose territorial jurisdiction, judgment debtors are holding property and are residing. On the analogy of section 20; C.P.C also, Court at Amritsar has territorial jurisdiction to execute the award because the judgment debtors/respondents are residing within its territorial jurisdiction.”
16. Madras High Court in the case of Kotak Mahindra v. Sivakama Sundari, S. Narayana S.B Murthy, has considered the scheme of entire Act in detail and in para 15 of the judgment takes the view that an Arbitral Tribunal is not a Court. Hence it follows that the Arbitration and Conciliation Act, 1996 elevates an award to the level of a decree, for the purpose of execution. But, it does not elevate the Arbitral Tribunal to the status of a civil Court.
Para 21. Therefore, it is clear that no Court to which an application for execution of an award is presented, can insist on the filing of the execution petition first before some other Court and to have it transmitted to it later. It appears that the High Court of Bombay has also adopted the same view, though not by a very elaborate order. Para 25 of the judgment is quoted herein below:
In the absence of any provision in the 1996 Act, requiring a Court to pass a decree in terms of the award (except in terms of section 34) and in the ab-sence of any provision in the 1996 Act making the Arbitral Tribunal a Court which passed the decree and in the absence of any provision anywhere making the Court within whose jurisdiction an award was passed as the Court which passed the decree, it is not open for any executing Court (I) ei-ther to demand transmission from any other Court; (II) or to order transmis-sion to any other Court.
17. Justice S. Muralildhar of Delhi High Court in the case of Religare Finvest Limited v. Ranjit Singh Chouhan, has agreed with the view taken by Madras High Court in Kotak Mahindra (supra). No decision of this Court has been cited by either party.
18. On considering relevant provisions of the Act and C.P.C, I find judg-ment of Delhi High Court given in Daelim Industrial Co. Ltd., the judgment of Madras High Court in the case of Kotak Mahindra Bank Ltd. is more reason-able and convincing.
19. In view of the above position, I respectfully agree with the view taken by Delhi, Punjab and Haryana and Madras High Court. The view taken by Madhya Pradesh High Court in the light of above discussion does not appear to be in consonance with the new Act.
20. In view of the above, it is held that irrespective of the fact that award has been given at any place, it can be executed by a Court in whose jurisdiction judgment-debtor resides, carries on business or his property is situated. Decree-holder is not required to obtain transfer certificate from the Court within whose jurisdiction award was passed for execution nor the Court within whose jurisdiction judgment-debtor resides or holds property can legally insist for ob-taining transfer certificate.
21. So far as agreement of parties regarding place of arbitration is con-cerned, needless to say that Clause 11.1 refers to the place of arbitration as mentioned in Item No. 16 of the Schedule. Clause 11.2 refers to the dispute per-taining to the agreement which would lead to arbitration and Clause 17 of the Schedule deals about place of arbitration. This agreement made by the parties refers to place where arbitration can take place. So far as execution is con-cerned, position is very clear and it can be filed in any Court where the judg-ment-debtor resides or his property is situated.
22. In view of the above discussion, impugned order cannot be sustained and revision is liable to be allowed. Revision is allowed. Order dated 3.7.2012 passed by District Judge, Lucknow is set aside. District Judge is directed to dispose of the execution ap-plication on merits in accordance with law.
23. Revision Allowed.