IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN THURSDAY, THE 23RD JULY 2009 / 1ST SRAVANA 1931 WP(C).No. 16926 of 2009(O) --------------------------------------- EP.247/2008 of PRL.SUB COURT,IRINJALAKUDA .................... WRIT PETITIONER/JUDGEMENT DEBTOR ------------------------------------------------------------ M/S.METRO SILKS AND SAREES, NORTH JUNCTION, CHALAKUDY REPRESENTED BY PROP: M.J.TOMY. BY ADV. MR.T.N.MANOJ RESPONDENT/DECREE HOLDER ----------------------------------------------- DARPAN TRADERS, 22-LK MARKET, IST FLOOR, ZAVERI BAZAR, MUMBAI- 400 002. BY ADV. MR.R.MURALIDHARAN (AROOR) . THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 16926/2009-O APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE OBJECTIONS FILED BY THE WRIT PETITIONER TO THE EXECUTION PETITION. EXT.P2: COPY OF THE ORDER DATED 30/05/2009 IN EP.247/2008 BY THE SUB COURT AT IRINJALAKUDA. RESPONDENT'S EXHIBITS: NIL //TRUE COPY// P.A. TO JUDGE rs. S.S.SATHEESACHANDRAN, J. ----------------------------- W.P.(C).No.16926 OF 2009 -------------------------- Dated this the 23rd day of July 2009 ------------------------------------- JUDGMENT Writ petition is filed seeking the following reliefs. i) Issue appropriate writ in the form of Certiorari and quash Ext.P2 ii) Issue such other appropriate writ order or direction that this honorable court deems fit to grant in the course of the proceedings. 2. Petitioner is the judgment debtor in E.P 247 of 2008. The above execution petition was filed to execute an award passed in arbitration by the Mumbai Textile Merchants Mahajan in an W.P.(C).No.16926 OF 2009 Page numbers arbitration case No. 20/2005-2006 at Mumbai. The award was transferred for execution to the District Court, Trichur from High Court of Mumbai. The learned District Judge, Trichur receiving such transfer made over the award to the Principal Sub Court, Irinjalakuda within the jurisdiction of which the defendant carried his business. The judgment debtor receiving notice of the proceedings from that court appeared and filed objections contending that the execution of the award can be proceeded only by the District Court and not by an inferior court. The learned Sub Judge negatived the objections holding that court is fully competent to execute the award. Ext.P2 is the copy of that order. Propriety and correctness of Ext.P2 order is impeached in the writ petition invoking the supervisory jurisdiction vested with this court under Article 227 of the Constitution of India. 3. I heard the learned counsel on both sides. The learned counsel for the petitioner submitted W.P.(C).No.16926 OF 2009 Page numbers that in view of the definition of 'court' under Section 2(1)(e) of the Arbitration and Conciliation Act 1996, hereinafter referred to as the Act, it is imperative that only a District Court has jurisdiction to enforce an award passed in an arbitration under the Act. The learned counsel relied on 'Mahesh.B.Shah v Joseph' (2005(3) KLT 787) to contend that the enforceability of an award as covered by Section 36 of the Act should be read along with Section 2(1)(e) of the Act defining a 'court', and when that be so, an award has necessarily to be executed by the District Court and not by an inferior court. On the other hand the learned counsel for the respondent inviting my attention to 'Muralimohan C.K v M/S Asok Corporation and Another' (2008(3) KHC 419) submitted that an award can be enforced as if it were a decree of the Civil Court, as stated in Section 36 of the Act and as such an inferior court below the District Court is also empowered and W.P.(C).No.16926 OF 2009 Page numbers competent to enforce such an award once it was made over by the District Court. 4. The question posed for consideration relate to the execution of the award passed under the Act by a civil court. In the decision referred to by the learned counsel for the petitioner 'Mahesh.B.Shah v Joseph' (2005(3) KLT 787) the award was directly presented by the Munsiff Court for execution and that was not a case where the award was made over by the District Court for execution. That distinction cannot be lost sight of. In the other decision referred to by the learned counsel for the respondent 'Muralimohan C.K v M/S Asok Corporation and Another' (2008 (3) KHC 419) the competency of an Additional District Judge to enforce an award under Section 36 of the above Act was considered and in that context it was held that Additional District Judge is also fully empowered to execute the award. Section 2 (1) W.P.(C).No.16926 OF 2009 Page numbers (e) of the above Act defines a “Court” as the principal Civil Court of original jurisdiction in the District 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 inferior to such principal Civil Court, or any court of Small Causes. Opening words of Section 2 of the Act mandates 'unless the context otherwise requires' so far as the reference of any term defined under that Section with respect to part I of the Act, the same meaning as defined has to be given effect to. Section 36 of the Act dealing with enforceability of the award falls under part I of the Act and, when that be so, the word 'Court' in that Section necessarily has to be interpreted and understood in tune with the definition of 'Court' under Section 2 (1) (e) of the Act. Section 36 of the Act states that the award shall be enforced under the Code of Civil Procedure in the same manner as if it were a decree of the W.P.(C).No.16926 OF 2009 Page numbers Court. When that be so, is it possible for an inferior court below the District Court to execute such an award even if it is transferred by a 'Court' as covered by Section 2 (1) (e) of the Act. Capital letter 'C' is used in the word 'Court' under Section 36 of the Act. Has it got any significance in interpreting the term 'Court' to find out which court is competent to execute the arbitral award? What is the impact of Sections 38 and 39 of the CPC in relation to Sections 16 to 20 of that Code in so far as the execution of an award if it is to be treated as if it were a decree of the court? These questions arise for consideration in determining which court is competent to execute the award. Enforceability of the arbitral award under Section 36 of the Act commences only after the time for making an application to set aside the award under Section 34 of the Act has expired or if any application is made, it has been refused. Such objections to an award are entertainable only before the 'Court' defined under Section 2 (1) (e) W.P.(C).No.16926 OF 2009 Page numbers of the Act, that is, the principal Civil Court of original jurisdiction. When that be so, can any inferior court execute an award as if it were a decree passed by that court. In I.C.D.S. Ltd. v. Mangala Builders Pvt. Ltd. (AIR 2001 Karnataka 364), analysing the question which is the proper court having jurisdiction to execute an arbitration award High Court of Karnataka has held that only the court defined under Section 2 (1) (e) of the Act is competent to execute the arbitral award and not an inferior court. In the above decision, it has been held thus: “It may be noted that if one juxtaposes the expression 'Court' occurring in Section 36 with Section 2 (1)(e) of the Act it would mean that the award shall be enforced in the same manner as if it were a decree made by a Court having jurisdiction to decide questions forming the subject matter of the arbitration if the same had been the subject matter of the suit”. On the above reasonings, it has been held that the court which has the jurisdiction to decide the subject matter W.P.(C).No.16926 OF 2009 Page numbers of the arbitration would have jurisdiction to levy execution. But the larger question remains whether the provisions of the Arbitration Act forbid and interdict the court as defined under Section 2 (1) (e) of the Act namely, the principal Civil Court of original jurisdiction from resorting to the provisions under Sections 38 and 39 of the CPC for enforcing an arbitral award by transfer of that award to the inferior court subject to the satisfaction of the provisions covered by Sections 16 to 20 of the CPC. Normally if the award is to be treated as a decree of a civil court as in any other case, then had it been passed by the principal Civil Court of original jurisdiction subject to the satisfaction under Sections 16 to 20 of the CPC, such decree can be executed by an inferior court on transfer of that decree by resorting to Section 39 of the CPC. The answer to the question lies on the fundamental and salutary principle that a decree cannot be transferred for execution to a Court which has no jurisdiction to W.P.(C).No.16926 OF 2009 Page numbers try the parent suit at the time when it was instituted or later when the application for transfer of the decree was filed. When the Act defines a 'Court' as the principal Civil Court of original 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, necessarily and inevitably, it leads to the irresistible conclusion that only that court or a court of competent jurisdiction like the Additional District Court alone can have competence to execute the arbitral award and not an inferior court. In that context, the term 'Court' used with the capital letter 'C' in Section 36 of the Act has also got much significance indicating that it relates to the 'Court' defined under Section 2 (1) (e) of the Act and none else. More than that, the object of the Act being minimising of the supervisory role over arbitral process confers limited role to 'judicial authority' and 'Court', the former in the matter of reference under Section W.P.(C).No.16926 OF 2009 Page numbers 8 and 11 of the Act, and, the latter in passing of interim measures under Section 9 of the Act entertaining objection against the enforcibility of the awards under Section 34 of the Act, and enforceability of the awards under Section 36 of the Act. So far as setting aside of the arbitral awards on the grounds provided under Section 34 of the Act, the forum before which such challenges are to be raised, it is to be noted that no distinction is made with respect to the awards passed in India or a foreign award. So much so, it is evident that the Court which can exercise the power under Section 34 of the Act alone is competent to enforce an award under Section 36 of the Act. No court inferior to the District Court is competent to enforce an arbitral award, and so much so, the order of transfer passed in the present case by the learned District Judge transferring the arbitral award for execution to the Sub Court was not proper and correct. W.P.(C).No.16926 OF 2009 Page numbers 5. Ext.P2 order is set aside directing the learned Sub Judge to return the award and the connected execution petition to the District Court, Trichur. On receiving the records back the District Judge shall execute the award or make it over to any other Additional District Judge for execution as mandated by Section 36 of the Arbitration and Conciliation Act. 6. Subject to the above directions, the writ petition is disposed. Sd/- S.S.SATHEESACHANDRAN, JUDGE //TRUE COPY// P.A TO JUDGE vdv