Sundaram Finance Ltd. Represented By ... vs Abdul Samad

2. The appellant 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 CIVIL APPEAL No.1650 of 2018 Page 2 of 21 per annum from 4.4.2011 till realization and costs.

4. The case of the appellant is that the award being enforceable as a decree under Section 36 of the said Act, execution proceedings were filed in the jurisdiction of the courts at Morena, Madhya Pradesh under Section 47 read with Section 151 and Order 21 Rule 27 of the Code of Civil Procedure, 1908 (hereinafter referred to as the ‘said Code’). The respondents sought to contest the proceedings inter alia on the ground that the vehicle against which the loan was obtained was stolen. It is not necessary to go into further details of the proceedings but suffice to say that the trial court vide order dated 20.3.2014 return the execution application on account of lack of jurisdiction to be presented to the court of competent jurisdiction. The effect of the judgment was that the appellant was required to file the execution proceedings first before the court of competent jurisdiction in Tamil Nadu, obtain a transfer of the decree and then only could the proceedings be filed in the trial court at Morena. This view adopted by the trial court was in turn based on the judgment of the Madhya Pradesh High Court and the opinion of the Karnataka High Court while it is pleaded that the view of the Rajasthan CIVIL APPEAL No.1650 of 2018 Page 3 of 21 High Court and the Delhi High Court were to the contrary. The petitioner did not approach the High Court against the said order of the trial court but straightway approached this Court by filing the Special Leave Petition on the ground that no useful purpose would be served by approaching the Madhya Pradesh High Court in light of the view already expressed by that Court in conflict with the opinions of some other High Courts.

10. The relevance of the aforesaid provision is that the application of the decree holder is made to the Court which passed the decree, which issues the precepts to any other Court competent to CIVIL APPEAL No.1650 of 2018 Page 12 of 21 execute the said decree. As noticed, the expression “the Court which passed the decree” is as per Section 37 of the said Code. We may note at this stage itself that in the case of an award there is no decree passed but the award itself is executed as a decree by 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.

(c) the date of the decree;

(d) whether any appeal has been preferred from the decree;

(e) whether any, and (if any) what, payment or other adjustment of the matter in controversy has been made between the parties subsequently to the decree;

(g) the amount with interest (if any) due upon the decree, or other relief granted thereby, together with particulars of any cross decree, whether passed before or after the date of the decree sought to be executed;

(h) the amount of the costs (if any) awarded;

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(i) the name of the person against whom execution of the decree is sought; and the mode in which the assistance of the court is required, whether—

(i) by the delivery of any property specifically decreed;

(ii) by the attachment, or by the attachment and sale, or by the sale without attachment, of any property;

(iii) by the arrest and detention in prison of any person;

Conclusion:

22. We are, thus, unhesitatingly of the view that the enforcement of an award through its execution can be filed anywhere in the country where such decree can be executed and there is no requirement for obtaining a transfer of the decree from the Court, which would have jurisdiction over the arbitral proceedings.

24. The appeal is accordingly allowed and the impugned order dated 20.3.2014 is set aside restoring the execution application filed by the appellant before the Morena courts. The parties are left to bear their own costs.

February 15, 2018.

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