Allahabad High Court: Objections Under Section 47 of CPC, 1908 are Not Maintainable in Proceedings for Execution/Enforcement of Arbitration Award

Allahabad High Court: Objections Under Section 47 of CPC, 1908 are Not Maintainable in Proceedings for Execution/Enforcement of Arbitration Award

The Allahabad High Court has observed that objections under Section 47 of Code of Civil Procedure, 1908 (CPC) are not maintainable in proceedings for the purposes of execution or enforcement of an arbitration award.

The single judge Justice Manish Mathur nonetheless clarified that, objections raised by judgment debtor which do not touch upon the merits of the award or raise questions which cannot be raised under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act) can very well be raised in such proceedings and to be adjudicated upon.

A petition was filed challenging the order dated 1 April, 2023 whereby objections preferred by the petitioner being judgment debtor, purportedly under Section 47 of the CPC had been rejected.

The background of the case is that the parties had entered into a builders agreement dated 10 November, 1996 with regard to the property in question but due to disputes arising out of the aforesaid agreement, the same was referred for adjudication to the sole arbitrator in an application filed under Section 11(6) of Arbitration and Conciliation Act, 1996. Award in the same was pronounced on 12 January, 2007 against the petitioner and 19 others.

The Father of the petitioner filed an Application under Section 34 of the A&C, Act 1996 which was dismissed by means of judgment and order dated 25 July, 2012.

Against the aforesaid judgment and order, an Appeal under Section 37 of the &C, Act 1996 was preferred in which initially interim orders were passed but the same was dismissed in default of appearance on 30 January, 2017.

Moreover, the restoration application was also dismissed for want of prosecution and thereafter a second application for restoration was filed. The same was also dismissed although a third Restoration Application is pending for consideration.

Sri Prashant Singh Gaur and Sri Vikrant Singh, counsel appearing for the petitioner submitted that once Section 36 of the A&C, Act 1996 specifically provides execution of an award in accordance with the provisions of the CPC in the same manner as if it was a decree of the court, then naturally the execution has to be sought under Order 21 of the CPC due to which objections under Section 47 of the CPC are clearly maintainable. It was submitted that the CPC cannot be made applicable in a piecemeal basis and either applies in its entirety or not at all.

Sri Virendra Mishra, counsel appearing for the opposite party argued that the provisions of the A&C, Act 1996 clearly indicates that an arbitration award is to be enforced as if it were a decree and therefore, the arbitration award does not come within the definition of a decree as envisaged under Section 2(2) of the CPC since it would only have the status of a deemed decree due to which objections under Section 47 are clearly barred.

The Court referred to the decision passed in the case of Paramjeet Singh Patheja vs. ICDS Ltd wherein it was observed that awards rendered in arbitration proceedings are not covered under the definition of decree as defined under Section 2(2) of the CPC and therefore, objections which can be taken under Section 34 of the A&C, Act 1996 cannot be taken in execution proceedings taking resort to Section 47 of the Code of Civil Procedure.

After analyzing catena of judgments the Judge was of the view that the award passed by the arbitrator does not come within definition of a decree in terms of Section 2(2) of the CPC and therefore, objections under Section 47 of the CPC are clearly not maintainable in execution proceedings for the purposes of enforcement of the arbitration award.

Nonetheless, the Court highlighted that application under Section 47 of the Code would not be maintainable arises in such situations where objections to the award can be taken in proceedings under Section 34 of the A&C, Act 1996.

The Court observed, “As a natural corollary, objections which cannot be taken under Section 34 of the Act of 1996 can very well be examined and decided by the executing court if they do not touch upon the merits of the award. In case these twin conditions apply, a judgment debtor cannot be left remediless.”

Therefore, in the present case, the Court noted that the petitioner being judgment debtor had raised objections to the effect that the relief sought in execution proceedings were beyond the scope of arbitration award and as such ignoring the fact that such objections have been filed purportedly under Section 47 of the CPC.

The Court was of the considered opinion that the executing Court would have an inherent right to decide such objections in view of what has been held herein above. However, the said determination would necessarily exclude objections raised to insufficiency of stamp duty which even otherwise was barred under the principles of res judicata, opined the Judge.

Accordingly, the Court allowed the petition.