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Civil

(Querist) 29 September 2010 This query is : Resolved 
Resp.Sir/madam
Pls provide me case law -
Daelim Industrial Co.Ltd. V. Numaligarh Refinary Ltd. decided by Hon'ble Delhi H.C on 13th march 2009.

Thanx in advance....
Parveen Kr. Aggarwal (Expert) 30 September 2010
IN THE HIGH COURT OF DELHI AT NEW DELHI
EA.No. 105/2009 in Ex.No. 242/2008 13.03.2009 Date of decision: 13th March, 2009
DAELIM
INDUSTRIAL CO LTD . Decree Holder Through: Mr Ashok Sagar, Mr Dharmendra
Rautray and Mr R. Vasanth,
Advocates.
Versus
NUMALIGARH REFINERY LTD. ....... Judgment Debtor Through: Mr Sudhir Chandra, Sr Advocate with
Mr Parijat Sinha, Ms Reshmi, Mr T.K. Majumdar,
Mr Mrinal Kanti Mandal and Mr Snehasish
Mukherjee, Advocates
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may
be allowed to see the judgment? Yes
2. To be referred to the reporter or not? Yes
3. Whether the judgment should be reported
in the Digest? Yes
RAJIV SAHAI ENDLAW, J.
1. Objection of the judgment debtor to the territorial jurisdiction of this court to entertain this execution
petition of an arbitral award dated 23rd September, 2000 as affirmed/modified by judgment dated 6th
September, 2007 of the Apex Court in Civil Appeals No. 4079/2007 and 4080/2007 is for consideration.
2. The decree holder filed the execution petition in this court stating, inter alia, that out of the awarded
amounts, a sum of Rs 4,98,97,205/- had been received on 29th February, 2008 as part payment, without
prejudice, by the decree holder; that a sum of Rs 34,22,19,014.06 was still outstanding under the award and
seeking EA.No.105/2009 in Ex.No.242/2008 Page 1 of 13 execution of the award as a decree by issuance of
warrants of attachment of the movable and immovable assets of the judgment debtor lying at 6th floor, 15-17,
Tolstoy Marg, New Delhi and by attachment of the monies lying in the accounts of the judgment debtor with
the State Bank of India, New Delhi Main Branch, New Delhi.
3. The execution was listed first on 4th July, 2008 when the decree holder was called upon to file an affidavit
explaining how this court has territorial jurisdiction to entertain the execution petition. The decree holder filed
an affidavit dated 18th July, 2008 stating, inter alia, that as per the agreement between the parties, the venue
of arbitration was agreed to be in India and it was further agreed that the courts at Guwahati shall have
exclusive jurisdiction in all matters except in relation to the arbitration; that the arbitration proceedings were
held and the award announced at Calcutta; that the award was challenged by the judgment debtor in the
District Court of Golaghat which court set aside the award; that in appeal the High Court of Guwahati set
aside the order of the District Court, Golaghat and partly upheld the award; in further appeal the Supreme
court partly modified the order of the High Court of Guwahati and partly upheld the award. It was further
stated that under the Arbitration and Conciliation Act, 1996 the execution of the award cannot be equated with
judgments of Civil Court which are required to be converted into a decree to become executable and the court
which passed the judgment alone has jurisdiction to execute or transfer the decree; that since no court
intervention is required for an award to be converted into a decree, the normal rule of CPC of the court which
passed the judgment alone being entitled to execute the decree or EA.No.105/2009 in Ex.No.242/2008 Page 2
of 13 transfer the decree, would not apply and it would be not appropriate to send the decree holder to the
District Court of Golaghat simply because the application under Section 34 of the Act was made in that court.
It was further stated that since no court had passed the decree, it is up to the decree holder to seek to enforce
the award wherefrom the assets of the judgment debtor may be situated; so long as some assets are situated
within the jurisdiction of the court, the court would have jurisdiction to entertain the execution. Reliance was
placed on Brace Transport Corporation Vs Orient Middle East Lines Ltd 1995 Supp (2) SCC 280 in support
of the principle though laid down in relation to the Foreign Awards (Recognition and Enforcement) Act 1961
that an award can be enforced wherefrom the property may be situated. It was urged that the position would
be the same in the present case.
4. During the subsequent hearing on 28th July, 2008, Brace Transport Corporation (supra) was held to be not
applicable since in relation to foreign awards, subject matter of that case, the jurisdiction was governed under
the proviso to Section 47 of the Act and it was further felt that jurisdiction in relation domestic award is
governed by Section 2(e) of the Act. However, it was found that the Apex Court in Merla Ramanna Vs
Nallaparaju AIR 1956 SC 87 had held that the court to whose jurisdiction the subject matter of the decree is
transferred, acquires inherent jurisdiction to entertain the execution petition, notwithstanding Section 38 of the
CPC. It was further held in the order dated 28th July, 2008 that the subject matter of the decree being money
lying in the bank account of the judgment debtor within the jurisdiction of this court, and further since the
decree holder has submitted that it will face difficulties in EA.No.105/2009 in Ex.No.242/2008 Page 3 of 13
applying for execution in the courts at Golaghat, Assam, warrants of attachment of the monies lying in the
account of the judgment debtor with the State Bank of India, New Delhi Main Branch, were ordered to be
attached. The attachment did not yield any result since no money was found on that date in the account of the
judgment debtor.
5. The judgment debtor thereafter failed EA.No.6/2009 for review, inter alia, of the order dated 28th July,
2008 holding that this court had territorial jurisdiction to entertain the execution. EA.No.7/2009 has been filed
for condonation of delay in applying for review. Thereafter, EA.No.105/2009 by way of objections to the
execution has been filed.
6. The senior counsel for the judgment debtor has fairly stated that the main objection of the judgment debtor
is to this court entertaining the execution. The other objections are only as to the calculation of the amount due
and of curative petition pending consideration in the Apex Court. Arguments have been heard on the aspect of
territorial jurisdiction only.
7. The senior counsel for the judgment debtor has contended that under Section 36 of the Arbitration Act, "the
award shall be enforced under the Code of Civil Procedure 1908 (5 of 1950) in the same manner as if it were a
decree of the court". It is further contended that "court" has to mean what is defined in Section 2(e) i.e., the
court having jurisdiction to decide the question forming the subject matter of the arbitration if the same had
been the subject matter of a EA.No.105/2009 in Ex.No.242/2008 Page 4 of 13 suit. It is further contended that
since in the present case the application under Section 34 was filed in the District Court at Golaghat, Section
42 mandates the execution also to be filed in that court only.
8. It was further contended that if at all the decree holder intended to execute by attachment and sale of any
property of the judgment debtor at Delhi, the same was possible only by obtaining from the District Court at
Golaghat the transfer of the decree to this court and whereupon only the execution application could be
entertained by this court. Reliance in this regard was also placed on Section 38 of the CPC providing that the
decree may be executed either by the court which passed it or by the court to which it is sent for execution. It
was urged that the court which passed the decree would be the District Court at Golaghat which had dealt with
the application under Section 34 of the Act. It was argued that the court which passed the decree would be the
court which would have been empowered to entertain the disputes subject matter of arbitration had the same
been the subject matter of a suit. On inquiry as to what was the agreement between the parties with respect to
the jurisdiction, it was informed that the agreement of territorial jurisdiction was with respect to the courts at
Guwahati though application under Section 34 was filed at Golaghat. It was further argued that the decree
holder is a Korean company and once recovers the money the judgment debtor would have no way of
restitution. Per contra, the judgment debtor is a Government of India Company and the decree holder under
the award is already entitled to interest at 15% per annum and decree ought not to be executed during the
pendency of the curative petition before the EA.No.105/2009 in Ex.No.242/2008 Page 5 of 13 Apex Court. It
was further argued that the money if received by the decree holder would not earn any interest in Korea.
9. The judgment of the Apex Court in Merala Ramanna (supra) relied upon by this court in entertaining the
execution was argued to be distinguishable. It was argued that in that case the subject matter of the suit had
been transferred to the court which entertained the execution and in the present case no property subject
matter of dispute had been transferred to this court; it was further pointed out that the Apex Court in that case
was also guided by the reason of no objection to the territorial jurisdiction having been taken at the earliest
opportunity.
10. The senior counsel for the judgment debtor also relied upon the judgment of a Single Judge in Computer
Sciences Corporation India Pvt Ltd Vs. Harishchandra Lodwal AIR 2006 Madhya Pradesh 34 holding that an
execution had to be filed in the court within whose jurisdiction the award had been passed and unless that
court transfers the decree to another court, it cannot be executed.
11. The counsel for the decree holder besides again relying upon Brace Transport aforesaid relied upon
Section 44-A of the CPC in relation to execution of decrees passed by courts in reciprocating territories.
Reliance in this regard was placed on International Woolen Mills Vs Standard Wool (U.K.) Ltd AIR 2000
Punjab 182 and Collector of Customs, Calcutta Vs East India Commercial Co. Ltd. AIR 1963 SC 1124. It was
further contended by the counsel EA.No.105/2009 in Ex.No.242/2008 Page 6 of 13 for the decree holder that
while the explanation to Section 49 in relation to enforcement of foreign award provides that where the court
is satisfied that the foreign award is enforceable, the award shall be deemed to be a decree "of that court",
Section 36 uses the expression "as if it were a decree of the court". It was thus argued while under Section 49
the decree was deemed to be of the court which had adjudicated the enforcement of foreign award, under
Section 36 the decree was not to be treated as the decree of the court which had adjudicated the application
under Section 34 of the Arbitration Act with respect to the award.
12. Save for the judgment aforesaid of the Madhya Pradesh High Court I have not found any precedent on the
subject.
13. There is no merit in the contention of the judgment debtor that owing to Section 42 of the Act, the
execution has to be filed in the court in which the application under Section 34 of the Act had been filed. To
be fair, the senior counsel for the judgment debtor, besides urging the said plea, did not even press the same.
14. The Apex Court in Rodemadan India Ltd Vs International Trade Expo Centre Limited (2006) 11 SCC 651
held in para 8 of the judgment that the power under Section 11(6) of the Act is the power of a designate
referred to under the Section and not that of the (Supreme) Court, albeit that it has not been held to have
judicial characteristics by reason of the judgment in SBP and Company Vs Patel Engineering Ltd 2005 8 SCC618. It was further held in para EA.No.105/2009 in Ex.No.242/2008 Page 7 of 13 25 of the judgment that
neither the Chief Justice nor his designate under Section 11(6) is a "Court" as contemplated under Section
2(1) (e) of the Act and further that the bar of jurisdiction under Section 42 is only intended to apply to a court
as defined in Section 2(1)(e).
15. The Apex Court again in Pandey and Co. Builders Pvt Ltd Vs State of Bihar (2007) 1 SCC 467 held that
Section 42 only applies to the applications and not to appeals under Section 37 of the Act.
16. Applying the same reasoning, Section 42 would also not apply to execution applications. The execution
application is not "arbitral proceedings" within the meaning of Section 42 of the Act and is not a subsequent
application arising out of the agreement and the arbitral proceedings. In fact the arbitral proceedings come to
an end when the time for making an application to set aside the arbitral award expires and the execution
application is an enforcement of the award. Thus the place of filing of the execution application need not be
the place of the filing of the application under Section 34 of the Act for the reason of Section 42 of the Act.
17. Once, Section 42 is out of the way, the question arises as to whether "Court" in Section 36 is to take its
colour from Section 2(1)(e). If that were to be so then it will have to be seen which was the court which was
competent to pass the decree had the subject matter of the arbitration been the subject matter of the suit. On
such reasoning, the court would be the court at Guwahati to whose EA.No.105/2009 in Ex.No.242/2008 Page
8 of 13 jurisdiction the parties had agreed in matters other than the arbitration.
18. However, in my view the expression "court" in Section 36 is not meant to be the court within the meaning
of Section 2(1)(e). The definitions in Section 2(1)(e) are, "unless the context otherwise requires". The word
"court" is used in Section 36 only in the context of, by a legal fiction, making the award executable as a
decree of the court within the meaning of CPC. The word "court" therein is used to describe the manner of
enforcement i.e., as a "decree of the court" and not in the context of providing for the court which will have
territorial jurisdiction to execute/enforce the award. In this context, the contention of the counsel for the
decree holder of the difference in language in Section 36 and in Section 49 is significant. The legislature has
in Section 49 provided for the enforcement of foreign awards by deeming the said awards to be a decree of
"that court" which would mean the decree of the court which has adjudicated on the enforcement of the
award. However, the legislature in Section 36 did not use the expression "that" and which is indicative of the
reference to court therein being only to describe the manner of enforcement of the award as a decree of the
court. There does not appear to be a legislative mandate to the effect that arbitral award has to be treated as a
decree of that court only which would have had the jurisdiction to entertain the suit.
19. Section 38 of the CPC applies only to a decree passed by the court. In the present case no court has passed
the decree. What is to be the position in such cases ?, which court is empowered to EA.No.105/2009 in
Ex.No.242/2008 Page 9 of 13 execute the award, which is a decree by a legal fiction and which has not been
passed by any court?
20. I find that certain orders of the company law board are also enforceable 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.
21. In Sindhu Chits and Trading (P.) Ltd. v. Khayirunnissa AIR 1992 Karnataka 281 it was held that under the
aforesaid Section 635 of the Companies Act, the orders of the company court are not decrees in the strict
sense of the word but may be enforced in the same manner as a decree. It was held to mean that though an
order passed by the company court does not amount to a decree for the purpose of execution, it will be treated
as though it is a decree and all the provisions of CPC relating to the execution of the decree would then apply.
It was further held that since the procedure to be followed in the matter of execution of the order of the
company court is different from that laid down in the CPC, it is not necessary to comply with the procedurelaid down in Sections 38 and 39 of the CPC and get the order first transferred by the court which made it, to
the court which is to enforce it and then make an application to execute it. It was held that a mere production
of a certified copy of the order is sufficient without getting the order transferred by the EA.No.105/2009 in
Ex.No.242/2008 Page 10 of 13 court which is required to enforce the order by taking necessary steps in the
same manner as if it had been made by itself.
22. The same High Court also in Rose Chit funds (P.) Ltd. Vs G. Venkatachallam 70 (1991) Company Cases
280 took the same view and also observed that the judgment debtor in that case was residing within the
jurisdiction of the court where the order of the company court was sought to be executed.
23. This court in Anand Finance (P) Ltd Vs Amrit Dasarat Kakad (1997) 90 Company Cases 350 Delhi
followed Rose Chit Funds (Supra) and held the mere production of a certified copy of the order before the
court where it was sought to be enforced, to be sufficient and no certificate/order of transfer of the decree
being required.
24. Thus it will be seen that where under other enactments, orders are made executable as a decree of the
court, insistence has not been on following Section 38 of CPC. However, the judgments (supra) in relation to
Section 635 of the Companies Act cannot be blindly followed, inasmuch as Section 635 itself provides a
procedure and which is missing in Section 36 of the Arbitration Act.
25. In this regard the addition of sub-section (4) to Section 39 vide CPC Amendment Act 2002 is relevant. It
provides that nothing in Section 39 shall be deemed to authorize the court which passed a decree to execute
such decree against any person or property outside the local limits of its jurisdiction. The legislative intent
appears to be that the decree should be executed by the court within EA.No.105/2009 in Ex.No.242/2008 Page
11 of 13 whose territorial jurisdiction the person or the property of the judgment debtor is situated. That is
logical also. The purpose of execution is realization of money from the property or the property of the
judgment debtor. Thus while territorial jurisdiction for suits is determined by place of occurrence of cause of
action, residence of defendant, locus of property etc, the territorial jurisdiction for execution is determined
only by locus of judgment debtor or the property. 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 enforced is
situated. That court in my view would have inherent jurisdiction to execute the decree and in the absence of
applicability of mandate of Section 38 of CPC, pedantic insistence on first applying for execution to one
court, merely to obtain transfer would be also contrary to intent of expedition in the 1996 Act.
26. The senior counsel for the judgment debtor also does not dispute that the award would be executable by
this court by attachment of the properties/monies of the judgment debtor at Delhi. However, he insists upon
the same being done only after obtaining a transfer of the decree from the courts at Guwahati /Golaghat to this
court. But what will that court transfer. There is no decree of that court which it can transfer. The court after
disposing of application/petition under Section 34 is not required to and does not pass any decree in terms of
the award, as under the 1940 Act. Moreover, the question of such transfer would arise only if it were to be
held that the power to execute and transfer is of that court only. EA.No.105/2009 in Ex.No.242/2008 Page 12
of 13 Such power as aforesaid is only in relation to decrees passed by that court and no in relation to the
arbitral awards which are deemed to be decree for the purpose of enforcement/execution. 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 situated would have inherent jurisdiction to entertain the execution.
27. 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.
28. For the reasons aforesaid I find myself unable to concur with the view taken by the Madhya Pradesh High
Court. In that case, there does not appear to have been any application within the meaning of Section 42 of the
Act. The court proceeded on the premise that the court of the place where award is passed is the court within
the meaning of Section 2(1)(e). That premise in my view is not correct.
29. The objection of the judgment debtor to the territorial jurisdiction of this court to entertain the execution is
thus rejected and the objection to that extent is dismissed.
RAJIV SAHAI ENDLAW
(JUDGE)
March 13, 2008


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