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2007 Supreme(SC) 1299
2007(7) Supreme 428
Supreme Court of india
(From Jharkhand High Court)
Tarun Chatterjee & P. Sathasivam, JJ.
N.R. Constructions Pvt. Ltd. — Petitioner
versus
Sri Ram Badan Singh & Ors. — Respondents
Appeal (civil) 4737 of 2007
(Arising out of SLP (C) No. 15858 OF 2006)
Decided on : 09-10-2007
important point
Applicability of Rules 18 and 19, Order XXI, CPC discussed.
Headnote:Code of Civil Procedure, 1908 – Order XXI Rules 18 and 19 – Rule 18 is applicable in the case where the applications are made to the Court for execution of the cross-decrees in separate suits for payment of two sums of money passed between the same parties – Rule 19 is applicable in the case where the application is made to the Court for the execution of a decree under which two parties are entitled to recover sums of money – Instantly, applications were filed in respect of two awards in the same arbitration case – As such the provisions of Rules 18 and 19 of Order XXI of C.P.C. are not applicable. (Para 9)
Facts of the case :
1.The appellant entered into a partnership with the respondents for completion of certain contract work which the appellant had obtained. One of the terms of the agreement provided for arbitration.
2.Disputes arising in the year 1995 among the partners could not be settled by mutual agreement and the work could not be completed. The partners, by mutual consent, appointed four persons as Arbitrators. On 19.04.1997, the Arbitrators, after hearing both the parties, submitted their award.
3.There is no specific reference whether the award is an interim award or a final award. According to the appellant, the award dated 19.04.1997 was acted upon by the parties and was never challenged by any of them. Thereafter, the Arbitrators passed various awards. It is not in dispute that none of those awards passed after 19.4.1997 was ever challenged by any of the parties. Finally on 25.11.2000, the Arbitrators passed an award. According to the appellant, in this award, it was not stated that whether the issues covered by the earlier awards and especially the award dated 19.4.1997 are to be merged in the final award.
4.The appellant challenged the award u/s 34 of the Arbitration and Conciliation Act, 1996 which was dismissed by the learned subordinate Judge, whereagainst appellant filed an Arbitration Appeal No. 6 of 2001 before the High Court which was dismissed. The SLP thereagainst was also dismissed.
5.The respondents, on the other hand, filed Execution Case No. 2 of 2001 for enforcement of the Award dated 25.11.2000. On 1.7.2003, the appellant filed Execution Case No. 5 of 2003 for enforcement of the award dated 19.4.1997 which was dismissed holding that it was an interim award and therefore not executable.
6.Aggrieved by the same, respondent No.1 herein preferred C.R.No. 75 of 2005 which stands admitted but no stay of execution has been granted till date.
7.Thereafter, the appellant filed an application under Order XXI Rules 18 and 19 of the C.P.C. read with Section 36 of the Act in Execution Case No. 2 of 2001 for adjustment of the amount and for recording of full satisfaction of the amount. The executing Court, found that the question of cross-decree was not maintainable and rejected the said application. High Court dismissed the Revision. Supreme Court approved the conclusions arrived at by the High Court.
Findings of the Court:
In the facts and circumstances of the case, Rules 18 and 19 of Order XXI are not applicable.
Result : Appeal dismissed.
JUDGMENT
P. Sathasivam, J.—
1.Leave granted.
2.This appeal is directed against the judgment dated 19.07.2006 passed by the High Court of Jharkhand at Ranchi in C.R. No.65 of 2006 whereby the learned single Judge dismissed the Civil Revision filed by the appellant herein against the order dated 28.06.2006 passed by the Subordinate Judge-I, Bokaro in Execution Case No. 2 of 2001 rejecting the appellants prayer for adjustment of the cross-award under the provisions of Order XXI Rules 18 and 19 of the Code of Civil Procedure.
3.The only question, inter alia, arises in this appeal is whether the provisions of Order XXI Rules 18 and 19 of the C.P.C. are applicable in case of adjustment of the cross-award as claimed by the appellant herein?
4.The appellant entered into a partnership with the respondents and a partnership deed was executed on 14.04.1992. The purpose of the partnership was for completion of certain contract work which the appellant had obtained. One of the terms of the agreement provided for arbitration, i.e., - “that if there be any dispute among the partners, the same can be referred to the Arbitrator/Arbitrators as appointed by the partners who would decide the names in accordance with the provisions of the Indian Arbitration Act, if not otherwise settled by the partners with mutual consent.”
5.As the disputes which arose in the year 1995 among the partners could not be settled by mutual agreement and the work could not be completed, the partners, by mutual consent, appointed four persons as Arbitrators. On 19.04.1997, the Arbitrators, after hearing both the parties, submitted their award. There is no specific reference whether the award is an interim award or a final award. According to the appellant, the award dated 19.04.1997 was acted upon by the parties and was never challenged by any of them. Thereafter, the Arbitrators passed various awards. It is not in dispute that none of those awards passed after 19.4.1997 was ever challenged by any of the parties. Finally on 25.11.2000, the Arbitrators passed an award. According to the appellant, in this award, it was not stated that whether the issues covered by the earlier awards and especially the award dated 19.4.1997 are to be merged in the final award.
6.The appellant herein, being aggrieved by the award dated 25.11.2000, filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act). The respondents filed Execution Case No. 2 of 2001 for enforcement of the Award dated 25.11.2000. By order dated 27.6.2003, the application filed by the appellant under Section 34 of the Act was dismissed by the learned subordinate Judge. On 1.7.2003, the appellant herein filed Execution Case No. 5 of 2003 for enforcement of the award dated 19.4.1997. Against the dismissal of the application filed under Section 34 of the Act, on 26.8.2003, the appellant filed an Arbitration Appeal No. 6 of 2001 before the High Court of Jharkhand at Ranchi. By order dated 29.4.2004, the High Court dismissed the said appeal. The special leave petition against the said order was also dismissed by this Court on 10.1.2005 with a modification as to the rate of interest.
7.The respondents filed an objection under Section 47 of the C.P.C. in Execution Case No.5 of 2003. The said objection was numbered as Misc. Case No. 7 of 2005. The case of the respondents before the Executing Court was that the so-called award of 19.04.1997 was nothing but a provisional direction of the Arbitrators for successful completion of the job and it cannot be treated as an interim award and was not enforceable as an arbitral award. All the directions given in the award dated 19.04.1997 have merged in the award dated 25.11.2000. After hearing both the parties, the Executing Court by order dated 27.5.2005 dismissed Misc. Case No. 7 of 2005 holding that the interim award was not executable. Aggrieved by the same, respondent No.1 herein preferred C.R.No. 75 of 2005. Though the Civil Rev
