IMPORTANT POINT
Execution of an award can be filed anywhere in the country where such decree can be executed.

JUDGMENT

SANJAY KISHAN KAUL, J.

1. The divergence of legal opinion of different High Courts on the question as to whether an award under the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the ‘said Act’) is required to be first filed in the court having jurisdiction over the arbitration proceedings for execution and then to obtain transfer of the decree or whether the award can be straightway filed and executed in the Court where the assets are located is required to be settled in the present appeal.

Facts:

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 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 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.

The Conflicting Views:

A. The transfer of decree should first be obtained before filing the execution petition before the Court where the assets are located:

5. The aforesaid view has been adopted by the Madhya Pradesh and the Himachal Pradesh High Courts:

i. Computer Sciences Corporation India Pvt. Ltd. v. Harishchandra Lodwal & Anr., AIR 2006 MP 34– The learned single Judge of the Madhya Pradesh High Court took recourse to the provisions of Section 42 of the said Act, dealing with the issue of jurisdiction in respect of an arbitration agreement read with Section 2(e) of the said Act which defines the ‘Court’. In th