Andhra Pradesh High Court
L.NARASIMHA REDDY, J.
Diddi Kumaraswamy - Petitioner
Versus
Pathakala Bhaskar & another - Respondents
Civil Revision Petition No. 796 of 2008
Decided on 03-03-2008
(B) Arbitration and conciliation Act 1996-Section 36, 7 and 2 (c) Arbitration Act 1940-Section 2(a)(b), 17 and 19- Enforcement of arbitral award. Person seeking enforcement has to satisfy Court that what is sought to be executed is an award, and that same satisfies other legal requirements. Executing Court can make an endeavour to satisfy itself, as to whether document sought to be enforced, answers description of an “award” and award whether preceded by an arbitration agreement. Party seeking execution of award, if maintains silence, as to existence of arbitration agreement Court can refuse to extend its help, in enforcement of such award. Petition dismissed. [Para 10]
(C) Arbitration-Award- Power of an executing Court is limited, in the context of interpretation of the decree rendered by a civil Court, or an award, in an arbitration. However, Court can make an endeavour to satisfy itself as to whether the document sought to be enforced, answers the description of an” award”. Court cannot go into the merits of terms of settlement, but it can take into account, the antecedents of the award to satisfy itself, whether it is outcome of an arbitration governed by relevant statute. [Para 7]
The petitioner filed EP No.92 of 2005, in the Court of District Judge, Warangal, for execution of a Settlement-cum-Award, dated 9.10.2002, said to have been rendered in an Arbitration, between himself and the respondents. It was pleaded that the father of the respondent No.1 borrowed a sum of Rs.14,000/- from the petitioner on 10.6.1993, and agreed to sell the house bearing No.15- 189/2, Narsampet, at the price that may be fixed by the elders. Possession was also said to have been delivered to the petitioner. It is stated that an agreement was executed by the father of the 1st respondent, stipulating the consideration for the property, at Rs.60,000/- and adjusting the amount of Rs.14,000/-, together with the accrued interest, amounting to about Rs.40,000/-. The petitioner alleged that when he offered to pay the balance of Rs.19,960/-, the 1st respondent and his father refused to receive it, and that there upon the matter was referred to Arbitrators. The petitioner prayed for enforcement of the Settlement-cum-Award, dated 9.10.2002.
2. The 1st respondent opposed the EP, denying the very existence of award, as well as the agreement, pleaded by the petitioner. The District Court dismissed the EP, observing that the petitioner approached it, on an earlier occasion, by filing EP.No.59 of 2003, for enforcement of that very award and that the same was dismissed. It was also observed that the petitioner himself is not sure, as to whether the one, sought to be enforced, is an award or settlement, and that there is nothing on record to disclose that the alleged dispute between the parties was referred to Arbitrators. The said order is challenged in this CRP.
3. Sri B. Harinath Rao, learned counsel for the petitioner, submits that the award, dated 9.10.2002, is binding on the parties and that the District Court was not justified in rejecting the EP. He contends that the earlier EP was dismissed with certain objections, and no decision was rendered, on merits. Learned counsel submits that on account of the rejection of the EP, the very institution of the proceedings, before Arbitrators, was defeated.
4. The execution sought for by the petitioner, is not of any decree, passed by a Civil Court. He wanted the District Court to enforce a settlement-cum- award, dated 9.10.2002. The District Court rejected the EP, on the grounds, that have already been mentioned in the preceding paragraphs. Certain procedural, as well as substantive aspects, arise for consideration in this CRP. On procedural side, Section 36 of the Arbitration and Conciliation Act, 1996 (for short "1996 Act"), provides for execution of an award, rendered in Arbitration, as though it is a decree passed by a Civil Court. The provision reads as under:
"Enforcement:- Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the court."
6. Under the Arbitration Act 1940 (for short "the 1940 Act"), an award passed in Arbitration was enforceable, only on its being made, the rule of the Court, under Section 17 of that Act. Enforceability is attached to the award in the 1996 Act, once the time for making an application to set aside the same had expired, or an application under Section 34, for setting aside the award, is rejected. Neither under the 1940 Act, nor under the 1996 Act, the word "Award" is defined, with reference to its contents. The 1940 Act defines the word, under Section 2(b) as:
"Award" means an arbitration award".
In the 1996 Act, the definition is inclusive in nature, under Section 2(c). It reads,
"Arbitral award" includes an interim award."
From these definitions, it is difficult to understand or perceive the form, in which the award has to be rendered. This question assumes significance, from the point of v
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