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2001 Supreme(Kar) 155

Karnataka High Court
I.C.D.S.Limited - Appellant
Versus
Mangala Builders Private Limited - Respondent
Decided On : 02-28-01
C.R.P. : 3641 of 2000

Advocates:
M.L.N.REDDY, S.VISHWAJITH SHETTY

The Court established that the Court which could entertain a suit with respect to the subject-matter of the arbitration dispute alone can exercise the power under Section 36 of the Arbitration and Conciliation Act, 1996.

Headnote:

Arbitration - Jurisdiction - Arbitration and Conciliation Act, 1996, Section 36

Fact of the Case:

An award made by an arbitrator under the Arbitration and Conciliation Act, 1996 was sought to be executed by the decree-holder invoking Section 36 of the Act. The respondents objected to the jurisdiction of the court where the execution was levied, leading to the dismissal of the execution petition. The petitioner challenged this order, leading to the question of the correctness of the finding that the Court below had no jurisdiction to entertain the execution proceedings.

Finding of the Court:

The Court analyzed the interpretation of the words in Section 36 of the Act and concluded that the Court which could entertain a suit with respect to the subject-matter of the arbitration dispute alone can exercise the power under Section 36 of the Act. It was found that the execution petition, having been levied in a Court other than the Principal District Judge, was not maintainable.

Issues: The main issue involved the interpretation of the words in Section 36 of the Act and the jurisdiction of the Court to entertain the execution proceedings.

Ratio Decidendi: The Court held that the Court which could entertain a suit with respect to the subject-matter of the arbitration dispute alone can exercise the power under Section 36 of the Act. It was also concluded that the 'court' as understood in Section 34 has alone the jurisdiction to entertain the enforcement of the arbitral award.

Final Decision: The revision petition was disposed of by allowing the petitioners to withdraw the present execution petition and to file the same before the proper Court having jurisdiction under Section 36 of the Act. The interim order made in the revision was allowed to continue for a period of one month to enable the petitioners to move the appropriate Court for orders to safeguard their interest.

V. P. MOHAN KUMAR, J.

( 1 ) AN award was made by thearbitrator appointed under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) in terms of the arbitration agreement entered into between the petitioner and the respondents. The award was made on 13-2-1997. The said award is sought to be executed by the decree-holder invoking Section 36 of the Act after the period to set aside the award has expired by filing execution petition before the II Additional Civil Judge (Senior Division), Mangalore within whose jurisdiction the properties of the respondents are situate. When sale proceedings were in progress, the respondents filed I. A.-V contending that the Court before which the execution is levied had no jurisdiction to entertain the same. On that objection being upheld, the execution petition was dismissed. The petitioner challenges the said order. Hence the question has come before this Court to consider the correctness of the finding that the Court below had no jurisdiction to entertain the execution proceedings.

( 2 ) THE question mainly involves the interpretation of the words in Section 36 of the Act. The said section is as follows :"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 (V of 1908) in the same manner as if it were a decree of the Court. "the expression relevant to understand this issue are the words "as if it were a decree of the Court. " The expression Court has been defined in the Act in Section 2 (e) in the following manner :" "court" means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes" (underlining for emphasis)

( 3 ) IT may be noted that if one juxtaposes the expression 'court' occurring in Section 36 with Section 2 (e) of the Act it would mean that the award shall be enforced in the same manner as if it were a decree made by a Court having jurisdiction to decide questions forming the subject-matter of the Arbitration if the same had been the subject-matter of the suit. If that be so, the inquiry would be, which is 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 suit. Then that Court which has the jurisdiction to decide the subject-matter of the Arbitration would have jurisdiction to levy execution. That takes us to Civil Procedure Code. We may refer to Section 38 of the Civil Procedure Code (CPC for short) which is relevant in this context. That section is as under:"38. Court by which decree may be executed : A decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution. "if so, which is the Court which could have passed the decree ? the answer lies in Sections 15 to 20 of CPC. In the instant case, it would be Section 20 thereof. It reads thus :"20. Other suits to be instituted where defendants reside or cause of action arises 1 Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction- (a) the defendants, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, on personally works for again, or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Co





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