SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2024 Supreme(Kar) 159

IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
C.M. Poonacha, J.
M/s Bellary Nirmithi Kendra By Its Chairman The Deputy Commissioner, Ballari - Appellant
Vs.
M/s Capital Metal Industries Represented By Its Proprieter Sri. Chandmal P Jain - Respondent
C.R.P. NO.100067 OF 2022
Decided On : 22-03-2024

Advocates:
Advocate Appeared:
For the Appellant : Sri Prashant F Goudar, Adv.
For the Respondent: Smt V Vidya, Adv.

Headnote:

CPC - Challenge to Arbitral Award - Section 47 - Section 18(3) of MSMED Act, Section 34 and 37 of Act of 1996 - Section 47 of CPC - The court discussed the applicability of Section 47 of the CPC in the execution proceedings initiated by the respondent to enforce the arbitral award passed under Section 18(3) of the MSMED Act. The court held that the award passed under the provisions of the Act of 1996 is to be treated as a decree only for the purpose of enforcement and the petitioner cannot invoke Section 47 of the CPC before the executing Court.

Fact of the Case:

The petitioner and the respondent entered into an Agreement for supply of Kapital Era Bus Shelters at Ballari. The respondent filed a petition before the Council for recovery of a sum of Rs.34,48,445/- under the MSMED Act. The Council allowed the petition and ordered the petitioner to pay Rs. 30,73,037/- along with interest. The petitioner challenged the award under Section 34 and 37 of the Act of 1996. The petitioner then filed an application under Section 47 of the CPC for dismissal of the Execution Petition on the ground that the award was a nullity and passed without jurisdiction.

Finding of the Court:

The court found that the petitioner cannot invoke Section 47 of the CPC in the execution proceedings initiated by the respondent to enforce the arbitral award passed under Section 18(3) of the MSMED Act.

Issues: The main issue was whether the petitioner was entitled to file the application under Section 47 of the CPC raising the question regarding inherent lack of subject matter jurisdiction with respect to the award sought to be executed by the executing Court.

Ratio Decidendi: The court held that the award passed under the provisions of the Act of 1996 is to be treated as a decree only for the purpose of enforcement and the petitioner cannot invoke Section 47 of the CPC before the executing Court.

Final Decision: The petition was dismissed as being devoid of merit. The amount deposited by the petitioner before the Court was to be transmitted to the Executing Court for appropriate orders.

ORDER :

The present Civil Revision Petition is filed under Section 115 of the Code of Civil Procedure, 1908 [Hereinafter referred to as ‘CPC’] challenging the order dated 19.03.2022 passed in Execution Case No.376/2015 by the Principal District and Sessions Judge, Bellary [Hereinafter referred to as ‘Executing Court’] wherein an application filed by the Petitioner under Section 47 of the CPC was dismissed.

2. The relevant facts necessary for consideration of the present petition are that the Petitioner and the Respondent entered into an Agreement dated 26.6.2013 [Herein after referred as the ‘said Agreement’.] for supply of Kapital Era Bus Shelters at Ballari. Alleging various violations in compliance of the terms of the said Agreement, the Respondent filed a petition in Reference Petition No.69/2014 before the Micro and Small Enterprises Facilitation Council [Hereinafter referred to as ‘Council’] for recovery of a sum of Rs.34,48,445/-, consequent to which, a notice of Conciliation under Section 18 r/w 17 of the Micro, Small and Medium Enterprises Development Act, 2006 [Hereinafter referred to as ‘MSMED Act’] was issued to the Petitioner. In response, the Petitioner herein issued a reply denying the jurisdiction of the Council to adjudicate the dispute by placing reliance on clauses 8 and 9 of the Agreement.

3. Vide order/award dated 17.11.2017, passed under Section 18(3) of the MSMED Act, the Reference Petition No.69/2014 was allowed and it was ordered that the Petitioner herein who was arrayed as Respondent in proceedings before the Council was required to pay Rs. 30,73,037/- along with interest. Being aggrieved, the Petitioner preferred Writ Petition No.4523/2018 before the High Court of Judicature at Bombay challenging the said award dated 17.11.2017. Vide order dated 17.09.2019, the said writ petition was disposed of leaving it open for the Petitioner to avail the remedy under Section 34 of the Arbitration and Conciliation Act, 1996 [Hereinafter referred to as Act of 1996]. The Petitioner preferred a petition under Section 34 of the Act of 1996 in Arbitration Petition No.1452/2019 before the High Court of Judicature, Bombay. Along with the said petition, I.A.1/2020 was filed for stay. Vide order dated 21.1.2020, the interim application as well as the petition were dismissed.

4. In the interregnum, Execution Case No.376/2018 was filed by the Decree Holder before the Executing Court wherein, the Petitioner filed an application under Section 47 of the CPC for dismissal of the Execution Petition on the ground that the award dated 17.11.2017 passed by the Council is a nullity, non est and passed without jurisdiction. The Respondent filed objections to the said application.

5. Being aggrieved by the order dated 21.1.2020, dismissing the Arbitration Petition No.1452/2019, the Petitioner preferred Appeal No.91/2020 before the Division Bench of the High Court of Judicature, Bombay under Section 37 of the Act of 1996. By order dated 09.04.2021, the said appeal was dismissed.

6. The Executing Court vide its order dated 19.03.2022, dismissed the application filed by the Petitioner under Section 47 of the CPC. Being aggrieved, the present petition is filed.

7. Learned counsel for the Petitioner assailing the order passed by the Executing Court contends that:

`i) There was inherent lack of subject matter jurisdiction for the Council to entertain the petition filed by the Respondent since the Respondent was not registered under the MSMED Act of 2006 as on the date of contract or supply and hence, the provisions of the said Act did not apply;

(ii) That the decree being a nullity, inherent lack of subject matter of jurisdiction could be raised even before the Executing Court;

(iii) That the question of inherent lack of jurisdiction can be raised in an execution proceedings, even after rejection of challenge to the award under Sections 34 and 37 of the Act of 1996 and hence, dismissal of the said challenge made by the Petitioner to the award dated

                            Click Here to Read the rest of this document
                            1
                            2
                            3
                            4
                            5
                            6
                            7
                            8
                            9
                            10
                            11
                            SupremeToday Portrait Ad
                            supreme today icon
                            logo-black

                            An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

                            Please visit our Training & Support
                            Center or Contact Us for assistance

                            qr

                            Scan Me!

                            India’s Legal research and Law Firm App, Download now!

                            For Daily Legal Updates, Join us on :

                            whatsapp-icon Back to top