JUDGMENT

EX.aPPL.(OS) 607/2021

1. The precise scope of Order XXI Rule 46(1) of the Code of Civil Procedure, 1908 (CPC), the concept of 'debt' within its meaning, the extent of the onus on the judgement debtor who seeks to invoke the provision, and the position, in law, in a situation in which the garnishee disputes the debt of which the judgement-debtor seeks attachment, are seminal issues which arise for consideration in this application.

46. attachment of debt, share and other property not in possession of judgment-debtor. -

(1) In the case of -

(a) a debt not secured by a negotiable instrument,

(b) a share in the capital of a corporation,

(c) other movable property not in the possession of the judgment-debtor, except property deposited in, or in the custody of, any Court, the attachment shall be made by a written order prohibiting,-

(i) in the case of the debt, the creditor from recovering the debt and the debtor from making payment thereof until the further order of the Court;

(ii) in the case of the share, the person in whose name the share may be standing from transferring the same or receiving any dividend thereon;

(iii) in the case of the other movable property except as aforesaid, the person in possession of the same from giving it over to the judgment-debtor.

Facts

2. OMP(Enf)(Comm) 172/2019 has been preferred under Section 36 of the arbitration and Conciliation act, 1996 ('the 1996 act') read with Order XXI of the Code of Civil Procedure, 1908 (CPC), seeking execution of a domestic arbitral award dated 18th april, 2015, passed by a three member arbitral Tribunal.

3. The aforesaid mentioned arbitral award ('the award', hereinafter) awarded, to the petitioner and against Respondent1,NeelachalIspat Nigam Limited (NINL), Rs. 15 crores and Rs. 50 lacs, with simple interest @ 10% per annum w.e.f. 30th January, 2011, along with costs of Rs. 60 lacs.

4. NINL and the petitioner have both assailed the award before the learned District Judge, Khurda, Bhubaneswar, under Section 34 of the 1996 act, vide arb P 67/2015, filed on 15th July, 2015 and arb P 68/2015, filed on 17th July, 2015. The challenge in the petitioner's Section 34 petition is limited to the issue of the rate of interest awarded by the learned arbitral Tribunal. Both petitions are currently pending. There is no stay, till date, of the award.

5. The petitioner has also filed Ex Petition583/2018 before the learned District Judge, Khurda, seeking execution of the award by way of attachment of the assets of NINL situated within the territorial jurisdiction of the learned District Judge, Khurda. That petition is also pending as on date. Statutory and precedential basis for filing the present petition

6. Section 36 of the 1996 act, as it read till 2015, envisaged enforcement of a domestic award, as if it were a decree of a Court, when the time for challenging the award under Section 34 had expired or where an application under Section 34 had been made and rejected. This resulted in a situation in which execution of awards remained pending for long periods, merely because the award had been challenged under Section 34 , even where there was no stay of operation of the award.Consequentto detailed deliberations, therefore, Section 36 was amended by Section19of the arbitration and Conciliation (amendment) act, 2015('the 2015amendment act'), clarifying that, in cases where the award had been challenged under Section 34 , the award was not rendered unenforceable merely because of the pendency of such challenge, in the absence of any order staying the operation of the award under Section 36 (