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2023 Supreme(Del) 345

IN THE HIGH COURT OF DELHI AT NEW DELHI
Yashwant Varma, J.
Hindustan Zinc Ltd. - Decree Holder
Versus
National Research Development Corporation - Judgement Debtor
OMP (ENF.) (COMM.) 135 of 2022 & EX.APPL.(OS) 3203 of 2022(Stay), EX.APPL.(OS) 3726 of 2022
Decided On : 24-01-2023

Advocates:
Advocate Appeared:
For the Decree Holder : Mr. Uday N. Tiwaly and Mr. Akshat Tiwaly, Advs.
For the Judgement Debtor: Mr. J. M. Kalia and Mr. Dhruv Kalia, Advs.

Headnote:

Civil Procedure, Code, 1908 – Section 47 – Order XXVII Rule 8A – Arbitration and Conciliation Act, 1996 – Section 34 – Limitation Act, 1963 – Section 3 – Arbitration Act, 1940 – Section 41 – Application for setting aside arbitral award – Question to be determined by the court – Present execution petition has been instituted for enforcement of final award judgment debtor has preferred objections styling them as being – Undisputedly respect of award in question objections under Section 34 of Arbitration and Conciliation Act, 1996 preferred on still pending – Held, Court consequently holds that objections as canvassed and noticed above clearly fall beyond contours and scope of present proceedings – While it thus leaves it open to respondent to raise those objections in appropriate proceedings they cannot impede or stall continuance of present proceedings for enforcement – All contentions of respective parties relating to merits of objections raised here are kept open to be addressed in appropriate proceedings – Order Accordingly.

ORDER :

1. The present execution petition has been instituted for enforcement of the final award dated 16 June 2014. The judgment debtor has preferred objections styling them as being under Section 47 of the Code of Civil Procedure, 1908, Code. Undisputedly, in respect of the award in question, objections under Section 34 of the Arbitration and Conciliation Act, 1996, Act have been preferred on 13 October 2014 and are still pending.

2. In terms of the objections preferred in these proceedings, it is contended that the sole arbitrator committed a manifest illegality while rejecting the claim of royalty as raised by the respondents herein and allowing a refund in favor of the petitioner. It is further averred that the counter claim which ultimately came to be allowed in terms of the award was also evidence of a manifest illegality having been committed since the same was barred by Section 3 of the Limitation Act, 1963, The 1963 Act, read with Section 43 of the Act.

3. In view of the aforesaid, it was the submission of learned counsel for the objector that the award thus rendered is a nullity and cannot be enforced. The submissions addressed on the objections and purporting to draw sustenance from Section 47 of the Code essentially rest upon a judgment rendered by a learned Judge of the Court in Khanna Traders vs. Scholar Publishing House P. Ltd. & Ors., 2017 SCC OnLine Del 7684 The submission of learned counsel primarily was that the objections so raised can be addressed even in enforcement proceedings as akin to the right that stands conferred in terms of Section 47 of the Code and which in turn obliges the executing court to deal with all questions that may arise in the course of execution of a decree of a court.

4. In Khanna Traders, the Court in course of execution of an arbitral award was called upon to deal with objections preferred by parties before it who had sought to contend that the award insofar as it permitted recourse against some of the judgment debtors in their personal capacity was invalid and should not be enforced. While dealing with the aforesaid question and considering whether such a challenge to the award could be entertained in proceedings for enforcement under Section 36, the learned Judge observed as under: -

    “14. As would immediately be evident from the judgments cited by respective counsels, the legal position is that an objection that the Court which passed the decree had no jurisdiction to pass the same can be taken under Section 47 of CPC in execution proceedings provided the said objection is evident on the face of the record and does not require any determination of facts. Such an objection has been distinguished from objections of other illegalities committed by the Court passing the decree viz. of awarding a high rate of interest, not awarding interest without giving any reasons therefor, not making the decree executable first against the principal debtor and making it executable simultaneously against principal debtor as well as guarantors etc., which cannot be taken in execution proceedings. What further emerges from the aforesaid judgments is that an objection that the Court which passed the decree had no jurisdiction to pass the same can be taken in execution proceedings only if it appears on the face of the record and does not require any determination of facts, not otherwise.

15. What has to however be adjudicated is, whether the said law applies to proceedings for execution of arbitral awards also particularly in the light of observations in MSP Infrastructure Ltd. and Bharti Cellular Ltd. supra cited by the counsel for DH.

16. Though the observations in both judgments supra to the effect that Parliament has enacted special rule of law to deal with arbitrations and contrary to general law on the subject, the said rule does not entitle an objection of jurisdiction to be taken at any time and that an objection as to jurisdiction cannot be permitted to be taken beyond the time prescribed therefor

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