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



IN THE HIGH COURT OF DELHI
Prathiba M. Singh, J.
Gati Kausar India Ltd. - Appellant
Versus
B.K. Structural Contracts Private Ltd. - Respondent
EX.F.A. 14 of 2021 & CM Appl. 25078 of 2021
Decided On : 04-10-2021




Execution of an arbitral award requires compliance with the 90-day limitation under Section 34; execution petitions filed before this period are impermissible.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 34(3) and 36 - Execution of arbitral awards - Execution petition filed prior to expiry of 90-day limitation period for setting aside awards under Section 34(3) is impermissible, warrants of attachment issued hence void - Court highlights need for urgency in sensitizing judicial officers about execution petitions post-arbitral award - Judgment Debtor's payment of decretal amount made under protest pending Court's decision on setting aside award. (Paras 26, 28, 30)

(B) Legal Principle - Execution of an arbitral award can be enforced only after the challenge period under Section 34 has expired unless under grave exigency. (Paras 18, 24)

(C) Procedural discrepancy noted between the execution petition and objections under Section 34, highlighting communication failures between Courts. (Paras 27, 28)

Facts of the case:
The Appellant filed an execution first appeal against attachment orders from the Executing Court related to an interim arbitral award. The Judgment Debtor argued execution petition was premature, as it was filed before the expiry of the limitation for setting aside the award. The entire decretal amount was subsequently paid under protest.

Findings of Court:
The Executing Court was correct in issuing warrants post 90 days from interim award's date, though the payment was under protest. The jurisdictional overlap between Courts highlighted procedural issues.

Issues: Can execution proceedings commence before the limitation for challenging an arbitral award under Section 34 expires?

Ratio Decidendi: The court ruled execution petitions must not be filed before the lapse of 90 days from award issuance to ensure adherence to procedural integrity in arbitration disputes.

Result: The petition disposed of without further interference.

Table of Content
1. challenge to execution of arbitral award. (Para 2 , 4)
2. disputes regarding payment under agreement. (Para 5 , 6 , 8)
3. limitation period for setting aside the award. (Para 9 , 10 , 13)
4. timeline for application under section 34. (Para 11 , 12 , 14 , 15)
5. execution of awards and legal requirements. (Para 17 , 18 , 21 , 22 , 27)
6. court order for execution of payments. (Para 25 , 28 , 30)

JUDGMENT

Prathiba M. Singh, J. (Oral)--This hearing has been done through video conferencing.

2. The present execution first appeal has been filed by the Appellant challenging the impugned orders dated 4th September, 2020 and 15th January, 2021 passed by the Ld. ADJ, Patiala House Courts, New Delhi (hereinafter "Executing Court"). By the impugned order dated 4th September, 2020, warrants of attachment have been issued by the Executing Court against the Judgment Debtor/Appellant herein (hereinafter "Judgment Debtor) in order to enforce the interim arbitral Award dated 16th November, 2019/1st February, 2020 passed by Ld. Arbitrator in favour of the Claimant/Decree Holder/Respondent herein (hereinafter "Decree Holder"). By the impugned order dated 15th January, 2021, the Execution application was disposed of by the Executing Court considering that the entire decretal amount had been paid by the Judgment Debtor.

3. The present case raises an important question in respect of passing of arbitral awards, the execution thereof, as also entertaining of objections under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter "the Act").

4. The dispute that has arisen between the parties herein pertains to the Agreement dated 29th December, 2016, in terms of which, the Judgment Debtor had engaged the Decree Holder for civil and allied works towards construction of a warehouse/cold storage at Shamirpet, Hyderabad. The project was to be executed for a total consideration of Rs. 3,50,00,000/-.

5. The case of the Claimant before the Arbitral Tribunal was that the amounts due as per the Agreement dated 29th December, 2016 had not been paid by the Judgment Debtor. In view of the arbitration clause in the said Agreement, Shri. N.K. Goel, former Addl. District and Sessions Judge, Delhi was appointed as the Sole Arbitrator to adjudicate the disputes. In the Arbitral proceedings being Arb. Case No. 01/2019 titled B.K. Structural Contracts Pvt. Ltd. v. Gati Kausar India Ltd., interim Award dated 16th November, 2019/1st February, 2020 came to be passed under Order XII Rule 6 CPC wherein the Decree Holder was awarded a sum of Rs. 23,63,004/-. The operative portion of the said interim Award reads as under:-

    "However, if we read the e-mails dated 11.10.2017 and 12.10.2017 together, we would reach to the irresistible conclusion that the respondent has made an unequivocal, unambiguous and plain admission with regard to its liability to pay Rs. 2463629, /- with taxes (net amount Rs. 1948950/-) but finding a difference of Rs. 1,00,625/- which is accepted by the claimant company also. Thus, the admitted liability of the respondent comes to Hs. 2463629/- minus Rs. 100625/- = Rs. 2363004/-.

    Therefore, it is a fit case where judgment on admission can be passed under Order 12 Rule 6 CPC. Accordingly, I hold that the claimant is entitled to an award of Rs. 2363004/- under Order 12 Rule 6 CPC. The interim award for the said amount is passed accordingly in favour of the claimant and against the respondent. The question of payment of interest and costs, if any, shall be decided at the time of final disposal of the claim petition."

6. After the passing of the above interim Award, the parties to the dispute filed parallel proceedings. The Decree Holder filed an execution petition being Execution Petition No. 47 of 2020 titled M/s. B.K. Structural Contracts Pvt. Ltd. v. M/s. GATI Kausar India Ltd. before the ld. ADJ, Patiala House Courts, New Delhi on 4th February, 2020. On the other hand, the Judgement Debtor filed an application under Sect

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