The judgment debtor cannot unilaterally adjust amounts against an arbitral award without prior adjudication and must fulfill payment obligations as per the award.

JUDGMENT

V. Kameswar Rao, J.

1. This petition has been filed seeking enforcement of the Arbitral Award dated November 28, 2019 (`Award', hereinafter) passed by the Sole Arbitrator appointed in pursuance of the order dated March 10, 2017 of the High Court of Punjab and Haryana at Chandigarh in Arbitration Case No. 247/2016 (O&M), to resolve the dispute between the parties arising out of Lease Deed dated December 22, 2009.

2. Two applications have been filed by the judgment debtor, (i) EX. APPL.(OS) 1186/2021 for recall/modification of orders dated July 20, 2021 and September 20, 2021 with a further prayer for dismissing the present petition, and (ii) EX. APPL.(OS) 286/2022 for issuance of notice to the decree holder to show cause as to why the payment made and the adjustment effected by the judgment debtor not be recorded as certified.

3. Reply to the application EX. APPL.(OS) 1186/2021 has been filed by the decree holder. It was contended by Mr. N.K. Kantawala, learned counsel for the decree holder that the present application is an abuse of process of law and not maintainable. According to him, claims allowed by the learned Sole Arbitrator are set out in paragraph 21 of the Award. Besides the same, no other claims of the judgment debtor was allowed by the Sole Arbitrator. The claims relating to the alleged security deposit do not find any mention in paragraph 21 of the Award. In other words, the learned Sole Arbitrator has neither passed any award nor granted any relief to the judgment debtor in relation to the alleged security deposit. That apart, he submits that a sum of Rs.1,58,94,457/- was remitted by the judgment debtor to the account of the decree holder. However, the said amount was paid post the filing of the present petition, and was accepted without prejudice and under protest.

4. He stated that this application, premised on the ground that an amount of Rs.38,67,360/- was required to be refunded by the decree holder is without any basis and any adjustment said to have been made by the judgment debtor is denied/contested.

5. Similarly, with regard to application EX. APPL.(OS) 286/2022, the submission of Mr. Kantawala is primarily the same. Though, it is stated in the execution petition that the learned Arbitrator has awarded an amount of Rs.88,90,125/- with interest computed as on December 31, 2019 which comes to Rs.1,90,24,868/-, it is stated in the reply to EX.APPL(OS) 286/2022 that as per the calculation of the decree holder the total amount payable as on December 31, 2019 is quantified at Rs.2,14,24,868/-. He also stated that the amounts have to be quantified again on March 31, 2020 in view of the part payment made by the judgment debtor. That apart, he reiterated that there was no adjudication of the claim of the judgment debtor which is sought to be adjusted/set off, i.e., the security deposit of Rs.38,67,360/-. In fact, it is his submission that the judgment debtor cannot unilaterally adjust the said amount. Therefore, the decree holder's amount still stands unpaid in full. He denied the fact that the Award itself mentions the entitlement of the judgment debtor to the amount of Rs.38,67,360/- from the decree holder and that the judgment debtor is entitled to certification that the Award stands satisfied. He seeks the dismissal of the applications.

6. According to