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2019 Supreme(Raj) 668

IN THE HIGH COURT OF RAJASTHAN BENCH AT JAIPUR
MOHAMMAD RAFIQ, ALOK SHARMA, JJ.
Ess Kay Fincorp Limited and Ors. - Appellants
Versus
Suresh Choudhary and Ors. - Respondents
D.B. Civil Misc. Appeal Nos. 12 of 2019, 5890 of 2018 and D.B. Civil Writ Petition No. 4379 of 2019
Decided On : 22-08-2019

Advocates Appeared:
For the Appellant : Himanshu Jain and Alok Garg
For the Respondent: Vikas Jain

Headnote:

Civil Procedure Code, 1908 – Section 47 and 151 – Order 21 Rule 27 – Irrigation Systems Rules, 2002 – Arbitration and Conciliation Act, 1996 – Section 2 – Commercial Appellate Division of High Courts Act, 2015 – Section 3 – Commercial Courts Act – Section 3, 10 and 15 – Arbitration Act, 1996 – Section 36, 42, 9 and 34 – Dismissing Execution – Seeking – Growers Federation Limited – Appeals and a writ petition, raise a common question of law as to which of the two Courts;-Principal Civil Court, having original jurisdiction in a district i.e. the Court of District and Sessions Judge, as defined under Section 2 – Arbitration and Conciliation Act, 1996 Commercial Court constituted under Section Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 and as defined in Section 2of that Act – Appeal filed appellant Equitas Small Finance Bank Limited assailing order passed by Commercial Court, Ajmer dismissing Execution Application seeking execution of award whereby claim of appellant was allowed and respondents were directed to jointly and severely pay a sum of together with interest till same is realized as also a sum towards arbitration fee and cost to appellant – Held, Learned Judges of Chhattisgarh High Court have taken from proviso to Section 15(2) of Commercial Courts Act is that since no suit or application where the final judgment has been reserved by Court prior to constitution of Commercial Division or Commercial Court shall be transferred either under sub-section (1) or sub-section (2) of Section 15 of Commercial Courts Act application subsequently filed for execution of award could also not be entertained by Commercial Court – Correct interpretation of proviso to Section 15(2) of Commercial Courts Act which has been engrafted therein only with a limited purpose of ensuring that cases in which arguments have been heard and judgments reserved, are given finality and not required to be reopened so as not to repeat those proceedings all over again – Appeal dismissed.

Judgement Key Points

Key Points: - The Commercial Court constituted under the Commercial Courts Act would be the only competent court to execute an arbitral award on a "commercial dispute" (not the Principal Civil Court) (!) (!) . - Proviso to Section 15(2) of the Commercial Courts Act serves a limited purpose to ensure finality of cases where judgments have been reserved before constitution, and does not bar execution applications for awards from being entertained by the Commercial Court (!) (!) (!) (!) . - A conjoint reading of Section 10(3) and 15(2) indicates that execution of an award under Section 36 of the Arbitration Act, when the subject matter is a commercial dispute, should be filed with the Commercial Court rather than the Principal Civil Court (!) (!) (!) .

What is the competent court to execute an arbitral award on a commercial dispute under Arbitration Act and Commercial Courts Act?

What is the effect of the proviso to Section 15(2) of the Commercial Courts Act on transfer of execution applications for arbitral awards?

What is the interpretation of Section 10(3) and 15(2) of the Commercial Courts Act in relation to execution of arbitral awards?


JUDGMENT :

Mohammad Rafiq, J.

1. These three matters, two appeals and a writ petition, raise a common question of law as to which of the two Courts;-Principal Civil Court, having the original jurisdiction in a district i.e. the Court of District and Sessions Judge, as defined under Section 2(1)(e) of the Arbitration and Conciliation Act, 1996 (for short 'the Arbitration Act') or the Commercial Court constituted under Section 3(1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (for short 'the Commercial Courts Act') and as defined in Section 2(b) of that Act, would be competent to execute an arbitral award, on a "commercial dispute" passed under the Arbitration Act?

2. Before adverting to the rival submissions, we deem it appropriate to briefly notice the facts of these matters.

3. Appeal No. 12/2019 has been filed by the appellant Ess Kay Fincorp Limited assailing order dated 20.10.2018 passed by the Commercial Court, Ajmer (for short 'the Commercial Court'), dismissing Execution Application No. 06/2018 seeking execution of the award dated 12.03.2018 whereby claim of the appellant was allowed and the respondents were directed to jointly and severely pay a sum of Rs. 4,77,387/- together with interest @ 36% per annum from 26.02.2018 till the same is realized, return the possession of the vehicle, as also a sum of Rs. 1,100/- towards arbitration fee and cost to the appellant.

4. Appeal No. 5890/2018 has been filed by the appellant Equitas Small Finance Bank Limited assailing order dated 20.10.2018 passed by the Commercial Court, Ajmer (for short 'the Commercial Court'), dismissing Execution Application No. 01/2018 filed in CIS No. 145/2018 seeking execution of the award dated 15.02.2018 whereby claim of the appellant was allowed and the respondents were directed to jointly and severely pay a sum of Rs. 5,70,960/- together with interest @ 18% per annum from 01.02.2018 till the same is realized as also a sum of Rs. 2,000/- towards arbitration fee and cost to the appellant.

5. Writ Petition No. 4379/2019 seeks to challenge order dated 21.12.2018 passed by the Commercial Court No. 1, Jaipur (Rajasthan) in CIS/Case No. Ex. 42/2018. In this case, Respondent No. 1, M/s. Solcon Engineers Private Limited filed a civil suit against the petitioner, Rajasthan State Cooperative Oilseed Growers Federation Limited and Respondent No. 2, National Heavy Engineering Cooperative Limited in the Court of Civil Judge, Senior Division, Pune (Maharashtra) for recovery of a sum of Rs. 21,95,833/-. The suit was filed on the basis of agreement executed between Respondent No. 1 and Respondent No. 2. On request of Respondent No. 2, the Court referred the matter to the arbitral tribunal for adjudication of the disputes between them. The arbitral tribunal by award dated 24.07.2004 allowed the claim of Respondent No. 1. Respondent No. 2 filed objections against the award before District and Sessions Judge, Pune (Maharashtra) which were dismissed vide judgment dated 23.04.2008. It is thereafter that the application under Section 36 of the Arbitration Act was filed seeking execution of the award before the Court of District and Sessions Judge, Pune. On application of Respondent No. 1, the said execution application was transferred to the Court of District and Sessions Judge, Jaipur Metropolitan, Jaipur, who transferred the same to the Commercial Court No. 1, Jaipur. Thereafter, the petitioner received show cause notice but the Commercial Court No. 1, Jaipur vide order dated 28.11.2018 transferred the execution application to the Court of District and Sessions Judge, Jaipur Metropolitan, Jaipur directing the parties to appear before that Court. According to the petitioner, Presiding Officer of the Commercial Court No. 1, Jaipur sent letter to the District and Sessions Judge, Jaipur Metropolitan and observed that necessary order from that Court be awaited. The matter was adjourned to 14.12.2018 and thereafter, it w

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