IN THE HIGH COURT OF MEGHALAYA
Dinesh Maheshwari, J.
Union of India - Appellant
Vs.
M/S. Krishna Enterprise - Respondent
Civil Revision Petition No. 11 of 2016
Decided On : 08-09-2016
Arbitration - Execution of Award - Arbitration and Conciliation Act, 1996 - Section 33 - Attachment of Bank Account - Rule 30 Order 21 of the Code of Civil Procedure
Fact of the Case:
The Chief Engineer and the Garrison Engineer questioned the legality of proceedings for execution of an arbitral award made in favor of the non-petitioners. The non-petitioners sought execution of the award by attaching the moveable properties, assets, and bank accounts of the Judgment Debtor. The petitioners made a part payment and sought withdrawal of the attachment of their bank account.
Finding of the Court:
The Court found that the Executing Court acted illegally in issuing a blanket attachment order of the entire bank account without ascertaining the amount due under the award and without limiting the attachment to the recoverable amount. The Court allowed the petitioners to make submissions regarding discharge or satisfaction of the award and directed the Executing Court to determine the relevant questions in accordance with the law.
Issues: The issues concerned the legality and validity of the proceedings in the execution case, including the improper issuance of the warrant of attachment and the failure to comply with the requirements of the Code of Civil Procedure.
Ratio Decidendi: The Court held that the Executing Court failed to comply with the requirements of Rule 17 Order 21 of the Code of Civil Procedure, which mandates the Court to ascertain compliance with applicable rules and to decide provisionally the amount due under the decree. The Court disapproved of the procedure adopted by the Executing Court and allowed the petitioners to make submissions regarding discharge or satisfaction of the award.
Final Decision: The petition was allowed, and the interim order withdrawing the attachment of the bank account of the petitioners was made absolute until further orders of the Executing Court. The Executing Court was directed to determine the relevant questions in accordance with the law and to consider the payment made by the petitioners in the final order.
ORDER :
Dinesh Maheshwari, J.
By way of this revision petition, the Chief Engineer, Military Engineering Service, Shillong Zone and the Garrison Engineer, Military Engineering Service, Shillong Division, East Khasi Hills District, Meghalaya (hereinafter referred to as 'the petitioners'/'the judgment-debtors'), have questioned the legality of proceedings in (ARB) Execution Case No.1 (T) of 2016 by the Court of Additional Deputy Commissioner (Judicial), Shillong for execution of an arbitral award made in favour of the non-petitioners (hereinafter also referred to as 'the decree-holders').
2. The relevant background aspects of the matter could be noticed as follows: Under a contract dated 28.09.2006 between the parties, the non-petitioners herein were to render periodical services to OTM ACCN at Happy Valley under the Garrison Engineer, Shillong. The disputes having arisen, matter was referred to arbitration; and ultimately, the sole arbitrator made an award dated 17.12.2015 in favour of the non-petitioners in the following terms:-
".....Thus the Claimant's total due comes to (Rs.3,41,092.35p + Rs.75000) = Rs.4,16,092.35p/-. The Respondents shall pay the said due amount of Rs.4,16,092.35p/- to the Claimant within a period of 3 (three) months from the date of the award with interest @10% per annum from the date of completion of work i.e., 11-06-2007 till realization of the entire due amount failing which the amount shall carry interest @15% per annum from the expiry of three months till realization of the whole amount."
3. The arbitrator further held the non-petitioners entitled to the cost of proceedings quantified at Rs.50,000/-.
4. It appears that on 11.03.2016, the present petitioners made an application under Section 33 of the Arbitration and Conciliation Act, 1996 ['the Act of 1996'] seeking rectification of the award but, on 01.04.2016, the learned Arbitrator rejected the said application while observing that the same was barred by time and was misconceived too, because the petitioners were seeking review of the award on merits, which was not permissible in law.
5. It is noticed that on 01.04.2016 itself, the present non-petitioners made an application seeking execution of the award aforesaid against 'Union of India represented by Chief Engineer, Military Engineering Service, Shillong Zone, Spread Eagle Falls, Shillong' by way of "attachment of the moveable properties and assets including vehicles upto the satisfaction of the decreetal amount that may be found in the office of the Judgment Debtor and also by attachment of bank accounts of the Judgment Debtor with the State Bank of India, Shillong Branch, Shillong." On the application so filed, the learned Executing Court recorded the following order on 01.04.2016:-
"01.04.2016 Record put up.
M/s Krishna Enterprise has filed the execution of the award dated 17.12.2015 which has been passed in Arbitration proceeding No.2/2014 passed by the sole arbitrator for satisfaction of the decreetal amount that may be found in the office of the Judgment Debtor which is Union of India represented by Chief Engineer, Shillong Zone, Spread Eagle Falls. Let the decree holder take steps for the execution to be taken up by the bailiff of the Court.
Fix 17.05.2016 for report on the execution."
6. Thereafter, on 06.04.2016, without any other order and without any other proceeding, the learned Additional Deputy Commissioner (Judicial), Shillong issued the warrant of attachment to the Bailiff of the Court under Rule 30 Order 21 of the Code of Civil Procedure ['CPC'] while stating as under:-
"Whereas the Judgment Debtors has been ordered under Award/Decree of the Arbitrator for necessary Execution of the Award/Decree passed on 17.12.2015 in Arbitration proceeding No.2/2014 to pay to the Decree Holder the sum of Rs.10,71,847.79 as noted in the margin and WHEREAS the said amount of Rs.10,71,847.79 has not be
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