The court has the power to stay execution proceedings initiated to implement an arbitral award during the pendency of a writ petition challenging the award, especially when the judgment debtor has already moved an application before the executing court for recall of the order for attachment and sale of its property.

Headnote:
Arbitration - Arbitration and Conciliation Act, 1996 - Sections 36, 37 - The court stayed the execution proceedings initiated by the decree holder to implement the arbitral award, as the judgment debtor had already moved an application before the executing court to recall the order for attachment and sale of its property. The court directed the decree holder to file its objections in the execution proceedings, and the executing court was asked not to take any further coercive action against the judgment debtor without leave of the court or until the writ petition was disposed of.
Fact of the Case:

The petitioner company filed a writ petition challenging an arbitral award and also filed an application for stay of the execution proceedings initiated by the decree holder to implement the award. The coordinate bench had earlier recorded the submission of the decree holder's counsel that he would not proceed further during the pendency of the writ petition, but the decree holder subsequently initiated execution proceedings and obtained an order for attachment and sale of the petitioner's property.
Finding of the Court:

The court found that the petitioner company was under a bona fide impression that the decree holder would not proceed further for implementation of the impugned award during the pendency of the writ petition, based on the earlier order of the coordinate bench. The court also noted that the petitioner had already moved an application before the executing court to recall the order for attachment and sale of its property, and the matter was posted for hearing the decree holder's objections. The court directed the decree holder to file its objections in the execution proceedings, and the executing court was asked not to take any further coercive action against the petitioner without leave of the court or until the writ petition was disposed of.
Issues: Whether the execution proceedings initiated by the decree holder to implement the arbitral award should be stayed, given the pendency of the writ petition challenging the award.
Ratio Decidendi: The court stayed the execution proceedings as the petitioner had already moved an application before the executing court to recall the order for attachment and sale of its property, and the matter was pending hearing of the decree holder's objections. The court directed the decree holder to file its objections in the execution proceedings, and the executing court was asked not to take any further coercive action against the petitioner without leave of the court or until the writ petition was disposed of.
Final Decision: The I.A. stands disposed of.

ORDER

. This matter is taken up through hybrid mode.

2. This I.A. has been filed with a prayer to stay the execution proceeding in Execution Case No.180 of 2022, pending in the Court of District Judge, Puri as well as order dated 27.06.2024 passed by the said Court to attach and sale the land and building of M/s. Hotel Sea Point Pvt. Ltd to satisfy the Arbitral Award dated 01.08.2022 passed by the learned Sole Arbitrator.

3. Mr. S. Rautray, learned Counsel for the Petitioner submits, though his client has filed I.A. No.16365 of 2022 along with the present Writ Petition for stay operation of the impugned Award passed by the learned Arbitrator, in view of the submissions made by learned Counsel for the Opposite Party on 13.01.2023, which has been duly recorded vide the said order dated

13.01.2023, the coordinate Bench did not pass any interim order on the said application. Thereafter, the matter was finally heard by this Bench on 10.04.2024 and the judgment is yet to be pronounced.

4. Mr. S. Rautray, learned Counsel for the Petitioner further submits, despite such submission made before the coordinate Bench, the Opposite Party has initiated execution proceeding for implementation of the Arbitral Award impugned in the present writ petition and pursuing the same, as a result of which the order dated 27.06.2024 has been passed by the executing Court for attachment and sale of the property of the Petitioner Company and unless the execution proceeding is stayed his client will be irreparably prejudiced and the Writ Petition will become infructuous.

5. Mr. Pal, learned Counsel for the Opposite Party submits, copy of the I.A. was served on him yesterday (18.07.2024), hence he is unable to file Objection to the I.A. within a short time and he may be granted at least a week’s time to file Objection to the I.A.

6. Apart from the said prayer for filing Objection, Mr. Pal, learned Counsel for the Opposite Party, drawing attention of this Court to order dated 10.07.2024 passed in Execution Case No.180 of 2022, which has been appended to this I.A. as Annexure-1, submits, the Petitioner has already moved before the executing Court for recall of the sale order dated 27.06.2024 by filing a petition to the said effect on 10.07.2024. A petition being moved on 10.07.2024, the same was taken up on the strength of an advance petition and now the matter stands posted to 25.07.2024 for filing Objection by his client, who is the Decree Holder in the said execution proceeding.

7. Mr. Pal further submits, since the Petitioner has already moved before the executing Court for recall of the order dated 27.06.2024, simultaneously moving an application before this Court for stay of execution proceeding is misconceived and the Court should not entertain this I.A. at this juncture.

8. As is revealed from the record, the coordinate Bench on 13.01.2023, passed the following order:-

“ Order dated 13.01.2023 This matter is taken up through hybrid mode.

2. As requested by Mr. A. Pal, learned counsel for the opp. Party, list this matter in the week commencing 30th January, 2023.

3. Basing on the submission made by Mr. A. pal that the opposite party will not proceed further in the matter, this Court is not passing any interim order.

4. List this matter in the week commencing 30th January, 2023.”

(Emphasis supplied) 9. From the said order passed by the coordinate Bench, it can be well revealed that the Petitioner Company was under a bonafide impression that the Opposite Party Company shall not proceed further for implementation of the impugned Award passed by the Arbitral Tribunal during pendency of the Writ Petition.

10. As is further revealed from the order sheet appended to this I.A. in Execution Case No.180 of 2022, an application under section 36 of the Arbitration and Conciliation Act, 1996 was moved before the District Judge, Puri on 16.12.2022 i.e. well before the order dated 13.01.2023 was passed by the coordinate Bench in this Writ Application and thereafter, being pursue

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2024 Supreme(Online)(ORI) 45

ORISSA HIGH COURTSanjay Kumar Mishra, JM/S HOTEL SEA POINT PVT. LTD. PURI – AppellantVersusM/S BLUELINE RESORTS PVT. LTD. BBSR – RespondentWP(C)

ORISSA HIGH COURT
Sanjay Kumar Mishra, J
M/S HOTEL SEA POINT PVT. LTD. PURI – Appellant
Versus
M/S BLUELINE RESORTS PVT. LTD. BBSR – Respondent
WP(C)