J U D G M E N T

% 11.03.2022 EX.APPL.(OS) 607/2021

1. The precise scope of Order XXI Rule 46(1)¹ of the Code of Civil Procedure, 1908 (CPC), the concept of “debt” within its 1 46. Attachment of debt, share and other property not in possession of judgment-debtor. – (1) In the

case of –

(a) a debt not secured by a negotiable instrument, (b) a share in the capital of a corporation, (c) other movable property not in the possession of the judgment-debtor, except property deposited in, or in the custody of, any Court, the attachment shall be made by a written order prohibiting,—

(i) in the case of the debt, the creditor from recovering the debt and the debtor from making payment thereof until the further order of the Court;

meaning, the extent of the onus on the judgement debtor who seeks to invoke the provision, and the position, in law, in a situation in which the garnishee disputes the debt of which the judgement-debtor seeks attachment, are seminal issues which arise for consideration in this application.

Facts

2. OMP (Enf) (Comm) 172/2019 has been preferred under Section 36 of the Arbitration and Conciliation Act, 1996 (“the 1996 Act”) read with Order XXI of the Code of Civil Procedure, 1908 (CPC), seeking execution of a domestic arbitral award dated 18^th April, 2015, passed by a three member Arbitral Tribunal.

3. The aforesaid mentioned arbitral award (“the award”, hereinafter) awarded, to the petitioner and against Respondent 1, Neelachal Ispat Nigam Limited (NINL), ₹ 15 crores and ₹ 50 lacs, with simple interest @ 10% per annum w.e.f. 30^th January, 2011, along with costs of ₹ 60 lacs.

4. NINL and the petitioner have both assailed the award before the learned District Judge, Khurda, Bhubaneswar, under Section 34 of the 1996 Act, vide Arb P 67/2015, filed on 15^th July, 2015 and Arb P 68/2015, filed on 17^th July, 2015. The challenge in the petitioner’s (ii) in the case of the share, the person in whose name the share may be standing from transferring the same or receiving any dividend thereon;

(iii) in the case of the other movable property except as aforesaid, the person in possession of the same from giving it over to the judgment-debtor.

Section 34 petition is limited to the issue of the rate of interest awarded by the learned Arbitral Tribunal. Both petitions are currently pending. There is no stay, till date, of the award.

5. The petitioner has also filed Ex Petition 583/2018 before the learned District Judge, Khurda, seeking execution of the award by way of attachment of the assets of NINL situated within the territorial jurisdiction of the learned District Judge, Khurda. That petition is also pending as on date.

Statutory and precedential basis for filing the present petition

6. Section 36² of the 1996 Act, as it read till 2015, envisaged enforcement of a domestic award, as if it were a decree of a Court, when the time for challenging the award under Section 34 had expired or where an application under Section 34 had been made and rejected. This resulted in a situation in which execution of awards remained pending for long periods, merely because the award had been challenged under Section 34, even where there was no stay of operation of the award. Consequent to detailed deliberations, therefore, Section 36 was amended, [336. Enforcement —] by Section19 of the Arbitration 236. Enforcement — Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced

under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court.

(1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall been forced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court.

(2) Where an application to set as