M/S PRADEEP VINOD CONSTRUCTION CO. v. UNION OF INDIA

8. The issue that arises for consideration of this court in the present proceedings is that once the statutory period of 30 days (or as decided between the parties) for seeking correction, clarification and/or interpretation of an Award under section 33 of the Arbitration Act, 1996 has passed and the award has attained finality, can the executing court under the section 47 of CPC consider questions arising with respect to execution, discharge and/or satisfaction of the Award?

9. Section 36(1) of the Arbitration and Conciliation Act, 1996 deals with enforceability of an Award. It reads as under:-

10. A perusal of above provision shows that if the period for setting aside the Award under section 34 of the Arbitration and Conciliation Act, 1996 has expired, then the award shall be enforceable in the same manner as if it were a decree of the court under the provisions of the Civil Procedure Code,

1908. The said provision serves as a legal fiction, aimed to ensure that an Award rendered by an arbitral tribunal affords equal benefits of enforcement/execution, as one would get from a decree of the court. The Hon’ble Supreme Court in Union of India v. Vedanta Ltd., (2020) 10 SCC 1 in this regard has observed as under:-

decree or order are two different things. The legal fiction created is for the limited purpose of enforcement as a decree. The fiction is not intended to make it a decree for all purposes under all statutes, whether State or Central.” (emphasis supplied)”

70. A Constitution Bench of this Court in Bengal Immunity Co. Ltd. v. State of Bihar, held that legal fictions are created only for some definite purpose. A legal fiction is to be limited to the purpose for which it was created, and it would not be legitimate to travel beyond the scope of that purpose, and read into the provision, any other purpose how so attractive it may be. In State of Karnataka v. State of T.N., this Court held that:

”

11. In view of the above, a domestic award is enforceable as a decree after the expiry of three months (extendable by 30 more days) by way of the deeming provision under section 36(1) of the arbitration and Conciliation Act, 1996. Thereafter, the court has the power to enforce/execute an Award as a decree under the provisions of the Civil Procedure Code, 1908.

12. In the present case, the judgment debtor filed objections to the Award under Section 47 read with Order 21, CPC on the ground that the decree holder is a partnership firm and the opening line of the award records the decree-holder as a registered company under the Companies Act, 1956. Hence, the award, as made, cannot be executed. No application under section 33 of the Arbitration and Conciliation Act, 1996 seeking clarification or modification was preferred by either of the parties and the statutory period in pursuing the same expired. The judgment of the Hon’ble Division Bench of this court in SPS Rana (supra) has held that the period of 30 days for filing an application under section 33 of the Arbitration and Conciliation Act, 1996 seeking correction in the Award is not extendable since the Arbitrator becomes functus officio. The operative portion of SPS Rana (supra) reads as under:- “10… Seen in this light, it will be found that the period of 30 days provided for preferring the application under Section 33 of the Act is not extendable inasmuch as unless the application is so preferred, there is no Arbitrator thereafter. We find that the same conclusion has been reached in UOI Vs. Saboo Minerals Pvt. Ltd. 106 (2003) DLT 92 and in Ircon International Ltd. Vs. Budhraja Mining & Constructions Ltd. MANU/DE/8647/2007 by Single Judges of this Court.”

13. Additionally, the parties have not challenged the award under section 34 of the Arbitration and Conciliation Act, 1996. It is now a settled law that the courts cannot condone delay in filing/pursuing objections under section 34 of the Arbitration and Conciliation Act, 1996. Hence, the award passed in favour of the decree-holder has attained finality and is now enforceable as a decree.

14. In these circumstances, what happens to the Award if an application is not preferred under section 33 of the Arbitration and Conciliation Act, 1996? Will the party, who has an award in his/her favour, have no remedy? The answer is NO. 15. Under the vires of section 47, CPC, the executing court has the power to determine questions arising for execution of a decree. Section 47 of the Civil Procedure Code, 1907 reads as under:-

16. The Hon’ble Supreme Court in Pradeep Mehra v. Harijivan J. Jethwa, 2023 SCC OnLine SC 1395 explained the scope of section 47 of CPC. The operative portion of the same reads as under:-

challenged by filing a properly constituted suit or taking any other remedy available under law on the ground that the original defendant absented himself from the proceeding of the suit after appearance as he had no longer any interest in the subject of dispute or did not purposely take interest in the proceeding or colluded with the adversary or any other ground permissible under law.

13. The reality is that pure civil matters take a long time to be decided, and regretfully it does not end with a decision, as execution of a decree is an entirely new phase in the long life of a civil litigation. The inordinate delay, which is universally caused throughout India in the execution of a decree, has been a cause of concern with this Court for several years. In Rahul S. Shah v. Jinendra Kumar Gandhi, (2021) 6 SCC 418, this Court had observed that a remedy which is provided for preventing injustice (in the Civil Procedure Code) is in fact being misused to cause injustice by preventing timely implementation of orders and execution of decrees. Then, it had observed as under:

14. The above judgment is an important judgment in respect of Section 47 as well as Order XXI, CPC as the three Judge Bench decision of this Court not only condemned the abuse of process done in the garb of exercise of powers under Section 47 read with Order XXI, CPC, but also gave certain directions to be followed by all Civil Courts in their exercise of powers in the execution of a decree. It further directed all the High Courts to update and amend their Rules relating to the execution of decrees so that the decrees are executed in a timely manner. As far as Section 47 is concerned, this Court had stated as under: “24. In respect of execution of a decree, Section 47 CPC contemplates adjudication of limited nature of issues relating to execution i.e. discharge or satisfaction of the decree and is aligned with the consequential provisions of Order 21 CPC. Section 47 is intended to prevent multiplicity of suits. It simply lays down the procedure and the form whereby the court reaches a decision. For the applicability of the section, two essential requisites have to be kept in mind. Firstly, the question must be the one arising between the parties and secondly, the dispute relates to the execution, discharge or satisfaction of the decree. Thus, the objective of Section 47 is to prevent unwanted litigation and dispose of all objections as expeditiously as possible.

25. These provisions contemplate that for execution of decrees, executing court must not go beyond the decree. However, there is steady rise of proceedings akin to a retrial at the time of execution causing failure of realisation of fruits of decree and relief which the party seeks from the courts despite there being a decree in their favour. Experience has shown that various objections are filed before the executing court and the decreeholder is deprived of the fruits of the litigation and the judgment-debtor, in abuse of process of law, is allowed to benefit from the subject-matter which he is otherwise not entitled to.

26. The general practice prevailing in the subordinate courts is that invariably in all execution applications, the courts first issue show-cause notice asking the judgment-debtor as to why the decree should not be executed as is given under Order 21 Rule 22 for certain class of cases. However, this is often misconstrued as the beginning of a new trial. For example, the judgment-debtor sometimes misuses the provisions of Order 21 Rule 2 and Order 21 Rule 11 to set up an oral plea, which invariably leaves no option with the court but to record oral evidence which may be frivolous. This drags the execution proceedings indefinitely.”” (Emphasis Supplied)

17. In view of the above, the executing court has the authority to decide all questions arising between the parties for execution of a decree, though the scope of interreference is inherently limited. The executing court cannot go beyond the decree. However, when such a case arises wherein an Award has been passed and the same has attained finality and it is to be executed as a decree, it is the duty of the executing court to ensure that the decree is given its due effect. The Hon’ble Supreme Court in Meenakshi Saxena v. ECGC Ltd., (2018) 7 SCC 479 has observed as under:-

18. To enforce the award dated 23.09.2023, this court in the impugned order dated 02.08.2024, while dismissing the objections under section 47 read with Order 21 CPC filed by the judgment debtor, has held that the error in the Award is merely a typographical error and it does not affect the merits of the award in any manner. The said determination has been made, in exercise of its power under section 47 of CPC, which permits this court to determine questions arising between the parties for the purpose of satisfying the decree. The order dated 02.08.2024 is passed in exercise of those powers.

19. Additionally, the judgment of the Hon’ble Division Bench of this court in SPS Rana (supra) does not provide any benefit to the respondent since in that matter the issue in consideration was whether the time of 30 days as provided under section 33(1) of the Arbitration and Conciliation Act, 1996 is extendable and further whether the submission that the various documents and submissions in writing of the party had not been considered by the Arbitrator fall within the ambit of Section 33(1)(a) or (b) of the Act. The inter-relation of section 36(1) of the Arbitration and Conciliation Act, 1996 and section 47 of CPC was not dealt by the Hon’ble Division Bench.

20. Further, the objections raised by the judgment debtor that the decreeholder is not a registered partnership firm and therefore cannot pursue suits/proceedings in terms of section 69 of the Partnership Act, 1932 is a question of fact. The same does not seem to have been raised before the learned Arbitrator in the Statement of Defence and no petition under section 34 of the Arbitration and Conciliation Act, 1996, raising the said grounds, has been filed. Therefore, these objections cannot be raised at this juncture before an executing court.

21. In view of the above finding, the review petition is found meritless and is dismissed.