While dismissing a Revision Application, the Calcutta High Court has observed that a title execution petition cannot be dealt with by a Court in an execution of an arbitral award under the provisions of the Arbitration & Conciliation Act, 1996.

Challenge in the revision petition was made to the order passed by the Additional District Judge, wherein the application filed at the behest of the petitioner under Section 47 of the Code of the Civil Procedure (CPC) was dismissed.

The Single Bench of Justice Bibhas Ranjan De held, “In the case at hand, initially title execution case no. 09 of 2002 was filed admittedly before a wrong forum. Subsequently, arbitration execution no. 535 of 2018 was filed. Title execution petition cannot be dealt with by a Court in an execution of arbitral award under the provision of the Act of 1996.”

Advocate Subhasis Sarkar represented the Petitioner, while Advocate Chayan Gupta represented the Respondent.

Factual Background

One Radha Krishan Poddar, the predecessor in-interest of the decree holder, had instituted an execution proceeding to execute the award passed in the arbitral proceedings. The original award holder passed away, and the opposite parties, being the legal heirs of the original award holder, were substituted by the Court. In the year 2018, the opposite parties became aware of the fact that the Civil Judge had no jurisdiction and accordingly withdrew the proceeding and filed an execution proceeding afresh, being an arbitration execution for the execution of the arbitral award. The same was transferred to the Additional District Judge.

During the pendency of such execution proceeding, the decree holder took out an application under Order 21 Rule 37 & 38 read with 3 Section 151 of the CPC. Upon obtaining notice of the same, the petitioners filed an application under Section 47 of the CPC questioning the execution of the said decree. The Executing Court vide its impugned order dismissed the application on the ground that there was no scope for the executing Court to go beyond the decree. Hence, the matter reached the High Court.

Reasoning

Elucidating upon the law relating to limitation, the Bench said, “Like a protective shield guarding the right, in my humble opinion, Section 14 of the Limitation Act stands as a sentinel, carefully preserving the precious period of limitation within its legislative embrace.”

It further stated, “In the case in hand the petition for withdrawal dated 07.09.2018 clearly spells out prayer for withdrawal on the ground of defect of jurisdiction and particularly in paragraph 15 of the application opposite party/ decree holder made a prayer for withdrawal for filing the same before appropriate forum. Therefore, absence of express liberty in the order cannot, in my opinion, affect the period of limitation while opposite party/ decree holder specifically made a prayer for withdrawal of the execution case for filing before the appropriate forum, for want of jurisdiction. Moreso, prayer for filing the execution case before the appropriate forum was not refused by the Learned Judge in the order dated 29.09.2018 in connection with Title Execution No. 09 of 2002.”

The High Court explained that challenging the appointment of an arbitrator for the first time during execution proceedings is generally not permissible. It was further explained that under the Arbitration and Conciliation Act, 1996, the issue of an arbitration agreement can be raised at various stages. A party can challenge the existence or validity of the agreement before the arbitral tribunal (Section 16) or in court proceedings (Section 8).

“According to provision of Section 8 of the Act of 1996 the party raising the question of arbitration agreement can apply before the appropriate forum at the time of submitting his first statement on the substance of the dispute. Section 16 (1) (b) clearly spells out that the said question regarding existence of arbitration agreement can be raised before the arbitral tribunal at the stage not later than the submission of the statement of defence. Therefore, significant provision of Section 8 & Section 16 of the Act of 1996 bestowed upon parties the valuable prerogative to challenge and contest the validity, scope & enforceability of an arbitration agreement, thereby establishing a crucial safeguard in arbitral process”, the Bench said.

Thus, finding no ground to interfere with the order impugned, the Bench dismissed the revision application.

Cause Title: Sri Arun Kumar Jindal & Anr. VS. Smt. Rajni Poddar & Ors (Case No.: C.O.441 of 2023)

Appearance:

Petitioner: Advocates Subhasis Sarkar, Subrata Bhattacharjee, Bikramjit Mandal, SK. Mustafi Rahaman

Respondent: Advocates Chayan Gupta, Rittick Choudhury, Shoham Sanyal

Click here to read/download Order


Calcutta High CourtJustice Bibhas Ranjan De

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.