Telangana High Court: Section 47 CPC Not An Alternative Route For Challenging Arbitral Award Without Exhausting Appeal U/s. 37 A&C Act

The Court dismissed a Civil Revision Petition challenging an Order by the Commercial Court, which dismissed an Application by the Petitioners under Section 47 of the CPC to dismiss an Execution Petition by the Respondents. The High Court also imposed costs of Rs. 5 Lakhs on the Petitioners.

A Division Bench of Justice Moushumi Bhattacharya and Justice BR Madhusudhan Rao ordered, “We hence do not find any reason to interfere with the findings of the Commercial Court. We also agree with the views expressed by the Commercial Court that the petitioners have not given any justification under the law for pursuing an alternative route for challenging the legality of the Award, without exhausting their rights under the pending Appeal under section 37 of the 1996 Act.”

Senior Advocate CV Mohan Reddy appeared for the Petitioner, while Senior Advocate A Venkatesh represented the Respondents.

Brief Facts

The Respondent, the Award-holder, filed an Execution Petition for the enforcement of the arbitral award.

Despite their pending appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (the Act) and the dismissal of their attempts to recall the conditional stay, the Petitioners (the Judgment-debtors) filed an application under Section 47 of the CPC in the ongoing Execution Petition.

Court’s Reasoning

The High Court remarked, “A careful reading of Section 36 of the Act would make it clear that the CPC only has a limited role in the matter of enforcement and stay of the Award. The language of section 36(1) emphasizes that the Award shall be enforced in accordance with the provisions of the CPC in the same manner as if it were a decree of the Court.”

The Court pointed out that “Section 47 of the CPC does not apply to the facts of this case since the Award is not a decree as defined under section 2(2) of the CPC…The petitioners failed to demonstrate any subsequent events after dismissal of the SLP by the Supreme Court on 09.04.2024 which would justify maintaining the section 47 application.”

The Bench explained that “In essence, the objections/grounds available to a judgment-debtor under section 47 of the CPC are distinct from those available to an Award-Debtor under section 36 of the 1996 Act. A judgment passed by a Court of law and an award made by an Arbitral Tribunal arise from different sources of conflict, procedures and the parties’ willingness to adjudicate their dispute in a forum of their choice (culminating in an award).”

The Bench held, “We find the conduct of the petitioners not only to be in blatant disregard of the law but also evincing desperation to avoid the processes of law by pushing back their obligation to make payment to the Award-holder by filing one vexatious proceeding after another. The petitioners’ selective reliance on the CPC for mounting a challenge to the Award under section 47 of the CPC is contrary to law. In fact, the petitioners have no explanation for suddenly switching from the main line to a chord line for reaching the same distinction i.e., for nullifying the Award.”

Consequently, the Court ordered, “C.R.P.No.787 of 2025 is accordingly dismissed as not maintainable, with costs of Rs.5 Lakhs to be paid by the petitioners to the respondent within two weeks from date. The respondent/Award-holder has been deprived of the fruits of the Award since 2019 and has instead been taken for a misconceived ride across Courts for more than 6 years.”

Accordingly, the High Court dismissed the Petition.

Cause Title: Hyderabad Metropolitan Development Authority v. Cyberabad Expressway Limited. (CIVIL REVISION PETITION No.787 of 2025)

Appearance:

Petitioner: Senior Advocate C.V. Mohan Reddy; Advocate K. Dhananjaya Naidu

Respondents: Senior Advocate A. Venkatesh; Advocate Ch. Pushyam Kiran

Click here to read/download the Judgement