All HC | Can Executing Court’s order for enforcement of arbitral award be challenged under Art. 226? HC decides

Allahabad High Court: Dr Yogendra Kumar Srivastava, J., held that,

Section 36 of the 1996 Act makes the arbitral award capable of being enforced in a like manner as a decree without any further judicial intervention.

Instant petition was filed under Section 226 of the Constitution of India principally seeking a writ of certiorari for quashing of the order passed by the Special Judge, SC/ST Act arising out of Execution Case.

Question for Consideration

Whether an order passed by the executing court during the course of enforcement of an arbitral award would be amenable to a writ of certiorari under Article 226 of the Constitution of India?

Analysis, Law and Decision

The A&C Act, 1996 was enacted to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation.

In terms of Section 36 (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 be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the court.

When 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), the award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the Court.

Therefore, the enforcement of an arbitral award under the 1996 Act, is to be made as per the terms of Section 36 and, unlike the 1940 Act, there was no requirement of filing an application to make the award a rule of the Court. Under the said Act, it would not be possible to resist the enforcement of an award by contending that the award has not been converted into a decree for the reason that the award has now to be enforced as per the procedure under the CPC in the same manner as if it were a court decree.

Question as to whether the award of the arbitrator under the 1996 Act tantamount to a decree or not was considered in Leela Hotels Ltd. v. Housing and Urban Development Corporation Ltd., (2012) 1 SCC 302, wherein it was held that the language used in Section 36 makes it clear that such an award has to be enforced under the CPC, in the same manner as if it were a decree of the Court. “…the language of the section leaves no room for doubt as to the manner in which the award of the arbitrator was to be accepted.”

“…provision for enforcement of an award, as per terms of Section 36, having been provided for in the same manner as if it were a decree of the court, it would follow that the court enforcing the award would exercise powers under the CPC which are available to a court executing a decree. This power would not be limited or trammelled by any other provision of the Act, 1996.”

Court added that execution is the enforcement of decree by a judicial process which enables the decree-holder to realise the fruits of the decree in his favour. The court enforcing the award would be a civil court exercising judicial powers and the orders to be passed in these proceedings would be judicial orders.

Whether judicial orders of a civil court would be amenable to writ jurisdiction under Article 226 came up for consideration in the case of Radhey Shyam v. Chhabi Nath, (2015) 5 SCC 423.

The law laid down in the nine-Judge Constitution Bench in the case of Naresh Shridhar Mirajkar v. State of Maharashtra, AIR 1967 SC 1 was also referred, wherein after considering the history of writ of certiorari and various English and Indian decisions, a conclusion was drawn that “certiorari does not lie to quash the judgements of inferior courts of civil jurisdiction”.

3-Judge Bench in the case of Radhey Shyam v. Chhabi Nath, (2015) 5 SCC 423 extensively referring to the legal position on the scope of writ of certiorari concluded that orders of civil court stand on different footing from the orders of authorities or tribunals or courts other than judicial/civil courts.

In the above decision, expression “inferior court” is not referable to judicial courts and accordingly judicial orders of civil courts are not amenable to a writ of certiorari under Article 226 and a writ of mandamus does not lie against a private person not discharging any public duty. It was also held that the scope of Article 227 is different from Article 226.

In view of the above, the legal position that emerged was that,

Judicial orders of civil court would not be amenable to writ jurisdiction under Article 226 and that challenge thereagainst can be raised under Article 227.

 High Court held that an order passed by the executing court in proceedings for enforcement of an arbitral award under Section 36 of the Act 1996, being a judicial order passed by a civil court of plenary jurisdiction, the same would not be amenable to a writ of certiorari under Article 226 of the Constitution of India. [Magma Leasing Ltd. v. Badri Vishal,  2021 SCC OnLine All 806, decided on 18-11-2021]


Advocates before the Court:

Counsel for Petitioner: C.K. Parekh

Counsel for Respondent: S.C., Shri Prakash Dwivedi

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