S. Chandrashekhar, J. - (1.) THE petitioner -L&T Finance Limited is aggrieved by order dated 16.07.2014 passed in Execution Case No. 08 of 2013 whereby, the Civil Judge, Senior Division No. 1 Hazaribagh has held that the City Civil Court, Mumbai has original jurisdiction to entertain the Execution Case and the Court at Hazaribagh can entertain the Execution Case, only if the Execution Case is transferred under Order XXI Rule 6 and 8 C.P.C. to the Court of Principal District and Sessions Judge, Hazaribagh.
(2.) THE petitioner -Company is registered under the Companies Act, 1956 and its registered as well as corporate offices are situated at Mumbai. The petitioner is one of the largest Non -Banking Financial Company (NBFC) in India and it is engaged in providing finance for the commercial vehicles and equipments. A loan cum hypothecation agreement dated 09.01.2007 was executed between the petitioner and the respondent No. 1 at Ramgarh within the territorial jurisdiction of the Hazaribagh Court. The respondent Nos. 2 and 3 are the guarantors for the said loan to the respondent No. 1. The cost of the vehicle, one Tractor and Tiller was Rs. 530476/ - for which a loan of Rs. 3, 35,000/ - was given to respondent No. 1, which was to be repaid in 48 months. The E.M.I. was Rs. 9771/ -. At the time of agreement, the respondent No. 1 executed one demand promissory note for the loan amount of Rs. 3,35,000/ - and irrevocable power of attorney for the vehicle. The guarantors have executed letter of guarantee. After the respondent No. 1 failed to make payment of the loan amount, the petitioner repossessed the vehicle on 13.07.2009 and sold the vehicle for Rs. 1,50,000/ -. An Arbitration proceeding was initiated by the petitioner and one Mr. Subodh P. Sirur was appointed as arbitrator vide notice dated 23.01.2012. A statement of claim for recovery of a sum of Rs. 1,31,391/ - as on 07.09.2001 and interest at the rate of Rs. 36% per annum on the said amount from 08.09.2009 was filed on 23.01.2012. The sole arbitrator passed award on 31.03.2012 directing the loanee and the guarantors to pay jointly and severely to the claimant a sum of Rs. 1,31,395/ - with further interest at the rate of 24% per annum from 08.09.2009 till, payment or realisation. Consequently, the petitioner filed Execution Case No. 08 of 2013 under Section 36 of the Arbitration Act in the Court of Civil Judge, Senior Division No. I, Hazaribagh which has been dismissed as not maintainable. The learned counsel for the petitioner submits that, the object and purpose of the Arbitration and Conciliation Act, 1996 are reflected in provisions contained in Section 5, Section 9, Section 35, Section 36 and Section 42. The various provisions under Arbitration and Conciliation Act, 1996 are intended at minimizing the supervisory role of the Courts in Arbitration proceedings. It is further submitted that, the award passed by the arbitrator under the Arbitration and Conciliation Act, 1996 is not a decree under Section 2(2) C.P.C. and Section 19 of the Arbitration and Conciliation Act, 1996 provides that Arbitral Tribunal is not bound by the provisions of the Code of Civil Procedure, 1908 and therefore, the legal fiction created under Section 36 that "the award shall be enforced in the same manner as if it were a decree of the Court" would not mean that the award can be executed only by the Court under whose jurisdiction it was made. Further elaborating his contention, the learned counsel submits that, since the respondents are residing within the territorial limit of the Hazaribagh Court and the subject matter in the Execution Case is situated within the territorial limit of the Hazaribagh Court, though the Court at Mumbai also may have jurisdiction to execute the award, the Execution Case filed in the Hazaribagh Court cannot be dismissed as not maintainable.
(3.) IN "Paramjeet Singh Patheja v. ICDS Ltd." reported in : (2006) 13 SCC 322, while examining section 36 of the Arbitration and Conciliation Act, 1996, the Hon'ble Supreme Court held that section 36 of the 1996 Act goes further than section 15 of the Arbitration Act, 1899 and makes it clear beyond doubt that enforceability is only to be under the Code of Civil Procedure. The legal fiction thus created under section 36 is for the limited purpose of enforcement as a Decree. In "Paramjeet Singh", it has been held that award made by an arbitrator is not a decree of the Court as contemplated under Section 2(2) C.P.C. however, Section 36 of the Arbitration and Conciliation Act, 1996 creates a legal fiction in as much as, the award under the Act shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a decree of the Court. The legal fiction thus, created under Section 36 though, recognises that the award is not decree of a Court still, it has to be enforced under the provisions of the Code of Civil Procedure, 1908. The expression "the award shall be enforced under the Code of Civil Procedure" makes it abundantly clear that in so far as, enforcement of the award is concerned, the provisions of the Code of Civil Procedure would govern the proceeding. The contention of the learned counsel for the petitioner that Section 19 of the Act excludes the application of the Code of Civil Procedure is misconceived. Section 19 merely provides that the Arbitral proceeding may not be conducted strictly following the provisions of the Code of Civil Procedure and the Indian Evidence Act. Moreover, Section 19 cannot be extended to cover the proceeding in the Court. It is apparent from the scheme of the 1996 Act that what is contemplated under the 1996 Act is minimum intervention of the Courts in the arbitration process and it does not restrict the provisions and applicability of other enactments after the award is rendered by the arbitrator. The provisions under the Arbitration and Conciliation Act, 1996 do not lay down a specific procedure of execution of the award. Though, Section 19 of the Act restricts the applicability of the code of Civil Procedure and the Indian Evidence Act insofar as, proceeding before the arbitral tribunal is concerned however, the restriction contained under Section 19 of the Act cannot be extended to the procedure in the execution proceeding.;