Skip to main content

Executing court is to execute decree and not check on facts behind the decree

In Punjab State Civil Supplies Corporation Ltd. & Anr. vs M/s Atwal Rice & General Mills Rep. by its Partners,  The Supreme Court bench of Justices Abhay Manohar Sapre and R.Banumathi, on
July 11, in an arbitration case, indicted both the executing Court and the Punjab and Haryana High Court, for “total non-application of mind” and set aside their orders.

In the instant case, the agreement between the appellant and the respondent, entered into in 1996, was the subject of arbitration, following the dispute between them. In terms of the agreement, the appellant was to give their paddy to the respondents, who were to process the paddy in their rice mill and the rice, produced after processing paddy, were to be delivered to the Food Corporation of India (FCI) for and on behalf of the appellant by the respondents.

The dispute arose because the respondents failed to process and deliver the full quantity of rice in terms of agreement to the FCI much less within the time framed. Therefore, it resulted in money losses to the appellant in addition to sustaining the damages due to non-delivery of the rice. In 2001, the Arbitrator allowed the appellant’s claim in part and passed a money award with interest payable at the rate of 21 per cent with effect from January 1, 1999 till realisation in appellant’s favour.

The respondents first challenged the Award before the ADJ, Jalandhar. The ADJ dismissed the challenged on June 4, 2009, and upheld the award. As the respondents did not pursue their appeal in the High Court, the 2001 award became final.

But the respondents did not pay the awarded amount to the appellants. The appellants, therefore, filed Execution Petition before the ADJ, Jalandhar for enforcement of the award. However, the Executing Court, by its order dated 3.11.2012, upheld the objections raised by the respondents, and dismissed the appellant’s execution application.

The High Court dismissed the revision filed by the appellant and upheld the order of the Executing Court subsequently. In Paragraph 27 of the judgment, the Supreme Court held that the executing court and the High Court neither understood the controversy, nor decided the same in accordance with law. Indicting them for total non-application of mind, the Court further observed that both the courts below neither set out the facts properly, nor dealt with the issues arising in the case and applied the principle of law which governs the controversy.

“Both the orders are, therefore, wholly perverse, illegal and without jurisdiction”, the SC bench concluded and held that an inquiry into facts cannot be held in execution proceedings in relation to award/decree.

“It is a well-settled principle of law that the executing Court has to execute the decree as it is and it cannot go behind the decree. Likewise, the executing Court cannot hold any kind of factual inquiry which may have the effect of nullifying the decree itself but it can undertake limited inquiry regarding jurisdictional issues which goes to the root of the decree and has the effect of rendering the decree nullity”, said the Bench.

The SC bench also awarded costs quantified at Rs.25000 payable by the respondents to the appellant.

Comments

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...

When debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company

In SHITAL FIBERS LTD.  vs  INDIAN ACRYLICS LIMITED, as per the respondent, appellant had made a payment of Rs.61,83,218/­. However, there was an outstanding balance of Rs.8,92,723/­ as on 28.7.2008. Since despite repeated requests, balance amount was not paid, the respondent issued a statutory notice to the appellant. The same was duly responded to. As the payment was not made despite notice being duly served on the appellant, the respondent filed the aforesaid Company Petition seeking winding up of the present appellant for its inability to pay admitted debts. The learned Company Judge vide order dated 28.9.2015 admitted the Company Petition. However, while doing so, the learned Company Judge observed, that since the appellant was an on­going concern, an opportunity should be granted to it to settle the accounts with the respondent by 31.12.2015. Only in case of failure of the settlement, the citation was directed to be published. On appeal, the Division Bench of the High Cou...

Abusing in-laws a ground for divorce: SC

Abusing in-laws and not allowing them to reside in the matrimonial home by a woman amounts to cruelty to her spouse, ground enough for grant of divorce, the Supreme Court has ruled while allowing an NRI's plea for legal separation from his wife. A bench of Justices Vikaramajit Sen and A M Sapre said such incidents could not be termed as "wear and tear" of family life as held by Madras High Court which had said that a couple must be prepared to face such situations in matrimonial relationship. The NRI had filed a divorce petition alleging that his wife was abusive to his family members and did not allow his parents and siblings to stay in his house when they visited the US. Referring to an incident, the husband told the court that his wife had once locked him and his sister out of the house and abused them saying they belonged to a 'prostitute family'. She refused to allow her sister-in-law to enter the house and even lodged a police complaint against her hu...