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...

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.

Procedure to be followed on admissibility of additional evidence at appeal stage

In The Corporation of Madras vs M. Parthasarathy & Ors., the trial court had allowed the respondent company to file evidence in the form of photocopies and had dismissed all the four suits filed by the respondents with costs as the evidence were in the form of photocopies and were objected to by the respondents. On appeal the Additional District Judge allowed the respondents to file additional evidence in the form the original documents of the earlier admitted photocopies and based on the same allowed the appeal. In its turn the High Court also dismissed the appeal filed by the appellants who in turn approached the Supreme Court. The Supreme Court decided that the first Appellate Court committed two jurisdictional errors in allowing the appeals.  Referring to earlier judgements of the Supreme Court in Land Acquisition Officer, City Improvement Trust Board vs. H. Narayanaiah & Ors., , Shalimar Chemical Works Ltd. vs. Surendra Oil & Dal Mills (Refineri...