Quashed

Surendra Aayam v. Magma Fincorp Ltd.

Chhattisgarh HC11 Aug 2024WP227/169/2020

Case brief

AI extract

What is this about?

Writ petition challenging a non-bailable warrant issued during execution of an arbitral award. The High Court distinguished the case from *ARK Builders* because the judgment debtors had already filed an appeal under Section 34, and quashed the arrest warrant without prior show-cause notice under Section 51 CPC.

What did the court decide?

The order issuing non-bailable warrant is set aside; the executing court is directed to follow Section 51 CPC provisions.

Surendra Aayam Vs Magma Fincorp Ltd. — Arbitration | Chhattisgarh HC (2024)

1 / 6

2024:CGHC:30272

NAFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

¶5

W.P(227) No. 169 of 2020

¶6

Surendra Aayam S/o Chhatruram Aayam, Aged About 45 Years R/o Village - Pampapur Post - Khadgawan Tahsil - Pratappur District - Surajpur Chhattisgarh.

¶7

Chhatruram Aayam S/o Dhanuram Aayam Aged About 70 Years R/o Village - Pampapur Post - Khadgawan Tahsil - Pratappur District - Surajpur Chhattisgarh. ... Petitioners

¶8

versus

¶9

Magma Fincorp Ltd., Registered Office 24 Park Street, Kolkatta Branch Office Kirti Complex Rajendra Nagar Chowk, District - Bilaspur Chhattisgarh

¶10

Ghasiram S/o Son Sai, Aged About 80 Years R/o Village - Palargha, Post - Kotiya, Tahsil - Pratappur - District - Surajpur Chhattisgarh.

¶11

... Respondents

¶12

For Petitioners: : For Respondent No.1: :

¶13

Hon'ble Shri Justice Deepak Kumar Tiwari Order on Board

¶14

12.08.2024

¶15

This Petition has been filed under Article 227 of the Constitution of India assailing the legality and validity of the order dated 13.01.2020 passed by the District Judge, Surajpur, District Surajpur in Execution Case No.13/15 whereby, the trial Court has directed for issuance of non

¶16

2 / 6

¶17

bailable warrant against the Petitioners and imposed cost of Rs.200/while dismissing their objection.

¶18

Brief facts of the case are that the Petitioners have purchased a tractor on finance and in the said transaction, an ex parte award has been passed by the Arbitrator in favour of Respondent No.1/decree holder on 26.05.2015. The Petitioners were given an unsigned photocopy of the award dated 26.05.2015 for which, they have approached the Execution Court alleging that the execution application was premature as compliance of Section 31(5) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’) was not made prior to filing of the execution application. The Petitioners’ objection was dismissed by the executing Court. Hence this Petition.

¶19

Shri Agrawal submits that compliance of Section 31(5) of the Act of 1996 is mandatory according to which, after the arbitral award is made, a signed copy shall be delivered to each party. He further submits that the copy of the award has been supplied at the time of execution, therefore, continuation of execution proceedings are bad in law. He prays to set aside the award impugned while placing reliance on State of Maharashtra & Ors. ARK Builders Private Limited reported in (2011) 4 SCC 616 wherein, the relevant paras i.e. 14 & 15 read thus:-

¶20

"14. We are supported in our view by the decision of this Court in Union of India v. Tecco Trichy Engineers & Contractors, (2005) 4 SCC 239; in paragraph 8 of the decision it was held and observed as follows:

¶21

‘The delivery of an arbitral award under sub-section (5) of Section 31 is not a matter of mere formality. It is a matter of substance. It is only after the stage under Section 31 has passed that the stage of termination of arbitral proceedings within the meaning of Section 32 of the Act arises. The delivery of arbitral award to the party, to

¶22

3 / 6

¶23

be effective, has to be ‘received’ by the party. This delivery by the Arbitral Tribunal and receipt by the party of the award sets in motion several periods of limitation such as an application for correction and interpretation of an award within 30 days under Section 33(1), an application for making an additional award under Section 33(4) and an application for setting aside an award under Section 34(3)and so on. As this delivery of the copy of award has the effect of conferring certain rights on the party as also bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation which would be calculated from that date, the delivery of the copy of award by the Tribunal and the receipt thereof by each party constitutes an important stage in the arbitral proceedings.

¶24

The highlighted portion of the judgment extracted above, leaves no room for doubt that the period of limitation prescribed under section 34(3) of the Act would start running only from the date a signed copy of the award is delivered to/received by the party making the application for setting it aside under section 34(1) of the Act. The legal position on the issue may be stated thus. If the law prescribes that a copy of the order/award is to be communicated, delivered, dispatched, forwarded, rendered or sent to the parties concerned in a particular way and in case the law also sets a period of limitation for challenging the order/award in question by the aggrieved party, then the period of limitation can only commence from the date on which the order/award was received by the party concerned in the manner prescribed by the law.”

¶25

Alternatively, Shri Mukhopadhyay, learned Counsel for Respondent No.1/decree holder submits that against the award passed by the Arbitrator, the Petitioners/judgment debtors have filed an Appeal. He has drawn attention of this Court towards the document annexed by the Petitioners themselves which reveals that by the registered post, the signed copy has been sent by the Arbitrator to the judgment debtors on 09.06.2015 and the Petitioners have challenged the award by filing an Appeal, therefore, the ratio laid down in the matter of State of Maharashtra & Ors. ARK Builders Private Limited (supra) is

¶26

4 / 6

¶27

distinguishable in facts and does not apply to the instant case. He further submits that the said Appeal has been dismissed on the ground of limitation.

¶28

Upon being asked, Shri Mukhopadhyay fairly admits that in support of the application, to enforce the execution by arrest and detention, no affidavit has been filed by the judgment debtor and no such document has been filed that the judgment debtor has or has had, since the date of decree, the means to pay the amount of the decree or some substantial part thereof. He further fairly admits that the judgment debtors, through their Counsel, have participated in the execution proceedings and raised an objection and warrant has been issued.

¶29

In reply, Shri Agrawal submits that it is only when the execution notice has been served along with a copy of the award, the Petitioners have come to know about the same and thereafter, they have challenged the said award under Section 34 of the Act of 1996 before the appellate Court, which was dismissed and thereafter, they have not challenged the said order any further.

¶30

Heard learned Counsel for the parties, perused the award impugned as also the documents annexed with the Petition carefully.

¶31

Admittedly, after passing of the impugned award by the Arbitrator, the Petitioners have availed the remedy of the Appeal under Section 34 of the Act of 1996, which was dismissed and the Petitioners have not challenged the said award any further. Perusal of the impugned order reveals that no such objection has been raised that the signed copy of the award has not been supplied to the Petitioners in terms of Section 31(5) of the Act of 1996 and only an averment has been made that no

¶32

5 / 6

¶33

statement has been given by the decree holder to the judgment debtors. Nowhere it has been stated that there was any breach in the compliance of statutory provisions. However, in the Writ Petition, the said fact has been developed. Be that as it may, as the Petitioners have availed the remedy before the appellate Court, therefore, the ratio laid down in the matter State of Maharashtra & Ors. ARK Builders Private Limited (supra) is distinguishable from the facts of the present case and is of no help to the Petitioners.

¶34

In the present case, the Petitioners/judgment debtors have participated in the execution proceedings, however, the learned executing Court has not issued any show cause notice to them though they have appeared before the Court through their Lawyer and the Court, at the first instance, may direct the Counsel to present the Petitioners/judgment debtors in person to answer as to why in execution of the award, they may not be sent to prison. Even before passing of such harsh order under Section 51 CPC, to enforce execution, the execution Court is required to follow provisions of (a), (b) & (c) to the said Section, which read as under:-

¶35

“(a) that the judgment-debtor, with the object or effect of obstructing or delaying the execution of the decree,-

¶36

(i) is likely to abscond, or leave the local limits of the jurisdiction of the Court, or

¶37

(ii) has, after the institution of the suit in which the decree was passed, dishonestly transferred, concealed, or removed any part of his property, or committed any other act of bad faith in relation to his property, or

¶38

(b) that the judgment-debtor has, or has had since the date of the decree, the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same, or

¶39

6 / 6

¶40

¶41

In view of the aforesaid discussion, the part of the order whereby arrest warrant has been issued against the Petitioners is hereby set aside and the concerned executing Court is directed to carry out execution proceedings strictly in accordance with law.

¶42

With the aforesaid observation/direction, the Petition stands disposed of.

¶43

Sd/-

¶44

(Deepak Kumar Tiwari) Judge

¶45

Priya

Surendra Aayam v. Magma Fincorp Ltd.

Case brief

What is this about?

What did the court decide?

Surendra Aayam v. Magma Fincorp Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Onkar Sahu Vs Raspal Singh

Ramkhilawan Nirmalkar Vs Tulesh Vaishnav

Smt. Asha Devi Vs Smt. Seema Singh

Smt. Meena Agrawal Vs H. D. B. Financial Service Limited

Uttar Pradesh Power Corporation Ld, Vs M/S Rajpootana Chables and Conductors Vt. Ltd.

Hrishikesh Yadav Vs Harihar Yadav