M/S Punjab Kashmir Finance Ltd. Vs Sanjay Kumar and Others

“ii The impugned order dated 15/12/2023 (Annexure P-2) passed in execution petition no.119/10 of 2016, by Ld. District Judge, Bilaspur, (H.P.) in case titled as M/s Punjab Kashmir Finance Ltd. Vs. Sanjay Kumar & others, may kindly be quashed and set aside.”

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Heard learned counsel for the parties and perused the

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pleadings and documents appended along-with present petition.

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1 Whether reporters of Local Papers may be allowed to see the judgment?

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2

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( 2025:HHC:9537 )

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The award, in the case at hand, was passed by the Arbitrator on 02.01.2005. The dispute inter se the parties in the case at hand arose out of the Hire Purchase Agreement dated 20.09.2009. The same is appended along with the present petition as Annexure P-

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The relevant Clause dealing with interest is being detailed

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herein below:-

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“18(iv) The Hirer agrees that all sums due and payable to the Owners under this Agreement if not paid by due date, shall be recoverable along with compensation for delay in payment at the rate of Rs.1/per thousand or part thereof per day with quarterly rest from the due date of payment by the Hirer, on account of the Owners incurring loss in his business turnover due to such delay, without in any way affecting the owner’s right interalia to repossess or retake possession of the Motor Vehicle and/or terminate the Agreement. --(sic) agreed that the Owners, at their sole discretion may appropriate any money received from the Hirer first against the said compensation for late payment and thereafter any other claim of the owners under this Agreement.”

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Based on the aforesaid, the Arbitrator in his award

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awarded interest at the agreed rate of 36% per annum till realization of the awarded amount. Undoubtedly, in the case at hand, before the learned Arbitrator, the present respondent has been proceeded against ex parte. Other than the aforesaid, against the impugned award dated

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3

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( 2025:HHC:9537 )

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02.01.2005, no application under Section 34 of the Civil Procedure Code was preferred.

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Section 35 and Section 36 of the Act as it stood at the

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relevant time are relevant for this appeal. They read as under :-

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“35. Finality of arbitral awards.

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Subject to this Part an arbitral award shall be final and binding on the parties and persons claiming under them respectively.

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36. Enforcement - Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court.”

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Section 35 gives finality to every arbitral award and makes the award binding on the parties and all persons claiming under them. So far as Section 36 is concerned, it deals with execution of the award. It says that once the Court dismisses the application filed under Section 34 of the Act or if no such application is made and time has expired for making such application, the award shall be enforced as if it is a decree of the Court and the enforcement of the award shall be under the Code.

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In other words, the arbitral award has been given the status of a decree of the Civil Court and, therefore, it is enforced like a decree of the Civil Court by applying the provisions of Order 21 of the

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4

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( 2025:HHC:9537 )

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Code and all other provisions, which deal with the execution of the decree of the Civil Court.

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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 (see- Kiran Singh & Ors. vs. Chaman Paswan & Ors., AIR 1954 SC 340).

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The objection being raised in the case at hand before the Executing Court pertained to the merit of the matter which stood decided by the Arbitrator resulting into passing of the award. The objection being raised did not pertain the jurisdiction of the Court affecting the very passing of the decree.

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With respect to the controversy at hand, reference can also be made to the decision of the Hon’ble Apex Court in Punjab State Civil Supplies Corporation Limited and another vs. Atwal Rice and General Mills, 2017(8) SCC 116 , which squarely covers the case at hand.

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5

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( 2025:HHC:9537 )

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In view of the aforesaid, present petition is allowed and impugned order dated 15.12.2023, passed by learned District Judge, Bilaspur, Himachal Pradesh, in Execution Petition No.119/10 of 2016, titled M/s Punjab Kashmir Finance Limited vs. Sanjay Kumar and

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others, is quashed and set aside.

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In view of above terms, present petition stands disposed of, so also, the pending miscellaneous application(s), if any.

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April 07, 2025 (KS)

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(Bipin Chander Negi) Judge

M/S Punjab Kashmir Finance Ltd. v. Sanjay Kumar and Others

Case brief

What is this about?

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M/S Punjab Kashmir Finance Ltd. v. Sanjay Kumar and Others

Case brief

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