Arbitral Award Can Be Enforced Anywhere In Country Where Decree Is Executable: Madhya Pradesh High Court

The High Court held that it is unnecessary to obtain a transfer of the decree from the Court that had jurisdiction over the arbitral proceedings.

Brief Facts:

Mahindra & Mahindra Financial Services Limited (the Applicant), who held the decree, filed a civil revision challenging a District Judge's order. The District Judge dismissed the Applicant's execution application, which was submitted under Section 36 of the Arbitration and Conciliation Act, 1996, along with Order 21 Rule 11 of the Civil Procedure Code (CPC). The dismissal was based on the claim that the court lacked territorial jurisdiction.

The Applicant argued that although the arbitration award was issued in Mumbai, the execution application was correctly filed with the District Judge because the non-applicants reside in Narsinghpur, and the property in question is within the District Judge's jurisdiction. The Applicant contended that the application should have been maintained by the District Judge. However, the Executing Court dismissed the application, referencing a High Court decision in the case of Computer Sciences Corporation India Pvt. Ltd. vs. Harishchandra Lodwal and another where it was held that such an application was not maintainable in that court. The Executing Court advised the Applicant to file the execution application before a competent court. Feeling aggrieved, the Applicant approached the High Court challenging the order of the District Judge.

Observations by the High Court:

The High Court found that the Executing Court determined the application to be not maintainable; consequently disposed of it and granted the Applicant liberty to file a fresh application before the competent court in accordance with the decision in the case of Computer Sciences Corporation Pvt. Ltd.

The Supreme Court's decision in Sundaram Finance Limited vs. Abdul Samad 2018(1) M.P.L.J. 640 (SC) established that an award could be enforced through its execution anywhere in the country where the decree could be executed. The High Court held that there was no necessity for obtaining a transfer of the decree from the Court that had jurisdiction over the arbitral proceedings.

The Supreme Court's judgment further clarified that the views taken by the Madhya Pradesh High Court and Himachal Pradesh High Court were not consistent with the correct legal position. Instead, the views of the Delhi High Court, Kerala High Court, Madras High Court, Rajasthan High Court, Allahabad High Court, Punjab and Haryana High Court, and Karnataka High Court accurately reflected the legal principles governing such matters.

In light of the Supreme Court's pronouncement, the High Court held that the impugned order was unsustainable in law. Therefore, the High Court set aside the impugned order and directed the Executing Court to restore the execution application to its original number and to decide the matter afresh.

Case Title: M/s Mahindra & Mahindra Financial Services Limited Versus Mr. Neelambar Singh Patel And Others

Case Number: CIVIL REVISION No. 240 of 2012

Shri Rajesh Maindiretta with Ms. Udita Maindiretta - Advocate for the applicant

None for the respondents, though served and represented.

Date of Judgment: 5th OF AUGUST, 2024

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