Can't Raise Objections U/S 47 Of CPC In Execution Proceedings For The Enforcement Of Award, S. 34 Of A&C Must Be Availed: Allahabad High Court

Brief Facts:

The matter pertained to a dispute among the family members of Lal Agarwal, including the Revisionist (Sanjay Agarwal), over the distribution of assets, particularly a leased property. Following interventions by Sri Anirudh Mithal, a family settlement award was passed outlining the distribution of property between the Revisionist and others. Subsequently, Opposite party No.1 (Rahul Agarwal) filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), in the Court of District Judge, Lucknow, seeking relief. This application was rejected, leading to an appeal before the Allahabad High Court (“High Court”).

The Revisionist contested the execution of the award. He argued that there was no arbitration agreement, and the award was not a result of arbitration proceedings. Furthermore, he contended that the award was a nullity and could not be executed. Despite no challenge under Section 34 of the Arbitration Act, the Revisionist filed objections under Section 47 of the Civil Procedure Code (CPC). The First Appeal came before the High Court, where it directed the District Judge, Lucknow, to dispose of the execution application and objections within three months. The District Judge, in the impugned order, rejected the objections filed by the Revisionist. Feeling aggrieved, the Revisionist challenged the order by filing a civil revision in the High Court.

Challenging the impugned order, the Revisionist argued that the award was a nullity, emphasizing the absence of an arbitration agreement, lack of reasons in the award, and the award's characterization as a family settlement.

On the other hand, the Respondent argued that the Revisionist participated in the arbitration proceedings and failed to challenge the award under Section 34 of the Arbitration Act. It asserted that the award had attained finality and should be enforced as per Section 36 of the Arbitration Act. Additionally, it argued that objections under Section 47 of the CPC did not apply to execution and that the District Judge's order was in accordance with the statutory scheme of the Arbitration Act.

Observations by the High Court:

The High Court highlighted the nature and scope of revisional jurisdiction, emphasizing its role in correcting errors of jurisdiction committed by subordinate courts. It held that the revisional jurisdiction is confined to addressing questions of jurisdiction and is not intended for re-examining or reassessing evidence on record.

The High Court dismissed the revisionist's argument regarding the maintainability of objections under Section 47 of the CPC at the execution stage. It held that the revisionist should have challenged the award under Section 34 of the Arbitration Act and that objections under Section 47 of CPC were not maintainable at the execution stage.

The High Court held that the objections under Section 47 of the CPC are not maintainable in execution proceedings for the enforcement of an arbitration award. It held that an arbitration award, not being issued by a "court," falls outside the definition of a decree as outlined in Section 2(2) of CPC. Moreover, once the award attains finality, any objections must be raised exclusively in proceedings under Section 34 of the Arbitration Act, and cannot be circumvented by raising them during execution proceedings for enforcing the award.

Consequently, it held that the District Judge rightly exercised his jurisdiction in rejecting the objections under Section 47 of the CPC, and the revisionist's submissions lacked merit.

Case Title: Sanjay Agarwal vs. Rahul Agarwal And Ors. 2024 LiveLaw (AB) 101

Case Citation: 2024 LiveLaw (AB) 101

Case Number: CIVIL REVISION No. - 27 of 2019.

Advocate for the Revisionist: Subhash Vidyarthi, Pritish Kumar, Shantanu Gupta.

Advocate for the Opposite Party: Kshitij Mishra, Sanjay Bhasin, Sunil Sharma.

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