Section 47 CPC Application Is Not Maintainable In Execution Proceedings Under Arbitration Act, 1940: Allahabad High Court

The Single Bench of Justice Piyush Agarwal held that an arbitration award is not a decree as defined under section 2(2) of CPC and therefore, the objection under section 47 of CPC, which can be filed only in execution of decree (as defined under section 2(2) CPC), is not maintainable in the proceedings seeking execution of the award.

The Court held that the Arbitration Act 1940 is a self-contained code, therefore, the objection regarding the jurisdiction of the arbitrator must be raised in terms of the provisions of the act and within the time period provided therein.

The Court further held a party that failed to appear before the arbitral tribunal and raise objections even after having been put on notice on several occasions cannot take the benefit of Section 47 of the CPC.

Facts

The parties entered into an agreement dated 05.07.1983 for manufacturing of fabricated items and accessories, etc. The agreement had an arbitration clause. A dispute arose between the parties.

Accordingly, the opposite party vide notice dated 05.05.1991 invoked the arbitration clause and requested the revisionist to nominate its arbitrator. The revisionist replied to the said notice and argued that a sole arbitrator is to be appointed by it. The opposite party filed its claim before the arbitrator and vide an award dated 01.01.1992, the arbitrator allowed the claim of the opposite party. Thereafter, it applied for the award to be made a rule of the Court. Its application was allowed and it accordingly, filed for the execution of the award.

Thereafter, the revisionist filed an application under Section 47 of the CPC which was rejected by the Court. Consequently, the revisionist filed the revision petition.

The Contention Of The Parties

The revisionist challenged the order of the Court rejecting its application under Section 47 on the following grounds:

• The arbitrator had no jurisdiction to adjudicate the dispute between the parties.
• The appointment of the arbitrator was not in accordance with the arbitration agreement, therefore, invalid in law.
• The arbitrator did not serve any notice on the revisionist; therefore, it was denied of its right of hearing.
• The Court while deciding the reference of the opposite party to make the award a rule of the Court also did not issue notice on the revisionist.
• It is only after the execution petition was filed that the revisionist came to know about such an award in favour of the opposite party, it accordingly filed the objection under Section 47 of the CPC. However, the Court below erred in rejecting its application as non-maintainable.
• It relied upon the decision of the Supreme Court in Dharma Prathishthanam Vs. Madhok Construction Private Limited [AIR 5005 SC 214].

The opposite party opposed the contention of the revisionist on the following grounds:

• The revisionist has intentionally not filed the copy of the arbitration agreement as it would defeat its argument as the appointment was purely in terms of the agreement.
• The arbitrator had issued several notices which were duly served on the revisionist; however, it decided to sit on those notices and did not participate in the arbitration proceedings.
• The Court while deciding on the application of the opposite party also issued notice to the revisionist, however, it did not appear before the Court.
• The Arbitration Act, 1940 is a complete code in itself and all the objections regarding the appointment of the arbitrator or its jurisdiction or against the award shall be raised only in terms of the Act and the revisionist has failed to raise any such objections at the material time.
• Section 47 of the CPC is not attracted in the execution of the arbitration award, therefore, the Court below rightly rejected the application of the revisionist as non-maintainable.

Analysis By The Court

The Court observed that the arbitrator has made a specific finding in the award that despite the service of several notices, the revisionist failed to appear before it. Accordingly, it rejected the contention that the award was passed without any notice being served on the revisionist.

The Court distinguished the judgment in Dharma Prathisthanam (supra) on the ground that in that case, the objection of the revisionist regarding the appointment of the arbitrator was not considered and the award was a nullity, therefore, the application under Section 47 was maintainable. However, in the present case, the revisionist never raised any such objection and remained absent from the arbitration and as well as the proceeding before the Court, therefore, the decision of the Apex Court is of no help to the revisionist.

The Court held that an arbitration award is not a decree as defined under section 2(2) of CPC and therefore, the objection under section 47 of CPC, which can be filed only in execution of decree (as defined under section 2(2) CPC), is not maintainable in the proceedings seeking execution of the award.

The Court further that the Arbitration Act 1940 is a self-contained code, therefore, the objection regarding the jurisdiction of the arbitrator must be raised in terms of the provisions of the act and within the time period provided therein.

Accordingly, it dismissed the revision application.

Case Title: Bharat Pumps and Compressors v. Chopra Fabricators, Civil Revision No. 53 of 2022

Case Citation: 2022 LiveLaw (AB) 269

Counsel for the Revisionist: Anoop Trivedi Sr. Advocate, Suraj Kumar Tripathi, Abhinav Gaur and Vibhu Rai.

Counsel for the Opposite Party: Rahul Mishra Advocate.

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