Jre precedent laid down by the High Court of Delhi in Kotak Mahindra Baak v. Narendra Kumar Prajapatt. Aggrieved by the same, the present revision petition is
Case Details
Counsel for the Petitioner: SRI T.SHARATH Counsel for the Respondent No.1 and 2: No representation The Court made the following: ORDER I I The Hon'ble Smt. Justice Renuka Yara Civil Revisioa Petition No.1487 of 2024 Order: The Civil Revision Petition is filed by the petitioner/Decree Holder aggrieved by the order passed by the learned Principal District and Sessions Judge, Ranga Reddy District at L.B.Nagar in E.P.No.2 of 2024 in Arb.Case No.3O14 of 2022, dated 23.O2.2O24, wherein, the petition liled to execute the Arbitration Award dated 29.12.2022 in Arbitration Case No.3O14 of 2022 Iiled under Section 23 of the Arbitration & Conciliation Act, 1996 (for short "the Act') has been dismissed as the award passed by the Arbitrator, is non est and void in the eye of law.
2. Heard Sri T. Sharath, learned counsel for the revision petitioner/Decree holder. Though notice was served, there is no representation on behalf of respondent No. l. Perused the record.
3. The background facts giving rise to the filing of the revision petition are that the petitioner herein entered into a Hypothecation-cum-l,oal Agreement, dated 04. 1O. 2O 19 with the regpondent herein for disbursing an amount of Rs.Rs.8,OO,OO0/-. When there was default in payment of EMls, a ciaim petition vide 2i2.. Arb. Case No.3O14 of 2O22 was hled before the sole arbitrator I nominated by the petitioner under Article 22 (a) of the Hypothecation-cum-lpan Agreement. Pursuant to said nomination, the arbitrator passed an award dated 29.L2.2O22 directing the respondents/Judgment debtors to pay a sum of Rs.18,53,886/- with interest at l2o/o per annum. Said award was presented before the learned Principal District and Sessions Judge, Ranga Reddy District for execution vide E.P.No.2 of 2024. The said E.P was heard on maintainability and dismissed based on tJre precedent laid down by the High Court of Delhi in Kotak Mahindra Baak Limited v. Narendra Kumar Prajapatt. Aggrieved by the same, the present revision petition is preferred.
4. In grounds of revision, it is pleaded that so long as the award is not set aside by a competent Court, the same can be enforced. Further, it is pleaded that an Executing Court can exa'r,ine the executability of decree only in case there is a challenge to it by contesting party. [n the instant case, there was no such challenge. Therefore, it is contended that an Executing / \zf SCC Online Dcl iI-ut ::3:: Court suo motu cannot enter into and decide the correctness of the award. I 5 The learned counsel for the revision petitioner relied upon judgment of the Hon'ble Supreme Court of India in case between Pradeep Mehra v. Har$ivaa J. Jethwa (since deceased thr. LRs.f and others2, wherein, it is held as below: "5. A bare perusal of the aforesaid provision shows that all questions between tJle parties can be decided by the executing court. But the important aspect to remember is that these questions are limited to the "execution of the decree". T?re executing court can never go behind the decree. Under Section 47, CPC the executing court cannot examine the validity of the order of the court which had allowed the execution of the decree in 2013, unless the court's order is itself without jurisdiction. More importantly tlris order (the order dated 12.O2.2O l3), was never challenged by the tenants/judgment debtors beforc any forum."
6. The above legal ratio laid down was in the context of a decree passed by a civil Court in an eviction suit. [n said instance, the decree was passed by a Court having jurisdiction. Said fact scenario is not applicable to the present case in which I thel award was passed by an Arbitrator who was unilaterally ' MANU/sc/ 1189/2023 I I I I I 4 appointed by ttre revision petitioner who is a Finance Company and the jurisdiction of said sole arbitrator to adjudicate the dispute between the parties and pass an award is challenged.
7. The learned counsel for the revision petitioner contended that by examining the maintainability of the decree, the Executing Court has gone behind the decree and the same is not tenable as per the legal ratio laid down in Pradeep Mehra (2 supral. With respect to EPs filed from the awards passed by arbitrators, reliance is placed on the order passed by this Court in CRP Nos.2929 of 2024, dated 22.11.2024. In said CRP, a distinction is made with respect to an order passed in case of Kotak Mahladra Bank Limited (1 supral. With respect to eligibility of an arbitrator, in Kotak Mahidra Bank Linrited ll supral, the High Court of Delhi has held that the arbitrator nominated was not an eligible person. [n that context, a distinction is made by this Court holding that the arbitrator appointed was a retired Judge and u,as not ineligible to be appointed as an arbitrator. Based on said distinction, tJle said CRP was altrowed. \ \ t I l / 5::
8. Relying upon the judgments of the Hon'ble Supreme Court of India in TRF Li.rrited v. Energo Engineering Projects Limited3 and Perkins Easttraa Architects DPIC v. IISCC (Indial Limiteda, the learned District Judge has extensively discussed about the unilateral appointment of an arbitrator and when such I I an arbitrator is interested in the outcome of the arbitration. In Perkins Eastman 14 supraf, it has been held that the proviso under Section 12(5) of the Act, lays down two conditions for waiver of right to object about the ineligibility of an arbitrator to be appointed. First is that tJle waiver has to be expressed by an agreement and in writing and second is that such an agreement must have been entered into after the disputes have arisen. \
9. Any unilateral appointment of an arbitrator even if it is done as per the agreement is not permissible. When there is no waiver, unilaleral appointment of an arbitrator is invalid and such an arbitrator does not have jurisdiction to try the claim. [n the instant case, even in case a retired District and Sessions Judge is appointed as sole arbitrator, by virtue of the fact that such an appointment is unilateral without an express waiver 1zov1 e scc ttt 3 o (2020) 20 scc 760 i I I I I 6 Cr' from the respondents herein, such an appointment is invalid and the arbitrator lacks jurisdiction to try the case. In view of the aforementioned discussion, the Civil Revision Petition lacks merits and is liable to be dismissed.
10. Accordingly, the Civil Revision Petition is dismissed confirming the impugned order passed by the learned Principal District and Sessions Judge, Ranga Reddy District at L.B.Nagar in E.P.No.2 of 2024 in Arb.Case No.3Ol4 of 2022, dated
23.O2.2O24. No costs. Consequently, connected miscellaneous petitions are closed. To, //TRUE COPY/' I SD/- P.CH.NAGABHUSHAMBA DEPUTY REGISTRAR ECTION OFFICER
1. The Principal District and Session Judge Rangareddy District at L B' Nagar' 2. One CC to SRI T.SHARATH Advocate [OPUCI 3. Two CD Copies NVB/PSL YY l HIGH COURT DATED:1311012025 ORDER CRP.No.1487 of 2024 ( ;HE S ,l o a 0 2 t:!, t01fr d"'iL .\ * DISMISSING THE CIVIL REVISION PETITION ".".fia", I I I i l l I l