CASE TITTLE: Kiran Devi Chouraria V Jhumar Mal Singhi and Others
CASE NO: WP(C) No.37 of 2017
ORDER ON: 25th August, 2023
QUORUM: Meenakshi Madan Rai, J.
FACTS OF THE CASE:
In the present case, the Order of the Learned District Judge, Gangtok, dated 07-04-2017, in Civil Execution Case No.03 of 2015, rejecting the prayer for execution of the Arbitral Award and declaring the Award a nullity, is being assailed by the Petitioner/Decree Holder under Article 227 of the Constitution of India.
The facts leading to the present case is that the Petitioner-Decree Holder and the Respondent No.1-Judgment Debtor are siblings, being the children of one Late Banechand Singhi. They mutually agreed to divide the properties described in Schedule „A‟ of the “Deed of Settlement”, executed between by way of transfer, The Deed of Settlement was prepared between the siblings allegedly without the knowledge of Ajay Kumar Singhi, Respondent No.2 herein, who is the son of Respondent No.1. On 13-06-2013, the Respondent No.2 along with Respondent Nos.3 and 4, being the sons of Respondent No.2, submitted an application before the Sub-Divisional Magistrate (SDM), seeking a hearing, in the event any person sought transfer and registration of their building mentioned in the Schedule to the application. The SDM accordingly heard the matter advised the parties to approach the competent Civil Court. The Deed of Settlement was entered into between the Decree Holder and Judgment Debtor prior to their objection, but this fact was not revealed by the siblings, either to the Respondent the date of first hearing of the objection of the Respondent Nos.2, 3 and 4. A second agreement was entered into between the Decree Holder and Judgment Debtor, at Chennai, At Clause (V) of the arrangement, a Mediation clause was inserted, wherein it was agreed that all further disputes and differences arising amongst the parties relating to the agreement would be referred to the Sole Arbitrator, namely, one Kesari Chand Galada, said to be the father-in-law of the Decree Holder‟s son, An Arbitral Award was passed by the said Arbitrator having been asked to adjudicate upon the disputes between the siblings regarding claims made by the Decree Holder against the Judgment Debtor, with regard to the possession of her share of the property. The Nazir of the Court was ordered to assist the Decree Holder by putting her in possession of the Scheduled property and to submit compliance report. Following this Order, the Respondent Nos.2, 3 and 4 as Objectors, filed an application under Section 47 read with Order XXI Rule 101, Order XXI Rule 97 read with Section 151 of the Code of Civil Procedure, 1908 and Section 36 of the Arbitration and Conciliation Act, 1996. The Objectors averred that they have an interest in the property. That, the Arbitration Award dated 30-01- 2014 was passed behind their back, hence the order of execution passed by the Court in Civil Execution Case No.03 of 2015 be stayed until the objection filed by them is disposed of. The Learned Court being of the opinion that the Objectors should be given an opportunity to be heard, recalled the order of execution . The Trial Court pronounced the impugned order.Hence this petition.
LEGAL ISSUES:
What is the locus standi of the Objectors?
What is the remedy available to the Objectors who were not a party to the Deed of Settlement 11-06-2013 and a dated and a subsequent Memorandum of Family Arrangement dated 24- 06-2013?
LEGAL PROVISIONS:
Section 151 of the Code of Civil Procedure, 1908 deals with inherent powers of the court
Section 36 of the Arbitration and Conciliation Act, 1996 talkas about enforcement
under Section 47 of the CPC Deals with delay in excecution of decree.
CONTENTIONS OF APPELLEANT:
The Petitioner through their counsel, submitted that, the Execution Case was filed by the Petitioner in the High Court of Madras on its Original Side, but was returned on the ground of lack of jurisdiction, inter alia with the observation that, as the Arbitration Award is not a Decree it can be executed directly by any Court without order of transmission from the said Court, in fact, the ground floor of the property was exchanged by the Judgment Debtor with the original seller of the property, who had sold the property to the father of the Judgment Debtor Late Banechand Singhi and his two uncles. Referring to the provisions of Section 47 of the CPC, the Counsel invited the attention of the Court to Explanation II therein and contended that the Objectors have no locus to interfere in the proceedings between the Judgment Debtor and the Decree Holder as the provision specifically mentioned that, for the purposes of Section 47, a purchaser of property at a sale in execution of a Decree shall be deemed to be party to the suit in which the Decree is passed. Therefore, it does not include persons who are in possession of the property, sans right, title and interest therein.the counsel further contented that The disputed property is ancestral property and partitioned in terms of the Hindu Succession Act, 1956, between the siblings, Decree Holder and Judgment Debtor, the Learned Executing Court had wrongly interpreted the provisions of Section 47 of the CPC by erroneously relying on a decision of the High Court of Kerala, the counsel urged that Order XXI Rule 97 of the CPC cannot be resorted to by the Objectors since the provision is for invocation by a Decree Holder. The counsel further Contended that the challenge to the Award ought to have been filed under Section 34 of the Arbitration Act,the counsel next urged that Order XXI Rule 97 of the CPC cannot be resorted to by the Objectors since the provision is for invocation by a Decree Holder, The Counsel for the Petitioner urged that the Objectors have no locus standi to interfere in the Arbitral Award, but have the right to avail other legal remedies. Hence, no relief can be obtained by them in the instant matter.
CONTENTIONS OF THE RESPONDENT:
The respondent through their counsel contended that, in fact a fraudulent Decree was obtained on 30-01-2014, as there was no dispute between the Judgment Debtor and the Decree Holder pertaining to the properties in the “Memorandum of Family Arrangement”. The counsel further contended That, the Arbitrator is the father-in-law of the Decree Holder‟s son, which is clearly barred by the provisions of Section 12 of the Arbitration Act read with Clauses 9, 10, 13 of the Fifth Schedule to the said Act. The counsel in Further fortifying his arguments , the Counsel went on to urge that a third party is not perforce bound by a Decree and can resist the execution of the Decree. That, the Objector herein had also made an application under Order XXI Rule 97(1) and as held in the said decision the executing court is enjoined to adjudicate the claim and record a finding, allowing or rejecting the claim. That, the three Judge Bench of the Hon‟ble Supreme Court has elucidated the powers of the Executing Court in Bhavan Vaja and Others vs. Solanki Hanuji Khodaji Mansang and Another and held that, an executing Court cannot go behind the Decree under execution, but that did not mean that it has no duty to find out the true effect of that Decree.the counsel further submitted that, For construing a Decree it can and in appropriate cases it ought to take into consideration the pleadings as well as the proceedings leading up to the Decree. That, to ascertain the meaning of the words employed in a Decree, the Court often has to consider the circumstances under which those words came to be used.
COURTS ANALYSIS AND JUDGEMENT:
The court on Having considered the submissions by Counsel, observed. That, Explanation II to Section 47 of the CPC lays down that for the purpose of the Section, a purchaser of a property at a sale, in execution of a Decree, shall be deemed to be a party to the suit in which the Decree is passed. Thus, although the normal rule is that in a dispute between a party to the suit or his representative on the one hand and a stranger who is not a purchaser at the execution sale on the other hand is outside the scope of the Section, by adding Explanation II to the Section, a purchaser of property at a sale in execution of a decree, though a stranger to the suit, is deemed to be a party to the suit in which the Decree has been passed. Therefore, there is no bar under the law for a stranger to the proceedings who has an independent legal right to appear and contest the execution proceedings and whose property interests will be adversely affected by sale of the property in execution proceedings, to point out that the Decree sought to be executed is a nullity. That, his right to approach the executing Court under Order XXI Rule 97 of the CPC anticipating dispossession cannot be rejected. The court further opined that Section 34 of the Arbitration Act it is clear that the said law only applies to parties to the Arbitral Award and not to a third party thereof, hence, this argument cannot be countenancedthe court further opined that, it is an admitted fact that the Objector/ Respondent No.2 is the son of the Judgment Debtor and Respondent Nos.3 and 4 are his offspring, their rights to the said property therefore require consideration to prevent protracted and multiplicity of litigation. In the aforesaid circumstances and for the reasons enumerated hereinabove by this Court, the questions formulated stands determined accordingly. Consequently, the court opined that the impugned Order of the Learned Trial Court warrants no interference, Hence the court dismissed the writ petition accordingly.
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Judgement reviewed by: Sowmya.R
