Deposit Of Awarded Amount In Court Registry Sufficient To Extinguish Liability Arising Under Award: Himachal Pradesh High Court

The Himachal Pradesh High Court bench of Mr. Justice Bipin Chander Negi has held that the deposit of awarded amount in pursuance of an order of the court into the court registry would be equivalent to payment under section 31 of the Arbitration Act. This will extinguish the liability arising under the award for which execution petition would then not be maintainable. Brief Facts The present petition has been filed laying challenge to the impugned judgment dated 23.08.2019, whereby objections filed by the present petitioner/judgment debtor against the execution filed by the present respondent/decree holder have been dismissed. In an arbitration proceeding inter-se the parties, an award was passed by learned Arbitrator against the present petitioner on 05.09.2002. The aforesaid award was challenged by way of an application under Section 34 of the Arbitration and Conciliation Act 1996 (herein after for the purpose of brevity referred to as the 'Act') by the present petitioner. The aforesaid application filed under Section 34 of the Act came up for consideration before a Co-ordinate Bench of this Court on 19.12.2002. On the said date, the execution of the award dated 05.09.2002 was stayed subject to the deposit of the entire amount in terms of the award.Therafter,the awarded amount was deposited in the Registry of this Court. In the reply, so filed, a specific objection qua pecuniary jurisdiction of the Hon'ble Court was taken.Subsequent thereto, on 27.06.2003, when the matter was listed before the Court, the application filed for grant of interim order (OMP No. 500 of 2002) was held to be mis-conceived in view of the provisions of Section 36 of the Act which provides that an award can only be enforced after objections filed under Section 34 of the Act are disposed of. Thereafter, on 27.08.2003, learned Counsel for the petitioner on account of non-maintainability (lack of pecuniary jurisdiction) of the application under Section 34 of the Act before the Hon'ble High Court sought return of the same for filing the application under section 34 of the Act before the appropriate forum. The section 34 application was thereafter heard and dismissed by the court of competent jurisdiction. Subsequent thereto, an execution petition was filed by the present respondent. In the said execution objections were filed by the present petitioner. A specific objection was taken therein qua the execution being not maintainable as the entire awarded amount had been deposited in the Registry of the Court in pursuance to order dated 19.12.2002 passed in OMP No. 500 of 2002 while the application under section 34 of the Act was pending adjudication before this court. Learned Trial Court after hearing both the parties and after going through the record by placing reliance on provision of Order 21 dismissed the objections filed by the present petitioner. Contentions The petitioner submitted that deposit of the award amount into the court in the case at hand is nothing but a payment to the credit of the decree holder. Reliance was placed on H.P. Housing & Urban Development Authority v. Ranjit Singh Rana, (2012). That the Arbitration Act is a self-contained Act. Mere reference to Civil Procedure Code in the said Section 36 cannot be construed in such a manner that it takes away the power conferred in the main statute Court's Analysis In H.P. Housing & Urban Development Authority (supra) the Supreme has held that the word “payment” may have different meaning in different context but in the context of Section 31(7)(b); it means extinguishment of the liability arising under the award. It signifies satisfaction of the award. The deposit of the award amount into the court is nothing but a payment to the credit of the decree-holder, the court noted. The court while applying the above ration to the facts of the present case observed that the deposit made in terms of the order of the Court did not place the same out of the reach of the respondent as while passing the order the Court did not qualify in the order that the money deposited could only be withdrawn on furnishing a security. The next contention whether provisions of the CPC would be applicable while hearing stay application filed under section 36(3) of the Arbitration Act. The court further noted that section 36(1) of the Arbitration Act which deals with enforcement of an award provides that an award shall be enforced “in accordance with” the provisions of the Code of Civil Procedure, 1908. Whereas Section 36(3) of the Arbitration Act which deals with staying of the operation of an arbitral award uses the expression “have regard to the provisions”. In Pam Developments (P) Ltd. v. State of W.B., (2019) the Supreme Court has held that the use of the expression “having regard to the provisions of CPC” in Section 36 and in the form as mentioned in Section 36(3) of the Arbitration...

Deposit Of Awarded Amount In Court Registry Sufficient To Extinguish Liability Arising Under Award: Himachal Pradesh High Court

Mohd Malik Chauhan

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