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Judgment
Both the orders are completely without jurisdiction and travel way beyond the authority of an executing Court.
An arbitral award was put into implementation, doubtless by a company controlled by a seemingly notorious person. But the notoriety of the principal person in control of the award-holder could not have guided the result of the execution proceedings.
A money award had been obtained. There is no dispute that a copy of the award was contemporaneously served on the respondents herein. The respondents herein chose not to challenge the arbitral award dated August 31, 2015.
Upon the arbitral award ripening to be executable, execution proceedings were instituted and the award-debtors were required to file their affidavits of assets. In filing such affidavits, the award-debtors purported to make suggestions as to the merits of the award-holder''s claim in the arbitral reference. Clearly, this was something that the executing Court could not have taken cognisance of, whether or not the executing Court liked the award-holder or may have had reservations regarding the arbitrator who passed the award. It was for the award-debtors to challenge the award in accordance with law and, once it was evident that the time to challenge the award had passed and the award had not been challenged, the award-debtors could not launch a challenge by way of a side-wind in the execution proceedings.
Indeed, such part of the affidavit of assets that did not conform to the statutory form or contained more information than was necessary to be supplied in course of such affidavit, had to be completely disregarded by the executing Court. The reference to the merits of the pre-award dispute was something that the executing Court could not have looked into, whatever may have been the doubts or suspicion or the like.
It appears that several erroneous steps were taken by the executing Court in directing certain documents to be produced by a bank and in persuading the bank to respond to the Court''s queries on the threat of initiating contempt proceedings. On the basis of the documents or information provided by the bank, the Court came to the conclusion that there was an egregious case of fraud which had been made out and such fraud was "also sought to be perpetrated on this Court by giving a complete misleading picture that the loan forming the subject-matter of the arbitration proceedings was granted to the award-debtors which they had failed to repay." The finding went to the very root of the award-holder''s claim, something that an executing Court could never have done, particularly, when the arbitral award remained unchallenged and the award had qualified to be implementable as a decree of Court.
The first order impugned dated February 17, 2017 does not indicate any reasons and it is difficult to comprehend how merely on the basis of the information furnished by the bank, the Court could dismiss the execution proceedings or impose costs. The subsequent order dated August 30, 2017 was passed on the award-holder''s petition for review. Again, nothing in the order dated August 30, 2017 reveals that relevant considerations were taken into account in passing the order dated February 17, 2017 or the subsequent order dated August 30, 2017. It is apparent, on the contrary, that utterly irrelevant considerations as to the merits of the principal dispute were taken into account to arrive at a completely erroneous finding. The exercise undertaken by the executing Court was completely without jurisdiction and both the orders dated February 17, 2017 and August 30, 2017 are set aside in their entirety.
The execution proceedings, EC No.110 of 2016, stand revived before the executing Court with a request to the executing Court to proceed with the implementation of the arbitral award which has now become a decree in accordance with law.
APO No.575 of 2017 and APO No.578 of 2017 along with GA No.4071 of 2017 are allowed as above with costs assessed at Rs.20,000/- to be paid by the respondents to the appellant.