Sajan Kumar Pasari And Ors. vs Sugata Mohan Bose

The present application (GA/01/2023) has been filed by the respondent no. 10/Judgment debtor, Dr. Sugata Mohan Bose, under Section 47 of the Code of Civil Procedure, 1908 questioning the maintainability of the execution proceedings in E.C. No. 238 of 2023.

The facts leading to the present Application are as follows:

The dispute relates to premises No. 52, Raja Ram Mohan Sarani (formerly Amherst Street), Kolkata, originally owned by Hemendra Mohan Bose. Upon his demise, the property devolved upon his nine sons, including Late Nripendra Mohan Bose, who held an undivided 18.85% share therein. The respondent no. 10 is the executor and sole beneficiary of the estate of Late Nripendra Mohan Bose.

It is the case of the respondent no. 10 that in the year 1983, the co-sharers entered into an agreement to sell the two plots described as Plots 'A' and 'B', to the predecessor-in-interest of the decree holders for a total consideration of Rs.3,77,000/- in respect of each plot, out of which a sum of Rs.1,57,000/- was paid as earnest money. Subsequently, disputes arose between the parties, which were referred to arbitration.

During the pendency of the disputes, Late Nripendra Mohan Bose died in the year 1984 and was succeeded by the respondent no. 10 under his last Will and Testament. It is further stated that while the remaining co-sharers executed twelve deeds of conveyance in favour of the nominees of the decree holders, the dispute relating to the share of Late Nripendra Mohan Bose was referred to the learned Sole Arbitrator, Hon'ble Justice Chittatosh Mookerjee (Retd.), who published an award on 30.12.2005.

According to the respondent no. 10, the award granted specific performance subject to strict compliance with certain conditions. The award required the claimants to tender the balance sale consideration of Rs. 45,064.50 to the respondent no. 10 within six weeks, and in the event of refusal, to deposit the said amount with the Registrar of this Court within twelve weeks. The award further provided that in default of such compliance, the claim for specific performance would stand automatically rejected.

The respondent no. 10 contends that the period of twelve weeks expired on 24.03.2006, whereas the records relied upon by the decree holders disclose that the balance sale consideration was deposited only on 29.03.2006, beyond the time stipulated in the award and without any order extending the prescribed period. It is further contended that the respondent no. 10 never received the balance consideration directly.

It is the further case of the respondent no. 10 that notwithstanding the alleged non-compliance with the mandatory conditions contained in the award, a decree came to be passed on 10.12.2019 enforcing the award in the absence of the respondent no. 10, thereafter the present execution proceedings were initiated.

On the aforesaid grounds, the respondent no. 10 seeks a determination under Section 47 of the Code of Civil Procedure, 1908 that the decree holders have failed to establish compliance with the conditions precedent contained in the arbitral award and, consequently, the execution proceedings are not maintainable. The respondent no. 10 has also prayed for stay of the execution proceedings pending disposal of the present application.

Submission on behalf of the respondent No. 10/Judgment Debtor

Mr. Meghnad Dutta, the learned Advocate appearing on behalf of the respondent no. 10/applicant submits that the execution proceedings are wholly misconceived and not maintainable inasmuch as the decree holders have failed to comply with the mandatory and time-bound conditions incorporated in the arbitral award itself. It is contended that the award dated 30.12.2005 granted the relief of specific performance only upon strict compliance with the conditions precedent requiring the claimants to tender the balance consideration of Rs. 45,064.50 to the respondent no. 10 within six weeks and, in the event of refusal, to deposit the said amount with the Registrar of this Court within twelve weeks. According to the respondent no. 10, the award unequivocally stipulated that failure to comply with the aforesaid conditions within the prescribed period would result in the automatic rejection of the claim for specific performance, leaving no discretion either with the parties or with the Court to condone such default.

Learned Counsel for the Respondent No. 10 further submitted that the award holders admittedly failed to comply with the conditions of the award within the stipulated period. Referring to the documents produced by the award holders themselves, learned counsel contends that while the period of twelve weeks expired on 24.03.2006, the balance consideration was deposited only on 29.03.2006. No application seeking extension of time was ever filed nor was any order extending the time granted by the Court. It is argued that once the time prescribed by the award expired without compliance, the consequence contemplated by the award automatically followed and the right to seek specific performance stood extinguished. It is also contended that the respondent no. 10 never received the balance consideration by way of tender as contemplated under the award.

Learned counsel further argues that the decree dated 10.12.2019 merely enforced the arbitral award and did not, nor could it, dispense with or modify the mandatory conditions contained therein. According to the respondent no. 10, an executing court cannot travel beyond the decree but is equally bound to ascertain whether the conditions precedent upon which the decree became enforceable were duly satisfied. Since the award holders failed to establish compliance with the conditions embodied in the arbitral award, the decree never became capable of execution and the present execution proceedings are, therefore, without jurisdiction.

On the aforesaid grounds, it is submitted that the objections raised by the respondent no. 10 under Section 47 of the Code of Civil Procedure go to the very root of the executability of the decree and are required to be adjudicated before any further steps are taken in execution. It is, accordingly, prayed that the award holders be directed to strictly prove compliance with the conditions of the arbitral award and, in the absence of such proof, the execution proceedings be dismissed as not maintainable.

Mr. Sarvapriya Mukherjee, learned counsel appearing on behalf of the decree holders submits that the application under Section 47 of the Code of Civil Procedure is wholly misconceived, frivolous and has been filed with the sole object of delaying and obstructing the execution of a decree which has attained finality. It is contended that the objections sought to be raised do not pertain to the executability of the decree but constitute an impermissible attempt to reopen issues which stand concluded by the arbitral award dated 30.12.2005 and the decree passed by this Court on 10.12.2019. According to the decree holders, the present application is a clear abuse of the process of Court and is liable to be dismissed in limine.

Learned counsel further submits that the decree holders had duly complied with every condition stipulated in the arbitral award. In terms of the award, the balance consideration of Rs. 45,064.50 was tendered to the respondent no. 10 through a banker's pay order dated 04.01.2006, forwarded by the decree holders' advocates, M/s. Kanodia & Co. It is contended that the pay order was duly delivered to the respondent no. 10, as evidenced by the postal acknowledgment showing delivery on 09.01.2006. However, despite receipt thereof, the respondent no. 10 deliberately failed to encash the pay order. In such circumstances, and strictly in accordance with the liberty reserved under the award, the decree holders deposited the said amount with the learned Registrar, Original Side of this Court pursuant to the order dated 21.03.2006. The Registrar accepted the deposit and the amount has remained available to the respondent no. 10. It is further submitted that the subsequent return of the pay order by the respondent no. 10 through his advocates by letter dated 10.05.2006 cannot efface the fact that the consideration had been duly tendered in accordance with the award.

It is argued that the respondent no. 10 has deliberately suppressed the material facts relating to the tender of the consideration and the deposit made with the Registrar and has falsely asserted that no consideration was ever tendered or paid. Such assertions, according to the award holders, are demonstrably contrary to the contemporaneous records and correspondence exchanged between the parties. The award holders contend that the deposit with the Registrar was made solely on account of the respondent no. 10's refusal to accept the payment and cannot be construed as non-compliance with the award. It is submitted that the contention regarding the alleged expiry of the period prescribed under the award is devoid of substance and ignores the fact that the decree holders had already tendered the consideration well within the stipulated period.

On the aforesaid grounds, learned counsel submits that the decree holders have scrupulously complied with the terms of the arbitral award and that the decree passed thereon has become final and binding. The objections raised by the respondent no. 10 are stated to be devoid of merit and intended solely to protract the execution proceedings.

Learned counsel for the award holders further submits that the scope of an enquiry under Section 47 of the Code of Civil Procedure is confined to questions relating to the execution, discharge or satisfaction of the decree and does not permit the executing Court to go behind the decree or reopen issues which stand concluded by the decree itself. It is contended that the objections raised by the respondent no. 10 seek, in substance, to challenge the correctness of the decree and the findings embodied in the arbitral award, which is impermissible in proceedings under Section 47 of the Code of Civil Procedure, 1908. Since the decree has attained finality and has neither been set aside nor modified by any competent forum, the executing Court is bound to execute it as it stands. The present application, according to the decree holders, is therefore beyond the permissible ambit of Section 47 of the Code and is liable to be rejected at the threshold.

This Court has heard the submissions advanced by the learned counsel appearing for the respondent no. 10/judgment debtor as well as the learned counsel appearing for the decree holders, and has also examined the documents placed on record.

The core issue that falls for determination in the present application (GA/01/2023) is whether the objections raised by the respondent no. 10/judgment debtor regarding alleged non-compliance with the conditions precedent contained in the arbitral award, namely, the timely tender and deposit of the balance sale consideration, are objections that go to the executability of the decree dated 10.12.2019 and are therefore capable of being agitated in execution proceedings under Section 47 of the Code of Civil Procedure, 1908.

Before adverting to the merits of the controversy, it would be apposite to set out the provisions of Section 47 of the Code of Civil Procedure, 1908, which reads as follows: "47. Questions to be determined by the Court executing decree.— (1) All questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit. (2) Omitted (3) Where a question arises as to whether any person is or is not the representative of a party, such question shall, for the purposes of this section, be determined by the Court."

A plain reading of the aforesaid provision discloses the following essential ingredients:

Applying the aforesaid principles to the facts of the present case, this Court notes that the arbitral award dated 30.12.2005 required the claimants (decree holders) to tender the balance consideration of Rs. 45,064.50 to the respondent no. 10 within six weeks from the date of the award, and, in the event of refusal by the respondent no. 10 to accept the same, to deposit the said amount with the Registrar, Original Side of this Court within twelve weeks from the date of the award.

The record shows that the decree holders tendered the balance consideration to the respondent no. 10 by way of a banker's pay order dated 04.01.2006, which was admittedly delivered to the respondent no. 10 on or before 09.01.2006, i.e., well within the period of six weeks stipulated in the award. It is not in dispute that the said pay order was not encashed by the respondent no. 10.

Upon such refusal/failure to encash, the decree holders were required, under the terms of the award, to deposit the said amount with the Registrar, Original Side, within twelve weeks from the date of the award, i.e., on or before 24.03.2006. It is on record, and is evidenced by Annexure "C" to the petition filed by the decree holders, being the certified copy of the order dated 21.03.2006 passed by this Court in A.P. No. 98 of 2006 (Sushila Devi Pasari v. Sugata Mohan Bose & Ors.), that the decree holders had, in fact, moved this Court seeking leave to deposit the balance consideration with the Registrar, Original Side. The said order records that an order was passed in terms of prayer (a) of that petition, thereby permitting the deposit. The certified copy of the said order was made available to the decree holders' advocates only on 24.03.2006, as is borne out from the endorsement thereon, and the amount was thereafter deposited with the Registrar, Original Side on 29.03.2006.

It is significant that the order dated 21.03.2006 passed in A.P. No. 98 of 2006, which permitted the deposit, has never been challenged, set aside, or modified by the respondent no. 10 in any proceeding. The said order has therefore attained finality. Once this Court, in the exercise of its jurisdiction under the Arbitration Act, 1940, permitted the decree holders to deposit the balance consideration with the Registrar, Original Side, and the decree holders acted upon that leave within a reasonable period of five days from the date on which the certified copy of the order became available to them, it cannot be said that there was any breach of the conditions precedent contained in the award. The decree holders could not have deposited the amount with the Registrar, Original Side, without obtaining leave of this Court, and it was this Court's own order, obtained within the twelve-week window itself, that governed the timeline for deposit thereafter.

It is equally significant that the arbitral award in the present case was governed by the provisions of the Arbitration Act, 1940. Under the statutory scheme of the said Act, an arbitral award did not, by itself, become executable. The Court was required to consider any objections that might be raised under Sections 30 and 33 of the Act and, upon rejecting such objections or in their absence, proceed to pronounce judgment according to the award under Section 17, whereupon a decree followed. Once such a decree came to be passed, the rights and obligations of the parties ceased to rest merely upon the award and stood merged in the decree of the Court. Consequently, any contention that the decree holders had failed to comply with a condition embodied in the award, or that the award had become incapable of enforcement by reason of such alleged non-compliance, was a matter that necessarily fell for consideration before the award was made a rule of the Court. Such questions cannot thereafter be resurrected in execution proceedings under Section 47 of the Code of Civil Procedure. To permit the respondent No. 10 to reopen those issues at the stage of execution would, in substance, require the executing Court to examine the correctness and enforceability of the decree itself, a course of action wholly beyond the limited jurisdiction conferred by Section 47 of the Code.

The contention of the respondent No. 10 that the decree has become inexecutable because of the alleged non-compliance with the conditions stipulated in the arbitral award cannot be accepted. Under the scheme of the Arbitration Act, 1940, all questions bearing upon the enforceability of the award, including whether the conditions precedent incorporated therein had been duly fulfilled, were matters that fell for consideration before the award was made a rule of the Court under Section 17 of the Act. Once a decree came to be passed upon the award, and the said decree attained finality, the rights and obligations of the parties stood merged in the decree of the Court. In the absence of any challenge to the decree or to the order permitting deposit of the balance consideration, it is not open to the respondent No. 10, in execution proceedings under Section 47 of the Code, to revive the very same controversy by characterising it as one relating to executability. To hold otherwise would permit an executing Court to undertake an indirect examination of matters which properly belonged to the proceedings culminating in the decree itself.

Even otherwise, this Court finds no merit in the factual foundation of the objection. The contemporaneous record unmistakably establishes that the decree holders tendered the balance sale consideration to the respondent No. 10 within the period of six weeks stipulated in the award. Upon the respondent No. 10 declining to accept or encash the same, the decree holders, before expiry of the period prescribed for deposit, approached this Court and obtained the order dated 21.03.2006 permitting deposit of the amount with the Registrar, Original Side. The actual deposit made on 29.03.2006 was in due compliance with the leave granted by this Court. The respondent No. 10 never questioned the said order, which has since attained finality. In these circumstances, it cannot be contended either that the decree holders failed to comply with the conditions of the award or that the award stood rendered incapable of enforcement by reason of any default on their part.

Thus, viewed from either perspective, namely, the limited jurisdiction of the executing Court under Section 47 of the Code or the merits of the respondent No. 10's allegation of non-compliance, the objection is unsustainable. The application is, therefore, liable to be dismissed.

In view of the dismissal of GA/01/2023, the decree holders are entitled to proceed with the execution of the decree dated 10.12.2019 enforcing the award dated 30.12.2005. Necessary orders in that regard shall be passed on the next date of hearing.

List the matter after three weeks.