State Of Chhattisgarh & Anr. vs ECI-Keystone (JV)

Hon'ble Shri Justice Ravindra Kumar Agrawal, J.

The petitioner/State has filed the present writ petition under Article 227 of the Constitution of India, against the orders dated 30.04.2026, 14.05.2026, 22.05.2026, 01.06.2026 and 22.06.2026, passed by the learned Commercial Court (District Judge Level), Nawa Raipur, in Execution Case No. 06 of 2023, and prayed for the following reliefs:-

The facts, in brief, giving rise to the present petition are that the Government of India, Ministry of Road Transport and Highways (in short “MoRTH”), accorded administrative and technical sanction for construction of a two-lane road on various stretches of NH-63 (Old NH-16) in District Bastar under the Left Wing Extremism (LWE) Scheme, initially for an amount of Rs. 169.23 crores, which was subsequently revised to Rs. 211.53 crores. The project was wholly funded by the Government of India, and the State Public Works Department, Chhattisgarh, acted as the executing agency. Pursuant to the tender process, the respondent/contractor was declared the successful bidder and, upon acceptance of the tender, the letter of acceptance was issued on 31.10.2012, followed by the work order dated 01.12.2012. The respondent completed the work on 30.06.2019 and thereafter, on 27.01.2020, raised an additional claim of Rs. 190.33 crores, which came to be rejected by the department. Consequently, the respondent invoked the arbitration clause contained in the contract and sought appointment of a sole arbitrator. Shri Rangraju was appointed as the sole arbitrator on 10.08.2020, and the arbitral proceedings commenced on 20.08.2020. During the arbitral proceedings, the State authorities repeatedly requested MoRTH to provide an authorised representative and legal assistance for conducting the arbitration and preparing the statement of defence. It is the case of the petitioners that, by communications dated 19.03.2021 and 19.07.2021, MoRTH directed that the dispute be resolved either through conciliation or before a panel of three arbitrators and indicated that approval of the competent authority was required before accepting a sole arbitrator. The respondent declined to participate in the conciliation proceedings and insisted upon continuation of the arbitration before the sole arbitrator. In the absence of an authorised representation and statement of defence on behalf of the State, the sole arbitrator proceeded ex parte and rendered an award dated 02.09.2022 directing payment of Rs. 160,30,11,411/- to the respondent along with applicable interest. The respondent thereafter initiated execution proceedings before the learned Commercial Court, registered as Execution Case No. 06 of 2023.

The petitioners subsequently challenged the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 (in short, “the Arbitration Act”); however, the said application was dismissed as barred by limitation by order dated 01.11.2023. The challenge to the said order under Section 37 of the Act was also dismissed by this Court in Arbitration Appeal No. 51/2023 vide order dated 10.06.2024. The Special Leave Petition preferred against the said order was thereafter dismissed by the Hon’ble Supreme Court on 19.01.2026 on the ground of delay of 484 days in its institution.

During the pendency of the execution proceedings, the petitioners also raised an objection under Section 47 of the Arbitration Act, read with Section 151 of the Code of Civil Procedure, 1908 (in short “CPC”), which was allowed by the learned Commercial Court vide order dated 23.07.2024, and the execution petition was dismissed. The said order was challenged by the respondent in W.P.(227) No. 691/2024, which was allowed by this Court on 04.07.2025. The challenge to the said judgment before the Supreme Court in SLP (C) No. 28500/2025 was dismissed on 10.02.2026. It is stated that review petitions against the orders dated 19.01.2026 and 10.02.2026 are presently pending before the Hon’ble Supreme Court.

In the aforesaid backdrop, the grievance of the petitioners in the present proceedings is directed against the manner in which the learned Executing Court has been proceeding with the execution of the arbitral award. Despite being apprised of the difficulties in making payment of the awarded amount and the pendency of the review proceedings before the Hon’ble Supreme Court, the Executing Court has passed coercive directions requiring personal affidavits and personal appearance of the concerned officers and has made observations regarding initiation of contempt proceedings for alleged wilful disobedience. The petitioner’s contention is that such directions and observations are beyond the jurisdiction vested in an executing court while enforcing an arbitral award under Section 36 of the Arbitration Act, read with Order XXI of the CPC, giving rise to the present petition under Article 227 of the Constitution of India.

Learned counsel appearing for the petitioners/State would submit that the impugned orders passed by the learned Executing Court are wholly without jurisdiction and travel beyond the powers conferred upon an executing court under Section 36 of the Arbitration Act, read with Order XXI of the CPC. He would submit that the arbitral award is a money award and the manner in which such award is required to be executed is governed by the provisions contained in Order XXI CPC, particularly Rule 30 thereof. The petitioners have already placed before the learned Executing Court the details of the accounts and properties of the award-debtor, and therefore, if the award is to be enforced, the Executing Court may adopt any of the modes prescribed under the CPC, including attachment and sale of the property of the judgment-debtor, but it cannot compel the individual officers of the department to satisfy the award from their personal resources or otherwise make them personally responsible for non-payment of the awarded amount. He would further submit that the entire project was funded by MoRTH under the Left Wing Extremism Scheme of the Government of India and the State Public Works Department was merely the executing agency. The sanctioned budget for the project has already been utilised and, consequently, the concerned officers cannot on their own make payment of the awarded amount without obtaining necessary sanction and following the prescribed governmental procedure. He would submit that the officers have been continuously corresponding with MoRTH for making arrangements for payment and a proposal has also been placed before the State Cabinet for necessary approval. Thus, there is neither wilful disobedience nor deliberate refusal to comply with the award; rather, the delay is attributable to the procedural requirements governing release and utilisation of public funds. The Executing Court cannot compel the officers to bypass such statutory and administrative procedures merely because interest continues to accrue on the awarded amount.

He would next submit that the learned Executing Court has exceeded its jurisdiction by repeatedly directing the concerned officers to remain personally present, furnish personal affidavits and undertakings and by threatening them with a recommendation for initiation of contempt proceedings and personal liability. Such coercive directions are impermissible in execution of a money award, particularly when the award-debtor is a department of the State and the officers before the Court are not themselves the judgment-debtors in their personal capacity. It is submitted that the jurisdiction of contempt cannot be invoked as a substitute for the procedure prescribed for execution of a decree or award, and the Executing Court is required to remain within the statutory framework of Order XXI CPC. The observations made by the learned Executing Court in its order dated 22.06.2026 describing the review petitions pending before the Hon'ble Supreme Court as “hoping against hope” are wholly unwarranted and beyond the scope of the execution proceedings. The petitioners are pursuing a remedy lawfully available to them before the Hon’ble Supreme Court, and the merits or otherwise of the pending review petitions cannot be prejudged by the Executing Court. He would submit that the petitioners have not sought to evade the award but have placed before the Court the genuine procedural difficulties in arranging the requisite funds and have been taking steps with the competent authorities for securing the necessary approval and funds. In these circumstances, the continued issuance of coercive directions, instead of adopting the modes of execution prescribed under Order XXI CPC, amounts to an exercise of jurisdiction not vested in the learned Executing Court and, therefore, warrants interference by this Court in exercise of supervisory jurisdiction under Article 227 of the Constitution of India. In support of his submissions, he would rely upon the judgment of “R.N. Dey and Others v. Bhagyabati Pramanik and Others” 2000 (4) SCC 400, “Food Corporation of India v. Sukh Deo Prasad” 2009 (5) SCC 665, “Kanwar Singh Saini v. High Court of Delhi” 2012 (4) SCC 307, and “State of Uttar Pradesh and Others v. Dr Manoj Kumar Sharma” 2021 (7) SCC 806.

Learned counsel appearing for the respondent/award-holder would submit that the arbitral award dated 02.09.2022 has attained finality, the challenge thereto having been rejected at every stage and the Special Leave Petition arising therefrom having also been dismissed by the Hon'ble Supreme Court. Therefore, there remains no legal impediment in enforcement of the award and the award-debtor cannot indefinitely postpone its satisfaction on the pretext of pursuing review proceedings or seeking further administrative approvals. It is submitted that the award amount of Rs. 160,30,11,411/- has already escalated to Rs. 2,22,06,54,058/- as on 16.06.2026 solely on account of continued non-payment, with interest accruing at approximately Rs. 4.5 lakhs per day. Despite repeated opportunities and assurances before the learned Executing Court, including the categorical statement made by the Engineer-in-Chief on 22.05.2026 that payment could be ensured pursuant to a specific direction of the Court, the petitioners have failed to make payment. It is further submitted that the plea that the State PWD is merely an executing agency of MoRTH or that the requisite budgetary approvals are awaited cannot furnish a justification for frustrating a final and executable award. The internal arrangements between the State Government, PWD and MoRTH are matters inter se and cannot prejudice the vested rights of the award-holder. The repeated correspondence with MoRTH and the subsequent proposal placed before the State Cabinet have not resulted in any concrete step towards payment. Even after the last opportunity granted on 01.06.2026, the State has merely placed before the Court a communication regarding the Cabinet decision, which does not disclose any definite arrangement for satisfaction of the award. The conduct of the award-debtor demonstrates not a genuine inability to comply but a persistent unwillingness or failure to take effective steps, resulting in substantial and continuing loss to the public exchequer. The award-holder cannot be compelled to indefinitely wait while the State authorities deliberate upon their internal financial or administrative arrangements, particularly when the liability is crystallised, and the interest burden continues to increase every day.

He would further submit that the present petition under Article 227 is an attempt to obstruct the lawful execution of the award by questioning the coercive measures adopted by the learned Executing Court after repeated defaults and assurances by the petitioners. The personal appearance and affidavits of responsible officers were directed only after ordinary directions for payment had failed to produce any result and were intended to ascertain responsibility and secure compliance with the Court's orders. The learned Executing Court was, therefore, justified in expressing concern regarding the avoidable depletion of public funds and in requiring the senior officers of the department to explain the continued non-compliance. It is submitted that once the officers had appeared before the Court and represented that payment could be made pursuant to a specific judicial direction, failure thereafter to act in terms of such direction could legitimately invite appropriate consequences. The respondent would, therefore, submit that no interference is warranted in the exercise of the limited supervisory jurisdiction under Article 227, particularly when the impugned proceedings are aimed at ensuring enforcement of a final award and preventing further accumulation of interest and consequent loss to the public exchequer. He would rely upon the judgment of “Chaduranga Kanthraj URS and Another v. P. Ravi Kumar and Others” 2024 SCC OnLine SC 3681, and “Pam Developments Private Limited v. State of West Bengal” 2019 (8) SCC 112.

I have heard learned counsel for the parties and perused the documents annexed with the petition.

It is necessary here to note the various orders passed by learned Executing Court time to time. The relevant part of the order dated 30.04.2026 is as under:-

On 14.05.2026, the learned Executing Court passed the order that:-

On 01.06.2026, the following order has been passed by the learned Executing Court:-

On 16.06.2026, the following order has been passed by the learned Executing Court:-

On 22.06.2026, the following order has been passed by the learned Executing Court:-

There can be no dispute that the arbitral award dated 02.09.2022 has attained finality for the purposes of execution, and the award-holder is entitled to seek its enforcement in accordance with law. At the same time, the finality of the award does not enlarge the jurisdiction of the Executing Court beyond the statutory framework governing execution. Section 36 of the Arbitration Act makes the award enforceable in accordance with the provisions of the CPC in the same manner as if it were a decree of the Court. Consequently, the Executing Court is required to enforce the award in accordance with the procedure prescribed under Order XXI CPC. It is equally well settled that an executing court cannot travel beyond the decree or adopt a mode of execution which is not sanctioned by law. The Supreme Court has reiterated that while an executing court is required to be diligent in securing the fruits of the decree, it must execute the decree as it stands and in accordance with law and cannot go beyond it.

In the present case, the grievance of the petitioners is not against execution of the award as such, but against the manner in which the learned Executing Court has proceeded to secure its satisfaction. From the orders extracted hereinabove, it is evident that the learned Executing Court, after noticing the continued non-payment of the awarded amount, has directed the personal appearance of senior officers of the PWD, required them to furnish affidavits and has proceeded to observe that failure to make payment would entail fixing personal financial responsibility upon such officers and even initiation of contempt proceedings. Such directions, in the considered opinion of this Court, cannot be sustained in the execution proceedings in the manner in which they have been issued. The award is against the award-debtor and not against the individual officers in their personal capacity. The liability created by the award cannot, in execution, be converted into a personal monetary liability of an officer merely because such officer happens to be responsible for processing or arranging payment on behalf of the department. If the award-debtor is a State department or authority, the Executing Court may certainly require the competent authority to disclose the position regarding assets, funds, sanctions or the steps taken for satisfaction of the award and may adopt the modes of execution permissible under Order XXI CPC; however, it cannot, merely for securing payment of a money award, impose upon individual officers a liability which does not flow from the award or from any adjudication in which they were personally liable.

The distinction between execution and contempt jurisdiction is also material.

Section 2(b) of the Contempt of Courts Act, 1971 contemplates “wilful disobedience” of a judgment, decree, direction, order, writ or other process of a Court. The Hon’ble Supreme Court has repeatedly held that contempt jurisdiction is not a substitute for execution and that a money decree or order is ordinarily required to be enforced through the remedy of execution available in law. In R.N. Dey (supra), the Hon’ble Supreme Court specifically cautioned that the weapon of contempt should not be used for execution of a decree where an alternative remedy of execution is available. In paras 7 and 8, it has been held that:-

The same principle has been reiterated in Sukh Deo Prasad (supra), in which it has been held that:-

In Kanwar Singh Saini (supra), it has been reiterated that:-

In the case of Dr Manoj Kumar Sharma (supra), it has been held that:-

It is true that the learned Executing Court was justified in expressing concern over the continued accrual of interest on the awarded amount and in requiring the award-debtor to take expeditious steps for satisfaction of the award. The fact that the amount payable is increasing on account of post-award interest cannot, however, authorise the Executing Court to depart from the procedure prescribed by law. The Court may certainly issue appropriate directions to the award-debtor to disclose its financial position, identify attachable assets and comply with the permissible modes of execution. It may also consider the consequences contemplated under the relevant provisions of Order XXI CPC. But the Court cannot substitute such statutory modes by compelling individual officers to furnish personal undertakings or affidavits promising payment, or by threatening to make them personally liable for the interest accruing on the award amount. The Hon’ble Supreme Court has consistently maintained that the executing court's duty is to execute the decree in accordance with law and not to travel beyond the decree or create a liability which the decree itself does not impose.

So far as the affidavits and submissions made by the officers are concerned, the learned Executing Court was certainly entitled to ascertain from the competent departmental authorities the steps being taken for implementation of the award. However, an affidavit filed by an officer explaining the administrative or financial position cannot, by itself, be treated as an undertaking creating a personal obligation to discharge the liability of the award-debtor. Equally, a statement made during the course of hearing by an officer regarding the possibility or expected timeframe of obtaining sanction cannot be converted into a personal decree against that officer. If the department has made a categorical submission before the Executing Court that payment is subject to governmental sanction, budgetary allocation or approval by the competent authority, the Court may examine the bona fides and adequacy of the steps taken and may require the competent authority to place the relevant record before it. However, it cannot proceed on the basis that such submission must necessarily result in personal liability of the officer if the payment is not made within the time indicated.

The observations contained in the order dated 22.06.2026 concerning the review petitions pending before the Hon'ble Supreme Court also require interference. The petitioners may or may not ultimately succeed in the review proceedings; that question is exclusively within the domain of the Hon'ble Supreme Court. The Executing Court was concerned with enforcement of the award and was not called upon to express an opinion on the merits or prospects of a pending proceeding before the superior Court. The expression “hoping against hope”, particularly when employed in relation to a pending judicial remedy, was therefore unnecessary and ought not to have formed part of the order under challenge. The pendency of the review petitions, however, does not by itself operate as a stay of the award; therefore, the award-holder remains entitled to proceed with execution unless there is an order of stay from the competent Court.

At the same time, this Court is conscious of the fact that the award-holder has been deprived of the awarded amount for a considerable period and that the liability towards interest continues to increase. The State authorities cannot indefinitely postpone execution merely by referring to internal correspondence or administrative difficulties. The finality of the award requires the competent authorities to take all lawful and expeditious steps for its satisfaction. The Executing Court, therefore, shall be at liberty to proceed with Execution Case No. 06/2023 in accordance with Section 36 of the Arbitration Act and the provisions of Order XXI CPC, including by requiring the award-debtor to disclose the particulars of its assets, funds and other means available for satisfaction of the award and by adopting such mode of execution as is permissible under law. What the Executing Court cannot do is to convert the execution proceedings into proceedings against individual officers who are not personally liable under the award or to employ contempt jurisdiction as a mechanism for execution of the money award. The Supreme Court has expressly recognised that execution and contempt are distinct jurisdictions and that contempt cannot ordinarily be employed as a substitute for execution.

The decision in Chaduranga Kanthraj Urs (supra) does not assist the respondent to contend that the learned Executing Court could employ coercive measures in the nature of contempt for securing payment of the arbitral award. In the said case, the Hon’ble Supreme Court was examining the scope of contempt jurisdiction and held that contempt cannot be used as a substitute for execution, and that civil contempt requires a clear, conscious and wilful disobedience of an explicit direction of the Court. In the present case, there is no independent direction of this Court which the petitioners or their individual officers are alleged to have wilfully disobeyed; rather, the learned Executing Court itself is seeking to secure satisfaction of a money award through personal affidavits, personal appearance and personal liability of departmental officers. Thus, the ratio of Chaduranga Kanthraj Urs (supra) must be undertaken through the remedies prescribed by law, and that contempt cannot be utilised as a means to enforce the monetary liability of the award-debtor.

In view of the aforesaid discussion, this Court is of the considered opinion that the impugned orders, insofar as they require personal affidavits/undertakings from the officers, threaten to fix personal financial liability upon them for the amount of interest accruing on the award, or contemplate initiation of contempt proceedings merely for non-payment of the money award, cannot be sustained. To that extent, the said directions are set aside, and the writ petition is partly allowed.

However, the execution of the arbitral award shall continue, and the learned Executing Court shall proceed with the execution strictly in accordance with Section 36 of the Arbitration Act read with Order XXI CPC and pass appropriate orders by adopting the modes of execution permissible in law.

It is clarified that this Court has not expressed any opinion on the entitlement of the respondent to recover the awarded amount or the accrued interest, nor does this order prevent the learned Executing Court from requiring the competent authority to furnish necessary particulars or to take steps for satisfaction of the award in accordance with law.

No orders as to costs.