Karnataka High Court
3M India Limited vs Mr.T.K.Ajith Kumar on 18 August, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF AUGUST, 2025
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 18349 OF 2025 (GM-CPC)
BETWEEN:
3M INDIA LIMITED
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956.
HAVING ITS REGISTERED OFFICE
ADDRESS AT 5TH FLOOR, MARKSQUARE 61,
ST MARK'S RD, SHANTHALA NAGAR,
ASHOK NAGAR, BENGALURU,
KARNATAKA - 560 001,
REPRESENTED BY ITS AUTHORIZED
REPRESENTATIVE MS. PRIYA MENON
EXECUTIVE DIRECTOR & GENERAL MANAGER
...PETITIONER
(BY SRI. VEGADARSHI K, ADVOCATE)
Digitally signed
by NAGAVENI AND:
Location: High
Court of
Karnataka MR. T.K. AJITH KUMAR
PROPRIETOR,
M/S LAKSHMI ENTERPRISES,
NO. 39/1038, UDAYARESHMI,
KARAKKAT ROAD, KOCHI - 682 016.
...RESPONDENT
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO (A) SET ASIDE AND
QUASH THE IMPUGNED ORDER DATED 07.01.2025 PASSED BY
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THE HONBLE LXXXII ADDITIONAL CITY CIVIL AND SESSIONS
JUDGE (CCH-83), BENGALURU, IN COM. EX. NO. 689/2024,
(ANNEXURE A) AND ETC.,
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA
ORAL ORDER
The petitioner is before this court seeking the following
prayers:
“(a) issue a writ of certiorari or any other writ, order,
or direction to set aside and quash the Impugned
Order dated 07.01.2025 passed by the Hon’ble
LXXXII Additional City Civil and Sessions Judge
(CCH-83), Bengaluru, in Com. Ex.No.689/2024,
(ANNEXURE A),
(b) consequently, restore the execution petition in
Com. Ex.No.689/2024 to the file of the Hon’ble
LXXXII Additional City Civil and Sessions Judge
(CCH-83), Bengaluru, with a direction to dispose
off the said execution with a period of six (6)
months, an ,
(c) pass any other order as this Hon’ble Court may
deem fit on the basis of the facts and
circumstances of the case, – in the interest of
justice and equity.”
2. Since the proceedings are closed before the
concerned court without issuing notice, notice in the subject
petition need not be issued.
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3. The issue in the lis stands completely answered by
the judgment rendered by this Court in the case of SUMITA
ABHISHEK SUNDARAM V. SANKALPAN INFRASTRUCTURE
(P) LTD., reported in 2025 SCC ONLINE KAR 14742. This
Court on considering the identical circumstance has held as
follows:
8. The afore-narrated facts, link in the chain of
events and the genesis of the dispute between the
petitioner and the respondent are a matter of record.
The petitioner sought appointment of an arbitrator which
was not acceded to by the respondent. This leads the
petitioner to this Court in C.M.P. No. 194 of 2021. This
Court, following the judgment of the Apex Court, holds
as follows:
“…………
14. In the light of the vehement opposition to be
Bangalore being the center, I deem it appropriate to
consider the issue with regard to jurisdiction
notwithstanding the parties not arriving at a
consensus in terms of Clause 10 (a) of the
agreement.
15. Reference to the latest judgment of the Apex
Court in the case of BGS SGS SOMA JV v. NHPC
LIMITED1, in the circumstances is apposite. The Apex
Court at paragraph 59, has held as follows:
“59. Equally incorrect is the finding in
Antrix Corpn. Ltd. that Section 42 of
the Arbitration Act, 1996 would be rendered
ineffective and useless. Section 42 is meant to
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avoid conflicts in jurisdiction of courts by
placing the supervisory jurisdiction over all
arbitral proceedings in connection with the
arbitration in one court exclusively. This is why
the section begins with a non obstante clause,
and then goes on to state “…where with
respect to an arbitration agreement any
application under this part has been made in a
court…”
The Apex Court in the case afore-extracted,
considering the fact of a part of cause of action
having arisen in a particular place, where an
application is made at the first instance to be the
seat of arbitration. The afore-narrated chain of
events have all happened in Bangalore, therefore,
in the light of the judgment of the Apex Court in
the case of BGS SGS SOMA JV (supra), Bangalore
will be the seat of arbitration.
16. It is germane to refer to the judgment of the
Apex Court in the case of Patel Road ways
Limited v. Prasad Trading Company interpreting
Section 20 of the CPC, which determines cause of
action. The Apex Court has held as follows:
“The clear intendment of the Explanation,
however, is that, where the corporation has a
subbordinate office in the place where the cause of
action arises, it cannot be heard to say that it
cannot be sued there because it does not carry on
business at that place. It would be a great
hardship if, in spite of the corporation having a
sub-ordinate office at the place where the cause of
action arises (with which in all probability the
plaintiff has had dealings), such plaintiff is to be
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compelled to travel to the place where the
corporation has its principal place. That place
should be convenient to the plaintiff; and since the
corporation has an office at such place, it will also
be under no disadvantage. Thus the Explanation
provides an alternative locus for the corporation’s
place of business, not an additional one.”
17. It is not in dispute that the respondent-
Company has its business or a branch at
Bangalore, where the petitioner was
functioning. Therefore, it would not lie with the
respondent – Company to contend that there is
no cause of action at all for the petitioner to
insist upon or contend that the seat of
arbitration should be Bangalore. In my
considered view, in the light of the facts
narrated hereinabove and the judgments of the
Apex Court, part of cause of action having
arisen in Bangalore, the dispute is arbitrable
within the jurisdiction of Bangalore.
18. Therefore, the following:
ORDER
[a] The petition is allowed, appointing Sri.
C.K. Nandakumar, Advocate, No. 519-520,
Prestige Centre Point, Level – 5, No. 7,
Cunningham Road, Bengaluru – 560 052
(Mob. No. 8884713999) as the sole
arbitrator to enter reference of the
disputes between the parties and conduct
proceedings at the Arbitration and
Conciliation Centre (Domestic and
International), Bengaluru according to the
Rules governing the said Arbitration
Centre.
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[b] All contentions inter se parties are left open for
adjudication in the arbitration proceedings.
[c] The Office is directed to communicate this
order to the Arbitration and Conciliation Centre
and Sri. C.K. Nandakumar, Advocate, No. 519-
520, Prestige Centre Point, Level – 5, No. 7,
Cunningham Road, Bengaluru – 560 052 (Mob.
No. 8884713999), as required under the
Appointment of Arbitrators by the Chief Justice
of Karnataka High Court Scheme, 1996.”
(Emphasis added)
In terms of the said order, the Arbitrator Sri. C.K.
Nandakumar, after hearing the parties, draws up an
award. This comes to be challenged by the respondent
before the Commercial Court under Section 34 of the
Arbitration and Conciliation Act; that is also dismissed.
9. The petitioner then files an execution petition one
before the Court at Thane owing to the fact that the
registered office of the respondent is at Thane,
Maharashtra. After dismissal of the petition under
Section 34, the petitioner prefers a second execution
before the executing Court at Bengaluru. In the said
proceedings, she files an application under Order XXI
Rule 41 of the CPC. Order XXI Rule 41 of the CPC reads
as follows:
“41. Examination of judgment-debtor as to
his property. -[(1)] Where a decree is for the
payment of money the decree-holder may apply to
the Court for an order that–
(a) the judgment-debtor, or
(b) where the judgment-debtor is a corporation,
any officer thereof, or
(c) any other person, be orally examined as to
whether any or what debts are owing to the
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judgment-debtor and whether the judgment-
debtor has any and what other property or
means of satisfying the decree; and the Court
may make an order for the attendance and
examination of such judgment-debtor, or
officer or other person, and for the production
of any books or documents.
(2) Where a decree for the payment of money has
remained unsatisfied for a period of thirty days, the
Court may, on the application of the decree-holder
and without prejudice to its power under sub-rule (1),
by order require the judgment-debtor or where the
judgment-debtor is a corporation, any officer thereof,
to make an affidavit stating the particulars of the
assets of the judgment-debtor.
(3) In case of disobedience of any order made
under sub-rule (2), the Court making the order, or
any Court to which the proceeding is transferred, may
direct that the person disobeying the order be
detained in the civil prison for a term not exceeding
three months unless before the expiry of such term
the Court directs his release.”
Rule 41 deals with examination of judgment debtor as
to his property. Invoking the said provision, the
petitioner prefers I.A. No. III seeking disclosure of assets
of the respondent/Company. After hearing the parties,
the matter was posted for further consideration on 20-
09-2024. On the previous day, the lease that the
Company had at Bangalore was surrendered and on the
next day it is projected that there are no assets of the
Company in Bengaluru and, therefore, the petitioner will
have to file it before the Court at Thane. The concerned
Court accedes to the submission of the Company.
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10. The issue now would be, whether the petitioner
can prefer an application in the second execution petition
filed by her or has to be driven to the jurisdictional Court
at Thane. It is not in dispute that the jurisdiction at
Bengaluru was directed to be the seat of Arbitration in
terms of the order quoted hereinabove. Pursuant to the
said order, the parties have arbitrated the dispute and
the respondent has suffered an award. Therefore, the
jurisdiction at Bengaluru becomes the seat Court, which
would be the Court of preliminary jurisdiction, for
execution of arbitral award.
11. In this regard, it becomes apposite to refer to two
of the judgments of the High Courts of Delhi and Calcutta
interpreting the said concept of seat Court. In the case
of GUJARAT JHM HOTELS LIMITED v. RAJASTHALI
RESORTS AND STUDIOS LIMITED2, the Delhi High Court
has held as follows:
“…………
37. As this Court considers the decisions
in Associated Contractors and Sundaram
Finance, it fails to find any irreconcilable or
discordant note between the two. Sundaram
Finance cannot possibly be read as being an
authority for the proposition that a petition for
execution of the arbitral award cannot be instituted
before the seat court. All that the Supreme Court
in Sundaram Finance held was that notwithstanding
the right of a party to petition the seat court for
execution of the award, it would additionally have the
choice to initiate execution in a court within whose
jurisdiction the assets of the judgment debtor may be
situate.
………
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41. While in light of the principles that were
enunciated by the Supreme Court in BGS Soma,
the Court must necessarily recognize the
importance and significance that stands
attached to the designation of a seat of
arbitration, in the considered opinion of this
Court the said principles do not conflict with
what was ultimately held by the Supreme Court
in Sundaram Finance. As was noticed
hereinbefore, all that Sundaram Finance seeks
to expound is of the option that is available to a
decree holder to initiate proceedings for
enforcement before any court which may be in a
position to proceed against the properties of the
debtor with due expedition and without being
bound by the rigidity or inflexibility of rules of
procedure.
………
50. However, the Court in the present is
called upon to discern the true ratio decidendi of
the aforenoted decisions and reconcile the
principles that stand enunciated therein. On a
careful consideration of the issue that arises
and the precedents which govern, the Court is
of the considered opinion that the position in
law can be safely recognised to be the seat
court being the focal point for all challenges
that may arise before, during or after the
conclusion of arbitral proceedings. The seat
court would always be the central pivot in terms
of the provisions that may be contained in the
arbitration agreement. It would thus clearly be
a court which would fall within the ambit and
scope of Section 42 of the Act. However, insofar
as petitions for enforcement are concerned and
as per Sundaram Finance, the decree holder
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need not and invariably be compelled to
institute proceedings before the seat court and
thereafter seek a transfer of those proceedings
for the purposes of effecting execution of the
award. The decree holder stands conferred with
the right to exercise an option of either
petitioning the seat court or moving directly to
the court within whose jurisdiction the
judgment debtor or its properties may be
situate.
51. In light of the aforesaid discussion, the Court
comes to ultimately conclude that there does not
appear to be an irreconcilable element or conflict
between the principles laid down in Associated
Contractors and Sundaram Finance. The ratio
of Associated Contractors and Sundaram
Finance when harmoniously construed lends
credence to the aforesaid conclusion. The perception
of the Jaipur Commercial Court that it was imperative
for the petitioner here to have first approached the
court situate in the juridical seat of arbitration may
not, strictly speaking, be a correct reading or
understanding of the aforenoted decisions.”
(Emphasis supplied)
Earlier to the aforesaid judgment of the High Court of
Delhi, the High Court of Calcutta in the case of MECHON
SERVICES v. PREDOMINANT ENGINEERS &
3
CONTRACTORS (P) LIMITED , has held as follows:
“…………
8. Thus, when an execution of an award is
levied in the Court within whose territorial
jurisdiction the seat of arbitral tribunal situates,
the award is deemed to have been sent to that
Court for execution.
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………
11. Since the assertion, made by the decree-
holder about the availability of the asset and/or
property and/or money belonging to the
judgment debtor within the jurisdiction of this
Hon’ble Court, is denied by the judgment
debtor, the decree-holder has the right to
examine the judgment-debtor for ascertaining
as to whether any asset and/or property and/or
money belonging to the judgment debtor lies
within the jurisdiction of this Hon’ble Court or
not. In the event after such examination it is
found that any asset and/or property and/or
money belonging to the judgment debtor is
available within the jurisdiction of this Court,
this Court certainly can proceed with the
execution case for executing the award.
However, it is equally true that in the event it is
ultimately found after such examination of the
judgment debtor that neither any asset nor any
property nor any money belonging to the
judgment debtor is available within the
territorial jurisdiction of this Court, the
Executing Court, by virtue of the provisions
contained in Section 39 of the Code of Civil
Procedure, can transmit the decree for
execution to the Court where the property
and/or asset and/or money belonging to the
judgment debtor lies.
12. Since examination of the judgment
debtor for ascertainment of the availability of
the property and/or asset and/or money
belonging to the judgment debtor is a step-in
aid of execution, this Court cannot at this stage
decide the said issue, relating to lack of
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jurisdiction of this Court to entertain this
execution proceeding, conclusively without
examining the judgment debtor.”
(Emphasis supplied)
Therefore, the Court at Bangalore did have and does
have the jurisdiction to entertain the execution petition.
12. The issue now is, with regard to the application
filed under Order XXI Rule 41 of the CPC. The provision
is quoted hereinabove. It clearly indicates that it is not
an application for execution but merely a step-in aid of
execution. It is further settled that the Court that had
passed the decree can entertain the application under
Order XXI Rule 41 of the CPC to determine the location
of the judgment debtor’s assets for transfer of execution
petition, if necessary. The High Court of Bombay
considers this issue in the case of UNITED
4
PHOSPHOROUS LIMITED v. A.K. KANORIA and holds as
follows:
“…………
12. In my opinion, application under Order
XXI, Rule 41 is not an application in an
execution. It is an application in aid of
execution or a step towards the execution.
Under Clause (j) of Rule 11(2) of Order XXI of
the Code of Civil Procedure, the execution
petition must specify the mode in which
assistance of the Court is required for the
execution of a decree. Clause (j) reads as follows:
(j) the mode in which the assistance of the
Court is required whether–
(i) by the delivery of any property specifically
decreed.
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(ii) by the attachment, or by the attachment and
sale, or by the sale without attachment, of any
property.
(iii) by the arrest and retention in prison of any
person;
(iv) by the appointment of a receiver;
(v) otherwise, as the nature of the relief granted
may require.
Examination of a judgment debtor under sub-
rule (1) of Rule 41 of Order XXI or direction to
the judgment debtor to file an affidavit to be
issued under sub-rule (2) of Rule 41 or Order
XXI is not one of the mode of execution of a
decree provided in clause (j) of Rule 11(2) of
Order XXI, Rule 30. Disclosure of the assets is a
preliminary step towards the execution of a
decree. Rule Nos. 3 to 9 of Order XXI of the
Code of Civil Procedure contemplate transfer of
a decree by the Court which passed the decree
to another Court for execution. The decree
holder, who is not aware of the assets of the
judgment debtor, is often unable to decide in
which Court he should file the execution petition
or in which Court he should get the decree
transferred unless he knows the particulars of
the assets of the judgment debtor. Rule 41 of
Order XXI enables the decree holder to get from
the judgment debtor the information of the
assets, which is within the special knowledge of
the judgment debtor. Therefore, an application
under Order XXI, Rule 41 is not an application
for execution of the decree but, merely an aid to
the decree holder to enable him to execute the
decree by obtaining information which is within
the special knowledge of the judgment debtor.
If this be so, the application under Order XXI,
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Rule 41 would ordinary precede the filing of an
execution petition, though it can also be filed in
the pending execution petition itself. I am
fortified in this view by the judgment of the Calcutta
High Court in Shew Kumar Company v. Grindlays
Bank Limited, AIR 1986 Cal 328 wherein the Division
Bench observed in para-9 of its judgment:
“We accept the contention of the Respondent
that an application for examination of a judgment
debtor (under Order XXI, Rule 41) is strictly not
an application for execution”.
In the said case, the Division Bench further held
even after the decree is transmitted for execution to
another Court, the Court passing the decree retains
jurisdiction in respect of the decree and can examine
the judgment debtor, under Order XXI, Rule 41. It is
not necessary in this case to consider whether the
Court which passes the decree retains jurisdiction
over the decree even after its transmission for
execution to another Court, but I am of the opinion
that the Court which passed the decree does not
cease to have a jurisdiction to entertain an application
under Order XXI, Rule 41 atleast till the decree is
transmitted to another Court for execution.”
(Emphasis supplied)
The High of Kerala also considers this issue in the
case of STATE BANK OF INDIA v. M.K. RAVEENDRAN5,
and holds as follows:
“…………
4. Rule 41 of Order 21 CPC is captioned as
‘attachment of property’. That does not
postulate it is applicable only when the
execution relate to attachment of property. The
object of the section is to enable the decree
holder to get the necessary information with
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respect to the properties of the judgment debtor
so that he can realise his debt without difficulty
and trouble. It is an effective provision to obtain
discovery in aid of the execution of the decree
which is obtained. The Bombay High Court
in United Phosphorus Ltd. v. A.K. Kanoria, (AIR 2003
Bom 97) has considered the scope and ambit of
Rule 41 of Order 21 of the CPC It has been held that
examination of a judgment debtor under sub-rule (1)
of Rule 41 of Order 21 or direction to the judgment
debtor under sub-rule (2) to file affidavit, is not one
of the modes of execution of a decree provided in
clause (j) of Rule 11(2) of Order 21 of the CPC What
is contemplated by Rule 41 of Order 21 CPC is
disclosure of the assets of the judgment debtor as a
preliminary step towards the execution of the decree.
In the above decision, the Bombay High Court has
also expressed the view that an application under
Rule 41 of Order 21 CPC by the decree holder can be
filed even before presentation of the execution
petition. A decree holder who is not aware of the
assets of the judgment debtor is often not able to
decide in which court he should file the execution
petition, to which court he should get the decree
transferred. He can resort to Rule 41 of Order 21 to
get the details from the judgment debtor the
information of his assets, which is within his special
knowledge and that can be sought for even before
proceeding with the execution by filing an execution
petition is the view taken by the above High
Court. Opinion expressed by the Bombay High
Court that the court which passed the decree
does not cease to have jurisdiction to entertain
application under Order 21 Rule 41 CPC at least
till the decree is transmitted to another court
for execution appears to be sound considering
the scope and ambit of Rule 41 of Order 21 of
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the Code of Civil Procedure. Since the provision
covered by the rule is intended only to aid the
execution and not one of the modes of the
execution, it is just and reasonable to hold that
even on the trial side in proceedings under
Order 38 of the CPC resort to Rule 41 of Order
21 of the Code can be sought for to get details
of the assets from the defendant to secure the
decree likely to be passed in the suit subject to
the satisfaction of the other conditions for
getting an order of interim attachment before
judgment. To restrict the scope of Rule 41 of
Order 21 of the Code only in a case of
attachment of property, but, not to cases
wherein enquiry on a plea of no means is raised
by the judgment debtor to resist the execution,
solely for the reason that the above rule is dealt
with the provisions relating to attachment of
property under the Code will not be conducive
to justice. Only safeguard before passing of an
order under sub-rule (1) and (2) under Order 41
of Rule 21 of the Code over and above the
satisfaction of the court in passing of such
orders, whether it be on the trial side or
execution, is that it must be done only after
notice to the judgment debtor. Disclosure of the
assets of the judgment debtor is a preliminary
step towards the execution of the decree and in
very many cases the information of assets is
within the special knowledge of the judgment
debtor. An executing court is bound to facilitate
the execution of the decree passed by a court
and as Rule 41 of Order 21 of the CPC is only an
aid in execution, its scope and applicability
cannot be confined to cases where attachment
of property is sought as mode of execution, but,
in cases of personal execution of the judgment
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debtor by arrest and detention as well. Setting
aside the impugned orders challenged in the
writ petition, the court below is directed to pass
appropriate orders taking note of the
observations made above, and in accordance
with law.”
(Emphasis supplied)
Both the High Courts clearly hold that Order XXI Rule
41 CPC is a step towards execution and the
jurisdiction qua such execution can be determined only if
there is a compliance on oath in terms of Order XXI Rule
41 CPC. The Calcutta High Court, in a later judgment, in
the case of MSTC LIMITED v. KRISHNA COKE (INDIA)
PRIVATE LIMITED6, has held as follows:
“…………
7. Sundaram Finance Limited (supra) has held
that, execution can be filed anywhere in the country
where the decree can be executed and that, there is
no requirement for obtaining a transfer of the decree
from the Court, which would have jurisdiction over
the Tribunal proceedings. The proposition laid down
in Sundaram Finance Limited (supra) does not help
the award-debtor. The arbitral award can be executed
as a decree of a Court in any Court in India without
the requirement of obtaining a transfer of the decree
from the Court which would have jurisdiction over the
arbitral proceedings. In the present case, the
award-holder is seeking to execute the arbitral
award on the basis that, there are assets and
properties of the award-debtor lying within the
territorial jurisdiction of this Hon’ble Court. It
has to be conclusively established that, the
award-debtor does not have any asset within
the territorial jurisdiction of this Hon’ble Court
for this Hon’ble Court to denude itself of
jurisdiction over the execution proceeding. Such
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stage is yet to arrive in the facts of the present
case. There is an order for examination of the
award-debtor. On examination of the award-
debtor, there is a possibility that, the award
holder may discover assets and properties of
the award-debtor lying within the jurisdiction of
this Hon’ble Court. In such an eventuality, it
cannot be said that, this Court does not have
jurisdiction to proceed with the execution
proceeding. As held in Shew Kumar
Nopany (supra) an application for execution of
the award-debtor is not an application for
execution but an application in aid of the
execution.”
(Emphasis supplied)
Therefore, jurisprudence across the Nation has
converged in recognition of the aforesaid principle.
The High Courts of Delhi, Bombay, Calcutta and
Kerala have with one voice has affirmed that an
application under Order XXI Rule 41 of the CPC is a
preliminary step in execution, not contingent upon
the success of an execution but, aimed at enabling
it. The seat Court of Arbitration as held in the
aforesaid judgments, retains jurisdiction to
entertain application, even when an another
execution is pending in another jurisdiction.
13. When the proceedings were instituted, the
concerned Court did have jurisdiction, as the assets were
still available. It is only when a date was fixed for further
submissions, the lease is surrendered. The surrender of
the lease, by a party during the proceedings, cannot
knock off jurisdiction of a Court, which it did have at the
time of institution of proceedings. The High Court of
Delhi considers the issue on identical facts and holds in
the case of MOTOROLA INC v. MODI WELLVEST PRIVATE
LIMITED7, as follows:
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“…………
26. The second plea of the judgment debtor
is that no bank accounts of the JD or any
amount therein existed in Delhi today. It is not
in dispute that the Bank accounts existed when
this execution petition was filed and had about
Rs. 50,000/- in them. While in the pleadings an
attempt was made by the judgment debtor to
obfuscate the issue by pleas which while
averring that bank accounts no longer existed in
Delhi, nevertheless omitted to give the dates of
closure of the accounts, the learned senior
counsel for the JD, Shri Andharujina, however,
very fairly stated that the bank accounts in
Delhi were closed during the pendency of this
execution petition. Consequently, when at the
time of filing of this execution petition assets of
the JD in the form of monies were available in
bank accounts in Delhi, the jurisdiction of this
Court to proceed with this execution was
established. Whether the amount available in
the bank account was sufficient to satisfy the
decree or that the account stood closed during
the execution proceedings in my view are not
considerations which have any bearing on the
applicability of Section 47 to enable the
availability of and indeed the maintainability of
the present execution proceedings under
Section 47 of the 1996 Act.”
(Emphasis supplied)
The High Court of Delhi clearly holds that at the time
of institution of execution petition the assets of Motorola
INC were still in existence in Delhi. The property was
sold during the proceedings. The Court, in the aforesaid
paragraph, holds that it would not strip off the
jurisdiction that was available at the time of execution of
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proceedings. It holds that the judgment debtors making
attempts to obfuscate the issue would not lead the Court
to accept and direct that the decree holder should be
ousted on the issue.
14. The High Court of Bombay, again on an identical
issue, in the case of GLOBAL ASIA VENTURE
COMPANY v. ARUP PARIMAL DEB8, holds that the word
‘Court’ as obtaining under Section 2(1)(e) of the Act
being the Court of seat of arbitration, it continues to
have jurisdiction to execute the arbitral award. In the
following paragraphs, it holds as follows:
“…………
14. Sundaram Finance therefore says that an
Award Holder has a choice. Its ratio does not operate
to strip the 2(1)(e) Court of its jurisdiction. It only
says that a successful claimant is not compelled to
come to the 2(1)(e) Court only to then have to detour
to a local court for enforcement. He may go to that
local court directly to execute his award.
15. Conceptually this is significant because I
suspect the arguments from the Respondents before
me tend to obliterate a fundamental distinction
between a civil decree in execution and an arbitral
award in enforcement. Arbitration is not a distinct
judicial forum like a subordinate Court. It is an
alternative dispute resolution mechanism with a
standalone statute. It is intended to provide for the
speedy resolution of disputes and enforcement with a
minimal level of judicial intervention. The essence of
arbitration is an agreement unlike a civil proceeding
in a law Court. The fact that Section 36 uses a
phraseology which equates an award with a decree
cannot be divorced from the legislative intent. Section
36(1) is enabling. It was meant to allow for the
smooth enforcement of arbitral awards and it,
therefore, allows these to be enforced ‘as’ decrees.
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Read as the Respondents would have it Section
36(1), far from being enabling, suddenly
becomes disabling, and itself becomes a restriction,
wholly contrary to the statutory intent of arbitration
law, for rapid and quick enforcement. When,
therefore, Section 36(1) says that an award shall be
enforced in accordance with the Code in the same
manner as if it was a decree of a Court, what this
really tells us is not that limitations and ousters of
jurisdiction will apply but that the enabling provisions
of the Code must apply to arbitral award as well.
Section 36(1) has to be read not in isolation but also
as part of the framework of the Arbitration Act. Mr.
Jagtiani is correct in pointing out that if this is read in
isolation, then Section 9 and its post-award provisions
are rendered entirely otiose. That Section allows the
Court to take interim steps before the award is
enforced. These include several steps in aid of
enforcement, such as orders of receivership,
injunction, deposit, disclosure and so on.
16. The correct view is, therefore, that while
there may be certain restrictions on the
enforcement of a decree of a Civil Court, since
the Arbitration Act ‘actually transcends all
territorial barriers’ as Sundaram Finance said,
those restrictions cannot be made to apply to
the enforcement of arbitral awards without
resulting in a completely incongruous situation.
Award holders have a jurisdictional choice that
decree holders do not. The source or
provenance of that jurisdictional choice is the
fundamental nature of the dispute resolution
process. A decree results in a lawsuit brought in
a causal court governed by Section 20 of the
Code. An award emanates from an arbitration.
Arbitral proceeding jurisdiction is wholly
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independent of Section 20 of the Code,
as BALCO tells us. That arbitral proceeding
jurisdiction is created by Section 2(1)(e) of the
Arbitration Act, not Section 20 of the Code.
Therefore, the result returned in Sundaram
Finance that arbitral proceeding jurisdiction
transcends territoriality. There is no warrant at
all to drag a now firmly defenestrated
territoriality back into arbitration only at the
time of enforcement.
17. I believe this needs some illustration. We must
return to the BALCO principle. The 2(1)(e) Court need
not be the causal Court. It is a court of the parties’
choice. Nothing has happened there — see the
illustration quoted from BALCO, paragraph 96. A civil
Court could not possibly exercise such jurisdiction in a
civil suit. It would be constrained causally by Section
20 of the Code. An arbitral Court is not. BALCO says
so, and entirely consistent with it, so does Sundaram
Finance. It is for this reason that Sundaram
Finance says that there is a transcending of territorial
barriers. That transcending starts from the inception
of the arbitration. It continues throughout. The
suggestion from the Respondents that this
transcending of territoriality somehow comes to a
grinding halt at the time of enforcement, and only at
the time of enforcement, seems to me to be nothing
more than an argument designed to defeat the
effective enforcement of arbitral awards.
18. The second decision in Mr. Jagtiani’s arsenal is
the recent Full Bench decision of this Court in Gemini
Bay Transcription Pvt. Ltd., Nagpur v. Integrated
Sales Service Ltd.5 Speaking for the Bench, AS
Chandurkar J set out the facts leading to the
reference and in paragraph 3 re-framed the question
for consideration. This is how he put it:
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“3. We have accordingly re-framed the
question to be considered and answered as under:
“Whether an Award made under Part-I of
the Arbitration and Conciliation Act, 1996 has to
be executed only by the Court as defined by
section 2(1)(e)(i), or, whether it can also be
executed by the Court to which it is sent for
execution under section 38 of the Civil Procedure
Code, 1908?
19. Again this was a discussion (post the 2015
Arbitration Act amendment) whether arbitral award
enforcement had to be in the arbitral 2(1)(e) Court or
whether it could be done in a Court to which ‘it was
sent’ for execution under Section 38 of the Code.
20. Mr. Jagtiani’s submission is that the Full
Bench not only considered Sundaram Finance
but also took into account a previous three-
Judge decision of the Supreme Court in State of
West Bengal v. Associated Contractors which
Sundaram Finance did not notice. The Full Bench
in Gemini Bay reconciled all views. The
conclusion that the Full Bench reached is that
the provisions of the Arbitration Act ‘permit a
decree to be executed either by the Court which
passed it’, i.e. the Section 2(1)(e) Court, or the
court to which it was sent for execution. The
2(1)(e) Court can also transfer for execution to
any subordinate Court of competent jurisdiction.
The Full Bench then went on to hold that the
expression ‘Court’ used in Section 36 has to be
read in a certain context, and that the
provisions of Section 39(1) of the Code must be
read independently of the provisions of Section
2(1)(e)(i) of the Act. In paragraph 30, the Full
Bench answered the reference by saying that an
arbitral award under Part I of the Arbitration
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Act can be executed not only by the 2(1)(e)
Court but also the court to which it is sent under
Sections 38 and 39 of the Code. Mr. Jagtiani,
therefore, submits, and in this is supported by
Mr. Khandeparkar, that there is no ‘ouster’ of
the 2(1)(e) Court’s jurisdiction at the stage of
enforcement as contended by the Respondents.
The Claimants have their choices. They can
come to the 2(1)(e) Court, or they can go to the
local court, but the local court’s jurisdiction
does not oust the jurisdiction of the 2(1)(e)
Court. There is nothing in any of these
judgments or any fair reading of these statutes
that would warrant an interpretation resulting
in the cessation of a 2(1)(e) Court’s jurisdiction
at the stage of enforcement.
21. Interestingly, both Mr. Pratap and Mr.
Samdani in oral arguments as well as in their
written submissions endeavoured to argue
that Sundaram Finance and Gemini Bay actually
support their view. The essence of their
argument, as I have understood it, is that
execution or enforcement is one thing and the
supervisory jurisdiction of an arbitral Section
2(1)(e) Court is quite another. A Court that has
no territorial jurisdiction whatsoever and which
is not a causal Court in any sense of the word
may nonetheless be a perfectly legitimate
Section 2(1)(e) arbitral Court. That ends, in
their formulation, once an award is passed
simply because Section 36 then says that the
enforcement must be in accordance with the
Code ‘in the same manner’ as if it were a
decree. If a decree could not be thus enforced
against the Respondents or their assets outside
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jurisdiction, nor should an award. Both learned
Senior Counsel say that in Sundaram
Finance the issue was not whether the 2(1)(e)
Court had jurisdiction at all but whether it
needed to send the decree to a local Court, or
whether the Claimant could go to that Court
directly. But this undermines their construct, for
their own reading of Sundaram Finance posits
that the 2(1)(e) Court is not robbed of
jurisdiction. If Sundaram Finance says a party
may go to the 2(1)(e) Court or the local court,
and does not have to go to the local court via a
transfer from the 2(1)(e) Court, then
necessarily this means that the 2(1)(e)
continues to have jurisdiction. All
that Sundaram Finance says is that the local
court also has jurisdiction, not that the 2(1)(e)
court does not.”
(Emphasis supplied)
In the light of the aforesaid elucidation of law by
different High Courts, to which I am in respectful
agreement of, the petitioner cannot now be non-suited,
on the score that execution proceedings are pending at
Thane. The seat of Arbitration was at Bengaluru. At the
time of execution, the assets of the judgment debtor,
movable or otherwise, were at Bengaluru. Therefore, it
cannot legally preclude the decree holder to seek
an order of filing of assets of the judgment debtor,
in compliance with Order XXI Rule 41 of the CPC, in
the execution filed before the Court at Bengaluru.
The attempt by the respondent to escape scrutiny
by shifting its base mid proceedings cannot be
countenanced. Such acts far from depriving
jurisdiction of a Court would only strengthen the
necessity compelling affidavit disclosure. What was
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sought in the leased premises was not the premises, but
movables inside the premises. Surrendering the lease
cannot make the movables vanish overnight. Therefore,
the affidavit becomes imperative. The concerned Court
has erred in rejecting the application filed by the
petitioner in I.A. No. III filed under Order XXI Rule 41 of
the CPC.
15. For the aforesaid reasons, the following:
ORDER
(i) Writ Petition is allowed.
(ii) The order dated 04-11-2024 passed by the
LXXXIII Additional City Civil and Sessions Judge,
Commercial Court, Bengaluru on I.A. No. III in
Commercial Execution No. 541 of 2024 stands
quashed.
(iii) I.A. No. III filed by the petitioner before the
concerned Court under Order XXI Rule 41 of
the CPC in Com.Ex. No. 541 of 2024 is allowed.
The judgment debtor shall file its affidavit of
assets before the executing Court in the subject
proceedings, within an outer limit of 15 days from
the date of receipt of a copy of this order.
The concerned Court has grossly erred in law in passing
the impugned order holding that the concerned Court has no
jurisdiction, as the respondent does not reside in the said
jurisdiction, notwithstanding the fact that the arbitral award
was passed in the jurisdiction of the concerned court.
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4. In the light of the issue standing answered, the
petition deserves to succeed and for the aforesaid reasons the
following:
ORDER
(i) Writ petition is allowed;
(ii) The order dated 07.01.2025 passed by the
Hon’ble LXXXII Additional City Civil and
Sessions Judge, Bengaluru stands quashed.
(iii) Proceedings in Commercial Ex.No.689/2024
stands restored on the file of the concerned
Court.
(iv) The concerned court is at liberty to regulate
its procedure thereafter.
(v) The petitioner shall appear before the
concerned Court on 28.08.2025.
Sd/-
(M.NAGAPRASANNA)
JUDGE
JY
List No.: 1 Sl No.: 103
CT: BHK