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M/s. Kotak Mahindra Bank Ltd., Egmore, Chennai, Represented by Chief Manager, Stephen Joseph, Kochi v/s Joseph Mohanan & Another


Company & Directors' Information:- MAHINDRA AND MAHINDRA LIMITED [Active] CIN = L65990MH1945PLC004558

Company & Directors' Information:- KOTAK MAHINDRA BANK LIMITED [Active] CIN = L65110MH1985PLC038137

Company & Directors' Information:- KOTAK AND COMPANY PRIVATE LIMITED [Active] CIN = U51900MH1995PTC094071

Company & Directors' Information:- JOSEPH AND CO PVT LTD [Active] CIN = U01211KL1954PTC000507

Company & Directors' Information:- E R JOSEPH & CO PVT LTD [Strike Off] CIN = U28920WB1955PTC022404

    OP(C). No. 1807 of 2019

    Decided On, 19 September 2019

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE SUNIL THOMAS

    For the Petitioner: Latheesh Sebastian, Advocate. For the Respondents: ----



Judgment Text


1. Petitioner is a scheduled bank. Respondents had availed a loan from the petitioner/bank. Since default was committed, petitioner initiated arbitration proceedings at Chennai claiming that, it was the seat of arbitration. Ext.P1 interim order was passed under section 17 of the Arbitration and Conciliation Act attaching the movable properties of the respondent and appointing an officer of the petitioner as the receiver. Petitioner filed C.M.A(Arb).No.649 of 2019 before the District Court, Ernakulam to execute Ext.P1 order. I.A.No.4078 of 2019 was also filed for appointing an advocate commissioner for taking possession of the movables of the respondents. The reason stated was that, respondents were residing at Ernakulam and movable properties were within the jurisdiction of District Court, Ernakulam.

2. Learned VIIth Additional District Judge before whom the matter came up, held that the interim order under section 17(2) can be executed by that Court only if the order is transferred for execution under section 39 of the Code of Civil Procedure. Arbitration OP was returned with a direction to present before the proper court. This order is assailed in this original petition.

3. Challenging the above order, learned counsel for the petitioner contended that the court below, by the impugned order, committed a jurisdictional error by holding that the order can be implemented only if the order is transmitted under section 39 of the CPC.

4. Heard the learned counsel for the petitioner.

5. Considering the limited question of jurisdiction, I am not inclined to issue notice to the respondent at this stage. The short point that arises is whether, a Court, in which the interim order under section 17 of the Arbitration Act is sought to be enforced has to follow the procedure under section 39 of the CPC.

6. Court below held that, it is the seat of the arbitration which determine the territorial jurisdiction of the Court. To support it, court below relied on the decision reported in Mobile Distribution (P) Ltd. v. Datawind Innovation (P) Ltd. (2017(2) KLT 665). It was held that another Court will get jurisdiction only if the interim order is transmitted under section 39 of the CPC.

7. The court below proceeded to hold that, section 39 deals with the execution of the decree and the transferee Court can execute the order in compliance with section 39 of the CPC. Court below thereafter proceeded to hold that the “order” under section 17(2) of the Arbitration and Conciliation Act, shall not take in an award. Court referring to the various decisions concluded that, both are different and consequently, the Court can enforce the interim order only after compliance of section 39 of the CPC.

8. Section 17(2) of the Arbitration Act provides that, subject to section 37 of the Act, any order issued by the Arbitral Tribunal under section 17 of the Arbitration Act shall be an order of the Court and can be enforced under the provisions of CPC as if it is an order of that Court. The initial premise from where the Court proceeded was that, an award was different from an interim order under section 17(2) of the Arbitration Act.

9. This Court, in Pradeepan K.N. v. S.I of Perumbavoor (2016(3) KHC 714) has dealt with section 17 of the Arbitration and Conciliation Act. This Court held that, while considering an application under section 17(2) of the Act, it shall resort to section 94 of the Code of Civil Procedure to enforce the interim order of the Arbitral Tribunal and is not required to follow any procedure as contemplated for the execution under the CPC. However, the enforcement of the final award under section 36 of the Arbitration Act is like the execution of the decree. While exercising the jurisdiction under section 17(2), the Court was not expected to follow any procedure under the CPC.

10. This is fortified by the decision of the Hon'ble Supreme Court in Sundaram Finance Ltd v. Abdul Samad and another (2018 KHC 6108), in which, while referring to the enforcement of an award, it was held that, there was no requirement for obtaining transfer of decree from the Court, which would have jurisdiction over arbitral proceedings.<

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br /> 11. In the light of above, I find no reason to sustain the impugned order. Evidently, section 39 has no application to the facts of the case. Accordingly, the finding that procedure contemplated in section 39 of the Act has to be complied with cannot be sustained. The impugned order is set aside. Consequently, original petition is allowed. Court below is directed to receive on file C.M.A. (Arb).No.649 of 2019 and to proceed in accordance with law.
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