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U.N. Automobiles v/s Sundaram Finance Ltd.

    Civil Writ No. 14291 of 2018

    Decided On, 04 October 2018

    At, High Court of Rajasthan

    By, THE HONOURABLE MR. JUSTICE DINESH MEHTA

    For the Appearing Parties: Rajesh Shah, Advocate.



Judgment Text


1. The present writ petition is directed against the order dated 06.08.2018 passed by the learned Additional District Judge No.1, Udaipur (hereinafter referred to as the 'Executing Court'), whereby the application dated 11.07.2018 under Order XXI Rule 54 of the Code of Civil Procedure filed by the decree-holder has been allowed and the immovable properties belonging to the petitioner have been ordered to be attached and a warrant of possession (Kurki Warrant) has been issued.

2. The facts in a nutshell relevant for the purpose of present writ petition are that an award dated 20.03.2017 came to be passed pursuant to a compromise placed by the petitioners and the respondent.

3. The petitioners, respondents in the claim case, failed to honour the terms of the award for which the claimant respondent herein lodged execution for its enforcement. During the course of the execution, the claimant filed an application dated 11.07.2018 under Order XXI Rule 54 of the Code of Civil Procedure and sought attachment of the petitioners' immovable properties contending inter alia that the award/decree cannot be satisfied by the movable property belonging to the petitioners.

4. In response to the aforesaid application under Order XXI Rule 54 of the Code of Civil Procedure, no formal reply seems to have been filed by the petitioners. However, in response to the execution application, a reply had been filed on 11.12.2017 contending that the immovable properties sought to be attached by the Executing Court have been mortgaged with the Bank of Baroda and as such the same cannot be attached.

5. Learned Trial Court having considered the aforesaid contention of the petitioners allowed the application dated 11.07.2018 and proceeded to attach immovable properties of the petitioners for enforcement of the award/decree passed by the arbitrator.

6. Mr. Shah, learned counsel for the petitioners contended that as per the terms of the award, particularly clause 5(c), execution could not have been lodged prior to 30.09.2018. It will not be out of place to reproduce Clause 5 of the award, which reads thus:-

"5) In view of the above compromise memo an award is passed as follows:

a) In the result, I pass an Award directing respondents 1 to 3 jointly and severally to pay to the claimant Rs. 2,34,14,008.51/-ps with interest thereon at 18% per annum from 18.09.2014 till realization with costs of Rs. 1,01,150/- made up the Arbitrator's fee of Rs. 1,00,000/- Arbitrator's expenses of Rs. 1000/- and value of Non-judicial stamps Rs. 150/-

b) If however, if the respondents pay a sum of Rs. 1,85,00,000/- (Rupees One Crore and eighty five lakhs only) as stated below, the entire amount as per 5 (a) shall stand fully discharged.

(i) A sum of Rs. 10,00,000/- on or before 31.03.2017;

(ii) A sum of Rs. 1,75,00,000/- on or before 31.03.2018 (as per the terms of the compromise)

(iii) Any amount paid after 31.03.2018 and before 30.09.2018 shall carry interest at 12% per annum.

c) If the respondents failed to pay the amount shown under Clause 5 (b) on or before the due dates as per clause 5 (b), the claimant is entitled to execute the award as per clause 5 (a) (less the amount if any paid by the respondents as per clause 5(b)), after 30/09/2018.

d) Time is the essence of the compromise

e) If the respondents pay the amount as per clause 5 (b) on or before the due dates, the claimant is directed to bear the fees and expenses of the Arbitrator

6) The Arbitration was held at Chennai."

7. Learned counsel for the petitioners further argued that the Trial Court had seriously erred in passing the impugned order and directing for attachment of the immovable properties of the petitioners inasmuch as the same were already mortgaged with the Bank and the original papers in relation thereof were lying with the Bank.

8. I have heard learned counsel for the petitioners and perused the material available on record.

9. As far as first argument raised by Mr. Shah, learned counsel for the petitioners is concerned that the execution lodged by the respondent claimant was premature, suffice it to observe that no such objection was raised by the petitioners, during the execution proceedings, as such in the present proceedings, filed under Article 227 of the Constitution of India, such argument cannot be permitted to be raised.

10. Further, the entire argument of Mr. Shah was based upon reading of the following part of the Clause 5(c):-

"the claimant is entitled to execute the award as per clause 5 (a) (less the amount if any paid by the respondents as per clause 5 (b), after 30/09/2018."

11. Such argument of Mr. Shah is fallacious and ill conceived. A part of the clause cannot be read dehors the complete clause nor can it be read in ignorance of other relevant part of the order. A bare look at the opening words of clause, particularly the expression "If the respondents failed to pay the amount shown under Clause 5 (b) on or before the due dates as per clause 5 (b)" leaves no room for ambiguity that on failure of the respondents (petitioners herein), to honour the award within the dates as prescribed in Clause 5(b) the claimant was entitled to execute the award. A look of clause (d) and (e) of the award fortifies my aforesaid view, as the time has been held to be an essence.

12. Hence, in considered opinion of this Court, the execution proceedings lodged by the claimant cannot be said to be premature as the petitioners have failed to comply with the timeline prescribed in para 5 (b) of the award.

13. Adverting to the second submission of Mr. Shah that the

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order of attachment cannot be passed as the properties in question are lying mortgaged with the Bank is equally misconceived. Firstly such objection cannot be considered at the instance of the petitioners judgment debtors and the same can be raised by the Bank, the mortgagee of the properties and secondly the mere fact that the property has been mortgaged to the Bank, cannot be a ground for rejection of the application under Order XXI Rule 54 of the Code. 14. There is neither any error of jurisdiction nor any error of law in the order dated 06.08.2018 passed by the Executing Court. The writ petition at hands is thus dismissed.
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