RBI tightens norms for gold NBFCs | Business Standard News

RBI tightens norms for gold NBFCs | Business Standard News

RBI norms as to GOLD LOAN Lending business by NBFCs...and as to opening of branches over and above 1000.

Distressed assets in NBFCs & SARFAESI Act

Distressed assets in banks - Moneylife

The Reserve Bank of India  has decided to make recommendations to the government for allowing designated large NBFCs to assign stressed assets to ARCs under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002 (SARFAESI Act)

Female Agricultural Workers in Assam: A Case Study of Darrang District | IJSRP February 2013 Publication

Female Agricultural Workers in Assam: A Case Study of Darrang District | IJSRP February 2013 Publication



A study of Female Workers in Assam by Dr. Chandrama Goswami.

Transmission in Arbitration Award -Required or not?

 Arbitration and Conciliation Act, 1996, Sec 31 states that the arbitral award shall be made by the members of the Arbitral Tribunal. Copy of signed award will be given to the parties and under Section 32 arbitral proceedings will be deemed to have ended once final award is given or Arbitrator passes specific order terminating the arbitration proceedings. Errors may be corrected within 30 days. Section 34 of the Act provides forum to challenge the award in court of law which challenge can be made after three months from the date the party has received the copy of award or any order, if any, passed under Section 33 of the Act making corrections in the award. This period of three months is extendable by a further period of 30 days.

Further, Section 36 of the Act, after the expiry of the time provided under Section 34 and if any order has been passed under Section 34, award became capable of enforcement as a decree of civil court. Section 36 of the Act is being reproduced below:- 

"Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908(V of 1908) in the same manner as if it were a decree of the Court." 

Section 37 of the CPC defines the Court which passed the decree and will be deemed to include,- 

"(a) where the decree to be executed has been passed in the exercise of appellate jurisdiction, the Court of first instance, and 
(b) where the Court of first instance has ceased to exist or to have jurisdiction to execute it, the Court which, if the suit wherein the decree was passed was instituted at the time of making the application for the execution of the decree, would have jurisdiction to try such suit." 

It is thus apparent that Section 37 makes a reference to the Court.

Section 38 CPC relevant for the purpose of controversy involved in this Court is being reproduced below:- 
"A decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution." 

Section 39 of the CPC enables the Court which passed a decree on the application of the decree-holder to send it for execution to another court where either judgment-debtor resides or carries on business or his property exits within the jurisdiction of such court etc.

Similar provision for transfer of decree has been made under Section 40 if decree is to be executed in another State.

Under the Arbitration Act, 1996 Act, award will be treated as a decree of court but arbitrator has not been treated to be a court. Court has been defined under Section 2(e) of the Act which definition is reproduced below:- 

"Court" means the Principal Civil Court of Original Jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such Principal Civil Court, or any Court of Small Causes; 

Moreover, Section 19 of the Act provides that The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (V of 1908) or the Indian Evidence Act, 1872 (1 of 1872) and the parties are free to agree on the procedure. 

In these circumstances, arbitrator cannot be treated to be a court although award made by him will be executed as decree of the Court. As Arbitrator is not a court, hence Sections 38 and 39 of the CPC would have no application. Since Arbitrator is not a court, it cannot entertain any application for execution. Therefore, it cannot transfer the application for execution under Section 39 of the CPC. The question of transfer would arise only when award still remains unsatisfied even on execution by the court where it is filed for execution. Position thus emerges is that an award can be filed in any court for execution as a decree of civil court where judgment-debtor resides or carries on business or has property within the jurisdiction of the said court. Execution court cannot refuse to entertain the application on the ground that decree holder should first file the application for execution at a place where arbitration award was given and then seek transfer from the said court to any other court. 

Decision by Madhya Pradesh High Court in the case of Computer Sciences Corporation India Pvt. Ltd. v. Harishchandra Lodwal & another reported in AIR 2006 Madhya Pradesh 34 is not correct in the above context. With reference to Section 39 of CPC, Madhya Pradesh High Court took the view that since award is passed at Indore therefore unless and until the Court at Indore transfers the decree to the Court at Delhi, it cannot be executed. Madhya Pradesh High Court proceeded on the basis that the award having been given at Indore, execution application should first be filed at Indore. There is no basis to support this view. 

Above position was considered in the case of Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd. (MANU/DE/1316/2009) by Delhi High Court. Justice Rajiv Sahai Endlaw drew the analogy from Section 635(4) of Companies Act which enabled order of Company Law Board to be executed as a decree holding that Sections 38 and 39 of CPC would have no application. Relying upon the decision given by Apex Court that mere production of certified copy is sufficient to confer jurisdiction for execution, in para 20 of the judgment, learned Judge observes that- 
"I find that certain orders of the company law board are also enforceable by a court. Section 635(4) of the Companies Act, 1956 provides that where any order of the company law board is required to be enforced by a court, a certified copy of the order shall be produced to the court required to enforce the order which shall then be enforced in the same manner and to the same extent as applicable to an order made by a court. 
....... The agreement between the parties restricting jurisdiction of one, amongst many courts also does not extend to execution and is applicable to the court which will adjudicate the lis. I do not see any reason, why where an award has been made executable as a decree, the execution cannot lie at a place where the property against which the decree is sought to be enforced is situated. 
........ Without the fetter of Section 38 the courts of the place where the property/money against which the decree is sought to be enforced is situated would have inherent jurisdiction to entertain the execution." 

Disagreeing with the view taken by Madhya Pradesh High Court (supra), Court holds as under:- 
"A money award, as in the present case, can be enforced through courts of the place wheresoever the money or any property of the party liable to pay is situated." 

This decision was followed by Madras High Court earlier in Kotak Mahindra Bank Ltd. v. Sivakama Sundari S. Narayana S.B.Murthy (MANU/TN/3588/2011). The Court examined in detail the matter and came to the conclusion that order of District Judge directing return of execution application was to be set aside. 

High Court of Punjab and Haryana in Indusind Bank Ltd. v. M/s Bhullar Transport Company and another (MANU/PH/2896/2012) also agreed with the view of Delhi High Court (supra). In paragraph 11 of the judgment, High Court observes as under:- 

"............. There is no provision in the Act stipulating that the arbitration award, which is treated as decree for the purpose of enforcement under section 36 of the Act, shall be deemed to be decree of the court of the place where the award was passed. In the absence of any such provision, in the instant case, it cannot be said that since the award was passed at Chennai, it shall be deemed to be decree to have been passed by the court at Chennai. 
............ Since respondents/judgment debtors are residing and are holding property within territorial jurisdiction of the court at Amritsar, the court at Amritsar certainly has territorial jurisdiction to enforce the arbitration award. It does not require transmission by the court at Chennai for its enforcement by the court at Amritsar because it cannot be said that the award is deemed to be decree passed by the court at Chennai. Even otherwise, the execution proceedings have to take place in court at Amritsar within whose territorial jurisdiction, judgment debtors are holding property and are residing. On the analogy of section 20 CPC also, court at Amritsar has territorial jurisdiction to execute the award because the judgment debtors/respondents are residing within its territorial jurisdiction." 
Madras High Court in the case of Kotak Mahindra v. Sivakama Sundari S. Narayana S.B.Murthy has considered the scheme of entire Act in detail and in para 15 of the judgment takes the view that an Arbitral Tribunal is not a Court. Hence it follows that the Arbitration and Conciliation Act, 1996 elevates an award to the level of a decree, for the purpose of execution. But, it does not elevate the Arbitral Tribunal to the status of a civil court. 

 Therefore, it is clear that no Court to which an application for execution of an award is presented, can insist on the filing of the execution petition first before some other Court and to have it transmitted to it later. It appears that the High Court of Bombay has also adopted the same view, though not by a very elaborate order. 

Para 25 of the judgment is quoted herein below:- 

In the absence of any provision in the 1996 Act, requiring a Court to pass a decree in terms of the award (except in terms of Section 34) and in the absence of any provision in the 1996 Act making the Arbitral Tribunal a Court which passed the decree and in the absence of any provision anywhere making the court within whose jurisdiction an award was passed as the court which passed the decree, it is not open for any executing Court (I) either to demand transmission from any other Court; (II) or to order transmission to any other Court. 

Justice S.Muralildhar of Delhi High Court in the case of M/s Religare Finvest Limited v. Ranjit Singh Chouhan and another has agreed with the view taken by Madras High Court in Kotak Mahindra (supra). No decision of this Court has been cited by either party. 

On considering relevant provisions of the Act and CPC, the judgment of Delhi High Court given in Daelim Industrial Co. Ltd., the judgment of Madras High Court in the case of Kotak Mahindra Bank Ltd. is more reasonable and convincing. 

In view of the above position, the Allahabad High Court , in Ge Money Financial Services Ltd.,New Delhi  V/s  Mohd. Azaz & Anr (CIVIL REVISION No. - 86 of 2012 ) agreed with the view taken by Delhi, Punjab and Haryana and Madras High Court. 

Practical Academic: Transmission of Arbitral Awards for Enforcement: M...

Practical Academic: Transmission of Arbitral Awards for Enforcement: M...: Kotak Mahindra Bank Ltd. v Sivakama Sundari S Narayana S B Murthy Case : C.R.P.(NPD) No.574 of 2011 Bench : Justice V. Ramasubramanian Dat...



Transmission of Arbitration Awards and Execution Petition always a matter of concern ; and the reading of sec 36 of the Arbitration Act makes it confusing for many. Here is a positive ruling states NO NEED TO TRANSMIT..

Family Arrangement - By CA A. K. Jain

Family Arrangement - By CA A. K. Jain



Family Property to be divided equitably and harmoniously by Family Arrangement / Settlement Deed. The essentials / fundamentals are discussed in length.

Backdated Mortgage Assignment Comes Back To Haunt Foreclosure Lender in Juarez v. Select Portfolio

Backdated Mortgage Assignment Comes Back To Haunt Foreclosure Lender in Juarez v. Select Portfolio



 Problem of back-dated mortgage assignments are discussed.

Res Judicata - Civil Procedure Code 1908, Administrative Law

Res Judicata - Civil Procedure Code 1908, Administrative Law



Res Judicata , the Latin Maxim , which stands for 'the thing has been judged'.

Mortgage assignments - stamp duty and registration challenges | Business Standard News

Mortgage assignments - stamp duty and registration challenges | Business Standard News





Mortgage assignments in India have not been very prevalent because of the long term nature of the underlying loans, complexities in stamp duty and registration and resultant uncertainty in enforceability of the underlying loans.