Itihas Samantray vs Tata Motors Finance Ltd.

S.K. Mishra, J.—Heard. The petitioner has filed an application u/s 34 of the Arbitration and Conciliation Act, 1996 before the learned District Judge at Bhubaneswar bearing Arbitration (P) No. 227 of 2013 with a prayer to direct the opposite party i.e. Tata Motors Finance Ltd. not to take any coercive action against the petitioner.

The facts are not in dispute. The petitioner has purchased a vehicle by availing loan from the Tata Motors Finance Ltd. As there was default in repayment of the same, the matter was referred to the arbitration and the sole arbitrator passed award in favour of the opposite party. The opposite party as yet has not instituted in a case for execution of the award. In the meantime, the petitioner filed an application u/s 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award. Therein the petitioner filed an application for restraining the opposite party from taking any coercive action against the petitioner.

The learned counsel for the petitioner relies on the reported case of National Aluminium Co. Ltd. Vs. Pressteel and Fabrications Pvt. Ltd. and Another, , wherein at paragraph-10 of the judgment the Hon''ble Supreme Court has held as follows:

At one point of time, considering the award as a money decree, we were inclined to direct the party to deposit the awarded amount in the Court below so that the applicant can withdraw it on such terms and conditions as the said Court might permit them to do as an interim measure. But then we noticed from the mandatory language of Section 34 of the 1996 Act, that an award, when challenged u/s 34 within the time stipulated therein, becomes unexecutable. There is no discretion left with the Court to pass any interlocutory order in regard to the said award except to adjudicate on the correctness of the claim made by the applicant therein. Therefore, that being the legislative intent, any direction from us contrary to that, also becomes impermissible. On facts of this case, there being no exceptional situation which would compel us to ignore such statutory provision, and to use our jurisdiction under Article 142, we restrain ourselves from passing any such order, as prayed for by the applicant.

Coupled with the aforesaid observations, this Court takes note of the fact that Section 36 of the Arbitration and Conciliation Act, 1996 provides that where within the time for making any application to set aside the arbitral award u/s 34 has expired, or on such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were decreed.

Thus, from the aforesaid reported as well as the Section 36 leads the Court to the conclusion that there is an automatic suspension of the execution of the award, the moment the application challenging the award is filed u/s 34 of the Act. Thus, the award has already been suspended by operation of law. This Court finds no reason to pass order to that effect.

With such observation, the writ petition is disposed of. Urgent certified copy of this order be granted as per rules.