New Delhi: ‘Court is vacant’, ‘original file is untraceable’, ‘presiding officer not present’, ‘judgment debtor is not present’, ‘time is sought by judgment debtors’, ‘advocates’ strike’, ‘advocates desist from court work’ — these are some of the reasons why a petition filed to execute a 1992 arbitration award was never heard by small causes court in Uttar Pradesh’s Prayagraj, despite being listed 147 times in the last 20 years.
The Supreme Court (SC), which took cognisance of the matter last week and issued notice to the other party, called it a “sorry state of affairs”, and directed the Allahabad High Court registrar to place on record how many execution petitions to execute such awards — both under the Arbitration Act, 1940, and its newer version, the Arbitration and Conciliation Act, 1996 — are pending in subordinate courts/executing courts in the state of Uttar Pradesh.
The bench led by Justice MR Shah also observed that “if the award, under the Arbitration Act, is not executed at the earliest, it will frustrate the purpose and object of the Arbitration Act as well as the Commercial Courts Act (2015)”.
Awarded to M/S Chopra Fabricators and Manufacturers Private Limited (CFMPL) in January 1992, the decree of Rs 1.68 crore was issued against a public firm — Bharat Pumps and Compressors Limited. CFMPL’s proprietor, 83-year-old Harvinder Singh Chopra, invoked the arbitration proceedings after a dispute arose between his company and Bharat Pumps.
An additional district judge of Prayagraj (then Allahabad) finalised the award in April 2003 and the same was accepted by both the contesting parties.
However, the public firm did not pay Chopra the decree amount, forcing him to move an execution petition before the small causes court in Prayagraj in September 2003.
However, the quick resolution process envisaged under the Arbitration Act eluded Chopra, whose case saw four judges preside over it in the small causes court in the last two decades.
Aggrieved by the “slow pace” of court proceedings, Chopra moved the SC in March after the Allahabad High Court in December 2021 refused to accede to his request for a direction to the small causes court to expedite hearing of his case.
The petitioner’s struggles
According to the arbitration award, Bharat Pumps and Compressors Limited was directed to pay Rs 1.68 crore to Chopra’s firm, along with an annual compound interest of 12 per cent from the date of claim till the date of realisation.
For Chopra, the struggle to recover this amount began the day when the decree was passed. In consonance with the procedure laid out in the Arbitration Act, 1940, he moved the small causes court in Prayagraj for finalisation of the decree, which was done after 11 long years on 28 April, 2003. However, the interest component was reduced to 6 per cent from the earlier 12 per cent.
Given that Bharat Pumps and Compressors Limited did not comply with the award, Chopra approached a district court in Allahabad with an execution petition on 11 September, 2003.
In the last 20 years, the matter was listed in the worklist of the court 147 times, but not even once has it witnessed an effective hearing. A perusal of the orders passed on these dates reveal several reasons for the inexplicable delay.
One of the primary causes for the case getting stuck was the unavailability of the judge hearing the matter. The order sheets show that on 47 occasions, the court was either “vacant” or the “presiding judge was on leave”, or the judge was out on “training”, or was “busy” with some other work.
Another reason cited for adjournments in the case is lawyers desisting from work in the court. So while the parties remained present in the court on all these dates, the court did not proceed with a hearing because the advocates had abstained from appearing.
It was only on 21 July, 2012 that the judgment debtor, against whom the decree was passed, was granted an opportunity to file its objection to the execution petition.
The sole effective order in the case was passed on 10 December, 2014, when an application was moved to insert the word “dead” in front of one of the defendants.
When Chopra moved Allahabad High Court last year, the HC in its order said it was not “inclined” to “grant priority” to Chopra’s case, overriding several cases that are pending and equally pressing.
“The fact that a particular case requires urgent disposal is to be considered by the concerned court itself,” the HC said, giving liberty to Chopra to move the small causes court, and directing the latter to consider his request to fast-track the hearing.
‘Precluded justice to petitioner, a cancer patient’
In his petition before SC, Chopra has assailed both the lower court and HC for “defeating the objective” of the Arbitration Act that is to provide an alternative resolution dispute mechanism for swift redressal of disputes.
“But this case is an example of non-execution of a decree in an arbitration award matter on unsubstantiated pretext. Regular adjournments in the case have precluded justice to the petitioner, who is suffering from multiple ailments, including prostate cancer, for which he is on anti-cancer injections and heart ailments,” Chopra’s lawyer, Aarti U Mishra, told ThePrint.
The HC order too is in contravention of the law as well as previous Supreme Court judgments, submitted the petition. It ignores the SC mandate that execution shall not become a second round of litigation and an execution petition must be decided within six months from the date of filing of the plea, and proceedings can be extended only by recording reasons in writing, it further said.
(Edited by Gitanjali Das)