Division Bench Orders in Execution of Arbitral Award Quashed; Single Judge Directed to Issue Statutory Notice Under Order 21 Rule 22

A bench of Justices Sanjay Kumar and Alok Aradhe heard appeals challenging orders of a Division Bench of the Bombay High Court that had admitted Letters Patent Appeals and stayed two orders of a Single Judge in execution proceedings arising out of an arbitral award. The appeals raised the question whether Letters Patent Appeals lay against interlocutory orders passed in the course of execution of an arbitral award and whether the executing court complied with the mandatory notice requirement under Order 21 Rule 22 of the Code of Civil Procedure.

The Court allowed the civil appeals, held that the Division Bench erred in admitting the Letters Patent Appeals and staying the Single Judge’s orders, and directed that the execution proceed in accordance with the CPC. The Court emphasised that Order 21 Rule 22 imposed a mandatory duty on the executing court to issue notice where execution was sought against the legal representative of a deceased judgment-debtor. The Court, in its reasoning, observed: The Court further quoted the statutory principle that “the use of word ‘shall’ in Order 21 Rule 22 (1) admits of no ambiguity” and that “the requirement of notice under Order 21 Rule 22 (1) ... is not a mere procedural courtesy but is the very foundation of the jurisdiction” when execution was sought against an estate.

Background

The dispute arose from a sole arbitral award dated 12.07.2010 in favour of the appellant, who was the son of the deceased judgment-debtor. Execution of the award was pursued in Dubai and recognized in Singapore; proceedings in multiple jurisdictions produced inconsistent practical results and the award remained unsatisfied. The deceased had executed a Will dated 16.09.1994 in favour of his brother (the uncle), who became a substantial beneficiary and legal representative after the deceased’s death on 08.03.2013. The appellant filed Execution Application (L) No.1036 of 2013 in the Bombay High Court and sought various reliefs including issuance of notice under Order 21 Rule 22 CPC, disclosure of assets and attachment orders. The Single Judge, by orders dated 18.12.2014, directed that execution must proceed, granted that a notice under Order 21 Rule 22 should issue and restrained creation of third-party rights over certain properties. The uncle filed chamber summonses challenging the award as a nullity; the Single Judge held such challenges to be premature and that the award had attained finality.

The respondents filed Letters Patent Appeals (Appeal Nos. 320 and 372 of 2015) before a Division Bench which, by orders dated 06.03.2018, admitted the appeals and stayed the Single Judge’s orders. The appellant challenged those Division Bench orders before the Supreme Court. The Supreme Court found that the Letters Patent Appeals were not maintainable because the impugned orders were passed in the course of execution of an arbitral award and were traceable to the Arbitration and Conciliation Act; respondents were acting as legal representatives and “stepped into the shoes” of the judgment-debtor for execution purposes. The Court quashed and set aside the Division Bench orders, dismissed the Letters Patent Appeals as not maintainable and issued specific directions: (i) the learned Single Judge shall issue notice to the respondents under Order 21 Rule 22(1) CPC; (ii) on receipt of such notice, respondents could prefer objections under Order 21 Rule 23(2) CPC; and (iii) the Single Judge shall decide objections on merits without being influenced by earlier observations. The appeals were disposed of accordingly.

Case Details: Case No.: 2025 INSC 1334 Case Title: Bharat Kantilal Dalal (Dead) through LR. v. Chetan Surendra Dalal & Ors. Appearances: For the Petitioner(s): [Not indicated in the judgment] For the Respondent(s): [Not indicated in the judgment]