B.Krishna Reddy v. M/S Shriram City Union Finance Limited Hanmakonda Branch

HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY AND HON'BLE SMT JUSTICE T.RAJANI CIVIL REVISION PETITION No.4083 of 2016 Date:06.02.2017 Between:

B.Krishna Reddy, S/o Sanjeeva Reddy ..... Petitioner And:

M/s Shriram City Union Finance Limited, Hanmakonda, Branch, reptd by its GPA Holder and Authorised SignatoryK.V.Ramana and another. .....Respondents Counsel for the petitioner: Mr. K.V.Bhanu Prasad Counsel for the respondents: Mr. O.Udaya Kumar For Mr. Maheswara Rao Kunchem The Court made the following:

ORDER: (per Hon'ble Sri Justice C.V.Nagarjuna Reddy) This Civil Revision Petition arises out of order, dated 08.9.2015, in E.A.No.72 of 2015 in E.P.No.112 of 2015 in Arbitration Case No.503 of 2012 on the file of the learned Principal District Judge, Warangal.

We have heard the learned counsel for both the parties and perused the record.

Respondent No.1 initiated arbitration proceedings before the sole arbitrator for recovery of certain monies based on the purported mortgage. The sole arbitrator passed award, dated 15.6.2013, in Arbitration Case No.503 of 2012 by granting the following reliefs:

"(i) Respondent Nos.1 and 2 shall pay the claim amount of Rs.20,55,478/- along with future interest @ 10% per annum on the said amount, from the date of reference of this claim petition till the date of this award and @ 18% p.a. from the date of award till the date of realisation.

(ii) In the event of default or failure of the respondents to pay aforesaid Claim amount within a period of 3 months from the date of this Award, the claimant is entitled to attachment of sale of schedule mentioned mortgaged property of the 1st respondent.

(iii) Respondent Nos.1 and 2 do pay a sum of Rs.10,329/- towards half of the costs of this arbitration proceedings to the claimant company."

Seeking execution of the said award, respondent No.1 has filed E.P.No.112 of 2013. The petitioner filed E.A.No.72 of 2015

raising objections to the executability of the award by raising the plea that the Arbitrator has no jurisdiction to pass an award in respect of the mortgaged property. The Executing Court, however, rejected the said objection and dismissed the said E.A. Feeling aggrieved by the said dismissal, judgment debtor No.1 filed this Civil Revision Petition.

Mr. O.Udaya Kumar, the learned counsel representing Mr. Maheswara Rao Kuncham, the learned counsel for respondent No.1-decree holder, on instructions, submitted that as the law is well settled that a mortgage decree could be passed only by a competent civil Court, his client is willing to forego relief No.(ii) granted by the Arbitrator and that the Arbitral award may be treated as a simple money decree. Mr. K.V.Bhanu Prasad, the learned counsel for the petitioner, did not oppose this request.

Having regard to the afore-mentioned facts of the case, the submissions of the learned counsel for respondent No.1 and in view of the judgment of the Supreme Court in Booz Allen and Hamiliton Inc. Vs. SBI Home Finance Limited and Others1, the arbitral award to the extent of relief No.(ii), i.e., "In the event of default or failure of the respondents to pay aforesaid Claim amount within a period of 3 months from the date of this Award, the 1 (2011) 5 SCC 532

claimant is entitled to attachment of sale of schedule mentioned mortgaged property of the 1st respondent", is set aside while sustaining the Arbitral award in respect of the balance reliefs. Respondent No.1 is permitted to enforce the modified arbitral award.

The Civil Revision Petition is, accordingly, partly allowed and E.A.No.72 of 2015 on the file of the lower Court is allowed to the extent indicated above.

As a sequel to disposal of the Civil Revision Petition, CRPMP.No.5291 of 2016 filed by the petitioner for interim relief shall stand disposed of as infructuous.

____________________________ JUSTICE C.V.NAGARJUNA REDDY ________________ JUSTICE T.RAJANI 06th February, 2017 DR