The Supreme Court has held that a Letters Patent Appeal (LPA) is not maintainable against an order passed by a Single Judge in the course of executing an arbitral award, as the Arbitration and Conciliation Act, 1996 (the Act) is a self-contained code. The Court further ruled that the issuance of a notice under Order 21 Rule 22 of the Code of Civil Procedure (CPC) is a mandatory condition precedent to jurisdiction when execution is sought against the legal representative of a deceased judgment debtor.
A Bench comprising Justice Sanjay Kumar and Justice Alok Aradhe quashed the orders of the Division Bench of the Bombay High Court which had entertained Letters Patent Appeals and stayed the execution proceedings initiated by the appellant.
Background of the Case
The dispute arose from a fracture in a joint family business involving late Mr. Kantilal Dalal (father of the appellant) and late Mr. Girdharilal Dalal (uncle of the appellant). To resolve disputes regarding family assets, the appellant, Bharat Kantilal Dalal, sought arbitration. On July 12, 2010, a sole arbitrator passed an award in favour of the appellant.
Following the award, the appellant initiated execution proceedings in Dubai and Singapore against his father. The father, who had executed a Will dated September 16, 1994, in favour of his brother (the uncle), passed away on March 8, 2013. The appellant then sought execution in the Bombay High Court, requiring the uncle—a substantial beneficiary under the Will—to disclose the assets. The uncle refused, claiming he was not a party to the award, and filed a suit declaring the award a nullity.
On December 18, 2014, a Single Judge of the Bombay High Court directed that execution must proceed and a notice under Order 21 Rule 22 CPC should issue. The Single Judge also disposed of a chamber summons filed by the uncle, holding that the award could not be declared a nullity at that stage. The respondents (heirs of the uncle) challenged these orders before a Division Bench via Letters Patent Appeals. The Division Bench, by orders dated March 6, 2018, stayed the Single Judge’s orders, leading to the present appeal before the Supreme Court.
Arguments
The appellant contended that the Arbitration and Conciliation Act, 1996, is a “complete code in itself.” Relying on Section 5 (Extent of judicial intervention), Section 36 (Enforcement), Section 37 (Appealable orders), and Section 50 (Appealable orders) of the Act, it was argued that no Letters Patent Appeal lies against the orders of the Single Judge passed in execution proceedings. The appellant further argued that the Division Bench erred in admitting the appeals without assigning reasons.
Conversely, the respondents argued that they were strangers to the arbitration proceedings and the award dated July 12, 2010. They contended that they did not have the locus to challenge the award under the Act as parties, and thus, the Letters Patent Appeals were maintainable. They further submitted that the award dealt with properties in which they had substantial interest.
Court’s Analysis
The Supreme Court examined two primary legal issues: the requirement of notice under Order 21 Rule 22 CPC and the maintainability of the Letters Patent Appeals.
1. Mandate of Order 21 Rule 22 CPC
The Court observed that Order 21 Rule 22 CPC mandates the executing court to issue notice to the person against whom execution is applied for if the application is made more than two years after the decree or against the legal representative of a party to the decree.
Justice Aradhe, writing for the Bench, observed:
“The use of word ‘shall’ in Order 21 Rule 22 (1) admits of no ambiguity and the executing court is under an obligation to issue notice to the person against whom a decree is sought to be executed in the circumstances enumerated therein.”
The Court emphasised that this requirement stands on “statutory compulsion” and the “principles of natural justice.” The judgment stated:
“The requirement of notice under Order 21 Rule 22 (1) to the persons enumerated therein is not a mere procedural courtesy but is the very foundation of the jurisdiction when the execution is sought against the estate of the deceased judgment debtor.”
2. Maintainability of Letters Patent Appeals
Addressing the maintainability of the appeals before the High Court Division Bench, the Supreme Court noted that the respondents were arrayed in the execution proceedings as legal representatives/executors of the Will of the deceased father, not in their individual capacity. Therefore, they “cannot be treated as third party to the arbitral award.”
The Court held:
“The Act is a self-contained code and is founded upon principles of party autonomy, expedition and finality. The legislative design of the Act restricts judicial interference. The orders of the learned Single Judge dated 18.12.2014, were passed in course of execution of arbitral award and are, therefore, traceable to the Act and not to CPC.”
Consequently, the Court ruled that the respondents step into the shoes of the judgment debtor for the limited purpose of execution, and the Letters Patent Appeals were not maintainable.
Decision
The Supreme Court quashed and set aside the impugned orders dated March 6, 2018, passed by the Division Bench of the Bombay High Court, dismissing the Letters Patent Appeals as not maintainable.
To restore the execution proceedings to the correct legal track, the Court issued the following directions:
- The Single Judge shall issue notice to the respondents under Order 21 Rule 22 (1) of the CPC in Execution Application (L) No. 1036 of 2013.
- On receipt of such notice, it would be open for the respondents to prefer objections to the execution proceedings under Order 21 Rule 23 (2) of the CPC.
- The objections shall be dealt with on their own merit by the learned Single Judge, “without being influenced by any of the observations/findings contained in the orders dated 18.12.2014.”
The Court clarified that the respondents “must be placed in the position, the law intended them to occupy i.e. the legal representatives are entitled to be heard before their estate is saddled with execution.”
Case Details:
- Case Title: Bharat Kantilal Dalal (Dead) Through LR. v. Chetan Surendra Dalal & Ors.
- Case Number: Civil Appeal Nos. 1026-1027 of 2019
- Coram: Justice Sanjay Kumar and Justice Alok Aradhe
- Citation: 2025 INSC 1334
