Himachal Pradesh High Court Dismisses Arbitral Award Execution; Jurisdiction Lies Where Debtor Keeps Account, Not Where Bank Has Branches
Isabella Mariam
The High Court of Himachal Pradesh, Single Bench of Justice Ajay Mohan Goel held that an execution petition for enforcing an arbitral award was not maintainable in this State, clarifying that such proceedings cannot be filed solely because the award debtor’s bank has branches here. The Court observed that execution is permissible only in the State where the debtor actually maintains its bank account. The dispute concerned the petitioner’s bid to execute a monetary award against a public sector undertaking that had no assets in Himachal Pradesh. The Court directed the petitioner to approach the competent court in Chhattisgarh.
The petitioner instituted an execution petition seeking enforcement of an arbitral award dated 11.06.2023 passed by a Sole Arbitrator, which held the petitioner entitled to a monetary sum calculated as due on 28.02.2022 along with cost of litigation, other expenses, and interest. The award had arisen from a claim petition filed under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006. The award debtor was a public sector undertaking.
The award debtor filed objections raising a preliminary challenge to the maintainability of the execution proceedings before the High Court of Himachal Pradesh. It contended that it had no movable or immovable property within the territorial limits of the Court, nor any branch office or employees within the State. Pursuant to the Court’s directions, the award debtor submitted affidavits disclosing its assets. These affidavits indicated that the award debtor’s immovable assets were situated in the State of Chhattisgarh and that it maintained a bank account with IndusInd Bank at its Pachpedi Naka branch in Chhattisgarh.
The petitioner argued that, because IndusInd Bank also operated branches in Himachal Pradesh, the execution petition was maintainable under Order XXI Rules 46 and 52 of the Code of Civil Procedure. It submitted that the bank officer was a public officer and therefore the bank account could be attached through proceedings before the Court. The dispute before the Court consequently focused on whether execution could be maintained when the award debtor’s assets were not located within the State.
The Court recorded that “it is not in dispute that the award debtor does not have any immovable or movable assets located within the territorial limits of the State of Himachal Pradesh.” It noted the petitioner’s argument that proceedings could still be maintained due to the presence of the bank’s branches within the State.
The Court referred to the statutory framework, stating that “Order XXI, Rule 46 of the CPC provides that in the case of a debt not secured by a negotiable instrument … the attachment shall be made in the mode prescribed therein.” It also recorded that “Order XXI, Rule 52 of the CPC provides that where the property to be attached is in the custody of any Court or Public Officer, the attachment shall be made by a notice to such Court or Officer.”
The Court addressed the petitioner’s submission by noting that the contention that the bank officer constituted a public officer was insufficient to confer jurisdiction. It stated that “neither any movable nor any immovable property of the award debtor is exists within the territorial limits of the State of Himachal Pradesh.” The Court further observed that the petitioner could have directly filed execution proceedings in the State where the assets were situated, referencing the Supreme Court’s declaration that “an execution can be filed anywhere where the decree can be executed.”
The Court also recorded that “simply because the award debtor has an account in a bank in Chhattisgarh, which bank also has its branches in the State of Himachal Pradesh, the same will not confer jurisdiction upon this Court.” It noted that extending jurisdiction on such a basis would be “slightly far-fetched.” The Court concluded by stating that the general position was that “an execution petition can only be filed where the movable and immovable assets of the debtor are situated.”
The Court directed that “this execution petition is held as not maintainable”. It further ordered that “liberty is granted to the petitioner to file the execution petition in the competent Court in the State where the movable and immovable assets of the award debtor are situated.”
Pending miscellaneous application(s), if any, also stand disposed of accordingly.”
Advocates Representing the Parties
For the Petitioners: M/s Suman Thakur and Madhurika Sekhon, Advocates
For the Respondents: Mr. Gautam Sood, Advocate
Case Title: M/s Esteem Industries v. Chhattisgarh Medical Services Corp. Ltd. and another
Neutral Citation: 2025: HHC:36440
Case Number: Exe. Pt. No. 28 of 2023
Bench: Justice Ajay Mohan Goel
