Source: Telengana High Court 

Why in News? 

A bench of Justice Moushumi Bhattacharya and Justice BR Madhusudhan Rao held that Section 47 of Civil Procedure Code, 1908 cannot be used for unsettling the award.  

• The Telangana High Court held this in the case of X v. Y (2025). 

What was the Background of X v. Y (2025) Case?   

• The case involves a Civil Revision Petition filed against an order dated 9th December 2024 passed by the Commercial Court at Hyderabad. 
• The petitioners are Judgment-debtors who were unsuccessful in an arbitration proceeding that resulted in an Award dated 27th February 2019. 
• The respondent is the Award-holder who was awarded Rs.140,89,01,800 for claim No.1 and Rs.39,50,00,000 as bonus annuity along with 12% interest per annum. 
• The arbitration arose from a Concession Agreement dated 17th August 2007 for design, construction, and maintenance of an expressway in Hyderabad. 
• The respondent filed an Execution Petition on 16th September 2019 for enforcement of the Award. 
• The petitioners filed a petition to set aside the Award, which was dismissed by the Commercial Court on 21st March 2022. 
• The petitioners filed an appeal against this dismissal, which is still pending. 
• A Division Bench granted conditional stay of the Award execution on 17th October 2023, requiring the petitioners to deposit 50% of the awarded amount within 6 weeks. 
• The petitioners failed to deposit the required amount and subsequently filed applications to recall the conditional stay order. 
• These applications were dismissed by the High Court on 5th January 2024, and the Supreme Court dismissed the petitioners' Special Leave Petition on 9th April 2024. 
• The petitioners then filed an application under Section 47 of the Civil Procedure Code, 1908 (CPC) to dismiss the Execution Petition, which was rejected by the Commercial Court on 9th December 2024. 
• This rejection forms the subject matter of the present Civil Revision Petition, which was dismissed on 2nd May 2025.

What were the Court’s Observations? 

• The Court found that Section 8 of The Commercial Courts Act, 2015 (CCA) bars filing of Civil Revision Applications against interlocutory orders of Commercial Courts. 
• The Court acknowledged that while Section 8 cannot impinge upon the High Court's supervisory powers under Article 227 of the Constitution, these powers should be exercised sparingly. 
• The Court determined that the petitioners exhausted all legal options except for their pending appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (A & C Act). 
• The Court noted that the petitioners failed to deposit 50% of the awarded amount as directed, despite the deadline passing more than a year ago. 
• The Court affirmed that the A & C Act is a complete code in itself with comprehensive mechanisms for dispute resolution. 
• The Court held that Section 36 of the A & C Act only refers to the CPC for the limited purpose of enforcement of awards, not for equating awards with decrees. 
• The Court ruled that objections available under Section 47 of the CPC are distinct from those available under Section 36 of the A & C Act. 
• The Court found no reason to interfere with the Commercial Court's decision, as it was well-reasoned and legally sound. 
• The Court determined that the petitioners' conduct showed "blatant disregard of the law" and desperation to avoid payment obligations through "vexatious proceedings." 
• The Court dismissed the Civil Revision Petition as not maintainable and imposed costs of Rs.5 Lakhs on the petitioners, noting that the respondent had been deprived of the fruits of the Award since 2019. 

What is Section 47 of CPC? 

• The Court executing a decree has exclusive jurisdiction to determine all questions arising between parties to the suit relating to the execution, discharge, or satisfaction of the decree. 
• Such questions must be decided by the executing Court itself and cannot be the subject of a separate suit. 
• The executing Court has the authority to determine whether any person is or is not a representative of a party for the purposes of this section. 
• A plaintiff whose suit has been dismissed and a defendant against whom a suit has been dismissed are both considered parties to the suit under this section. 
• A purchaser of property at a sale in execution of a decree is deemed to be a party to the suit in which the decree was passed. 
• All questions relating to the delivery of possession of such property to the purchaser or their representative are considered questions relating to the execution, discharge, or satisfaction of the decree.