Punjab & Haryana HC: Execution Court Must Enforce Section 17 Arbitration Orders Without Delay, Warrants of Attachment Directed

Case Name: Shri Suresh Garodia v. Niyaz Ahmed Khan & Anr.
Date of Judgment: January 14, 2020
Citation: CR No. 227 of 2020
Bench: Hon’ble Mr. Justice Rajiv Narain Raina

Held: The High Court allowed the revision petition and held that the execution court erred in issuing only notice instead of warrants of attachment when called upon to enforce an interim order under Section 17 of the Arbitration and Conciliation Act, 1996. It held that under Order 21 Rule 22(1)(a) CPC, notice is required only if execution is sought after two years from the date of decree. Since the execution application was filed well within two years of the arbitrator’s interim order, the District Judge, Gurugram ought to have straightaway issued warrants of attachment to preserve the subject matter. The Court modified the order dated 18.12.2019 and directed that the arbitrator’s interim protection order dated 03.11.2019 restraining transfer of shares and property of Starline Hotels Ltd. be enforced in letter and spirit.

Summary: The petitioner, decree-holder in arbitral proceedings, filed execution for enforcement of interim measures granted under Section 17 of the Arbitration Act. The arbitrator had restrained the respondents from transferring 2,80,000 shares of Starline Hotels Ltd. and from selling or creating third-party rights in its immovable property “Hotel Grand Starline” at Guwahati, Assam, creating a charge to secure Rs. 16.14 crores as balance consideration. The District Judge, Gurugram, instead of issuing warrants of attachment, issued notice to the respondents. The petitioner argued this was contrary to Order 21 Rule 22 CPC, relying on Parminder Singh Sandhu v. Maninder Singh (CR No. 1604 of 2015), where it was held that executing courts must directly issue warrants when the decree is within two years. The High Court agreed, emphasizing that delays could defeat arbitration by enabling dissipation of assets. It reiterated that Section 17 orders are enforceable as decrees and execution courts must act promptly to preserve the arbitral corpus.

Decision: The High Court allowed the revision, directed that the arbitrator’s interim order dated 03.11.2019 be enforced, and modified the District Judge’s order by requiring consideration of issuing warrants of attachment immediately to secure the property pending arbitration.