Allahabad High Court
M/S KESARWANI & COMPANYversusSMT. PARWATI DEVI AND 6 OTHERS
- Decided
- Bench
- PIYUSH AGRAWAL
Holding
An order passed without reasons is invalid and must be set aside.
Summary
M/s Kesarwani & Co. challenged a Commercial Court order that summarily rejected its applications (Ga/31 and Ga/33) seeking execution of a 2016 arbitral award. The petitioners argued that the order was unsustainable because it was passed without any reasons, violating the principle that every adjudicatory order must be reasoned. The respondents contended that the petitioners had delayed filing a Section 36 application and relied on precedents limiting such delays. The High Court held that an order devoid of reasons is contrary to natural justice and cannot stand. Consequently, the Court quashed the Commercial Court’s order, allowed both petitions, and remanded the matter for a fresh, reasoned decision within 15 days, staying any coercive action pending disposal.
Issues considered
- Whether a Commercial Court order rejecting applications without recording reasons is legally valid.
- Whether the delay in filing a Section 36 application under the Arbitration and Conciliation Act, 1996 affects the validity of the order.
Legislation cited
- Arbitration and Conciliation Act, 1996 — s. 34, 36(2), 36(3)
- Code of Civil Procedure, 1908 — s. Order 41 Rule 5
Subjects
- Arbitration
- Section 34
- Section 36
- Reasoned order
- Natural justice
- Execution of award
- Article 227
- Commercial Court
- Quashing order
Judgment
HIGH COURT OF JUDICATURE AT ALLAHABAD
MATTERS UNDER ARTICLE 227 No. - 13228 of 2026
M/S Kesarwani & Company
.....Petitioner(s)
Versus
Smt. Parwati Devi And 6 Others
.....Respondent(s)
Counsel for Petitioner(s) : Ashish Mishra, Mohd. Arish
Counsel for Respondent(s) : Abhiuday Mehrotra, Rishabh Agarwal
With
MATTERS UNDER ARTICLE 227 No. - 13246 of 2026
(M/s Kesarwani Sheetalaya Vs. Smt. Parwati Devi and others)
Court No. - 7
HON'BLE PIYUSH AGRAWAL, J.
1. Heard Mr. Ashish Mishra for the petitioner and Mr. Abhiuday
Mehrotra and Mr. Rishabh Agrawal for the respondents.
2. Similar controversy is involved in both the aforesaid petitions,
therefore, with the consent of the parties, both the petitions are decided at
the admission stage by common order treating Matter U/ A 227 No.
13228 of 2026 as leading case.
MATTERS UNDER ARTICLE 227 No. - 13228 of 2026
3. By means of present petition, the petitioner is assailing the order dated
7.9.2026 passed by the Commercial Court, Allahabad whereby the
petitioners applications Ga /31 and Ga/33 have been rejected.
4. Learned counsel for the petitioner submits that the dispute is arising out
of the arbitral award dated 27.11.2016 passed by the learned Arbitrator in
Arbitration Case No. 55 of 2010. He submits that by the impugned award,
apart from the claim amount, a direction has been given to pay the interest
@ 15 % per annum for a period from 29.10.2008. He submits that
aggrieved by the said award, the petitioner has filed an appeal under
Section 34 of the Act registered as Arbitration Case No. 2 of 2017.
A227 No. 13228 of 2026
2
During pendency of the said appeal, the respondents have filed Execution
Case No. 70 of 2017 in which the petitoner has preferred application
Ga/31 and Ga/33 but the Commercial Court summarily rejected the said
applications without assigning any reason. He submits that while rejecting
the said applications, the Commercial Court has not assigned any cogent
reason, therefore, the order is not sustainable in the eyes of law. In
support of his submission, learned counsel for the petitioner has relied
upon the judgment of the Supreme Court in the case of Kranti Associates
Private Limited and another Vs. Masood Ahmed Khan and others,
(2010) 9 Supreme Court Cases 496.
5. Per contra, learned counsel for the respondents has vehemently
opposed the impugned order. He submits that an application under
Section 36 (2) and (3) of the Arbitration and Conciliation Act has been
filed after almost 9 years of filing of appeal under Section 34 of the Act.
The applicant did not move before the Court with reasonable expedition
for interim prayer. In support of his submission, learned counsel for the
respondent has relied upon the judgement of Supreme Court in the case of
Sepco Electric Power Constructions Corporation Vs. Power Mech
Projects Ltd. (2026) 3 SCC 701 and National Projects Construction
Corporation Ltd Vs. Ishvakoo (India) Pvt. Ltd. 2026 SCC Online SC
1535. He further submits that while passing an order under Section 36 (2)
and (3) of the Act, the Court has to keep in mind the provisions of Order
41, Rule 5 of CPC, which contemplates for deposit of decreetal amount
with interest. To buttress his submission, he has relied upon the decision
of the Apex Court in the case of Atma Ram Properties (P) Ltd. Vs.
Federal Motors (P) Ltd. (2005) 1 Supreme Court Cases 705.
6. After hearing learned counsel for the parties, the Court has perused the
records.
7. The record shows that no reason has been assigned while rejecting the
applications filed by the petitioner.
8. It is settled law that reason is the heartbeat of every conclusion. An
order without valid reasons cannot be sustained. To give reasons is the
rule of natural justice. One of the most important aspect for necessitating
A227 No. 13228 of 2026
3
to record reason is that it substitutes subjectivity with objectivity. It is
well settled that not only the judicial order, but also the administrative
order must be supported by reasons recording in it.
9. Highlighting this rule, the Hon'ble Supreme Court, in the cases of
Assistant Commissioner, Commercial Tax Department, Works
Contract & Leasing, Kota Vs. Shukla & Brothers, (2010) 4 SCC 785,
M/s Travancore Rayon Ltd. v. Union of India, 1969 (3) SCC 868 have
observed that the administrative authority and the tribunal are obliged to
give reasons, absence whereof would render the order liable to judicial
chastisement. Similar view has been taken in the case of Kranti
Associates Pvt. Ltd. and another (supra).
10. Once the reason has not been assigned by the Commercial Court
while passing the impugned order, the impugned order is not justified.
11. In view of the facts and circumstances of the case as well as law laid
down by this Court, the impugned orders passed in both the petitions
cannot be sustained in the eyes of law and same are hereby quashed.
12. Both the petitions succeed are allowed. The matter is remanded to
the Commercial Court, Prayagraj, who shall decide the
applications Ga/31 and Ga/33, afresh in accordance with law by reasoned
and speaking order, within a period of 15 days from the date of
production of certified copy of this order.
13. Till disposal of the aforesaid applications or for a period 20 days,
whichever is earlier, no coercive action shall be taken against the
petitioner(s), herein.
14. It is made clear that no adjournment shall be granted to either of the
parties till the disposal of the applications Ga/31 and Ga/33.
(Piyush Agrawal,J.)
September 23, 2026
Rahul Dwivedi/-
Digitally signed by :-
RAHUL DWIVEDI
High Court of Judicature at Allahabad
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