Holding

Order XXI Rules 18 and 19 of the Code of Civil Procedure are not applicable to adjustment of cross‑awards that stem from the same arbitration proceeding.

Summary

The appellant, a partner in a construction firm, entered into arbitration with the respondents over a partnership dispute, resulting in two awards dated 19 April 1997 and 25 November 2000. The appellant sought adjustment of the cross‑award under Order XXI Rules 18 and 19 of the CPC, arguing that the awards could be treated as cross‑decrees. The lower courts, including the High Court and the Supreme Court, dismissed the applications, holding that the awards were part of the same arbitration proceeding and not separate suits. The Supreme Court examined whether Rules 18 and 19, which govern execution of cross‑decrees in distinct suits or under a single decree, could be invoked for two awards arising from the same arbitration. It concluded that the factual situation fell outside the scope of those rules, as the awards were not separate decrees but components of a single arbitration case. Consequently, the appeal was dismissed, affirming the lower courts' orders.

Issues considered

Whether Order XXI Rules 18 and 19 of the Code of Civil Procedure, 1908 are applicable to the adjustment of a cross‑award when the awards arise from the same arbitration case
Whether the award dated 19 April 1997 constitutes an interim award enforceable under the Arbitration and Conciliation Act, 1996

Legislation cited

Arbitration and Conciliation Act, 1996s. Section 34, s. Section 36, s. Section 47
Code of Civil Procedure, 1908s. Order XXI Rules 18, s. Order XXI Rules 19

Subjects

ArbitrationCross‑awardExecution of decreeCPC Order XXIRule 18Rule 19Section 34Section 36Section 47Partnership dispute

Judgment

A N.R. CONSTRUCTIONS PVT. LTD.
v.
SRI RAM BADAN SINGH AND ORS.

OCTOBER 9, 2007
B
[TARUN CHATTERJEE AND P. SATHASIVAM, JJ.]

Code of Civil Procedure,· 1908-0. XX!, rr. 18 and 19-
Applicability of-To adjustment of cross award-Held, rr 18 and 19
C not applicable since application was in respect of two awards in the
same arbitration case-It was not for execution of cross-decrees in
separate suits for payment of money in between the parties or for
execution qfa decree under which two parties are entitled to recover
sums ofnioney-Also objection petition regarding interim award and
D final award dismissed by Courts below including Supreme Court.
The Question which arose for consideration in this appeal was
whether the provisions ofOrd'er XX.I Rules18and19 of the Code
of Civil Procedure, 1908 are applicable in case of adjustment of the
cross-award as claimed by the appellant.
E
Dismissing the appeal, the Court
HELD : 1.1. From a bare reading of the Rules 18 and 19 of
Order XX.I of Code of Civil Procedure, 1908, it is clear that Rule 18
is applicable in the case where the applications are made to the Court
F for execution of the cross-decrees in separate suits for payment of
two sums of money passed between the same parties and Rule 19 is
applicable in the case where the application is made to the Court
for the execution of a decree under Which two parties are entitled
to recover sums of money. In the instant case, High Court rightly
G observed that neither the application has been made for execution
of cross-decrees in separate suits for the payment of money in
between the parties nor the application is for execution of a decree
in which the parties are entitled to recover sums of money from each

H
792
N.R.CONSTRUCTIONSPVT.LTD. v. SRIRAMBADAN 793
SINGH [P. SATHASIVAM,J.]
other. The particulars furnished clearly show that the applications A
were in respect of two awards in the same arbitration case and as
such the provisions of Rules 18and19 of Order XX.I ofC.P.C. are
not applicable. [Para 9] [797-A, B, C, D]
1.2. It is also relevant to mention that in the Objection Petition
under Section 34 of the Arbitration and Conciliation Act, 1996 the B
issue regarding interim award and final award came up for
consideration before the subordinate Court which was dismissed and
the appeal filed also met the same result at the hands of the High
Court. This Court also confirmed the order of the High Court except
in the rate of interest. In the light of these materials and earlier C
orders including this Court and various clauses in the awards dated
19.04.1997 and 25.11.2000, subordinate Judge rejected the petition
filed by the appellant. High Court by the impugned order accepted
the said factual conclusion and dismissed the Revision. In view of
the conclusion based on the factual details furnished in both the D
execution cases, the conclusions of the Courts below are concurred
with. [Paras 9and10] [797-D, E, F, G] ~

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4737 of
2007.
E
From the final Judgment and Order dated 19.07.2006 of the High
Court of Jharkhand at Ranchi in C.R. No. 65 of2006.
Dr. R.G. Padia, Abhishek Singh and Praveen Agrawal for the
Appellant. ·
F
Bhaskar P. Gupta, Ashish Verma, K. Datta and K.V. Mohan for
the Respondents. ·
The Judgment of the Court was delivered by
-- ~
P. SATHASIVAM, J. 1. Leave granted. G

2. This appeal is directed against the judgment dated 19.07.2006
passed by the High CoUit of Jharkhand at Ranchi in C.R. No.65 of2006
whereby the learned single Judge dismissed the Civil Revision filed by the
appellant herein against the order dated 28.06.2006 passed by the H
794 SUPREME COURT REPORTS [2007] 10 S.C.R.

A Subordinate Judge-I, Bokaro in Execution Case No. 2 of2001 rejecting -\
the appellant's prayer for adjustment of the cross-award under the
provisions of Order XXI Rules 18 and 19 of the Code of Civil Procedure.

3. The only question, inter alia, arises in this appeal is whethe(the
provisions of Order XXI Rules 18 and 19 of the C.P.C. are applicable
B in case of adjustment of the cross-award as claimed by the c:i.ppellant
herein?

4. The appellant entered into a partnership with the respondents and
a partnership deed was executed on 14.04.1992. The purpose of the
c partnership was for completion of certain contract work which the
appellant had obtained. One of the terms of the agreement provided for
arbitration, i.e., - "that if there be any dispute among the partners, the
same can be referred to the Arbitrator/Arbitrators as appointed by the
partners who would decide the names in accordance with the provisions
D of the Indian Arbitration Act, if not otherwise settled by the partners with
mutual consent."

5. As the disputes which arose in the year 1995 among the partners
could not be settled by mutual agreement and the work could not be
completed, the partners, by mutual consent, appointed four persons as
E Arbitrators. On 19.04.1997, the Arbitrators, after hearing both the parties,
submitted their award. There is no specific reference whether the award
is an interim award or a final award. According to the appellant, the award
dated 19.04.1997 was acted upon by the parties and was never
r ,
challenged by any of them. Thereafter, the Arbitrators passed various
F awards. It is not in dispute that none of those awards passed after
19.4.1997 was ever challenged by any of the parties. Finally on
25.11.2000, the Arbitrators passed an award. According to the appellant,
in this award, it was not stated that whether the issues covered by the
earlier awards and especially the award dated 19.4.1997 are to be merged
G in the final award.

6. The appellant herein, being aggrieved by the award dated
25 .11.2000, filed an application under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as "the Act). The
respondents filed Execution Case No. 2 of2001 for enforcement of the
H
N.R. CONSTRUCTIONS PVT. LTD. v. SRI RAMBADAN 795
SINGH [P. SATHASIVAM, J.]
)
Award dated 25.11.2000. By order dated 27.6.2003, the application filed A
by the appellant under Section 34 of the Act was dismissed by the learned
subordinate Judge. On 1. 7.2003, the appellant herein filed Execution Case
No. 5of2003 for enforcement of the award dated 19.4.1997. Against
the dismissal of the application filed under Section 34 of the Act, on
26.8.2003, the appellant filed an Arbitration Appeal No. 6 of2001 before B
the High Court of Jharkhand at Ranchi. By order dated 29.4.2004, the
High Court dismissed the said appeal. The special leave petition against
the said order was also dismissed by this Court on 10. l.2005 with a
modification as to the rate of interest.
7. The respondents filed an objection under Section 47 of the C.P.C. C
in Execution Case No.5 of2003. The said objection was numbered as
Misc. Case No. 7 of 2005. The case of the respondents before the
Executing Court was that the so-called award of 19.04.1997 was nothing .
but a provisional direction of the Arbitrators for successful completion of
the job and it cunnot be treated as an interim award and was not D
enforceable as an arbitral award. All the directions given in the award
dated 19.04.1997 have merged in the award dated 25.11.2000. After
hearing both the parties, the Executing Court by order dated 27.5.2005
dismissed Misc. Case No. 7 of2005 holding that the interim award was
not executable. Aggiieved by the same, respondent No. l herein preferred E
C.R.No. 75 of2005. Though the Civil Revision stands admitted but no
stay of execution has been granted till date. Thereafter, the appeliant filed
""' an application under Order XXI Rules 18 and 19 of the C.P.C. read with
Section 36 of the Act in Execution Case No. 2 of2001 for adjustment
of the amount and for recording of full satisfaction of the amount. By order F
dated 28.6.2006, the executing Court, after finding that the question of
cross-decree under Order XXI Rules 18 and 19 is not maintainable,
rejected the said application. Questioning the said order, the appellant
preferred C.R.No. 65 of 2006 before the High Court of Jharkhand at
·-. >
Ranchi. By the impugned order dated 19.07.2006, the High Court G
dismissed the Revision. Hence, the present appeal by way of special leave
has been filed before this Court.
8. We have heard Dr. R.G. Padia, lea.med senior counsel, appeming
for the appellant and Mr. Bhaskar P. Gupta, learned senior counsel,
H
_,
796 SUPREME COURT REPORTS [2007] 10 S.C.R.

A appearing for the respondents.
9. Though the learned senior counsel appearing on either side, made
elaborate submissions as to awards dated 19.4.1997 and 25.11.2000 and
applicability of Order XXI Rules 18 and 19 of C.P.C., in the light of the
order to be passed hereunder, we are of the view that there is no need
B to traverse the same. However, in order to understand the rival claim, it
is useful to refer Order XXI Rules 18 and 19 which read as under:
)..
"Rule 18. Execution in case of cross-decrees- ( 1) Where
applications are made to a Court for the execution of cross-decrees
c in separate suits for the payment of two sums of money passed
between the same parties and capable of execution at the same
time by such Court, then -
(a) if the two sums are equal, satisfaction shall be entered upon
both decrees; and
D
(b) if the two sums are unequal execution may be taken out only
by the holder of the decree for the larger sum and for so much
only as remains after deducting the smaller sum, and satisfaction
for the smaller sum shall be entered on the decree for the larger
sum as well as satisfaction on the decree for the smaller sum.
E
(2) ................................... .
(3)
(4) ................................... "
F "Rule 19. Execution in case of cross-claims under same decree
- Where application is made to a Court for the execution of a
decree under which two parties are entitled to recover sums of
money from each other, then-
(a) if the two sums are equal, satisfaction for both shall be entered
G
upon the decree; and
(b) if the two sums are w1equal, execution may be taken out only
by the party entitled to the larger sum and for so much only as
remains after deducting the smaller sum, and satisfaction for the
H smaller sum shall be entered upon the decree."
N.R. CONSTRUCTIONS PVT. LTD. v. SRI RAM BAD AN 797
SINGH[P. SATHASIVAM,J.]
Both the learned senior counsel fairly admitted that Rule 18 is not A
applicable to the case on hand. From a bare reading of the Rules, extracted
supra, it is clear that Rule 18 is applicable in the case where the
applications are made to the Court for execution of the cross-decrees in
separate suits for payment of two sums of money passed between the
same parties and Rule 19 is applicable in the case where the application· B
is made to the Court for the execution of a decree under which two parties
are entitled to recover sums of money. As rightly observed by the High
Court, in the case on hand, neither the application has been made for
execution of cross-decrees in separate suits for the payment of money in
between the parties nor the application is for execution of a decree in c
which the parties are entitled to recover sums of money from each other.
In our opinion, in the instant case, the particulars furnished clearly show
that the applications were in respect of two awards in the same arbitration
case and as such the provisions of Rules 18 and 19 of Order XXI of
C.P.C. are not applicable. It is also relevant to mention that in the D
Objection Petition under Section 34 of the Act the issue regarding interim
award and final award came up for consideration before the subordinate
Court, Bokaro. The said objection petition was dismissed on 27 .6.2003
and the appeal preferred also met the same result at the hands of the High
Court of Jharkhand. This Court also confirmed the order of the High Court E
except in the rate of interest. In the light of these materials and earlier
orders including this Court and various clauses in the awards dated
19.04.1997 and 25.11.2000, learned subordinate Judge rejected the
petition filed by the appellant herein. The High Court by the impugned
order accepted the said factual conclusion and dismissed the Revision.
F
10. In view of the conclusion based on the factual details furnished
in both the execution cases while agreeing with the said conclusion of the
Courts below, we are of the view that there is no need to refer various
decisions relied on by both the parties. On the other hand, we are in
. . . ). agreement with the said conclusion. G
11. In the light of the above discussion, the appeal fails and the same
is dismissed. There shall be no order as to costs.
N.J. Appeal dismissed.
H