Chhattisgarh HC upholds Rs 7.29 crore attachment of Raipur civic body accounts to enforce arbitral award

Justice Ravindra Kumar Agrawal dismissed the Raipur Municipal Corporation petition under Article 227, holding that a Commercial Court can execute an arbitral award in a commercial dispute of specified value even if no Section 34 challenge was ever pending before it, and that a municipal body enjoys no blanket immunity from execution merely because its funds are meant for public welfare.

The Raipur Municipal Corporation has lost its challenge to the attachment of its HDFC Bank and Kotak Mahindra Bank accounts and the remittance of Rs 7,29,40,041 to the Commercial Court at Nava Raipur, money seized to satisfy an arbitral award of April 2018 that the corporation spent four years failing to overturn. Justice Ravindra Kumar Agrawal of the Chhattisgarh High Court, in a reserved order delivered on 28 October 2026, held that the Commercial Court (District Judge Level) had jurisdiction to execute the award under Section 10(3) of the Commercial Courts Act, 2015, rejected the argument that it lost that jurisdiction because no Section 34 challenge was pending before it, and ruled that “no blanket immunity from execution can be inferred” from the corporation’s status as a statutory body holding public funds.

A 2002 GIS mapping contract, a 2018 award and a 1,200-day delay

The dispute goes back to a tender the corporation floated for mapping, surveying and property-tax assessment of Raipur city using geographical information systems. M/s Associated Software Consultancy, a registered partnership firm from Amravati in Maharashtra, won the work and signed an agreement on 18 February 2002. Disputes during execution went to a sole arbitrator, who on 7 April 2018 allowed the firm’s claim for Rs 2,27,79,729 with interest at 9 per cent a year and other reliefs.

The corporation’s attempts to set the award aside never reached the merits. It first went to the High Court, withdrew on 15 May 2019 with liberty to file a properly constituted challenge, and then filed before the Commercial Court on 23 July 2021. That application under Section 34 of the Arbitration and Conciliation Act, 1996, came with a plea to condone a delay the firm put at more than 1,200 days, and was dismissed on 7 May 2022 on the ground of delay. The High Court refused to interfere on 27 July 2022 and the Supreme Court on 13 December 2022. The award was final.

The firm had meanwhile filed Execution Case No. 07 of 2020 before the Commercial Court on 8 December 2020 under Order 21 Rule 11 of the Code of Civil Procedure read with Section 36 of the Arbitration Act, and on 6 May 2022 applied for attachment of the corporation’s bank accounts. The corporation objected under Section 47 CPC on 2 June 2022, arguing that the arbitrator had made errors in the award. On 29 November 2022 the Commercial Court dismissed those objections and directed the two banks to attach the accounts to the extent of Rs 7 crore. A recall application followed, and on 16 December 2022 the court directed the banks to remit the amount by demand draft.

The corporation came to the High Court against both orders. On 2 January 2023 it was given liberty to raise before the Commercial Court an objection to that court’s jurisdiction to execute the award. It did so on 7 January 2023; the objection was dismissed on 11 January 2023, and on 13 January 2023 the Commercial Court directed the banks to remit Rs 7,29,40,041 by demand draft and listed the matter on 23 January 2023 for receipt of the money. The present petition under Article 227 attacked the orders of 29 November 2022, 11 January 2023 and 13 January 2023. By the time it was heard, the Rs 7 crore and the further amount recovered from the accounts had been deposited with the Commercial Court and placed in fixed deposits under the High Court’s interim orders.

The corporation’s case: wrong court, public money

Sourabh Sharma and Sourabh Gupta, for the corporation, argued that the Commercial Court had dismissed the objections in a cryptic manner without examining whether an execution proceeding was even maintainable before it under the Arbitration Act, the Commercial Courts Act and the CPC. Their central point was jurisdictional. The execution application was filed on 8 December 2020, when no proceeding under Section 34 had been instituted before the Commercial Court. The fact that the award arose from a commercial dispute did not, they said, by itself confer execution jurisdiction on that court. Reading the definition of application in Section 2(1)(b) with Sections 10(3) and 15(2) of the Commercial Courts Act, they argued that the award had to be executed by the principal civil court of original jurisdiction, and that Section 15(2) does not authorise a Commercial Court to entertain every execution merely because the underlying dispute was commercial. They relied on the Chhattisgarh High Court’s own decision in South Eastern Coalfields Limited v. Padam Kumar Singhaniya, AIR Online 2018 Chh 1199, and on State of Nagaland v. Lipok Ao, (2005) 3 SCC 752, for a liberal approach to delay where State instrumentalities are concerned.

The second limb was about the money. The corporation is a statutory body under the Madhya Pradesh Municipal Corporation Act, 1956, providing civic amenities, not a private trader. The funds in its accounts, it pleaded, were earmarked for public welfare schemes and development projects, and attaching and remitting a substantial sum would cripple its ability to discharge statutory obligations to citizens.

Harish Dangre and Vikram Dixit, for the firm, answered that the award had attained finality after the corporation’s challenge failed all the way to the Supreme Court, and that the Section 47 objections were an attempt to reopen the same grounds. The execution had been filed under Section 36 read with Order 21 Rule 11 in respect of a commercial contract above the specified value, so Sections 2(1)(b), 2(1)(c) and 10 of the Commercial Courts Act, read with Sections 34 to 36 of the Arbitration Act, gave the Commercial Court jurisdiction; the absence of a pending Section 34 application made no difference. They cited Ess Kay Fincorp Limited v. Suresh Choudhary, 2020 (1) RLW 93 (Raj), and Delhi Chemical and Pharmaceutical Works Pvt. Ltd. v. Himgiri Realtors Pvt. Ltd., 2021 SCC OnLine Del 3603. The corporation, they pointed out, had participated in the execution from the start, repeatedly sought time to deposit the amount, and even applied for a stay on the ground that it had initiated Section 34 proceedings; the jurisdictional objection surfaced only after it challenged the attachment orders in W.P. (227) No. 817 of 2022, and was an afterthought designed to delay an award passed in April 2018. A municipal corporation, they said, cannot claim immunity from execution simply because its funds are intended for public purposes when no legal basis for exempting the attached funds has been shown. Relying on the Supreme Court’s order in Chopra Fabricators and Manufacturers Pvt. Ltd. v. Bharat Pumps and Compressors Ltd., (2023) 3 SCC 534, they asked that the petition be dismissed and the interim order restraining disbursal be vacated so the money could be released.

Section 10(3) and the meaning of an application arising out of arbitration

Justice Agrawal framed two questions: whether the Commercial Court had jurisdiction to entertain and proceed with execution of the award, and whether the orders rejecting the objections and directing attachment and remittance called for interference under Article 227. He first cleared away the merits. The corporation had taken part in the execution, sought time to deposit, sought a stay on the strength of its Section 34 challenge, and then lost that challenge on delay before three courts. It could not use Section 47 to reopen the correctness of the award; the executing court could not sit in appeal over it. The jurisdictional objection, however, was a distinct question that had to be decided independently on the statute.

Section 10(3) of the Commercial Courts Act provides that where the subject matter of an arbitration is a commercial dispute of specified value and the arbitration is not international, applications or appeals arising out of it under the Arbitration Act that would ordinarily lie before the principal civil court of original jurisdiction in a district shall be filed in and heard by the Commercial Court having territorial jurisdiction, where one has been constituted. The court held that the word application in Section 10(3) “is of wide import” and does not expressly exclude an application to enforce an award under Section 36. Since Section 36 says an enforceable award is to be enforced under the CPC as if it were a decree of the court, the enforcement application “cannot be viewed as wholly disconnected from the arbitration proceedings” that produced the award.

The judgment then surveyed how other High Courts have read the provision. In Vijay Cotton and Fiber Company v. Agarwal Cotton Spinning Private Limited, 2019 SCC OnLine Guj 7075, the Gujarat High Court held a district-level Commercial Court competent to execute an award in a commercial dispute, observing that the designation of the presiding officer does not alter the statutory character of a court constituted under Section 3. In Ess Kay Fincorp, the Rajasthan High Court read Sections 10(3) and 15(2) together, held that a Section 36 execution application is one arising out of the arbitration for the purpose of Section 10(3), and expressly declined to follow the narrow reading of Section 15(2) adopted by the Chhattisgarh High Court in Padam Kumar Singhaniya, concluding that the Commercial Court is the only competent court to execute an award in a commercial dispute. The Gujarat High Court in Arun Kumar Jagatramka v. Ultrabulk A/S, 2022 SCC OnLine Guj 2767, held that the commercial character of a dispute does not vanish at the execution stage and that the word applications in Section 6 includes execution applications; the fact that Section 16 did not amend the CPC’s execution provisions did not mean the Commercial Court lacked the power to execute. The Andhra Pradesh High Court in Obulapuram Mining Company Pvt. Ltd. v. R.K. Mining Private Ltd., 2023 SCC OnLine AP 2031, the Allahabad High Court in Bharat Petroleum Corporation Ltd. v. Anoop Kumar Modi, 2023 SCC OnLine All 4234, and the Karnataka High Court in Abraham Memorial Education Trust v. Prodigy Development Institution Pvt. Ltd., 2025 SCC OnLine Kar 1219, took the same view. The Karnataka decision had specifically considered and declined to accept the contrary Chhattisgarh line, including South Eastern Coalfields Limited v. M/s. Tirupathi Constructions, 2018 SCC OnLine Chh 63, which treated execution as outside the scheme because Section 10 does not separately prescribe an execution procedure.

Distinguishing the court’s own precedent, and the 2023 notification

The corporation’s reliance on the Chhattisgarh decisions was met by distinguishing them. Tirupathi Constructions, the court said, arose from an application under Section 15(5) seeking transfer of an execution already pending before the principal civil court to the Commercial Court. The present case concerned an execution instituted directly before the Commercial Court on 8 December 2020. That distinction was material: the earlier ruling had to be read in the context of the transfer question it actually decided, and did not resolve the separate question of direct institution. Section 15(2), the court added, principally governs the transfer of suits and applications in commercial disputes that were pending in other courts when the Commercial Court was constituted; the corporation had not shown that this execution was ever transferred under it. The jurisdictional question therefore could not be answered by asking only whether an execution is transferable under Section 15(2); it had to be examined under Section 10(3), which operates in a different context and independently covers applications arising out of domestic arbitration in commercial disputes of specified value. The two provisions had to be read harmoniously.

Applying that, the contract for mapping, surveying and tax assessment of Raipur city and the award of Rs 2,27,79,729 with interest and costs placed the dispute within the definition of a commercial dispute of specified value, and the execution was maintainable before the Commercial Court with territorial jurisdiction. Section 10(3), the court held, does not make the Commercial Court’s jurisdiction over an execution depend on a challenge to the award being pending before it. The court also took note of a notification of 20 December 2023 issued during the pendency of the petition, by which the State Government, under Section 3 of the Commercial Courts Act and in consultation with the High Court, designated the existing Commercial Court (District Judge Level), Raipur, as the Commercial Court for matters of pecuniary value above Rs 50 lakh, including arbitration cases, with territorial jurisdiction over the entire State of Chhattisgarh.

On the public-funds argument, the court was brief. The corporation’s statutory status and the public character of its bank balances did not make the execution one without jurisdiction. No blanket immunity could be inferred from the status of the judgment-debtor. Any specific exemption for particular funds or property would have to be examined on the relevant statutory provision and supporting material, and in the absence of an established legal prohibition on attaching the funds in question, a general assertion that they were meant for public welfare could not defeat the firm’s right to enforce a final award. The attachment and remittance directions had been issued in the course of enforcing an award that had attained finality, after the Commercial Court had given the corporation several opportunities to satisfy it, and the corporation had shown no jurisdictional infirmity warranting supervisory intervention.

Order

W.P. (227) No. 55 of 2023, reserved on 21 August 2026, was dismissed on 28 October 2026. The orders of the Commercial Court (District Judge Level), Nava Raipur, dated 29 November 2022, 11 January 2023 and 13 January 2023 in Execution Case No. 07 of 2020 stand. The dismissal is subject to any specific statutory exemption or legally sustainable objection concerning the particular funds attached, if duly raised and established before the executing court. All pending interim applications were disposed of, the interim order granted in the corporation’s favour was vacated, and there was no order as to costs. The order is marked not approved for reporting.