JUDGMENT
Vikramajit Sen, J.
1. Two questions fall for determination in this petition. The first whether this Court should exercise jurisdiction under Section 9 of the Arbitration and Conciliation Act, 1996, in circumstances where admittedly the parties are before an Arbitral Tribunal which possess powers to pass similar orders under Section 17 of the said Act. The second is whether a Receiver can be appointed in respect of leased properties which are presently in the possession of a company which has invoked the Sick Industrial Companies (Special Provision) Act, 1985.
2. Counsel for the Respondent has relied on a decision of a learned Single Judge of this Court in Arun Kapur Vs. Vikram Kapur & Ors., . In paragraph 56 of that decision the learned Judge has opined that ” if the party invokes preliminary alternative remedy before the Arbitral Tribunal, it is debarred from invoking the jurisdiction of the Court under Section 9 of the Act. Ordinarily if the Arbitrator is seized of the matter the interim relief should not be entertained and the parties should be advised to approach the Arbitrator for interim relief unless and until the nature of relief intended to be sought falls outside the jurisdiction of the Arbitrator or beyond terms of the agreement or reference of disputes. Otherwise the very object of adjudication of disputes by arbitration would stand frustrated.” Reliance has also been placed on paragraph 44 of that judgment but I fail to find any justification for reference thereto. The learned Judge merely draws a distinction between Section 9 and Section 17 of the Act. He does not state that if Section 17 is available Section 9 cannot be invoked. A Division Bench of this Court has decided in Escorts Finance Ltd. Vs. Mohd. Hanif D. Khan, 2001 V AD (Delhi) 392 that it is not proper for the Court to decline to exercise jurisdiction under Section 9 of said the Act merely because arbitral proceedings are pending. The Division Bench had applied the pronouncements in M/s Sundaram Finance Ltd. Vs. M/s NEPC India Ltd . My attention has also been drawn to a decision of another Single Judge of this Court in S.R.F. Finance Ltd. Vs. Prakash Industries Ltd. & Anr., OMP No.184/1997 decided on 23.8.2002. In this judgment it was observed that recourse under Section 17 is an enabling additional recourse and is not in substitution of Section 9 of the Act and that the former Section cannot operate as an ouster of jurisdiction of the Court granted under the latter Section. In view of the opinion of the Hon’ble Supreme Court as well as of the Division Bench of this Court the decision rendered in Arun Kapur’s case (supra) may not be correct. In any event the learned Judge has really done no more than express the salutory practice of not rushing to Court where relief from an alternate forum is conveniently available. The learned Judge does not in terms state that the Court cannot exercise the powers given to it by virtue of Section 9 of the Act. I am of the view that the Court has powers to pass appropriate orders under Section 9 of the Act notwithstanding the pendency of arbitral proceedings.
3. On the second question also the contention of learned counsel for the Respondent does not have merit. It is his submission that there is a dispute pending on the question of who is the owner of leased equipments. It is in very few cases that such defenses are not raised by the Respondent. The attempt is only to protract the litigation and thereby delay the grant of appropriate relief, and in some cases defeat it. The latter position is likely to occur in the present case since the Sick Industrial Companies (Special Provision) Act, 1985 has been invoked. What the Court must look into is the documents exchanged between the parties. My attention has been drawn to Clauses 2.5, 4.2, 4.15, 6.6, 8.1. These are reproduced below since they clearly illustrate that the leased equipment was ubiquitously agreed by the parties to belong to the Petitioner.
“2.5 Upon termination of this Agreement by efflux of time, or otherwise, the Lessee shall, at its own cost and expenses, forthwith deliver or cause to be delivered to the Lesser the product at such time and place as may be directed by the Lesser, in goods order and condition (subject to normal wear and tear)
4.2 Hold the product as a bailee Lesser.
4.10 Not transfer, assign or otherwise dispose of or purport to transfer, assign or dispose of the Lesser’s rights or obligations or interest hereunder by way of mortgage, charge, sub-lease, sale or other assignment, hypothecation, pledge, hire, encumbrance, conducting arrangement, license or otherwise in any manner part with the possession of the product or any part thereof or allow or purport to do allow or create any lien, charge, attachment or there claim of whatsoever nature on the product or any part thereof.
4.15 Not claim any relief by way of any deduction, allowance or grant available to the Lesser as the owner of the product under the Income Tax Act, 1961 or under any other statute, rule, regulation or guideline issued by the Government of India or any statutory authority and not do or omit to do or be done any act, deed or thing whereby the Lesser is deprived, whether wholly or partly, of such relief by way of deduction, allowance or grant. The Lessee shall, at the end of each financial year of the Lesser, provide to the Lesser such information as it may require to claim relief by way of deduction, allowance, or grant, as the owner of the product under the Income Tax Act, 1961 and the Lessee undertakes to comply with and observe, at all times all the terms and conditions to be complied with or observed in respect of the use and operation of the product to entitle the Lesser to obtain such relief.
6.6 As between the Lesser and the Lessee and their respective successors in title the product shall remain the personal property of and shall continue to be in the ownership of the Lesser.
8.1 On the occurrence of any of the events specified below, the Lesser shall be entitled, without prejudice to any other right or remedy the Lesser may have under this Agreement or otherwise in law and notwithstanding any subsequent acceptance of rentals, to terminate this lease, without any notice (except) as specified in 8.1.2) thereof) at any time after the occurrence of such event.”
4. The learned Single Judge in S.R.F. Finance Ltd. (supra) had considered the appropriateness of the appointment of a Receiver in situations similar to those prevailing in the present case. After noting the decisions in Prakash Industries Ltd. Vs. Bajaj Auto Finance Ltd. 1993 (2001) DLT 159 (DB), Space Capital Services Ltd. Vs. Prakah Industries Ltd. 2001 30 SCL 420 Delhi, GE Capital Transportation Financial Services ltd. Vs. Dee Pharma Ltd. 76 (1998) DLT 278, M/s Wipro Finance Ltd. Vs. Dee Pharma Ltd., , Credit Capital Corporation Vs. Foremost Industries Ltd. 1996 Companies Cases (Delhi) 251, the Single Judge had appointed a Receiver to take the custody of the plant and equipment. In Prakash Industries Ltd. (supra) the Division Bench had held that since the Defendant was not paying the installents it cannot be allowed to continue to use machinery and earn money from it in an unbusiness like manner. In cases where the Respondent has already invoked the directions of the Sick Industrial Companies (Special Provision) Act, 1985 it is imperative for the Court to intervene since otherwise not only would the installments be unrecoverable but there would be a danger of the equipments being damaged or becoming non-functional by careless handling of the Lessee/bailee. There may be an exception where the Defendant is legitimately carrying on business and is in a position to honour the decree or orders passed by the Court. This is not so once the Sick Industrial Companies (Special Provision) Act, 1985 comes into operation.
5. The appointment of a Receiver is also imperative for the reason that there appears to be numerous petitions filed against Prakash Industries Ltd., the Respondent herein, and the assets and leased machinery are, therefore, almost certainly likely to be dissipated.
6. I accept the suggestion of learned counsel appearing for the Petitioner that Major Jagjit Singh Gujral should be appointed as the Receiver. It is so ordered. The Receiver is authorised to take possession of the leased equipment and machinery from the possession of the Respondent and store it in safe custody in an appropriate place arranged by the Petitioners. The fees of the Receiver as well as the costs of transportation and storage shall be borne by the Petitioner. In the event that the Receiver is apprehensive of encountering any resistence to the execution of these Orders he shall be entitled to seek Police assistance.
The petition is disposed of.