ORDER
S.S. Subramani, J.
1. All these revisions are filed under Article 227 of the Constitution of India, challenging the order of the lower Court in O.P. No. 137 of 1998 on the file of the X Assistant Judge, City Civil Court, Chennai and four miscellaneous petitions are filed along with these revisions.
2. The relevant facts which are necessary for the disposal of these revisions could be summarised thus: The petitioner and the respondent entered into a hire purchase agreement regarding supply of two Wind Turbine Generators on 25-9-1995 after agreeing to the schedule of repayment and also consequence in case of default. Clause 24-a of the hire purchase agreement provided for an arbitration clause which reads thus :
“All disputes, differences and/or claims, arising out of this hire purchase agreement whether during its subsistence or thereafter shall be settled by arbitration in accordance with the provision of Indian Arbitration Act, 1940 or any statutory amendments thereof and shall be referred to the sole arbitration of an arbitrator nominated by the Managing Director of the Owner. The award given by such an arbitrator shall be final and binding on all the parties to this agreement.
It is a term of this agreement that in the event of such an arbitrator to whom the matter has been originally referred dying or being unable to act for any reason, the Managing Director of the Owner, at the time of such death of the arbitrator or his inability to act as arbitrator, shall appoint another person to act as arbitrator. Such a person shall be entitled to proceed with the reference from the stage at which it was felt by his predecessor.”
3. The petitioner defaulted in payment. Some correspondence followed and finally, the respondent came to know that various litigations were pending against the petitioner and therefore invoking Clause 24-a of the hire purchase agreement, it filed an application under Section 9 of The Arbitration and Conciliation Act, 1996 (hereinafter also referred to as ‘the Act’). Though the petition was filed on 3-4-1998, it was taken up and numbered only 7-4-1998. Along with the main application, two other interlocutory applications were also filed; one for appointment of a Commissioner and the other for getting police protection. On 7-4-1998 itself the lower Court passed the impugned order appointing a Commissioner to take possession of the goods with the help of the police. This order is challenged in all these revisions mainly for the reason that the petition in O.P. No. 137 of 1998 itself is not maintainable and therefore, the Court did not have jurisdiction to pass an order.
4. Learned Senior counsel for the petitioner submitted that Section 9 of the Act only provides for interim measure and that cannot be granted as a substantial relief. Apart from that, it is contended that no arbitration proceedings are pending and without asking for specific relief under the Act, an application for getting the interim relief alone is not maintainable. The impugned order is one without jurisdiction.
5. It is further contended by the learned Senior Counsel that on 7-4-1998 the application was allowed to be numbered and even without notice to the petitioner, an order has been passed as if the respondent has entered appearance and he was ex parte. There is no application of mind. A civil Court should not pass such an order when the effect of interim relief is grave and serious. It is further stated that by allowing the order, the entire relief in the main petition is granted without hearing the petitioner and therefore, it violates the principle of natural justice.
6. As against the said contention, learned senior counsel for the respondent submitted that the maintainability of these revisions itself is questionable. Against the impugned order a statutory appeal is maintained under Section 37 of the Act. When there is an effective alternative remedy, revisions under Article 227 of the Constitution of India is not maintainable.
7. It is further contended that Section 9 of the Act contemplates proceedings even before the arbitration proceedings begin and therefore, the impugned order is correct and no interference is called for. Even before filing these revisions, the order has been executed and therefore, these revisions have become infructuous.
8. It is further stated that as against the petitioner various other litigations are pending and even winding up proceedings are pending before this Court and therefore, the impugned order has to be considered as a protective order in the best interest of the parties. Therefore, he prayed for the dismissal of the revisions.
9. Let me first consider the question whether an application under Section 9 of the Act is maintainable and its scope.
10. Before going to the legal submissions, let me consider what is the relief sought for in the O.P. No. 137 of 1998. The petition itself is filed under Section 9(ii)(a), (c) & (e) of the Arbitration and Conciliation Act, 1996. The relevant portion of the prayer reads thus :
“The petitioner prays for directions under Section 9(ii)(a), (c) & (e) of the Arbitration and Conciliation Act, 1996, for (i) appointing Advocate Commissioners to take custody of the subject hire purchase machinery/equipment of 2 Nos. of wind turbine generators (non-conventional energy equipment) as per model No. NEPC/M 1500-600/150 KW with all accessories one at Survey No. 257, Athikinathupatti village, Coimbatore District, Tamil Nadu and the other at Survey Nos. 1123/1 & 1123/2, Perungudi village, Tirunelveli District where the hire purchase machineries are located with police protection and restore the custody of the machineries/ equipments pending of the above petition, to the petitioner.
(ii) to direct the respondent to pay the costs of the proceedings; and
(iii) such other or further relief.”
10A. Section 9 of the Arbitration and Conciliation Act, 1996 reads thus :
“9. Interim measures, etc. by Court.
A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court :–
(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or for an interim measure of protection in respect of any of the following matters, namely :
“(a) the preservations, interim custody or sale
of any goods which are the subject matter of the
arbitration agreement; ”
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient forthe purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the Court to be just and convenient.
and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.”
11. The above section corresponds to Section 41 read with second schedule of the Arbitration Act, 1940. Section 41 of the old Act deals with the procedure and powers of the Court which reads thus :
“41. Procedure and powers of Court :–
Subject to the provisions of this Act and of rules made thereunder –
(a) the provisions of the Code of Civil Procedure, 1908, shall apply to all proceedings before the Court, and to all appeals, under this Act, and
(b) the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court : Provided that nothing in Clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any of such matters.”
Sub-section (b) of Section 41 refers to Second Schedule of the Act, which gives the powers of the Court and which reads thus :
“1. The preservation, interim custody or sale of any goods which are the subject-matter of the reference.
2. Securing the amount in differences in the reference.
3. The detention, preservation or inspection of any property or thing which is the subject of the reference or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon or into any land or building in the possession of any party to the reference, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence.
4. Interim injunctions or the appointment of a receiver.
5. The appointment of a guardian for a minor or person of unsound mind for the purposes of arbitration proceedings.”
12. A combined reading of Section 41 of the old Act with the Second Schedule makes it clear that those matters are now included in Section 9 of the new Act. Section 41 of the old Act deals with only interim measures or protective orders. Section 9 of the new Act deals with the interim measures. In fact, the various powers and the various orders that are contemplated under Section 9 of the Act also show that the orders therein are not for the main relief, but only during the pendency of the other proceedings, the protective orders are to be passed. Section 9 of the Act by itself cannot be a substantial relief in any proceedings.
13. In this case, the main relief is sought under Section 9 of the Act and the same is repeated in the two interlocutory applications. It is not disputed by either side that till date no arbitration proceedings have been initiated and no proceedings is pending before any Court and no action has been taken for even appointment of an arbitrator. In fact, Sub-section (ii) of Section 9 of the Act reiterates the words ‘for an interim measure of protection’. Clause (a) of Sub-section (ii) of Section 9 of the Act provides for interim custody or sale of the goods and Clause (c) of the Sub-section (ii) of Section 9 provides for detention, preservation or inspection of any property to which any question may arise therein. Clause (d) and (e) also provide for interim injunction or such other interim measure for protection of the property. Sub-section I of Section 9 of the Act deals with the appointment of a guardian for the purposes of arbitral proceedings correspondent to Order 32 of the Code of Civil Procedure. A reading of the entire Section shows that no substantial relief could be granted under Section 9 of the Act and this section could be used only in cases where protective orders are to be passed pending arbitral proceedings.
14. Russel, on Arbitration — 21st edition –1997, has dealt with the powers of the Court to make orders during arbitration. Chapter VII of the book deals with the role of the Court before and during the arbitration. Section 44 of the English Arbitration Act, 1996 corresponds to Section 9 of the Indian Arbitration and Conciliation Act, 1996. Section 44 of the English Arbitration Act, 1996 reads thus :
“44, Court Powers exercjsable in support of arbitral proceedings :
(1) Unless otherwise agreed by the parties, the Court has for the purposes of and in relation to arbitral proceedings the same power of making orders about the matters listed below as it has for the purposes of an (sic) in relation to legal proceedings.
(2) Those matters are –
(a) the taking of the evidence of witnesses;
(b) the preservation of evidence;
(c) making orders relating to property which is the subject of the proceedings or as to which any question arises in the proceedings –
(i) for the inspection, photographing, preservation, custody or detention of the property, or
(ii) ordering that samples be taken from, or any observation be made of or experiment conducted upon, the property;
and for that purpose authorising any person to enter any premises in the possession or control of a party to the arbitration.
(d) the sale of any goods the subject of the proceedings;
(e) the granting of an interim injunction or the appointment of a receiver.
(3) If the case is one of urgency, the Court may, on the application of a part or proposed party to the arbitral proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets.
(4) If the case is not one of urgency, the Court shall act only on the application of a party to the arbitral proceedings (upon notice to the other parties and to the tribunal) made with the permission of the tribunal or the agreement in writing of the other parties.
(5) In any case the Court shall act only if or to the extent that the arbitrari tribunal and any arbitral or other institution or person vested by the parties with power in that regard, has no power or is unable for the time being to act effectively.
(6) If the Court so orders, an order made by it under this Section shall cease to have effect in whole or in part on the order of the tribunal or of any such arbitral or other institution or person having power to act in relation to the subject-matter of the order.
(7) The leave of the Court is required for any appeal from a decision of the court under this section.”
Article 9 of the United Nation Commission on International Trade Law (UNCITRAL) provided
for arbitration agreement and interim measures reads thus :
“Article 9. Arbitration agreement and interim measures by Court.
It is not incompatible with an arbitration agreement for a party to request, before, or during arbitral proceedings, from a Court an interim measure of protection and for a Court to grant such measure.
Commentary :
This provision is also consistent with English Law. Subject to certain restrictions, a party to an arbitration agreement can apply at any time to the Court for a wide range of interim measures to preserve assets (e.g. a Mareva injunction) and to secure evidence. The Arbitration Act, 1996, Section 44 gives the court express power (unless otherwise agreed by the parties) to make orders, about the matters listed in Sub-section 44 (2), but “only if and to the extent that” the arbitral tribunal or any institution agreed by the parties “has no power or is unable for the time being to act effectively”.
The learned author, commenting upon the scope of power of the Courts, says thus (page -381):
“Power of the Court to make other orders during an arbitration.
Apart from the two specific powers granted by section 42 (enforcing peremptory orders of the tribunal) and section 43 (securing the attendance of a witness at an arbitration conducted in England) section 44 of the Arbitration Act, 1996 confers wide powers on the Court in relation to the preservation of evidence and property for an arbitration. The Court’s powers under this section are the same as those exercisable in legal proceedings. Accordingly, the provisions of Section 44 must be read in conjunction with the relevant rules of the Court governing the exercise of those powers in relation to legal proceedings.
The powers contained in section 44 are available even if the seat of the arbitration is abroad or no seat has been designated or determined, but in that case the court may refuse to exercise the powers if it considers that it would be ‘inappropriate to do so’.”
15. Before the present Act, the Government of India has permutated Arbitration and Conciliation Ordinance, 1996. Section 9 of the Ordinance also had a similar provision which is now replaced by the Act. The scope of Section 9 of the Act came up for consideration before the Delhi High Court in its decision in Ashok Chawla v. Rakesh Gupta, 1996 (2) Arbi LR 255. In that case, the petitioner therein filed a suit for declaration and injunction seeking for certain reliefs. The learned Judge found that since there is an arbitration clause, the parties can only move before the arbitrator and the interim relief was not granted. Immediately thereafter the petitioner filed an application under Section 9 of the Act for certain reliefs. Considering the scope of the application, the learned Judge held thus:
“The present petition is under Section 9 of the Ordinance which deals with interim measures etc. by the court. The petitioner seeks interim directions without seeking any substantial relief such as appointment of Arbitrator, reference of dispute to the Arbitrator etc. under the above said Ordinance. In my opinion, in the absence of any prayer for substantive relief, the prayer for issuing any directions by way of interim measure cannot be entertained.”
16. As already stated Section 41- b of the old Act corresponds to Section 9 of the new Act. The Hon’ble Supreme Court had an occasion to consider the scope of Section 41-b in a recent decision in Santram & Co. v. State of Rajasthan, after extracting the relevant portion of Section 41 of the old Act and after following an earlier decision, their Lordships in Kamaluddin Ansari & Co. v. Union of India, held thus:
“….. It will, therefore, be clear that to avail of the remedy under the provisions of the Code of Civil Procedure, when an application for injunction under Section 41(b) read with the Second Schedule is filed, the Court shall have pending proceedings for the purpose of and in relation to the arbitration proceedings availed of through the process of the court, the same power of making orders in respect of any matters set out in the Second Schedule as it has for the purpose of and in relation to any proceedings before the Court. The initiation of pendency of any proceedings in the Court in relation to the arbitration proceedings would, therefore, be a precondition for the exercise of the power by the civil Court under the Second Schedule of the Act.”
17. The scope of Section 9 of the Arbitration and Conciliation Act, 1996 came up for consideration before the Karnataka High Court in Anand David Saidanha v. K. Rathnaraj Ballal, ILR 1997 Kar 3223. In that case also an application was filed under Section 9 of the Act for interim injunction to restrain the respondent from interfering with the possession. The application was rejected on the ground that no arbitration proceedings was pending. The same was questioned before the High Court. After referring to the Supreme Court decision cited supra, the Karnataka High Court considered the question in detail. Para 8 to para 12 is the relevant portion which is , quoted below :
“In this appeal which has come for admission today, it is contended by Sri. Manian, the learned Counsel appearing for the appellant that the trial Court was wrong in holding that the application filed by the appellant under Section 9 of the Arbitration Act is not maintainable. It is submitted by the learned Counsel that under Section 53 of the Partnership Act, when once the partnership is dissolved, neither of the partners can use the property of the firm for his own benefit. It is submitted by him that when there is a deed of partnership and when the partnership is dissolved, irrespective of the fact whether the appellant is in possession or not, he can pray for an order of injunction by virtue of Section 53 of the Partnership Act.
9. I am not inclined to accept any of the contentions raised by the learned Counsel for the appellant. First of all, let me consider the provisions of Section 8 of the Arbitration Act. Section 9 of the Arbitration Act reads as follows :–
9. Power to party to appoint new arbitrators, or, in certairi cases, a sole arbitrator:–Where an arbitration agreement provides that a reference shall be to two arbitrators, one to be appointed by each party, then, unless a different intention is expressed in the agreement:–
(a) if either of the appointed arbitrators neglects or refuse to act, or is incapable of acting, or dies, the party who appointed him may appoint a new arbitrator in his place;
(b) if one party fails to appoint an arbitrator, either originally or by way of substitution as aforesaid, for fifteen clear days after the service by the other party of a notice in writing to make the service by the other party of a notice in writing to make the appointment, such other party having appointed his arbitrator before giving the notice, the party who has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator in the reference, and his award shall be binding on both parties as if he had been appointed by consent:
Provided that the Court may set aside any appointment as sole arbitrator made underclause (b) and either on sufficient cause being shown, allow further time to the defaulting party to appoint an arbitrator or pass such order as it thinks fit.
Under the above mentioned provisions, a party through an Arbitration proceeding, may seek the assistance of the Court :–
1. For the appointment of a Guardian for a minor or a person of unsound mind, for the purpose of Arbitral proceedings.
2. Their preservation, Interim custody or sale of any goods which are the subject matter of the Arbitration agreement;
3. Detention, preservation or inspection of any property or any jurisdiction subject matter of dispute in Arbitration.
4. Securing the amount in dispute in Arbitration.
5. Interim injunction or appointment of Receiver and such other interim measure of protection as may appear to the Court to be just and convenient.
It is the contention of the learned Counsel for the appellant that without there being any Arbitration proceedings, the appellant is entitled to file an application straightway under Section 9 of the Act. According to the learned Counsel, Section 9 of the Arbitration Act clearly states that a party may, before or during Arbitral Proceedings or at any time after making of the Arbitral Award can apply to the Court under Section 9 of the Arbitration Act. In other words, what is contended by the learned Counsel is that the word ‘before’ used in the Section clearly indicates that such an application can be tiled before any proceeding is initiated ‘under the Act before the Arbitral Tribunal.
10. Section 8 of the Arbitration Act relates to the referring of the matters to Arbitration when there is an Arbitration Agreement. The Hon’ble Supreme Court in Sant Ram v. State of Rajas than, , after considering the provisions of Section 41 of the f940 Arbitration Act, has held that the1 initiation or pendency of any proceedings in relation to the Arbitration therefore is a precondition for the exercise of power by the Civil Court under the Second Schedule of the old Act. In Sant Ram’s case, the facts were that the party concerned straightway filed an application under Order 39, Rule 1, CPC read with Section 41(b) of the old Arbitration Act. The learned District Judge before whom the said application was filed, rejected the same on the ground that it was not maintainable when no arbitration proceeding was pending and the said order was confirmed in an appeal by the High Court. Therefore, the facts in the case are much similar to the facts in this case. But it is submitted by the learned Counsel that the Provisions of the old Arbitration Act is quite different from Section 9 of the present Arbitration Act, Section 41(b) of the Arbitration Act, 1940 reads as follows :
“The Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court.”
Second Schedule to the 1940 Act is the powers of the Court and items No. 4 is “Interim injunction or the appointment of a receiver”. Therefore, there is no virtual difference between Section 41 read with Schedule 2 and present Section 9 of the Arbitration Act. Moreover, if an interpretation such as the one contended by the learned Counsel for the appellant is to be given to Section 9 the very object of the Act would be defeated. Any party, who has an agreement for Arbitration with another can rush to Civil Court and straightway get an order under Section 9 and thereafter keep quiet without referring the matter to Arbitration. That will have a very serious consequence on the provisions of the Act. It could not have been the intention of the legislature in enacting the present arbitration Act. Further, the very fact that Section 9 comes after Section 8 which deals with the reference of disputes to Arbitration, the only interpretation that could be given to Section 9 is that it could be availed of when an arbitration proceeding is pending before the Arbitral Tribunal or is at the reference stage before the Court or after the Arbitral award has been made.
11. The present Arbitration Act has dispensed
with many of the provisions of the 1940 Act
where the Court has power to deal with many of
the matters. Section 9 and Section 17 of the 1996
Arbitration Act enables the Court to take interim
measures. Similar power for taking interim measures is found in Section 17 where Arbitral Tribunal itself has got power to make any interim
measure for protection of the subject matter of
the dispute. Likewise, Section 31(6) gives power
to the Arbitral Tribunal to pass a interim award
and in matters with respect to which it may make,
a final arbitral award.
12. To make any interim measures, there must be proceeding seeking a permanent relief. It is only when arbitration proceedings is initiated or when the matter is before the Court under Section 8 of the Act. the Court is given power to refer parties to Arbitration when a party applies to it concerning the subject-matter of the proceeding before the Court. In my view, Section 9 has to be interpreted to give effect to the object of the Act. Under Section 9, a party may before or during arbitral proceedings or at any time after making the arbitral award but before it is enforced can apply to the Court for an interim order of injunction. The party can apply only for an interim injunction and not for permanent injunction as it is now sought for by the appellant. Further the word ‘before’ used in the Section is to be taken as that when the parties are before the Court and before the Court refers the matter to arbitration under Section 8 of the Act on an application by a party or during the arbitral proceedings pending between the parties or after the arbitral award is passed but before it is enforced under Section 36. Hence the contention raised by the appellant that the appellant can file an application under Section 9 directly to the Court for perpetual injunction without any suit or arbitral proceedings pending before an Arbitral Tribunal cannot be accepted.”
18. In Harbhajan Singh Kaur v. Unimode Finance, 1997 (2) Cal LT 414 the question that came for consideration was what are the powers under Section 9 that could be exercised by a Court and whether the powers incorporated under Section 9(ii)(d) are exhaustive or whether more powers are there for Court while exercising powers therein. In para 3 of the judgment his Lordship held thus :
“This Court was concerned with Clause (ii) to
Section 9(a) of the said Act which begins with a
prefix, namely, for an interim measure of protection in respect of the following matters may be
taken by the Court which are catalogued in Clauses (a) to (d) of Section 9(ii) of the said Act. The
Court is made to ponder over the proposition
used in the expression “interim measure” by
insertion of ‘an’ and, at the same time, a catena of
matters has been elicited thereunder. The expression used is in the midst of pendency of an arbitral
proceeding in between making of the arbitral
award and endorsement in accordance with Section 36. Therefore, the expression ‘an’ is one of
the alternatives and it has to be rated as in the
midst of possibility of many during the pendency
of an arbitral proceeding as indicated in Section
9 itself. This Court is required to construe the
etymological significence of any expression used
in terms of grammatical construction or etymo
logical significance of any expression keeping in
view that the presumption about the legislative
wisdom also has knowledge ability about the user
of any expression after judging it from all possible aspects. It appears that one of the many
interim measures during the pendency of such
proceeding as aforesaid has been catalogued in
the catena of illustrations of Clauses (a) to (d) of
Section 9(ii) of the said Act and Clause (e) provides for such other interim measures of protection as may appear to the Court to be just and
convenient. On a plain reading of the comprehensive conspectus of Seclion 9(ii). itself, it appears that apart from comprehending that the
given situation as forecast in Clauses (a) to (d)
covered by Section 9(ii) of the said Act, the.
aforesaid section tends to encompass within its
ambit even such other interim measures which
may appear to the Court to be just and convenient.”
19. From the above decisions, it is clear that
the present application before the lower Court
Under Section 9 of the Act is misconceived. No
effort was made by the respondent to have an
arbitrator appointed or to resolve the dispute or claim. So long as there is no proceedings under the Act to resolve the case. Section 9 of the Act cannot be invoked.
20. Learned counsel for respondent contended that there is vast difference between Section 41 and Second Schedule of the old Act and the word used in Section 9 of the new Act. Learned counsel laid stress on the word ‘before’ occurring in Section 9 of the Act, which is absent in the earlier enactment. But Article 9 of UNCITRAL has also used the word ‘before’. I have already extracted the comments on the same from the book ‘Arbitration’ by Russel.
21. Even if we take the word ‘before’, it has got a definite meaning. Section 9 of the Act contemplates only an interim measure. Forgetting an interim measure, there must be a substantial relief, at least for appointment of an arbitrator or some other substantial relief contemplated under the Act. In fact, the very same contention was rejected in the decision of the Karnataka High Court which I have already extracted.
22. In this case, it is also better to take note of the earlier decisions of AndhraPradesh and Kerala High Courts, They are: M/s. Vijaya Transport v. A. P. State C. S. Corpn. Ltd.. and Gokuldas v. Union of India, .
23. Even under Section 41(b) of the old Act read with the Schedule, there was a dispute as to what are the powers of Court in granting interim relief and whether the same could be exercised before the arbitration commences on the reference or before it.
24. The Andhra Pradesh High Court pointed out some decisions, especially, in Baby Paul v. Hindustan Paper Corporation Ltd., . it was held that arbitration proceedings commence only on the arbitrator getting authority to arbitrate and act on that behalf and only at that time Section 41 of the old Act could be made applicable. This decision was not followed by the Andhra Pradesh High Court in its decision cited supra, wherein it was held thus at page 173 :
“Section 41 is worded widely and empowers a Court to exercise the powers of passing interim orders and mentioned in the Schedule 2 not only for the purpose of arbitration proceedings, but also in relation to an arbitration proceeding. Arbitration proceedings cannot necessarily be held to commence only from the point of time when an arbitration proper is commenced with the appointment of the arbitrator by the Court. There are no such clear words of limitation used in Section 41 compelling to deny the Courts jurisdiction to grant an interim relief till an arbitrator is appointed but on the contrary the phrase arbitration proceedings is wide enough to justify the granting of interim relief even before the arbitrator is appointment.”
25. The Kerala High Court in its decision cited supra did not follow the earlier decision of that Court i.e., and held that the Court gets the power under Section 41 of the old Act when the proceedings is initiated in Court under Section 20 of the old Act and even before an arbitrator is appointed. The relevant portion of the decision reads thus at page 171 :
“Section 41(a) makes applicable all provisions of Civil P. C. to all proceedings before the Court under the Act. In that case, the Court will have all the powers a Court has under the Code. Of course, this is subject to the provisions of the Act and the Rules thereunder. There is no provision in the Act or the Rules which takes away the power of the Civil Court to grant an injunction or to appoint a receiver in proceedings under the Act pending before a Court. Hence in a proceeding under Section 20 which is a proceeding under the Act the Court will have the power to grant an injunction, if a prima facie case is made out and other conditions for the issue of an injunction are satisfied. This power is conferred upon the Court by Clause(a) of Section 41 and not by Clause (b) of Section 41 as Clause (b) is a special provision for proceeding before Court under the Act after an order of reference has been made under Section 20(4). that is to say, pending reference.”
26. From these decisions it is clear that even before the new Act, interim orders could be given even before the arbitral proceedings commences and even before an arbitrator is appointed and thereafter during the course of reference. But, in all such cases, there was a substantial relief at least for appointment of an arbitrator. So, the word “before” occurring in the new Act will apply only in such cases as is contemplated in the decisions of Andhra Pradesh and Kerala High Courts cited supra. Argument of the learned senior counsel for the respondent that the word ‘before’ has to be interpreted and Section 9 of the Act can be invoked even without any pending arbitration proceedings, cannot be accepted. In fact, the difference of opinions of the various High Courts regarding Section 41 of the old Act is now resolved by the new enactment. It is also to be noted that Section 9 is incorporated in the Statute book after Section 8, which relates to the procedure for initiating proceeding for appointment of arbitrator. Section 9 of the Act with have to be read only after the procedure under Section 8 is initiated.
27. In this case, we are concerned about the powers of the Court in an arbitration proceeding. It is true that Section 21 of the Act defines as to when the arbitration proceeding commences. When we consider the scope of Section 9 of the Act. Section 21 of the Act will have no application. In this case, the respondent has not even issued notice regarding the appointment of an arbitrator or has requested for the same.
28. In view of the various decisions, the only interpretation that could be given to Section 9 is that the “interim direction or relief could be granted by a Court only when proceedings have been initiated for substantial relief under the Act and the Court is entitled to give interim relief before an arbitrator is appointed by the Court and before he enters into reference and during the reference and after the award, but before the enforcement.” If this is the interpretation that could be applied, the present application before the lower Court under Section 9 of the Act is misconceived. That itself is sufficient to allow these revisions. The impugned order was one without jurisdiction.
29. P.C. Markanda, in his book Law relating to Arbitration and Conciliation II Edition (1997) at page 135 has commented on Section 9 of the Act thus :
“The application for appointment of a receiver stands on the same footing as an application for injunction. None of them is taken out for aiding the progress of the suit. These applications are taken out for the protection of the interests of the parties, pending the decision on dispute either by the Civil Court or in a private forum.
“Arbitration proceedings cannot necessarily be held to commence only from the point of time when an arbitration proper is commenced with the appointment of the arbitrator by the Court. There are no such clear words of limitation used in this section to deny the Court’s jurisdiction to grant an interim relief till an arbitrator is appointed, but on the contrary, the phrase arbitration proceedings is wide enough to justify the granting of interim relief even before the arbitrator, is appointed.”
N.D. Basu in his book ‘Law of Arbitration and Conciliation’ 9th Edition (1998) at page 516 has commented on Section 9 of the Act thus :
“…. .This section taken from the English rule of Court is a corollary action designed to defeat the subsequent execution of the decree.”
30A. We may also take note of the powers of Arbitration Tribunal under Section 17 of the Act. While Section 9 of the Act deals with the powers of the Court, Section 17 of the Act deals with the powers of the Tribunal. The power of granting interim measure is also granted to the Tribunal.
30. Johari, in his book ‘Commentary on Arbitration and Conciliation Act, 1996’ 1997 Edition at page 278, has stated thus :
“A party may “before or during arbitral proceedings or at any time after the making of the award but before it becomes decree of a Court1,’ apply to a Court.” In Gokuldas v. U.O.I., , held, relief may be granted before and in anticipation of any’ reference. Also see AIR 1968 J and K 86. But in , held, relief cannot be given unless arbitration proceedings are pending. This view was taken also in AIR 1946 Pat 70 and (1977) 18 Guj LR 660. The new Law has set at rest this controversy. It is also immaterial now whether arbitrator has been appointed or not, hence the conflict of opinion between (whether or not arbitrator is appointed) and is also irrelevant.”
31. Now, 1 come to the main relief sought for in the application. I have already stated that Section 9 of the Act has no application regarding the petition of the respondent herein before the lower Court. Even otherwise, the relief sought for in that petition is for the appointment of an Advocate Commissioner and to restore the custody of the machinery to the petitioner. Even though in para 11 of the petition it is stated that the Court has got powers to order for preservation, detention or sale of the property, the relief sought for by the respondent is that he wanted to restore the custody of the machinery. That cannot be the relief that could be granted under Section 9 of the Act. It is also clear from the other averments in the original petition before the lower Court that what the respondent wanted was to exercise his right of ownership under the Hire Purchase Agreement and not a relief that is contemplated under Section 9 of the Act. The reliefs prayed for and granted are for beyond the scope-of the Act and cannot be allowed.
32. Learned Senior Counsel for respondent further submitted that even if the application is misconceived, interest of justice will have to be considered as per the hire purchase agreement. According to him, the respondent is the owner, and hire purchase agreement is one of the documents that were made available before lower Court. It has considered the provisions of the agreement and has passed the impugned order and the order should not be interfered with.
33. In this case, we are not concerned about the inter se right between the petitioner and respondent. We are concerned only with the question whether Section 9 of the Act could be applicable in such cases. At the time of granting any interim relief, inter se right of the parties need not be considered finally. Prima facie case alone shall be considered. Even for the same, substantial relief under the Arbitration Act must be pending. The relief sought for in the main original petition goes far beyond the scope of Section 9 of the Act and the lower Court should not have entertained the same.
33-A. Learned counsel for respondent thereafter submitted that there is no manifest injustice in this case and the petitioner has also got an alternative remedy of appeal.
33-B. It is true that against the order under Section 9 of the Act, a statutory appeal is maintainable. But I do not think that that will be a par for invoking the power under Article. 227 of the Constitution of India. In this regard, the Hon,’ble Supreme Court in its decision in Maneck Custodji v.Sarasazali, , has held thus :–
“It is very difficult to appreciate the reasoning; behind the order made by the High Court. It is to say the least an extraordinary order which flies in the face of law and judicial procedure. The respondent had clearly a legal remedy available to him by way of an appeal against the decree of the City Civil Court and this remedy was not only adequate but were comprehensive than the one under Article 227 of the Constitution. Even so, for the same inexplicable reasons, the respondent chose to prefer a Special Civil Application under Article 227 of the Constitution and Vaidya, J., entertained the Special Civil Application and granted relief to the respondent casting to the winds the well-settled principle that the High Court does not ordinarily, in exercise of its discretion, entertain a special civil application under Article 227 of the Constitution where an adequate alternative legal remedy is available to the applicant. It is true that this principle is not rigid and inflexible and there can be extraordinary circumstances where despite the existence of an alternative legal remedy, the High Court may interfere in favour of an applicant.”
34. The power of Article 227 of the Constitution of India is a power of superintendence conferred upon the High Court by Article 227 and it is not confined to administrative superintendence only, but includes the power of judicial revision also, even where no appeal or revision lies to the High Court under the ordinary law. This power involves a duty on the High Court to keep the inferior Courts and tribunals ‘within, the bounds of their authority and to see that they do what their duty requires and that they do it in a legal manner’.
35. What is the power of superintendence? In the decision in Bimal Sahoo, Secy., Basudebpur Girls’ High School v. Court Rani Pahari, , it is held thus:
“……It is urged that Article 227 of the
Constitution is fettered with similar limitation. I am unable to subscribe this view. Power of supervision cannot be so equated with power of revision. As a matter of fact Court will strike down a patently illegal exercise of jurisdiction in exercise of the power of superintendence. I am therefore unable to uphold the contention of Mr. Roychowdhury that the Court will not exercise this power of superintendence if an alternative remedy is available, particularly When the Court finds inherently want of jurisdiction.”
36. In Kiran Singh v. Chaman Paswan, , it was held thus at page 342 (of AIR):
“It is a fundamental principle that a decree passed by a Court without jurisdiction is nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree, and such a defect cannot be cured even by consent of parties.”
This decision has been followed by the Delhi High Court in Union of India v. K.L. Bhalla, while justifying the exercise of power under Article 227 of the Constitution of India.
37. The Court below has now passed a final order on the petition filed by the respondent herein. The petition itself was numbered on 7-4-1998 and on the very same day the Court has passed the order and the third para of the order reads thus :
(Vernacular matter omitted)
This statement is patently incorrect and so there is non-application of mind. The order has been passed without hearing the petitioner herein and therefore there is violation of natural justice. That also would be added ground to invoke the powers under Article 227 of the Constitution.
38. In India Exports House Pvt. Ltd. v. J.R. Vohra, it is stated thus :
“The order of the Rent Controller directing recovery of possession is challenged in this petition under Article 227 of the Constitution on the ground that the order was made without notice to the petitioners to raise objections, if any. The respondent contends that the petitioners should have first approached the Rent Control Tribunal before approaching the High Court. It is true that the party should first exhaust the alternative remedies available to it, but is not an inexorable rule and the Court can exercise its power of superintendence even where the party has got exhausted alternative remedy.”
39. Learned senior counsel for the respondent submitted that various litigations are pending against the petitioner in various Courts and interim orders are obtained. If the respondent had not taken any action to restore the property, it would have been taken by other creditors. Therefore, it is absolutely necessary to protect the interest of the respondent.
40. The interest of a party alone will not confer a jurisdiction to a Court if it is otherwise not having the jurisdiction. Such an agreement cannot be accepted to support the impugned order.
41. Consequently, I set aside the impugned order. I make it clear that I am not concerned as to the rights of the respondent under hire purchase agreement and as to whether the respondent is entitled to take possession of the machineries or not under any other law. In this revision, I have only dealt with the question whether Section 9 of the Act is applicable and under what circumstances the power under that Section could be exercised. If the respondent has any other right for taking possession of the movables, this decision will not affect the same.
42. In the result, the revisions are allowed with costs. Advocate fee Rs. 5,000/-. Consequently, the connected C.M.P. is closed.