{"id":25192,"date":"2003-03-26T00:00:00","date_gmt":"2003-03-25T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/atul-limited-vs-prakash-industries-ltd-on-26-march-2003"},"modified":"2017-07-20T01:36:01","modified_gmt":"2017-07-19T20:06:01","slug":"atul-limited-vs-prakash-industries-ltd-on-26-march-2003","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/atul-limited-vs-prakash-industries-ltd-on-26-march-2003","title":{"rendered":"Atul Limited vs Prakash Industries Ltd. on 26 March, 2003"},"content":{"rendered":"<div class=\"docsource_main\">Delhi High Court<\/div>\n<div class=\"doc_title\">Atul Limited vs Prakash Industries Ltd. on 26 March, 2003<\/div>\n<div class=\"doc_citations\">Equivalent citations: 2003 IIIAD Delhi 459, 2003 (2) ARBLR 489 Delhi, 2003 (68) DRJ 430, 2003 (2) RAJ 409, 2003 46 SCL 73 Delhi<\/div>\n<div class=\"doc_author\">Author: V Sen<\/div>\n<div class=\"doc_bench\">Bench: V Sen<\/div>\n<\/p>\n<pre><\/pre>\n<p>JUDGMENT<\/p>\n<p>Vikramajit Sen,  J.  <\/p>\n<p> 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.\n<\/p>\n<p>2.     Counsel for the Respondent has relied on a decision of a learned Single Judge of this Court in  Arun  Kapur Vs. Vikram Kapur &amp; Ors., .  In paragraph 56 of that  decision the learned  Judge has opined that &#8221; 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.&#8221;  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. &amp; 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&#8217;ble Supreme Court as well as of the  Division Bench of this Court  the decision rendered in Arun Kapur&#8217;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.\n<\/p>\n<p>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.\n<\/p>\n<p>  &#8220;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)  <\/p>\n<p> 4.2 Hold  the product as a bailee  Lesser.\n<\/p>\n<p> 4.10 Not transfer, assign or otherwise dispose of or purport to transfer, assign or dispose of the Lesser&#8217;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.\n<\/p>\n<p> 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.\n<\/p>\n<p> 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.\n<\/p>\n<p> 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.&#8221;\n<\/p>\n<p> 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.\n<\/p>\n<p> 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.\n<\/p>\n<p> 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.\n<\/p>\n<p>  The petition is disposed of.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Delhi High Court Atul Limited vs Prakash Industries Ltd. on 26 March, 2003 Equivalent citations: 2003 IIIAD Delhi 459, 2003 (2) ARBLR 489 Delhi, 2003 (68) DRJ 430, 2003 (2) RAJ 409, 2003 46 SCL 73 Delhi Author: V Sen Bench: V Sen JUDGMENT Vikramajit Sen, J. 1. Two questions fall for determination in this [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-25192","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Atul Limited vs Prakash Industries Ltd. on 26 March, 2003 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/atul-limited-vs-prakash-industries-ltd-on-26-march-2003\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Atul Limited vs Prakash Industries Ltd. on 26 March, 2003 - Free Judgements of Supreme Court &amp; 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