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2006 Supreme(AP) 150

Andhra Pradesh High Court
Judges : B.S.REDDY, D.S.R.VERMA
Sai Priya Construction Company - Appellant
Versus
K.Anantha Kumari Satya Raju - Respondent
Decided On : 02-08-06

Headnote:Arbitration & Conciliation Act, 1996 - Section 9B, 34, 37 - Arbitration - Interim Relief - Interim Relief granted under Section 9 shall not be allowed to continue to unreasonable extent.

       Held : relief, which was granted, as an interim protection, shall remain as an interim measure only but shall not be allowed to continue to an unreasonable extent and as such, the arbitral proceedings shall commence within a reasonable period from the date of the order passed under Section 9 of the Act. it is further obvious that if the said arbitral proceedings, as contemplated under the agreement, did not commence within a reasonable periodfrom the date of the interim order passed under Section 9 of the Act, the relationship between the order passed under section 9 of the Act and the actual arbitral proceedings would cease and the order can no longer be treated as the one passed before the arbitral proceedings. What is the reasonable period for the commencement of arbitral proceedings from the date of passing of interim order under Section 9 of the Act would depend upon the facts and circumstances of each case.

       In other words, the orders passed under Section 9 of the Act being temporary in nature would remain as temporary and wither away by lapse of time, if it is unreasonable.

       From the provisions of Section 14 of the Act, it is abundantly clearthatthe mandate of an Arbitrator or Arbitrators shall terminate in two situations. Firstly when he or they failed to perform his or their functions, or for other reasons failed to act without undue delay, secondly when the Arbitrator or arbitrators withdraw from the office. The present situation, as already pointed out, falls within the four corners of Clause (a) of sub-section (1) of Section 14 of the Act, inasmuch as the Arbitrators failed to perform their duties without undue delay. As already noticed, the Arbitrators were appointed in the months of April and May, 2003.

D. S. R. VARMA, J.

( 1 ) HEARD both sides.

( 2 ) THOUGH the matter is listed under the caption "interlocutory", with the consent of both the learned counsel, the Civil miscellaneous Appeal itself is disposed of by this judgment.

( 3 ) THE present Civil Miscellaneous Appeal, under Section 37 of the Arbitration and conciliation Act, 1996 (for brevity "the Act"), is directed against the order, dt. 11-7-2005, passed by the XII Additional Chief Judge, city Civil Court, Hyderabad (Fast Track court), dismissing the Arbitration o P. No. 1031 of 2003 as not maintainable.

( 4 ) THE appellant is the builder and the respondents are the owners of disputed property.

( 5 ) FOR the sake of convenience, in this judgment, the appellant and the respondents will be referred to as "the builder" and "the owners" respectively.

( 6 ) THE backdrop, in brief, appears to be that there was an agreement between the builder and the owners to develop the land of the owners bearing Plot Nos. 5 and 6, situated chikoti Gardens, Hyderabad. The said agreement is dated 25-1-12001. Later, the owners cancelled the agreement on 18-7-2002, and the builder was informed of the same by way of a notice on 27-7-2002. Aggrieved thereby, the builder invoked the arbitration clause incorporated under the agreement and nominated an arbitrator on 26-4-2003. The owners also nominated an aibitrator of their choice on 27-5-2003. Subsequently, when the property under dispute was likely to be alienated to third parties, the builder filed the said O. P. , under section-9 of the Act and obtained ad interim injunction on 1 -5-2003, which was eventually dismissed on 1 -7-2005 through the impugned order. Hence, the present Civil Miscellaneous appeal.

( 7 ) A perusal of the impugned order reveals that the said O. P. , was dismissed on the ground that the same is not maintainable. In order to arrive at this conclusion, the Court below relied on some judgments of other high Courts as well as the apex Court.

( 8 ) LEARNED counsel for the builder contends that the Court below was in error in holding that the said O. P. , was not maintainable, following the judgment relied on by the owners.

( 9 ) ON the other hand, it is the contention of the learned counsel for the owners that the builder did not take steps within reasonable time. It is his further contention that when the arbitrators were appointed by both parties in the year 2003 and when no umpire was appointed by the said arbitrators, no steps have been taken by the builder within reasonable time, as contemplated under law. It is his further contention that having obtained ad interim injunction on 1 -5-2003, no steps atleast have been taken by the builder after 1-5-2003 i. e. , the date on which the Court below granted ad interim injunction. Therefore, it is the contention of the learned counsel for the owners that reasonable time cannot be extended too long.

( 10 ) IN the light of the above contentions, the only question that falls for consideration is as to whether the Court below was justified in dismissing the said O. P. , as not maintainable?

( 11 ) THE Court below dismissed the said o. P. , mainly on two grounds firstly the said o. P. , was not maintainable in the light of the judgment of the Gauhati High Court in Archcon v. Sewda Construction Co, and secondly the builder did not take any steps to have the umpire appointed by the nominated arbitrators when they failed to do so.

( 12 ) IN this regard, as could be seen from the very opening words of Section 9 of the act, it is obvious that Section 9 of the Act was intended to have interim measures etc by the court. The very expression "interim measures" denotes that they cannot and shall not, be treated as permanent measures.

( 13 ) IN other words, in an application filed under Section 9 of the Act, no orders of permanent nature can be passed. Further, it is clear that the aggrieved party may invoke the jurisdiction of the Court under Section-9 of the Act before or during arbitral proc

























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