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In the High Court of Judicature at Hyderabad
DILIP B. BHOSALE, M.S. RAMACHANDRA RAO & A. RAMALINGESWARA RAO, JJ.
East India Udyog Limited – Appellant
Versus
Maytas Infra Limited & Another – Respondents
C.M.A. No. 1206 of 2012
Decided On : 12-06-2015
Arbitration & Conciliation Act, 1996 – Sections 2 (e), 9 and 35 – Civil Procedure Code, 1908 – Order XXX and VIII – Rule 5 – Section 141 – Interim measures – Finality of arbitral awards – Arbitral proceedings – Whether Court as defined under Section 2 (e) of the Act, is entitled to grant any interim order pending disposal of interim measure application under Section 9 of Act – Whether further application pending disposal of interim measure under Section 9 of Act, is maintainable – Seeking interim reliefs or directions, once again further interim applications are being filed like the present one which is appealed against in this appeal, seeking further or varied interim reliefs by way of injunctions and directions which only amounts to duplication of the very enquiry and adds to the delays in disposal of main interim application and repetition of the exercise – Held, Considered judgments of the Supreme Court and the High Courts and after having perused the relevant provisions carefully, it appears to us that when an application is made under Section 9 of the Act to a Court, such application gives rise to a ‘proceeding’, which is original in nature. Such a ‘proceeding’ is not dependent upon the pendency of any other proceedings such as any suit or appeal. As a matter of fact, Section 9 itself makes it clear that an application seeking interim measure, as provided therein, may be made even before any arbitral proceedings are commenced. In other words, even before commencement of arbitral proceedings, an application under Section 9 can be filed and such application, being original in nature, in our opinion, would stand on the same footing as the proceedings within the meaning of Section 141 of the Civil Procedure Code. As observed earlier that no special procedure is prescribed by the Act for dealing with an application for interim measure/order under Section 9 thereof and further when power is conferred under a special statue on a Civil court without laying down any special condition for exercise of that power, the general rules that governed the Court while considering the grant of interim measure order at threshold are attracted. Thus, when an application under Section 9 is made and during pendency of such application, an ex parte ad interim order becomes imperative facts and circumstances of the case, it is open to the Court to pass an ad interim ex parte order based on well recognized principles contemplated by the provisions of Order Civil Procedure Code governing the grant of interim injunctions and/or other orders of interim protection or the appointment of a Receiver power to grant an ex parte interim order is derived by a Court under the principle that every Court has the power to pass an order – Application stand disposed.
Dilip B. Bhosale, J.
1. The order of reference dated 28th January, 2013, which has occasioned the constitution of this Full Bench, has been passed by a Division Bench in the instant Civil Miscellaneous Appeal. The Division Bench in this case having disagreed with the view taken by another Division Bench of this Court in Bilasraika Sponge Iron Pvt. Ltd., Hyderabad V. Devi Trading Co., Hongkong (2011(5) ALD 327 (DB) = 2011 (4) ALT 297 (DB) (for short ‘Bilasraika’) formulated the following questions, which consequently require determination by this Full Bench:
a) Whether the Court as defined under Section 2 (e) of the Act, is entitled to dispose of the application filed under Section 9 of the Act before initiation of the arbitral proceedings under section 21 of the Act, ex-parte without giving notice to the respondents, if the facts and circumstances so warrant?
b) Whether the Court as defined under Section 2 (e) of the Act, is entitled to grant any interim order pending disposal of the interim measure application under Section 9 of the Act?
c) Whether further application pending disposal of the interim measure under Section 9 of the Act, is maintainable?”
2. The Division Bench, in the instant appeal, also considered the judgment of this Court in Gulf Oil Corporation Ltd., Hyderabad V. Singareni Collieries Co. Ltd., Kothagudem (2008 (2) ALD 693 (DB) = 2008 (3) ALT 631 (DB) (for short ‘Gulf Oil’) and having noticed the view taken therein observed that the learned Judges were unable to prima facie agree with the opinion of the Division Bench in Bilasraika with regard to the power of the Court to pass an ad-interim order/measure before disposal of interim measure application filed under Section 9 of The Arbitration & Conciliation Act, 1996 (for short ‘the Act’).
3. It would be advantageous to reproduce the relevant observations made by this Court in Bilasraika for understanding better the background against which the Division Bench in the instant Civil Miscellaneous Appeal framed the aforementioned questions and referred to Full Bench. The relevant paragraphs 16, 17 and 21 read thus:-
“16. Since the jurisdiction to order interim measures is conferred on the Court, in respect of any grievance of a party before or during arbitral proceedings, it is axiomatic that the Court has the power, authority and jurisdiction to order ad-interim measures as well and pending ordering of measures after hearing affected parties(arrayed as respondent to an application under Section 9). The appeal provided under Section 37 of the 1996 Act comprises within its locus an appeal against an order granting ad-interim measures, pending passing of final orders under Section 9 of the 1996 Act as well.
17. In the considered view of this Court since Section 9 of the 1996 Act incorporates a power in the Court to grant ad-interim measures, pending grant of measures after hearing the concerned parties as well and without the necessity of reliance on the provisions of Order XXXVIII Rule 5 CPC, the order of this Court dated 12.1.2011 could be considered proprio vigore an order under Section 9 of the 1996 Act granting ad-interim measures. Such an order could be appealed against under Section 37 of the 1996 Act.
21. In the view we have taken; that the power to pass an order granting ad-interim measures before hearing the respondent in an application under Section 9 of the 1996 Act is also comprehended within the scope of the powers granted under Section 9, the order dated 12.1.2011 could be truly and fairly considered an order passed under Section 9 and it would not be necessary, in the facts and circumstances of this case, for the appellant to await the passing of an order under order XXXVIII Rule 6 CPC and to pursue remedies there against. This appeal is therefore maintainable as an appeal against an order passed under Section 9 of the 1996 Act. This issue is answered accordingly and in favour of the appellant.”
(emphasis supplied)
4. In Gulf Oil (supra), the Divis
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