2000 Supreme(Kar) 515
Karnataka High Court
SUBHODA SHETTY - Appellant
Versus
BOTTOMS UP WINES - Respondent
Decided On : 08-29-00
M.F.A. : 525 of 1998
K.C.SHIVASUBRAMANIAM, UDAYA HOLLA
Headnote:Arbitration and Conciliation Act, 1996-Section 9-Application for Interim Order-any party to the arbitration agreement can file an application even before initiation of the proceeding-instantly, both plaintiff and defendants are parties to arbitration agreement-hence application filed before initiation of the proceeding is maintainable-order passed by D.J. holding that the application filed before initiation of the proceeding is not maintainable set aside.
( 1 ) THIS appeal is by the plaintiff in A. C. 3/97 against the order dated 12. 1. 1998 passed by the principal District Judge, Mysore.
( 2 ) THE parties in this appeal are referred to as arrayed in the District Court. The plaintiff and defendants 3 and 4 are partners of the first respondent firm. The partnership deed provides for arbitration in the event of dispute among the partners in relation to the business carried on by the partnership firm. In view of this clause the plaintiff has made an application for appointment of receiver in respect of the business carried on in the schedule premises under Section 9 of the Arbitration and Conciliation Act 1996 (for short'act' ). Before making that application for an interim order the plaintiff had issued a notice dated 2. 9. 1997 to the respondents seeking for arbitration. The said application was resisted by the defendants on the ground of maintainability of the application filed by the plaintiff. The contention of the defendants before the District Judge is that the application filed under Section 9 of the Act even before initiation of the arbitration proceedings is not maintainable in law. On the pleadings of the parties the learned District Judge has raised a point for consideration which reads as follows: - "whether the present petition is maintainable. " , the learned District Judge answered this point in the negative. This order is under challenge in this appeal. ,
( 3 ) THE point that arises for consideration in this appeal is whether the District Judge is justified in holding that the application filed by the plaintiff under Section 9 of the Act is'not maintainable in law? in order to consider this point it is useful to refer to Section 9 of the Act. Section 9: Interim measures etc. by Court - A party mav. before or during arbitral proceedings or at any time after the making of the arbitral award but beforfe 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 ii) for an interim measure of protection in respect of any of the following matters namety:-A) the preservation, 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 or 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 sample 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; (1) interim injunction or the appointment of a receiver; e) such other interim measure of protection as may appear to the Court 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. The word party as defined under Section 2 (h) of the Act reads as follows:- "party means a party to an arbitration agreement", from the reading of Section 9 it is clear that it contemplates 3 stages:-1) before or ii) during arbitraly proceeding or iii) at any time after the making arbitral award but, before it is enforced in accordance with Section 36 of the Act. From the facts it is seen that the plaintiff had issued a notice to the respondents requesting for arbitration. If that is so, as required under Section 21 of the Act the arbitral proceedings in respect of a dispute have commenced. Even assuming if no notice has been issued expressing intention for arbitration or making a request for arbitral proceedings, it is open for a party to the arbitration agreement to file an application even before initiation of the proceedings under section 9 of the Act. In the in