Karnataka High Court
Judges : Ajit J.Gunjal
SYMPHONY SERVICES CORPORATION (INDIA) PRIVATE LIMITED - Appellant
Versus
SUDIP BHATTACHARJEE - Respondent
Writ Petition 12127 Of 2007
Decided On : 08/21/2007
Advocates Appeared :
BISWAJITH BHATTACHARYA, K.G.RAGHAVAN, R.Nataraj, S.DUBEY
Arbitration Act - Interim Measures - Section 9
Fact of the Case:
The petitioner, a multi-national company, terminated the services of the respondent, who then initiated proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 for interim measures. The respondent sought a direction to deposit a sum of Rs. 2 crores in the trial court and to continue receiving regular remuneration. The trial court granted an ex parte interim injunction restraining the petitioner from alienating certain properties and attached the petitioner's bank account.
Finding of the Court:
The court found that the trial judge's decision to attach the petitioner's bank account to the tune of Rs. 2 crores was not justified, as it did not satisfy the requirements for an extraordinary measure. The court suspended the impugned order and directed the petitioner to appear before the trial court and file a reply within 15 days.
Issues: The issues involved the maintainability of the writ petition, the justification of the trial judge's decision to attach the petitioner's bank account, and the applicability of the Code of Civil Procedure to the proceedings under Section 9 of the Arbitration Act.
Ratio Decidendi: The court held that the appeal provision was not applicable to the interim measures under Section 9 of the Act, making the writ petition maintainable. It also emphasized that the application of the Code of Civil Procedure was not excluded and was applicable to the proceedings under Section 9 of the Act.
Final Decision: The impugned order was suspended, and the petitioner was directed to appear before the trial court and file a reply within 15 days. The court's observations during the proceedings were stated to be only for the purpose of disposing of the writ petition and were not to weigh with the trial judge while deciding the application on merits.
( 1 ) THE petitioner in this writ petition has called in question the order passed by the learned City Civil Judge CCH No. 11 bangalore on an application made by the respondent herein under Section 9 of the Arbitration Act in AA No. 131/2007. The copy of the impugned order is at Annexure-'k'.
( 2 ) THE facts leading to the filing of this writ petition can be summarised as follows: the petitioner, a multi-national Company appointed the respondent as Vice President and Chief Financial Officer in terms of the letter issued to him. Pursuant to the said appointment, the petitioner and the respondent have separately entered into a confidential Information and Invention Assignment Agreement providing for non-disclosure of confidential information, which he would have acquired in the course of his employment with the petitioner-Company. On 11-4-2007, the petitioner terminated the services of respondent from the petitioner-Company. The reason for termination was that the petitioner-Company found that the respondent did not satisfy the High standard and was found wanting in discharging his responsibilities as Vice President and Chief financial Officer. It was also found that the respondent was discourteous to his colleagues and sub-ordinates. The respondent issued a legal notice on 23-4-2007 alleging that his termination was motivated, illegal, arbitrary and unilateral. Suffice it to say that the notice also contained a claim for damages to the tune of Rs. 2 crores for the alleged loss and the hardship suffered by him. A suitable reply was sent by the petitioners On 4-5-2007. The respondent initiated proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 before the Trial Court, which was registered as AA No. 131/ 2007 for interim measures. In the said petition the respondent sought for a direction to the petitioner to deposit a sum of Rs. 2 crores in the trial Court and during the pendency of the said application under section 9 of the Arbitration and Conciliation Act, 1996, to pay the applicant i. e. , the respondent regular remuneration including all benefits commencing from June 2007. The respondent also maintained an interim application under Section 9 of the Act claiming certain reliefs, which was in the nature of injunction restraining the petitioner from alienating the property mentioned in the schedule. The said application as granted by the Trial Court without notice to the petitioner. The petitioner, it appears received a communication on 26-7-2007 from the Counsel appearing for the respondent in the Trial court informing that the petitioner's main Bank Account in HSBC bank of M. G. Road, Bangalore has been attached. The petitioner has called in question the said order passed by the learned Trial Judge.
( 3 ) MR. K. G. Raghavan, leaned Senior Counsel appearing for the petitioner submits that the very nature of the application filed by the respondent does not entitle him for an order of attachment. He further submits that the application, was in the nature of an ex-parte order of temporary injunction restraining the respondent from alienating any portion of the property described in the schedule. But however, the learned trial Judge has chosen to travel beyond the scope of the application and has issued an attachment warrant freezing the account of the petitioner to the extent of Rs. 2 crores. That is the subject matter of the original proceedings under Section 9 of the Act. He submits that in the very nature of things, the learned Trial Judge could not have bypassed the provisions of Order 38, Rule 5 of the Code of Civil Procedure assuming that they are applicable. He further submits that the attachment of the Bank account is the last resort and is to be exercised only when the Courts are satisfied that in the event of the applicant succeeds in the proceedings, the relief, which is granted should not go unanswered.
( 4 ) MR. Bishwajith Bhattacharya, learned Senior Counsel appearing for
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