Caveats filed in original jurisdiction are valid in commercial suits, and interim orders under Section 9 of the Arbitration Act should not impose arbitrary time limits.

ORDER :

Suraj Govindaraj, J.

1. The Petitioners are before this Court seeking for the following reliefs:

a. To issue a writ, order or direction in the nature of certiorari or any other writ quashing the order dated 12.01.2021 on interlocutory application I.A.No.1 passed by the Hon’ble Commercial Court at Bangalore in Com.A.A. No.10 of 2021 (“Impugned Order”) (Annexure-A);

b. Grant an order of temporary injunction in terms of I.A.No.1 filed in Com.A.A.No.10 of 2021 restraining the Respondents, their agents, employees, or other persons claiming through or under them, from, in any manner, encumbering, selling, alienating, disposing of, or creating any third party rights over the Petition Schedule Properties pending disposal of the proceedings in Com.A.A.No.10 of 2021 and;

c. Pass any other orders deemed fit, in the facts and circumstances of the case, in the interests of justice.

2. The petitioners are stated to be partners in a Firm, engaged in the Real estate business. There being certain disputes between the petitioner and the respondents under the Partnership deed/dissolution of partnership, the petitioners filed a proceeding under section 9 of the Arbitration and Conciliation Act, 1996 [‘A&C Act’ for short] for appointment of a receiver to preserve and manage the firm's assets and also restraining the respondents from in any manner of alienating, encumbering or creating third party rights over the schedule properties they acquired. A caveat having been filed, in the original suit jurisdiction, the Commercial Court took up the caveat and indicated that no order could be passed unless the caveator was served. It is challenging the same the petitioner had approached this court in the above writ petition.

3. During the pendency of the above matter, the Section 9 proceedings have been disposed off, extending the interim order by 30 days.

4. The submission of Sri.Pradeep Nayak, learned counsel appearing for the petitioner is that the Commercial Court ought not to have imposed the said time limit of 30 days but ought to have extended the interim order until the constitution of the Arbitral Tribunal to enable the petitioners to approach the Tribunal for appropriate relief.

5. The petitioners having issued a notice invoking the arbitration clause and nominating its arbitrator, neither consent nor a reply was issued by the respondents requiring the petitioners to file proceedings under Section 11 of the A&C Act which finally came to be allowed on 11.11.2024 and it is in pursuance thereof, that the Arbitral Tribunal is being now constituted, thus, the restriction of 30 days imposed on 25.03.2024 while disposing A.A. No. 10/2021 is without any basis and submits that the interim order which is granted is required to be extended.

6. Initially the submission of Sri.P.D.Surana, learned counsel appearing for the respondent was that the Commercial O.S. having been disposed, the above petition would not survive for consideration. This submission was made even before the order dated 11.11.2024 appointing an arbitrator was passed. Subsequently Sri.P.D.Surana retired from the matter and Sri.P.N.Rajeshwara, learned counsel entered appearance for the respondents.

7. Similar is the submission made by Sri.P.N.Rajeshwara, learned counsel that the above writ petition arising out of the non-grant of injunction in a Section 9 proceedings, the said Section 9 proceedings having been disposed, the above writ petition would not survive for consideration.

8. Heard Sri.Pradeep Nayak, learned counsel for the petitioner and P.N.Rajeshwara, learned counsel for respondents. Perused papers.

9. The points that would arise for consideration are;

1. Whether a caveat petition filed in the original suit jurisdiction can be taken into consideration in a Commercial Suit?

2. Whether a court seized of Section 9 proceedings can impose a time period during which the interim order granted would be in force or not?

3. What Order?

10. I answer above points as under:

11. Answer to point No.1: Wh