The main legal point established in the judgment is the court's power under Section 9 to order sale of equipment pending determination of Section 34 applications, ensuring full restitution to the judgment debtor if the award is set aside.

I.P. MUKERJI, J.

1. A very interesting point of law has arisen in these four cases. All of them are being disposed of by this common judgment.

2. section 9 of the Arbitration and Conciliation Act, 1996, before its amendment on 23rd October, 2015, empowered the court to make inter alia an order for preservation, interim custody and sale of any property which was the subject matter of the arbitration agreement, to pass an order of interim injunction, to appoint a receiver and so on. After amendment of this Act, once the arbitral tribunal has been constituted, it has the power to pass these orders. If for any reason the court finds that the order of the tribunal will not be efficacious, it might entertain the application. Any party to an arbitration might apply to the court and now the tribunal under Section 9. This application can be made before the arbitral proceedings, during it and after an award has been passed. It has to be made before the execution proceedings under Section 36 of the Act.

3. In each of these four matters an award has been passed by the learned arbitrator. Till now the respondents are using the equipments which are hypothecated by them to the petitioners, by agreement. The respondents have failed and neglected to pay the instalments payable under the respective loan cum hypothecation agreements. By the awards in question the respondents have been directed to pay the sums due under the agreement together with interest accrued thereon and penalty subject to the petitioners' charge over the equipments. Either the respondents have filed applications to set aside the awards under Section 34 of the said Act or the time to make the same has not expired.

4. Now, the problem is this: The petitioners want to invoke Section 9 of the said Act, by appointment of receivers by this court to take possession of the equipments, sell them and hold the proceeds to the credit of the proceedings, during the pendency of the Section 34 applications. Learned Counsel for the petitioners Mr. Swatarup Banerjee and Mr. Ali submit that the equipments in the hands of the respondents are fast depreciating. If the petitioners ultimately succeed in the applications filed by the respondents to challenge the awards their interest will be seriously affected by the deterioration of the equipments and loss of their market value.

5. On the other hand Mr. Saha for the respondents submits that since applications to set aside the awards are under consideration by the court or the time to make them is not over, under Section 36 no order under Section 9 can be passed as that would tantamount to enforcement of the award.

Facts:

What happened in the case (AP 438 of 2017) is this. The equipment in question is a Hyundai R 210-7 equipment bought on loan obtained by the respondents from the petitioners and hypothecated to the latter. The agreement between the parties was made on 17th July, 2013 by which the petitioner lent and advanced Rs. 39,10,000/- to the respondent No. 1. The respondent No. 2 stood as the guarantor. The respondents according to the petitioner defaulted in the payment of instalments. On 18th September, 2015 the petitioner invoked the arbitration clause under section 21 of the Arbitration and Conciliation Act, 1996. Meanwhile, the respondents filed a title suit (T.S. 1592 of 2015) before the learned City Civil Court at Calcutta, and obtained an order of injunction on 21st November, 2015 restraining the petitioner from taking possession of the equipments. The petitioner subsequently filed a Section 8 application before the said court. The said Section 8 application could only be disposed of 28th April, 2017 vacating the order of injunction, much after the award was passed in favour of the petitioner on 15th April, 2016. Therefore, it is quite evident that during the pendency of the Section 8 application the petitioner could not obtain an order appointing a receiver under Section 9 to take possession of the equipment.

6. This application