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1983 Supreme(Ker) 270

Judges : M.P.MENON
KERALA STATE HOUSING BOARD - Appellant
Versus
YUSUFF - Respondent
Case No : C.R.P. No. 3165 of 1983
Decided On : 12/12/1983
Advocates Appeared :
P. Sukumaran Nayar; A.K. Chinnan; Xavier Cherian; For Petitioner P. Gopalakrishnan Nair; D. Somasundaram; For Respondent

The court's power to issue orders under the Arbitration Act is limited to interlocutory proceedings pending determination of the rights of parties by the arbitrator.

Headnote:

Arbitration Act - Filing of Arbitration Agreement - The court's power to issue orders under the Arbitration Act is limited to interlocutory proceedings pending determination of the rights of parties by the arbitrator. The power to issue an order of injunction is found only in clause (b) of S.41, not in clause (a). The heading of S.41 is 'Procedure and Powers of Court', and the power to issue interlocutory orders is conferred by clause (b). The court must consider the question of jurisdiction before ordering appointment of a commission.

Fact of the Case:

The respondent applied for 'filing' the arbitration agreement and for the issue of a commission for local inspection. The petitioner contended that the power under S.41 of the Arbitration Act could not be exercised until an order of reference was made under sub-s. (4) of S.20.

Finding of the Court:

The court set aside the order impugned and directed the court below to consider the question of jurisdiction first before taking up the commission application for consideration.

Issues: The court considered the question of jurisdiction and the petitioner's objection to the exercise of power under S.41 of the Arbitration Act before an order of reference was made.

Ratio Decidendi: The court's power to issue orders under the Arbitration Act is limited to interlocutory proceedings pending determination of the rights of parties by the arbitrator. The power to issue an order of injunction is found only in clause (b) of S.41, not in clause (a). The heading of S.41 is 'Procedure and Powers of Court', and the power to issue interlocutory orders is conferred by clause (b).

Final Decision: The court set aside the order impugned and directed the court below to consider the question of jurisdiction first before taking up the commission application for consideration.

Judgment :-

1. The respondent moved an application, under S.20 of the Arbitration Act, for "filing" the arbitration agreement before court. He also applied for issue of a commission for local inspection, under 0.26 R.9 CPC. The petitioner contended that till an order of reference was made under sub-s. (4) of S.20, the power under S.41 of the Act could not be exercised. The court below did not express any opinion on this question of jurisdiction, but allowed the commission application. The petitioner objects.

2. In Baby Paul v. Hindustan Paper Corporation (AIR. 1978 Ker. 223) Vadakkel J. had taken the view that orders in respect of matters set out in items (1), to (4) of the Second Schedule to the Arbitration Act could be issued under S.41 (b) of the Act only after the passing of an order of reference. In other words, such orders could not be issued in proceedings under S.20 till the stage of reference was reached. Observing that such orders could only be interlocutory in nature, and that there could be no question of any interlocutory order till the arbitrator was seized of the main dispute, his Lordship said:

the court's power of making orders in respect of matters set out in items (1) to (4) of the Second Schedule to the Arbitration Act, 1940 is only to make interlocutory orders in interlocutory proceedings during the course of the arbitration proceedings pending determination of the rights of parties thereto finally by order passed by the arbitrator, and the court is not competent to pass an order in those matters anticipating a reference."

It was further held that:

"arbitration proceedings commence only on the arbitrator getting authority to arbiter, and act in that behalf."

3. The decision was however distinguished in Gokuldas v. Union of India (1983 KLT. 266) where Narendran J. thought that the observations should be confined to cases where parties invoke the power of the court under clause (b) of S.41, and that the power under clause (a) was still available to the court, to issue interim orders of injunction, I am not quite sure whether the reasoning and the conclusion in Baby Paul could so easily be distinguished, in relation to the facts of the present case. At any rate, the Supreme Court has recently held in Kamaluddin Ansari v. Union of India ((1983) 4 S.C.C. 418) that the power to issue an order of Injunction could be found only in clause (b) of S.41, and not in clause (a). The court said:

"Faced with the difficulty learned counsel for the appellant fell back on clause (a) of S.41 to contend that clause (a) makes the Code of Civil Procedure applicable to all proceedings before the Court and therefore the appellant was entitled to invoke 0.39 of the Code to get an injunction order even if the conditions of clause (b) are not satisfied. We are afraid this contention cannot be accepted."

"Clause (a) of S.41 makes only the procedural rules of the Code of Civil Procedure applicable to the proceedings in court under the Arbitration Act. This clause does not authorise the court to pass an order of injunction. The power is conferred by clause (b) of S.41. The source of the power, therefore, cannot be traced to clause (a) Besides, if clause (a) of S.41 gave wide powers to pass an order of Injunction, clause (b) of S.41 would become otiose."

4. It is settled law that reference can be made to headings of sections or marginal notes when difficulty arises in interpreting the scope and meaning of a provision. The heading of S, 41 is "Procedure and Powers of Court". Clause (a) only "applies" the provisions of the CPC. to proceedings before the court; conferment of power to make orders in respect of matters in the Second Schedule is made by clause (b). That perhaps is the reason why the Supreme Court said that clause (a) is concerned with procedure and that the power to issue interlocutory orders has to be found in clause (b).

5. It is however unnecessary to pronounce finally on the question, because the question of jurisdiction had firs


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