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High Court of Kerala
V. RAMKUMAR & P.Q. BARKATH ALI
Muthukoya Thoopiyakal
Versus
Union Territory of Lakshadweep
Arb.A.No. 48 of 2011
Decided on : 28-11-2011
Arbitration and Conciliation Act 1996 - Sections. 9 and 37( 1)(a) - Interim measures, etc., by Court - Appealable orders - Whether an appeal is maintainable u/S.37(1)(a) of the Arbitration and Conciliation Act, 1996, against an interim order passed pending disposal of a petition u/S.9 of the Act ? What is appealable u/S.37(1)(a) in granting or refusing to grant any measures u/S.9 - Whether power to grant an ad interim measure of protection to the applicant in deserving cases cannot be denied to the Civil Court which has all the ancillary powers to do so - Appeal is maintainable against an interim order passed pending disposal of an application u/S.9, if such interim order partakes the character of a final order - Held, A party approaching the civil court with a request for an interim measure of protection under Section 9 of the Act, will naturally be apprehending some danger or adverse consequences at the hands of the respondents. It is to forestall such danger or adverse consequences that he is approaching the civil court under S.9 of the Act. The Kerala Arbitration and Conciliation (Court) Rules, 1997 prescribe the form of application to be filed before the civil court and the procedure to be followed by the civil court. R.3 of the Rules makes the relevant provisions of the Code of Civil Procedure, 1908 and the Kerala Civil Rules of Practice, 1971 applicable for verification of pleadings in the case of every application presented before the Court. R.6 enjoins that when an application is made under the Act the Court shall order notice thereof to all the respondents and to such other person as may appear to the Court to be likely to be affected by the proceedings and calling upon them to show cause within the time specified in the notice, as to why the reliefs sought in the application should not be granted. If an order on a petition under S.9 of the Act can be passed only after complying with the above procedure and after calling upon the respondent to show cause against granting the relief prayed for, in very many cases the application itself may become infructous on the happening of the apprehended danger or adverse consequences. Hence, a power to grant an ad interim measure of protection to the applicant in deserving cases cannot be denied to the civil court which has all the ancillary powers to do so. If the applicant is asked to wait until the respondents file their objections or until the matter is finally heard, it would amount to negation of justice to such applicant. Hence, depending upon the expediency of and the dire need for the interim order passed by the court on the apprehended danger or adverse consequences pending final disposal of an application under S.9, it can be said that an appeal from such interim order would be maintainable if such interim order partakes the character of a final order. We hold that if an interim order of interim measure of protection passed by the civil court pending disposal of a petition under S.9 of the Act is of such a nature that it partakes the character of a final order rendering the apprehended danger or the adverse consequences imminent, such interim order would be appealable under S.37(1)(a) of the Act - Directions issued.
V. RAMKUMAR, J.
1. In this appeal filed under S.37 of the Arbitration and Conciliation Act, 1996 (“the Act” for short), the appellant who was the petitioner in O.P. (Arbitration) No.1 of 2011 on the file of the District Court, Lakshadweep, challenges the order dated 13.10.2011 passed by the said Court dismissing the interlocutory application (I.A.No.157 of 2011) filed by the appellant n the said O.P.
THE BACKGROUND FACTS
2. The first respondent is the Union Territory of Lakshadweep represented by its Administrator at Kavaratti. The 2nd respondent is the Director of Tourism, Union Territory of Lakshadweep, Kavaratti. The 3rd respondent is the Society for Promotion of Recreational Tourism and Sports (SPORTS), Kavaratti, represented by its Managing Director.
The facts leading to this appeal are as follows:-
1996:R3 invited global tenders for the running of a twenty bed tourism resort at Agatti Island called Agatti Island Beach Resort (AIBR). The appellant (Muthukoya Thoopiyakal) who belongs to the Scheduled Tribe and who is an islander hailing from the Amini Island of the Union Territory of Lakshadweep, was the successful bidder.
1.11.1996:Ext.A1 registered lease deed was executed between the appellant and R3 (SPORTS) as per which the 20 bed resort AIBR was let out to the appellant for a period of 5 years on a rent of `5 lakhs for the first year, `6 lakhs for the second year, `7 lakhs for the 3rd year, `8 lakhs for the 4th year and `9 lakhs for the 5th year.
Clause 9 of the lease deed provides that in case the lessee opts to continue the lease agreement after the expiry of the lease period he may apply for renewal of the lease suggesting his terms and conditions at least six months before the expiry of the lease to be extendable for further periods of 5 years or more. Clause 20 of the lease deed provides that any dispute arising between the lessor and the lessee during the currency of the lease or after its expiry or earlier termination shall be settled by arbitration of two arbitrators one to be appointed by each party and that the arbitrators will select an umpire before commencing the arbitration hearing the venue of which shall be Kavaratti.
2001:Six months before the expiry of the lease the appellant exercised his option for renewal of the lease for a further period of 5 years.
19.10.2001:In a special general body meeting in which the appellant also attended, R3 reviewed its earlier decision not to renew the lease and resolved that in view of the fact that the resort was run by an islander who was given only five year’s term initially and he had, despite difficulties, cleared all the dues, the request of the appellant deserves favourable consideration. Accordingly, it was decided to renew the lease for another 5 years on the terms recommended by the meeting dated 4.6.2001 of the Board of Management namely, a minimum guarantee of `8 lakhs or 22% of the gross turnover whichever is higher. The appellant was agreeable to those terms.
22.4.2002:R2 sent a letter to the appellant inviting his attention to the meeting of R3 held on 19.10.2001 and the undertaking by the appellant to pay `8 lakhs or 22% of the gross turnover whichever was higher per year as rent and called upon the appellant to pay the rent immediately to R1 under receipt head 3452 Tourism 800 other receipts.
It appears that since the minimum rent of `8 lakhs fixed for renewal was less than the rent of `9 lakhs fixed under Ext.A1 lease deed for the period from 1.11.2000 to 31.10.2001, R1 intervened and insisted that the renewal shall only be for a period of two years. A notice to that effect was served on the appellant on 10.7.2003. As the appellant was not agreeable for the same he instituted a suit O.S. 6 of 2003 before the District Court, Lakshadweep, seeking specific performance of the agreement to renew the lease as decided on 19.10.2001 and consequential injunction calling upon R1 and R2 (who were defendants 2 and 3) to execute the renewal of the
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