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2016 Supreme(Ker) 102

IN THE HIGH COURT OF KERALA AT ERNAKULAM
A. MUHAMED MUSTAQUE, J.
PRADEEP K.N. - PETITIONER
Vs.
THE STATION HOUSE OFFICER, PERUMBAVOOR POLICE STATION & ORS. - RESPONDENTS
W.P.(C).Nos. 38725/2015, 39542/2015, 4325/2016, 4333/2016, 7435/2016, 7932/2016, 8667/2016, 9660/2016 & 10044/2016
Decided On : 16-03-2016

Advocates Appeared:
For the Petitioner: SRI. BABU CHERUKARA.
For the Respondent: GOVT. PLEADER SRI. MANOJ P. KUNJACHAN, SMT. JAYASREE MANOJ, SRI. JITHIN PAUL VARGHESE, SMT. M. PPRIYANKA.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 17, 17(2) and 36 - Constitution of India,1950 - Article 226 - Civil Procedure Code, 1908 - Sections 2(14) and 94 - Arbitration agreement - Interim measures ordered by arbitral tribunal - Enforcement of the final award - Supplemental proceedings - Jurisdiction - Petitions is regarding enforcement of the interim order issued under Section 17 of the Arbitration and Conciliation Act, 1996 (Act 26 of 1996) as amended by the Act 3 of 2016, by the Arbitral Tribunal - Interim order passed by the Arbitral Tribunal is enforced/being attempted to be enforced without putting the orders for enforcement, following the procedures under the Code of Civil Procedure, before the Principal Civil Court - Held, When an order/award issued by the Arbitral Tribunal impinges the fundamental rights of a citizen in the colour of exercise of the authority stemmed from the Statute, certainly, this Court can step into, to restore the rights of the citizen to the limited extent to restore the right which has been taken away by enforcing of an order/award without any authority - Nowhere in Section 17(2) of the Act, Legislature mandated to follow the procedure of execution to implement the interim order - Court while considering an application under Section 17(2) shall resort to Section 94 of the Code of Civil Procedure to enforce the interim order of the Arbitral Tribunal and need not require to follow any procedure as contemplated for execution under the Code of Civil Procedure - Enforcement of the final award under Section 36 of the Act is like an execution of the decree - Conferring the power of the Civil Court to the Tribunal for passing an interim order does not mean that the Tribunal is conferred with the power of enforcement - Arbitral Tribunal cannot pass an order to enforce its order by directing the Advocate Commissioner/Receiver to repossess the vehicle from the opposite party.

JUDGMENT :

The common question of law in all these writ petitions is regarding enforcement of the interim order issued under Section 17 of the Arbitration and Conciliation Act, 1996 (Act 26 of 1996) as amended by the Act 3 of 2016, by the Arbitral Tribunal.

2. The writ petitioners have availed vehicle loans from finance companies, which have been arrayed as party respondents in the writ petitions. They have approached this Court raising a grievance to the effect that the interim order passed by the Arbitral Tribunal is enforced/being attempted to be enforced without putting the orders for enforcement, following the procedures under the Code of Civil Procedure, before the Principal Civil Court.

3. Before proceeding to consider the questions that have arisen for consideration, it is appropriate to refer the power of this Court to interfere with an order passed by the Arbitral Tribunal. The Constitution of the Arbitral Tribunal is referable to a Contract. The jurisdiction, therefore, is based on a Contract. The Arbitration and Conciliation Act, 1996 is enacted essentially for the recognition of the award and its enforcement.

4. The jurisdiction of this Court invoking power of Article 226 of the Constitution cannot be used directly to interfere with the interim order or award as the Arbitral Tribunal cannot be considered as a State within the meaning of Article 12 of the Constitution nor the award can be subjected to a judicial review. Further, the Arbitral Tribunal is not a Tribunal within the meaning of Tribunal as referred under Article 227 of the Constitution (See judgment of this Court in Daison v. Varghese Jose [2016 (1) KLT 612]. However, when an order/award issued by the Arbitral Tribunal impinges the fundamental rights of a citizen in the colour of exercise of the authority stemmed from the Statute, certainly, this Court can step into, to restore the rights of the citizen to the limited extent to restore the right which has been taken away by enforcing of an order/award without any authority.

5. Before the amendment to the Arbitration Act, 1996 which came into effect from 23/10/2015 inserted by Act 3 of 2016, the interim order passed by the Arbitral Tribunal could not be enforced as an order of the civil court. Prior to the substitution of Section 17, the Arbitral Tribunal had also power under Section 17 to order interim measures. However, wider power was conferred on the civil court to pass orders for interim measures before or during arbitral proceedings or at any time after making of the arbitral award under Section 9 of the Act 26 of 1996. However, substantial changes have been made after amendment Act 3 of 2016 crippling the power of the civil court to pass an interim order by inserting sub-section 3 to Section 9. Under Section 9(3) the Court can entertain an application for interim measures only if the Court finds that circumstances exist which may not render remedy to grant interim orders by the Tribunal efficacious. After the amendment by Act 3 of 2016, under Section 17, the Arbitral Tribunal is conferred with an enormous power which otherwise is conferred with a Civil Court to pass order for interim measures. In terms of Section 17(2) of the amended Act, these interim orders are also enforcible in the same manner as if it were an order of civil court. Section 17(2) reads as follows:

"17(2) Subject to any orders passed in an appeal under section 37, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were an order of the Court."

6. In M.D. Army Welfare Housing Organisation v. Sumangal Services Pvt. Ltd. [(2004) 9 SCC 619], it was held by the Hon'ble Supreme Court that no power was conferred on the Arbitral Tribunal to enforce its order nor does it provide for judicial enforcement thereon. In Sri Krishan v. Anand [(2009) 3 Arb LR 447 (Del)], the Delh




















































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