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2020 Supreme(Ker) 674
IN THE HIGH COURT OF KERALA AT ERNAKULAM
R. NARAYANA PISHARADI, J.
Manoj C.J. S/o. Joy @ Ulahannan & Ors. - Petitioners
Versus
Shriram Transport Finance Company Limited - Respondent
O.P (C) No. 312 of 2020
Decided On : 06-10-2020
For the Petitioners: Sri. K.C. Eldho, Sri. Mallenathan M., Smt. K. Sindhu Elias, Smt. Krishna Santhosh, Smt. Haritha Jayan.
For the Respondent: Sri. C. Harikumar, Sri. Renjith Rajappan, Smt. Nova Sen Abraham.
IMPORTANT POINTS:
Granting such an order would have the effect of not merely varying or altering the order passed by the arbitral tribunal under Section 17(1) of the Act but really nullifying it
Headnote:
Constitution of India- Article 227 ;; The Arbitration and Conciliation Act, 1996- Section 17(1), Section 17(2), Section 37(2)(b) - An order passed under Section 17(1) of the Act by the arbitral tribunal is appealable under Section 37(2)(b) of the Act- Enforcement of an order of the arbitral tribunal by the Court under Section 17(2) of the Act is subject to any orders passed in an appeal under Section 37 of the Act
Statement of facts:
The first petitioner availed a vehicle loan -Committed default in repayment of the loan, the respondent recalled the loan and initiated arbitral proceedings against them-The petitioners filed an application as I.A.No.4032/2019 (Ext.P3) before the District Court for an order granting status quo ante with regard to the vehicle-As per Ext.P7 order, the learned Additional District Judge dismissed Ext.P3 application-This original petition under Article 227 of the Constitution of India is filed by the petitioners challenging the legality and propriety of Ext.P7 order.
Finding of the court:
The petitioners did not file any appeal against the order passed by the arbitral tribunal and it remained unchallenged. The order was enforceable under Section 17(2) of the Act. The lower court rightly refused to restore possession of the vehicle to the petitioners. There is no jurisdictional error committed by the lower court. In such circumstances, there is no sufficient ground to invoke the supervisory jurisdiction of this Court under Article 227 of the Constitution and to interfere with Ext.P7 order order passed by the lower court.
Result: Original petition is dismissed.
JUDGMENT :
The first petitioner availed a vehicle loan from the respondent, a finance company. The second and the third petitioners were the guarantors in the loan transaction.
2. Alleging that the petitioners committed default in repayment of the loan, the respondent recalled the loan and initiated arbitral proceedings against them.
3. The respondent filed application before the arbitral tribunal for taking possession of the vehicle IEMC 121819 involved in the loan transaction. The arbitral tribunal passed an order on 03.05.2019 for taking possession of the vehicle.
4. The respondent filed C.M.A.(Arb.) No.389/2019 in the District Court, Thrissur under Section 17(2) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') for enforcing the aforesaid interim order passed by the arbitral tribunal.
5. As per the order in I.A. No. 3511/2019, the District Court appointed an advocate commissioner to take possession of the vehicle and to hand over it to the respondent. The Commissioner took possession of the vehicle and handed over the same to the respondent.
6. The petitioners filed an application as I.A.No.4032/2019 (Ext.P3) before the District Court for an order granting status quo ante with regard to the vehicle.
7. As per Ext.P7 order, the learned Additional District Judge dismissed Ext.P3 application.
8. This original petition under Article 227 of the Constitution of India is filed by the petitioners challenging the legality and propriety of Ext.P7 order.
9. Heard the learned counsel for the petitioners and also the respondent.
10. Section 17(1) of the Act empowers the arbitral tribunal to pass interim orders of the nature mentioned thereunder. Section 17(2) of the Act provides that, subject to any orders passed in an appeal under Section 37, any order issued by the arbitral tribunal under Section 17 shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 in the same manner as if it were an order of the Court.
11. Admittedly, the arbitral tribunal had passed an order for taking possession of the vehicle which was involved in the loan transaction. There can be no doubt with regard to the fact that it was an order passed by the arbitral tribunal under Section 17(1) of the Act.
12. As per the order in I.A.No.3511/2019, the District Court appointed an advocate commissioner to take possession of the vehicle and to hand over it to the respondent. Pursuant to that order, the advocate commissioner took possession of the vehicle and handed over the same to the respondent.
13. Ext.P3 application for passing an order granting status quo ante in respect of the vehicle was filed by the petitioners on two grounds, (i) possession of the vehicle was taken by using force and (ii) possession of the vehicle was taken before considering Ext.P2 application filed by the petitioners for keeping in abeyance the order passed by the court in that regard.
14. The District Court, in the light of the report of the advocate commissioner, has rightly found that possession of the vehicle was taken over pursuant to the order passed by the Court, by due process of law.
15. Pendency of Ext.P2 application filed by the petitioners did not render the act of taking possession of the vehicle illegal. There was no order passed by the Court to keep in abeyance the execution of the warrant issued to the advocate commissioner for taking possession of the vehicle.
16. Ext.P2 application was filed by the petitioners raising dispute with regard to the amount due from them to the respondent and also contending that the order passed by the Court for seizure of the vehicle was passed without notice to them.
17. Before passing an order under Section 17(2) of the Act for enforcement of the interim order of the arbitral tribunal to take possession of a vehicle, it is not mandatory or necessary to issue notice to the affected party (See HDFC Bank Limited v. Manaf : 2018 (4) KHC 84). The vehicle may be the only securit
