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2001 Supreme(Raj) 240
High Court Of Rajasthan
Judgename : Shiv Kumar Sharma
Union of India - Appellant
Versus
Trimurti Construction Ajmer - Respondent
S.B. Civil Misc. Appeal No. 1403 of 2000
Decided On : 03/05/2001
Mr. Alok Garg, for the Appellant.
Mr. Suresh Sahni, for the Respondents.
The injunctive powers under Section 9 of the Arbitration and Conciliation Act, 1996 are limited to securing the amount in dispute and should not include a direction to make payment of the amount.
Headnote:
Arbitration - Interim Injunction - The court found that the injunction granted by the lower court, directing the payment of a disputed amount, exceeded the powers provided under Section 9 of the Arbitration and Conciliation Act, 1996. The court held that the injunction should only secure the amount in dispute, not direct payment.
Fact of the Case:
The contractor respondent sought an interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996, disputing the liability of a certain amount and seeking to restrain the appellants from proceeding further and making recovery of the amount.
Finding of the Court:
The court found that the injunction granted by the lower court exceeded the powers provided under Section 9 of the 1996 Act, as it effectively directed the payment of the disputed amount, which was not requested by the respondent in the application.
Issues: The main issue was whether the injunction granted by the lower court, directing the payment of a disputed amount, was within the scope of Section 9 of the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The court held that the injunctive powers under Section 9 of the 1996 Act are confined to securing the amount in dispute in arbitration proceedings and should not include a direction to make payment of the amount.
Final Decision: The court set aside the direction to pay the disputed amount and modified the impugned order, restraining the appellants from proceeding further and maintaining status quo pending the decision of arbitral proceedings.
Shiv Kumar Sharma, J.-Matter was finally heard with the consent of the learned counsel for the parties.
2. Theappellants seek to quash the order dated August 4, 2000 of the learned Additional District Judge Ajmer whereby application of the respondent moved under Section 9 of the Arbitration and Conciliation Act, 1996 (for short 1996 Act) was allowed and the appellants were restrained from proceeding further in pursuance to letter dated March 2, 2000 and from withholding the amount which is more than the amount payable under contract or Rs. 13,81,706.20 whichever is less and from making adjustment of amount payable to the respondents under other contracts.
3. Contextual facts depict that the contractor respondent disputing the liability of Rs. 13,81,706.20 referred in the appellants letter dt. 3.2000, moved an application Under Section 9 of 1996 Act seeking interim injunction pending arbitral award. Appellants contested the application by filing reply. Learned court below after hearing the parties allowed the application and issued interim injunction as indicated hereinabove.
4. A bare look at the injunction of the contractor respondent demonstrates that he only made request to restrain the appellants from proceeding further in pursuance to the letter dated March 2, 2000 and making recovery of the amount which according to respondent was not determined so far and to direct the appellants to maintain status quo pending the decision of arbitral award. Grievance projected on behalf of the appellants in the instant miscellaneous appeal is that the relief not asked for by the respondent was granted to him. It was canvassed that the impugned order virtually amounts to a direction to pay the amount to the contractor respondent.
5. An attempt was however made on behalf of the contractor respondent to establish that payment due in regard to another contract can not be withheld in view of Railway Board’s decision communicated through letter dated September 6, 1990.
6. Injunctive powers under Section 9 of 1996 Act are confined to matters which are for the purpose of and in relations to arbitration proceedings. Section 9 merely enables the court to grant interim relief in an appropriate case. Judicial discretion should not be exercised by the Court in an arbitrary manner. The court may issue interim order securing the amount in dispute in arbitration, but a direction to make payment of amount is outside the Scope of Section 9 of 1996 Act.
7. Their Lordships of the Supreme Court in H.M.K. Ansari v. U.O.I, 1983 (4) SCC 417, propounded that an order injuncted a party from withholding the amount due to the other side under pending bills in other contracts necessarily means that the amount must be paid. If the amount is withheld there will be a defiance of the injunction order and that party could be hauled up for infringing the injunction order.
8. After having considered the rival submissions and on a close Scrutiny of the material placed before me I am of the opinion that learned court below travelled beyond the powers provided to it under Section 9 of 1996 Act. Restraining the appellants from withholding the amount which is more than the amount payable under contract or Rs. 13,81,706.20/-whichever is less, and from making adjustment of amount payable to the contractor respondent under other contract, virtually amounts to a direction to pay the amount to the contractor respondent. This relief awarded to the contractor respondent by the learned court below was not asked for in the application under Section 9.
9. Consequently, the aforequoled direction is set aside and impugned order stands modified. The appellants are restrained from proceeding further in pursuance to the letter dated March 2, 2000 and shall maintain status quo pending the decision ot arbitral proceedings.
10. The civil miscellaneous appeal stands disposed of as indicated above without any order as to costs.
