IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
MANINDRA MOHAN SHRIVASTAVA, REKHA BORANA, JJ.
Madanlal Jain S/o Late Shri Jeevraj Jain – Appellant
Versus
M/s Vinay Fabric Pvt. Ltd. – Respondent
D.B. Civil Misc. Appeal No. 642 of 2022
Decided On : 17-03-2023
Arbitration and Conciliation Act, 1996 - Section 9 - Arbitration - Court seeking interim measures on pleadings - Illegal and in breach – In application it was also stated that because of pendency of PIL and in view of conditions imposed in award could not be executed but in meantime respondent is proceeding to dispose off/transfer right title or interest in respect of property involved in dispute between parties - Pendency of proceedings in the writ petition are essentially in public domain.
Finding of Court:
In court opinion said order ought to have been continued as application under Section 9 filed before Commercial Court is still pending consideration - Reasons assigned by Commercial Court to vacate interim order are not correct - Pendency of proceedings in writ petition are essentially in public domain - Merely because Court had modified interim order that would not mean that rights of appellants as flowing from award are in any manner diluted or diminished.
Result: Appeal is allowed.
ORDER :
1. The counsel for the respondent has not appeared apparently because he is abstaining from work pursuant to the call given by the office bearers of the Bar Association. Such non-appearance is clearly illegal and in breach of the order passed by Hon’ble Supreme Court in the case of Ex. Capt. Harish Uppal vs. Union of India and Another, 2003 (2) SCC 45.
2. Heard.
3. This appeal is directed against the order dated 26.04.2022 passed by the Commercial Court No. 1 Jodhpur by which the interim order dated 13.04.2022 pending decision of application under Section 9 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) filed by the appellants, has been discontinued.
4. The appellants moved an application under Section 9 of the Act before the Commercial Court seeking interim measures on the pleadings inter-alia that an award for specific performance of agreement between the parties has been passed by the sole Arbitrator on 31.07.2021. In the application, it was also stated that because of the pendency of PIL and in view of the conditions imposed in the award, the award could not be executed but in the meantime, the respondent is proceeding to dispose off/transfer the right, title or interest in respect of the property involved in the dispute between the parties.
5. The Commercial Court initially vide order dated 13.04.2022 passed the interim order restraining the respondent from selling or transferring any right, title or interest in respect of the property in dispute.
6. Later on, vide impugned order dated 26.04.2022, the interim order has not been continued though the application under Section 9 of the Act has remained pending for consideration. It is against this order that this appeal has been filed.
7. Learned counsel appearing for the appellants would argue that once there was an award passed in favour of the appellants, in terms of the agreement for sale of a floor, the appellants are entitled to appropriate interim relief so that the award is not frustrated. He would further submit that the order passed in the pending PIL in the High Court registered as D.B. Civil Writ Petition No. 19102/2018 does not allow the respondent to raise constructions beyond the 8th floor. Taking undue advantage of the order which was passed by the High Court on 23.02.2022, the respondent may proceed to dispose off by sale or otherwise constructed floors without there being any opportunity to the appellants to enforce the award.
8. On the other hand, the respondent in person would argue that the agreement for sale between the parties and the award are not in respect of other properties/floors than the one in respect of which the agreement was entered into and which the appellants may be entitled under the law by way of sale in execution of award for specific performance of contract. If an order is passed restraining the respondent, it will have adverse effect on the rights of other intending buyers, with whom the respondent has entered into agreement for sale upto 8th floor.
9. We have heard the parties and perused the records.
10. Undisputedly, the parties had entered into agreement for sale on 19th July, 2016. Amongst other conditions, the agreement stipulated under the Note that with consent of both parties floor number can be changed, but sale area will be same as per the agreement, remaining amount will be given at the time of execution of sale-deed.
11. On a PIL filed challenging the legality and validity of constructions raised by the respondent, initially a Division Bench of this Court passed an interim order dated 7th January, 2019 restraining the respondents from creating third party interest in any portion of the subject property. Thereafter, vide order dated 23.02.2022, the interim order dated 07.01.2019 was modified.
12. A dispute having arisen between the parties, arbitration proceedings were drawn, which eventually culminated in passing of award in favour of the appellants on 31.7.2021. As on that date the interim order dated 0
Pendency of proceedings in the writ petition are essentially in public domain.
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The main legal point established in the judgment is that an interim order under section 9 of the Arbitration and Conciliation Act, 1996 must continue to safeguard the interest of the claimant till th....
Once an Arbitral Tribunal is constituted, Section 9 of the Arbitration Act prohibits further applications for interim relief unless the party shows that the remedy under Section 17 is ineffective.
The court clarified that the initiation of arbitral proceedings is marked by the notice of appointment of an arbitrator, and the court retains the discretion to extend interim measures beyond the sta....
The court emphasized the need to balance equities between the parties and highlighted the importance of following contractual provisions for submission of the final bill and processing thereof.
Interim injunction – Jurisdiction under Section 9 of Arbitration and Conciliation Act, 1996, is not an adjudicatory substitute for final determination of rights, but a supportive mechanism to facilit....
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