High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S.S. SUBRAMANI
Nepc India Limited - Appellant
Versus
Sundaram Finance Limited - Respondents
CRP Nos. 1421 to 1423 of 1998 and CMP Nos. 6698 to 6701 of 1998
Decided On : 22 June 1998
Fact of the Case:
The petitioner and the respondent entered into a hire purchase agreement for the supply of wind turbine generators. The respondent filed an application under Section 9 of the Act seeking interim relief. The lower court passed an order appointing a Commissioner to take possession of the goods. The petitioner challenged the order, arguing that the application under Section 9 was not maintainable.Finding of the Court:
The court held that an application under Section 9 of the Act is maintainable only when proceedings for substantial relief under the Act are pending. The court clarified that Section 9 only provides for interim measures and cannot be used to grant substantial relief. The court further stated that the relief sought in the main petition went beyond the scope of Section 9 and should not have been entertained.Ratio Decidendi:
An application under Section 9 of the Arbitration and Conciliation Act, 1996 is maintainable only when proceedings for substantial relief under the Act are pending. Section 9 provides for interim measures and cannot be used to grant substantial relief. The word "before" in Section 9 refers to the pendency of arbitration proceedings or the reference stage before the court, and not before any proceedings are initiated. Final Decision: The court set aside the impugned order and allowed the revisions.S.S. SUBRAMANI, J.
All these revisions are filed under Art. 227 of the Constitution of India, challenging the order of the lower Court in O.P. No. 137 of 1998 on the file of the X Assistant Judge, City Civil Court, Chennai and four miscellaneous petitions are filed along with these revisions.
2. The relevant facts which are necessary for the disposal of these revisions could be summarised thus. The petitioner and the respondent entered into a hire purchase agreement regarding supply of two Wind Turbine Generators on 25-9-1995 after agreeing to the schedule of repayment and also consequence in case of default. Clause 24-A of the hire purchase agreement provided for an arbitration clause which reads thus,
"All disputes, differences and/or claims, arising out of this hire purchase agreement whether during its subsistence or thereafter shall be settled by arbitration in accordance with the provision of Indian Arbitration Act, 1940 or any statutory amendments thereof and shall be referred to the sole arbitration of an arbitrator nominated by the Managing Director of the owner. The award given by such an arbitrator shall be final and binding on all the parties to this agreement.
It is a term of this agreement that in the event of such an arbitrator to whom the matter has been originally referred dying or being unable to act for any reason, the Managing Director of the owner, at the time of such death of the arbitrator on his inability to act as arbitrator, shall appointed another person to act as arbitrator. Such a person shall be entitled to proceed with the reference from the stage at which it was felt by his predecessor."
3. The petitioner defaulted in payment. Some correspondence followed and finally, the respondent came to know that various litigations were pending against the petitioner and therefore invoking Clause 24-A of the hire purchase agreement, it filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter also referred to as 'the Act'). Though the petition was filed on 3-4-1998, it was taken up and numbered only 7-4-1999. Along with the main application, two other interlocutory applications were also filed; one for appointment of a Commissioner and the other for getting police protection. On 7-4-1998 itself the lower Court passed the impugned order appointing a Commissioner to take possession of the goods with the help of the police. This order is challenged in all these revisions mainly for the reason that the petition in O.P. No. 137 of 1998 itself is not maintainable and therefore, the Court did not have jurisdiction to pass an order.
4. Learned Senior Counsel for the petitioner submitted that Section 9 of the Act only provides for interim measure and that cannot be granted as a substantial relief. Apart from that, it is contended that no arbitration proceedings are pending and without asking for specific relief under the Act, an application for getting the interim relief alone is not maintainable. The impugned order is one without jurisdiction.
5. It is further contended by the learned Senior Counsel that on 7-4-1998 the application was allowed to be numbered and even without notice to the petitioner, an order has been passed as if the respondent has entered appearance and he was ex parte. There is no application of mind. A Civil Court should not pass such an order when the effect of interim itself is grave and serious. It is further stated that by allowing the order, the entire relief in the main petition is granted without hearing the petitioner and therefore, it violates the principles of natural justice.
6. As against the said contention, learned senior counsel for the respondent submitted that the maintainability of these revisions itself is questionable. Against the impugned order a statutory appeal is maintained under Section 37 of the Act. When there is an effective alternative remedy, revisions under Art. 227 of the Constitution of India is not maintainable.
7. It i
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