The main legal point established in the judgment is that an application under section 9 of the Arbitration and Conciliation Act must show the intention to start arbitration, and the court may dismiss the application if it is deemed a misuse of the court process.

Vinod K. Sharma, J.

1. This application under Order XIV Rule 8 of O.S. Rules read with sec.9(ii)(b) & (e) of Arbitration and Conciliation Act, 1996 have been filed by M/s. Hinduja Leyland Finance Ltd., seeking an order to appoint an Advocate Commissioner to seize and deliver the vehicle, which is available at the respondent's premises at Putibandh, Dhanupali, Orissa.

2. The question to be determined in this case is "whether the provision of section 9 of the Arbitration and Conciliation Act, can be invoked to use the High Court as a Recovery Agent by Finance Companies/Banks to seize the vehicle ex-parte, without giving an opportunity of hearing to the respondent/ borrower, by seeking appointment of Advocate Commissioner, to seize the vehicle even without serving notice of petition along with the documents, so as to enable the borrower to know the reason for passing this extreme order of seizure."

3. Section 9 of the Arbitration and Conciliation Act, 1996 reads as under:

9. Interim measures etc. by Court.-

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the Court to be just and convenient,"

4. Reading of the Section 9 of the Arbitration and Conciliation Act, 1996, shows that power under section 9 can be exercised before, during arbitral proceedings or at any time after passing arbitral award, but before it is enforced in accordance with section 36 of the Arbitration and Conciliation Act, 1996, the jurisdiction can be exercised for preservation, interim custody or sale of any goods which are subject matter of arbitration.

5. The decision of this Court that jurisdiction under section 9 cannot be exercised before commencement of arbitral proceedings was set aside by the Hon'ble Supreme Court in M/s. Sundaram Finance Ltd. vs. M/s. NEPC India Ltd. (A.I.R. 1999 SC 564) wherein the Hon'ble Supreme Court was pleased to lay down as under:

"17. In our opinion this view correctly represents the position in law, namely, that even before the commencement of arbitral proceedings the Court can grant interim relief. The said provision contains the same principle which underlies Section 9 of the 1996 Act.

18. Our attention was also drawn to the case of (Die Channel Tunnel Group Ltd. and France Manche S.A. v.Balfour Betty Construction Ltd. and Ors. [1992] 2 Lloyd's Law Reports) dealing with question of the jurisdiction of the England Court to grant an interim injunction in a case where the parties have agreed that the disputes shall be settled by arbitration. The Court of Appeal referred to Section 12(6) of the Arbitration Act, 1950 which provided as follows:

"The High Court shall have, for the purpose of and in relation to a reference, the same power of making orders in respect of -(h) interim injunctions or the appointment of a receiver; as it has for the purpose of and in relation to an action or matter in the High Court....

Construing this Staughton LJ observed as under:

"In my view this power can be exercised before there has been any request for arbitration or the appointment of arbitrators, provided that the applicant intends to take the dispute to arbitration in due course. Whatever the meaning of "reference" to Section 12(6)(h) (and it is not always easy to determine the precise meaning of the word in arb