The main legal point established in the judgment is that the jurisdiction under section 9 of the Arbitration and Conciliation Act should be used sparingly and with conditions, and the need for rules to be framed by the High Courts to deal with the procedure for exercising jurisdiction under section 9 of the Act.

Vinod K.Sharma, J.

This order shall dispose of A.Nos.5201, 5202 & 5203 of 2012 and 1296, 1297 & 1298 of 2013, as the common question of fact and law are involved in all these applications.

A.Nos.5201 to 5203 of 2012:

1. These applications 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. for appointment of an Advocate Commissioner to seize and deliver the vehicles namely, 'Multi Axle Goods Vehicle Truck' with police aide by breaking open the premises, wherever it is found and hand it over to the applicant.

A.Nos.1296 to 1298 of 2013:

These applications under Order 14 Rule 8 of O.S. Rules read with section 9(ii)(e) of Arbitration and Conciliation Act, 1996 have been filed by the respondent/borrower for grant of leave to raise the interim orders, dated 10.12.2012 passed by this Court in A.Nos.5201, 5202 and 5203 of 2012.

2. The question to be determined in these cases 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. vs. 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 powe