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2023 Supreme(Mad) 2659
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
Sri Kauvery Medical Care (India) Ltd. Rep. by its Executive Chairman Dr. S. Chandrakumar – Appellant
Versus
M/s. CeeDeeYes Health Care Services (P) Ltd. rep. by its Chairman and Managing Director C. Devadasa Sundaram & Another – Respondents
Arb. Appln. No. 55 of 2023
Decided On : 22-08-2023
For the Appellants:S. Rajasekar, For the respondents:M.K. Kabir, Senior counsel, R1, T. Jayaraman, R. Imayavaramban for R2, M/s. Ramalingam & Associates, Advocates.
The court emphasized that the appropriateness of seeking relief under Section 9 of the Arbitration and Conciliation Act depends on the stage of arbitration proceedings and the availability of other efficacious remedies.
Headnote:
Arbitration and Conciliation Act - Application for Direction to Issue Addendum to Notice of Sale - Section 9(1)(ii)(e)
Fact of the Case:
The applicant sought a direction to the 2nd respondent to issue an addendum to the notice of sale through private treaty and secure the applicant's interest over the 1st respondent's property. The property was sold under SARFAESI Act due to default by the 1st respondent. The applicant's claim was disputed by the 1st respondent, who also made a counter claim for breach of contract.
Finding of the Court:
The court found that the relief sought was discretionary and the arbitration was in its final stage, making it inappropriate to entertain the application under Section 9 of the Arbitration and Conciliation Act. The court dismissed the application.
Issues: The main issue was the appropriateness of seeking relief under Section 9 of the Arbitration and Conciliation Act when the arbitration was in its final stage and the relief sought had become infructuous.
Ratio Decidendi: The court held that it would only entertain an application under Section 9 when there is no other efficacious remedy available, and the decision to grant such relief depends on the facts and circumstances of each case.
Final Decision: The application was dismissed as there was no merit in seeking relief under Section 9 of the Arbitration and Conciliation Act when the arbitration was in its final stage and the relief sought had become infructuous.
JUDGMENT
(Prayer: Application filed under Order XIV Rule 8 of Original Side Rules r/w Sec 9 (1)(ii)(e) of the Arbitration and Conciliation Act, 1996 to direct the 2nd respondent to issue an addendum to the notice of sale through private treaty dated 09.11.2022 and bring on record the applicant''s charge over the 1st respondent''s property at Door No.383, Velacherry Tambaram Main Road, Velacherry, Chennai - 600 042 and further to secure the applicant''s interest to the tune of Rs.3,13,84,043/- (Rupees Three Crore Thirteen Lakhs Eight Four Thousand Forty Three only) inclusive of interest at 18% p.a. calculated on the principal amount until 24.01.2023 together with future interest, in the event of realisation of sale proceeds over and above the claim of 2nd respondent against the 1st respondent by way of sale of the property at Door No.383, Velacherry Tambaram Main Road, Velacherry, Chennai - 600042.)
1. This application has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 seeking for a direction to the 2nd respondent to issue an addendum to the notice of sale through private treaty dated 09.11.2022 and bring on record the applicant''s charge over the 1st respondent''s property at Door No.383, Velacherry Tambaram Main Road, Velacherry, Chennai - 600 042 and further to secure the applicant''s interest to the tune of Rs.3,13,84,043/- (Rupees Three Crores Thirteen Lakhs Eight Four Thousand Forty Three only) inclusive of interest at 18% p.a. calculated on the principal amount until 24.01.2023 together with future interest, in the event of realisation of sale proceeds over and above the claim of 2nd respondent against the 1st respondent by way of sale of the property at Door No.383, Velacherry Tambaram Main Road, Velacherry, Chennai - 600 042.
2. The applicant had agreed to purchase the aforementioned property from the 1st respondent under a Memorandum of Understanding dated 19.05.2019. The applicant has terminated the Memorandum of Understanding dated 19.05.2019 on the ground that the 1st respondent has committed a breach of the said Memorandum of Understanding. In view of the termination, the applicant has sought for refund of the advance amount paid to the 1st respondent under the Memorandum of Understanding dated 19.05.2019. There is an arbitration clause in the Memorandum of Understanding dated 19.05.2019. The applicant has already initiated arbitration in terms of the arbitration clause and a sole arbitrator has acted upon the reference. Before the sole arbitrator, the 1st respondent has also made a counter claim. According to them, the applicant has committed breach of Memorandum of Understanding dated 19.05.2019 and they have also committed breach of the Letter of Intent(LoI), dated 08.05.2017 and the Addendum to the Letter of Intent, dated 26.10.2017. It is an undisputed fact that in the arbitration, trial has got completed and it is in the arguments stage.
3. The applicant contends that a similar relief cannot be granted by the Arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996, since the relief has been sought for against a 3rd party viz., the 2nd respondent in this application.
4. As seen from the Letter of Intent dated 08.05.2017 and the Addendum to the Letter of Intent, dated 26.10.2017, the applicant was aware about the mortgage in respect of the property morefully described in the schedule to the Judges Summons, while entering into the Memorandum of Understanding dated 19.05.2019 with the 1st respondent. The applicant also came to know about the liability of the 1st respondent to the secured creditor while signing the Memorandum of Understanding dated 19.05.2019. As part of the sale consideration under the Memorandum of Understanding dated 19.05.2019, the applicant has undertaken to settle the dues of the secured creditor. The property morefully described in the schedule to the Judges Summons was brought for sale under the SARFAESI Act by the secured creditor in view of the def
