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2015 Supreme(P&H) 2006

IN THE HIGH COURT OF PUNJAB AND HARYANA
Kuldip Singh, J.
Raja Ram Corn Products, Punjab Pvt. Ltd. (M/s) – Appellant
Vs.
Suncity Projects Pvt. Ltd. – Respondent
FAO No. 4971 of 2015 (O/M)
Decided On : 05-08-2015

Advocates:
Advocate Appeared:
For the Appellant : Puneet Bali, Vibhav Jain
For the Respondent: Aashish Chopra

The jurisdiction of the court in arbitration matters is exclusive, and lower courts must implement the directives of higher courts in accordance with the law.

Headnote:

Arbitration and Conciliation Act, 1996 - Attachment of Property - Section 9 - Section 34 - Section 42 - [ARBITRATION AND CONCILIATION ACT, 1996, SECTION 9, SECTION 34, SECTION 42]

Fact of the Case:

The appellant filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 for interim protection. The application was initially dismissed, but on appeal, the court directed the respondent to furnish security or face attachment of a specific property. The lower court misinterpreted the order and refused to attach the property, leading to the appellant's appeal.

Finding of the Court:

The court found that the lower court misdirected itself by misinterpreting the order of the higher court and failing to implement it. It also observed that the lower court's interpretation of the Act was contrary to its provisions.

Issues: Misinterpretation of court order, refusal to implement court directive, jurisdiction over arbitration matters, defiance of court order

Ratio Decidendi: The lower court's refusal to attach the property and its misinterpretation of the court order were against the law and the provisions of the Arbitration and Conciliation Act, 1996. The jurisdiction of the court in arbitration matters is exclusive, and the lower court's defiance of the higher court's order led to the transfer of the case to a different court.

Final Decision: The appeal was allowed, and the impugned order of the lower court was set aside. The arbitration case was withdrawn from the lower court and transferred to the court of the District Judge, Chandigarh, with a direction to conclude the arguments and dispose of the case within two months.

JUDGMENT :

Kuldip Singh, J.

Appellant has filed this appeal against the order dated 13.7.2015, passed by the learned Additional District Judge, Chandigarh, vide which the application of the appellant for attaching Tower No. 3-A, Parikrama Group Housing Society, Sector-20, Panchkula, in compliance with the order dated 29.5.2015, passed by this Court in FAO No. 2232 of 2015 titled as M/s Raja Ram Corn Products Punjab Pvt. Ltd. v. Suncity Projects Pvt. Ltd., was dismissed.

2. The short controversy involved in the present case is that the present appellant had earlier filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (in short 'the Act') for grant of interim protection in the form of requiring the respondent to furnish appropriate security for recovery of Rs. 20 crores plus interest at the rate of 12% per annum from the date of award i.e. 23.10.2013 till the date of recovery. Shri Ranjit Kumar Jain, the learned Additional District Judge, Chandigarh, vide order dated 27.1.2015, dismissed the said application. Aggrieved by the said order, the present appellant filed FAO No. 2232 of 2015 before this Court, which was disposed of on 29.5.2015. The operative part of the order passed by this Court on 29.5.2015 is reproduced as under :-

"Therefore, I am of the view that the order passed by the learned Additional District Judge, Chandigarh, dated 27.1.2015 is not sustainable in the eye of law. The same is accordingly set aside. The respondent is directed to furnish the security in the sum of Rs. 24 crores before the learned Additional District Judge, Chandigarh, where the objections under Section 34 of the Arbitration Act, 1996 are pending, to satisfy the award that may be ultimately upheld against them, within a period of four weeks from today. If the security is not furnished within four weeks, tower No. 3-A, Parikrama Group Housing Society, Sector-20, Panchkula, is ordered to be attached. However, such attachment shall be subject to the earlier encumbrances and the interest created in favour of the third person before the date of passing of this order. The attachment will continue till the award, if finally affirmed in favour of appellant, is satisfied.

Consequently, the present appeal is allowed."

3. In pursuance to the said order, the present appellant filed an application before the lower Court for attaching Tower No. 3-A, Parikrama Group Housing Society, Sector-20, Panchkula, which was dismissed by Shri Ranjit Kumar Jain, learned Additional District Judge, Chandigarh. The relevant extract of the said order is reproduced as under :-

"3. Heard. Judicial filed perused. The order has been passed by Hon'ble High Court of Punjab and Haryana in FAO No. 2232 of 2015 (O/M) vide which order passed by this Court on 27.1.2015 while disposing off petition under Section 9 of the Arbitration and Conciliation Act, 1996, has been set aside with direction by the Hon'ble High Court to respondent Suncity Projects Private Limited to furnish the security in the sum of Rs. 24 crores before Additional District Judge, Chandigarh where petition under Section 34 of the Arbitration and Conciliation Act, 1996 is pending (in this Court) to satisfy the award that may be ultimately upheld against them, within a period of four weeks from today i.e. the order passed by the Hon'ble High Court. If the security is not furnished within four weeks, tower No. 3-A, Parikrama Group Housing Society, Sector 20, Panchkula, is ordered to be attached. However, such attachment shall be subject to the earlier encumbrances and the interest created in favour of the third person before the date of passing of this order. The attachment will continue till the award, if finally affirmed in favour of appellant, is satisfied. So, from the very operative part of this order passed by the Hon'ble High Court vide which FAO No. 2232 of 2015 (O/M) has been disposed off itself is exhaustive. Nowhere it is required by the Hon'ble High Court to undersigned to pass any ord











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