IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
P.NAVEEN RAO, P.SREE SUDHA, JJ.
Sree Venkataraya Builders Private Limited – Appellant
Versus
M/s. Kausalya Shelters Limited rep.by its Chairman, Sri D.Ravinder Rao, S/o. Chokka Rao – Respondent
Civil Revision Petition No.1727 of 2021
Decided on : 28-01-2022
Arbitration and Conciliation Act, 1996 – Sections 9, 82 , 84 , 36, 37 and 2(e) - Grant injunction restraining the petitioner from interfering with the peaceful possession - Agreement-cum-General Power of Attorney - Differences arose between the parties to the agreement, resulting in petitioner invoking remedy under Section 9 of Arbitration and Conciliation Act, 1996 by filing Arbitration Court of XXIV Additional Chief Judge, City Civil Court - Respondent filed Arbitration Court of XXIV Additional Chief Judge, City Civil Court grant injunction restraining the petitioner from alienating or encumbering built up area in the petition schedule ‘B’ property, fallen to the share of the petitioner herein, pending conclusion of the arbitration proceedings and to grant injunction restraining petitioner from interfering with the peaceful possession of the petition schedule ‘A” property - Trial Court restrained petitioner from making alienation of property fell to its share earlier interim order was extended – Held, Documents were not served along with notice under Rule 11, ex parte injunction order cannot be nullified unless petitioner pleads and proves prejudice is caused to him. As rightly observed by the trial Court, while granting ad-interim ex parte injunction, trial Court ordered notice to be sent by Court and did not compel respondent to take out notice - Office of Court did not send all the documents, petitioner cannot seek to penalize respondent - Court a person complaining non-observance of procedural fairness must satisfy the revisional Court how prejudice is caused to him - No prejudice is pleaded and proved - Case and balance of convenience in favour of respondent granted the injunction order pending arbitration proceedings - No application is filed to seek vacation of the said order - Court is also reminded that jurisdiction of this Court against orders of civil Court under Section 9, is supervisory, revisional and not an appellate jurisdiction - It is intended to correct grave errors in exercising jurisdiction/application of law/complying procedural safeguards, but not to reassess decision on merits – Court’s opinion that trial Court has not committed error in rejecting the I.A - Civil Revision Petition is dismissed
ORDER :
P.NAVEEN RAO, J.
Petitioner claims to be the owner of land admeasuring Acs.2.08 guntas in Sy.No.144 of Nanakramguda village, Serilingampally Mandal, Ranga Reddy district. Petitioner entered into Development Agreement-cum-General Power of Attorney, registered on 12.01.2015, in the Office of Joint Sub-Registrar, Ranga Reddy district for construction of complex in the above extent of land. Supplementary Agreement was entered, where under it was agreed that 60% would fall to the share of the developer and 40% to the owner. As per clause-5 of the Development Agreement, respondent agreed to pay Rs.4 crores as interest free refundable deposit. This amount should be refunded on successful completion of the project.
2. It appears, differences arose between the parties to the agreement, resulting in petitioner invoking remedy under Section 9 of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act, 1996’) by filing Arbitration O.P.No.62 of 2021 in the Court of XXIV Additional Chief Judge, City Civil Court, Hyderabad. Respondent filed Arbitration O.P.No.65 of 2021 in the Court of XXIV Additional Chief Judge, City Civil Court, Hyderabad, praying to grant injunction restraining the petitioner from alienating or encumbering built up area in the petition schedule ‘B’ property, fallen to the share of the petitioner herein, pending conclusion of the arbitration proceedings and to grant injunction restraining the petitioner from interfering with the peaceful possession of the petition schedule ‘A” property.
3. On 23.07.2021, while issuing urgent notice, returnable by 30.07.2021, by way of ad-interim injunction, the trial Court restrained the petitioner from making alienation of the property fell to its share till 30.07.2021. On 30.07.2021, the earlier interim order was extended till 11.08.2021 rejecting the memo filed by the petitioner for vacating the interim order observing that on a memo interim order cannot be vacated. Petitioner then filed I.A.No.73 of 2021 in Arbitration O.P.No.65 of 2021 praying the trial Court not to extend the interim order dated 30.07.2021 as the respondent failed to comply mandate of Order XXXIX Rule 3 of the Code of Civil Procedure, 1908 (for short, ‘CPC’). The trial Court by order dated 27.09.2021 overruled the said objection and having found prima facie case and balance of convenience in favour of the respondent, dismissed the said I.A.
4. Heard Mr.Botla Venkateswara Rao representing Mr. M.V.Durga Prasad appearing for the petitioner and Mr. Bankatlal Mandhani learned counsel for the respondent.
5. Learned counsel for the petitioner submitted that in an application filed under Section 9 of the Act, 1996, Civil Court is bound by the provisions of Code of Civil Procedure in all its vigour and application and non-compliance thereof, vitiates the orders passed by the civil Court. According to the learned counsel, Order XXXIX Rule 3 of CPC mandates that if an ex parte ad-interim injunction is granted with a direction to the plaintiff to serve notice on the defendant, it is mandatory for the plaintiff to serve notice by enclosing copy of arbitration application and the documents filed by the respondent before the date fixed for hearing. Admittedly, respondent has not served all the documents relied upon by him, but only gave copy of arbitration application. Therefore, the mandate of Order XXXIX Rule 3 of CPC is not complied and on that ground alone the ex parte ad-interim injunction stands dissolved. The trial Court erred in overruling the objection.
6. He further submitted that trial Court erred in not going into the aspect of prima facie case and balance of convenience and merely noting that another arbitration application filed by the petitioner is pending, granted ex parte injunction depriving the right of the petitioner to enjoy his share of the property.
7. In support of his contention, learned counsel for petitioner placed reliance on the following decisions:
A.Venkatasubbaiah Naidu vs. S.Chellappan and others
East India Udyog Ltd., Ghaziabad, U.P. vs. Maytas Infra Ltd., Hyderabad and another
ITI Ltd., vs.Siemens Public Communications Network Ltd.
It is well settled that where more than one court has jurisdiction, it is open for parties to exclude all other courts.
An application under Section 9 of the Arbitration and Conciliation Act can be maintained post-arbitral award until satisfaction of the award, but the court retains discretion on whether to entertain ....
The court upheld the rejection of an interim injunction under the Arbitration Act due to the appellant's failure to establish a prima facie case and balance of convenience.
Interim injunction – Jurisdiction under Section 9 of Arbitration and Conciliation Act, 1996, is not an adjudicatory substitute for final determination of rights, but a supportive mechanism to facilit....
Once an Arbitral Tribunal is constituted, Section 9 of the Arbitration Act prohibits further applications for interim relief unless the party shows that the remedy under Section 17 is ineffective.
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