IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18^TH DAY OF MARCH, 2026 BEFORE THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA MISCELLANEOUS FIRST APPEAL NO.7967 OF 2019 (AA)

BETWEEN:

SRI SRINIVASA GANIGA S/O. LATE BATCHA GANIGA, AGED ABOUT 64 YEARS, R/AT SHREE KRISHNA SANKIRTHANALAYA, JARJADDU, CHERKADY VILLAGE AND POST, BRAHMAVARA TALUK-576215 UDUPI DISTRICT. …APPELLANT (BY SRI ANIL SHEKAR K.S., ADVOCATE)

AND:

1. M/S. SHRIRAM TRANSPORT FINANCE CO. LTD., REGD. OFFICE AT NO.123, ANGAPPAN NAICAKAN STREET, CHENNAI-1, AND BRANCH OFFICE, AT 2^ND FLOOR, RAJ TOWER, Digitally signed by NEAR CITY BUSTAND, MAHALAKSHMI B M UDUPI-576101 Location: HIGH COURT OF REP. BY GPA HOLDER, KARNATAKA PRAKASH MESTA S/O. HONNAPPA, AGED ABOUT 56 YEARS.

2. NEELADHARA SALIAN S/O. CHANDRAVATHI, R/AT H.NO.19-114, MADHAVANAGAR, MOODDABETTU VILLAGE, KODAVOOR POST-576108 UDUPI TALUK AND DISTRICT. …RESPONDENTS (BY SRI M. VAIBHAV ALVA, ADVOCATE FOR SRI M.J. ALVA, ADVOCATE FOR R-1;

NOTICE TO R-2 IS SERVED & UNREPRESENTED)

THIS MFA IS FILED UNDER SECTION 37(1)(a) OF THE ARBITRATION AND CONCILIATION ACT, AGAINST THE JUDGMENT AND AWARD DATED 30.07.2019 PASSED IN A.A.NO.1/2019 ON THE FILE OF THE PRL. DISTRICT AND SESSIONS JUDGE, UDUPI, ALLOWING THE PETITION FILED UNDER SECTION 9 OF THE ARBITRATION AND CONCILIATION ACT.

THIS APPEAL COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MRS. JUSTICE K.S. HEMALEKHA

ORAL JUDGMENT

The present Miscellaneous First Appeal is preferred by respondent No.1 in A.A.No.1/2019, on the file of the Principal District Judge, Udupi (‘Trial Court’ for short). By the impugned order dated 30.07.2019, the petition filed by respondent No.1-Company herein under Section 9 of the Arbitration and Conciliation Act, 1996 (‘Act, 1996’ for short) seeking an order of mandatory injunction/appointment of a receiver pending arbitration proceedings against the appellant herein came to be allowed directing the appellant to surrender Mahindra Scorpio bearing registration No.KA-21M-7938 (‘vehicle’ for short) to the custody of the petitioner (respondent No.1 herein) along with all records thereto.

2. Parties herein are referred to as per the ranking before the Trial Court for the sake of convenience.

3. The question that falls for consideration before this Court is:

“Whether an application under Section 9 (1)

of Act, 1996 is maintainable when the arbitration proceedings are pending?”

4. Heard learned counsel for the appellant and learned counsel for the respondents and perused the material on record.

5. The petitioner-Company contended that respondent No.1 had entered into a loan-cum- hypothecation agreement with the petitioner-Company for the purchase of Mahindra Scorpio vehicle bearing KA-21M- 7938. Respondent No.1 was the borrower and respondent No.2 was the guarantor. Pursuant to the agreement, a loan of `4,23,128/- was availed. As the respondents failed to repay the loan in terms of the agreement, they became defaulters. The agreement contained an arbitration clause, and therefore, the dispute was liable to be resolved through arbitration.

6. Pending initiation of the arbitration proceedings, the petitioner-Company filed petition under Section 9 of the Act, 1996 seeking interim protection by way of mandatory injunction directing the respondents to surrender the vehicle for securing the loan amount through appropriate orders.

7. Learned counsel for the appellant, drawing the attention of this Court to Section 9 (3) of the Act, 1996, submits that once an Arbitral Tribunal had been constituted, the Court could not have entertained an application under Section 9 (1) unless it is found that circumstances existed rendering the remedy provided under Section 17 inefficacious. It is contended that no such circumstances exist in the present case and instead of seeking relief before the Arbitral Tribunal, respondent No.1-Company approached the Court under Section 9 (1)

which is unsustainable.

8. Per contra, learned counsel for respondent No.