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2021 Supreme(Online)(KER) 581
HIGH COURT OF KERALA
S.MANIKUMAR, CJ, SHAJI P.CHALY, J
SHRIRAM TRANSPORT FINANCE COMPANY LIMITED – Appellant
Versus
ROY M. V. – Respondent
WA/1723/2021
C.HARIKUMAR, ARUN KUMAR M.A, SRI.ABDUL LATHEER FOR R1, SMT.SANDRA SUNNY FOR R3, SRI.K.P.HARISH, SENIOR GOVERNMENT PLEADER FOR R5
Judicial intervention in arbitration processes is restricted under the Arbitration and Conciliation Act, emphasizing deference to the tribunal's authority unless exceptional circumstances arise.
Headnote:
Judicial Review - Writ Petition - Arbitration and Conciliation Act 1996 - Sections 5, 37 - The court affirmed that judicial intervention in matters governed by arbitration is significantly limited under Section 5, and reiterated the restricted grounds for appeal under Section 37, leading to the dismissal of the writ petition.
Fact of the Case:
A finance company petitioned the court to set aside an order by an Arbitral Tribunal regarding the custody of a vehicle due to alleged defaults in repayment. The tribunal had ordered the vehicle to be surrendered based on concerns of potential losses.
Issues: Whether the High Court could intervene in the interim orders of an Arbitral Tribunal under Article 226 of the Constitution, given the statutory limitations on judicial review in the Arbitration and Conciliation Act.
Ratio Decidendi: The principle established is that judicial intervention in arbitration matters is exceptionally limited, and courts should respect the confined avenues for appeal as prescribed by the Arbitration and Conciliation Act.
Final Decision: The writ appeal was allowed, and the previous order was set aside.
JUDGMENT
Dated this the 23rd day of December, 2021
S.Manikumar, C.J.
Before the writ court, M/s. Shriram Transport Finance Company Limited - respondent No.1, sought for the following reliefs:
i)To call for the records relating to Exhibit P-1 to P-7 and to issue a writ of mandamus declaring that the entire proceedings in AC No.39/2021 based upon Exhibit P4 notice and Exhibit P6 is illegal and opposed to law and to set aside Exhibit P6 order, command respondents 1 and 2 to immediately release vehicle bearing No.KL37A-2282 to the petitioner as taking into custody of the vehicle was illegal, unjust and opposed to law.
ii)To pass orders directing respondents 1, 2 and 3 to pay compensation amount to Rs.5 lakhs as there is violation of the constitutional right to live.
2. Exhibit P6 interim order of the Arbitral Tribunal, Kottayam made in I.A.No.19/2021 dated 7th July, 2021, sought to be quashed, are reproduced hereunder:
“ INTERIM ORDER
This is a petition filed under Section 17 (1) of the Arbitration and Conciliation Act 1996 by the petitioner for the protection of the subject matter of the dispute in the Arbitration. I peruse the petition along with the Affidavit and the records before me apart from the hearing of the Counsel for the petitioner. The petitioner herein is a public Limited Company, incorporated under the Indian Companies Act 1956, having its registered Office at No-14 A-South Phase Industrial Estate, Guindy, Chennai-600032 and branch office at Kanjirappally. The petition company is engaged in the business of Hire Purchase and leasing and financing of commercial vehicles. According to the petitioner, the respondent's jointly and severally executed a loan cum hypothecated agreement. KANJRT906290018 for availing financial assistance for purchase of a SWARAJ MAZDA SMART FBT-Reg. No. KL 37 A 2282 on 01-07-2019 for an amount of Rs. 2,75,000/-(Rupees Two Lakhs Seventy Five Thousand Only). It is contented that as per agreement the respondent agreed to repay Rs.3,91,145/-(Rupees Three Lakhs Ninety Thousand One Hundred And Forty Five Only) to the petitioner in 36 monthly installments. Apart from it the respondents also agreed to pay an overdue compensation at the rate of 3% to the petitioner. The petitioner, again contented that the respondents willfully defaulted the monthly installment as agreed and an amount of Rs.3,74,781/- (Rupees Three Lakhs Seventy Four Thousand Seven Hundred And Eighty One only) is due from the respondents on 14.12.2020 for a final settlement.
The petitioner further contented that the respondents are not maintaining the vehicle in a proper condition and it is also learned that they have contacted buyers to sell the parts of vehicle by dismantling the same. The petitioner is apprehended irreparable loss and injury will be caused to the vehicle if this petition is disallowed.
1 peruse all the records filed along with the petition, the contention and submission of the petitioner I would like to allow the petition as follows:
ORDER
1. The respondents are hereby directed to surrender the vehicle bearing Reg. No. KL 37 A 2282 forthwith to the petitioner for safe custody. If the respondents failed to comply the order, the petitioner is at liberty to take possession of the vehicle by lawful means including police assistance.
2. The petitioner is also directed to keep the vehicle in proper and safe custody until further orders as and when the petitioner obtains possession.”
3. Exhibit P7 is a notice issued by the appellant to Mr.Roy.M.V. - respondent No.1 herein, calling upon him to pay a sum of Rs.3,74,781/- to settle the contract in full.
4. Writ court, considering the facts and circumstances, directed to release the vehicle subject to respondent No.1 making a payment of Rs.1,00,000/-. Short order made in I.A.No.1 of 2021 in W.P.(C) No.25718 of 2021 dated 15th December, 2021, impugned in this writ appeal is re- produced hereunder:
“ O R D E R
Considering the peculiar facts and circumstances narrated in this writ petition and
