A party must demonstrate a manifest intention to initiate arbitration to seek interim measures under Section 9 of the Arbitration & Conciliation Act.

1. This order will govern disposal of AA Nos. 13/14, 14/14 & 15/14 since all these appeals involve same issue. The facts as well as the orders under challenge are similar in all these appeals. These appeals are directed against the orders passed by Additional District Judge dated 2/9/2014 rejecting the application filed by appellant under S.9 of Arbitration & Conciliation Act, 1996.

2. In brief, the appellant had filed the application under S.9 of Arbitration & Conciliation Act before the Additional District Judge raising the plea that the vehicle was financed by appellant to the respondents and hypothication agreement containing the arbitration clause was executed but the respondents had committed default in payment of installment and had not cooperated with appellant inspite of communication in this regard and it was apprehended that the respondents may misappropriate the vehicle therefore, relief as interim measure was sought to obtain the possession of the vehicle from respondents and also obtain security of balance amount.

3. The learned Additional District Judge vide order dated 2/9/14 has rejected the application on the ground that there is no intention on part of appellant to initiate the arbitration proceedings and the application has been filed belatedly and need for issuing the direction under S.9 is not proved.

4. Learned counsel for appellant submits that the court below has committed an error in rejecting the application and that arbitration is a lengthy procedure, therefore, instead of adopting the same the appellant has filed the application under S.9 of Limitation Act which is the only remedy available to the appellant. He further submits that limitation provisions are not attracted yet the court below has rejected the application as barred by time.

5. I have heard the learned counsel for the appellant and perused the record.

6. The issue raised by counsel for appellant is as to weather a party to arbitration agreement who does not want to initiate arbitral proceedings is still entitled for an order under S.9 of the Act?

7. S.9 of the Act permits a party to approach the court "before or during arbitral proceedings or at any time after making of award but before it is enforced". Since S.9 only provides for issuing order by way of interim measure to enable the final settlement of dispute through arbitration therefore, a party approaching for order as interim measure under this Section before commencement of arbitral proceedings, is required to establish clear and manifest intention to initiate the arbitration proceedings or that the arbitration proceedings are in contemplation. The newly inserted sub-section (2) of S.9 makes the above position further clear by providing that on passing the order for any interim measure under sub-section (1) before commencement of the arbitral proceedings, the arbitral proceedings will commence within 90 days from the date of such order or within such further time as the court may determine. Thus a party who does not intend to invoke the arbitration clause and does not want to proceed for arbitration is not entitled for any order by way of interim measure under S.9 of Act.

8. The above view is supported by the judgment of Supreme court in the matter of Sundaram Finance Ltd. Vs. NEPC India Ltd. reported in 1999 (2) SCC 479 wherein it has been held that in case if the party approaches for issuance of interim measure under S.9 even before issuing a notice contemplated by S.21, the court will first have to be satisfied that there exists a valid arbitration agreement and the appli