Bosabari Tea Estates Private Ltd. v. Auro Tea Co. Ltd.
1999-02-25
BRIJESH KUMAR, P.C.PHUKAN
body1999
DigiLaw.ai
Brijesh Kumar, C. J.— This appeal arises out of order dated 6.4.1998 passed by Civil Judge (Senior Division), District Jorhat in Misc (J) Case No. 96 of 1997 granting temporary injunction in favour of the present respondent Auro Tea Company Private Ltd restraining the appellant Bosabari Tea Estate Private Ltd from transferring the ownership of the Bosabari Tea Estate by sale, lease or by any other means of transfer till final disposal of Title Suit No.51 of 1997. 2. We have heard Shri AK Bhattacharyya for the appellant and Shri BK Goswami appearing for the respondent. We have also perused the order passed by the learned Civil Judge. 3. The facts, very briefly, which may be necessary to resolve the controversy involved in this appeal are that the respondent M/s Auro Tea Company Private Ltd filed a suit, namely, Title Suit No.51 of 1997. It appears that there was an agreement between the parties under which the defendant, namely, the present appellant M/s Bosabari Tea Estate Private Ltd had to supply the entire green tea leaves of the year 1997 to the plaintiff Auro Tea Company Private Ltd. It further transpires that a dispute arose in regard to the said agreement on the question of supply of tea leaves resulting in filing of a suit, namely, Title Suit No. 51 of 1997 by Auro Tea Company Private Ltd, amongst others, with a prayer for recovery of a given sum of amount from the defendant to compensate the loss alleged to be caused to the plaintiff and for grant of an injunction restraining the defendant from selling the tea estate of transferring its ownership by any other means. 4. The defendant, namely, the present appellant moved an application No. 2148 of 1997 under section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter called the Act) for stay of the proceedings and for referring the matter to arbitration since the matter was covered by the arbitration clause of the agreement. The said application for referring the dispute to arbitration under section 8 was allowed by order dated 6.4.1998 and the proceedings of the suit was stayed under section 8 of the Act and the parties were referred to arbitration. The parties seemed to have submitted to the order passed referring the parties to the arbitration under section 8 of the Act. 5.
The parties seemed to have submitted to the order passed referring the parties to the arbitration under section 8 of the Act. 5. It also transpires that the plaintiff Auro Tea Company Private Ltd also moved an application for grant of ad interim temporary injunction in the suit proceedings of Title Suit No. 51 of 1997. The case of the plaintiff-applicant was that the defendant intended to remove or dispose of the property with a view to defrauding its creditors. Hence the temporary injunction order was necessary to be passed failing which it will cause financial injury and irreparable loss to the plaintiff. According to the plaintiff-applicant, balance of convenience was in its favour and the Court could grant injunction under Order 39, Rules 1 and 2 or under section 151 CPC. The prayer for interim injunction was resisted on behalf of the defendant-appellant on the ground that an application under section 8 of the Arbitration and Conciliation Act, 1996 had already been moved for stay of the proceedings and referring the matter to the Arbitrator, hence no relief of interim injunction could be granted under Order 39, Rules 1 and 2 read with section 151 CPC. It also seems to have been submitted that by virtue of section 5 of the Arbitration Act no interference can be made by the Courts in the matters covered by section 8 of the Arbitration and Conciliation Act, 1996. 6. Learned counsel for the appellant has challenged the impugned order dated 6.4.1998 granting temporary injunction on the ground that the Civil Judge (Senior Division) has no jurisdiction to grant temporary injunction. The contention is that section 9 of the Act vests jurisdiction in the Court to pass orders by way of interim measures. Section 9 of the Act reads as follows : “9. Interim measures etc by Court- A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court.
Section 9 of the Act reads as follows : “9. Interim measures etc by Court- A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court. (i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure of protection in respect of any of the following matters namely: (a) the preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement; (b) securing &e amount in dispute in the arbitration; (c) the detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; (d) interim injunction or the appointment of a receivers; (e) such other interim measure of protection as may appear to the Court to be just and convenient, and the Court shall have the power for making orders as it has for the purpose o and in relation to, any proceedings before it.” Learned counsel for the appellant has drawn our attention to section 2(1) (e) of the Act which defines the word 'Court'.
Clause (e) is quoted below : “Court means the principal civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to deckle the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, but does not include any civil Court of a grade inferior to such principal civil Court, or any Court of Small Causes.” It is submitted that the powers vested in a Court to pass orders by way of interim measure can be exercised only by principal civil Court of original jurisdiction in a district and not by Civil Judge (Senior Division) which is not the principal civil Court of original jurisdiction in a district. It is only the Court of the District Judge which would fall in the category of principal civil Court of original jurisdiction in a district. A perusal of clause (e) also indicates that it is specifically provided that the Court would not include any civil Court of a grade inferior to such principal civil Court or any Court of Small Causes. The contentions raised on behalf of the appellant is that it, has not been disputed by the respondent that jurisdiction vested under section 9 of the Act to pass orders by way of interim measure, by a Court which means principal civil Court of original jurisdiction in a district nor any such contention has been raised that the Civil Judge (Senior Division who has passed the order impugned in this Court is a principal civil Court of the district. In view of the position as indicated above, it would not take much time to come to a conclusion that the Civil Judge (Senior Division) had no jurisdiction to pass the order granting temporary injunction under section 9 of the Act. 7. However, the learned counsel for the respondent submits that this appeal would not be main tamable under Order 43 Rule 1 (r) CPC. It is submitted that injunction order has been granted under section 151 CPC, which has not been made appealable under Order 43, Rule 1 (r). It is not an order under Order 39, Rule 1 and 2 which has been made appealable under Order 43, Rule 1 (r) CPC.
It is submitted that injunction order has been granted under section 151 CPC, which has not been made appealable under Order 43, Rule 1 (r). It is not an order under Order 39, Rule 1 and 2 which has been made appealable under Order 43, Rule 1 (r) CPC. Our attention has been drawn to the findings recorded by the trial Court pertaining to this aspect of the matter and the learned trial Court has come to the conclusion that the provisions of Order 39, Rules 1 and 2 are not attracted in this case as in the instant case injunction was prayed in respect of Bosabari Tea Estate. There is no dispute between the parties regarding the title. The learned trial Court then found that the interim order could be granted under section 9 (ii) of the Act by way of interim measures. The learned trial Court further went on to discuss that section 151 CPC makes a provision for making an order necessary for securing the ends of justice and to prevent the abuse of process of the Court. Hence the injunction can be granted under section 151 CPC. 8. From the findings recorded by the learned trial Court as indicated above, the picture that emerges that according to those findings the order passed by the learned trial Court is not referable to Order 39, Rules 1 and 2 CPC but the Court l had jurisdiction to pass an order under section 9 (ii) of the Act as well as under section 151 CPC which would be applicable in view of inapplicability of Order 39, Rules 1 and 2. 9. On behalf of the appellant it is submitted that once the same Court had referred the parties to the arbitration under section 8 of the Act it was left with no jurisdiction to pass any further order granting interim injunction or there was any occasion to apply section 151 CPC. We find that there is a clear order, passed by the learned Civil Judge (Senior Division) on the same date referring the parties to the arbitration under section 8 of the Act. Once that order was passed, it is difficult to accept the contention of the learned counsel for the respondent that section 151 CPC could still be pressed into service to pass the interim order.
Once that order was passed, it is difficult to accept the contention of the learned counsel for the respondent that section 151 CPC could still be pressed into service to pass the interim order. It is also one of the generally accepted principles that once a specific provision is provided under the law to pass interim order to secure the ends of justice, there would be no occasion to apply section 151 CPC. On the findings recorded by the learned Civil Judge itself an order by way of interim measure can be passed under section 9 (ii) of the Act. We feel that once the matter is referred to the arbitration, all the relevant provisions as contained under the Act would become applicable. Once after reference to the arbitration section 9 of the Act would become applicable, there is no question of exercising the powers under section 151 CPC. The order of temporary injunction granted by the learned Civil Judge is clearly referable to the powers vested under section 9 of the Arbitration Act. But such powers can be exercised by a Court which is the principal civil Court of original jurisdiction in the district that is to say an application for injunction could only be moved and order be passed by a principal civil Court of original jurisdiction in a district and not by the learned Civil Judge (Senior Division) as in the instant case. 10. The learned counsel appearing for the respondent submits that by passing an order under section 8 of the Act, namely, by referring the parties to the arbitration, the civil Court is not divested of all jurisdiction and the proceedings in the suit continue to be pending in civil Court. In support of the contention he has referred to section 34 of the Arbitration Act, 1940 which is quoted below : “34. Powers to stay legal proceedings where there is an arbitration agreement-Where any party to an arbitration agreement or any person claiming under him commences any.
In support of the contention he has referred to section 34 of the Arbitration Act, 1940 which is quoted below : “34. Powers to stay legal proceedings where there is an arbitration agreement-Where any party to an arbitration agreement or any person claiming under him commences any. legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings.” A perusal of section 34 indicates that the Court was authorised to pass an order staying the proceedings. Whereas now no such provision is contained under section 8 providing that the proceedings in the Court may be stayed. That part of the provision under section 34 of the Arbitration Act, 1940 is omitted under the new provision now applicable, namely, section 8 of the Arbitration and Conciliation Act, 1996 which reads as follows: “8. Power to refer parties to arbitration where there is an arbitration agreement- (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.” 11. A perusal of section 8 shows that the Court is empowered to pass an order to refer the parties to the arbitration.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.” 11. A perusal of section 8 shows that the Court is empowered to pass an order to refer the parties to the arbitration. Sub-section (3) of section 8 only envisages pendency of the application under sub-section (1) of section 8 by providing that even though an application under sub-section (1) of section 8 is made for referring the parties to the arbitration and the said issue about referring £ the parties to the arbitration still remains pending, arbitration may commence and continue and even an Award can be made during pendency of an application under sub-section (1) of section 8. It does not provide for staying the proceedings in the civil Court. The final order which can be passed under section 8 is to refer the parties to arbitration. Thereafter there remains hardly anything to be done by the judicial authority in a petition under section 8 of the Act. In this light of the matter we hardly find any force in the submission made on behalf of respondent that the judicial authority after passing an order under section 8 of the Act still retains jurisdiction to pass any other order applying section 151 CPC. Learned counsel for the respondent has placed reliance upon a decision of Allahabad High Court reported in AIR 1971 Allahabad 569 (Onkar Nath Jain vs. UP Co-operative Cane Union's Federation Ltd). At the very outset it may be observed that the case relates to the old provision containing section 34 of the Arbitration Act, 1940. The said provision provided for staying the proceeding in the suit. The judgment considered the question as to under what circumstances an order staying the proceedings. in the suit may be recalled. In our view this decision would not be applicable to the present case. It was held that if defendant had failed to appoint the arbitrator within a reasonable time, the Court would be justified in recalling the order to stay. But as observed earlier once there is no such provision for staying the proceedings in the suit as it stood under section 34 of the old Act, an order in consonance with section 8 of the Arbitration and Conciliation Act, 1996 alone can be passed.
But as observed earlier once there is no such provision for staying the proceedings in the suit as it stood under section 34 of the old Act, an order in consonance with section 8 of the Arbitration and Conciliation Act, 1996 alone can be passed. We would also like to observe that in a situation where one of the parties may be inordinately delaying or refusing to appoint Arbitrator or to agree in appointment of an Arbitrator or Umpire, it would always be open to the aggrieved party to approach Court for passing appropriate order under the provisions of the Arbitration and Conciliation Act, 1996. The aggrieved party would not be left without any remedy. 12. Coming back to the question of maintainability of appeal under Order 43, Rule 1 (r) CPC, we find that it is though true that an appeal under the aforesaid provision would not be maintainable, but this would not render the appeal as incompetent. According to the findings of the trial Court itself an order by way of interim measure can be passed under section 9 (ii) of the-Act. We also find that once the parties are referred to be arbitration, the provisions contained under the Act including section 9 would be applicable. The applicability of Order 39, Rules 1 and 2 CPC has been ruled out by the trial Court itself and we have held in the earlier part of this judgment that section 151 CPC would not be available for grant of interim injunction. The result thus would be that the order of temporary injunction granted by the learned trial Court is only referable to the Court's power and jurisdiction vested under section 9 of the Act. An order passed granting or refusing to grant any relief under section 9 of the Act is appealable under section 37 of the Act. Needless to emphasis where a Court is vested with jurisdiction to pass order or to entertain and decide an appeal, wrong mentioning of the provisions under which the appeal is filed or entertained or an order is passed will be wholly irrelevant and immaterial. The jurisdiction of the Court passing the orders as vested under the statute remains intact. So long the Court retains that jurisdiction and passes an order within the scope of the jurisdiction vested under the law, the order would be referable to those powers vested under the law.
The jurisdiction of the Court passing the orders as vested under the statute remains intact. So long the Court retains that jurisdiction and passes an order within the scope of the jurisdiction vested under the law, the order would be referable to those powers vested under the law. Therefore, we have no hesitation in treating this appeal as appeal under section 37 of the Arbitration and Conciliation Act, 1996 against an order passed under section 9 of the Act instead of an appeal under Order 43, Rule 1 (r) as filed or to treat the order under section 151 CPC. 13. Once we have come to the conclusion that the order of temporary injunction was passed under section 9 of the Act as also held by the trial Court that an order could be passed under section 9, it could be passed only by the Court competent to pass such order. We have already discussed in the earlier part of the judgment that a principal civil Court of original jurisdiction of a district is competent to pass an order under section 9 of the Act. That being the position the impugned order passed by the Civil Judge (Senior Division) is without jurisdiction. The appeal is, therefore, allowed and the order passed by the trial Court dated 6.4.1998 is set aside as an order passed without jurisdiction. We would further like to observe that this judgment would not be a bar for the respondent to move any appropriate application before any appropriate forum under section 9 of the Act, if so advised. There would be no order as to costs.