JUDGMENT 1. - Vide Order dated 25.11.05, the District Judge, Jaipur had passed an interim order in favour of the M/s. Aerens Goldsouk International Ltd. (henceforth to be referred to as the respondent', for short) under Section 9 of the Arbitration and Conciliation Act, 1996 (henceforth to be referred to as `the Act', for short). Under the said Order, the appellants, Mr. Samit Kavadia and M/s. Indra Colonizers (P) Ltd. (henceforth to be referred individually by their names and collectively to be referred to as 'the appellants', for short) were restrained from "alienating by way of sale, lease, mortgage or creating any charge or interest by way of further agreement to sell to any third party or raising any structure on the land till the settlement of the dispute between the parties by Arbitrator." They were further prevented from "raising any structure on the land in dispute and changing its character till the dispute between the parties under the Act of 1996 is finally decided". Since both the appeals challenge the said Order, they are being decided by this common judgment. 2. These appeals have a checkered history. On 8.3.2002, the Director, Tourism and Culture Department issued two separate 'Pattas" (Title Deeds) in favour of the appellant, Mr. Samit Kavadia under Rajasthan Land Revenue (Industrial Area Allotment) Rules, 1959. According to the first 'Patta', the Government had agreed to allot 5 Bighas and .06 Biswa of land situated in Village Amer and to further allot 5.16 Hectares of land situated in village Nagla. Susawatan, Tehsil Amer to Mr. Samit Kavadia. Similarly, by the second "Patta" the Government had agreed to allot 3.81 Hectares of land situated in Village Nagla Susawatan, Tehsil Amer, District Jaipur to Mr. Kavadia. However, the second 'Patta' was given to Mr. Kavadia in his capacity as the power of attorney holder of Mr. Gajanand Meena and of Mr. Mangala Meena, both members of the Scheduled Tribe community. Both these "Pattas" were issued with certain conditions : according to Condition No. IV, the allottee was required to construct a 30 tourism complex or a hotel within two years from the date of allotment. In case he failed to do so, the land would revert back to the government. According to Condition No. VII, the allottee could not transfer his rights of the land to any other person without the written permission of the government. In case he failed to do so, the land would revert back to the government. According to Condition No. VII, the allottee could not transfer his rights of the land to any other person without the written permission of the government. However, despite the allotment of land to Mr. Kavadia for the 35 purpose of establishing a tourist complex or a hotel, he failed to do so within the stipulated period of two years. The said allotment was going to lapse on 8.3.2004. 3. On 8.3.2004 itself, Mr. Kavadia entered into a Memorandum of Understanding (henceforth to be referred to as 'the MOU', for short) with the 40 respondent, for the entire land covered by the two ''Pattas". It is essential to point out that the total land consists of two parcels of land, namely the first part consisting of 31 Bighas, 12 Biswas (about 8 Hectares) of land in Villages Amer and Nangal Susawatan, both in Tehsil Amer, Dist. Jaipur and the second part consisting of 0.81 Hectares of land situated only in Village Nangal Susawatan, Tehsil Amer, Dist. Jaipur. Both the parcels of land are adjacent to each other and form a continuous plot of land in a rectangular shape. This is obvious from the map submitted before this . However, while the first parcel of land is the property of Mr. Kavadia as the "Karta" of a HUF, the second parcel of land belongs to Mr. Gajanand Meena and Mr. Mangla Meena, both members of a Schedule Tribe. Mr. Kavadia is merely their power of attorney holder. 4. But in the MOU, Mr. Kavadia claimed to be the absolute owner" of both the parcels of land. He further assured the respondent that "the property is free from all encumbrances and he is entitled to sell the said property along with the lease-hold rights and to get the property mutated in favour of the Vendee (the respondent) or its nominee". According to the 15 MOU, Mr. Kavadia had agreed to sell the property @ Rs. 17,25,000/- per Bigha. He received Rs. 5 Lacs as advance money from the respondent. The further mode of payment was also spelt out in the MOU. Mr. Kavadia also assured the respondent that "the property to be sold under this agreement is free from all encumbrances, sale, mortgage, loan, dispute, litigation, etc. 17,25,000/- per Bigha. He received Rs. 5 Lacs as advance money from the respondent. The further mode of payment was also spelt out in the MOU. Mr. Kavadia also assured the respondent that "the property to be sold under this agreement is free from all encumbrances, sale, mortgage, loan, dispute, litigation, etc. and the Vendor shall give the peaceful vacant physical possession of the said property to the Vendee at the time of registration of sale deed": According to Condition No. 10, the said MOU was binding on both the parties "till signing of the agreement to sell". 5. On 20.4.2004, the parties entered into two different agreements to sell. The first agreement related to 7.16 Hectares of land belonging to Mr. Kavadia. There is no dispute about this land as subsequently the Government granted the requisite permission for the sale of this land. 6. It is the second agreement that has led to the disputes between the parties. The second agreement related to 0.81 Hectares of land belonging to Mr. Gajanand Meena and Mr. Mangla Meena. Interestingly, in the beginning of the agreement, Mr. Kavadia claimed himself to be the Vendor". But later in the agreement, for the first time, he revealed the fact that he is merely a power of attorney holder on behalf of the Mr. Gajanand Meena and Mr. Mangla Meena. He further claimed that both Mr. Gajanand Meena and Mr. Mangla Meena had taken their consideration and had handed over possession of the land to him. He further claimed to be "recorded owner" with all rights, title, interests, easements, patent or latent enjoyed and reputed to be enjoyed in respect thereof". In the latter part of the agreement there is certain amount of confusion with regard to be locus standi of Mr. Kavadia whether he is "the vendor" or "the attorney on behalf of the vendor" as both the terms are used simultaneously. But be that as it may, later in the agreement, the attorney promised to get the permission from the local authorities or from the Government for "the sale/transfer of the said property in favour of the vendee or its nominee(s) before the execution of the Sale Deed". Thus, Mr. Kavadia had taken upon himself to get the permission from the local authorities or the Government for the sale/transfer of the land in favour of the vendee. Thus, Mr. Kavadia had taken upon himself to get the permission from the local authorities or the Government for the sale/transfer of the land in favour of the vendee. Moreover, the sale deed was to be executed "on or before 15.3.2005, or within clear days from the date of receipt of intimation by Vendee from the Vendor and Attorney of having obtained Sale Permission, whichever is later, the Vendor and the Attorney will execute and get the sale deed of the said property registered in favour of the vendee or its nominee(s)". 7. On 23.4.04, Mr. Kavadia did get the permission for the sale/transfer 5 of his land the land covered by the first agreement. However, the process of seeking permission for the second parcel of land stretched from 20.4.04 to 19.1.06, i.e. for almost two years. During this period, Mr. Kavadia requested the respondent to pay for the land for which the permission was granted. However, the respondent was unwilling to do so. For, its project could not to be developed only on one parcel of land. For its project it needed the entire land comprising of both the parcels of land. The map of the land also reveals that the second parcel of land jets into the first parcel of land and divides it into two separate pieces with a corridor in between. Thus, it would be difficult, if not impossible, for the respondent to develop the 5 projecta hotel and a tourist complexin first parcel of land. But meanwhile, the real estate prices increased. instead of honoring his commitment, Mr. Kavadia decided to return the money taken from the respondent and to wriggle out of the agreement entered between the parties. Therefore, vide letter dated 8.4.2005, he returned Rs. 60 Lacs (as zo the total amount so far paid by the respondent to him) to the respondent and begged to be excused from the agreement. Interestingly, till 8.4.2005, the Government had not expressed its views about denying the permission with regard to the second parcel of land. The record reveals that during this period infra-departmental correspondences were going on and initially, Mr. Kavadia was applying for the permission, subsequently one Mr. Amit Gupta also applied on behalf of the respondent. It was not till 19.1.06 that the Government refused to grant permission for the second parcel of land. The record reveals that during this period infra-departmental correspondences were going on and initially, Mr. Kavadia was applying for the permission, subsequently one Mr. Amit Gupta also applied on behalf of the respondent. It was not till 19.1.06 that the Government refused to grant permission for the second parcel of land. The respondent suspected that something was rotten in the state of Denmark. For, meanwhile on 24.8.2005, Mr. Kavadia entered into a Sale 30 Deed with M/s. Indra Colonizers (P) Ltd. for both the parcels of land that he had agreed to sell to the respondent. 8. Naturally disputes arose between the parties. Realising the dishonest intention of Mr. Kavadia, the respondent issued a public notice in the Hindi dailies of the area, namely "Rajasthan Patrika" and "Dainik Bhaskar". Since an arbitration clause existed in the agreement to sell, the respondent requested Mr. Kavadia to appoint an arbitrator. However. Mr. Kavadia paid no heed to their request. In order to protect their commercial interest, on 27.10.2005, the respondent filed an application under Section 9 read with Section 11 of the Act for interim measure before the District Judge, Jaipur. After hearing both the parties, vide Order dated 25.11.2005, the learned Judge granted the interim injunction in favour of the respondent in the terms mentioned above. Hence, these appeals before this. 9. Mr. M.M. Ranjan, the learned counsel for the Mr. Kavadia, has made fivefold submissions before this : firstly, the power under Section 9 of the Act is akin to the power under Order 39, Rules 1 and 2 of the Code of Civil Procedure (henceforth to be referred to as the Code', for short). Secondly, therefore, while exercising its power under Section 9 of the Act, the learned Judge should have considered the three essential elements for so grant of injunction : (a) the existence of prima facie case, (b) balance of convenience and (c) the irreparable loss caused to the party. However, in the present case he has not done so. Instead, he has granted the temporary injunction interalia on the grounds that an arbitration agreement exists and so do the disputes exist between the parties and that the land in dispute needs to be protected. Hence, he has gone against the tenor of Section 9 of the Act. However, in the present case he has not done so. Instead, he has granted the temporary injunction interalia on the grounds that an arbitration agreement exists and so do the disputes exist between the parties and that the land in dispute needs to be protected. Hence, he has gone against the tenor of Section 9 of the Act. Thirdly, that after filing of the application under Section 9 of the Act, s the respondent has not filed any application under Section 11 of the Act before this for appointment of the arbitrator. Therefore, the respondent is abusing the right under Section 9 of the Act in order to prolong the process and to prevent the. appellants from carrying on any construction on the land. Fourthly, under the provisions of the Specific Relief Act, 1963 the agreement is incapable of enforcement. For the arbitrator does not have the power to enforce an agreement. At best, the respondent can be compensated monetarily. Fifthly, the second agreement was void for under Section 42 of the Rajasthan Tenancy Act as land belonging to the Schedule Caste or Schedule Tribe cannot be sold or transferred to the Is non-Scheduled Caste/Tribe person. Since a decree of specific performance cannot be granted, so an injunction cannot be granted either. Thus, the learned Judge has erred in granting the interim measure in favor of the respondent. 10. On the other hand, Mr. R.K. Agarwal, the learned counsel for the 20 M/s. Indra Colonizers (P) Ltd. has argued that the learned Judge erred in granting an injunction against the M/s. Indra Colonizers. For, the arbitration agreement was entered between Mr. Kavadia and the respondent. M/s. Indra Colonizers were not a party to the said arbitration agreement. Hence, an injunction could not be granted against M/s. Indra Colonizers. Secondly, his clients are bona fide purchasers of the land in dispute. Thirdly, they are in possession of the land. Therefore, an injunction cannot be granted against the bona fide owner. He has also echoed the contentions raised by Mr. Ranjan. 11. Mr. Alok Sharma and Mr. Kalia, the learned counsels for the 30 respondent, have also raised a number of contentions before this . Firstly, that the conduct of the appellants would clearly show that they have played fraud with the respondent. Mr. Kavadia misstated the crucial facts about the land in question. Furthermore, Mr. Ranjan. 11. Mr. Alok Sharma and Mr. Kalia, the learned counsels for the 30 respondent, have also raised a number of contentions before this . Firstly, that the conduct of the appellants would clearly show that they have played fraud with the respondent. Mr. Kavadia misstated the crucial facts about the land in question. Furthermore, Mr. Kavadia committed a breach of the contract. Hence, the respondent is not only entitled for 35 compensation, but it is also entitled to specific performance of contract. Secondly, Section 9(ii) clearly lays down the circumstances in which the can grant an interim measure to the party. According to Section 9(ii)(c) for the purpose of "the detention, preservation or inspection of any property" an interim measure can be granted by the learned Judge. 40 Furthermore, Section 9(ii)(e) clearly grants the power to the to grant "such other interim measure of protection as may appear to the to be just and convenient". According to the learned counsels, the scope of Section 9 of the Act is greater than the scope of Order 39, Rules 1 and 2 of the Code. In fact, Section 9 of the Act includes the inherent power of 45 the under Section 151 of the Code. Therefore, the power under Section 9 is not confined to the parameters established by Order 39, Rules 1 and 2 of the Code. Under Section 9 of the Act, the is empowered to take such measures as would be "just and convenient" for the purpose of preservation of the property. Thirdly, the ingredients required for the exercise of power under Section 9 of are the existence of the arbitration agreement, the existence of the dispute between the parties, and the possibility of threat to the property. Since these three ingredients do exist in the present case, the learned Judge was legally justified granting the temporary injunction in favour of the respondent. 12. We have heard the learned counsels for the parties, have considered the record and have examined the impugned Order. 13. The raison d'etre of the judicial system is to do justice to the people. Justice is a divine concept, a sacred concept. Notwithstanding its positivist birth, its origin lies in the Natural Law. Therefore, there are situations and circumstances when justice travels beyond the confines of law. 13. The raison d'etre of the judicial system is to do justice to the people. Justice is a divine concept, a sacred concept. Notwithstanding its positivist birth, its origin lies in the Natural Law. Therefore, there are situations and circumstances when justice travels beyond the confines of law. As Justice Krishna lyer famously said, "When injustice is chased, sky is the limit." Hence, the must endeavour to do justice to the litigants before them. It is for the purpose of doing justice to the parties that the is deemed to have inherent powers, which are neither bestowed by the law, nor controlled by the law.Section 9 of the Act is as under : 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 (i) for the appointment of a guardian for a minor or a' person of unsound mind for the purpose of arbitral proceedings; or (ii) for an interim measure in 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 the 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 receiver; (e) such other interim measure of protection as may appear to the to be just and convenient. (Emphasis added) and the shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it. 14. An analysis of the said section reveals its different faces. Firstly, a party may apply for an interim measure either before or during or any time after the making of the arbitral award but before it is enforced under Section 36 of the Act. 14. An analysis of the said section reveals its different faces. Firstly, a party may apply for an interim measure either before or during or any time after the making of the arbitral award but before it is enforced under Section 36 of the Act. Secondly, such an interim measure may be granted by the under the six circumstances cumulatively enumerated under Sub-section (i) and (ii) of the section. Thirdly, the shall exercise all the powers it has for the purpose and in relation to any proceeding before it. Thus, it would have the power under Order 39, Rules 1 and 2 of the Code. But according to Section 9(ii)(e) the power is not cribbed, cabined and confined to the power enumerated under Order 39, Rules 1 and 2 of the so Code. In fact, where it appears to the that it is "just and convenient" under the peculiar facts and circumstances of the case to travel beyond the scope of Order 39, Rules 1 and 2 of the Code, it may do so. The underline 1 factor is to do justice to the parties. Thus, if justice demands that the should travel beyond the scope of Order 39, Rule 1 and 2 of the Code, it certainly has the power to do so. In the case of Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal, AIR 1962 SC 527 the Hon'ble Supreme 5 has held, that the has the inherent power to go beyond the scope and ambit of Order 39, Rule 1 and 2 of the Code. Thus, the learned Judge was not bound by the limits of Order 39, Rule 1 and 2 of the Code. It is, indeed, a settled position of law that under Section 151 of the Code, the has got inherent power to protect the rights of the parties pending the 10 suit. In fact, the legislature in its wisdom has used the words. "the shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it" in Section 9 of the Act. Therefore, the inherent power contained under Section 151 of the Code would have to be ipso facto read into Section 9 of the Act. "the shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it" in Section 9 of the Act. Therefore, the inherent power contained under Section 151 of the Code would have to be ipso facto read into Section 9 of the Act. Hence, the contention of the 15 counsels for the appellants that the is duty bound to consider only the three ingredients of Order 39, Rules 1 and 2 of the Code is devoid of any merit. Although the learned Judge has not indicated that he is exercising his powers under Section 9(ii)(e) of the Act, but nonetheless, the Order dated 25.11.2005 is legally valid under the said provision. 15. Of course, the would not be justified in jumping over the limits placed by Order 39, Rules 1 and 2 of the Code in every case. Since the discretion granted under Section 9 of the Act is a vast one, it has to be exercised sparingly. It is settled position of law that the more vast the discretion, the more sparing its exercise. Moreover, the exercise of discretion 25 would have to be judicious and not capricious or whimsical. The must consider the existence of an arbitration agreement, the existence of a dispute, and the need to preserve the property. It should prevent the threat to the property. If the nature of the property is likely to be changed, if the property is likely to be transferred, if the subject matter of the dispute is likely to disappear during the pendency of the proceeding, it should exercise the power under Section 9 of the Act. It must examine the conduct of the parties. It must also prevent the multiplicity of litigation. Many a times, the hyper-technical view of the situation may lead to proliferation in litigation. The parties are unnecessarily embroiled in series of litigation. Since the purpose of commercial transaction is not to get caught in the quagmire of litigation, but to implement the commercial project, the must protect the parties from the labyrinth of litigation. The s must encourage economic activities rather than hindering them. Hence, although the exercise of power may be sparingly done, the vision for the exercise of the power has to be vast one. 16. The s must encourage economic activities rather than hindering them. Hence, although the exercise of power may be sparingly done, the vision for the exercise of the power has to be vast one. 16. Since any observation from this may prejudice the cause of the parties, this refrains from commenting about the conduct of the parties. However, a bare perusal of the facts narrated above clearly shows that Mr. Kavadia had entered into a Sale Deed with M/s. Indra Colonizers (P) Ltd., even before the Government had refused its permission for the second parcel of land. In case M/s. Indra Colonizers (P) Ltd., were allowed to raise construction or to change the nature of the land in dispute, or to transfer the said land to a third party, the subject matter of the dispute would disappear. Moreover, it would lead to mushrooming of litigations between the partiesa 50 luxury the judiciary can ill afford to permit. Considering the peculiar facts of the case, the conduct of the parties, the possibilities mentioned above, the learned Judge was, justified in granting a temporary injunction in favour of the respondent. 17. So far as the other contention raised by Mr. Ranjan is concerned that the second agreement is void as land belonging to the Scheduled Tribe person cannot be transferred or sold to a non-scheduled tribe person, this contention too is without force. Such a contention leads to three conclusions; firstly, it shows that Mr. Kavadia was well aware that he was playing fraud on the respondent. s do not come to the rescue of those who play fraud 10 on others. For, to protect those who play fraud would motivate others to repeat the misconduct. s cannot encourage lawlessness. Secondly, even the sale of land to the M/s. Indra Colonizers is nothing short of fraud. After all, if the law prohibits the first set of transaction, it would also prohibit the second transaction with the M/s. Indra Colonizers. Thirdly, Section 42 of 15 the Rajasthan Tenancy Act relates to the sale of land belonging to the scheduled castes/scheduled tribe. However, the matter before the Government was for conversion of land usage. The Government had already granted permission on an earlier occasion for use of land for construction of hotel/tourist complex. Thus, there was no question of land being sold. However, the matter before the Government was for conversion of land usage. The Government had already granted permission on an earlier occasion for use of land for construction of hotel/tourist complex. Thus, there was no question of land being sold. Hence, the bar contained in Section 42 of the Rajasthan Tenancy Act is inapplicable to the present case. 18. The contention of Mr. Ranjan that the arbitrator has no power to pass a decree of specific performance is also without merit. In the case of Olympus Superstructures Pvt. Ltd. v. Meena Vijay Khetan and Oths., (1999) 5 SCC 651 the Apex has held, "Merely because there is need for exercise of discretion in case of specific performance, it cannot be said that only the civil can exercise such a discretion. Disputes relating to specific performance of a contract can be referred to arbitration and Section 34(2)(b)(i) (of the Arbitration and Conciliation Act, 1996) is not attracted". It 30 further held as under : We are of the view that the right to specific performance of an agreement of sale deals with contractual rights and it is certainly open to the parties to agree with a view to shorten litigation in regular s to refer the issues relating to specific performance to arbitration. There is no prohibition in the Specific Relief Act, 1963 that issues relating to specific performance of contract relating to immovable property cannot be referred to arbitration. Nor is there such a prohibition contained in the Arbitration and Conciliation Act, 1996 as contrasted with Section 15 of the English Arbitration Act, 1950 or Section 48(5)(b) of the English Arbitration Act, 1996 which contained a prohibition relating to specific performance of contracts concerning immovable property. 19. Thus, the arbitrator does have the power to decide a specific performance of a contract. 20. The last contention raised by Mr. Ranjan is about the conduct of the respondent. According to him, after the learned Judge granted the interim injunction to the respondent, it has not taken any step for the appointment of the arbitrator. According to Mr. Kalia this is a misstatement of fact. The respondent has already filed an application for the appointment of an arbitrator before this . This has allowed the said application and an arbitrator has been appointed. 21. As far as the contention raised by Mr. According to Mr. Kalia this is a misstatement of fact. The respondent has already filed an application for the appointment of an arbitrator before this . This has allowed the said application and an arbitrator has been appointed. 21. As far as the contention raised by Mr. Agarwal is concerned that M/s. Indra Colonisers (P) Ltd. was not a party to the arbitration agreement, suffice it to say that once they bought the property in dispute from Mr. Kavadia, they stepped into his shoes. Anthony Walton, Russell on the Law of Arbitration clearly states "An arbitration agreement will bind not only the 5 actual parties to it, but also an assignee of a contract containing it." (Stevens & Sons, 1979, Nineteenth Edition, P 69). Thus, Mts. Indra Colonizers would be bound by the arbitration agreement. Moreover, when the learned counsel was asked if his clients were aware of the fact that the land in dispute was earlier sold to the respondent, he frankly conceded that his clients were, indeed, aware of this phenomenon. Thus, under Section 19 of the Specific Relief Act, the M/s. Indra Colonizers are not entitled to any relief. 22. In the result these appeals are devoid of any force. They are, hereby, dismissed.Appeal Dismissed. *******