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2007 DIGILAW 787 (AP)

Gulf Oil Corporation Limited, Kukatpally v. Singareni Collieries Company Limited, Kottagudem, Khammam District

2007-08-20

B.PRAKASH RAO, G.BHAVANI PRASAD

body2007
JUDGMENT: Sri B. Prakash Rao The appellant herein, who is the petitioner in the Court below, by way ofthis appeal under Section 39 of the Arbitration and Conciliation Act, 1996 (forbrevity 'the Act'), seeks to assail the order dated 05.04.2007 in I.A.No.850 of2007 in O.P.No.338 of 2007 on the file of the Court of First Additional DistrictJudge at Khammam, dismissing an interim injunction application purported to befiled under Section 9 (ii) (d) of the Act, where under the appellant sought anad interim injunction restraining the respondents from deducting any amountfrom the running bills of the appellant in respect of purchase order No.KC-60 &ROC.1030, dated 30.06.2006 unilaterally pending disposal of the main O.P. 2. Heard Sri S. Ravi, learned counsel appearing for the appellant and Sri J.Prabhakar, learned counsel appearing for the respondents and at their request,the main appeal itself is taken up for disposal. 3.The appellant herein filed the main application in O.P.No.338 of 2007against the respondents herein with the following reliefs: "a) to direct the respondents, their employees or anybody claiming through the respondents to record the post - excavated measurements in the presence of representatives of both the petitioner and respondents; b) further, the respondents, their employees or anybody claiming through them bedirected not to alter the said measurements unilaterally;c) c) to pass an order of injunction restraining the respondents from deducting anyamounts from the running bills of the petitioner unilaterally in respect ofpurchase orders KC-60 and ROC 1030, dtd.30.06.2006 during the pendency of the main O.P. d) to award costs of this petition; e) to grant any other relief or relieves as the Hon'ble Court may deem fit andproper in the circumstances." 4. The case of the appellant, in brief, is that the appellant is engaged inmanufacture and sale of industrial explosives and accessories and the respondents are M/s Singareni Collieries Company Limited, which is a Government Company, floated a tender for supply of SMS/SME explosives and accessories for removal of over burden by the respondents for the period from 01.07.2007 to30.06.2008. Accordingly, after negotiations, the respondents placed a purchaseorder dated 30.06.2006 for supply of specified quantity of the said explosiveswhich contains certain terms and conditions. Later, there had been furthernegotiations and the appellant started supplying the explosives and therespondents had been making payments. However, later, there had been certain minor differences arose due to the alleged survey volume, which resulted intovaried correspondences between them. Later, there had been furthernegotiations and the appellant started supplying the explosives and therespondents had been making payments. However, later, there had been certain minor differences arose due to the alleged survey volume, which resulted intovaried correspondences between them. According to the appellant, the respondentshave unilaterally and arbitrarily started reducing the power factor on the basisof the said survey. This action on the part of the respondents is beingdisputed by the appellant. Since the contract provides settlement of disputesthrough arbitration as per Clause No.18 of the tender document i.e., Annexure P1, the appellant has initiated the process of arbitration proceedings byaddressing a letter dated 27.03.2007 to the first respondent to refer the matterfor arbitration. However, pending disposal thereof, the appellant has filed thisapplication for protecting the interests and thus, sought the aforesaid reliefsin the main application. The main case was filed on 29.03.2007. Along with thesaid application, the appellant has filed the interim injunction application inI.A.No.850 of 2007 by trying to invoke sub-clause (ii) (d) of Section 9 of theAct and sought ad interim injunction restraining the respondent from making anysuch deductions from the running bills unilaterally. This application wasvirtually filed on the same day of filing the aforesaid application underSection 9 of the Act. According to the appellant, the affidavit, which hasbeen filed in support of this application, reiterates the self-same allegationsand complains that any such action would impire his rights and cause irreparableloss and they would be put to damages and injuries. Therefore, having regard toprima facie case in their favour, they sought for such interim order. 5. Contesting the said application, the respondents herein filed a detailedcounter-affidavit denying about the allegations and specifically pointing outthat no such wrong recoveries are being made from the running bills of theappellant and the exercise of survey is only for arriving at a proper volumecalculations and therefore, there is absolutely no prima facie case and theappellant is not entitled to any indulgence. As evident from the record, therespondents have filed the counter only in this interim application pending themain application. 6. As evident from the record, therespondents have filed the counter only in this interim application pending themain application. 6. The Court below, after hearing the counsel on both the sides and marking thedocuments, which have been filed from both the sides as Exs.A.1 to A.12 onbehalf of the appellant and Exs.B.1 to B.6 on behalf of the respondents, did notfind favour with the appellant and dismissed the application mainly on theground that the main relief is totally different since it only pertains tomeasure the excavation in the presence of the appellant's representative and notto change the measurements whereas the interim relief as now sought is not theone to achieve the main relief but is totally different one whereby theappellant seeks an interim injunction not to deduct any amounts form the runningbills. Therefore, the interim relief as sought for is not in consonance withthe main relief and as such, it cannot be granted. Even otherwise, it has beenobserved that nothing has been placed on behalf of the appellant or any materialin support to show that there is any change or alteration of the actualexcavation measurements. 7. Sri S. Ravi, learned counsel appearing for the appellant strenuously contendedthat having regard to the nature of relief as sought and unless and until suchdeductions are not stopped, the appellant would be put to great loss and for nofault of him, he will be denied of his due entitlement in regard to thesupplies, which have been made. Therefore, the Court below was not right inholding that no such relief would be granted pending the main application. 8. Sri J. Prabhakar, learned counsel for the respondents sought to sustain thefindings of the Court below and the reasons given in support and further statedthat having regard to the very nature of proceedings, the appellant cannot seekany indulgence. 9. Having heard the counsel on both the sides and on perusal of the materialavailable on record, the only point which arises for consideration is as towhether on the facts and circumstances, the appellant is entitled to interimrelief as sought for pending disposal of the main application ? 10. 9. Having heard the counsel on both the sides and on perusal of the materialavailable on record, the only point which arises for consideration is as towhether on the facts and circumstances, the appellant is entitled to interimrelief as sought for pending disposal of the main application ? 10. At the first flash, it is curious to note that there has been a total erroneousapproach from all sides in appreciating or keeping in view the scope and theprinciples as contemplated under the provisions of the Act and especially thevery provision i.e., Section 9 of the Act, which needs to be quoted beforeventuring into the merits and it reads as follows:" Interim measures, etc. by Court - A party may, before, or during arbitralproceedings or at any time after the making of the arbitral award but before itis enforced in accordance with Section 36, apply to a Court – (i) for the appointment of a guardian for a minor or a person of unsound mindfor the purposes of arbitral proceedings; or (ii) for an interim measure of protection in respect of any of the followingmatters, namely:- (a) the preservation, interim custody or sale of any goods which are thesubject-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 isthe subject-matter of the dispute in arbitration, or as to which any questionmay arise therein and authorizing for any of the aforesaid purposes any personto enter upon any land or building in the possession of any party or authorizingany samples to be taken or any observation to be made, or experiment to betried, which may be necessary or expedient for the purpose of obtaining fullinformation or evidence; (d) interim injunction or the appointment of a Receiver; (e) such other interim measure of protection as may appear to the Court to bejust and convenient, and the Court shall have the same power for making orders as it has for thepurpose of, and in relation to, any proceedings before it." 11. From the above, it is quite apparent that the very provision and the procedureas contemplated under the aforesaid Section 9 of the Act is only to provide foran interim measure as the very head note reads. From the above, it is quite apparent that the very provision and the procedureas contemplated under the aforesaid Section 9 of the Act is only to provide foran interim measure as the very head note reads. Though a substantive provisionhas been made in the main Act itself, the remedy as contemplated is not asubstantive one as such either in regard to appointment of an Arbitrator orassailing any awards either way. It only provides for the interim arrangementprotection or any directions, which may warrant on the facts and circumstancesand a party can invoke the said provision to seek any such reliefs as specifiedthere under. Therefore, the relief enshrined there under can safely be put onpar with like a grant of injunction, ad interim injunction or appointment of aReceiver etc., as provided for under the regular procedure in the Code of CivilProcedure. It further reiterates that a party can invoke this provision evenbefore or during the arbitral proceedings or at any time after the award butbefore it is enforced as contemplated there under, the reliefs, which areexclusively intended for, only as an interim measure, include like appointmentof a guardian or any such measure for protection or preservation, custody orsecuring the amounts, detention or inspection including the appointment of aReceiver, and further widens under clause (e) to take any further or widermeasures as may be expedient in the circumstances, which the parties can seek for. Therefore, the relief as provided for or the application, which needs tobe filed under the aforesaid provision is absolutely only an interim one but notan application for any substantive reliefs. In Sundaram Finance Limited V. NEPCIndian Limited1, it has been held that the interim orders under the aforesaidprovision can be passed even before commencement of arbitration and even it neednot be preceded by issuance of notice invoking the arbitration clause.Therefore, the Court has ample power to pass appropriate orders even like adinterim ex parte and also after notice and hearing the respondent, as the factsand circumstances warrant. Therefore, when disputes arise between the partiesand where there is a provision for settlement of disputes by arbitrationproceedings, the parties may have to approach for any such relief andnecessarily it has to be treated only as an interim application and disposed ofaccordingly. 12. Therefore, when disputes arise between the partiesand where there is a provision for settlement of disputes by arbitrationproceedings, the parties may have to approach for any such relief andnecessarily it has to be treated only as an interim application and disposed ofaccordingly. 12. In spite of such clear and categorical letter of the Law under the aforesaidprovision, it is brought to our notice that pending all such applications filedunder Section 9 of the Act, seeking interim reliefs or measures or for anydirections, once again further interim applications are being filed like thepresent one which is appealed against in this appeal, seeking further or variedinterim reliefs by way of injunctions and directions which only amounts toduplication of the very enquiry and adds to the delays in disposal of maininterim application and repetition of the exercise. Such action is not onlypermissible and contemplated under the law but goes far beyond the scope ofprovision and objects intended under Section 9 of the Act. Therefore, it has tobe seen that the very application filed under Section 9 of the Act itself shouldbe treated as an interim application alone and shall accordingly be disposed ofon the same procedure or approach as normally followed. This Court is informedduring the course of arguments that even the main applications filed underSection 9 of the said Act are being kept for quite long time for some or otherreason including due to pendency of such further interlocutory applications andare being treated as a substantive application almost on par like a regular suitor other O.P., touching upon the main lis. However, having regard to the verynature of the proceedings as provided for and as stated above, necessarilywherever such applications are being filed by the parties, the Court should takeup the main application itself and dispose of in the same manner as an interimapplication but not to entertain any interim applications. In this case, no-doubt, the Court below has rejected the present interim application on theground that it is in total variance with the main relief without taking up mainapplications. In this case, no-doubt, the Court below has rejected the present interim application on theground that it is in total variance with the main relief without taking up mainapplications. We refrain from expressing any opinion on merits either way.Instead of entertaining applications of this nature, which may give scope to theparties to go on filing one application after the other pending the mainapplication under Section 9 of the Act, the endeavour should be to take up themain application under Section 9 of the Act and dispose of the same asexpeditiously as possible after appearance of the respondent. Therefore, wehold that having regard to the nature of proceedings as contemplated underSection 9 of the Act, further interim application as has been filed and framedis neither maintainable nor can require to be considered by the Court.However, by taking into consideration the apprehensions expressed across the Barin regard to long pendency and delays in disposal of the applications filedunder Section 9 of the Act, we hold that all such applications shall have anexpeditious disposal as expeditiously as possible, immediately after theappearance of the respondent not later than three months from such appearance ofthe respondent. Such approach would more apt and objectively meets the ends ofjustice. 13. Having regard to the aforesaid reasons and facts and circumstances, we do notfind any merits in the above appeal. The Civil Miscellaneous Appeal isaccordingly dismissed. However, the Court below is directed to take up the mainO.P.No.338 of 2007 itself for an expeditious disposal not later than three (3)months from the date of receipt of a copy of this order. No costs.