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Uttarakhand High Court · body

2009 DIGILAW 378 (UTT)

INDIAN OIL CORPORATION v. DEVKI OILS

2009-07-21

V.K.GUPTA

body2009
Judgment These three Appeals are being disposed of by this common judgment. 2. The respondents/plaintiffs, in all the three Appeals, are the dealers/distributors of the appellant with respect to procurement, storage, distribution and sale of Kerosene Oil and Super Kerosene Oil. Certain disputes with respect to the location for shifting of the distribution points arose between the parties, which led the respondents/plaintiffs to file their separate individual suits in the learned Trial Court. The learned Trial Court received and entertained the suits, and in the accompanying applications filed under Order 39 Rules 1 & 2 C.P.C., granted ad interim injunction against the appellant and in favour of the respondents/plaintiffs. The appellant filed Written Statements also in the three suits in which a specific plea was taken that the Civil Court did not have jurisdiction to entertain the civil suits in view of the fact that there was, in existence between the parties, an arbitration agreement which required that all disputes and differences as well as questions between the parties would be adjudicated upon and resolved through arbitration. Having regard to such a preliminary objection in the Written and resolved through arbitration. Having regard to such a preliminary objection in the Written Statements, the learned Trial Court framed the following issue for consideration and adjudication. “Whether the suit of plaintiff is barred by the provisions of Arbitration and Conciliation Act? If so, its effect?” 3. After hearing the parties, the learned Trial Court vide the impugned order held as under: “Hence, as per agreement, the dispute between the parties needs to be referred to the contention of defendants is acceptable, because the provisions of the Act clearly show that when there is any arbitration clause in the contract between the parties, then the dispute arising out of the contract shall be heard by arbitrator and Civil Court will have no jurisdiction.” 4. Finally, while disposing of the Suit, based upon its finding on Issue No.1, the learned court below held as under: “Accordingly, this Preliminary Issue is decided in the positive in favour of defendants and it is hereby held that this Court has no jurisdiction to hear the dispute between the parties and defendants are directed to refer the matter to the arbitrator within a period of one month.” 5. Having decided Issue No. 1 in the aforesaid manner and having disposed of the Suit as indicated herein above by clearly holding that the existence of the arbitration agreement between the parties gave rise to a situation where the disputes had to be settled through arbitration, as regards the question relating to the grant of temporary injunction and its continuance etc., the learned court below in the course of the impugned order held as under: “As regards the temporary injunction already granted, there is no dispute about the position that this is a matter within the purview of Civil Court now at this stage and the order about temporary injunction of this Court will remain in force till the matter is finally decided by the arbitrator. In these circumstances, it is also necessary that the defendants be also directed to refer the matter to arbitrator as per agreement clause immediately who will decide the dispute between the parties as per agreement and the provisions of Arbitration and Conciliation Act.” 6. There is absolutely no doubt in my mind and I have no hesitation in saying so that the learned court below patently erred in assuming jurisdiction about the grant of temporary injunction as well as its continuance. 7. Section 5 of the Arbitration and Conciliation Act, 1996 (‘1996 Act’ for short) completely and totally bars the jurisdiction of every judicial authority, which means and includes a civil court, with respect to any matter which is the subject matter of an arbitration agreement. Section 5 reads thus: “5. Extent of judicial intervention. – Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.” 8. If a person, who is a party to an arbitration agreement, despite the bar contained in Section 5 (supra), files a suit in a civil court with respect to the subject matter which also is the subject matter of an arbitration agreement, Section 8 immediately comes into play which mandates a civil court to immediately stop the proceedings in the suit and refer the parties to arbitration. Section 8 reads thus: “8. Power to refer parties to arbitration where there is an arbitration agreement. Section 8 reads thus: “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.” 9. Even though in the present case the learned District Judge did not proceed any further in the matter and indeed referred the parties to arbitration, he, by gross misinterpretation of the provisions of 1996 Act and patently falling into an error of law, held that the issue relating to the grant of temporary injunction was within the purview of civil court and accordingly directed that the temporary injunction shall remain in force till the matter is finally decided by the arbitrator. This, to say the least, was assumption of a jurisdiction which did not at all vest in the civil court. The jurisdiction of the civil court was completely ousted by a plain reading of Section 5 of 1996 Act. 10. Yes, the court, as defined in Section 2(e) of 1996 Act, has jurisdiction and power to grant interim measures with respect to a matter covered by an arbitration agreement and this power flows from Section 9 of 1996 Act. The types of interim measures to be granted under Section 9 have been specifically spelt out in clauses (i) and (ii) of Section 9. Exercise of a power under Section 9, within its specified parameters while receiving and entertaining an application under Section 9, is distinct and totally different than the exercise of the power to grant temporary injunction in a civil suit by invoking jurisdiction under Order 39 Rules 1 & 2 C.P.C. Both are different as well as distinct and operate in different fields. Whereas the exercise of temporary injunction jurisdiction under Order 39 Rules 1 & 2 CPC in a civil suit is practically unlimited as well as untrammeled, the exercise of a power under Section 9 of 1996 Act, because of specific jurisdiction vested in the court, is limited as well as guided by sub-clauses (a) to (e) of clause (ii) of Section 9. A court exercising jurisdiction under Section 9 is not permitted to traverse beyond what has been spelt out in clause (i) and (ii) of Section 9. On the other hand, a court exercising jurisdiction under Order 39 Rules 1 & 2 C.P.C. in a suit is not inhibited, limited or restricted in the exercise of such a power. 11. For the reasons which have been indicated herein above, the learned court below patently got miscarried in holding that the civil court has the jurisdiction to initially grant temporary injunction and, then, to continue it and keep it in force until the matter is finally decided by the arbitrator. As indicated herein above, this was in patent violation of the aforesaid specific legal provisions. 12. The Appeals are allowed. The impugned orders are set aside with all the consequences. 13. This Court has set aside the impugned orders only on the ground that the learned civil court did not have jurisdiction to either grant any ad interim injunction initially or to continue with it after holding that indeed there was in existence an arbitration agreement between the parties. This brings me to Section 17 of 1996 Act, which confers jurisdiction upon an arbitrator to grant interim measures of protection as the arbitrator may consider necessary with respect to the subject matter of the dispute pending before him for adjudication through arbitration. Upon, thus, making a reference to Section 17 (supra), I leave it to the parties to approach the learned Arbitrator (already appointed) in terms of Section 17 (supra) for obtaining such interim measures as may be available to the parties upon taking recourse to Section 17 (supra). If the parties, indeed, take recourse to this provision of law, I leave it to the learned Arbitrator to exercise his jurisdiction under Section 17 (supra) on the merits of the case and strictly in accordance with the established principles of law with respect to the grant of temporary measurers. 14. All the three Appeals are allowed. If the parties, indeed, take recourse to this provision of law, I leave it to the learned Arbitrator to exercise his jurisdiction under Section 17 (supra) on the merits of the case and strictly in accordance with the established principles of law with respect to the grant of temporary measurers. 14. All the three Appeals are allowed. No order as to costs.