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2013 DIGILAW 1695 (PNJ)

Shivraj Singh v. Talwandi Sabo Power Ltd.

2013-12-16

K.KANNAN

body2013
JUDGMENT Mr. K. Kannan, J. (Oral) - The appeal is against the order passed by the court below in a petition under Section 9 of the Arbitration and Conciliation Act, vacating the interim order already passed. The interim order was a restraint against further assignment of the work and for preservation of the work at the site in the manner that it was at the time of cancellation of the contract. Along with the main petition, there was a prayer for appointment of a Local Commissioner to inspect the properties, measure the work completed and for taking inventory of the work done, stock and the machinery which were lying at the work site. The court passed an order on 1.3.2013 staying further work to be undertaken by any other third party and passed a subsequent order on 10.4.2013 to have the work measured with the help of SDO (PWD), Mansa as the Local Commissioner. After this order, the court has passed the impugned order vacating the interim stay granted. 2. The grievance expressed by the appellant is that after vacating the order that was already passed on 1.3.2013 the court has literally annulled its order passed on 10.4.2013 appointing a Local Commissioner and for preparation of a report after inspection. 3. Learned Senior Counsel appearing for the appellant would argue that when the order was passed on 10.4.2013, the court was literally disposing of section 9 petition substantially and there was nothing more to be done than taking the report on file and that would have concluded the issue for preservation of property and would have allowed the parties to move ahead for resolution of the dispute through an arbitral process. Learned Senior Counsel appearing for the respondent would contend that for all the works done already, the appellant has already submitted its bill which gives an exact idea of the actual work done and when it was pointed out before the court that the work could not be stopped and the appellant has actually abandoned the site without completing the work assigned, the court was justified in vacating the order and if its effect was that the Local Commissioner was not any longer required to be assessing the work, it was a natural consequence to the imperative for vacating the an interim order passed on 1.3.2013. Learned Senior Counsel appearing for the respondent also states that the value of the work was over 20 crores and it involved some developmental works to take place and they were all hampered by the interim order already passed and, therefore, when they moved an application for vacating the stay, the court passed the impugned order on consideration of all the relevant facts. He brings it to my attention that the Local Commissioner appointed by court below gave a report that he himself was not sufficiently equipped to give report on the work already completed or to carry out the measurements and in the existing situation when the order already passed could not be properly given effect by the inability of the Commissioner, and that only some other qualified person from the Irrigation Department could alone complete the job, the court could not have allowed for the continuation of the interim injunction to operate. 4. From the time when the petition was filed and an interim order was granted on 1.3.2013 to the present when the appeal is being taken up, there have been some changes of circumstances which are also required to be recorded; one, the inspection by the Local Commissioner has not yielded any result so far; two, by vacating the order, the work has been entrusted to another contractor and the works have been continued through contractor and the Senior Counsel appearing on behalf of the respondent would state that it is near completion. 5. There are claims and counter-claims made by the respective parties about the quantum of work completed and it cannot be now decided as to who has larger claim to sustain against other and whether the machinery and the other equipments alleged to be at the work site could be ordered to be removed for the benefit of the petitioner or not. There is even a dispute of what really constitute the movable assets at the site and there is a substantial variance in the list given by the appellant and the list given by the respondent. 6. One part of the relief under Section 9 has really been rendered unworkable now, namely the relief of injunction restraining the respondent from entrusting the work to any other contractor or to carry out the work. 6. One part of the relief under Section 9 has really been rendered unworkable now, namely the relief of injunction restraining the respondent from entrusting the work to any other contractor or to carry out the work. Indeed it will also be inexigent to put any developmental work on hold only to assess the claim for damages. I would, therefore, find that if the substantial relief of injunction of what is possible under Section 9 has now been literally rendered infrcutuous, the only other prayer which would obtain relevance will be a prayer for appointment of a Local Commissioner and to measure the actual work done. If there are separate segments of work which can be divided and work already done could be identified then the purpose of appointment of a Local Commissioner to assess the work already done would obtain relevance. This again would have a meaning in a situation where new contractor had not entered the site and the work completed was at the time when the appellant’s contract was terminated and when no new work had been undertaken. If it has gone past the stage, even the assessment of work already done would not be possible through personal inspection and it could be best inferred only on the statement already furnished by the appellant. The documents submitted for work completed status would themselves obtain relevance. I would, therefore, think even the prayer which was originally asked and which was acceded to by the court in its earlier order dated 10.4.2013 appointing a Local Commissioner to measure the works does not have any value at this time. 7. There are still some machinery which are said to be lying at the site which is refuted by the respondent. The appellant would also state that there are several movables and raw-materials lying there which belong to the appellant. The respondent would counter this assertion by submitting that the appellant had drawn advances for the purchase of some materials/equipments and all of them have been used up and they would be referable only to the credits availed to the appellant by the respondent. The respondent would counter this assertion by submitting that the appellant had drawn advances for the purchase of some materials/equipments and all of them have been used up and they would be referable only to the credits availed to the appellant by the respondent. Whatever benefit that it will obtain, if there are identifiable materials at the spot and the appellant could bring a co-relation of all the materials lying at the site with documents in his possession to claim ownership, the best evidence of what could be picked up at the site need not be lost. I will now, therefore, modify the scope of the Commission, which was already issued for a Local Commissioner, who was appointed already to inspect the site and take up such material/machinery/stock as were identified by the appellant as belonging to him and will make no adjudication but will secure copies of the documents from the respective parties to help the court assess the respective claims of what the parties are asserting as their own. This is only to facilitate what Section 9 contemplates. Section 9 that allows a court to pass interim measures of protection and issue appropriate direction even for interim custody of the goods, which are the subject matter of the arbitral agreement. The materials which could not be used or the material which are claimed by the appellant who has not now the privilege to continue his work need not languish to gather dust or to be rusted. If the report is given the court may proceed to carry through to the next stage of disposal of Section 9 petition, which is admittedly pending before the court below. If the report of a Local Commissioner had been given, it could have helped the court to dispose of the application but if the Commissioner has reported his inability to complete the work and the original order of stay granted on 1.3.2013 had been vacated subsequently on 10.4.2013, it cannot mean that section 9 petition itself has been substantially disposed of. The order vacating it still keeps a certain area of consideration which would be to preserve such materials which are capable of being preserved for the benefit of any of the parties. 8. The order vacating it still keeps a certain area of consideration which would be to preserve such materials which are capable of being preserved for the benefit of any of the parties. 8. Learned Senior counsel appearing for the respondent would submit that the appellant himself has not taken any steps for arbitration though Section 9 is essentially interim in character for adjudication before or during arbitral award. The arbitrator has also a power under Section 17 to pass an interim measures to be undertaken. It appears that the respondent has taken steps to have an arbitrator appointed by an application filed under Section 11 (6) of the Arbitration and Conciliation Act and the same is reported to be pending before the first court. Learned counsel appearing for the appellant himself undertakes to take notice of the same and I will take that as a circumstance that it will head towards the appointment of an arbitrator who will be competent to make such further protective orders as it would be necessary. 9. Since the power under section 9 exists even during the pendency of the proceedings before the arbitrator, the court will not abdicate its duty to assign any work to the arbitrator or to refer to the arbitrator of any duty which the court itself is bound to exercise. I will not, therefore, leave the request of the appellant for interim protection as having become otiose. The protection would become relevant to the extent that is possible by appointment of a Local Commissioner that has already been made. As I have observed, the scope of the Commission will now stand restricted only for inventory of the material/machinery/stock and identification of the material which are claimed by the appellant, which have been lying at the site. It will be open to the appellant to apply to the court for custody of the material, if prima facie ownership is shown, the court will be competent to pass appropriate direction, however, it will secure the interest of the respondent as well in having to secure what is claimed by the respondent that it has right to claim several crores of rupees from the appellant. This is only to assure that the person who takes the custody still does not render the scope of final adjudication illusory and makes it possible for any successful party to claim against the other, which is relevant for the award that may be passed by the arbitrator in the ultimate process. 10. The order vacating the injunction is not interfered and it is confirmed. The order appointing the Commission on 10.4.2013, although not directly matter brought in appeal, will now be understood and applied in the light of the direction given above. The revision petition is disposed of in the above terms. ------------------