Shriram Transport Finance Company Ltd. , represented by its Manager S. Sumesh v. P. R. Sunil
2014-09-19
B.KEMAL PASHA
body2014
DigiLaw.ai
JUDGMENT 1. The short point to be decided is whether the Arbitral Tribunal can pass an interim order of protection within the meaning of Section 17(1) of the Arbitration and Conciliation Act, 1996(for short 'The Act'). 2. By hypothecating a vehicle, the first respondent herein availed a vehicle loan from the revision petitioner, finance company. It seems that he had defaulted instalments of repayment and consequently, on the basis of the arbitration clause in the agreement, an Arbitrator was appointed. The Arbitrator has passed an order by invoking the powers under Section 17(1) of the Act and directed the first respondent to surrender the vehicle to the revision petitioner. The assistance of the police is also seen ordered by the Arbitrator for getting that order executed. The said order was challenged by the first respondent herein as appellant before the District Court, Kottayam through CMA 11 of 2011. The learned Additional District Judge by placing reliance on the decision of the Apex Court in M.D.Army W.H.O. v. Sumangal Services Pvt. Ltd. - AIR 2004 SC 1344 , held that the Arbitral Tribunal has no power to pass an order under Section 17, in the absence of any specific agreement in relation thereto, and the learned Additional District Judge has set aside the said order, against which, the present CRP has been filed. 3. Heard the learned counsel for the petitioner Sri.C. Harikumar and the learned counsel for the first respondent Sri.P.C. Haridas. The learned counsel for the petitioner has pointed out that the Arbitrator has power to pass such an interim order of protection as per Section 17(1) of the Act. The learned counsel for the 1st respondent, by relying on the decision noted supra has canvassed an argument that Arbitrator has no power to order such an award in the absence of a specific agreement between the parties to that effect. 4. It seems that the decision in M.D.Army(supra) was rendered in a matter which comes under the Arbitration Act, 1940, based on the proviso to Section 41(b) of the Arbitration Act of 1940. Section 41(b) of the Arbitration Act of 1940 is not at all pari materia with Section 17(2) of the present Act.
4. It seems that the decision in M.D.Army(supra) was rendered in a matter which comes under the Arbitration Act, 1940, based on the proviso to Section 41(b) of the Arbitration Act of 1940. Section 41(b) of the Arbitration Act of 1940 is not at all pari materia with Section 17(2) of the present Act. As per Section 17(1) of the present Act, in the absence of any agreement to the contrary between the parties, the Arbitrator may, at the request of a party, order a party to take any interim measure of protection. Through the said provision, the Arbitrator can pass an order of interim measure of protection. At the same time, such an order should be one directing a party to the proceedings to take any interim measure of protection. It seems that the Arbitrator can direct the defaulter, who is a party to the proceedings, to take an interim measure of protection by producing the vehicle. Therefore, the said power only confines to the giving of such a direction to any of the parties to take an interim measure of protection and it does not extend to the passing of an order directing police assistance to somebody to trace out vehicles hypothecated etc. Section 17(1) does not confer such interim powers to the Arbitrator. The Arbitrator cannot be regarded as a court of law. Apart from ordering a party to take an interim measure of protection, the Arbitrator cannot pass any further orders. The Arbitrator cannot execute such an order. Therefore, there is nothing wrong on the part of the Arbitrator in passing an order directing the first respondent herein to surrender the vehicle to the petitioner herein by way of an interim measure of protection. Matters being so, the interim order passed by the Arbitrator can be modified and limited to an order directing the first respondent to surrender the vehicle to the petitioner. 5. In the result, this CRP is allowed in part, by upholding that part of the order passed by the Arbitrator which directs the 1st respondent to surrender the vehicle to the petitioner herein. The rest of the order is without jurisdiction and therefore, the same is set aside.
5. In the result, this CRP is allowed in part, by upholding that part of the order passed by the Arbitrator which directs the 1st respondent to surrender the vehicle to the petitioner herein. The rest of the order is without jurisdiction and therefore, the same is set aside. It is made clear that the Arbitrator has no power to execute an order and therefore, he has no power to direct the police to provide assistance to any of the parties, or any other person to get the order implemented.