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2016 DIGILAW 414 (CAL)

Bishnu Kumar Yadav v. M. L. Soni & Sons

2016-05-12

INDIRA BANERJEE, SAHIDULLAH MUNSHI

body2016
JUDGMENT : This appeal is against an Order passed by the learned Judge, VIIIth Bench, City Civil Court at Calcutta in an application for interim relief filed by the respondent financier under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "1996 Act"). 2. By the order impugned, the learned Court has appointed a Receiver for the purpose of taking over possession of a vehicle bearing Registration No. WB 23B 6532 with Engine No. 80K62716108 and Chassis No. 426031KRZ223212 observing that a huge amount of money was payable by the appellant to the respondent financier. 3. The vehicle in question was financed by the respondent financier and remained hypothecated and/or charged with the respondent financier. Mr. Pradeep Kumar, learned Counsel appearing on behalf of the appellant challenged the impugned order on the ground that the application under Section 9 of the 1996 Act ought not to have been entertained in view of the amendments to Sections 9 and 17 of the 1996 Act, by the Arbitration and Conciliation (Amendment) Act, 2015. 4. The provisions of Sections 9 and 17 of the 1996 Act as amended by the Arbitration and Conciliation (Amendment) Act, 2015 with effect from 23rd October, 2015 are set out herein below for convenience : "9. Interim measures etc. 4. The provisions of Sections 9 and 17 of the 1996 Act as amended by the Arbitration and Conciliation (Amendment) Act, 2015 with effect from 23rd October, 2015 are set out herein below for convenience : "9. Interim measures etc. by Court.- (1) A party may, before, or during arbitral proceeding or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court- (i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure of 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 Court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it. (2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine. (3) Once the arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1), unless the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious." "17. (3) Once the arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1), unless the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious." "17. Interim measures ordered by arbitral tribunal.- (1) A party may, during the 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 the arbitral tribunal- (i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure of 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 arbitral tribunal to be just and convenient, and the arbitral tribunal shall have the same power for making orders, as the court has for the purpose of, and in relation to, any proceedings before it. (2) Subject to any orders passed in an appeal under section 37, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were an order of the Court." 5. As rightly argued by Mr. Pradeep Kumar the learned Arbitral Tribunal has by the Amendment Act, 2015 been conferred with identical powers as the Court under Section 9 to grant interim relief. Mr. As rightly argued by Mr. Pradeep Kumar the learned Arbitral Tribunal has by the Amendment Act, 2015 been conferred with identical powers as the Court under Section 9 to grant interim relief. Mr. Pradeep Kumar argued that in view of sub-section (3) of Section 9 of the 1996 Act as amended the Court ought not to have entertained the application under Section 9. Sub-section 3 of Section 9 quoted above provides that once an arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1) of Section 9 unless the Court finds that circumstances exist which may not render the remedy provided under Section 17 efficacious. 6. The jurisdiction of Court to grant interim relief does not automatically get barred once the arbitral tribunal is constituted. However, the Court would not ordinarily entertain an application. The Court might however entertain an application if circumstances exist which may not render the remedy provided under Section 17 efficacious. 7. Mr. Pradeep Kumar also emphasised on the opening words of Section 17 which reads "A party may, during the 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 the arbitral tribunal" for interim relief. 8. In the application being C.A.N. 2529 of 2016 for stay of the order under appeal, it is pleaded that in course of hearing of the aforesaid application, the appellant came to know for the first time, that the learned Arbitrator appointed at the instance of the respondent, had made and published an award dated 23rd July, 2015. However, no copy of the award had been served upon the petitioner. 9. An application for setting aside of the said purported award dated 23rd July, 2015 under Section 34 of the Arbitration and Conciliation Act, 1996 has been filed by the petitioner and the same is pending for disposal. A copy of the said application filed under Section 34 of the Arbitration and Conciliation Act, 1996 is annexed to the stay application. 10. Section 32 of the 1996 Act provides that the arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2). A copy of the said application filed under Section 34 of the Arbitration and Conciliation Act, 1996 is annexed to the stay application. 10. Section 32 of the 1996 Act provides that the arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2). Sub-section (2) of Section 32 provides for issuance of an order for the termination of the arbitral proceedings, where the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute or where the parties agree on the termination of the proceedings, or where the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible. Sub-section (3) provides that subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings. 11. In this context, reference may be made to Section 33 of the 1996 Act which is set out herein below for convenience : "33. Correction and interpretation of award; additional award.- (1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties- (a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award; (b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award. (2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award. (3) The arbitral tribunal may correct any error of the type referred to in clause (a) or sub-section (1), on its own initiative, within thirty days from the date of the arbitral award. (3) The arbitral tribunal may correct any error of the type referred to in clause (a) or sub-section (1), on its own initiative, within thirty days from the date of the arbitral award. (4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award. (5) If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make the additional arbitral award within sixty days from the receipt of such request. (6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, give an interpretation or make an additional arbitral award under sub-section (2) or sub-section (5). (7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral award made under this section. 12. Reference may also be made to sub-section (4) of Section 34 of the 1996 Act which provides that on receipt of an application under sub-section (1), the Court might, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order, to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action, as in the opinion of arbitral tribunal, will eliminate the grounds for setting aside the arbitral award. 13. From the aforesaid provisions it is patently clear that once a final award is pronounced the mandate of the arbitrator terminates unless the circumstances specified in Section 33 or Section 34(4) exist. 14. An arbitral award has been defined in Section 2 sub-section (c) of the 1996 Act to include an interim award. After an interim award, which is also an award within the meaning of Section 2(c), is made an application for interim relief would necessarily have to be made before the learned tribunal under the amended provision of Section 17. Similarly, if after the pronouncement of the final award there was an application to the arbitrator under Section 33 or an order of court in terms of Section 34 sub-section (4) an application for interim relief would have to be made before the learned arbitrator. Similarly, if after the pronouncement of the final award there was an application to the arbitrator under Section 33 or an order of court in terms of Section 34 sub-section (4) an application for interim relief would have to be made before the learned arbitrator. 15. However, where the mandate of the learned arbitrator has terminated with pronouncement of the final award and there is no application under Section 33 and no order of court under Section 34(4,) there can be no question of making application for interim relief before the arbitral tribunal, the reason being that the arbitral tribunal has ceased to function since its mandate has terminated. 16. Even otherwise the learned court might entertain an application for interim relief after the constitution of a tribunal if the court finds that circumstances exist which might not render the remedy provided under Section 17 efficacious. 17. In view of the uncertainty as to whether the arbitral tribunal can at all be said to be functional and/or whether the mandate of the arbitral tribunal stands terminated, the learned court was justified in entertaining the application under Section 9. May be reasons should have been given by the learned Court below. However, a party obtaining an order in its favour is not to suffer only by reason of the failure of the Court to give reasons if the order is otherwise sustainable in law. We find no infirmity with the decision to grant interim relief. 18. For the reasons discussed above, the appeal along with the connected application is dismissed. All other questions are kept open. 19. Urgent certified photostat copy of this order, if applied for, be supplied to the learned Advocates appearing for the parties, subject to compliance with all requisite formalities. Appeal dismissed.