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Karnataka High Court · body

2018 DIGILAW 219 (KAR)

Radiant Info Systems Limited, Represented by its Authorised Signatory Mallikarjun Prasad v. Karnataka State Road Transport Corporation, Represented By Its Managing Director

2018-02-16

VINEET KOTHARI

body2018
JUDGMENT : 1. The present appeal has been filed by the appellant - Radiant Info Systems Ltd., against the Respondent-KSRTC aggrieved by the order dated 30.06.2016 passed by the learned Court below under Section 9 of the Arbitration and Conciliation Act, 1996 in A.A.No.25006/2016 (Radiant Info Systems Ltd., vs. KSRTC), by which, the learned Court below rejected the application of the appellant under Section 9 of the Act for interim relief. 2. The operative portion of the impugned order dated 30.06.2016 is quoted below for ready reference:- 29. The agreement between the parties is relating to the booking of the tickets by the public online. The relationship between the parties to the agreement is strained. Therefore, if the parties are directed to act as per the agreement, there are chances and possibilities of one party complaining against the other that the other party is not performing its part of the contract. This would affect the working of the online Passenger Reservation System and ultimately affect the image of the Respondent. This is also a ground in the opinion of this Court to refuse the grant of interim relief to the applicant. 30. It is a well established principle of law that a person seeking the relief has to approach the court at the earliest point of time. This court has to agree with the submission of the learned counsel for the respondent that the applicant has not approached the Court immediately after the issue of termination notice. But, the applicant has waited till the fresh tenders are called, the bids are opened and the bids are accepted. The granting of relief in favour of the applicant would have been considered, if it had approached the court at least after the fresh tender is called. But, the applicant has participated in the Tender. The applicant has approached at the fag end, when the 6 months after the issue of termination notice are about to expire. If an order of injunction as prayed by the applicant is passed, it would affect the interest of the successful bidder M/s. Abhibus. 31. The counsels for both the parties have relied on various other rulings. The said rulings are not applicable and not relevant to consider the application on hand and are relevant to determine the validity of the agreement and its termination which this court cannot look into in this application. 32. 31. The counsels for both the parties have relied on various other rulings. The said rulings are not applicable and not relevant to consider the application on hand and are relevant to determine the validity of the agreement and its termination which this court cannot look into in this application. 32. For the above reasons this Court is of the opinion that the Balance of convenience is not in favour the applicant but is in favour of the Respondent in refusing the interim relief and no irreparable injury would be caused to the applicant if an interim relief as prayed by it is not granted. Hence these points are answered in the Negative. 33. Point No.5: Considering the relationship between the parties, the dispute involved, and as it is held by this court that the applicant has made out the prima facie case the parties must be directed to bear their respective costs. 34. In the result, this Court proceeds to pass the following: ORDER The Application filed by the Applicant Under Section 9 of the Arbitration and Conciliation Act 1996 is dismissed with no order as to costs. Sd/- (J.R. Mendonca) XXVIII Addl. City Civil Judge Mayohall, Bangalore". 3. The learned counsel for the appellant Mr.K.Arun Kumar submitted that the facts of the case required an interim relief to be granted in favour of the appellant because Online Ticket booking software developed by the appellant was made operational for the Respondent-KSRTC under the Agreement only with effect from 31.03.2013 for a tenure of 5 years and would have continued up to 31.03.2018, but the said Agreement was illegal and prematurely terminated by the Respondent-KSRTC in July, 2016, which caused serious prejudice and great monetary loss to the appellant and therefore, by way of interim relief, the appellant had approached the learned Court below for continuing the operation of the said Agreement between the parties while the Arbitral proceedings could be initiated and commenced a while later. The learned counsel for the appellant further submitted that during the pendency of the present appeal, this Court in C.M.P.No.236/2016 (Radiant Infosystems Ltd., vs. KSRTC) has appointed a Former Judge of this Court namely, Hon'ble Mr. Justice Mohammad Anwar to act as an Arbitrator in the said matter on 02.08.2017 and the arbitral proceedings have since commenced in the matter. The learned counsel for the appellant further submitted that during the pendency of the present appeal, this Court in C.M.P.No.236/2016 (Radiant Infosystems Ltd., vs. KSRTC) has appointed a Former Judge of this Court namely, Hon'ble Mr. Justice Mohammad Anwar to act as an Arbitrator in the said matter on 02.08.2017 and the arbitral proceedings have since commenced in the matter. He however submitted that the present appeal for grant of Interim Relief against the impugned order of the learned Court below is maintainable even now and therefore, the same deserves to be considered on merits. 4. On the other hand, learned counsel for the Respondent Mr.P.Dhananjaya has urged before the Court that since the Arbitration proceedings have commenced now with the appointment of an Arbitrator in the aforesaid C.M.P.No.236/2016, the appellant-company can very well approach the learned Arbitrator himself even for Interim Relief under Section 17 of the Act and this Court need not decide the present appeal on merits as far as the question of interim relief is concerned. He however submitted that the contract of Online booking of tickets has been given to the third party long back. 5. Having heard the learned counsels for the parties, this Court is of the opinion that Section 17 of the Act of 1996 quoted below, enables the parties to the Arbitral proceedings to approach the learned Arbitrator for interim relief. Section 17 of the Arbitration and Conciliation Act, 1996, is quoted below for ready reference:- "17. 5. Having heard the learned counsels for the parties, this Court is of the opinion that Section 17 of the Act of 1996 quoted below, enables the parties to the Arbitral proceedings to approach the learned Arbitrator for interim relief. Section 17 of the Arbitration and Conciliation Act, 1996, is quoted below for ready reference:- "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 authorizing for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorizing 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 measures 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. 6. 6. The present appeal under Section 37 of the Act if considered on merits at this stage, is not only likely to interfere with the discretion of the learned Arbitrator under Section 17 of the Act, but will also require this Court to go into the details and merits of the case itself, as to in what circumstances, the contract in question came to be terminated and whether the appellant is entitled to such interim relief at this stage. The same may affect the main arbitral proceedings as well. 7. Therefore, this Court is of the opinion that the present appeal under Section 37 of the Act need not be decided on merits, because the scope of Section 9 of the Act is limited to the extent of grant of interim measures or interim relief only. The main proceedings namely, Arbitration proceedings are admittedly now commenced with the appointment of an Arbitrator by this Court in C.M.P.No.236/2016 on 02.08.2017 by appointing a Former Judge of this Court namely, Hon'ble Mr. Justice Mohammad Anwar. 8. Since the learned Arbitrator is now seized of the matter, it is considered appropriate that the appellant should approach the said Arbitrator only for interim relief, if any, under Section 17 of the Act quoted above. In case, such a petition under Section 17 of the Act is filed before the learned Arbitrator, it is needless to add that the learned Arbitrator is expected to decide the same in accordance with law, uninfluenced by the observations made by the learned Court below in the impugned order. 9. Therefore, with the aforesaid observations, the present appeal under Section 37 of the Act is disposed of with a liberty and direction to the parties to approach the learned Arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996. No costs.