Shriram Transport Finance Co. Ltd v. Saneesha M. S. , W/o Vishnudas
2024-09-03
A.MUHAMED MUSTAQUE, S.MANU
body2024
DigiLaw.ai
JUDGMENT : A. Muhamed Mustaque, Acg.C.J. This appeal is filed by M/S. Shriram Transport Finance Co.Ltd. They raised a dispute against Sooraj P.C and Beena Chidambaran before the arbitrator. Adv.Sheen Jose has been appointed as arbitrator. Arbitrator passed an interim order invoking Section 17 of the Arbitration and Conciliation (Amendment) Act 2015. By that order, a property comprised in Sy.No.152/4-7-2 in Kottuvally Village, Paravur Taluk has been attached. In the order itself, the arbitral tribunal has given the intimation of attachment to the Sub Registrar, Paravur and Village Officer etc. Consequent upon attachment being recorded by the Sub Registrar and Village Officer, the writ petitioner- Saneesha M S, who claims to be the owner of the property, has approached this Court challenging the interim order passed by the arbitral tribunal invoking Article 226 of the Constitution of India. 2. The learned Single Judge, who heard the matter, had allowed the challenge. The learned Single Judge, noting that the property attached does not belong to the debtors, who were before the arbitral tribunal, but belonged to the writ petitioner-Saneesha M S, had ordered that the award cannot be sustained against the real owner. This is questioned before this Court in an intra-court appeal. 3. The learned counsel for the appellant submits that no challenge can be sustained against the interim order passed under the Arbitration and Conciliation Act invoking Article 226 of the Constitution of India and the remedy lies before the Civil Court under Section 37 of the Arbitration and Conciliation Act. 4. The learned counsel for the respondents submits that since an order has been passed without impleading the writ petitioner-Saneesha M S, she is precluded from raising a challenge against the order invoking Section 37 of the Arbitration and Conciliation Act and since no other remedy is available under law, the writ petition is maintainable. 5. We are now called upon to decide a peculiar issue on intersection of private law and public law remedy. 6. Section 17 of the Arbitration and Conciliation Act confers power on arbitral tribunal to issue interim measures. Sub Section 2 of Section 17 of the Arbitration and Conciliation Act states that such an order issued by the arbitral tribunal shall deem to be an order of the court for all practical purposes and further states that it shall be enforcible under the Code of Civil Procedure.
Sub Section 2 of Section 17 of the Arbitration and Conciliation Act states that such an order issued by the arbitral tribunal shall deem to be an order of the court for all practical purposes and further states that it shall be enforcible under the Code of Civil Procedure. This power is akin to power conferred on civil court under Section 9 of the Arbitration and Conciliation Act, where a civil court is also competent to issue interim measures before or during the arbitral proceedings at any time before the enforcement of the award in accordance with Section 36 of the Arbitration and Conciliation Act. 7. What is the remedy available to the third party to challenge an order of the arbitral tribunal is the question that foremost arises for consideration. It may not be proper for us to conclude now that the remedy lies under Section 37 of the Arbitration and Conciliation act, as we are now dealing with the issue arising out of a challenge under Article 226 of the Constitution of India. Whether a challenge can be made under Section 37 of the Arbitration and Conciliation Act or not is a matter to be decided in appropriate forum. We leave open that question. We are certainly sure that Article 226 of the Constitution of India is not a remedy to challenge an interim measure ordered under Section 17 of the Arbitration and Conciliation Act. The arbitral tribunal, though has to follow the statutory provisions, cannot be considered as State within Article 12 of the Constitution of India nor the award can be subjected to judicial review bypassing statutory remedy. However, there is a limited scope to interfere with such an order if such a tribunal under the guise of the statutory power, acting under the statutory provisions to issue interim measures encroaching upon the fundamental rights of the citizen. A Single Judge of this Court, (one among us, Justice A. Muhamed Mustaque), in Pradeep K.N v. Station House Officer and Another [ 2016 (2) KHC 714 ] (W.P. (C) No.38725 of 2015) observed in paragraph 4 and 20 as follows: 4.
A Single Judge of this Court, (one among us, Justice A. Muhamed Mustaque), in Pradeep K.N v. Station House Officer and Another [ 2016 (2) KHC 714 ] (W.P. (C) No.38725 of 2015) observed in paragraph 4 and 20 as follows: 4. The jurisdiction of this Court invoking power of Article 226 of the Constitution cannot be used directly to interfere with the interim order or award as the Arbitral Tribunal cannot be considered as a State within the meaning of Article 12 of the Constitution nor the award can be subjected to a judicial review. Further, the Arbitral Tribunal is not a Tribunal within the meaning of Tribunal as referred under Article 227 of the Constitution (See judgment of this Court in Daison v. Varghese Jose [ 2016 (1)KLT 612 ]. However, when an order/award issued by the Arbitral Tribunal impinges the fundamental rights of a citizen in the colour of exercise of the authority stemmed from the Statute, certainly, this Court can step into, to restore the rights of the citizen to the limited extent to restore the right which has been taken away by enforcing of an order/award without any authority. 20. The repossession of the vehicles by enforcing the order of the Arbitral Tribunal without the intervention of the civil court, therefore, has to be treated as violation of Article 21 of the Constitution of India. In the colour of statutory backing, the Tribunal's order has been allowed to be enforced without any statutory authority. The encroachment into a public law field in a private law remedy is nothing but a sheer abuse of process of law. The citizen has to be safeguarded against such arbitrariness. Therefore, the writ petitions are maintainable to the extent nullifying an act done by encroaching into public law power, by exceeding power conferred under the private law. All the writ petitions, therefore, are disposed of in the light of the facts involved in each case. 8. As we note under Section 17(2) of Arbitration and Conciliation Act, the arbitral tribunal cannot directly enforce its own order. The party concerned will have to invoke the power of the civil court to enforce the order of the arbitral tribunal. In Pradeep's case (supra), this Court had considered the similar issue and in paragraph 8 and 13, held as follows: 8.
The party concerned will have to invoke the power of the civil court to enforce the order of the arbitral tribunal. In Pradeep's case (supra), this Court had considered the similar issue and in paragraph 8 and 13, held as follows: 8. It is to be noted that the legislature used “enforcement” interchangeably in the context of different provisions of the Act 26 of 1996 as amended by the Act 3 of 2016. In terms of Section 17(2), “enforcement” means causing implementation of the order. The enforcement of an interim order under Section 17(2) is on account of disobedience to the interim order. Therefore, it need not follow the same procedure as contemplated in “execution”. It can be implemented in a like manner as the Court exercises its power under Section 27(5) of the Act 26 of 1996. It is also appropriate to refer Section 94 of the Code of Civil Procedure for the Court to enforce such orders. Section 94 of the Code of Civil Procedure provides as follows: “94. Supplemental Proceedings.-In order to prevent the ends of justice from being, defeated the Court may, if it is so prescribed,- (a) issue a warrant to arrest the defendant and bring him before the Court to show cause why he should not give security for his appearance, and if he fails to comply with any order for security commit him so the civil prison; (b) direct the defendant to furnish security to produce any property belonging to him and to place the same at the disposal of the Court or order the attachment of any property; (c) grant a temporary injunction and in case of disobedience commit the person guilty thereof to the civil prison and order that his property be attached and sold; (d) appoint a receiver of any property and enforce the performance of his duties by attaching and selling his property; (e) make such other interlocutory orders as may appear to the Court to be just and convenient.” 13. “Enforcement” is defined under the Blacks law dictionary as follows: “Enforcement - The act of putting something such as a law into effect; the execution of a law; the carrying out of a mandate or command.” Enforcement implies a force to implement. The law enforcement is a Sovereign and State function.
“Enforcement” is defined under the Blacks law dictionary as follows: “Enforcement - The act of putting something such as a law into effect; the execution of a law; the carrying out of a mandate or command.” Enforcement implies a force to implement. The law enforcement is a Sovereign and State function. The nature of the Arbitral Tribunal’s composition emanates from a contract though, the powers of the Arbitral Tribunal is governed by the Statutory provisions. Nevertheless, it confers no power on the Tribunal to enforce its own order. Conferring the power of the Civil Court to the Tribunal for passing an interim order does not mean that the Tribunal is conferred with the power of enforcement. The Tribunal, by its constitution or creation, inherently lacks power to deal with any sovereign function or public law in the sense that their authority is founded in a contract and power is regulated by the statute. 9. On a reading of Section 17(2) of the Arbitration and Conciliation Act, it is clear that the arbitral tribunal cannot directly enforce the order of attachment by intimating the same to the Sub Registrar office and the revenue officials. The arbitral tribunal, in this case usurped the power of the civil court by directly ordering enforcement of the order of attachment and by communicating the same to the registrar and the tribunal. We are of the view that such exercise in the guise of statutory provision is nothing but abdication of the authority conferred upon the arbitral tribunal. Therefore, the writ petition is maintainable to the extent to nullify an act done by encroaching in the public law in exercising power conferred on the arbitrator under the statutory provisions. To that extent, of course, the writ petition is maintainable. 10. The question is what is the remedy then available for a third party who is aggrieved by an order of attachment. So long as the order is not enforced, the same is not self workable. If it is enforced through a civil court, necessarily, the third party, who is aggrieved can raise his objection against the enforcement or even after the enforcement, the third party can very well raise an objection as against the enforcement by claiming that the property belongs to him. The Code of Civil Procedure provides necessary mechanism for the third party to raise a claim or title over the property.
The Code of Civil Procedure provides necessary mechanism for the third party to raise a claim or title over the property. We are of the view that the writ petitioner-Saneesha M S, is not deprived of any remedy as the Code of Civil Procedure safeguard such interest of the third parties. The law is very clear that the tribunal cannot exercise sovereign function of enforcement and such power is vested with civil court. Therefore, writ petitioner- Saneesha M S can very well resist the enforcement or can raise a claim before the civil court when an order is sought to be enforced. So long as it is not enforced, no right of the writ petitioner-Saneesha M S is deprived of to enjoy the property in accordance with law, if the writ petitioner-Saneesha M S is the real owner of the property. As we noted earlier, we have not decided the maintainability of such challenge in appeal before civil court under Section 37 of the Arbitration and Conciliation Act. That will have to be worked out independently as it is not for us to observe whether such appeal is maintainable or not in this proceedings. 11. On conclusion, we are of the view that the arbitral tribunal usurped the power of civil court by directly intimating the order of attachment to the Sub Registrar and the Village Officer. That direction will have to be nullified. Accordingly, we nullify the direction. The Sub Registrar or any revenue officials is not bound by any orders passed by the arbitral tribunal unless such an order is enforced through the civil court. We make it clear that the Sub Registrar or any revenue officials shall not act on the direct intimation of the arbitral tribunal regarding attachment unless and until it is enforced through a civil court. We direct the learned Government Pleader to communicate this order by directing the Principal Secretary, Revenue Department and Finance Department to intimate all registrar as well as the revenue authorities not to record attachment order which is directly communicated by the arbitral tribunal unless and until it is communicated through the civil court by an order. Therefore, we set aside the impugned judgment to the extent it interferes with the order of attachment. Accordingly, the writ appeal is disposed of as above.