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M/s. Bilasraika Sponge Iron Pvt., Ltd., Rep., by its Director Balraj Agarwal v/s M/s. Devi Trading Company, rep., by its Special Power of Attorney, Holder K.H. Monappa


Company & Directors' Information:- SPONGE IRON INDIA LTD [Amalgamated] CIN = U27102TG1975PLC001866

Company & Directors' Information:- DEVI IRON AND POWER PRIVATE LIMITED [Active] CIN = U27100MH2004PTC145461

Company & Directors' Information:- S S P SPONGE IRON PRIVATE LIMITED [Active] CIN = U13100AP2007PTC056107

Company & Directors' Information:- B R SPONGE AND POWER LIMITED [Active] CIN = U27101OR2003PLC007028

Company & Directors' Information:- BILASRAIKA SPONGE IRON INDIA PRIVATE LIMITED [Active] CIN = U27106TG2003PTC040996

Company & Directors' Information:- K Y S SPONGE IRON PRIVATE LIMITED [Active] CIN = U27102WB1998PTC086942

Company & Directors' Information:- K B SPONGE IRON LIMITED [Active] CIN = U27102WB2002PLC094456

Company & Directors' Information:- S R S SPONGE PRIVATE LIMITED [Active] CIN = U27102WB2004PTC099344

Company & Directors' Information:- R K AGARWAL TRADING COMPANY PRIVATE LIMITED [Active] CIN = U51100GJ1997PTC031593

Company & Directors' Information:- J G SPONGE AND POWER PRIVATE LIMITED [Active] CIN = U27109DL2003PTC121655

Company & Directors' Information:- B D SPONGE IRON PRIVATE LIMITED [Active] CIN = U27102WB2004PTC100006

Company & Directors' Information:- AGARWAL TRADING COMPANY PRIVATE LIMITED [Active] CIN = U51909WB2007PTC114871

Company & Directors' Information:- POWER TRADING INDIA PRIVATE LIMITED [Active] CIN = U40108TN2013PTC090789

Company & Directors' Information:- S. N. SPONGE PRIVATE LIMITED [Active] CIN = U27310MH2015PTC270853

Company & Directors' Information:- R S SPONGE IRON PRIVATE LIMITED [Active] CIN = U27102WB2004PTC099668

Company & Directors' Information:- M POWER TRADING PRIVATE LIMITED [Active] CIN = U51909MH2004PTC145027

Company & Directors' Information:- POWER TRADING PRIVATE LIMITED [Active] CIN = U74900TN2015PTC098718

Company & Directors' Information:- B. M. AGARWAL TRADING PRIVATE LIMITED [Active] CIN = U51909RJ2019PTC064901

Company & Directors' Information:- KH CORPORATION PRIVATE LIMITED [Active] CIN = U45500MH2019PTC324128

    Civil Miscellaneous Appeal No.100 of 2011

    Decided On, 30 March 2011

    At, High Court of Andhra Pradesh

    By, THE HONOURABLE MR. JUSTICE GODA RAGHURAM & THE HONOURABLE MR. JUSTICE G. KRISHNA MOHAN REDDY

    For the Appellant: E. Manohar, Senior Counsel, P. Kamlakar, Advocate. For the Respondent: B.V. Subbaiah, Senior Counsel, G. Rama Gopal, Advocate.



Judgment Text

Oral Order: (Per GR,J)


The respondent in this appeal filed an Arbitration Original Petition (O.P.) under Section 9 of the Arbitration and Conciliation Act, 1996 (for short ?the 1996 Act?) for a direction to the appellant herein to furnish security for US $ 797951.42 equivalent to Rs.3,63,06,789-81 Ps., (at the rate of Rs.45-50 ps., per US $). Along therewith it filed an application under Section 9 of the 1996 Act read with Order XXXVIII Rule 5 and Section 151 of the Code of Civil Procedure, 1908 (for short ?the CPC?) for a direction to the appellant herein to furnish security for the aforesaid amount within three days and for a simultaneous order of conditional attachment of the petition schedule properties, pending disposal of the O.P.


As the concerned Court, of the learned Chief Judge, City Civil Court, Hyderabad was in vacation, the respondent moved this Court under Section 33 of the Andhra Pradesh Civil Courts Act, 1972 (for short ?the 1972 Act?) read with Section 151 CPC by way of Receive and Transmit applications to receive the O.P. and the interlocutory application filed therewith and transmit the same to the concerned Court. These were numbered as R & T. Petition No. 8 of 2011 and R & T. C.M.P.No. 9 of 2011 respectively.


This Court on 12-01-2011 passed an order in R & T.C.M.P.No. 9 of 2011: notice to the respondent to furnish security for the suit amount within a period of six weeks and in default, there shall be conditional attachment of the petition schedule property. Since under Section 33 of the 1972 Act, the order of this Court is deemed to be the order of concerned Court viz., of the learned Chief Judge, City Civil Court, Hyderabad, which has the jurisdiction over the O.P. and the interlocutory application therein, on re-opening after vacation, the respondent therein filed the present appeal inter alia contending that this Court ought to have rejected both the R & T Petition No. 8 of 2011 and R & T.C.M.P.No. 9 of 2011 instituted by the respondent represented by its Special Power of Attorney Holder ? Sri K.H. Monappa, for non-compliance with the mandatory provisions of Rule 32 of The Andhra Pradesh Civil Rules of Practice and Circular Orders, 1990 (for short ?the CRP?).


Rule 32 of the CRP reads:


?32. Party appearing by Agent:--


(1) When a party appears by any agent, other than an advocate, the agent shall, before making of or doing any appearance, application, or act, in or to the Court, file in Court the power of attorney, or written authority, thereunto authorizing him or a properly authenticated copy thereof together with an affidavit that the said authority still subsisting, or, in the case of an agent carrying on a trade or business on behalf of a party, without a written authority, an affidavit stating the residence of his principal, the trade or business carried on by the agent on his behalf and the connection of the same with the subject matter of the suit, and that no other agent is expressly authorized to make or do such appearance, application, or act.


(2) The Judge may thereupon record in writing that the agent is permitted to appear and act on behalf of the party; and unless and until the said permission is granted, no appearance, application, or act, of the agent shall be recognized by the Court.?


In C.M.A.C.M.P.No. 264 of 2011 in this appeal, the appellant sought suspension of the order of this Court dated 12-01-2011 in R & T.C.M.P.No. 9 of 2011, which on transmission to the Court of the learned Chief Judge, City Civil Court, Hyderabad, was re-numbered as I.A.No. 392 of 2011 in Arbitration O.P.No. 358 of 2011. In paragraph No.4 of the affidavit accompanying C.M.A.C.M.P.No. 264 of 2011, the appellant specifically pleaded that the respondent herein had neither filed the Special Power of Attorney authorizing Sri Monappa to represent the respondent nor sought the permission of the Court as enjoined by Rule 32 of CRP and R & T Petition No. 8 of 2011 and R & T.C.M.P.No. 9 of 2011 ought not therefore to have been entertained. Though the order dated 12-01-2011 is also assailed on merits pleading that the order does not satisfy the requirements of Order-XXXVIII Rule 5 CPC, Sri E. Manohar, the learned senior counsel representing the appellant herein confines the challenge to entertainment of the R & T Petition and the miscellaneous application therewith as in violation of the provisions of Rule 32 of CRP.


It requires to be noticed that the respondent herein filed the O.P. under Section 9 of 1996 Act and filed an interlocutory application therein (being R & T C.M.P.No. 9 of 2011 since re-numbered as I.A.No. 392 of 2011 in Arbitration O.P.No. 358 of 2011) under Section 9 read with Order XXXVIII Rule 5 and Section 151 of CPC.


On 23-02-2011 this Court passed an order extending the time granted on 12-01-2011 (in R & T C.M.P. No. 9 of 2011) for furnishing security for the suit amount by the appellant herein, for a further three weeks; and further extended time for a further two weeks by the order dated 16-03-2011.


In the counter affidavit filed by the respondent to C.M.P.No.264 of 2011 in this appeal, it is pleaded (in paragraph No.5) that non-compliance with the procedure under Rule 32 of CRP is not fatal and the said formality may be fulfilled by filing an application (later) before the Chief Judge, City Civil Court, in the proceedings now pending in that Court and in any event the respondent is ?going to file? an application under Rule 32 of CRP before the Chief Judge, City Civil Court. It is also pleaded that as the factual ingredients requisite to seek an order of conditional attachment were satisfied, this Court had passed the order dated 12-01-2011 which is not therefore liable to be interfered with, particularly since non-compliance with the provisions of Rule 32 CRP is a curable defect and does not go to the root of the jurisdiction, to pass the order dated 12-01-2011.


In oral argument, Sri B. V. Subbaiah, the learned senior counsel appearing for the respondent contends that while the Special Power of Attorney authorizing Sri Monappa to represent the respondent herein as well as an affidavit as envisaged by Rule 32 of CRP was filed along with R & T Petition No. 8 of 2011, but admits that no application was filed seeking permission to permit the Power of Attorney Holder to prosecute the arbitration application and the interlocutory application therein; that this is a curable defect and the provisions of Rule 32 CRP could lawfully be complied with later as well. It is also contended by Sri B.V. Subbaiah, that the respondent has now filed I.A.No. 866 of 2011 on 18-03-2011 (a copy of which is placed for the perusal of this Court) in O.P.No. 358 of 2011, seeking permission for Sri Monappa to represent the respondent in the O.P. and along therewith a copy of Special Power of Attorney was also filed. In paragraph No.4 of the affidavit accompanying I.A.No. 866 of 2011, it is pleaded that while filing proceedings under Receive and Transmit procedure, though the duly signed affidavit under Rule 32 CRP was entrusted to the learned counsel, due to oversight and inadvertence the same was not kept in the papers and Rule 32 CRP affidavit was not there in the record and therefore now the affidavit is being filed for compliance with Rule 32 CRP.


Sri Manohar, the learned senior counsel submits that since there has admittedly been a violation of the mandate of Rule 32, the very institution of R & T Petition No. 8 of 2011 and R & T. C.M.P.No. 9 of 2011 and the entertainment of these petitions by this Court is unsustainable and consequently R & T C.M.P.No. 9 of 2011 and R & T Petition No. 8 of 2011 must be returned and the order dated 12-01-2011 rescinded.


According to Sri B.V. Subbaiah, his verification of the records of the R & T Petition reveals that the Special Power of Attorney and an affidavit had been filed, but not an application seeking permission for the Special Power of Attorney Holder Sri Monappa to prosecute the O.P. on behalf of the respondent-company. Hence the contention that since there was substantial compliance with the provisions of Rule 32 CRP, no interference in this appeal is called for. It is also urged that since the provisions of Rule 32 CRP are procedural in character and directory in nature, non-compliance is not fatal to the entertainment of R & T Petition No. 8 of 2011 or R & T C.M.P.No. 9 of 2011, nor does the infirmity invalidate the order of this Court dated 12-01-2011. The respondent urges that the appeal itself is not maintainable since the order dated 12-01-2011 is an order passed under Order XXXVIII Rule 5 CPC and the appropriate remedy in the circumstances is to move for modification or vacation of the said order and that only when an order under Order XXXVIII Rule 6 CPC is passed would an appeal lie under Order XLIII Rule 1 (q) CPC.


Sri Manohar, learned senior counsel argued that since the order dated 12-01-2011 is passed by this Court under the plenitude of powers available under Section 9 of the 1996 Act, the present appeal is maintainable under Section 37 of the said Act.


In the context of the rival pleadings and contentions, the following issues arise for consideration in this appeal.


(a) Whether this miscellaneous appeal is maintainable against the order of this Court dated 12-01-2011 in R & T C.M.P.No. 9 of 2011 in R & T Petition No. 8 of 2011; and


(b) Whether non-compliance by the respondent, of the provisions of Rule 32 of CRP is fatal to the entertainment by this Court of R & T Petition No. 8 of 2011 along with R&T C.M.P.No. 9 of 2011 and to the order dated 12-01-2011 passed in R & T C.M.P.No. 9 of 2011.


Issue: (a)


Section 9 of the 1996 Act provides for interim measures that may be ordered by a Court, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36 of the Act.


In the case on hand, the respondent claimed an amount of US $ 797951.42 equivalent to Rs.3,63,06,789.81 before the Arbitral Tribunal in London against the appellant, a claim founded on disputes arising out of a contract with the appellant, dated 09-11-2009. In the circumstances an application seeking interim measures, under Section 9 of the 1996 Act could be instituted. Section 9 consecrates jurisdiction on a Court (inter alia the Principal Civil Court of original jurisdiction in a District) by a party, before or during arbitral proceedings, inter alia for seeking such other interim measure of protection as may appear to the Court to be just and convenient (Section 9(e) of the 1996 Act). On such application the Court is endowed the same power for making orders as it has for the purpose of and in relation to, any proceedings before it.


Since the jurisdiction to order interim measures is conferred on the Court, in respect of any grievance of a party before or during arbitral proceedings, it is axiomatic that the Court has the power, authority and jurisdiction to order ad-interim measures as well and pending ordering of measures after hearing affected parties (arrayed as respondents to an application under Sec.9). The appeal provided under Section 37 of the 1996 Act comprises within its locus an appeal against an order granting ad-interim measures, pending passing of final orders under Section 9 of the 1996 Act as well.


In the considered view of this Court since Section 9 of the 1996 Act incorporates a power in the Court to grant ad-interim measures, pending grant of measures after hearing the concerned parties as well and without the necessity of reliance on the provisions of Order XXXVIII Rule 5 CPC, the order of this Court dated 12-01-2011 could be considered proprio vigore an order under Section 9 of the 1996 Act granting ad-interim measures. Such an order could be appealed against under Section 37 of the 1996 Act.


The Contention on behalf of the respondent challenging the maintainability of this miscellaneous appeal must therefore fail and is accordingly rejected.


Sri B.V. Subbaiah, learned senior counsel for the respondent relied on decisions of learned Division Benches of this Court in Union Bank of India, Visakhapatnam v. M/s. Andhra Technocrat Industries 1982(II) ALT NRC 19 and Y. Chandra Reddy v. N. Chandramouli Naidu 1991(II) ALT 343 to contend that the power under Order XXXVIII Rule 5 CPC includes the power to order conditional attachment before hearing a defendant.


In Y. Chandra Reddy (2 supra), the learned Division Bench has held that under Order XXXVIII Rule 5 (3) CPC, the Court can order conditional attachment also along with a show cause notice to be issued under Rule 5 (1); that the Court can adopt the first part of Form 5 and in such an event it may be necessary for the Court to hear the defendant before issuance of such notice and it is also open to the Court to adopt the first and second parts of Form 5 without issuing notice and direct the bailiff to attach the property straightaway, if the defendant fails to comply with the first part of Form 5. The Court held that in the latter case the order will be one of ?conditional attachment? and that if the defendant comes to Court and satisfies the Court, it will be open to the Court to withdraw such conditional attachment under Rule 6 (2) of Order XXXVIII CPC.


In the view we have taken; that the power to pass an order granting ad-interim measures before hearing the respondent in an application under Section 9 of the 1996 Act is also comprehended within the scope of the powers granted under Section 9, the order dated 12-01-2011 could be truly and fairly considered an order passed under Section 9 and it would not be necessary, in the facts and circumstances of this case, for the appellant to await the passing of an order under Order XXXVIII Rule 6 CPC and to pursue remedies thereagainst. This appeal is therefore maintainable as an appeal against an order passed under Section 9 of the 1996 Act. This issue is answered accordingly and in favour of the appellant.


Issue: (b)


Demonstrably the respondent has not complied with the provisions of Rule 32 CRP. On a true and fair construction of the provisions of Rule 32 the filing of the Power of Attorney or written authority when a party appears by any agent, other than an advocate, together with an affidavit asserting that the said authority still subsisting, or, in the case of an agent carrying on a trade or business on behalf of a party, without a written authority, an affidavit stating the residence of his principal, the trade or business carried on by the agent on his behalf and the connection of the same with the subject matter of the suit, and that no other agent is expressly authorized to make or do such appearance, application, or act, is mandatory and the Judge may, in such circumstances, record in writing that the agent is permitted to appear and act on behalf of the party. Rule 32 (2) enjoins that unless and until such permission is granted, no appearance, application, or act, of the agent shall be recognized by the Court.


Having regard to the phraseology of Sub-rule (2) of Rule 32 normally the provisions of Rule 32 are to be construed as mandatory and the non-compliance thereof as a factor vitiating the entertainment of an application by a party acting on behalf of another under authorization.


Sri B.V. Subbaiah, learned senior counsel however (as already noticed) contended that the provisions of Rule 32 are procedural prescriptions and non-compliance thereof is not fatal to the entertainment of R & T Petition No. 8 of 2011 or R & T C.M.P.No. 9 of 2011; and that the procedural irregularity of non-compliance with this provision is curable and has been cured by filing a petition of the respondent (I.A.No. 866 of 2011 in the Arbitration O.P.No.358 of 2011 on the file of Chief Judge, City Civil Court, Hyderabad), now seeking permission of the Court as required under Rule 32 of CRP.


Reliance for this contention is placed on several precedents. A Full Bench of this Court in Satyanarayana v. Venkata Subbaiah 1957 ALT 369 considered the issue whether the presentation of an application by a pleader to whom the authority in the prescribed manner under Order-III Rule 4 CPC was not given, is a nullity. The learned Full Bench held that the presentation of an application by a pleader to whom the authority in the prescribed manner under Order-III Rule 4 CPC not given is not a nullity, but only an irregularity which could be cured at a subsequent stage.


In Syed Kazim Sahab v. Sayeed Bakaran Sahab 1990 (1) An.W.R. 256, considering the provisions of Rules 32 and 33 of CRP (A.P) and Order III Rule 2 CPC, a learned single Judge of this Court held that the presentation of the plaint signed and verified by the power of attorney holder coupled with the very power of attorney executed in his favour filed in the Court, does not require any permission from the Court, for an advocate duly appointed by the said power of attorney holder, duly authorizing him in this behalf, had entered appearance in the Court. The absence of an affidavit (under Rule 33) however does not invalidate the suit resulting in its dismissal, held this Court.


In Abu Taher v. Abdul Majeed 1995 (1) ALT 57 the provision Rule 32 of CRP fell for consideration (erroneously noted as Rule 23 CRP), this Court held on considering of several decisions pertaining to compliance with the provisions of CRP, including Mangatayaramma v. Indian Bank 1984 (2) An.W.R. 292; B. Rizwang Baig v. M.C.H. 1989 (2) ALT 476; Govinddoss v. Muthaiah Chetty AIR 1925 Madras 660 and the decision of the Full Bench of this Court in Satyanarayana (3 supra), that filing of a petition under Order IX Rule 9 CPC by a general power of attorney of the petitioner without obtaining necessary permission from the Court as contemplated under Rule 32 of CRP is only a curable irregularity and not an illegality.


In M/s. Nethra Chits (P) Ltd., v. B. Ramachandra Reddy 2006 (4) ALT 190 a plaint was presented by the Foreman of the plaintiff Chit Fund Company without obtaining permission of the Court. Noticing the error committed an application was fled by the Foreman and Director of the plaintiff Company to permit him to act as a representative of the Company and to prosecute the suit. The sa

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id application was dismissed by the lower Court. In revision, this Court held that the presentation of plaint by the Agent without obtaining permission of the Court is a curable irregularity and an application made specifying sufficient reasons, cures the defect and the rejection of application by the Court below was therefore not in order. From the precedential guidance provided by the several decisions referred to hereinabove, it is clear that the failure of the respondent in seeking permission of this Court for Sri Monappa, the Special Power of Attorney Holder of the respondent to appear on behalf of the respondent (to prosecute the O.P. filed under Section 9 of the 1996 Act and the interlocutory application filed along therewith seeking ad-interim measures pending orders on the application filed under Section 9 of the 1996 Act, without filing an affidavit seeking leave of the Court for the agent to appear), is a curable defect and does not render the institution of R & T Petition No. 8 of 2011 and the R & T C.M.P.No. 9 of 2011; or their entertainment by this Court; or the order dated 12-01-2011 invalid. In any event, the said irregularity is cured by the respondent herein now filing I.A.No. 866 of 2011 in Arbitration O.P.No. 358 of 2011 on the file of the Chief Judge, City Civil Court, Hyderabad. This issue is accordingly answered. As the validity of the order dated 12-01-2011 on its merits has not been canvassed before us in oral argument and as the appellant may canvass the same before the court below, while it considers passing of final orders in Arbitration O.P.No.358 of 2011 or in any application seeking modification of the order dated 12-01-2011 passed by this Court in R & T.C.M.P.No. 9 of 2011 in R & T.P.No. 8 of 2011, we are not inclined to consider the challenge to the order dated 12-01-2011 on its merits. We make no pronouncement on the merits of the order dated 12 ? 01 ? 2011. On the aforesaid analysis, no case is made out for interference in this appeal. It is accordingly dismissed. No costs.
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