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M/s Thengalbari Estates (Pvt) Limited, Assam v/s M/s Greenfield Crops Private Limited, Assam

    Case No. Arb.A. 15 of 2019

    Decided On, 20 September 2019

    At, High Court of Gauhati

    By, THE HONOURABLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA

    For the Petitioner: A.K. Sahewalla, Advocate. For the Respondent: M. Dutta, Advocate.



Judgment Text

1. Heard Mr. M. Dutta, learned counsel for the appellant and Mr. M. Dutta, learned counsel appearing for the respondent.

2. The appellant herein had initiated an arbitration proceeding in respect of a dispute that had arisen as regards the incorporation and implication of an agreement for sale dated 18.01.2006 supported by a supplementary deed dated 02.11.2007 and a deed of lease dated 03.11.2007.

3. Without going into the details of the dispute between the parties, it is stated that according to the appellant, they had terminated the aforesaid agreements and the result thereof would be that the earlier agreement that they had arrived with the respondents to transfer/sale of the tea garden namely Madhapur Tea Estate stood terminated. The claim of the appellant was rejected by the sole arbitrator by the award dated 11.09.2017 by arriving at a conclusion that the termination of the agreements were unsustainable. Against the award dated 11.09.2017 of the sole arbitrator, an appeal under Section 34 of the Arbitration and Conciliation Act, 1996 was preferred and by the judgment dated 30.01.2019, the award of the sole arbitrator dated 11.09.2017 was set aside.

4. Without going into the question on the implication of the award of the sole arbitrator being set aside, what we take note of is that against the judgment and order dated 30.01.2019, an appeal had been preferred by the respondent herein before this Court, which is presently pending.

5. In the aforesaid circumstance, the appellant herein preferred an application under Section 9 of the Arbitration and Conciliation Act, 1996 (in short Act of 1996) for securing certain orders as regards the possession and control of the garden in question. The said petition under Section 9 of the Act of 1996 was registered as Misc(J) Case No.27/2019. The application under Section 9 of the Act of 1996 was dismissed by arriving at its conclusion as follows:

“The limited power of the Court is that it can either set aside or affirm or modify the award and the order setting aside the award is under challenge before the High Court.”

6. Accordingly, in the opinion of the learned District Judge the pendency of the appeal before the High Court in a Section 34 proceeding will be a bar for the Court to pass any order in a petition under Section 9 of the Act of 1996. Ultimately, in the order of 02.07.2019, a conclusion was arrived at that in the absence of any arbitral award, no relief can be granted to the appellant under Section 9 of the Act of 1996.

7. The reasons stated in the order of 02.07.2019 are not clear enough to understand as to why the Section 9 petition stood rejected. Therefore, without going into the said question in this appeal, we examine the question whether in the circumstance as indicated above, a Section 9 petition would be maintainable or not. We further clarify that we only look into the question of maintainability of a Section 9 petition under the aforesaid circumstance and we do not intend nor make any observation on merit of the petition under Section 9 as to the entitlement of the parties.

8. Section 9 of the Arbitration and Conciliation Act, 1996 is as follows:

“9. Interim measures, etc., by Court-

(1) A party may, 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, apply to a Court-

(i) for the appointment of a guardian for a minor or a 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 p arty 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.”

9. Mr. M. Dutta, learned counsel appearing for the respondent raises a contention that as provided under Section 9(3), an arbitral tribunal having been constituted, the Court shall not entertain an application under Section 9(1) unless it finds that the circumstance exist which did not render the remedy provided under Section 17 to be efficacious. Accordingly, we look at the provisions of Section 17 of the Act of 1996, which is as follows:

“17. Interim measures ordered by arbitral Tribunal-

(1) A party may, during the arbitral proceedings, 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 t o 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.”

10. Section 17 of the Act of 1996 provides that a party may during the arbitral proceeding apply to the arbitral tribunal for passing any of the orders that are specified therein. But a relevant question would be if during the arbitral proceeding, a party applies to the arbitral tribunal for passing any such order, whether such orders can be passed or not has to determine in the facts and circumstance of each case.

11. As already indicated herein above, in the present case, the dismissal of the arbitral proceeding by the sole arbitrator was assailed in an appeal under Section 34, where the award of the sole arbitrator was set aside and against that an appeal had been preferred before the High Court. Although, technically it can be construed that the arbitral proceeding are still continuing as because the matter has not attained its finality in view of it being at the stage of an appeal before the High Court, but at the same time when we look into the question as to whether any of the party may now make an application under Section 17, we confronted with a situation that the application can neither be made before the High Court where the appeal is presently pending nor it can be made before the sole arbitrator, who had earlier arbitrated the matter. After the award was passed, the sole arbitrator became functus officio in this matter, so he does not have any further jurisdiction to entertain such application. At the same time, it would be highly impractical on the part of the High Court to entertain an application under Section 17 of the Act of 1996 by taking the required evidence for the purpose by itself and arrive at a conclusion as to whether the reliefs claimed in the petition under Section 17 of the Act of 1996 can be given a due consideration or not.

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. We are of the considered view that the circumstances in the present case are so that the remedy provided under Section 17 of the Act of 1996 may not be efficacious. Accordingly, the provisions of Section 9(3) of the Act of 1996 is inapplicable in the present circumstance. It being so, we are of the view that we do not find any reason as to why an appropriate petition under Section 9 of the Act of 1996 would not be maintainable and be not considered on its own merit. 13. Accordingly, we provide that the parties, if they desire, may prefer appropriate application under Section 9 of the Act of 1996 before the appropriate Court and on it being preferred, the same be adjudicated upon on its own merit without being influenced by any observation made in this order. 14. In view of the order passed, we interfere with the order dated 02.07.2019 in Misc(J) Case No. 27/2019 and require the Court to decide the application on its own merit. 15. The arbitration appeal stands disposed of in the above manner.
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