ABDUL VAHEED vs SREI EQUIPMENT FINANCE LIMITED & ANR.

The appeals have really worked themselves out.

The appeals are directed against orders dated November 8, 2017 and December 8, 2017 passed by the arbitration Court.

On the respondent finance company''s petition under Section 9 of the Arbitration and Conciliation Act, 1996, an initial order was passed on June 21, 2017 appointing joint receivers, presumably, to take possession of the asset covered by the agreement as a sum in excess of Rs.22 lakh remained due only on account of unpaid instalments.

The petition was again taken up on November 8, 2017 when the appellant herein was not represented and one of the receivers appointed by the previous order was directed to obtain possession of the asset covered by the agreement with police assistance.

The appellant then applied, suggesting that the Section 9 proceedings had become infructuous since the finance company was in breach of its obligation to commence arbitral proceedings within the period envisaged in the amended Section 9(2) of the said Act. The arbitration Court noticed that the appellant herein as borrower had no intention to make payment despite the claim of the finance company being substantial and it being apparent that a sum in excess of Rs.22 lakh remained due only on account of unpaid instalments. When this appeal was received, an order was made on December 22, 2017 permitting the appellant to make payment of a sum of Rs.10 lakh to ward off the receiver taking possession of the asset. In default of such payment, the receiver was left free to take possession of the asset in terms of the orders passed by the arbitration Court.

The appellant contends that in view of the statutory mandate in Section 9(2) of the Act, a pre-reference petition for interim measures cannot be continued without the arbitral proceedings being commenced within 90 days from the date of the original order passed on such provision. That does not appear to be command of the statute. Indeed, the relevant provision permits the commencement of the arbitral proceedings to be even later as may be determined by Court. It also does not appear that Section 9(2) of the Act requires a subsisting interim order to be undone or vacated merely because the arbitral proceedings may have not been commenced, though it may be open for the Court so to do in an appropriate situation.

As noticed in the previous order in these appeals, the appellant''s contention is that because the no-dues certificates in respect of certain previous agreements had not been made over by the finance company, payments in respect of the present agreement were withheld. The grievances pertaining to the previous agreements, if any, would not come within the purview of the arbitral reference in the present case. Since a Court in seisin of a petition under Section 9 of the said Act, passes orders in aid of the arbitral reference or the final order that may be made therein, what cannot be taken into consideration by the arbitral tribunal cannot also be taken into account by the court, particularly, since the appellant''s grievance does not pertain to the present agreement at all.

The finance company says that the receiver has taken possession of the asset. The asset will be preserved and not used by the finance company. Appropriate directions may be sought from the arbitrator in course of the arbitral reference as to how the asset will now be dealt with.

APO No.558 of 2017 and APO No.559 of 2017 together with GA No.3985 of 2017, GA No.3996 of 2017 and GA No.3997 of 2017 are disposed of without any order as to costs.