Shriram City Union Finance Ltd. vs Haji Abdul Samad

A. Kabir, J.—This appeal is directed against Order No. 3 dated 22nd September, 2000 passed by the learned Acting Chief Judge, City Civil Court, at Calcutta, in Misc. Case No. 5057 of 2000, fixing a date for hearing of the application filed by the respondent herein u/s 9 of the Arbitration and Conciliation Act, 1996 and staying the operation of the Award dated 7th July, 2000, till the said date.

As will appear from the order-sheet of the said Misc. Case, the same was started on an application made by the respondent herein u/s 34 of the aforesaid Act. Subsequently, the said respondent as the petitioner in the said Misc. Case filed another application u/s 9 of the Arbitration and Conciliation Act, 1996. Since a Caveat had been lodged, a direction was given for service of the application on the Caveator.

On 22nd September, 2000, the application u/s 9 was taken up for consideration and the order, as indicated hereinabove, was passed.

Challenging the said order on behalf of the opposite party/appellant herein, Mr. Banerjee, learned Advocate appearing on behalf of the appellant, firstly urged that the learned Court below was incompetent to pass an order staying the operation of the Award in an application u/s 9 of the Arbitration and Conciliation Act. 1996. According to Mr. Banerjee, such power could not be invoked in the absence of any of the circumstances, as set out in paragraphs (a) to (d) of sub-clause (ii) of section 9.

Mr. Banerjee referred to the provisions of sections 35 and 36 of the aforesaid Act and urged that u/s 36, it has been clearly indicated that the Award could be enforced only when the time for making an application to set aside the arbitral award u/s 34 had expired or upon such application being made, the same had been refused. Mr. Banerjee submitted that the application u/s 9 was in fact redundant.

Mr. Banerjee submitted that in the absence of authority under the provisions of section 9 of the aforesaid Act to pass an order staying the operation of the Award, the said order had been erroneously made and was liable to be set aside.

Appearing on behalf of the respondent. Mr. Rahanian, learned Advocate, submitted that, in fact, the application u/s 9 of the Arbitration and Conciliation Act, 1996 had been made for an order of interim protection in respect of the vehicle, which was covered by the Award and the prayer, which had been made, was to restrain the appellant herein from taking forcible possession of the vehicle from the custody of the respondent. Mr. Rahaman urged that in such circumstances, since the application u/s 9 was fixed for hearing at a later date, the learned Court below thought it fit as an interim measure to stay the operation of the Award in the meantime.

Having considered the submissions made on behalf of the respective parties, we are of the view that since an application had been made u/s 34 of the aforesaid Act within the time prescribed, the provisions of section 36 of the said Act came into operation and the appellant herein was no longer in a position to execute the award till the application u/s 34 was disposed of.

However, the learned Court below appears to have overlooked the provisions of section 36 in passing the impugned order staying the operation of the Award, although the prayers in the application u/s 9 were only for some interim protection in respect of the vehicle which was covered by the Award which was under challenge.

In such circumstances, we are inclined to agree with Mr. Banerjee that having regard to the provisions of section 36 of the 1996 Act, such stay was incorrectly granted by the learned Court below when no such prayer had in fact been made in the application u/s 9 of the aforesaid Act.

We, therefore, allow the appeal to the extent that such portion of Order No. 3 dated 22nd September, 2000, wherein the learned Court below stayed the operation of the Award, is set aside.

The learned Court below is directed to hear out the pending Misc. Case, being No. 5057 of 2000, along with the application u/s 9 of the Arbitration and Conciliation Act, 1996, within two months from date. The appellant herein, who is the opposite party in the learned Court below, will be entitled to file written objection to both the applications within a fortnight from date. Reply, if any, is to be filed within a fortnight thereafter.

Appearing for the appellant, Mr. Banerjee on instruction from his client submits that the appellant will not take steps to remove the vehicle from the custody of the respondent till the disposal of the Misc. Case and similarly, Mr. Rahaman on instructions from his client submits that the respondent herein will not encumber, transfer or part with possession of the vehicle in question till the disposal of the said Misc. Case.

Let a copy of this order be communicated to the learned Court below by special messenger at the cost of the appellant. Such cost is to be put in by Tuesday.

The appeal is accordingly disposed of. There will be no order as to costs.

If an urgent xerox certified copy of this order is applied for the same is to be supplied to the applicant at an early date, subject to compliance of all the required formalities.

A.K. Banerjee, J.

I agree.

Appeal disposed of