Gauhati High Court
Indian Railway Catering And Tourism ... vs Alak Kumar Ghose And Ors. on 5 December, 2006
Equivalent citations: 2007(2)ARBLR503(GAU), (2007)2GLR521, 2007(1)GLT174
Author: H.N. Sarma
Bench: H.N. Sarma
JUDGMENT H.N. Sarma, J.
1. Challenging the legality and validity of the order dated 27.11.2006 passed by the learned District Judge, Kamrup, Guwahati, in Misc. Arb. Case No. 597/2006 and Misc. Arb, 596/2006 granting an order of injunction in the form of status quo, in an application under Section 9(e) of the Arbitration and Conciliation Act. 1996, This two appeals have been filed under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996.
2. I have heard Mr. G. Banerjee, learned senior counsel for the appellant and also heard Mr. K.N. Choudhury, the learned senior counsel for the respondents.
3. On the basis of the judgment and order passed by this court in a batch of writ petitions, i.e., CR No. 2308/1997, W.P.(C) 7852/2005, W.P.(C) 2852/2005 CR No. 2332/1997, CR No. 2949/1997, CR No, 2331/ 1997 CR No. 2343/1997, W.P.(C) No. 4648/2002 and W.P.(C) No. 4041/ 2002 dated 17.8.2006 giving liberty to the parties to settle the dispute raised therein by way of adjudication through arbitration in terms of the relevant clause of the agreement, as was prayed for the matter had been referred for arbitration before the sole arbitrator to be appointed by the NF Railway authorities. Accordingly the disputes were referred for arbitration. While the matter was pending before the arbitrator, on such reference, the respondents herein filed an application in the Court of the learned Principal Judge, Court of original civil jurisdiction, i.e, the District Judge Kamrup, Guwahati under Section 9(e) of the Arbitration and Conciliation Act, 1996, praying for injunction, restraining the appellant from proceeding any further and/or finalizing the NIT dated 28.9.2006, pending conclusion of the arbitral proceeding commenced between the parties. The learned trial judge on 27.11.2006 passed the following order:
27.11.2006 This is an application under Section 9(e) of the Arbitration and Conciliation Act, 1996 submitted by the petitioner with a prayer for interim order prohibiting the respondents from finalizing the Notice Inviting Tender dated 28.9.2006 pending conclusion of the arbitration proceeding.
Heard the learned Counsel appearing for the petitioner. Also perused the order dated 17.8.2006 passed by the hon'ble High Court in WP(C) Case No. 2308/1997. Perused the materials available in the record.
The learned Counsel for the respondents has already appeared and has submitted, inter alia, that he has received the copy of the petition just now and he requires sometime to file objection.
Having heard both sides and having considered the urgency of the matter, it is ordered, the status quo be maintained by the parties as on today.
Fixed 18.12.2006 for objection, if any.
4. Challenging the aforesaid order Mr. Banerjee, the learned senior counsel submits that in passing the impugned order directing the status quo to be maintained by the parties as on 27.11.2006, the learned court did not consider the necessary relevant facts and laws which were necessary to be considered for passing the impugned order.
Referring to the impugned order dated 17.8.2006 passed by the High Court in the aforesaid batch of writ petitions, and other materials annexed with the petition, viz., the order of selection and allotment of the contract in question by the railway authorities, the application filed under Section 9(e) of the Arbitration Act, containing the letter dated 23.11.2006 intimating the allotees/respondents regarding the allotment of the contract and such other documents, it is submitted by Mr. Banerjee that the learned Trial Judge passed the impugned order without taking note of those facts and mechanically passed the impugned order which is not sustainable in law. It is strenuously submitted that by inviting tender the contract in question has already been settled with the private respondents and in the process the Railway authorities have got 37 lakh more than at what the respondents were running, that too without having a valid settlement in their favour after expiry of the earlier period of settlement.
5. Per Contra, Mr. Choudhury the learned senior counsel for the respondents submits that since the appellant had already appeared before the Trial Judge on the date of the passing of the impugned order and prayed for time, the learned Trial Judge committed no irregularity or illegality in passing the impugned order, thereby, protecting the interest of the respondents. Mr. Choudhury, also referred to the letter dated 7.11.2006 issued by the Chief Commercial Manager, addressed to one of the respondents, wherein an observation was made with regard to the renewal of fresh licence to the effect that decision for regularization of contract would be taken in due course in consonance with the award of arbitrator and its compliance and submits that in view of the aforesaid letter the railway authority could not have settled the contract in favour of anybody prior to the passing of the award by the arbitrator.
6. I have considered the rival submissions made by the learned Counsels for the parities. Although the learned senior counsel appearing for the parties have argued at length referring to the various documents and orders, I refrain from commenting on those documents inasmuch as the entire matter is now pending before the learned trial judge who is yet to decide the application under Section 9(e) of the Act finally.
7. The power under Section 9 of the Act to grant any injunction or interim order of protection by way of restrain order is a temporary measure that may be necessary in the facts and circumstances of a case, to be passed, pending disposal of a arbitral proceeding before the arbitrator. The said prayer provided under Section 9(e) of the Act is to be exercised by the learned court in a careful manner, keeping in mind the principles of granting injunction as provided under Order 39, Rules 1 and 2, CPC. In passing such a restrain order under Section 9 the learned Trial Judge is equally "bound by the principals of granting injunction and the said power cannot be said to be a bald on without any restraint. The impugned order discloses' that the learned trial court directed the parties to maintain the status quo which is a form of injunction. But the learned trial court, who is the principal court of original Civil jurisdiction in the Station, in passing the impugned order did not disclose any reasons for passing the impugned order. Disclosure of reasons even in passing an interlocutory injunction order is the mandate of law, which has been decided by this court in various decisions. To refer a few, a decision of the Full Bench of this court reported in 1984 1 GLR 133 Akmal Ali and Ors. and Abdul Mannan and Ors. v. State of Assam and Ors. may be referred to hon'ble Mr. Justice Lahiri (as his Lordship then was) speaking for the full court, had held as follows:
Any controversy as to whether reasons need be recorded while making an ex parte order of ad interim injunction has been removed by the introduction of Rule 3, which provides that the court after recording reasons for its satisfaction that the object of granting injunction would be defeated by delay, etc., may pass an order of ex parte ad interim injunction under Rules 1 and 2 of Order 39. It does not stand to scrutiny that an ad interim ex parte order devoid of reasons, rendered in violation of the well-known principles that a judicial order must contain reasons, and in violation of the mandatory provision of Rule 3 can escape the jurisdiction of the appellate court, but the same order can be revised by the very same court. Judicial order must be reasoned order. After the amendment, it must contain reason. The trial court must apply its mind to the materials placed before it, and, on being satisfied about the requirements of Order 39, Rules 1 and 2 make the order. Further, Rule 3 enjoins "reasons to be recorded". Under these circumstances when the trial court is required by law to state reasons, but does not furnish them in its order, it violates the provisions of "the code". By its own inaction or intentional violation of the mandatory provisions of the Rules a court cannot take away the right of appeal of a person aggrieved by that order. As such, an ex parte order of injunction, whether speaking or non-speaking, is appellable.
8. A similar view has also been expressed by the Division Bench of this court in the case of Sri Kalu Hazi v. Nabin Ch. Boro and Ors. 1985 GLR 281 wherein the Division Bench held at para 4 is as follows:
Before parting with the record I would observe that granting temporary injunction or making of interlocutory orders restraining the right of a party is a serious business. Temporary injunctions are regulated by Order 39, rule l(a), (b) and (c). The conditions precedent for granting temporary injunctions are: (1) when any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit or wrongly sold in execution of a decree an injunction may be granted. Similarly, if the defendant threatens, or intends to remove or dispose of his property with a view to defrauding his creditors, a temporary injunction may be granted, Further, if the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property under Order 39, Rule 2, the court may restrain the defendant from committing a breach of contract or other injury of any kind, whether compensation in the suit is claimed or not. If the defendant during the continuance of suit or proceeding tries to take possession of the suit land the court may equally issue notice in exercise of the power under Order 39 of the Code. However, before granting injunction the court must bear in mind the principles of granting injunction. Although the power is discretionary it must be used judicially and in accordance with self-settled principles. Injunction or interlocutory orders should not be granted. The court must examine the case and reach the conclusion that there is a bona fide contention between the parties which, in other words, is described "prima facie" case. Thereafter, the court should also considered the balance inconvenience if the injunction is not issued. In short the court must be satisfied that (i) the applicant has prima facie case to go to trial ; (ii) that protection is necessary from that species of injury known as 'irreparable injury, and (iii) that the mischief or inconvenience likely to arise from withholding injunction will be greater than which is likely to arise from granting it. The principles have set out by this court time out of number. It is needless to reiterate the same. The learned Munsiff issued ad interim injunction without considering the case of the parties, the balance of convenience/ inconvenience and/or the question of irreparable injury. In short, there is no reason for injuncting the defendants. In the result, the impugned orders rendered by the Munsiff cannot be upheld. Similarly, the impugned appellate order is also void of any reason why the order of the Munsiff had to be stayed. I am of opinion, it is not at all necessary to allow the proceeding to continue before the appellate court and further delay the proceedings. The proceeding in Misc. Appeal No. 2 of 1983, now pending in the court of Assistant District Judge, Sonitpur, Tezpur is also quashed as it has become infructuous in view of the present order.
8. There is yet another Single Bench decision of this court in which the decision of the Full Bench as well as various other decisions of the Apex Court have been referred and reported in 1984 2 GHC 182 Md. Saifullah Wdkf Estate v. Sara Devi Agarwalla @ Mandhania, the same view has been reiterated.
9. As eluded from the decision referred to above disclosing the reasons is undoubtedly necessary to read the mind of the learned court as to know that what impelled the learned court to pass such a restrain order and what were the consideration thereof and without such reasoning the order falls short of a judicial order. The learned principal judge passing such an order, did not consider the basic principles that were required to be considered in passing an injunction order.
10. Without commenting on the merits of the case as argued by the learned Counsels at length, I find that the impugned order is not sustainable on the aforesaid ground alone.
11. Consequently, the impugned order stands set aside and quashed. The learned trial judge is directed to take up the case on 18.12.2006 itself and the appellant shall file their objections if any, on the prayer of the respondents against the interim prayer of injunction, in the meantime by serving a copy upon the counsel for the respondents
12. With the aforesaid directions, this appeal stands allowed, miscellaneous cases also stand disposed of in the same light.
13. No costs.