Karnataka High Court
M/S Bharat Petroleum vs B G Arunkumar on 5 January, 2016
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M.F.A.No.6145/2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JANUARY 2016
BEFORE
THE HON'BLE MR. JUSTICE H.G.RAMESH
MISCELLANEOUS FIRST APPEAL NO.6145/2014 (AA)
BETWEEN:
M/S. BHARAT PETROLEUM
CORPORATION LIMITED
A PUBLIC SECTOR UNDERTAKING
BHARAT BHAVAN, NO.1 & 2
BALLARD ESTATE, MUMBAI-400 001
BY ITS TERRITORY MANAGER, RETAIL
BANGALORE ... APPELLANT
(BY SRI UDAYA HOLLA, SENOR COUNSEL FOR
SRI N.J.KUMAR,
M/S. ARGUS PARTNERS, ADVOCATES)
AND:
B.G.ARUNKUMAR
S/O B.N.GOPAL
AGED ABOUT 57 YEARS
PROP. M/S.ADVAITA
NO.12, JAYANAGAR 4TH BLOCK
BANGALORE - 560 011 ... RESPONDENT
(BY SRI M.N.SESHADRI, SENIOR COUNSEL FOR
SRI M.KRISHNAPPA, ADVOCATE)
MFA FILED U/S 37(1)(a) OF THE ARBITRATION AND
CONCILIATION ACT, AGAINST THE ORDER DATED 22.4.2014
PASSED IN A.A.NO.444/2013 ON THE FILE OF THE 6TH
ADDITIONAL CITY CIVIL & SESSIONS JUDGE, BANGALORE,
ALLOWING THE PETITION FILED UNDER SECTION 9 OF THE
ARBITRATION AND CONCILIATION ACT.
MFA COMING ON FOR ADMISSION, THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
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M.F.A.No.6145/2014
JUDGMENT
H.G.RAMESH, J. (Oral):
1. This appeal is directed against the order dated 22.4.2014 passed by the Court of the VI Additional City Civil Judge, Bangalore City, ('the Civil Court' for short) in Arbitration Application No.444/2013 in exercise of the power under Section 9 of the Arbitration and Conciliation Act, 1996 ('the Act' for short). By the impugned order, the Civil Court has restrained the appellant (Bharat Petroleum Corporation Ltd.) from interfering with the operation of Auto LPG facility by the respondent in the petition schedule property, till 'arbitration proceedings' is over.
2. I have heard Sri Udaya Holla, learned Senior counsel appearing for the appellant and Sri M.N.Seshadri, learned Senior Counsel appearing for the respondent, perused the impugned order dated 22.4.2014 and also the order dated 30.3.2015 passed by the sole arbitrator, which is produced by the appellant along with a memo dated 3.11.2015.
3. Sri Udaya Holla, learned Senior Counsel appearing for the appellant submitted that as the arbitration proceedings -3- M.F.A.No.6145/2014 got terminated by the order dated 30.3.2015 passed by the sole arbitrator, the impugned order passed under Section 9 of the Act has ceased to be in force from 30.3.2015 i.e. from the date of termination of the arbitration proceedings. He submitted that the appeal may accordingly be disposed of.
4. On the contrary, Sri M.N.Seshadri, learned Senior Counsel appearing for the respondent submitted that 'arbitration proceedings' referred to in the impugned order dated 22.4.2014 passed by the Civil Court also takes within its ambit Arbitration suit No.52/2013 filed under Section 14(2) of the Act by the respondent on 1.8.2013 to terminate the mandate given to the sole arbitrator and his nominee. Therefore, he submitted that as the aforesaid suit is still pending, the impugned order is still in force.
5. For clarification, it is relevant to state that an application under Section 14 of the Act will be registered as an Arbitration suit in view of Rule 4(b) of the High Court of Karnataka Arbitration (Proceedings before the Courts) Rules, 2001. Hence, the aforesaid application filed by the -4- M.F.A.No.6145/2014 respondent under Section 14(2) of the Act is registered as Arbitration suit no.52/2013.
6. In view of the above two rival contentions, the only question that falls for determination in this appeal is as to whether 'arbitration proceedings' referred to in the impugned order dated 22.4.2014 takes within its ambit arbitration suit No.52/2013 also?
7. In my opinion, the aforesaid question has to be answered in the negative for the following reasons.
8. To examine the question raised, it is relevant to extract paras 11 & 12 of the order dated 30.3.2015 passed by the sole arbitrator terminating the arbitration proceedings:
"11. As stated hereinabove, Advaita have not filed their Statement of Claim in this proceeding in spite of being given sufficient opportunities for the same. They have therefore clearly defaulted in complying with the provisions of Section 23(1) of the Act and continuance of the arbitration proceedings has also become impossible.
12. In the circumstances stated above, I am satisfied that the arbitration proceedings should be terminated and I hereby direct and pass orders terminating the Arbitration proceedings under Section 25(a) and 32(2)(c) of the Act. The parties shall bear their own cost."
(Underlining supplied) -5- M.F.A.No.6145/2014 As could be seen from the above order of the sole arbitrator, the arbitration proceedings came to be terminated on 30.3.2015 as the respondent failed to file his statement of claim.
9. It is also relevant to refer to Sections 23(1) and 25(a) of the Act which reads as follows:
"23. Statement of claim and defence.--(1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.
25. Default of a party.--Unless otherwise agreed by the parties, where, without showing sufficient cause, --
(a) the claimant fails to communicate his statement of claim in accordance with sub-section (1) of section 23, the arbitral tribunal shall terminate the proceedings;"
10. The operative portion of the order of the Civil Court impugned herein also requires to be noticed:
"(1) The petition filed by the Petitioner Under Section 9 of the Arbitration and Conciliation Act, 1996; is hereby allowed.
(2) The Respondents are hereby restrained from interfering with the operation of Auto LPG facility by the Petitioner in the petition schedule property, till arbitration proceedings is over.
(3) No order as to costs."
(Emphasis supplied)
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M.F.A.No.6145/2014
11. In my opinion, 'arbitration proceedings' referred to in the impugned order does not take within its ambit arbitration suit No.52/2013 filed under Section 14(2) of the Act as nowhere in the impugned order it is so indicated. A reading of the impugned order does not indicate that 'arbitration proceedings' referred to by the Civil Court will take within its ambit the arbitration suit also. Hence, the impugned order dated 22.4.2014 has ceased to be in force with effect from the date of termination of the arbitration proceedings i.e. from 30.3.2015. The appeal stands disposed of accordingly.
12. At this stage, learned Senior Counsel appearing for the respondent prays for stay of this order to enable the respondent to approach the Supreme Court. I find no ground to stay this order. His prayer is rejected.
Appeal disposed of.
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JUDGE hkh.