Kerala High Court
Fr. M.C.Paulose vs Mr. Shibi Abraham
Author: C.K. Abdul Rehim
Bench: C.K.Abdul Rehim, V Shircy
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM
&
THE HONOURABLE MRS. JUSTICE SHIRCY V.
MONDAY, THE 26TH DAY OF MARCH 2018 / 5TH CHAITHRA, 1940
Arb.A.No. 83 of 2017
(AGAINST THE ORDER DATED 13-11-2017 IN IA No.636/2017 IN OP (ARB) No.36/2017 OF
ADDITIONAL DISTRICT COURT-II, PATHANAMTHITTA)
APPELLANT//PETITIONER/ORIGINAL RESPONDENT:
FR. M.C.PAULOSE
AGED 56, S/O. LATE M.T. CHERIAN,
CEO, ST.GREGORIOUS MEDICAL MISSION HOSPITAL, PARUMALA.
BY ADVS.SRI.CHERIAN GEE VARGHESE
SRI.P.HARIDAS
SRI.RENJI GEORGE CHERIAN
SRI.P.C.SHIJIN
RESPONDENTS/RESPONDENTS/ ORIGINAL PETITIONERS:
1. MR. SHIBI ABRAHAM
AGED 43 YEARS, S/O. LATE T.G. ABRAHAM,
MANAGING PARTNER, PIONEER MEDICAL IMAGING,
RESIDING AT KODAKERIL SHIBI COTTAGE,
KURATTISSERIL VILLAGE, PAVUKKARA, CHENGANNUR,
ALAPPUZHA DISTRICT.
2. MR. JOHN MATHEW,
AGED 47 YEARS, S/O. MR. MATHAI YOHANNAN,
PARTNER, PIONEER MEDICAL IMAGING,
RESIDING AT KUDANTHAYIL KIZHAKETHIL,
KALANJOOR P.O., EDATHARA JUNCTION,
PATHANAMTHITTA DISTRICT.
R1 & R2 BY ADV.SRI. S. PRAKASH
THIS ARBITRATION APPEAL HAVING BEEN FINALLY HEARD ON 26-03-2018, ALONG
WITH ARB. A No.11/2018 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
AMG
Arb. A No.83/2017
APPENDIX
APPELLANT'S ANNEXURES
NIL
RESPONDENTS' ANNEXURES
ANNEXURE-A - TRUE COPY OF THE AGREEMENT MADE BY RESPONDENT & THE
APPELLANT DATED 01-06-2013.
ANNEXURE-B - TRUE COPY OF THE LETTER DATED 08-05-2017.
ANNEXURE-C - TRUE COPY OF THE LETTER DATED 18-09-2017.
ANNEXURE-D - TRUE COPY OF THE NOTICE SENT BY THE RESPONDENT TO THE
APPELLANT DATED 12-10-2017.
AMG
C.K. ABDUL REHIM, J.
&
SHIRCY V., J.
-------------------------------------------------
Arb. Appeal No. 83 OF 2017
&
Arb. Appeal No. 11 OF 2018
-------------------------------------------------
DATED THIS THE 26th DAY OF MARCH, 2018
JUDGMENT
Abdul Rehim, J:
Since both these appeals arise from interim orders passed by the District Court, Pathanamthitta in the very same original petition and since the parties are common in both these cases, these appeals were considered together and dispose of through this common judgment.
2. The respondents in both these appeals have approached the District Court in OP (Arb) No.36/2017 seeking interim measure of protection with respect to the subject matter in dispute relating to a 'C.T. Scan Unit' and an 'Ultra Sonography Unit' established by the respondents in the hospital of the appellant. In the said original petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act' for short) the respondents have filed IA No.600/2017 seeking an interim Arb. A Nos. 83/2017 & 11/2018 -2- order of injunction restraining the appellant from dispossessing the respondents from the scheduled premises and from restraining the appellant from running their 'Ultra Sonography Unit' and also for restraining the appellant from installing a new 'C.T. Scan Unit' in the hospital premises. When the said interim application was moved, the court below has passed an ad interim order of injunction on 11th October 2017. It was made clear in the said order that if the arbitral proceedings are not initiated within 90 days from the date of the said order, the order shall stand vacated without any specific order is being passed by the court to that effect.
3. On receiving notice in the original petition and in the interim application, the appellants herein had moved the court below to vacate the interim order by filing IA No.636/2017. Through an order dated 13-11-2017 the court below had declined to vacate the interim order by observing that, there is no sufficient reasons existing because the respondents had already started the arbitral proceedings. There also it was made clear that, if the arbitral Arb. A Nos. 83/2017 & 11/2018 -3- proceedings are not initiated within 90 days from the date of interim order, the said order shall stand vacated without any specific order being passed to that effect. The above said order dated 13-11-2017 is challenged in Arb. Appeal No.83/2017 at the instance of the appellant.
4. During pendency of the Arb. Appeal No.83/2017, the court below had passed an interim order dated 30-01- 2018, extending the injunction order passed in I.A. No.600/2017, till an Arbitrator is appointed in the matter. The appellant had chosen to challenge the said order also by filing Arb. Appeal No.11/2018.
5. Heard; counsel appearing on either side. It is submitted that, both sides have suggested Arbitrators of their own choice, which was not accepted by either side. Learned counsel appearing for the respondents submitted that they have already moved this court in a petition under Section 11 of the Act seeking for appointment of an Arbitrator/Arbitrators in the case. On a perusal of the copy of agreement produced by the respondents along with their counter affidavit, it is revealed that the agreement contains Arb. A Nos. 83/2017 & 11/2018 -4- a clause restraining the appellant from operating directly or indirectly or making investment as shareholder/partner, proprietor or in any other manner in 'C.T. Scan' and 'Ultra Sonography Scan' units within a radius of 9 Kms., during validity of the agreement. Presumably, contention of the respondents is that, they are entitled to continue the operation of 'C.T. Scan unit' and 'Ultra Sonography Scan Unit' established in the premises of the appellant till the arbitration is proceeded. Seemingly the relief sought for before the District Court is to protect the situation which is prevailing till the arbitration is proceeded. It is on that background they are seeking injunction restraining the appellant from dispossessing them and from establishing a new C.T. Scan Unit in the hospital premises. But, the learned counsel appearing for the appellant submitted that, by virtue of the interim order of injunction the respondents are preventing the appellant from meeting their needs in the hospital with respect to operation of the scanning units. The allegation is that the respondents are not functioning the unit properly to suit the needs in the hospital. It is also Arb. A Nos. 83/2017 & 11/2018 -5- alleged that huge amounts are due for payment towards arrears of rental and service tax from respondents.
6. Evidently the order impugned in Arb. Appeal No.83/2017 was passed by the District Court with an intention to preserve the subject matter of the arbitration, in exercise of the power vested under sub section 1 (ii) of Section 9 of the Act. The order impugned in Arb. Appeal No.11/2018 is evidently an extension of time limit with respect to validity of the said order. In this regard, the provisions contained in sub section (2) of Section 9 assumes importance. It provides that, if on passing an interim order under sub section 1, the arbitral proceedings should be commenced within a period of 90 days from the date of such order or within such further time as the court may determine. A legal presumption which can be drawn from the said provision is that, if the arbitral proceedings is not commenced within a period of 90 days from the date of the interim order, such order may not be valid after 90 days, unless further time is granted by the court in exercise of powers vested under sub section 2. In the case at hand, it is Arb. A Nos. 83/2017 & 11/2018 -6- evident that the court below had specified in the orders passed on 11-10-2017 & 13-11-2017 that those orders shall stand vacated without any specific order being passed, if the arbitral proceedings are not initiated within 90 days from the date of such interim orders. But in the order passed on 30-01-2018 it is mentioned that, the case of the respondents is that they have already initiated arbitral proceedings. Hence the time of validity of the order was enlarged by the court below, till an Arbitrator is appointed in the matter. The date of commencement of the arbitral proceedings is stipulated under Section 21 of the Act as the date on which a request for referring the dispute for arbitration is received by the respondents. In the case at hand, as submitted by the counsel appearing on both side, the request for referring the dispute for arbitration has already been received by the parties, each other. Therefore, it is revealed that the arbitral proceedings has already been commenced. But at the same time the fact remains that, the Arbitrator/Arbitrators were not yet appointed. Therefore the court below cannot be blamed in extending validity of the Arb. A Nos. 83/2017 & 11/2018 -7- interim order, till an arbitrator is appointed. But at the same time, we are of the opinion that, it is for the court below to consider the contention on the factual matrix of the matter and to take a decision whether the ad interim order granted need to be continued or not. In this regard, after considering arguments on both side, the court below has to take an appropriate decision, considering the well settled parameters with respect to granting of interim orders of injunction, including the parameters regarding the balance of convenience. In this regard the court exercising powers under Section 9 of the Act is empowered even for appointing a Receiver, as provided under Section 9 (1) (ii) (9). We also take note of the fact that, on appointment of the Arbitrator or Arbitrators, the parties will be at liberty to seek appropriate interim measures before such Arbitrator/Arbitrators, as provided under Section 17 of the Act.
7. Under the above mentioned circumstances we are of the considered opinion that the parties can be relegated to the District Court for adjudicating the matter before that Arb. A Nos. 83/2017 & 11/2018 -8- court. The District Court shall pass final orders on OP (Arb) No.36/2017, after hearing both sides and if necessary after taking evidence in the matter, taking into consideration of the observations contained herein above. It is left to the court below to take an appropriate decision with respect to the interim measure to be continued, if found necessary, till the Arbitrator/Arbitrators were appointed and the actual proceedings of the arbitration is started before the Arbitrator/Arbitrators.
8. Considering urgency of the matter it will be most desireable for the District Court to take a final decision in the matter at the earliest possible, at any rate, within a period of 2 months from the date of receipt of a copy of this judgment.
Sd/-
C.K. ABDUL REHIM, JUDGE.
Sd/-
SHIRCY V., JUDGE.
AMG True copy P.A. to Judge