Gauhati High Court
Assam Industrial Development ... vs Assam Paper Mill Pvt. Ltd on 3 August, 2017
Author: Prasanta Kumar Deka
Bench: Prasanta Kumar Deka
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IN THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM &
ARUNACHAL PRADESH)
PRINCIPAL SEAT
Arbitration Appeal No. 22/ 2013
Assam Industrial Development Corporation & Ors
.......... Appellants
-VERSUS -
Assam Paper Mill Private Limited & Ors
............ Respondents
Advocate for the appellant: Mr. S. Chamaria.
....... Advocate.
Advocate for the Respondents Mr. B. Sarma,
............ Advocate.
-BEFOR E-
HON'BLE MR. JUSTICE PRASANTA KUMAR DEKA
Date of hearing : 03.08.2017
Date of judgment & order : 03.08.2017
JUDGMENT & ORDER (Oral)
Heard Mr. S. Chamaria, learned counsel appearing for the appellants and Mr. B. Sarma, learned counsel, appearing for the respondents.
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2. This Arbitration appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996") is for setting aside the judgment and order dated 15.5.2013, passed in Misc. Arbitration Case No. 460/2012 by the learned Additional District Judge, No. 2, Kamrup, Guwahati.
3. The present appellants vide letter No. AIDC/INC/IID-D/ Land/ 7056-60 dated 22.7.2005 allotted land at IID project at Dalgaon, Assam as per the application made by the respondent dated 6.5.2005. On the basis of the said allotment, a lease agreement was entered between the present appellants, as the lessor and the respondent company, as the lessee. In the said lease agreement dated 21.2.2005, it contains an arbitration clause which runs as follows:-
"Every dispute, difference or question touching or arising out or in respect of this land Lease Agreement or the subject matter thereof shall be referred to the sole arbitration to Collector of the district wherein the leased plot is situated or any person appointed by him, the decision of such arbitration shall be final and binding on the parties."
4. Within the said land allotted, the present respondents started the business of manufacturing of papers, craft papers, craft board etc. 3 As per the lease agreement, the maintenance of the said shed alongwith the land is to be carried out by the present appellants. Owing to allegations leveled on the part of the respondents with regard to deficiency in the maintenance of the lease hold property, a dispute between the present parties arose. It is the contention of the appellant that as per the clause stipulated in the said lease deed, owing to default in payment of rent and other maintenance charges by the respondent company, the said allotment was cancelled.
5. Upon such cancellation, the dispute arose and apprehending that the appellant Corporation would occupy the said allotted plot of land, an application was filed under Section 9 of the Arbitration and Conciliation Act, 1996 before the court of the learned Additional District No. 2, Kamrup at Guwahati by the respondents. By way of the said petition, it was pleaded that the respondent Company is holding the possession of the said plot of land after huge investment alongwith the plant and machinery and under such a situation, if the respondent Company is dispossessed, irreparable loss and injury would be sustained to it. Hence, the respondent Company filed the said application to restrain the present appellant Corporation from dispossessing the respondent Company.
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6. The present appellant Corporation resisted such prayer on the part of the respondent Company. However, after hearing both the parties, the learned court below was satisfied that the schedule land needs to be protected and preserved till disposal of the arbitration proceeding. Accordingly, the interim order dated 11.10.2012 in the said Misc. Arbitration case No. 460/2012 was made absolute with respect to the allotted land to the respondent Company vide judgment and order dated 15.5.2013.
7. Being aggrieved, the present appellant Corporation preferred the present appeal thereby challenging the judgment and order passed by the learned court below granting status-quo with respect to the possession of the allotted land till completion of the arbitral proceeding.
8. Mr. Chamaria submits that the impugned judgment has its inherent defect inasmuch as under Section 9 of the Arbitration and Conciliation Act, 1996, it has been specifically stipulated that once the arbitral Tribunal has been constituted, the Court shall not entertain the application under Sub-Section (1) of Section 9 unless court finds the circumstances exist which may render remedy under Section 17 inefficacious.
59] It is also submitted that under Section 17 of the Act of 1996, the power is given to the arbitral tribunal to grant interim measure during continuation of the arbitral proceeding or at any time after making of the arbitral award, before its execution.
10. Bringing into reference to the said provision of the said Act, 1996, Mr. Chamaria submits that as of now arbitral tribunal has already been constituted inasmuch as per the arbitral clause in the lease deed i.e. Clause (H)(3), it is the Collector of the District wherein the plot of land is situated or any person appointed, shall be the sole arbitrator. It is also submitted that already parties to the present appeal had moved the concerned authority for initiation of the arbitral proceeding. Under such circumstances, further continuation of the impugned judgment and order is not required. Moreover, it is further submitted that as there is a specific bar for continuation of an order passed under Section 9 after forming of the arbitral Tribunal, the present order violates the provision of Section 9 and as such the same is liable to be set aside.
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11. Mr. Sarma, learned counsel for the respondent Company submits that once the arbitral proceeding is started, order passed under Section 9 is bound to lost its effectiveness.
12. Considered the submissions of both the learned counsels. The submission of Mr. Chamaria has its force and accordingly the judgment and order passed in Misc. Arbitration Case No. 460/2012 thereby directing the parties to maintain status quo till the completion of the arbitral proceeding is liable to be set aside, which I accordingly do.
13. However, the respondent Company is at liberty to move necessary petition for such interim measure before the arbitral Tribunal, if so advised. Accordingly, this appeal succeeds and the same is disposed of. LCR if any be send back.
JUDGE Eam/