Karnataka High Court
P C Babu vs Sri Sandeep B on 19 April, 2018
Equivalent citations: AIRONLINE 2018 KAR 1666
Author: B.V.Nagarathna
Bench: B.V.Nagarathna
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF APRIL, 2018
BEFORE
THE HON'BLE MRS.JUSTICE B.V.NAGARATHNA
WRIT PETITION No.12168/2018 (CS-RES)
BETWEEN:
P. C. BABU,
S/O. CYRIAC JOHN,
AGED ABOUT 61 YEARS,
KUTTY'S COMPOUND,
KALPANA ROAD,
BENDOREWELL,
MANGALORE - 575 002. ... PETITIONER
(BY SRI K. DIWAKARA, ADVOCATE)
AND:
1. SRI SANDEEP .B,
ADVOCATE,
THE ARBITRATOR, APPOINTED UNDER
THE MULTISTATE CO-OPERATIVE
SOCIETIES ACT 2002,
SRI KRISHNA COMPLEX, M.G. ROAD,
KODAILBAIL,
MANGALORE - 676 001.
2. THE RUBBER MARKETING &
PROCESSING CO-OPERATIVE LTD.,
(RUBTECH INDIA), NELLIKAI,
BUNDER MANGALORE,
REPRESENTED BY ITS
GENERAL MANAGER - 676 001.
3. GURUPRASAD SHASTRY,
S/O. VITTAL SHETTY,
M.G. ROAD, ATTAVARA,
MANGALORE - 676 001. ... RESPONDENTS
*****
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THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH
THE ORDER DATED 29.10.2015, VIDE ANNEXURE-B BEARING
NO. ARBITRATION CASE NO.1/15 LEADING TO ATTACHMENT OF
THE PERSONAL PROPERTIES OF THE PETITIONER AND ETC.,
THIS PETITION COMING ON FOR PRELIMINARY HEARING
THIS DAY, COURT MADE THE FOLLOWING:
ORDER
Petitioner has assailed order dated 29/10/2015 (Annexure-B), passed in Arbitration case No.1/15, by which personal properties of the petitioner have been attached. Petitioner has also sought a declaration that the said Arbitration case No.1/15 pending before the first respondent/Arbitrator is not maintainable by virtue of Section 84 of the Multi-State Co-operative Societies Act, 2002 ("the Act" for short) against Directors of the society as the third respondent does not fall under any of the categories mentioned under Section 84 of the Act.
2. Heard learned counsel for the petitioner.
3. Petitioner is aggrieved by the impugned order dated 29/10/2015 (Annexure-B), by which the properties of petitioner comprising of lands in three survey numbers have been attached until further orders.
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4. Learned counsel for the petitioner submits that thereafter communication has been addressed to the jurisdictional Sub-Registrar, jurisdictional Tahsildar, third respondent/claimant and to the petitioner herein on 09/11/2016. However, petitioner was unaware of the impugned order of attachment. In the circumstances, the same has been assailed in this writ petition.
5. It is noted that the first respondent herein has exercised jurisdiction as an arbitrator in respect of the claim made by the third respondent having regard to Section 84 of the Multi-State Co-operative Societies Act, 2002, which is applicable in the present case. Sub-section (5) of Section 84 reads as under:
"84. Reference of disputes.- (5) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act, 1996."
Therefore, the arbitration proceedings under the provisions of the aforesaid Act are subject to Arbitration and Conciliation Act, 1996. Under Section 17 of the Arbitration and Conciliation Act, 1996, the arbitrator has the jurisdiction to pass -: 4 :- interim measures of protection as may appear to the arbitrator just and convenient [Section 17(1)(ii)(e)]. If any person is aggrieved by any interim order passed by the Arbitral Tribunal, the remedy lies under Section 37(2) of the Arbitration and Conciliation Act, 1996. The remedy is by way of an appeal to a Court from an order of the Arbitral Tribunal granting or refusing to grant an interim measure under Section 17. Therefore, the petitioner herein has an alternative and efficacious remedy of an appeal under Section 17(2) of the Arbitration and Conciliation Act, 1996. In the circumstances, the writ petition is dismissed as not maintainable.
6. In this regard reliance is placed on a decision of the Hon'ble Supreme Court in the case of SBP & Company vs. Patel Engineering Limited & another [(2005)8 SCC 618], wherein at paragraph Nos.45, 46 and 47, it has been observed as under:
"45. It is seen that some High Courts have proceeded on the basis that any order passed by an Arbitral Tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constitution. We see no warrant for such an approach. Section 37 makes certain orders of the Arbitral Tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating its grievances against the award including any in-between orders that might have -: 5 :- been passed by the Arbitral Tribunal acting under Section 16 of the Act. The party aggrieved by any order of the Arbitral Tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The Arbitral Tribunal is, after all, a creature of a contract between the parties, the arbitration agreement, even though, if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the Arbitral Tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed the Arbitral Tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution. Such an intervention by the High Courts is not permissible.
"46. The object of minimizing judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 or under Article 226 of the Constitution against every order made by the Arbitral Tribunal. Therefore, it is necessary to indicate that once the arbitration has commenced in the Arbitral Tribunal, parties have to wait until the award is pronounced unless, of course, a right of appeal is available to them under Section 37 of the Act even at an earlier stage.-: 6 :-
"47. We, therefore, sum up our conclusions as follows:
(i) to (v)xxxxxxxxxxx
(vi) Once the matter reaches the Arbitral Tribunal or the sole arbitrator, the High Court would not interfere with the orders passed by the arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Section 37 of the Act or in terms of Section 34 of the Act."
The Hon'ble Supreme Court has strongly disapproved intervention of the High Courts by exercising jurisdiction under Article 226 and 227 of the Constitution of India by entertaining writ petitions filed against interim orders passed by the Arbitral Tribunal.
7. Further, this Court, in the case of K.Satish Kumar vs. M/s. Rohan Associates (W.P.No.37175/2013 disposed on 23/01/2014) by following the dictum of the Hon'ble Supreme Court, has dismissed the writ petition assailing the order passed by an Arbitrator on the ground of maintainability. The said order is also squarely applicable to the present case. In the circumstances, writ petition is dismissed as not maintainable reserving liberty to the petitioner herein to avail the alternative and efficacious statutory remedy, if so advised. -: 7 :-
8. In the event there is any delay in filing of such an appeal, then the pendency of the writ petition before this Court may be taken note of.
9. Further, petitioner is at liberty to seek interim or protective orders from the appellate authority in the event an appeal is filed by the petitioner.
10. Office to return certified copies of documents filed along with memorandum of writ petition to petitioner's counsel forthwith subject to filing of photocopies of the same for the purpose of records.
Sd/-
JUDGE S*