Karnataka High Court
Shahbaz S/O Mustaq Hunagund, vs The Manager, on 16 February, 2017
Author: Vineet Kothari
Bench: Vineet Kothari
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Date of Judgment 16.02.2017 M.F.A. No.100223/2017
Shahbaz S/o. Mustaq Hunagund
Vs.
The Manager
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 16TH DAY OF FEBRUARY 2017
PRESENT
THE HON'BLE DR. JUSTICE VINEET KOTHARI
AND
THE HON'BLE MR. JUSTICE SREENIVAS HARISH KUMAR
M.F.A. No.100223/2017 (AA)
BETWEEN :
SHAHBAZ S/O. MUSTAQ HUNAGUND,
AGE: 20 YEARS,
OCC: STUDENT/BUSINESS,
R/O: VEERESHWARA NAGAR,
MULGUND ROAD,
GADAG, DIST: GADAG.-582101.
... APPELLANT
(BY SRIYUTHS DINESH M. KULKARNI & R. A.
PUROHIT, ADVOCATES)
AND :
THE MANAGER,
SRI RAM FINANCE TRANSPORT COMPANY LTD.,
GADAG BRANCH GADAG,
R/O: 1ST FLOOR, K.L. JAIN COMPLEX,
PALA BADAMI ROAD,
OPP: OLD D.C. OFFICE,
GADAG - 582101.
... RESPONDENT
THIS MFA IS FILED U/S.37(1) OF ARBITRATION AND
CONCILIATION ACT, AGAINST THE JUDGMENT AND
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Date of Judgment 16.02.2017 M.F.A. No.100223/2017
Shahbaz S/o. Mustaq Hunagund
Vs.
The Manager
ORDER DATED 13.12.2016 PASSED IN A.A. NO.1/2016 ON
THE FILE OF THE PRINCIPAL DISTRICT AND SESSIONS
JUDGE, GADAG, DISMISSING THE PETITION FILED
UNDER SEC.9 OF ARBITRATION AND CONCILIATION ACT.
THIS APPEAL COMING ON FOR ADMISSION THIS
DAY, DR. VINEET KOTHARI, J., DELIVERED THE
FOLLOWING:
JUDGMENT
Mr. Dinesh M. Kulkarni & R. A. Purohit, Advocates for appellant.
1. This appeal has been filed by the petitioner, Shabaz S/o. Mustaq Hunagund, aggrieved by the order dated 13.12.2016 passed by the Prl. District and Sessions Judge, Gadag, rejecting application under Section 9 of Arbitration and Conciliation Act, 1996 (for short, 'the Act') as not maintainable.
2. The petitioner borrowed a loan from the respondent
- Sri Ram Finance Transport Company Limited, Gadag, for financing the purchase of a vehicle and on account of failure to repay the same, as per the Schedule fixed in the loan agreement, certain disputes arose and invoking the Arbitration Clause, the petitioner appears to have straight away approached the learned Trial Court under Section 9 of 3/7 Date of Judgment 16.02.2017 M.F.A. No.100223/2017 Shahbaz S/o. Mustaq Hunagund Vs. The Manager the Act for interim relief seeking a declaration that the petitioner be declared as owner of the vehicle and the hypothecation agreement be cancelled and further to direct the respondent - Company to furnish account extract.
3. The learned Trial Court rejected the said application under Section 9 of the Act with the following observations :
"10. Under Rule 9(3) if an application for interim relief is filed U/s. 9 of the Act before commencement of the arbitral proceedings, the application is required to specifically refer to the steps already taken to seek arbitration in terms of the arbitration agreement clause. Sub Rule (4) of Rule 9 of the Rules provides that if application for interim relief is made before initiating arbitral proceedings and within three months from the date of presentation, if arbitral proceedings are not initiated interim relief granted stands vacated. In the present case petitioner has not stated in the petition anything about the steps taken for initiating arbitral proceedings, either before filing this petition or thereafter. Petitioner has failed to show compliance of this Rule 9 for taking steps for initiation of arbitral proceedings. Hence, the relief sought for grant of interim relief U/s. 9 of the Act cannot be granted.4/7
Date of Judgment 16.02.2017 M.F.A. No.100223/2017 Shahbaz S/o. Mustaq Hunagund Vs. The Manager
11. Rule 4 provides as to what are the contents of the application filed under the Act, Rule 4(f) requires the applicant to file an affidavit in support of the application U/s.9 together with certified copy of arbitration agreement and other relevant documents referred to in the affidavit. In the present case petitioner has filed only verification affidavit, but not the affidavit required under Rule 4(f). He has produced photo copy of loan-cum-hypothecation agreement, original cash receipts and copies of vehicle documents. This is not in compliance with Rule 4(f). In this context the petition is not tenable under law.
12. It is contended for the respondent that petitioner had filed earlier a suit wherein application was filed U/s.8 for referring the dispute for arbitration and it was withdrawn and original agreement was produced in that case by the respondent. Therefore, petitioner could have obtain certified copy nor explanation is given for not producing certified copy or about the steps to be taken or already taken for initiating arbitral proceedings.
13. In the present case petition was presented on 21.01.2016 and more than 90 days have lapsed and petitioner has not disclosed compliance of the Rules. However, the learned counsel for petitioner has contended that agreement copy is filed and more than Rs.20,00,000/- is repaid and loan availed itself was Rs.20,00,000/- and now respondent claims that 5/7 Date of Judgment 16.02.2017 M.F.A. No.100223/2017 Shahbaz S/o. Mustaq Hunagund Vs. The Manager still more than Rs.25,00,000/- is due. In this petition U/s.9 of the Act court cannot go into such contentions regarding correctness of the claim, repayment made, because only interim relief as contemplated U/s. 9 of the Act can be granted but, not any relief by way of declaration or directions. Therefore, as argued for the respondent prayer for declaration that petitioner is the owner of the vehicle or for cancellation of hypothecation agreement and to direct respondent to furnish account extract cannot be granted in this case.
14. For all the above reasons as per the objections taken up for the respondent the petition is not maintainable. Therefore, the law laid down in the cited decision referred by the learned counsel for the accused does not help his contentions for the purpose of granting the reliefs sought for. The frame of this petition invoking Order VII Rule 1 of CPC itself is not maintainable under law. The provision is misquoted. Considering the nature of the claim and the facts of the case it can be said that petitioner intended to invoke Sec. 9 of the Act. Nevertheless, none of the reliefs sought for can be granted. Accordingly, the following :
ORDER Petition Under Sec. 9 of Arbitration and Conciliation Act, is dismissed.
Sd/-
(Smt. K. Nagarathna) Prl. District & Sessions Judge, Gadag."6/7
Date of Judgment 16.02.2017 M.F.A. No.100223/2017 Shahbaz S/o. Mustaq Hunagund Vs. The Manager
4. Learned counsel for the appellant, Mr. Dinesh M. Kulkarni relied upon the decision of this Court in the case of Prakash Chand P. Ostwal vs. L. Srinivas, 2015 (3) KCCR 2165 (DB) in which the Division Bench of this Court held that the word 'before' used in Section 9 of the Act which provides for interim relief in arbitration proceedings to be availed before the Civil Court permits that even before the initiation of arbitration proceedings, the Civil Court can be approached for such interim relief.
5. There is no dispute on the ratio of the said judgment that a party can approach the court for interim relief even before the initiation of arbitration proceedings, but we cannot agree with the submissions made at Bar by learned counsel for the appellant that the appellant could seek a declaration of the nature sought by him declaring him to be the owner of the vehicle, in question, financed by the respondent - Finance Company and also a declaration about cancellation of the hypothecation agreement itself in question. The appellant has even described the said Section 7/7 Date of Judgment 16.02.2017 M.F.A. No.100223/2017 Shahbaz S/o. Mustaq Hunagund Vs. The Manager 9 application as a civil suit invoking Order VII Rule 1 of C.P.C. as observed in para 14 of the learned Trial Court's order. We are sure that no such declaration could be sought by the petitioner in the application under Section 9 of the Act and it was beyond the realm of the scope of Section 9 of the Act.
6. The petition is, therefore, rightly rejected by the learned Trial Court and we do not find any force in the present appeal and the same is liable to be dismissed. Accordingly, appeal is dismissed. No costs.
Sd/-
JUDGE Sd/-
JUDGE hnm