An ex parte order appointing an advocate commissioner may be passed, but simultaneously notice shall be ordered to go to the respondent indicating the date of hearing of the application - After the vehicle has been seized, it shall be in the custody of the applicant. This custody is on behalf of the Court
Citation
CDJ 2010 MHC 184
Cholamandalam DBS Finance Ltd vs Sudheesh Kumar
(2010(1) CTC 481)
Head Note
Arbitration and Conciliation Act - Section 9 - Civil Procedure Code - Order 39 Rule 1 -Appellant-company and respondent-borrower entered into a loan agreement in respect of the above vehicle - agreement provided for the resolution of dispute by arbitration - Article 11 of the agreement provides for re-possession by the company of the Asset of the company, as the vehicle is called, on occurrence of any of the events of default set out in Article 10 of the agreement and if the borrower failed to deliver the Asset, it was open to the company to enter any place where the Asset may be and to remove or take possession of the same - respondent filed application, wherein he has stated that he had been paying the instalments for the two vehicles, which he had purchased on loan, but due to recession, he could not make payments - He has also stated that the appellant had filed Arbitration O.P, against the respondent and the guarantor and prayed for an order of attachment to attach the immovable property with a direction to furnish security and I.A. also filed for interim attachment, which the District Court, Ernakulam had granted - learned single Judge held that since the attachment order is in force and the respondent's rights are protected, it is not necessary for the appellant to have the custody of the vehicle and accordingly, ordered the return of the vehicle - against this present appeal has been filed.
Court held - Requirement of section 9 of Arbitration and Conciliation Act is that the parties claiming the relief should show that the interim measure of protection is necessary for the preservation, detention or inspection of any property, which is the subject matter of the dispute in arbitration and it also lays down what directions the Court may give in order to make this power effective - person applying should show prima facie case and should also establish the irreparable injury and also the balance of convenience and in case, where a vehicle is to be emergently seized, there should be averments to show why it is just and convenient to seize the vehicle - party invoking Section 9 must also be able to satisfy the Court that the arbitral proceedings are actually contemplated or about to be initiated - in the affidavit, no averments are made to justify interim order except to state that the vehicle will be subject to constant depreciation in value, wear and tear - There must be necessary pleadings to show that it is just and convenient to pass the interim measure of protection - Since the respondent himself says that there was an one-time settlement of payment of Rs.3,20,000/-, if that amount is paid to the appellant, then they shall release the vehicle - learned counsel for the appellant denies there was such an one-time settlement - Therefore, the same shall be decided by the learned Arbitrator in the arbitral proceedings initiated by the appellant - With above observations, Original Side Appeal is disposed of.
Cases Referred:
1988-I-L.W.-109 (Mercantile Credit Corporation Ltd. Messrs. v. V.Amaravathi)
1993-I-MLJ-284 (Paramasivam v. The T.N. Indl. Invt. Corpn. Ltd.)
1999-1-L.W.-267 (Sri Rama Machinery Corporation Limited, etc. v. Standard Chartered Bank, etc. & another)
2006 (1) CTC 670 (The Managing Director, Orix Auto Finance (India) Ltd. v. Jagmander Singh)
2007-1-L.W.-880 (Manager, I.C.I.C.I. Bank Ltd. v. Prakash Kaur & Others)
416 U.S. 600 (Mitchell v. W.T.Grant Co.)
(1969) 3 All England Reported 1376
M/s.Sundaram Finance Ltd. v. M/s.NEPC India Ltd. (A.I.R. 1999 SC 564)
(2004) 3 SCC 155 (Firm Ashok Traders v. Gurumukh Das Saluja)
(2007) 7 SCC 125 (Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd.)
Comparative Citations:
2010 (1) CTC 481, 2010 (1) LW 951, 2010 (2) MLJ 448
Court held - Requirement of section 9 of Arbitration and Conciliation Act is that the parties claiming the relief should show that the interim measure of protection is necessary for the preservation, detention or inspection of any property, which is the subject matter of the dispute in arbitration and it also lays down what directions the Court may give in order to make this power effective - person applying should show prima facie case and should also establish the irreparable injury and also the balance of convenience and in case, where a vehicle is to be emergently seized, there should be averments to show why it is just and convenient to seize the vehicle - party invoking Section 9 must also be able to satisfy the Court that the arbitral proceedings are actually contemplated or about to be initiated - in the affidavit, no averments are made to justify interim order except to state that the vehicle will be subject to constant depreciation in value, wear and tear - There must be necessary pleadings to show that it is just and convenient to pass the interim measure of protection - Since the respondent himself says that there was an one-time settlement of payment of Rs.3,20,000/-, if that amount is paid to the appellant, then they shall release the vehicle - learned counsel for the appellant denies there was such an one-time settlement - Therefore, the same shall be decided by the learned Arbitrator in the arbitral proceedings initiated by the appellant - With above observations, Original Side Appeal is disposed of.
Cases Referred:
1988-I-L.W.-109 (Mercantile Credit Corporation Ltd. Messrs. v. V.Amaravathi)
1993-I-MLJ-284 (Paramasivam v. The T.N. Indl. Invt. Corpn. Ltd.)
1999-1-L.W.-267 (Sri Rama Machinery Corporation Limited, etc. v. Standard Chartered Bank, etc. & another)
2006 (1) CTC 670 (The Managing Director, Orix Auto Finance (India) Ltd. v. Jagmander Singh)
2007-1-L.W.-880 (Manager, I.C.I.C.I. Bank Ltd. v. Prakash Kaur & Others)
416 U.S. 600 (Mitchell v. W.T.Grant Co.)
(1969) 3 All England Reported 1376
M/s.Sundaram Finance Ltd. v. M/s.NEPC India Ltd. (A.I.R. 1999 SC 564)
(2004) 3 SCC 155 (Firm Ashok Traders v. Gurumukh Das Saluja)
(2007) 7 SCC 125 (Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd.)
Comparative Citations:
2010 (1) CTC 481, 2010 (1) LW 951, 2010 (2) MLJ 448
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