2001 (6) TMI 785 - HC - Companies Law

Power to refer parties to arbitration when there is an arbitration agreement, Interim measure etc., by Court

Summary

Issues:
1. Jurisdiction of the Court to decide on arbitration matters.
2. Interpretation of the term "Court" under the Arbitration and Conciliation Act, 1996.
3. Applicability of sections 8 and 9 of the Act in seeking interim orders during arbitration proceedings.

Issue 1: Jurisdiction of the Court to decide on arbitration matters:
The revision petition arose from a suit filed by the respondent seeking accounts and an injunction against the petitioners. The petitioners contended that the Court exceeded its limits by directing custody of the hypothecated lorries during arbitration. They argued that any party seeking interim orders during arbitration proceedings should approach the Court under section 9 of the Act. The key question was which Court the parties should approach based on the definition of "Court" in section 2(1)(e) of the Act.

Issue 2: Interpretation of the term "Court" under the Arbitration and Conciliation Act, 1996:
The debate centered on the interpretation of the term "Court" as defined in the Act. The petitioner argued that parties should approach the District Court for interim orders, while the respondent contended that any Principal Civil Court of original jurisdiction could be approached. Reference was made to the definition of "District" in the Code of Civil Procedure and "District Judge" under the General Clauses Act to determine the jurisdiction of the Court.

Issue 3: Applicability of sections 8 and 9 of the Act in seeking interim orders during arbitration proceedings:
The judgment referred to a previous case where it was held that the Court referred to in section 9 of the Act is the Principal District Court. The Court clarified that while the suit filed by the respondent was not maintainable in the Junior Civil Judge's Court, the order directing arbitration was upheld. However, the rest of the order was set aside, and the respondent was directed to seek interim orders from the District Court. The petitioners were instructed not to seize the vehicles for a specified period.

In conclusion, the Civil Revision Petition was allowed in part, emphasizing the importance of approaching the correct Court for seeking interim orders during arbitration proceedings and clarifying the jurisdiction of the Principal District Court in such matters.