2014 (3) TMI 1090 - SC - Indian Laws

Arbitration and Conciliation - Held that - Dispose of special leave petition by the following order (i) The impugned order under Section 9 of the Arbitration and Conciliation Act, 1996 is declared to be ineffective from the date the respondent Nos. 1 and 2 filed the suit and applied for interim relief. (ii) The suit filed by the respondent Nos. 1 and 2 shall be decided on its own merits uninfluenced by any observations made in the impugned order and the present order. HC ref case - 2011 (6) TMI 926 - CALCUTTA HIGH COURT

Summary

Issues involved:
1. Effectiveness of the impugned order under Section 9 of the Arbitration and Conciliation Act, 1996.
2. Filing of an independent suit by respondent Nos. 1 and 2 challenging the assignment of debt to a third party.
3. Decision on the suit filed by respondent Nos. 1 and 2.

Analysis:

Issue 1: Effectiveness of the impugned order under Section 9 of the Arbitration and Conciliation Act, 1996
The judgment addresses the ineffectiveness of the impugned order under Section 9 of the Arbitration and Conciliation Act, 1996. The respondent Nos. 1 and 2 had filed a suit and challenged the assignment of debt to a third party subsequent to the proceedings under Section 9 and the impugned order. The senior counsel for respondent Nos. 1 and 2 informed the court about the filing of the suit and the interim order passed in their favor. Consequently, the impugned order was declared ineffective from the date respondent Nos. 1 and 2 filed the suit and sought interim relief. The court disposed of the special leave petition by making this declaration, thereby rendering the impugned order ineffective.

Issue 2: Filing of an independent suit by respondent Nos. 1 and 2 challenging the assignment of debt to a third party
The judgment highlights that respondent Nos. 1 and 2 had taken the step of filing an independent suit challenging the assignment of debt to a third party. The court acknowledged this action and emphasized that the suit filed by respondent Nos. 1 and 2 should be decided on its own merits, without being influenced by any observations made in the impugned order or the present order. This direction ensures that the suit is adjudicated impartially and solely based on its own legal merits, detached from any previous judicial observations.

Issue 3: Decision on the suit filed by respondent Nos. 1 and 2
Regarding the suit filed by respondent Nos. 1 and 2, the judgment specifies that it should be decided on its own merits, uninfluenced by any remarks made in the impugned order or the current order. This directive ensures a fair and unbiased adjudication of the suit, emphasizing the importance of evaluating the case solely based on the legal arguments and evidence presented within the suit itself. The court's decision to allow the suit to proceed independently underscores the principle of judicial impartiality and the necessity of evaluating each legal matter on its individual legal standing.

In conclusion, the judgment effectively addresses the issues related to the impugned order under the Arbitration and Conciliation Act, the filing of an independent suit challenging the debt assignment, and the directive for deciding the suit on its own merits.