2009 (11) TMI 981 - HC - Indian Laws

Issues Involved:
1. Challenge to the order u/s 34 of the Arbitration and Conciliation Act, 1996.
2. Application by respondents to not deposit US$ 300,000 in court.
3. Scope of the arbitration agreement and the appeal.
4. Review/recall of the court's order directing deposit of US$ 300,000.
5. Allegation that the amount of US$ 550,000 was not received by respondents.
6. Argument of waiver u/s 4 of the Arbitration and Conciliation Act.
7. Court's inherent powers and jurisdiction to pass interim orders.

Summary:

1. Challenge to the order u/s 34 of the Arbitration and Conciliation Act, 1996:
The appellant filed an appeal u/s 37(1)(b) of the Arbitration and Conciliation Act, 1996, challenging the order dated 29.02.2008, whereby the learned Single Judge allowed objections u/s 34 of the Act and set aside the arbitrator's award made in favor of the appellant.

2. Application by respondents to not deposit US$ 300,000 in court:
Respondent Nos. 1 and 2 filed an application to be excused from depositing US$ 300,000 or its equivalent in rupees in compliance with the court's order dated 12.01.2009, as corrected on 06.02.2009.

3. Scope of the arbitration agreement and the appeal:
The arbitration agreement dated 29.08.2009 specified the distribution of sale proceeds of US$ 550,000 from the sale of a house in Kabul. The agreement required US$ 300,000 to be kept with Harinder Singh and US$ 250,000 with Kirat Singh until the arbitration/settlement of accounts.

4. Review/recall of the court's order directing deposit of US$ 300,000:
The court's order dated 12.01.2009, corrected on 06.02.2009, directed the respondents to deposit US$ 300,000 in court. The respondents sought a review/recall of this order, claiming they never received the amount of US$ 550,000.

5. Allegation that the amount of US$ 550,000 was not received by respondents:
Respondents claimed that the amount of US$ 550,000 was never received by them and was lying with an estate agent in Kabul. They argued that this information was not presented to the court when the order was passed.

6. Argument of waiver u/s 4 of the Arbitration and Conciliation Act:
Respondents argued that the appellant waived his right to require the deposit of US$ 300,000 by participating in the arbitration proceedings without objection, despite knowing that the amount was not kept in custody as per the arbitration agreement.

7. Court's inherent powers and jurisdiction to pass interim orders:
The court held that it had the jurisdiction to pass the order dated 12.01.2009, as corrected on 06.02.2009, under Section 9 of the Act and inherent powers u/s 94 read with Section 151 CPC to ensure justice and prevent the ends of justice from being defeated.

Conclusion:
The court dismissed the respondents' application with costs of Rs. 50,000 to be paid to the appellant within two weeks, affirming that the respondents had received the amount of US$ 550,000 and were required to deposit US$ 300,000 in court. The court found no merit in the respondents' claims and upheld the original order.

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