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TMI Blog2003 (4) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... fferences and claims and questions have to be resolved by referring the same to the Arbitrator, it is stated that they have referred the dispute to the Arbitrator. It is also stated that the respondent-company, was declared as a sick company by the BIFR. On the basis of these averments, the Applicant has come forward with this Application to appoint an Advocate Commissioner to seize with the police protection and sell the equipments subject to the matter of the lease agreement dated 8-9-1993 and adjust the proceeds thereof to the outstanding of the respondent. 2. Though the respondent filed a counter and the learned counsel submitted that the agreement does not provide to appoint sole arbitrator, the fact remains, he admits the existence of a clause to appoint an Arbitrator in the agreement. 3. On the basis of the above facts, now I have to decide the scope of section 9 so as to sustain the Application for appointment of a Commissioner to re-possess the equipment supplied to the respondent on lease basis and sell the same by the Commissioner. 4. In this case, no independent agreement was entered into with respect to arbitration. "Arbitration agreement" is defined in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o approach the Court to get interim orders. To understand the scope of section 9 of the Act, we have to see the Statement of Objects and Reasons appended to the Bill with respect to the Act. It is specifically stated that the Arbitration Act, 1940, had become outdated. The United Nations Commission on International Trade Law (UNICITRAL) and the Rules made thereunder were taken as a model legislation to legislate the provisions of the Arbitration and Conciliation Act. 8. Section 9 of the Act details as to the nature of interim measures of protection could be ordered by the Court. The said provision has been made with the aim to preserve the assets protecting the position of the parties, maintaining the status quo and preserving evidence. 9. Though arbitral Tribunal also was given power under section 17 of the Act to pass orders by way of interim measures of protection, it can be passed only with respect to the subject-matter of the dispute. Such a power also can be excluded by an agreement between the parties. The scope of section 9 is considerably wider than that of section 17. The scope of the said provision came up for consideration before the Apex Court in Sundaram Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w to see that effective steps are taken by the applicant for commencing the arbitral proceedings. What is apparent, however, is that the Court is not debarred from dealing with an application under section 9 merely because no notice has been issued under section 21 of the 1996 Act." (p. 488) 10. From the above it is clear that to invoke section 9 of the Act ( i )there should be a dispute which had arisen with respect to the subject-matter in the agreement and referable to the arbitral Tribunal. ( ii )There has to be manifest intention on the part of the applicant to take recourse to the arbitral proceedings at the time of filing application under section 9 of the Act. The issuance of the notice in a given case is sufficient to establish the manifest intention to have the dispute referred to an arbitral Tribunal. But it is also not necessary that notice as contemplated under section 21 of the Act invoking arbitration clause must be issued to the opposite party before filing the application under section 9 could be filed. But, if an application is made in such circumstances under section 9 of the Act, the Court must satisfy that the arbitration agreement is in existence and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customer (called hirer again) becomes the sole owner. There is also the right of retaking the vehicles on default of the hirer in any manner as stipulated. Ordinarily, the clause vesting on the hirer an option to purchase the vehicle or good as the case may be would be absent. But its absence does not detract the real legal significance of the agreement. 31. Thus it is seen that whilst in the first type of hire purchase agreement, the property in the goods always remain with the financing company and the customer of hirer becomes the owner thereof eo instanti he pays off the dues or exercises his option, in the second type of hire purchase agreement, the intention as gathered from the content and terms of the agreement is, not to transfer any interest in the vehicle by the customer or hirer to the financing company, notwithstanding there appears in the ancillary documents connected with such a hire purchase agreement, a sale letter by the hirer in favour of the financing company. In both types of agreements, the financing company is described as the owner and the customer as hirer..." 32. to 34.****** "35. ...No doubt, the right to seize the vehicle is peculiar to a hire pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hayter v. Nelson 1990 (2) Lloyd s Rep. 265, it was held that the word "dispute" in an arbitration clause should be given its ordinary meaning and was not confined to cases where it could not then and there be determined whether one party or other was in the right, so that the fact that a person has no arguable grounds for disputing something does not mean in ordinary language that he is not disputing it. But this view in Hayter s case ( supra ) was not accepted by Court of Appeal in the judgment reported in Halki Shipping CorPo. v. Spea Oils Ltd. 1998 (2) All ER 23. 15. Under the Law of Arbitration, a dispute means that one party has a claim and the other party says for some specific reasons that the said claim is not correct and then the same can be concluded as a dispute. 16. On the basis of the above discussion we have to now decide whether such an application can be brought into the mischief of section 9 of the Act though such relief can be sustained invoking common law remedy in view of the right given in the agreement. This doubt arises only due to the fact that in view of the settled law with respect to the ownership of the machinery, equipment, vehicle etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the dispute raised. By securing and making adjustment towards the amount sought to be recovered by the applicant from the respondent, the liability of the respondent also reduces correspondingly. If for any reason such a course viz., appointment of a Commissioner to re-possess the machinery, etc., and selling the same is not adopted, the value of those machinery etc., goes down in course of time and subsequently if it is sold it fetches only low price and thereby the hirer/lessor also will be prejudiced. 19. In such a case, even if the machinery etc., are not the subject-matter of the dispute directly before the arbitrator, such an application can be entertained under section 9 of the Act and ordered for the purpose of securing the amount in dispute by selling the said machinery etc. 20. In the present case the only objection raised by the learned counsel appearing for the respondent is that since there is a dispute regarding appointment of Arbitrator, which itself is pending, the applicant cannot sustain the application filed under section 9( ii )( a ), ( b ), ( c ) and ( e ) of the Act. Such a submission cannot be countenanced. Section 9 can be invoked as held above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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