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TMI Blog2001 (4) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... in payment of lease money, the agreement was terminated and the present suit has been filed by the Plaintiffs for recovery of the possession of the lease equipments as also for recovery of arrears of lease money from the Defendant No. 1/Company. So far as the money part of the decree, that is claimed by the Plaintiffs in the suit, it is claimed by the Plaintiffs that it is joint and several liability of the Defendant Nos. 1 & 2 and therefore they are jointly and severally liable. 2. By this Notice of Motion, the Plaintiffs pray for appointment of Receiver of the lease equipments and also pray for temporary injunction. It appears that at the ad interim stage, by order dated 6th August, 1999, ad interim order in terms of prayer clauses (e) & (f) of the Notice of Motion was granted and the appeal was carried against the ad interim order. The Appeal Court by ad interim order vacated the ad interim order passed by the learned Single Judge. Against the order of the Appeal Court vacating the ad interim order, petition for special leave to appeal was preferred before the Supreme Court, which the Supreme Court disposed of by directing the Appellate Court to decide the appeal as expeditious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act is concerned, it contemplates an application being made to the Court. The application contemplated is a written application. No such application has been made to this date. It is further submitted that even If it is assumed that an oral application can be made under Section 8, then as the subject matter of the suit is not same as a subject matter of the arbitration agreement, an application under Section 8 cannot be granted. It is submitted that the arbitration clause is contained only in the lease agreement between the Plaintiffs and the Defendant No. 1. The Suit is not only to enforce the lease agreement, but it is also for enforcement of the guarantee agreement between the Plaintiffs and the Defendant No. 2, in which there is no arbitration agreement. Therefore, the subject matter of the suit is the lease agreement as also the guarantee agreement and as there is no arbitration clause in the guarantee agreement, it cannot be said that the subject matter of the suit is the same as the proceedings before the Arbitrator which may be started pursuant to the arbitration agreement and therefore, as an application under Section 8 itself is not tenable, section 5 will not operate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that what is barred under Section 22 is the suit for recovery of money. It is submitted that the present suit cannot be said to be a suit for recover of money. The principal relief that is claimed in the suit is of recovery of possession of machinery. What will be barred by the provisions of Section 22 is the suit simplicitor for recovery of money or for enforcement of any security against the Industrial Company. This is, basically, a suit for recovery of lease machinery and incidentally a money decree for the arrears of the lease money has been claimed and therefore, according to the Plaintiffs, this suit would not be barred. Reliance has been placed on several decisions of the learned Single Judges of this Court, both reported as also unreported. One of them being judgment of the learned Single Judge of this Court in the case of M/s. Kotak Mahendra Finance Ltd. v. M/s. Deve Paints Ltd.,. 5. Now, in the light of these rival submissions if the objections are to be considered, in so far as the objection that in view of the pendency of the proceedings before the Chief Justice of the Delhi High Court under Section 11 of the Arbitration Act this suit cannot proceed, the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subject of an arbitration agreement shall. If a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the Judicial Authority, an arbitration may be commenced or continued and an arbitral award made." 8. It is clear from the perusal of section 8 that a party who claims that the suit which is pending before the Court is the subject of an arbitration agreement, has to make an application to the Court not later than when submitting his first statement on the substance of the dispute for referring the parties to arbitration. Sub-section (2) of Section 8 further lays down that an application under sub-section 1 for referring the parties to arbitration shall not be entertained unless it is accompanied by the original arbitration agreement or duly certified copy thereof. In my opinion, the provisions of sub-section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, even today no such application has been made. Thus, there is no application made under Section 8 for referring the dispute to the arbitration and therefore as there is no application made for referring the dispute to the arbitration, provisions of Section 5 do not come into play and do not operate. It is further to be seen that even if it is assumed that an oral application for referring the parties to Arbitrator can be entertained, it is clear from the observations of the Supreme Court quoted above in its judgment in P. Anand's case that one of the essential requirement is that the subject matter of the action is the same as the subject matter of the arbitration agreement. Thus, according to the Supreme Court in order that under Section 8 matter can be referred to arbitration, there has to be identity of the subject matter of the suit and the arbitration agreement. As pointed out above, the subject matter of the suit is two agreements namely the agreement of lease of equipment between the Plaintiff and the Defendant No. 1 as also the agreement of guarantee between the Plaintiff and the Defendant No. 2, whereas, the subject matter of the arbitration agreement is only the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Section 22 before amendment in 1994. However, provisions of Section 22, on which the Defendant is relying are the provisions, which are incorporated by an amendment. It is true that the judgment of the learned Single Judge of this Court in Kotak Mahendra Finance's case referred to above considered the provisions of Section 22 as amended in 1994, as also the nature of the agreement as also the relief claimed in that suit. However, in that judgment the Court has not considered the provisions of Section 22 introduced by amendment separately and independently. Still, " it can be said that the Court while deciding M/s. Kotak Mahendra's case was alive to the provisions of Section 22 as amended in 1994 and the learned Single Judge has held that the suit instituted for recovery of the property which is leased to the Industrial Company, which is before B.I.F.R. as also for recovery of the arrears of the lease money is maintainable and that the bar of Section 22 of S.I-C.A. Act does not operate. In my opinion, the provisions incorporated by amendment in the year 1994 will not apply to a suit which is a suit basically filed for recovery of the property of the Plaintif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) of any guarantee in respect of any loans or advance granted to the Industrial Company shall lie or be proceeded with except with the consent of the Board or the Appellate Authority under the said Act. For our purposes, therefore, the relevant words are : "no suit .... for the enforcement ... of any guarantee in respect of any loans or advance granted to the Industrial Company" shall lie without the consent of the Board or the Appellate Authority. The words are crystal clear. There is no ambiguity therein. It must, therefore, be held that no suit for the enforcement of a guarantee in respect of a loan or advance granted to the Industrial Company concerned will lie or can be proceeded with, without the sanction of the Board or the Appellate Authority under the said Act. 8. It is not possible to read the relevant words in Section 22 as meaning that only a suit against the Industrial Company will not lie without such consent. There is no requirement in section 22, as analysed above, that, to be covered thereby, a suit for the enforcement of a guarantee in respect of a loan or advance to the Industrial Company should be against the Industrial Company." 12. It is cle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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