ATUL LIMITED Vs. PRAKASH INDUSTRIES LIMITED

JUDGEMENT

(1.) Two questions fall for determination in this petition. The first whether this Court should exercise jurisdiction under Section 9 of the Arbitration and Conciliation Act, 1996, in circumstances where admittedly the parties are before an Arbitral Tribunal which possess powers to pass similar orders under Section 17 of the said Act. The second is whether a Receiver can be appointed in respect of leased properties which are presently in the possession of a company which has invoked the Sick Industrial Companies (Special Provision) Act, 1985.

(2.) Counsel for the Respondent has relied on a decision of a learned Single Judge of this Court in Arun Kapur Vs. Vikram Kapur & Ors., 95 (2002) DLT 42. In paragraph 56 of that decision the learned Judge has opined that " if the party invokes preliminary alternative remedy before the Arbitral Tribunal, it is debarred from invoking the jurisdiction of the Court under Section 9 of the Act. Ordinarily if the Arbitrator is seized of the matter the interim relief should not be entertained and the parties should be advised to approach the Arbitrator for interim relief unless and until the nature of relief intended to be sought falls outside the jurisdiction of the Arbitrator or beyond terms of the agreement or reference of disputes. Otherwise the very object of adjudication of disputes by arbitration would stand frustrated." Reliance has also been placed on paragraph 44 of that judgement but I fail to find any justification for reference thereto. The learned Judge merely draws a distinction between Section 9 and Section 17 of the Act. He does not state that if Section 17 is available Section 9 cannot be invoked. A Division Bench of this Court has decided in Escorts Finance Ltd. Vs. Mohd.Hanif D.Khan, 2001 V AD (Delhi) 392 that it is not proper for the Court to decline to exercise jurisdiction under Section 9 of said the Act merely because arbitral proceedings are pending. The Division Bench had applied the pronouncements in M/s Sundaram Finance Ltd. Vs.M/s NEPC India Ltd AIR 1999 SC 56. My attention has also been drawn to a decision of another Single Judge of this Court in S.R.F. Finance Ltd. Vs. Prakash Industries Ltd. & Anr., OMP No.184/1997 decided on 23.8.2002. In this judgment it was observed that recourse under Section 17 is an enabling additional recourse and is not in substitution of Section 9 of the Act and that the former Section cannot operate as an ouster of jurisdiction of the Court granted under the latter Section. In view of the opinion of the Hon'ble Supreme Court as well as of the Division Bench of this Court the decision rendered in Arun Kapur's case (supra) may not be correct. In any event the learned Judge has really done no more than express the salutory practice of not rushing to Court where relief from an alternate forum is conveniently available. The learned Judge does not in terms state that the Court cannot exercise the powers given to it by virtue of Section 9 of the Act. I am of the view that the Court has powers to pass appropriate orders under Section 9 of the Act notwithstanding the pendency of arbitral proceedings.

(3.) On the second question also the contention of learned counsel for the Respondent does not have merit. It is his submission that there is a dispute pending on the question of who is the owner of leased equipments. It is in very few cases that such defences are not raised by the Respondent. The attempt is only to protract the litigation and thereby delay the grant of appropriate relief, and in some cases defeat it. The latter position is likely to occur in the present case since the Sick Industrial Companies (Special Provision) Act, 1985 has been invoked. What the Court must look into is the documents exchanged between the parties. My attention has been drawn to Clauses 2.5, 4.2, 4.15, 6.6, 8.1. These are reproduced below since they clearly illustrate that the leased equipment was ubiquitously agreed by the parties to belong to the Petitioner.