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Judgment
B. Prakash Rao, J.—The appellant herein, who is the petitioner in the Court below, by way of this appeal u/s 39 of the Arbitration and Conciliation Act, 1996 (for brevity ''the Act''), seeks to assail the order dated 5.4.2007 in I.A. No. 850 of 2007 in O.P. No. 338 of 2007 on the file of the Court of First Additional District Judge at Khammam, dismissing an interim injunction application purported to be filed u/s 9(ii)(d) of the Act, whereunder the appellant sought an ad interim injunction restraining the respondents from deducting any amount from the running bills of the appellant in respect of Purchase Order No. KC-60 & ROC. 1030, dated 30.6.2006 unilaterally pending disposal of the main O.P.
Heard Sri S. Ravi, learned Counsel appearing for the appellant and Sri J. Prahhakar, learned Counsel appearing for the respondents and at their request, the main appeal itself is taken up for disposal.
The appellant herein filed the main application in O.P. No. 338 of 2007 against the respondents herein with the following reliefs:
(a) to direct the respondents, their employees or anybody claiming through the respondents to record the post-excavated measurements in the presence of representatives of both the petitioner and respondents;
(b) further, the respondents, their employees or anybody claiming through them be directed not to alter the said measurements unilaterally;
(c) to pass an order of injunction restraining the respondents from deducting any amounts from the running bills of the petitioner unilaterally in respect of purchase orders KC-60 and ROC 1030, dated 30.6.2006 during the pendency of the main O.P.
(d) to award costs of this petition;
(e) to grunt any other relief or reliefs as the Hon''ble Court may deem fit and proper in the circumstances.
The case of the appellant, in brief, is that the appellant is engaged in manufacture and sale of industrial explosives and accessories and the respondents are M/s Singareni Collieries Company Limited, which is a Government Company, floated a tender for supply of SMS/SML explosives and accessories for removal of overburden by the respondents for the period from 1.7.2007 to 30.6.2008. Accordingly, after negotiations, the respondents placed a purchase order dated 30.6.2006 for supply of specified quantity of the said explosives which contains certain terms and conditions. Later, there had been further negotiations and the appellant started supplying the explosives and the respondents had been making payments. However, later, there had been certain minor differences arose due to the alleged survey volume, which resulted into varied correspondences between them. According to the appellant, the respondents have unilaterally and arbitrarily started reducing the power factor on the basis of the said survey. This action on the part of the respondents is being disputed by the appellant. Since the contract provides settlement of disputes through arbitration as per Clause No. 18 of the tender document i.e., Annexure P1, the appellant has initiated the process of arbitration proceedings by addressing a letter dated 27.3.2007 to the first respondent to refer the matter for arbitration. However, pending disposal thereof, the appellant has filed this application for protecting the interests and thus, sought the aforesaid reliefs in the main application. The main case was filed on 29.3.2007. Along with the said application, the appellant has filed the interim injunction application in I.A. No.850 of 2007 by trying to invoke Sub-clause (ii)(d) of Section 9 of the Act and sought ad interim injunction restraining the respondent from making any such deductions from the running bills unilaterally. This application was virtually filed on the same day of filing the aforesaid application u/s 9 of the Act. According to the appellant, the affidavit, which has been filed in support of this application, reiterates the selfsame allegations and complains that any such action would impire his rights and cause irreparable loss and they would be put to damages and injuries. Therefore, having regard to prima facie case in their favour, they sought for such interim order.
Contesting the said application, the respondents herein filed a detailed counter-affidavit denying about the allegations and specifically pointing out that no such wrong recoveries are being made from the running bills of the appellant and the exercise of survey is only for arriving at a proper volume calculations and therefore, there is absolutely no prima facie case and the appellant is not entitled to any indulgence. As evident from the record, the respondents have filed the counter only in this interim application pending the main application.
The Court below, after hearing the Counsel on both the sides and marking the documents, which have been filed from both the sides as Exs.A.1 to A. 12 on behalf of the appellant and Exs.B.1 to B.6 on behalf of the respondents, did not find favour with the appellant and dismissed the application mainly on the ground that the main relief is totally different since it only pertains to measure the excavation in the presence of the appellant''s representative and not to change the measurements whereas the interim relief as now sought is not the one to achieve the main relief but is totally different one whereby the appellant seeks an interim injunction not to deduct any amounts form the running bills. Therefore, the interim relief as sought for is not in consonance with the main relief and as such, it cannot be granted. Even otherwise, it has been observed that nothing has been placed on behalf of the appellant or any material in support to show that there is any change or alteration of the actual excavation measurements.
Sri S. Ravi, learned Counsel appearing for the appellant strenuously contended that having regard to the nature of relief as sought and unless and until such deductions are not stopped, the appellant would be put to great loss and for no fault of him, he will be denied of his due entitlement in regard to the supplies, which have been made. Therefore, the Court below was not right in holding that no such relief would be granted pending the main application.
Sri J. Prahhakar, learned Counsel for the respondents sought to sustain the findings of the Court below and the reasons given in support and further stated that having regard to the very nature of proceedings, the appellant cannot seek any indulgence.
Having heard the Counsel on both the sides and on perusal of the material available on record, the only point which arises for consideration is as to whether on the facts and circumstances, the appellant is entitled to interim relief as sought for pending disposal of the main application?
At the first flash, it is curious to note that there has been a total erroneous approach from all sides in appreciating or keeping in view the scope and the principles as contemplated under the provisions of the Act and especially the very provision i.e., Section 9 of the Act, which needs to be quoted before venturing into the merits and it reads as follows:
Interim measures, etc. by Court - A party may, before, or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36, apply to a Court-
(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters, namely:
(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorizing for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party or authorizing any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a Receiver;
(e) such other interim measure of protection as may appear to the Court to be just and convenient,
and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.
From the above, it is quite apparent that the very provision and the procedure as contemplated under the aforesaid Section 9 of the Act is only to provide for an interim measure as the very head note reads. Though a substantive provision has been made in the main Act itself, the remedy as contemplated is not a substantive one as such either in regard to appointment of an Arbitrator or assailing any awards either way. It only provides for the interim arrangement protection or any directions, which may warrant on the facts and circumstances and a party can invoke the said provision to seek any such reliefs as specified thereunder. Therefore, the relief enshrined thereunder can safely be put on par with like a grant of injunction, ad interim injunction or appointment of a Receiver etc., as provided for under the regular procedure in the Code of Civil Procedure. It further reiterates that a party can invoke this provision even before or during the arbitral proceedings or at any time after the award but before it is enforced as contemplated thereunder, the reliefs, which are exclusively intended for, only as an interim measure, include like appointment of a guardian or any such measure for protection or preservation, custody or securing the amounts, detention or inspection including the appointment of a Receiver, and further widens under Clause (e) to take any further or wider measures as may be expedient in the circumstances, which the parties can seek for. Therefore, the relief as provided for or the application, which needs to be filed under the aforesaid provision is absolutely only an interim one but not an application for any substantive reliefs.
In M/s. Sundaram Finance Ltd. Vs. M/s. NEPC India Ltd., , it has been held that the interim orders under the aforesaid provision can be passed even before commencement of arbitration and even it need not be preceded by issuance of notice invoking the arbitration clause. Therefore, the Court has ample power to pass appropriate orders even like ad interim ex parte and also after notice and hearing the respondent, as the facts and circumstances warrant. Therefore, when disputes arise between the parties and where there is a provision for settlement of disputes by arbitration proceedings, the parties may have to approach for any such relief and necessarily it has to be treated only as an interim application and disposed of accordingly.
In spite of such clear and categorical letter of the law under the aforesaid provision, it is brought to our notice that pending all such applications filed u/s 9 of the Act, seeking interim reliefs or measures or for any directions, once again further interim applications are being filed like the present one which is appealed against in this appeal, seeking further or varied interim reliefs by way of injunctions and directions which only amounts to duplication of the very enquiry and adds to the delays in disposal of main interim application and repetition of the exercise. Such action is not only permissible and contemplated under the law but goes far beyond the scope of provision and objects intended u/s 9 of the Act. Therefore, it has to be seen that the very application filed u/s 9 of the Act itself should be treated as an interim application alone and shall accordingly be disposed of on the same procedure or approach as normally followed.
This Court is informed during the course of arguments that even the main applications filed, u/s 9 of the said Act are being kept for quite long time for some or other reason including due to pendency of such further interlocutory applications and are being treated as a substantive application almost on par like a regular suit or other O.P., touching upon the main lis. However, having regard to the very nature of the proceedings as provided for and as stated above, necessarily wherever such applications are being filed by the parties, the Court should take up the main application itself and dispose of in the same manner as an interim application but not to entertain any interim applications.
In this case, no doubt, the Court below has rejected the present interim application on the ground that it is in total variance with the main relief without taking up main applications. We refrain from expressing any opinion on merits either way. Instead of entertaining applications of this nature, which may give scope to the parties to go on filing one application after the other pending the main application u/s 9 of the Act, the endeavour should be to take up the main application u/s 9 of the Act and dispose of the same as expeditiously as possible after appearance of the respondent. Therefore, we hold that having regard to the nature of proceedings as contemplated u/s 9 of the Act, further interim application as has been filed and framed is neither maintainable nor can require to be considered by the Court.
However, by taking into consideration the apprehensions expressed across the Bar in regard to long pendency and delays in disposal of the applications filed u/s 9 of the Act, we hold that all such applications shall have an expeditious disposal as expeditiously as possible, immediately after the appearance of the respondent not later than three months from such appearance of the respondent. Such approach would more apt and objectively meets the ends of justice.
Having regard to the aforesaid reasons and facts and circumstances, we do not find any merits in the above appeal. The civil miscellaneous appeal is accordingly dismissed. However, the Court below is directed to take up the main O.P. No. 338 of 2007 itself for an expeditious disposal not later than three (3) months from the date of receipt of a copy of this order. No costs.