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Judgment
S. Rajeswaran, J.—The applicant has filed this Original Application in O.A. No. 341 of 2005 for an order of interim injunction restraining
the respondents from disrupting the supply for the requisite natural gas to the petitioner''s manufacturing unit situated at No. 123-C
Uthamacholapuram, Narimanam P.O. Nagapatinam Taluk, Nagapattinam District pending completion of the arbitration proceedings.
The Applicant firm is a manufacturer of Sodium Silicate having its manufacturing unit at Uthamacholapuram, Narimanan P.O. Nagapattinam
District. For the above manufacturing activity, they require natural gas. For the supply of natural gas they entered into a contract with the
respondent on 27-12-1997 with a duration of five years. It is his case that all of a sudden the respondents in the course of extending the first five
years'' contract unilaterally suggested certain conditions and accordingly they amended the contract dated 16-12-2002. It is his case that he was
forced to sign the said contract under protest. The applicant made representation to alter certain amendments to be carried out in the respondents''
draft of the proposed ''amended contract'' dated 16-12-2002. But there was no response from the respondents. Later, the respondents promised
to revert back on the issue. It is the case of the applicant that the respondents have not done anything in this regard. It is also stated by the
applicant that there has always been a threat to disconnect the gas supply. Therefore, apprehending disconnection of gas supply, the applicant has
filed this O.A. pending arbitration proceedings. This Court granted an order of interim injunction on 8-4-2005.
Learned Counsel for the Applicant submitted that the five year contract dated 16-12-2002 was amended unilaterally by the respondent without
having any discussion with the Applicant and the Applicant was forced to sign under duress and protest. He also submitted that the Applicant had
made request for carrying out certain amendments in the respondents'' proposed ''amended con-tract'' dated 16-12-2002 and the same is pending.
Regarding intimation of arbitration, the respondents in their reply dated 2-8-2003 promised to revert back on the issue of referring the dispute to
Arbitration after consultations with its head office. But it is his case that till date the respondents have not responded positively and that they are
avoiding the constitution of the Arbitration Tribunal leave alone commencing the adjudication proceedings. Hence he submitted that the interim
injunction granted on 8-4-2005 has to be continued.
Common counter-affidavit has been filed by the respondents''. Learned Senior counsel Mr. R. Muthukumaraswamy while reiterating the
averments made in the counter affidavit, submits that the contract was signed on 27-12-1997. As per the contract, the natural gas is to be supplied
to the applicant for a period of 5 years up to 31-12-2002, in the case of the applicants it was for about three years, i.e. from 27-2-1999 to 31-
12-2002. When the applicant sought for extension of supply of gas, certain amendments were incorporated and a new contract was signed on 16-
12-2002. It is specifically urged by the learned Senior Counsel that the applicant signed the contract without any protest. It is also submitted by
him that the gas supply was continued beyond 16-12-2002 initially for a period of one year and subsequently extended from time to time and the
last of such extension was valid up to 30-9-2005, Thus the applicant has entered into an agreement with the respondent department and the
respondents are supplying gas as per terms of the contract only. Though the period was over on 30-9-2005, the supply is being continued as per
the orders of this Court. It is his case that only to prolong the issue and without adhering to the revised terms, the petitioner has filed this application
u/s 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the Act''). The interim injunction is still in force and the O.A. is liable
to be dismissed as devoid of merits.
Moreover, it is pointed out by learned Senior Counsel appearing for the respondent that there is no proper dispute as stated by the applicant to
be raised before this Court or before the tribunal. Therefore, on that ground this Original Application filed u/s 9 of the Act is not maintainable. It is
also submitted by the learned Senior Counsel that u/s 9 of the Act, one could get interim orders pending disposal of the arbitration proceedings. In
this case, the applicant after writing a letter to the respondent on 2-8-2003 invoking the arbitration clause, has not done anything. In all fairness,
they should have moved the Court for appropriate orders, u/s 11 of the Act. But no steps have been taken at all in this regard. He has also brought
to the notice of this Court the judgment of Firm Ashok Traders and Another etc. Vs. Gurumukh Das Saluja and Others etc., and reiterated that the
party invoking Section 9 of the Act, might not have actually commenced the arbitral proceedings, but must satisfy the Court that the arbitral
proceedings had actually commenced or manifestly entitled to do so. It is his specific case that no action was taken by the applicant to commence
the arbitral proceedings. Therefore, the applicant loses his right to seek the indulgence of this Court. On that ground alone, the injunction
application is liable to be dismissed.
I have heard the learned senior counsel appearing for the respondents as well as the learned Counsel for the applicant.
I find that applicant is yet to commence the arbitral proceedings. Though the applicant has expressed in the application that he would commence
the arbitral proceedings, he has not done anything in this regard. There is total inaction on the part of the applicant. As per law well established by
the Courts and as held in the judgment cited supra particularly, effective and immediate steps should have been taken to commence the arbitral
proceedings. In para 18 of the above judgment, the Apex Court has stated as follows:
The party having succeeded in securing an interim measure of protection before arbitral proceedings cannot afford to sit and sleep over the relief,
conveniently forgetting the ""proximately contemplated"" or ""manifestly intended"" arbitral proceedings itself. If arbitral proceedings are not
commenced within a reasonable time of an order u/s 9, the relationship between the order u/s 9 and the arbitral proceedings would stand snapped
and the relief allowed to the party shall cease to be an order made ""before"" i.e. in contemplation of arbitral proceedings.
In the instant case, the Impugned order was granted on 8-4-2005 and since then no steps were taken by the applicant for commencement of
arbitral proceedings. Therefore, if the case on hand is viewed in the light of the materials referred to above, it is clear that there is total inaction on
the part of the applicant from 8-4-2005. By his own conduct, he has clearly accepted that he has no intention at all to commence arbitral
proceedings. No reason is available as to why the applicant has not commenced the arbitral proceedings till now. Therefore, the judgment reported
in Firm Ashok Traders'' case referred to above would squarely apply to the facts on hand. Since the inordinate delay in commencing the arbitration
proceedings has snapped, the interim order this application has to be dismissed.
In view of the forgoing, O.A. 341 of 2005 is dismissed. Application No. 3954 of 2005 is allowed.