Partly allowed

M/S.Shriram Transport Finance Company Ltd. v. Chinchu Sugunan

Kerala HC19 Sept 2014CRP/271/2012

Case brief

AI extract

What is this about?

The Kerala High Court reconsidered the powers of an Arbitrator under Section 17(1) of the Arbitration and Conciliation Act, 1996, distinguishing prior precedent to uphold the order for surrender of property but striking down the directive for police assistance.

What did the court decide?

The direction for surrender of vehicle upheld; direction for police assistance set aside as without jurisdiction.

M/S.Shriram Transport Finance Company Ltd. Vs Chinchu Sugunan — Arbitration | Kerala HC (2014)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE B.KEMAL PASHA

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FRIDAY, THE 19TH DAY OF SEPTEMBER 2014/28TH BHADRA, 1936

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CRP.No. 271 of 2012 ()

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AGAINST THE ORDER/JUDGMENT IN CMA 10/2011 of DISTRICT COURT, KOTTAYAM DATED 13-01-2012

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REVISION PETITIONER(S)/IST RESPONDENT/CLAIMANT:

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M/S.SHRIRAM TRANSPORT FINANCE COMPANY LTD., REPRESENTED BY ITS MANAGER SUMESH.S GEETHA COMMERCIAL COMPLEX, NEAR Y.W.C.A., M.C.ROAD KOTTAYAM.

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BY ADVS.SRI.C.HARIKUMAR

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SMT.C.B.ANUROOPA SRI.VIPIN VARGHESE

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RESPONDENT(S)APPELLANT & 2ND RESPONDENT/RESPONDENTS:

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1. CHINCHU SUGUNAN, AGED 25 YEARS, S/O. SUGUNAN, RESIDING AT KOLEZHATHU HOUSE, VADAYAR VILLAGE, VAIKOM TALUK KOTTAYAM DISTRICT - 686 605.

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2. BEBI VINODINI, W/O SUGUNAN, KOLEZHATHU HOUSE, THALAYOLAPARAMBU P.O., VAIKOM, KOTTAYAM-686 605.

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R1&2 BY ADV. SRI.J.ABHILASH

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THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 19-09-2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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B.KEMAL PASHA, J.

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................................................................ C.R.P. No. 271 of 2012

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............................................................... Dated this the 19^th day of September, 2014

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O R D E R

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The short point to be decided is whether the Arbitral Tribunal can pass an interim order of protection within the meaning of Section 17(1) of the Arbitration and Conciliation Act, 1996(for short 'The Act').

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By hypothecating a vehicle, the first respondent herein availed a vehicle loan from the revision petitioner,

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finance company. It seems that he had defaulted instalments of repayment and consequently, on the basis of the arbitration clause in the agreement, an Arbitrator was appointed. The Arbitrator has passed an order by invoking the powers under Section 17(1) of the Act and directed the first respondent to surrender the vehicle to the revision petitioner. The assistance of the police is also seen ordered

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CRP 271 of 2012

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-: 2 :-

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by the Arbitrator for getting that order executed. The said order was challenged by the first respondent herein as appellant before the District Court, Kottayam through CMA 11 of 2011. The learned Additional District Judge by placing reliance on the decision of the Apex Court in M.D.Army W.H.O. v. Sumangal Services Pvt. Ltd. - AIR 2004 SC 1344 , held that the Arbitral Tribunal has no power to pass an order under Section 17, in the absence of any specific agreement in relation thereto, and the learned Additional District Judge has set aside the said order, against which, the present CRP has been filed.

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Heard the learned counsel for the petitioner Sri.C. Harikumar and the learned counsel for the first respondent Sri.P.C. Haridas. The learned counsel for the petitioner has pointed out that the Arbitrator has power to pass such an interim order of protection as per Section 17(1) of the Act. The learned counsel for the 1^st respondent, by relying on the decision noted supra has canvassed an argument that

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CRP 271 of 2012

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-: 3 :-

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Arbitrator has no power to order such an award in the absence of a specific agreement between the parties to that effect.

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It seems that the decision in M.D.Army (supra) was rendered in a matter which comes under the Arbitration Act, 1940, based on the proviso to Section 41(b) of the Arbitration Act of 1940. Section 41(b) of the Arbitration Act of 1940 is not at all pari materia with Section 17(2) of the present Act. As per Section 17(1) of the present Act, in the absence of any agreement to the contrary between the parties, the Arbitrator may, at the request of a party, order a party to take any interim measure of protection. Through the said provision, the Arbitrator can pass an order of interim measure of protection. At the same time, such an order should be one directing a party to the proceedings to take any interim measure of protection. It seems that the Arbitrator can direct the defaulter, who is a party to the proceedings, to take an interim measure of protection by

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CRP 271 of 2012

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-: 4 :-

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producing the vehicle. Therefore, the said power only confines to the giving of such a direction to any of the parties to take an interim measure of protection and it does

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not extend to the passing of an order directing police assistance to somebody to trace out vehicles hypothecated etc. Section 17(1) does not confer such interim powers to the Arbitrator. The Arbitrator cannot be regarded as a court of law. Apart from ordering a party to take an interim measure of protection, the Arbitrator cannot pass any further orders. The Arbitrator cannot execute such an order. Therefore, there is nothing wrong on the part of the Arbitrator in passing an order directing the first respondent herein to surrender the vehicle to the petitioner herein by way of an interim measure of protection. Matters being so, the interim order passed by the Arbitrator can be modified and limited to an order directing the first respondent to surrender the vehicle to the petitioner.

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In the result, this CRP is allowed in part, by

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CRP 271 of 2012

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-: 5 :-

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upholding that part of the order passed by the Arbitrator which directs the 1^st respondent to surrender the vehicle to the petitioner herein. The rest of the order is without jurisdiction and therefore, the same is set aside.

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It is made clear that the Arbitrator has no power to execute an order and therefore, he has no power to direct the police to provide assistance to any of the parties, or any other person to get the order implemented.

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Sd/- B.KEMAL PASHA, JUDGE

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ul/-

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[True copy] P.S. to Judge

M/S.Shriram Transport Finance Company Ltd. v. Chinchu Sugunan

Case brief

What is this about?

What did the court decide?

M/S.Shriram Transport Finance Company Ltd. v. Chinchu Sugunan

Case brief

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What did the court decide?

What the court decided

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