Allowed

Benny Thomas, v. State of Kerala

Kerala HC10 Aug 2020WA/1009/2020

Case brief

AI extract

What is this about?

This Writ Appeal challenged the Single Judge's order directing release of a seized vehicle pending arbitration. The High Court set aside the Single Judge's judgment, dismissed the underlying writ petition, and left the resolution of the commercial dispute and enforcement of the arbitration award to the competent court under the Arbitration Act.

What did the court decide?

The judgment of the learned Single Judge in W.P.(C).No.30157/2019 was set aside. The underlying Writ Petition was dismissed. All issues regarding the arbitration award and its execution were left open

Benny Thomas, Vs State of Kerala — Contract and Commercial Disputes | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT

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THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

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THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

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MONDAY, THE 10TH DAY OF AUGUST 2020 / 19TH SRAVANA, 1942

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WA.No.1009 OF 2020

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AGAINST THE JUDGMENT IN WP(C) 30157/2019(T) DATED 28.05.2020 OF HIGH COURT OF KERALA

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APPELLANT/S:

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BENNY THOMAS, AGED 55 YEARS, S/O. OUSEPH THOMAS, PARIYATHUMALIL, P.K. ROAD, PERUMBAIKADU, THELLAKOM, KUMARANELLOOR P.O., KOTTAYAM-686016, REPRESENTED BY POWER OF ATTORNEY HOLDER ANNAMMA CHACKO, AGED 45 YEARS, W/O. BENNY THOMAS, RESIDING AT PARIYATHUMALIL HOUSE, PERUMBAIKADU VILLAGE, KUMARANALLOOR P.O., KOTTAYAM.

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BY ADVS. SRI.T.M.ABDUL LATHEEF SRI.K.ASHOK SARAN

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RESPONDENT/S:

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1 STATE OF KERALA, REPRESENTED BY CIRCLE INSPECTOR OF POLICE, GANDHINAGAR POLICE STATION, KOTTAYAM-686531.

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2 CIRCLE INSPECTOR OF POLICE, GANDHINAGAR POLICE STATION, KOTTAYAM-686531.

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3 M/S. MUTHOOTH VEHICLE AND ASSET FINANCE LIMITED, MUTHOOT CHAMBERS, KURIAN TOWERS, BANERJI ROAD, ERNAKULAM, KOCHI-18, NOW AT 6TH FLOOR MIDHUN TOWER, K.P. VALLON ROAD, KADAVANTHARA, KOCHI682020, REPRESENTED BY POWER OF ATTORNEY HOLDER MADHU E., S/O. LATE KELAPPAN, RESIDING AT EDAVATH HOUSE, KARYAD P.O., MEPPAYUR VIA, CALICUT DISTRICT.

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SR GP SRI. SURIN GEORGE IPE FOR R1 AND R2, SRI.S.SREEKUMAR CHELUR FOR R3

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 10.08.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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JUDGMENT

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Dated this the 11th day of August 2020

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SHAJI P.CHALY, J.

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This appeal was filed by the 3rd respondent

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in W.P.(C).No.30157/2019, challenging the judgment dated 28.05.2020, whereby the learned Single Judge issued the following directions.

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"I have heard the contentions

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advanced. It appears that the vehicle

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is in the possession of the 1^st respondent in connection with a crime. The Jurisdictional Magistrate has ordered release of the vehicle to the 3^rd respondent under Section 451 Cr.P.C. This Court, in revision, has modified the order and has held that the vehicle

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is liable to be released to the 3^rd respondent without insisting on the condition for production of the

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original of the RC Book, insurance certificate and tax certificate. The

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objection of the petitioner is with regard to payments due to them. It is the stand of the 1^st respondent that without resolving the dispute between the petitioner and the 3^rd respondent,

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the vehicle cannot be released to either of them. This Court in Crl.R.P.No.1068/2019 has considered the claim of the petitioner/financier as well and has held that in case of default in payment, the financier has a right to take possession in accordance with law. The petitioner apparently has taken such steps.

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In the above view of the matter and in view of the conflicting orders issued in two different jurisdictions,

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it may not be proper for this Court to exercise jurisdiction under Article 226 of the Constitution of India to direct the release of the vehicle to either of

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the parties. In case the dispute

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between the petitioner and the 3^rd respondent is resolved and the parties approach the 1^st respondent for release of the vehicle, the request shall be duly considered by the 1^st respondent in terms of the settlement entered into between them. In the absence of such settlement being arrived at, the arbitration shall be proceeded with and the parties shall abide by the terms of

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the award in the said case. The

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vehicle shall remain in the custody of the 1^st respondent till then."

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It is thus challenging the correctness and validity of the said judgment, this appeal is preferred.

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Brief material facts for the disposal of the writ petition are as follows:

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The 3rd respondent in the appeal, who was the

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petitioner in the writ petition is a company

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incorporated under the Companies Act, doing

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banking operations including extending loans on hypothecation agreement. The appellant herein secured financial assistance from the 3rd respondent to purchase Audi Q-4 brand motor car which is having registration No. KL-33-E5.

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According to the appellant, the said vehicle was given on rent under 'rent a car agreement' to one Vidyasagar, who defaulted the payment of the rent amounts. However, the case of the financier is that, the appellant committed default in repayment of the loan which has accrued to Rs.12,59,000/- as on 19.09.2019.

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Matters being so, in accordance with the

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terms of the agreement entered into by and

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between the parties, the matter was referred for Arbitration, in which, the Arbitrator passed

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Ext.P1 interim order permitting the financier to repossess the vehicle. Consequent to the same, the financier filed C.M.A (Arbitration)

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No.1160/2019 before the District Court, Ernakulam, to enforce Ext.P1 order passed by the Arbitrator under the provisions of the Arbitration and Conciliation Act 1996, through the process of Court. In the said proceedings, an Advocate Commissioner was appointed to repossess the vehicle and a commission warrant was issued to the Advocate Commissioner Sri. K.Mahadevan, evident from Ext.P2.

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While so, the financier came to know that

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the vehicle is in the possession of the Station House Officer, Gandhi Nagar Police Station, Medical College Road, Kottayam, in connection with Crime No.1291/2019, on the files of the Judicial Magistrate of the First Class-I, Ettumanoor. Thereupon, the Advocate Commissioner and the financier approached the Station House

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Officer on 16.10.2019 to enforce Ext.P2 commission warrant to take possession of the vehicle after making Ext.P3 request in writing.

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However, the Station House Officer issued Ext.P4 reply to the Advocate Commissioner stating that, the vehicle in question is the subject matter of a crime and it is in the custody of the police on the basis of the directions issued by the Judicial Magistrate of the First Class-I, Ettumanoor. Accordingly, the Advocate

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Commissioner filed an interim report before the

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District Court on 18.10.2019, evident from Ext.P5.

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In the meantime, the appellant herein filed C.M.P.No.7250/2019 under Section 451 of Cr.P.C. before the Magistrate court to release

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the vehicle. The said application was allowed by order dated 28.09.2019 permitting the appellant to take possession of the vehicle on execution of bond and also complying other conditions, evident

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from Ext.P6 order. With the above background facts, the case of the financier in the writ petition was that the Station House Officer had

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no right to retain the vehicle with him, and

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therefore Ext.P4 letter of the station house officer was liable to be quashed. It was thus the writ petition was filed seeking to quash Ext.P4 letter issued by the Station House Officer, and for a further writ of mandamus directing the Station House Officer to release the vehicle to the financier through the Advocate Commissioner, in accordance with Ext.P2 warrant issued by the District Court, Ernakulam.

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Learned Single Judge, after evaluating the pros and cons in the matter, and taking into account the counter affidavit filed by the Station House Officer found that, though an order was passed under Section 451 Cr.P.C., in favour of the appellant, no records were produced and accordingly the vehicle was not released to the appellant. However, taking into account the order in Crl. R.P. No.1068/2019 dated 22.11.2019 passed by a learned Single Judge of this Court,

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it was found that the condition with regard to production of the original records was considered in the afore-specified Crl.R.P. and ordered that the vehicle shall be released to the appellant without production of the original records. It is also recorded that the appellant herein submitted that he would take steps to pay off the amounts due to the financier, if some time is granted. Anyhow, ultimately learned Single Judge found that, in view of the conflicting orders issued in two different jurisdictions, it may not be proper for the Writ Court to exercise the jurisdiction conferred under Article 226 of the Constitution of India and direct to release the vehicle to either of the parties. Accordingly, it was directed that the parties are at liberty to approach the Station House Officer in case of settlement of the dispute by and between them, and if so the request shall be considered by the Station House Officer in terms of the settlement

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entered into by and between them. It was also observed that, in the absence of such settlement being arrived at, the arbitration shall be proceeded with and the parties shall abide by the terms of the award in the said case.

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We have heard learned counsel for the

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appellant Mr.T.M.Abdul Latheef, Sri. Surin George Ipe, learned Senior Government Pleader and Sri. G Sreekumar (Chelur) for the financier and perused the pleadings and the documents on record.

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The respective counsel have addressed

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their arguments in accordance with the discussions made above. The question emerges for consideration is whether any manner of interference is warranted to the judgment of the

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learned Single Judge. The material facts narrated above in respect of advancing loan by the financier to the appellant is admitted. It is also an admitted fact that, consequent to the

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dispute arose by and between the parties in

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respect of repayment of the loan amounts, arbitration proceedings were initiated in terms of the agreement and the financier has secured Ext.P1 interim order from the arbitrator in I.A. No.51/2019 in Arbitration Reference No.51(MVFL) of 2019. It is also brought to our notice by the financier that the arbitrator has passed the final award, evident from Annexure A2 dated 15.01.2020, in favour of the financier. Learned counsel for the appellant submitted that the appeal is preferred against the Award of the arbitrator which is pending consideration before the District Court, Kottayam, in which an interim order of stay was granted against execution of Annexure A2 award passed by the arbitrator. Anyhow, it is an admitted fact the learned Single Judge of this Court in the Crl.R.P. specified above has passed Annexure A1 order dated 22.11.2019, directing to release the vehicle to the appellant without insisting for the

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production of the original RC Book, insurance certificate and tax certificate. The financier

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has no case that any proceedings challenging the order passed by the learned Single Judge in Criminal revision is preferred. As things stand now, it can be seen that the order passed in the Criminal revision Petition by the learned Single Judge modifying the order of the Magistrate under section 451 Cr. P.C governs the issue.

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True, on the basis of the award passed

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by the arbitrator, the financier is entitled to secure necessary relief by executing the award. But, fact remains, the award of the arbitrator is stayed by a Court of competent jurisdiction as per the provisions of the Arbitration and Conciliation Act, 1996. Therefore, we have no hesitation to think that, consequent to the initiation of proceedings under the provisions of

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Act 1996, the parties are guided by the provisions contained under the said Act. If at

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all the financier had any grievance in respect of

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the interim order staying the execution of the award passed, it has got necessary remedies as per the provisions of Act, 1996. We are at a loss to understand how the financier approached this Court by filing a writ petition seeking the reliefs specified above, when the matter was guided by an interim order passed by the arbitrator and the order passed by the District Court, Ernakulam, appointing an Advocate Commissioner to take possession of the vehicle.

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Taking into account the material aspects, and the fact that there is a valid order passed by a learned Single Judge of this Court in the Crl.R.P specified above to release the vehicle to the appellant as per the terms and conditions recited thereunder, the Station House Officer has

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no manner of power or authority to retain the vehicle with him. Therefore, the findings rendered by the Learned Single Judge in the fact

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circumstances, according to us, cannot be

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sustained under law.

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Judging so, we set aside the Judgment of the learned Single Judge, allowing the writ appeal and accordingly the Writ Petition is dismissed. However, we make it clear that, all the issues by and between the parties in terms of the award passed by the arbitrator and the

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challenge pending before the competent court of jurisdiction, are all left open,leaving open the liberty of the parties to seek appropriate orders in accordance with law, and also in terms of the Arbitration and Conciliation Act, 1996.

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The Writ Appeal is allowed accordingly.

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sd/- S. MANIKUMAR, CHIEF JUSTICE.

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sd/-

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SHAJI P. CHALY, JUDGE.

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APPENDIX

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APPELLANT'S EXHIBITS:

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ANNEUXRE A1: TRUE COPY OF THE ORDER PASSED BY THIS HON'BLE COURT IN CRL. PETITION NO.1068/2019 DATED 20.11.2019.

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ANNEXURE A2: TRUE COPY OF THE ARBITRATION AWARD IN ARBITRATION REFERENCE NO.51/2019 DATED 15.01.2019.

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ANNEXURE A3: TRUE COPY OF THE ORDER IN I.A.NO. 1 OF 2020 IN OP ARBITRATION NO.113/2020 DAED 18.06.2020.

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RESPONDENTS' EXHIBITS: NIL

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/True Copy/

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PS to Judge.

Benny Thomas, v. State of Kerala

Case brief

What is this about?

What did the court decide?

Benny Thomas, v. State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

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