M/S Bartronics India Ltd & Anr vs M/S S.E Investments Ltd
2014 Latest Caselaw 4889 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI
+                        ARB.A. 26/2014
%                            Judgement pronounced on: 26.09.2014
       M/S BARTRONICS INDIA LTD & ANR                    ..... Appellants
                         Through:     Mr.Sudipto Sirlar, Advocate
                                      alongwith Mr.Yashwardhan Tiwari,
                                      Mr.G.Swati Pathgotri and Mr.A.D.N.
                                      Rao, Advocates.
                         versus

       M/S S.E INVESTMENTS LTD                  ..... Respondent
                      Through: Mr.P. Nagesh, Advocate.

CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA

JUDGMENT (ORAL)

1. Vide the present appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996, wherein the appellants have challenged the order of the Arbitral Tribunal dated 29.04.2014 passed under Section 27(5) of the Arbitration and Conciliation Act, 1996.

2. The history of the case shows that earlier the respondent has filed OMP No. 303/13 under Section 9 of the Arbitration and Conciliation Act before this Hon'ble Court wherein the present appellants were restrained from selling, alienating, transferring or in any manner disposing of/handing over the hypothecated goods/stocks in favour of any third person on entity vide order dated 22nd March, 2013.

3. Subsequently, vide order dated 18th July, 2013, the said OMP was disposed of with directions that the petition under Section 9 of the

Arbitration and Conciliation Act be sent to the learned Arbitrator to be treated by him as an application under Section 17 of the Act and pass an appropriate orders after giving due opportunity of hearing to the parties.

4. Learned Arbitrator thereafter, after hearing the parties, passed an order under Section 17 of the Arbitration and Conciliation Act dated 17 th October, 2013. While maintaining the order passed by this court on 22 nd March, 2013, learned Arbitrator have further directed the appellants herein to furnish the appropriate unencumbered securities to protect the subject matter of the amount mentioned in the claim and/or deposit the monetary value of the impairment of securities to the claimant, whichever is higher, within 15 days from the date of the passing of the Order. The said order was not challenged by the appellants herein but they also did not comply with the directions of the learned Arbitrator.

5. The learned Arbitrator, thereafter, proceeded to pass an order dated 29th April, 2014 in exercise of its power under Section 27(5) of Arbitration and Conciliation Act. It is this order which is under challenge under Section 37 of the Arbitration and Conciliation Act.

6. It is argued on behalf of the appellants herein that the order of Section 17 of the Arbitration and Conciliation Act stands merged with the order passed under Section 27(5) of the Act and therefore, the present appeal under Section 37 of the Arbitration and Conciliation Act is maintainable.

7. Learned counsel for the respondent has submitted that both are independent proceedings and while order passed under Section 17 of the Arbitration and Conciliation Act is appealable, the order passed under Section 27 (5) of the Act is non-appealable.

8. Learned counsel for the petitioner has thereafter argued that the order

dated 29.04.2014 passed under Section 27(5) of the Act is wholly illegal and has been passed by the learned Arbitrator without having any jurisdiction to enforce this order passed under Section 17 of the Arbitration and Conciliation Act. Hence, the order needs to be set aside.

9. Under Section 37 of the Arbitration and Conciliation Act only an order passed under Section 17 of the Act is an appealable order.

10. From the perusal of the pleadings of the parties, it is apparent that nowhere the appellant herein has challenged the order of the Arbitrator passed in exercise of this power under Section 17 of the Arbitration and Conciliation Act. There is also no contention in the appeal that the order passed under Section 17 of Arbitrator and Conciliation Act by the Arbitrator stands merged in the order of Arbitrator under Section 27(5) of the Arbitration and Conciliation Act.

11. Even otherwise, enforcement of an order does not amount to its merging in the order of enforcement. The order remains there. It is only the enforcement which is the subsequent act to that order.

12. It is the order of enforcement of the said order of learned Arbitrator under Section 17 of the Act which is under challenge before this Court.

13. From the perusal of the order under challenge, it is also apparent that learned Arbitrator has not taken cognizance of any contempt against the appellant herein on account of his non-compliance of his order under Section 17 of the Act but has simply given the claimant, the respondent herein, to enforce his rights before this court by initiating the contempt proceedings. Its always open to the appellant herein to challenge this order in case the respondent moves this court for initiation of the contempt proceedings.

14. Since under Section 37 of the Arbitration and Conciliation Act, no appeal is maintainable against the order passed under Section 27 of the Arbitration and Conciliation Act. The present appeal is therefore not maintainable. The same is dismissed.

DEEPA SHARMA (JUDGE) SEPTEMBER 26, 2014 sapna