Madras High Court
M. Gajendran vs M/S. Everest Blue Metals on 21 October, 2021
C.M.A. No. 1751 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21.10.2021
CORAM:
THE HON'BLE MR. JUSTICE ABDUL QUDDHOSE
C.M.A. No. 1751 of 2021
and
C.M.P. Nos. 9292, 9293 & 9295 of 2021
1. M. Gajendran
2. M.G. Vasantha Kumar ... Appellants
Vs.
1. M/s. Everest Blue Metals,
S.F. No.2523,
Veppilai Mettur (Vill),
V. Kongarapatti (Po),
Kadaiyampatti (TK),
Salem (dt) 636 351.
2. R. Munirathinam
3. M. Raja ...Respondents
Civil Miscellaneous Appeal filed under Section 37 (2) (b) of the
Arbitration and Conciliation Act, 1996 against the Order of the Learned
Arbitrator in I.A. No.3 of 2020 in V.P. No.1 of 2020 in O.P. No.79 of
2020 dated 10.03.2021 in dismissing the interim application filed under
Section 17 of the Arbitration and Conciliation Act, 1996.
For Appellants : Mr. G. Hari Hara Arun Somasankar
For Respondents : Mr. D. Shivakumaran
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C.M.A. No. 1751 of 2021
JUDGMENT
This Appeal has been filed under Section 37 of the Arbitration and
Conciliation Act, challenging the order dated 10.03.2021 passed by the
Arbitral Tribunal under Section 17 of the Arbitration and Conciliation
Act rejecting the Appellants' application I.A. No.3 of 2020, wherein the
Appellants have sought for direction to the respondents to deposit a sum
or Rs.5,96,74,929/- along with interest at 18% per annum or to furnish
security for the said sum failing which to order for the attachment of the
properties in the schedule of the petition.
2. Heard the learned counsel on both sides.
3. It is the case of the Appellants who are the claimants in the
Arbitration that the respondents have admitted their liability to the extent
of the aforesaid amount and in such circumstances they have filed
I.A.No.3 of 2020 before the Tribunal seeking for the aforementioned
direction.
4. However, learned counsel for the respondents would submit
that the respondents have never admitted their liability to the Appellants.
Under the impugned order, the Arbitral Tribunal has given the following
reasons for dismissing the application I.A. No.3 of 2020 filed by the
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C.M.A. No. 1751 of 2021
Appellants under Section 17 of the Arbitration and Conciliation Act :
Moreover, the petitioners have not quantified the amount of claim
from the respondents in the claim petition. On the other hand, the
petitioners have prayed for a declaration that they are the major share
holders of the first respondent firm and to direct the deposit of 60% of
profit made by the first respondent firm and to appoint a receiver to
ascertain the amount. Hence unless the petitioners have been declared as
major share holders of the first respondent firm and the total amount of
claim is ascertained, no order can be passed with regard to the direction
to the respondents to deposit a sum of Rs.5,96,74,929/- or to furnish
security for the said amount and failing which for the order of the
attachment of the properties mentioned in the schedule of the petition.
Moreover, any interim relief must be in conformity with the main prayer in
the claim petition. Under these circumstances the present petition filed by
the petitioners under Sec.17 of the Arbitration and Conciliation Act, 1996
for the relief as prayed therein cannot be accepted at this stage of the
proceedings and it has to be rejected. Accordingly, I decided the Issue
No.2 against the Petitioners. In view of the above findings, the Petition
filed by the Petitioners under Section 17 of the Arbitration and
Conciliation Act, 1996 to direct the Respondents to deposit a sum of
Rs.5,96,74,929/- along with interest at 18% per annum or to furnish
security for the said sum of Rs.5,96,74,929/- or failing which to order for
the attachment of the properties mentioned in the schedule of the petition is
hereby dismissed.
5. Any order passed under Section 17 of the Arbitration and
Conciliation Act is a discretionary order. Only when the said discretion
has not been exercised judiciously by not following sound legal
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C.M.A. No. 1751 of 2021
principles, this Court is having the power to interfere under Section 37 of
the Arbitration and Conciliation Act, 1996.
6. The reasons given by the Tribunal under the impugned order as
stated supra cannot be considered to be injudicious. The learned
Arbitrator has observed that the Appellant has not quantified the amount
of claim from the respondents in the claim petition and only under those
circumstances he has rejected the application I.A. No.3 of 2020. This
Court does not find any infirmity in the impugned order.
7. The learned counsel for the Appellant would submit that the
impugned order has been passed by the Arbitral Tribunal without
deciding I.A. No. 2 of 2020 filed by the Appellant wherein the Appellant
had sought an interim relief also under Section 17 of the Arbitration and
Conciliation Act to appoint a receiver to ascertain the activities of the
first respondent including the orders, machinery bought, client details
and all other activities in relation to the first respondent. The learned
counsel for the Appellant would submit that without deciding the
aforementioned application, the learned Arbitrator has adjudicated and
erroneously dismissed application I.A. No.3 of 2020. According to him,
only after deciding I.A. No.2 of 2020, the Arbitrator ought to have
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C.M.A. No. 1751 of 2021
decided I.A. No.3 of 2020. Admittedly, no order has been passed in I.A.
No.2 of 2020 by the Arbitral Tribunal, till date.
8. The only matter under challenge before this Court is an order
passed in I.A. No.3 of 2020. As observed earlier, as seen from the
impugned order, there is no scope for interference as the Arbitrator has
exercised his discretion judiciously while dismissing the application filed
by the Appellant seeking for a direction to the respondents to deposit the
alleged admitted amount. Since it is admitted by the learned Counsel
appearing on both sides that I.A. No.2 of 2020 is still pending on the file
of the Arbitral Tribunal, no prejudice would be caused to both the parties
if a direction is issued to the Arbitral Tribunal to dispose of I.A. No.2 of
2020 on merits and in accordance with law before passing of any Arbitral
Award.
9. In the result, this Civil Miscellaneous Appeal stands dismissed.
However, a direction is issued to the Arbitral Tribunal to dispose of
I.A. No.2 of 2020 filed by the Appellant seeking for appointment of
receiver within a period of one month from the date of receipt of a copy
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C.M.A. No. 1751 of 2021
of this Judgment before pronouncement of the final Arbitral Award in the
main arbitration claim. No costs. Consequently, connected
miscellaneous petitions are closed.
21.10.2021
Index: Yes/No
Internet: Yes/No
Speaking Order/Non-Speaking Order
ab/vsi2
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C.M.A. No. 1751 of 2021
ABDUL QUDDHOSE, J.
ab
C.M.A. No. 1751 of 2021
and
C.M.P. No. 9292, 9293 & 9295 of 2021
21.10.2021
https://www.mhc.tn.gov.in/judis/
