Madras High Court

Sundaram Finance Ltd vs K.Karthikeyan on 1 April, 2025

Author: A.D.Jagadish Chandira

Bench: A.D.Jagadish Chandira

                                                                                       CRP No. 441 of 2024


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                DATED: 01-04-2025

                                                         CORAM

                      THE HONOURABLE MR JUSTICE A.D.JAGADISH CHANDIRA

                                                CRP No. 441 of 2024

                Sundaram Finance Ltd.,
                No.21, Patullos Road,
                Chennai-600 002.
                Rep. by AGM (Legal) S.Sornaraj
                                                                                       Petitioner(s)
                                                              Vs

                1. K.Karthikeyan
                S/o.Krishnaraj,
                D.No.1/1213, Succuess Nagar,
                Arumuthampalayam, Naranapuram,
                Palladam Taluk, Thiruppur District.

                2.K.Krishnaraj
                S/o.Kodasamy,
                D.No.1/1213, Succuess Nagar,
                Arumuthampalayam, Naranapuram,
                Palladam Taluk, Thiruppur District.

                3.R.Palanisamy
                S/o.Rangasamy,
                D.No.8/439, Arulpuram,
                Karaipudur, Thiruppur-641605


                1/10


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                                                                                           CRP No. 441 of 2024


                                                                  Respondent(s)
                PRAYER Petition filed under Article 227 of the Constitution of India to partly

                set aside the Order dated 11.07.2023 passed in IA No.106/2023 in Arbitration

                No.ST/SF/018/2021 on the file of Principal District Judge, Tiruppur in so far as

                directing the Petitioner to file a IA for enforcement of order under sec.17 and

                appointing an Advocate Commissioner to accompany and assist the Bailiff.


                                  For Petitioner(s):       Mr.S.Mukunth
                                                           Senior Advocate
                                                           for Mr.S.Suresh

                                  For Respondent(s):       No appearance

                                                             ORDER

This Civil Revision Petition has been filed to partly set aside the Order

dated 11.07.2023 passed in IA No.106/2023 in Arbitration No.ST/SF/018/2021

on the file of Principal District Judge, Tiruppur, in so far as directing the

Petitioner to file an IA for enforcement of order under sec.17 and appointing an

Advocate Commissioner to accompany and assist the Bailiff.

2.Brief facts of the case:

The petitioner/Finance Company represented by its authorised

representative had entered into a loan cum hypothecation agreement with the

respondents herein on 12.09.2018 who purchased a vehicle along with its

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accessories. The total agreement value was Rs.4,50,744/-, payable in 60

monthly installments commencing from 10.10.2018 for a sum of Rs.7,654/- per

month. Since the respondents were irregular in paying of installments, the

vehicle was recovered from them and sold for Rs.1,85,000/- on 31.01.2020 and

in respect of the balance sum of Rs.1,50,035.10, the present arbitration

proceedings was initiated against the respondents. The petitioner had moved an

application under section 17 of the Arbitration and Concilliation Act seeking

for a direction to the respondents to furnish security to the claim amount, failing

which, to pass an order of conditional attachment of property, and the Arbitrator

by order dated 20.11.2021 in I.A.No.47 of 2021 in ARB.No.ST/SF/018/2021

passed an order of attachment of the property of the respondents, since the

respondents failed to furnish security of Rs.1,50,035.10 and the attachment

order was forwarded to the District Court for notification. However, the District

Court had insisted the petitioner file an application under Section 136 & 151 of

CPC and the same was filed in I.A.No.106/2023, wherein the trial Court

allowed the application, pursuant to which an Advocate Commissioner was

appointed, and he was directed to submit a report of attachment to the Court.

Challenging the insistence of filing an application under Section 136 & 151

CPC and the appointment of an Advocate Commissioner, the present revision

petition has been filed by the petitioner/Finance Company.

3.Mr.S.Mukunth, learned Senior counsel appearing for the petitioner

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submitted that as per Section 17 of Arbitration and Conciliation Act, the

Arbitral Tribunal shall have the same powers for making orders as a Court for

the purpose of and in relation to any proceedings before it and in such

circumstances, an order passed under Section 17(2) of the Arbitration and

Conciliation Act by the Arbitraor is to be construed as the order of the Court for

all purposes and no judicial order is warranted from the District Court for

implementing such interim orders passed by the Arbitral Tribunal under Section

17 of Act, and that the Court is only discharging the ministerial responsibility

and it cannot sit as an Appellate Forum over an order passed by the Arbitral

Tribunal. In such circumstances, the District Court exceeds its jurisdiction in

directing the petitioner to file an application under Section 136 & 151 of CPC

and also appointing an Advocate Commissioner to submit his report of

attachment to the Court. He would further emphasise that the interim order

issued by the Arbitral Tribunal shall be deemed to be an order of the Court for

all purposes, and it shall be enforceable under CPC in the same manner as if it

were an order of the Court. He would seek to set aside the impugned order

insofar as it is compelling the petitioner to file a separate application for

attachment and appointment of an Advocate Commissioner. The learned senior

counsel would further submit that the similarly placed persons with that of the

petitioner are also facing problems and on account of that, are facing delays in

notification of the orders of the attachment.

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4.Heard the learned counsel for the Petitioner and perused the available

records.

5.This Court finds that the issue is only between the petitioner and the

Court, hence, notice to the respondent is dispensed with.

6.A perusal of the impugned order shows that the learned District Judge

at paragraph 7 has held that the Arbitrator has got ample powers to pass an

interim order under Section 17 of the Arbitration and Conciliation Act, 1996 and

the orders passed by the Arbitrator shall be deemed to be an order of the Court

for all purposes and shall be enforceable u/s.136 of the CPC. However, in the

previous paragraph i.e., Para No.6, it was held that an application under Section

17 of the Arbitration and Conciliation Act is to be moved in order to enforce the

interim order passed by the Arbitrator. In this regard, it is apposite to refer to

the judgment of the Madurai Bench of this Court in the case of Sundaram

Finance Ltd., Vs. P.Sakthivel reported in 2018 (5) CTC 801, the relevant portion

is extracted as under:

“19. Since the Arbitral Tribunal cannot in any event enforce the interim order passed by it on its own, it has to necessarily knock the doors of the District Court. In this case, the venue of the Arbitral Tribunal is at Chennai. Even if the property attached is located in Chennai, the Arbitral tribunal could not have enforced the order of attachment on its own. It will have to seek the assistance of the Principal District and Sessions Judge, Chennai.

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Therefore, whenever the Arbitral Tribunal passes an interim order under Section 17 of the Act, it has to follow the procedure laid down under Section 136 of CPC. Whenever the District Judge receives communication from another Court for enforcement in terms of Section 136 of CPC, he will immediately forward the order to the Nazir section for implementation. The recipient court will have not have any difficulty because the process fee would have been remitted in the court which passed the order. But, in the case of an Arbitral Tribunal, there is no scope for receiving the process fee. It will have to be necessarily remitted only in the court by the party in whose favour the interim order has been passed. In the very nature of things, this remittance will have to be made in the Nazir section of the District Court. These are days when we do come across acts of forgery and fraud committed even in respect of orders of court.

20. Therefore, it is directed that the process fee in such cases should be remitted by a counsel who is practising before the District Court to which the order of the Arbitral Tribunal is communicated. Of course, the counsel who is remitting the process fee in the Nazir section will have to hold Vakalat and he will have to authenticate the genuineness of the interim order transmitted by the Arbitral Tribunal. But then, there is no necessity to take out an application in the form of an I.A. before the court. What is to be performed is a pure ministerial act. No judicial order is warranted from the District Court for implementing the interim order passed by the Arbitral Tribunal under Section 17 of the Act. The District Court is only discharging a ministerial responsibility and cannot sit in appeal over the order passed by the Arbitral Tribunal. Since such an interim order is appealable in view of Section 37(2)(b) of the Act, there is a built-in safeguard also.

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21. The learned Senior Counsel expresses his grievance that an uniform approach is not adopted by all the District Courts in Tamil Nadu. While some courts proceed to implement the interim order as contemplated under Section 17(2) of the Act r/w Section 136 of CPC, many do not. He passed on a copy of a formal application in the form of an I.A. filed by a counsel before the District Court in Madurai in one such case.

22. This Court, therefore, reminds all the District Courts that an interim order issued by the Arbitral Tribunal shall be deemed to be an order of the court. This is for all purposes. It shall be enforceable under CPC in the same manner as if it were an order of the Court. The expression “for all purposes” is significant. This Court calls upon all the District Courts to take note of the legislative amendment and the decision of the Hon'ble Supreme Court reported in 2017 (6) CTC 38 (Alka Chandewar v. Shamshul Ishrar Khan) and give effect to the interim order passed by the Arbitral Tribunals accordingly.”

7.This Court also takes note of Section 136(2) of CPC, which is extracted

here under:

“(2)The District Court shall, on receipt of such copy and amount,

cause the arrest or attachment to be made by its own officers, or

by a Court subordinate to itself, and shall inform the Court which

issued or made such warrant or order of the arrest or

attachment.”

A bare reading of the provision extracted above makes it amply clear a separate

application is not necessary to implement the orders passed u/s.17 of the

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Arbitration and Concilliation Act. Furthermore, on receipt of such an order

copy, the District Court has to get along with the proceedure rather than

directing the petitioner to file a separate application for enforcing the order.