Mytrah Vayu Som Private Limited vs Ge India Industrial Private ...
2021 Latest Caselaw 1343 Tel

          HON'BLE SRI JUSTICE A.RAJASHEKER REDDY
                            AND
           HON'BLE DR. JUSTICE SHAMEEM AKTHER

                IA.No.2 OF 2021 IN COMCA.No.39    of 2020
                                  And
                         COMCA No.39 OF 2020,
                IA.No.2 OF 2021 IN COMCA.No.40    of 2020
                                  And
                         COMCA No.40 OF 2020,
                IA.No.2 OF 2021 IN COMCA.No.41    of 2020
                                  And
                         COMCA No.41 OF 2020
                                   &
                IA.No.2 OF 2021 IN COMCA.No.42    of 2020
                                  And
                         COMCA No.42 OF 2020




COMMON ORDER :(per Hon'ble Sri Justice A.Rajasheker Reddy)

      Since, in all these Commercial Court Appeals, I.A.No.2 of 2021

is filed seeking permission of this Court to withdraw the above

appeals i.e. COMCA Nos.39, 40, 41 & 42 of 2020 along with

COP.Nos.52, 55, 49 & 58 of 2020 respectively, on the file of the

Hon'ble XXIV Additional Chief Judge-cum-Commercial Court, in view

of the constitution of the Arbitral Tribunal, with liberty to pursue all

interim reliefs under Section 17 of the Arbitration and Conciliation

Act, 1996, as such, they are being disposed of by way of this

Common Order.

      Appellant states that Section 9 petition was instituted on

account of the fact that the Arbitral Tribunal has not been

constituted at the relevant stage. It is also asserted that though they

sought several interim reliefs, before the Court below, it has limited

its submissions only to certain reliefs which were urgent and was

intending to invoke the jurisdiction of the Arbitral Tribunal under

Section 17 of the Act. After disposal of Section 9 petition, present

appeals are filed and the matters are heard on 02.02.2021 and
                                    2



continued   on   03.02.2021,   meanwhile,    Arbitral   Tribunal   was

constituted on 04.02.2021, and the respondent has informed this

Court about the same, as such, the matters were adjourned without

any further hearing. Meanwhile, the appellants filed applications

under Section 17 of the Act before the Arbitral Tribunal on

07.04.2021 and that the Tribunal was also informed about pendency

of these appeals and request for necessary closure of the appeals

before this Court. It is also asserted that the object of proceedings

under Section 9 of the Act is only an interim measure pending

commencement of the arbitral proceedings and any substantial relief

can be claimed before the Arbitral Tribunal, seeks withdrawal of

these appeals as well as applications under Section 9 of the Act for

pursuing its interim reliefs before the Arbitral Tribunal under Section

17 of the Act. Since the order passed under Section 9 has not

attained finality and rights of the parties have not been crystallized,

the petitioners can be permitted to withdraw the applications under

Section 9 and the present Appeals.

The respondent filed counters stating that the Commercial

Court has heard applications under Section 9 and passed elaborate

order dismissing the same and the findings given by the Commercial

Court are in favour of the respondents. It is also stated that without

hearing the appeals, the petitioners cannot be permitted to withdraw

Section 9 applications. Since the findings given by the Commercial

Court are in favour of the respondents, such right accrued cannot be

wiped out by permitting the petitioners to withdraw the applications

under Section 9; and that the findings rendered by the Commercial

Court under Section 9 cannot be set aside by the Arbitral Tribunal,

since this Court has to consider the correctness of the findings in

these appeals. Hence, sought for dismissal.

Heard Sri S.Niranjan Reddy, learned Senior Counsel appearing

for the appellants, who submits that the scheme of Arbitration Act

provides for obtaining interim measures pending arbitral proceedings

and that no conclusive rights are decided between the parties in

such applications. He also submits that it is in the nature of interim

application and the party can withdraw the same at any time even at

the appellate stage. He further submits that since applications under

Section 17 are already filed before the Arbitral Tribunal and since the

main issue has to be decided by the Arbitral Tribunal, it would be

appropriate that the entire issue be left open for the Tribunal to

decide. He further submits that the Judgments cited by the learned

counsel for respondent has no application to the present case and

the Judgment rendered by the Apex Court in R.Rathinavel Chettiar

v. V.Sivaraman [(1994) 4 SCC 89] arising out of the suit

proceedings. He also submits that para-12 of the said judgment is in

favour of petitioner as the Hon'ble Apex Court clearly held that when

there is final determination of rights of the parties, the said

proceedings cannot permitted to be withdrawn at the appellate stage,

but, in the present case since the interim measure under Section 9 of

the Act cannot be equated to the suit proceedings. He also submits

that even otherwise, instead of deciding the appeal in piecemeal

basis, the entire issue can be left open for the decision of Tribunal.

On the other hand, Sri Ritin Rai, learned Senior Counsel for

the respondent while reiterating the contentions in the counter

affidavit relied on the Judgments in Kirtikumar Futarmal Jain v.

Valencia Corporation [2019 SCC Online Guj 3972] and

Velugubanti Hari Babu v. Parvathini Narasimha Rao [2017 SCC

Online Hyd 469]. He submits that any interim measure granted

under Section 9 lasts till conclusion of arbitral proceedings. In

pending arbitral proceedings, the issue between the parties is

decided and the findings are rendered after hearing both sides

elaborately and such findings cannot be disturbed by permitting the

withdrawal of Section 9 applications; and that the withdrawal can be

permitted only after appeal is heard and this Court is satisfied that

such findings are erroneous. He also submits that without hearing

the appeals, if the petitioner is permitted to withdraw the

applications, great prejudice will be caused to respondent.

After hearing both the counsel, it is an admitted fact that the

petitioner filed Section 9 applications before the Commercial Court

and the said applications are dismissed. Only some issues were

raised before the Commercial Court by the petitioner and the

Commercial Court rendered a decision on merits in favour of the

respondent. It is not in dispute that after arbitral Tribunal is

constituted on 07.04.2021, applications are filed in respect of all

other interim reliefs also. But, for want of orders to be passed in

these appeals, the said applications were not taken up and the

Hon'ble Arbitral Tribunal was also informed about the pendency of

the appeals. No doubt, the Commercial Court rendered findings in

favour of respondent. The object of enacting of Arbitration Act is for

quick disposal of the disputes. In the present case, since already

applications are filed under Section 17 of the Act, instead of deciding

some issues by this Court and some issues by the Tribunal on

piecemeal basis, we feel it appropriate that the main issue as well as

the other interim issues can be conveniently and effectively decided

by the Tribunal.

Further, in B.Rathinavel Chettiar v. Sivaraman [(1999) 4

SCC 89] the Honourable Supreme Court at paras-9 to 12 held as

follows;

"9. Every suit, if it is not withdrawn or abandoned, ultimately results in a decree as defined in Section 2(2) of the Code of Civil Procedure. This definition, so far as it is relevant, is reproduced below:

'2.(2) 'decree' means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144, but shall not include__

(a) any adjudication from which an appeal lies as an appeal from an order, or

(b) any order of dismissal for default.

Explanation:- A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final.'

10. Thus a 'decree' has to have the following essential elements, namely:

(i) There must have been ad adjudication in a suit.

(ii) The adjudication must have determined the rights of the parties in respect of, or any of the matters in controversy.

(iii) such determination must be a conclusive determination resulting in a formal expression of the adjudication.

11. Once the matter in controversy has received judicial determination, the suit results in a decree either in favour of the plaintiff or in favour of the defendant.

12. What is essential is that the matter must have been finally decided so that it becomes conclusive as between the parties to the suit in respect of the subject-matter of the suit with reference to which relief is sought. It is at this stage that the rights of the parties are crystallized and unless the decree is reversed, recalled, modified or set aside, the parties cannot be divested of their rights under the decree. Now, the decree can be recalled, reversed or set aside either by the court which had passed it as in review, or by the appellate or revisional court. Since withdrawal of suit at the appellate stage, if allowed, would have the effect of destroying or nullifying the decree affecting thereby rights of the parties which came to be vested under the decree, it cannot be allowed as a matter of course but has to be allowed rarely only when a strong case is made out. It is for this reason that the proceedings either in appeal or in revision have to be allowed to have a full trial on merits."

There is no final judicial adjudication/determination between the

parties in the proceedings under Section 9 of Arbitration Act as such

same cannot be equated to that of determination of rights in the suit.

What has been held by the Apex Court in the said Judgment is in

respect of suit proceedings, as such, same is not applicable to the

present case. No doubt, as contended by learned Senior Counsel for

the respondent that interim measure granted under Section 9 of the

Act can continue pending arbitral proceedings as held in the case of

Kirtikumar Futarmal Jain v. Valencia Corporation [2019 SCC Online

Gujarat 3972] and Velugubanti Hari Babu v. Parvathini Narsimha Rao

[2017 SCC Online Hyderabad 469], but still that interim measures will

continue pending arbitration proceedings, as such, no final

determination between parties.

In view of above facts and circumstances of the case, instead of

deciding the present issue in these appeals on merits, we feel it

appropriate to allow these applications and keep open all the issues

for the parties to be raised before the Arbitral Tribunal under Section

17 of the Act.

Accordingly, these applications are allowed permitting the

petitioners to withdraw OPs on the file of Commercial Court as well

as these Commercial Court Appeals with liberty to pursue all interim

reliefs under Section 17 of the Arbitration and Conciliation Act,

1996, before the Arbitral Tribunal. No order as to costs.

As a sequel thereto, miscellaneous petitions, if any, pending

shall stand dismissed.

____________________________ A.RAJASHEKER REDDY, J

___________________________ Dr.SHAMEEM AKTHER, J Date: 26.04.2021 tk

HON'BLE SRI JUSTICE A.RAJASHEKER REDDY AND HON'BLE DR. JUSTICE SHAMEEM AKTHER

IA.No.2 OF 2021 IN COMCA.No.39 of 2020 And COMCA No.39 OF 2020, IA.No.2 OF 2021 IN COMCA.No.40 of 2020 And COMCA No.40 OF 2020, IA.No.2 OF 2021 IN COMCA.No.41 of 2020 And COMCA No.41 OF 2020 & IA.No.2 OF 2021 IN COMCA.No.42 of 2020 And COMCA No.42 OF 2020

Date: 26.04.2021

tk