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Vijayawa Transport, Hyderabad Vs. Andhra Pradesh State Civil Supplies Corporation Ltd., Hyderabad and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.O. No 1072 of 1982
Judge
Reported inAIR1983AP172
ActsArbitration Act, 1940 - Sections 41
AppellantVijayawa Transport, Hyderabad
RespondentAndhra Pradesh State Civil Supplies Corporation Ltd., Hyderabad and anr.
Appellant AdvocateDuba Mohana rao, Adv.
Respondent AdvocateS. Ranga Reddy, Adv.
Excerpt:
.....proceedings - civil court has jurisdiction to entertain any application and grant of any interim relief essential for administration of justice - nothing mentioned in section 41 to deny court jurisdiction - under section 41 court can pass interim orders for purpose of arbitration proceedings and in relation to arbitration proceedings. - - the corporation proceeding on the basis that the failure of the petitioner-appellant to delivery the above mentioned quality of sugar for distribution to kurnool district had caused damages to it, withheld the payment of moneys which are due and payment of moneys which are due and payment of moneys which are due and payable to the petitioner-appellant for the transport work he had done with respect tot he aforementioned four districts of..........the necessary adjunctive authority and jurisdiction to entertain any application and grant of any interim relief so essential for administration of justice. in many cases obtaining of interim relief is no less important than obtaining of final relief. whether we are dead or not in the long run as kenyes predicted, many of us may not be alive to see the fruits of out court litigation. the fruits of court litigation are not oft interred with our bones. it follows, therefore that court jurisdiction to grant an interim relief should not be lightly denied by interpretation unless the language used by the statute is intra table. we not only find that there is no such clear words of limitation used in s. 41 of the arbitration act compelling us to deny the court jurisdiction to grant an interim.....
Judgment:

P.A. Choudary, J.

1.This civil Miscellaneous appeal is filed against an order of the 6th Additional Judge, city, civil Court Hyderabad, rejecting the grant of any relief to the appellant-petitioner in I.A. No. 1979/82 in O.S. No. 1089/82 by directing the A.P. State civil supplies corporation limited not to withhold payment of amounts due to the petitioner-appellant for the transportation work done by the transportation work done by the petitionerappellant for that corporation.

2. The petitioner-appellant was appointed by the respondent-corporation as a transport contractor for the purpose of transporting sugar. For the above purpose the corporation had appointed the appellant as a contractor with reference to several districts under separate agreements. Those districts covered by separate agreements are Adilabad Khammam, mahaboobnagar and Medak. In addition to the above the petitioner-appellant had also been appointed as a contractor to transport sugar of the corporation to Kurnool district. It appears that there was a separate agreement executed with reference to this contract work also. Although the petitioner-appellant disputes the validity and enforceability of that agreement the corporation maintains that the agreement is valid and binding between the parties. Now the petitioner appellant rather-high-handedly with held the delivery of sugar which was entrusted to him to be transported to Kurnool district. We are told even to this day the quantity of sugar so with held by the petitioner-appellant from being delivered for distribution to Kurnool District remains, with the petitioner-appellant only. The corporation proceeding on the basis that the failure of the petitioner-appellant to delivery the above mentioned quality of sugar for distribution to Kurnool district had caused damages to it, withheld the payment of moneys which are due and payment of moneys which are due and payment of moneys which are due and payable to the petitioner-appellant for the transport work he had done with respect tot he aforementioned four districts of Adilabad. Khammam, medak and Mahaboobnagar. The petitioner appellant disputing the rights of the respondent corporation to withhold payments and invoking arbitration clause, had filed O.S. No. 1089/82 under S. 20 of the arbitration Act. Pending that arbitration suit, the petitioner-appellant had filed the aforementioned I.A. No. 1979/82 requesting the Court to issue an order under S. 41(b) of the Arbitration Act read with its II schedule directing the corporation not to withhold the payment of amounts due to the petitioner appellant for the transport work done by him with respect tot he aforementioned four Districts on the ground of damages alleged to have been suffered by the corporation with reference to the work of the petitioner in Kurnool district. This application was rejected by the lower Court, against which this appeal has been filed.

3. Mr. Duba Mohanrao the learned counsel for the appellant had argued at great length contending that this is a fit case where the lower Court ought not to have refused to grant the relief asked for. His case is that the moneys were due to his client from the corporation with respect to the work which has been satisfactorily done by him and that there was no jurisdiction for the corporation to withhold payment of those moneys on the ground that the work which his client had done in relation to Kurnool district had caused damage to the corporation. In support of this contention, he had relied on S. 41(b) of the Arbitration Act read with II schedule and also a decision of the Supreme Court also a decision of the Supreme Court in Union of India v. Raman Iron Foundry, : [1974]3SCR556 . We must frankly say that the argument of Mr. Mohanrao is fully supported by the judgment of the Supreme Court, where in the Supreme Court held that the Court power to make an order in that case directing the respondent-govt not to withhold the payments due to the petitioner on similar grounds as in the present case, is available under S. 41(b) of the arbitration Act. We are therefore, unable to agree with the lower Court that the Court lacks power under the Arbitration Act to make the order which is asked for by the petitioner-appellant.

4. The arguments of sri S. Ranga reddy, for the corporation that the power under S. 41(b) of the Arbitration Act would not be available to be exercised by the Court till an arbitrator has been appointed does not appear to be correct. S. 41 of the Arbitration Act is worded very widely and empowers a Court to exercise the powers of passing interim orders and mentioned in the II schedule not only for the purpose of an arbitration proceeding, but also in relating to an arbitration proceeding. An arbitration proceeding may not be the same thing as an arbitration. An arbitration proceeding covers a much wider area than an arbitration in strict sense. In the context of the Arbitration Act, arbitration proceedings need not necessarily be held to commence only from the point of time when an arbitration proper is commenced with the appointment of an arbitrator by the Court. Arbitration proceeding would take in a proceeding taken for the appointment of an arbitrator. Construing the language of S. 41 of the Arbitration Act and considering its purpose, we find no justification to give that section such a restriction interpretation that would deny a civil Court the necessary adjunctive authority and jurisdiction to entertain any application and grant of any interim relief so essential for administration of justice. In many cases obtaining of interim relief is no less important than obtaining of final relief. Whether we are dead or not in the long run as kenyes predicted, many of us may not be alive to see the fruits of out Court litigation. The fruits of Court litigation are not oft interred with our bones. It follows, therefore that Court jurisdiction to grant an interim relief should not be lightly denied by interpretation unless the language used by the statute is intra table. We not only find that there is no such clear words of limitation used in S. 41 of the arbitration Act compelling us to deny the Court jurisdiction to grant an interim relief till an arbitrator is appointed, but on the contrary we also find the phrase 'arbitrator is appointed but on the contrary we also find the phrase arbitration proceeding' is wide enough to justify the granting of interim relief even before an arbitrator is appointed. The judgment of the kerala High Court reported in Baby paul v. Hindustan paper corporation ltd., : AIR1978Ker223 no doubt supports the view which is advanced by the respondent corporation. That judgment holds that arbitration proceedings commence only on the arbitrator getting authority to arbitrate and Act on that behalf. According to this view the applicability of S. 41 of the Arbitration Act would be postponed till the Court appoints an arbitrator under S. 20 of the Act. This view of the law would create a vacuum to meet the situation that might arise from the time an application for the appointment of an arbitrator has been made to the Court and till that application has been disposed of by the Court by appointing an arbitrator. Considering the fact that S. 41 of the Arbitration Act is a remedial section and provides for a machinery of justice, we consider it proper not to clog its operational efficiency and functional effectiveness by such a restricted interpretation. The language used in the section also does not compel us to take that view and deny the Court jurisdiction to exercise this power. For these reasons we do not think that we can accept the judgment of the kerala High Court in baby paul v. Hindustan paper corporation (supra).

5. But this does not mean that the petitioner appellant's application for the relief asked for should be granted. The application of the petitioner-appellant appears to be defective basically for the reason that it does not fall under the arbitration Act at all. We are prima facie, of the opinion that the arbitration suit filed by the appellant in O.S No. 1098/82 is not competently instituted there is no clause in the arbitration agreement which provides either for the withholding of the money by the corporation or adjusting the moneys due and payable by the corporation to the transport contractor towards the amounts due and payable by the contractor to the corporation. The withholding of payments due to the appellant is not a dispute that arises under the contract in fact, the corporation has taken a specific plea in the Court below and it has been repeated here, that the arbitration suit itself is incompetent for the reason that the dispute is not arbitrable. In view of the fact that this dispute is not and cannot be said to arise under the terms of the arbitration agreement, and as we hold that this dispute falls totally outside that agreement, we conclude that the petitioner-appellant's arbitration suit in O.S. No. 1089/82 is incompetently instituted if that were to be so, as we held it to be so the question of the petitioner-appellant filing the abovementioned I.A. No. 1979/82 for the interim relief and the applicability of S. 41 of the Arbitration Act, would not arise. We, therefore, for that reason confirm the order of the Court below and dismiss this. Civil Miscellaneous Appeal with costs.

6. Appeal dismissed.


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