Jaleel M.K. and Fathima Kochumammed v. Fortune Integrated Asset Finance Limited

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI** **TUESDAY, THE 10TH DAY OF NOVEMBER 2020 / 19TH KARTHIKA, 1942** ## **OP(C).No.365 OF 2020** **AGAINST THE ORDER IN CMA(Arb) 53/2020 DATED 17-01-2020 OF ADDITIONAL DISTRICT COURT & SESSIONS COURT - VII, ERNAKULAM** ## **PETITIONERS/RESPONDENTS:** |**1**|**JALEEL M.K.,**| |---|---| ||**MANDATIKUDY, MARAMBILLY, MARAMBILLY P.O.,**| ||**ERNAKULAM-683 105.**| |**2**|**FATHIMA KOCHUMUHAMMED**| ||**MANDATIKUDY, MARAMBILLY, MARAMBILLY P.O.,**| ||**ERNAKULAM-683 105.**| ||**BY ADV. SRI. AJMAL V. A.**| ## **RESPONDENT/PETITIONER:** **FORTUNE INTEGRATED ASSET FINANCE LIMITED FIRST FLOOR PANATTU SQUARE, OPPOSITE SML MOTORS, PUKKATTUPADY ROAD, TOLL JUNCTION, EDAPALLY, ERNAKULAM-682 024, REPRESENTED BY ITS AUTHORIZED SIGNATORY, RAJESH.S., S/O.SUDHAKARAN, AGED 37 YEARS, SIDHARA, KIZHAKKEPPURAM, NORTH PARAVUR.** ## **R1 BY ADV. SRI.SABU S.KALLARAMOOLA** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 06-11-2020, THE COURT ON 10-11-2020 DELIVERED THE FOLLOWING:** ## **R. NARAYANA PISHARADI, J** ---------------------------------------------------- ## **O.P.(C) No. 365 of 2020** ----------------------------------------------------- Dated this the 10[th] day of November, 2020 ## **JUDGMENT** The first petitioner availed a vehicle loan from the respondent, a finance company. The second petitioner was the guarantor in the loan transaction. 2. In the arbitral proceedings initiated by the first respondent against the petitioners, an interim order was passed by the arbitral tribunal for taking possession of the vehicle bearing registration No. KL-08/AP/5890 which was involved in the loan transaction. 3. The respondent filed C.M.A (Arb.) No. 53/2020 in the District Court, Ernakulam under Section 17(2) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') for enforcing the aforesaid interim order passed by the arbitral tribunal. 4. As per Ext.P4 order in I.A.No.2/2020 in C.M.A (Arb.)No. 53/2020, the Additional District Court, Ernakulam appointed an Advocate Commissioner to take possession of the vehicle. **OP(C).No.365 OF 2020** **3** 5. The petitioners have filed this original petition under Article 227 of the Constitution of India challenging the legality and propriety of Ext.P4 order. 6. Heard the learned counsel for the petitioners and also the respondent. 7. Learned counsel for the petitioners contended that, before passing Ext.P4 order, the court below did not issue any notice to the petitioners. Learned counsel for the petitioners also contended that the petitioners were not made aware of the interim order passed by the arbitral tribunal. 8. Section 17(1) of the Act empowers the arbitral tribunal to pass interim orders of the nature mentioned thereunder. Section 17(2) of the Act provides that, subject to any orders passed in an appeal under Section 37, any order issued by the arbitral tribunal under Section 17 shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 in the same manner as if it were an order of the Court. 9. Admittedly, the arbitral tribunal had passed an order for taking possession of the vehicle which was involved in the loan transaction. There can be no doubt with regard to the fact that it was an order passed by the arbitral tribunal under Section 17(1) of the **OP(C).No.365 OF 2020** **4** Act. 10. Before passing an order under Section 17(2) of the Act for enforcement of the interim order of the arbitral tribunal to take possession of a vehicle, it is not mandatory or necessary to issue notice to the affected party (See **HDFC Bank Limited v. Manaf : 2018 (4) KHC 84** ). The vehicle may be the only security and asset available to the creditor for realisation of the debt. Issuance of notice prior to taking possession would enable the debtor to remove the vehicle out of the process of law. 11. The dispute raised by the debtor with regard to the amount due to the creditor cannot be adjudicated by the Court before or while passing an order under Section 17(2) of the Act. The Court has also no power under Section 17(2) of the Act to determine the validity or otherwise of the interim order passed under Section 17(1) of the Act by the arbitral tribunal (See **Sakthi Finance Limited v. Shanavas : 2018 (5) KHC 739** ). 12. What is contemplated under Section 17(2) of the Act is only enforcement of the interim orders passed by the arbitral tribunal under Section 17(1) of the Act. While exercising the jurisdiction under Section 17(2) of the Act, the court is not sitting in appeal over the correctness or otherwise of the interim order passed by the arbitral **OP(C).No.365 OF 2020** **5** tribunal under Section 17(1) of the Act. In exercise of the power under Section 17(2) of the Act, the court is not entitled to modify or vary the orders passed or directions given under Section 17(1) of the Act by the arbitral tribunal (See **HDB Financial Services Limited v. Kings Baker Private Limited : 2019 (1) KHC 814 : 2019 (1) KLT 784** ). 13. An order passed under Section 17(1) of the Act by the arbitral tribunal is appealable under Section 37(2)(b) of the Act. Enforcement of an order of the arbitral tribunal by the Court under Section 17(2) of the Act is subject to any orders passed in an appeal under Section 37 of the Act. 14. All these aspects have been considered by this Court in detail in the recent decision in **Manoj v. Shriram Transport Finance Company Limited [2020 (5) KHC 421: 2020 (5) KLT 775].** 15. Learned counsel for the petitioners would submit that he could not file any appeal against the interim order passed by the arbitral tribunal because no such order was communicated to the petitioners. However, the petitioners have no case that after they came to know about the interim order passed by the arbitral tribunal, they took any steps to file appeal under Section 37(2)(b) of the Act challenging the interim order of the arbitral tribunal. **OP(C).No.365 OF 2020** **6** 16. The interim order passed by the arbitral tribunal under Section 17(1) of the Act is enforceable under Section 17(2) of the Act. There is no jurisdictional error committed by the lower court in passing Ext.P4 order. In such circumstances, there is no sufficient ground to invoke the supervisory jurisdiction of this Court under Article 227 of the Constitution and to interfere with Ext.P4 order. 17. Learned counsel for the petitioners requested that the petitioners may be allowed to remit the amount due to the respondent by instalments and the first petitioner may be given possession of the vehicle. Learned counsel for the respondent submitted that the arbitral tribunal has already passed an award. 18. Since the arbitral tribunal has already passed award, this Court cannot now consider any request made by the petitioners to remit the amount in instalments without knowing the details of the award passed. The petitioners are at liberty to challenge the arbitral award in appropriate proceedings and seek appropriate reliefs in such proceedings. 19. Even otherwise, I am not inclined to consider the request for granting instalment facility to the petitioners to repay the amount due to the respondent company. **OP(C).No.365 OF 2020** **7** 20. Consequently, the original petition is dismissed. Interlocutory applications, if any, pending in the original petition are closed. **Sd/-R. NARAYANA PISHARADI JUDGE** lsn **OP(C).No.365 OF 2020** **8** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** - **EXHIBIT P1** - **TRUE COPY OF THE CMA (ARB)NO.53 OF 2020 FILED BY THE RESPONDENT BEFORE THE ADDITIONAL DISTRICT AND SESSION'S JUDGE VII, ERNAKULAM.** - **EXHIBIT P2 TRUE COPY OF THE MESSAGE SEND BY THE RESPONDENT AS 28,860/- RUPEES IS THE DUE AMOUNT IN EMI TOWARDS THE LOAN AMOUNT TO THE COMPANY.** - **EXHIBIT P3** - **TRUE COPY OF THE IA NO.02/2020 FILED BY THE RESPONDENT IN CMA(ARB) NO.53 OF 2020 BEFORE THE ADDI TONAL DISTRICT AND SESSIONS JUDGE VII, ERNAKULAM.** - **EXHIBIT P4 TRUE TYPED COPY OF THE ORDER PASSED BY THE ADDITIONAL DISTRICT AND SESSIONS JUDGE VII, ERNAKULAM IN IA NO.2/2020 OF CMA(ARB) NO.53/2020.** ## **RESPONDENTS EXHIBITS: NIL** **TRUE COPY** **P.A TO JUDGE** ## **LSN**