Shriram Transport Finance Company Limited v. Roy M.V. and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** ## **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **THURSDAY, THE 23[RD] DAY OF DECEMBER 2021 / 2ND POUSHA, 1943 WA NO. 1723 OF 2021** **AGAINST THE ORDER IN WP(C) 25718/2021 OF HIGH COURT OF KERALA** ## **APPELLANT:** **SHRIRAM TRANSPORT FINANCE COMPANY LIMITED REPRESENTED BY BRANCH MANAGER,KANJIRAPPALLY, KOTTAYAM, GROUND FLOOR, MALL NINETY DEGREE, OPPOSITE KSEB, PONKUNNAM P.O., KANJIRAPPALLY, KOTTAYAM – 686 506** **BY ADVS. C.HARIKUMAR ARUN KUMAR M.A** ## **RESPONDENTS:** **1. ROY M.V. AGED 44 YEARS, S/O.VARGHESE, MUTTATHUPARA, KULATHOORMOZHI, KULATHOORPRAYAR P.O. KOTTAYAM – 686541 2. HRIRAM TRANSPORT FINANCE COMPANY LIMITED REPRESENTED BY MANAGING DIRECTOR, 101-105, FIRST FLOOR, B WING, SHIV CHAMBERS SECTOR – 11, CBD, BELAPUR, NAVI MUMBAI 400 614.** **3. ADVOCATE P.SATHEESH CHANDRAN NAIR, RETIRED DISTRICT PRESIDENT/JUDGE(C.D.R.F.), KANDATHIL RESIDENCY, ROOM NO.8, COLLECTORATE P.O., KOTTAYAM – 686001** **4. ARBITRATOR, ADVOCATE P.SATHEESH CHANDRAN NAIR, RETIRED DISTRICT PRESIDENT/JUDGE(C.D.R.F.), KANDATHIL RESIDENCY, ROOM NO.8, COLLECTORATE P.O., KOTTAYAM – 686001.** **5.THE SUB INSPECTOR OF POLICE, MANIMALA, KARUCKACHAL MANIMALA ROAD, MANIMALA P.O., KOTTAYAM – 686 543. BY ADVS. SRI.ABDUL LATHEER FOR R1 SMT.SANDRA SUNNY FOR R3 SRI.K.P.HARISH, SENIOR GOVERNMENT PLEADER FOR R5** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 23.12.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.A No.1723 of 2021 **2** ## **JUDGMENT** Dated this the 23[rd] day of December, 2021 ## **S.Manikumar, C.J.** Before the writ court, M/s. Shriram Transport Finance Company Limited - respondent No.1, sought for the following reliefs: i)To call for the records relating to Exhibit P-1 to P-7 and to issue a writ of mandamus declaring that the entire proceedings in AC No.39/2021 based upon Exhibit P4 notice and Exhibit P6 is illegal and opposed to law and to set aside Exhibit P6 order, command respondents 1 and 2 to immediately release vehicle bearing No.KL37A-2282 to the petitioner as taking into custody of the vehicle was illegal, unjust and opposed to law. ii)To pass orders directing respondents 1, 2 and 3 to pay compensation amount to Rs.5 lakhs as there is violation of the constitutional right to live. 2. Exhibit P6 interim order of the Arbitral Tribunal, Kottayam made in I.A.No.19/2021 dated 7[th] July, 2021, sought to be quashed, are reproduced hereunder: W.A No.1723 of 2021 **3** ## “ INTERIM ORDER This is a petition filed under Section 17 (1) of the Arbitration and Conciliation Act 1996 by the petitioner for the protection of the subject matter of the dispute in the Arbitration. I peruse the petition along with the Affidavit and the records before me apart from the hearing of the Counsel for the petitioner. The petitioner herein is a public Limited Company, incorporated under the Indian Companies Act 1956, having its registered Office at No-14 A-South Phase Industrial Estate, Guindy, Chennai-600032 and branch office at Kanjirappally. The petition company is engaged in the business of Hire Purchase and leasing and financing of commercial vehicles. According to the petitioner, the respondent's jointly and severally executed a loan cum hypothecated agreement. KANJRT906290018 for availing financial assistance for purchase of a SWARAJ MAZDA SMART FBT-Reg. No. KL 37 A 2282 on 01-07-2019 for an amount of Rs. 2,75,000/-(Rupees Two Lakhs Seventy Five Thousand Only). It is contented that as per agreement the respondent agreed to repay Rs.3,91,145/-(Rupees Three Lakhs Ninety Thousand One Hundred And Forty Five Only) to the petitioner in 36 monthly installments. Apart from it the respondents also agreed to pay an overdue compensation at the rate of 3% to the petitioner. The petitioner, again contented that the respondents willfully defaulted the monthly installment as agreed and an amount of Rs.3,74,781/(Rupees Three Lakhs Seventy Four Thousand Seven Hundred And Eighty One only) is due from the respondents on 14.12.2020 for a final settlement. The petitioner further contented that the respondents are W.A No.1723 of 2021 **4** not maintaining the vehicle in a proper condition and it is also learned that they have contacted buyers to sell the parts of vehicle by dismantling the same. The petitioner is apprehended irreparable loss and injury will be caused to the vehicle if this petition is disallowed. 1 peruse all the records filed along with the petition, the contention and submission of the petitioner I would like to allow the petition as follows: ## ORDER 1. The respondents are hereby directed to surrender the vehicle bearing Reg. No. KL 37 A 2282 forthwith to the petitioner for safe custody. If the respondents failed to comply the order, the petitioner is at liberty to take possession of the vehicle by lawful means including police assistance. 2. The petitioner is also directed to keep the vehicle in proper and safe custody until further orders as and when the petitioner obtains possession.” 3. Exhibit P7 is a notice issued by the appellant to Mr.Roy.M.V. - respondent No.1 herein, calling upon him to pay a sum of Rs.3,74,781/to settle the contract in full. W.A No.1723 of 2021 **5** 4. Writ court, considering the facts and circumstances, directed to release the vehicle subject to respondent No.1 making a payment of Rs.1,00,000/-. Short order made in I.A.No.1 of 2021 in W.P.(C) No.25718 of 2021 dated 15[th] December, 2021, impugned in this writ appeal is reproduced hereunder: “ ## **O R D E R** Considering the peculiar facts and circumstances narrated in this writ petition and also the pathetic situation pointed out by the learned counsel for petitioner, I think the vehicle now seized as per Exhibit P6 interim order can be released to the petitioner provisionally and subject to the result of this writ petition on condition that the petitioner will pay an amount of Rs.1,00,000/- (Rupees One lakh only). W.P.(C) Post after Christmas holidays.” 5. The above said order is challenged on the grounds inter alia that proceedings under the Arbitration and Conciliation Act 1996 cannot be a subject matter of a writ petition under Article 226 of the Constitution of India. ## 6. On the above aspect, the appellant has contended thus: “The interference of the High Court under Article 226 of the Constitution of India, in deposit orders came to be commented by the Supreme Court in **Navyuga Engineering company Vs.** W.A No.1723 of 2021 **6** **Bangalore Metro Rail Corporation Limited,** [2021 SCC Online SC 469]. A writ petition was filed challenging the stay order of the execution of an Arbitral Award on condition on deposit of 60% and security for the balance amount by the city civil court. The writ petition filed by the respondent was allowed and the deposit reduced to 50% of the principal amount. Interfering with the order of the High Court of Karnataka and restoring the execution order of the City Civil Judge the Apex Court commented as follows: “4. Despite this court repeatedly referring to Section 5 of the Arbitration act in particular and the Arbitration Act in general and despite this court having laid down in **Deep Industries Ltd. v. ONGC [** (2020) 15 SCC 706] that the High Court under Article 226 and 227 should be extremely circumspect in interfering with orders passed under the Arbitration Act, such interference being only in cases of exceptional rarity or cases which are stated to be patently lacking in inherent jurisdiction, we find that High Courts are interfering with deposit orders that have been made. This is not a case of exceptional rarity or of any patent lack of inherent jurisdiction.” Thus, in the instant case the learned single judge has committed an error in law in interfering with an order in execution of the interim order of the arbitrator which is not a case of exceptional rarity or a case of patent lack of inherent jurisdiction and is thus liable to be interfered with by the exercise of appellate jurisdiction vested in this Hon'ble Court.” ## 7. Reliance is made on the decisions of the Hon'ble Supreme Court W.A No.1723 of 2021 **7** ## in **Deep Industries Limited. v. Oil And Natural Gas Corporation** **Limited and Another,** reported in [(2020) 15 SCC 706], wherein the Supreme Court held thus: “11. Having heard the learned counsel for both parties, it is first necessary to set out certain provisions of the Arbitration and Conciliation Act, 1996. _12_ _**.** Section 5 states:_ “5. _**Extent of judicial intervention**_ .—Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.” _**13.** Section 37 which is also material states as follows:_ “37. _**Appealable orders**_ .—(1) An appeal shall lie from the following orders (and from no others) to the court authorised by law to hear appeals from original decrees of the Court passing the order, namely— ( _a_ ) refusing to refer the parties to arbitration under Section 8; ( _b_ ) granting or refusing to grant any measure under Section 9; ( _c_ ) setting aside or refusing to set aside an arbitral award under Section 34. (2) An appeal shall also lie to a court from an order granting of the Arbitral Tribunal— ( _a_ ) accepting the plea referred in sub-section (2) or sub-section (3) of Section 16; or ( _b_ ) granting or refusing to grant an interim measure under Section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.” 14. What is also important to note is that under Section 29-A of the W.A No.1723 of 2021 **8** Act which was inserted by the Amendment Act, 2016 a time-limit was made within which arbitral awards must be made, namely, 12 months from the date the Arbitral Tribunal enters upon the reference. Also, it is important to note that even so far as Section 34 applications are concerned, Section 34(6) added by the same amendment states that these applications are to be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other parties. 15. Given the aforesaid statutory provision and given the fact that the 1996 Act repealed three previous enactments in order that there be speedy disposal of all matters covered by it, it is clear that the statutory policy of the Act is that not only are time-limits set down for disposal of the arbitral proceedings themselves but time-limits have also been set down for Section 34 references to be decided. Equally, in _Union of India_ v. _Varindera Constructions Ltd._ [ _Union of India_ v. _Varindera Constructions Ltd._ , (2020) 2 SCC 111 : (2020) 1 SCC (Civ) 277] , dated 17-9-2018, disposing of SLP (C) No. 23155 of 2013, this Court has imposed the selfsame limitation on first appeals under Section 37 so that there be a timely resolution of all matters which are covered by arbitration awards. 16. Most significant of all is the non obstante clause contained in Section 5 which states that notwithstanding anything contained in any other law, in matters that arise under Part I of the Arbitration Act, no judicial authority shall intervene except where so provided in this Part. Section 37 grants a constricted right of first appeal against certain judgments and orders and no others. Further, the statutory mandate also provides for one bite at the cherry, and interdicts a second appeal being filed [ _see_ Section 37(2) of the Act]. 17. This being the case, there is no doubt whatsoever that if W.A No.1723 of 2021 **9** petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non obstante clause of Section 5 of the Act. In these circumstances, what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us hereinabove so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction. _**18.** In Nivedita Sharma v. COAI [Nivedita Sharma v. COAI, (2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947] , this Court referred to several judgments and held : (SCC pp. 343-45, paras 11-16)_ “ _11._ We have considered the respective arguments/submissions. There cannot be any dispute that the power of the High Courts to issue directions, orders or writs including writs in the nature of habeas corpus, certiorari, mandamus, quo warranto and prohibition under Article 226 of the Constitution is a basic feature of the Constitution and cannot be curtailed by parliamentary legislation— _L. Chandra Kumar_ v. _Union of India_ [ _L. Chandra Kumar_ v. _Union of India_ , (1997) 3 SCC 261 : 1997 SCC (L&S) 577] . However, it is one thing to say that in exercise of the power vested in it under Article 226 of the Constitution, the High Court can entertain a writ petition against any order passed by or action taken by the State and/or its agency/instrumentality or any public authority or order passed by a quasi-judicial body/authority, and it is an altogether different thing to say that each and every petition filed under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy. Rather, it is settled law that when a statutory forum is created W.A No.1723 of 2021 **10** by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. _12._ In _Thansingh Nathmal_ v. _Supt. of Taxes_ [ _Thansingh Nathmal_ v. _Supt. of Taxes_ , AIR 1964 SC 1419] , this Court adverted to the rule of self-imposed restraint that the writ petition will not be entertained if an effective remedy is available to the aggrieved person and observed : (AIR p. 1423, para 7) ‘ _7._ … The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up.’ _13._ In _Titaghur Paper Mills Co. Ltd._ v. _State of Orissa_ [ _Titaghur Paper Mills Co. Ltd._ v. _State of Orissa_ , (1983) 2 SCC 433 : 1983 SCC (Tax) 131] , this Court observed: ‘ _11._ It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in _Wolverhampton New Waterworks Co._ v. _Hawkesford_ [ _Wolverhampton New Waterworks Co._ v. _Hawkesford_ , (1859) 6 CBNS 336 : 141 ER 486] in the following passage : (ER p. 495) “… There are three classes of cases in which a liability may be established founded upon a statute. … But there is a third class viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. … the remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to.” W.A No.1723 of 2021 **11** The rule laid down in this passage was approved by the House of Lords in _Neville_ v. _London Express Newspapers Ltd._ [ _Neville_ v. _London Express Newspapers Ltd._ , 1919 AC 368 (HL)] and has been reaffirmed by the Privy Council in _Attorney General of Trinidad & Tobago_ v. _Gordon Grant & Co. Ltd._ [ _Attorney General of Trinidad & Tobago_ v. _Gordon Grant & Co. Ltd._ , 1935 AC 532 (PC)] and _Secy. of State_ v. _Mask & Co._ [ _Secy. of State_ v. _Mask & Co._ , 1940 SCC OnLine PC 10 : (1939-40) 67 IA 222 : AIR 1940 PC 105] It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The High Court was therefore justified in dismissing the writ petitions in limine.’ _14._ In _Mafatlal Industries Ltd._ v. _Union of India_ [ _Mafatlal Industries Ltd._ v. _Union of India_ , (1997) 5 SCC 536] , B.P. Jeevan Reddy, J. (speaking for the majority of the larger Bench) observed : (SCC p. 607, para 77) ‘ _77._ … So far as the jurisdiction of the High Court under Article 226— or for that matter, the jurisdiction of this Court under Article 32— is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment.’ _15._ In the judgments relied upon by Shri Vaidyanathan, which, by and large, reiterate the proposition laid down in _Baburam Prakash Chandra Maheshwari_ v. _Antarim Zila Parishad, Muzaffarnagar_ [ _Baburam Prakash Chandra Maheshwari_ v. _Antarim Zila Parishad, Muzaffarnagar_ , AIR 1969 SC 556] , it has been held that an alternative remedy is not a bar to the entertaining of writ petition filed for the enforcement of any of the fundamental rights or where there has been a violation of the principles of natural justice or where the order under challenge is wholly without jurisdiction or the vires of the statute is under challenge. _16._ It can, thus, be said that this Court has recognised some exceptions to the rule of alternative remedy. However, the proposition laid down in _Thansingh Nathmal_ v. _Supt. of Taxes_ [ _Thansingh Nathmal_ v. _Supt. of Taxes_ , AIR 1964 SC 1419] W.A No.1723 of 2021 **12** and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field.” 19. In _SBP & Co._ [ _SBP & Co._ v. _Patel Engg. Ltd._ , (2005) 8 SCC 618] , this Court while considering interference with an order passed by an Arbitral Tribunal under Articles 226/227 of the Constitution laid down as follows : (SCC p. 663, paras 45-46) “ _45._ It is seen that some High Courts have proceeded on the basis that any order passed by an Arbitral Tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constitution. We see no warrant for such an approach. Section 37 makes certain orders of the Arbitral Tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating its grievances against the award including any in-between orders that might have been passed by the Arbitral Tribunal acting under Section 16 of the Act. The party aggrieved by any order of the Arbitral Tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The Arbitral Tribunal is, after all, a creature of a contract between the parties, the arbitration agreement, even though, if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the Arbitral Tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the Arbitral Tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution. Such an intervention by the High Courts is not permissible. _46._ The object of minimising judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 or under Article 226 of the Constitution against every order made by the Arbitral Tribunal. Therefore, it is necessary to indicate that once the arbitration has commenced W.A No.1723 of 2021 **13** in the Arbitral Tribunal, parties have to wait until the award is pronounced unless, of course, a right of appeal is available to them under Section 37 of the Act even at an earlier stage.” 20. While the learned Additional Solicitor General is correct in stating that this statement of the law does not directly apply on the facts of the present case, yet it is important to notice that the sevenJudge Bench [ _SBP & Co._ v. _Patel Engg. Ltd._ , (2005) 8 SCC 618] has referred to the object of the Act being that of minimising judicial intervention and that this important object should always be kept in the forefront when an Article 227 petition is being disposed of against proceedings that are decided under the Act. _**21.** It is true that in Punjab Agro Industries Corpn. Ltd. [Punjab Agro Industries Corpn. Ltd. v. Kewal Singh Dhillon, (2008) 10 SCC 128] , this Court distinguished SBP & Co. [SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] stating that it will not apply to a case of a non-appointment of an arbitrator. This Court held : (Punjab Agro Industries Corpn. Ltd. case [Punjab Agro Industries Corpn. Ltd. v. Kewal Singh Dhillon, (2008) 10 SCC 128] , SCC p. 132, para 9)_ “ _9._ We have already noticed that though the order under Section 11(4) is a judicial order, having regard to Section 11(7) relating to finality of such orders and the absence of any provision for appeal, the order of the Civil Judge was open to challenge in a writ petition under Article 227 of the Constitution. The decision in _SBP & Co._ [ _SBP & Co._ v. _Patel Engg. Ltd._ , (2005) 8 SCC 618] does not bar such a writ petition. The observations of this Court in _SBP & Co._ [ _SBP & Co._ v. _Patel Engg. Ltd._ , (2005) 8 SCC 618] that against an order under Section 11 of the Act, only an appeal under Article 136 of the Constitution would lie, is with reference to the orders made by the Chief Justice of a High Court or by the designate Judge of _that High Court_ . The said observations do not apply to a subordinate court functioning as designate of the Chief Justice.” (emphasis in original) What is important to note is that the observations of this Court in _Punjab Agro Industries Corpn. Ltd._ [ _Punjab Agro Industries Corpn. Ltd._ v. _Kewal Singh Dhillon_ , (2008) 10 SCC 128] were for the reason W.A No.1723 of 2021 **14** that no provision for appeal had been given by statute against the orders passed under Section 11, which is why the High Court's supervisory jurisdiction should first be invoked before coming to this Court under Article 136. Given the facts of the present case, this case is equally distinguishable for the reason that in this case the Article 227 jurisdiction has been exercised by the High Court only after a first appeal was dismissed under Section 37 of the Act.” The said decision has been followed later on in **Navyuga Engineering company Vs. Bangalore Metro Rail Corporation Limited,** [2021 SCC Online SC 469]. 8. Further contention has been made that the learned Single Judge ought not have entertained the writ petition, when the respondent has a remedy under section 37 of the Arbitration and Conciliation Act, 1996. 9. Though, Mr.T.M.Abdul Latheef, learned counsel for respondent No.1, made submissions on the grounds inter alia that no sooner the Arbitral Tribunal has passed the interim order, appellant had taken steps to seize the vehicle, seeking for appointment of an Advocate Commissioner, through the process of the District Court, and that there was no time even to approach the District Court, we are not inclined to accept the said contention, so as to empower the writ court to entertain a writ petition, against an order of deposit. 10. Following the judgments of the Supreme Court, interim order dated 15[th] December, 2021, is liable to be set aside. Accordingly, it is set W.A No.1723 of 2021 **15** aside. Writ appeal is allowed. Sd/- **S.Manikumar Chief Justice** Sd/- **Shaji P.Chaly Judge** smv