1. This writ petition is filed invoking Article 227 of the Constitution, challenging Ext. P7, an injunction order issued by the District Court, on an application filed by the first respondent herein under Section 9 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as the ‘Act’.
2. Respondents 3 and 4, the then owners of an item of property and the first respondent entered into an agreement to build, the first respondent herein being the builder and respondents 3 and 4 being the owners of the land. It appears that respondents 3 and 4 styled themselves as ‘Vilas Constructions’, a firm, the second respondent in this writ petition.
3. As against respondents 2 to 4, a third party filed a suit before a competent civil Court and obtained a decree, in execution of which, the item of property in question was brought to sale and the writ petitioner purchased it. He was issued Ext. P1 sale certificate. This was followed by delivery of the property to him, as evidenced by Ext. P2. According to the writ petitioner, he is thus in possession of the property. Going by the documents, there is no reason to assume to the contrary.
4. Alleging that disputes have arisen pursuant to the agreement entered between respondents 1 to 4, the first respondent invoked Section 9 of the Act and filed Ext. P4, I.A No. 1795 of 2005 seeking an order of injunction restraining the writ petitioner and respondents 2 to 4 or their agents from doing any work or challenging or altering the present nature of the property and the piles in the said property till the alleged work done by the first respondent is measured out and the value assessed or in the alternative, to pay an amount as stated in the said petition. The impugned Ext. P7 has been issued against the writ petitioner and respondents 2 to 4 on the said petition. It is appropriate in this context to extract the said order of injunction. It reads as follows:
“Upon motion made into this Court by the petitioner's counsel and upon reading the petition of the said petitioner in this matter held on 18-5-2005 and upon hearing the evidence of the petition and affidavit in support thereof, this Court both order that an interim injunction be awarded to restrain the respondents or their agents or the present owner of the land in Sy. Nos. 142/2 and 3 of Ernakulam village from doing any work or changing or altering the present nature of the property and pile in the property in Sy. Nos. 142/2 and 3 of Ernakulam village till measuring the work done by the petitioner in the property in Sy. Nos. 142/2 and 3 of Ernakulam village and assessing total amount due to the petitioner or in the alternative pay the admitted amount of Rs. 16,28,800/- with interest due to the petitioner for the pile work done in the land in Sy. Nos. 142/2 and 3 of Ernakulam village or tampering or causing damages to the equipments and materials of the petitioner at the sight or remove the same or from committing any waste in the pile work done in the injunction schedule property.”
5. The question that arises for decision is as to whether the writ petitioner, admittedly, a third party to an alleged arbitral agreement between the respondents and who has, in his favour, a confirmed Court sale and certificate of such sale and delivery of possession, following and arising under an independent decree, could be dispossessed, injuncted or subjected to other Court proceedings under Section 9 of the Act?
6. It is apposite in this context to read Section 9 of the Act, which is as follows:
“9. Interim measures etc. by Court.— A party may, before or during arbitration proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36, apply to a Court:—
(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters, namely:—
(a) the preservation, interim custody or sale of any goods which are to subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the Court to be just and convenient.
and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.”
For appreciating the scope of Section 9, the term ‘party’ has to be understood, following the definition of the said term in Section 2(1)(h), which states that unless the context otherwise requires ‘party’ means a party to an arbitration agreement. By Section 2(1)(b), ‘arbitration agreement’ means an agreement referred to in Section 7. Whatever be its form as conceived in sub-section (2) of Section 5 thereof, arbitration agreement, going by sub-section (1) of Section 7, means an agreement by the parties to submit to arbitration, all or certain disputes which have arisen or which may arise between them in respect of a definite legal relationship, whether contractual or not. Section 9 occurs in Chapter II in Part I which defines an arbitration agreement and provides the power of a judicial authority to refer the parties to arbitration, where there is an arbitration agreement and provides further, for interim measures by Court. These are the three provisions contained in Chapter II of Part I. So much so, the interim measures which are conceived by the Legislature while enacting Section 9 are those interim measures which relate to the arbitration agreement between the parties and being interim, they are to confine to the matters relating to the arbitration agreement between the parties. This intention is explicit from the opening words of Section 9, which provides for the party to apply for interim measure under Section 9. Therefore, only a party to the arbitration agreement can apply to a Court invoking Section 9, which consists of two parts. Section 9(i) deals with appointment of a guardian for a minor or a person of unsound mind for the purpose of arbitrary proceedings. Section 9(ii) enumerates five types of interim measures of protection in respect of the matters enumerated in Clauses (a) to (e) of Section 9(i), Clause (a) deals with preservation, interim custody of sale of any goods which are the subject-matter of the arbitration agreement. Clause (b) provides for securing the amount in dispute in the arbitration. Clause (c) provides for detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising, for any of the aforesaid purposes any person, to enter upon any land or building in the possession of any party or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence. A reading of the said provision would show that the orders under Section 9(ii)(c) can be passed only in relation to the subject-matter of the dispute in arbitration which may be in the possession of any party since it is not the intention of the Act or any arbitration proceedings as conceived by the law of arbitration, to interfere with or interpolate third party rights. The reason for this is obvious, that, an arbitral tribunal rests its authority on the agreement between the parties to the arbitration agreement and it is not a Court, to interfere with third party rights, as may the Courts authorised in that regard, by the law of the land. The issuance of interim injunction or appointment of receiver provided for under clause (d) and the residuary provision to issue such interim measure of protection as may appear to be just and convenient in terms of clause (e) of Section 9(i) and (ii) have to be read in the backdrop of the extent of jurisdiction which can be exercised and, this is limited to the parties who are governed by the arbitral agreement and not in excess thereof. On a plain reading of Section 9 of the Act and going by the scheme of the said Act, there is no room to hold that by an interim measure under Section 9, the rights of third party, holding possession on the basis of a Court sale could be interfered with, injuncted or subjected to proceedings under Section 9 of the Act. Section 9 of the Act contemplates issuance of interim measures by the Court only at the instance of a party to an arbitration agreement with regard to the subject-matter of the arbitration agreement. This can be only as against the party to an arbitration agreement, or, at best, against any person claiming under him. The writ petitioner is a third party auction purchaser in whose favour is a sale certificate, followed by delivery of possession. He cannot therefore be subjected to proceedings under Section 9 of the Act, initiated on the basis of an alleged arbitral agreement between the respondents.
7. For the foregoing reasons, the impugned order, as against the writ petitioner, is without jurisdiction, I am of the considered view that the proceeding before the Court below, in so far as it is against the writ petitioner is a clear abuse of process of Court.
In the result, this writ petition is allowed quashing Ext. P7 with costs to the petitioner, fixed at Rs. 25,000/-, payable by the first respondent.
Petition allowed.