Calcutta High Court
V3 Polyplast Private Limited vs Rajasthan Hosiery Factory Private … on 21 April, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD 42
ORDER SHEET
AP-COM/291/2025
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL DIVISION
V3 POLYPLAST PRIVATE LIMITED
VS
RAJASTHAN HOSIERY FACTORY PRIVATE LIMITED
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 21st April, 2025.
Appearance:
Mr. Rajarshi Dutta, Adv.
Mr. Debraj Sahu, Adv.
Mr. Hareram Singh, Adv.
Ms. Shreya Saria, Adv.
Ms. S. Auddya, Adv.
...for the petitioner
The Court:
1. This is an application for interim measures under Section 9(1) of the
Arbitration and Conciliation Act, 1996.
2. The petitioner is a registered MSME Enterprise and had approached
MSME Facilitation Council with a dispute. Conciliation failed and
stood terminated. Thereafter, arbitration commenced on February 11,
2025. The petitioner filed the statement of claim on February 19, 2025.
The petitioner submits that the respondent has stayed away from the
arbitration proceeding and as such, apprehends that the assets and
monies lying in the accounts of the respondent, may be either removed
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or siphoned off. This would render the arbitral award, which may
eventually be passed in favour of the petitioner, a paper decree. There
will be little chance of recovery of the amount.
3. Under such circumstances, the petitioner prays for directions for
attachment, appointment of receiver and security.
4. In my opinion, this application is pre-mature as the petitioner has not
approached the arbitral tribunal for interim protection or measures.
Section 9(3) of the Arbitration and Conciliation Act, 1996 is quoted
below:
“Once the arbitral tribunal has been constituted, the Court shall not
entertain an application under sub-section (1), unless the Court finds
that circumstances exist which may not render the remedy provided
under section 17 efficacious.”
5. Section 18(3) of the MSME Act is quoted below:-
“18(3) Where the conciliation initiated under sub-section (2) is not
successful and stands terminated without any settlement between
the parties, the Council shall either itself take up the dispute for
arbitration or refer it to any institution or center providing alternate
dispute resolution services for such arbitration and the provisions of
the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then
apply to the dispute as if the arbitration was in pursuance of an
arbitration agreement referred to in sub-section(1) of section 7 of that
Act.”
6. Section 17 of the Arbitration and Conciliation Act, 1996 is quoted
below:-
“17. Interim measures ordered by arbitral tribunal.–(1) A party may,
during the arbitral proceedings, apply to the arbitral tribunal–
(i) for the appointment of a guardian for a minor or 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 the subject-matter of the arbitration agreement;
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(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 authorizing
for any of the aforesaid purposes any person to enter upon any
land or building in the possession of any party, or authorizing
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 arbitral tribunal to be just and convenient, and the arbitral
tribunal shall have the same power for making orders, as the
court has for the purpose of, and in relation to, any
proceedings before it.
(2) Subject to any orders passed in an appeal under section 37,
any order issued by the arbitral tribunal under this section
shall be deemed to be an order of the Court for all purposes
and shall be enforceable under the Code of Civil
Procedure,1908 (5 of 1908), in the same manner as if it were
an order of the Court.”
7. I do not find that the petitioner has availed of the rights conferred by
Section 17 of the Arbitration and Conciliation Act, 1996, before
approaching this Court. Section 18(3) has made the provisions of
Section 17 of the 1996 applicable. No exceptional situation has been
established which will persuade this Court to exercise discretion under
Section 9(3). The petitioner has to establish that the remedy under
Section 17 of the 1996 Act is not efficacious. Only then, interim
protections can be granted.
8. At this juncture, Mr. Dutta submits that the petitioner will take
appropriate steps before the Arbitral Tribunal.
9. Accordingly, the application is dismissed as withdrawn.
10. However, this order shall not be construed as rejection of the prayer
on merits. If a situation so arises in future, the petitioner can always
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approach this Court, subject to satisfying that an exceptional situation
exists for grant of any interim measure and the reliefs available under
Section 17 of the Arbitration and Conciliation Act, 1996 are inadequate
and not efficacious.
(SHAMPA SARKAR, J.)
B.Pal