Calcutta High Court
Lakhotia Metalizers Private Limited vs Matashree Snacks Pvt. Ltd on 23 April, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OCD-21
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
AP-COM/129/2025
LAKHOTIA METALIZERS PRIVATE LIMITED
VS
MATASHREE SNACKS PVT. LTD.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 23rd April, 2025.
Appearance:
Mr. Debraj Sahu, Adv.
Mr. H. Singh, Adv.
Mr. Antara Biswas, Adv.
...for petitioner.
1. Despite service, none appears on behalf of the respondent. Affidavit of
service is taken on record.
2. This is an application for interim measures under Section 9(1) of the
Arbitration and Conciliation Act, 1996.
3. 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 May 10, 2024. The
petitioner filed the statement of claim on May 22, 2024. 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 or siphoned off.
There will be little chance of recovery of the amount.
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4. Under such circumstances, the petitioner prays for directions for
attachment, appointment of receiver and security.
5. 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.”
6. 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.”
7. 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.”
8. I do not find that the petitioner has availed of the statutory 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 also 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.
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9. At this juncture, learned counsel submits that the petitioner will take
appropriate steps before the Arbitral Tribunal.
10. Accordingly, the application is dismissed as withdrawn.
11. 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
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.)
S. Kumar / R.D. Barua