IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN WEDNESDAY, THE 8TH JULY 2009 / 17TH ASHADHA 1931 WP(C).No. 16984 of 2009(O) -------------------------- AOP.177/2008 of DISTRICT COURT, THRISSUR .................... PETITIONER(S): --------------- K.PRAMOD, AGED 36, ADVOCATE, S/O. ADV. K. CHANDRASEKHARAN, SECRETARY, THRISSUR, DISTRICT CRICKER ASSOCIATION, AQUATIC COMPLEX, THRISSUR. BY ADV. SRI.RAJIT RESPONDENT(S): --------------- 1. KERALA CRICKER ASSOCIATION HAVING ITS OFFICE AT KCA COMPLEX, T.C. 24/131(1) SASTHAMKOVIL ROAD, THYCAUD, THYCAUD, THIRUVANANTHAPURAM, REP. BY SECRETARY. 2. RADHAKRISHNAN, ADHOC COMMITTEE, CHAIRMAN TDCA,KDA COMPLEX, T.C. 24/131(1) SASTHAMKOVIL ROAD, THYCAUD, THIRUVANANTHAPURAM 3. JAISH GEORGE, ADHOC COMMITTEE MEMEBER, TDCA,KDA COMPLEX, T.C. 24/131(1) SASTHAMKOVIL ROAD, THYCAUD,THIRUVANANTHAPURAM 4. B.VINOD, ADHOC COMMITTEE MEMBER, TDCA,KDA COMPLEX, T.C. 24/131(1) SASTHAMKOVIL ROAD, THYCAUD,THIRUVANANTHAPURAM 5. KARTHICK VARMA,ADHOC COMMITTEE MEMBER, TDCA,KDA COMPLEX, T.C. 24/131(1) SASTHAMKOVIL ROAD, THYCAUD,THIRUVANANTHAPURAM 6. K.S. VENUGOPAL, ADVOCATE,THRISSUR, BAR ASSOCIATION, AYYANTHOLE, THRISSUR. ADV. SRI.A.V.THOMAS FOR R1 SRI.BABU PAUL FOR R1 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23/06/2009, THE COURT ON 08/07/2009 DELIVERED THE FOLLOWING: WPC.16984/09 APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPIES OF THE ORDER 13.8.2008 PASSED BY THE DISTRICT COURT, THRISSUR IN AOP.NO.177/2008. EXT.P2: COPIES OF THE APPLICATION I.A.NO.2837/2008 IN ARB.OP.NO.177/2008 FILED BEFORE THE DISTRICT COURT, THRISSUR. EXT.P3: COPIES OF THE APPLICATION IN I.A.1642/2009 IN AOP.NO.177/2008 FILED BY THE PETITIONERS BEFORE THE DISTRICT COURT. EXT.P4: COPIES OF THE APPLICATION FILED BY THE PETITIONER BEFORE THE DISTRICT COURT, THRISSUR IN I.A.NO.1664/2009 IN AOP.177/2008 /TRUE COPY/ P.A TO JUDGE S.S.SATHEESACHANDRAN, J. ------------------------------- W.P.(C).NO.16984 OF 2009 () ----------------------------------- Dated this the 8th day of July, 2009 J U D G M E N T The writ petition is filed under Article 227 of the Constitution of India seeking the issue of directions/orders to the subordinate court below to hear and dispose two petitions (Exts.P2 and P3) moved by the petitioner, in a proceeding under Section 9 of the Arbitration and Conciliation Act, 1996, expeditiously. 2. The short facts involved can be summed up thus: Petitioner is the Secretary of Thrissur District Cricket Association. An arbitral proceeding as contemplated by the bye-laws of the first respondent, Kerala State Cricket Association, is now going on with respect to a dispute relating to the election to the Managing Committee of the District Association. Arbitral reference of that dispute commenced WPC.16984/09 2 pursuant to proceedings initiated by one of the affiliated clubs of the association before the District Court, Thrissur, seeking some interim reliefs under Section 9 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as 'the Act'. The application moved by that club as O.P.(Arb.).No.128/2008, related to a dispute whether that club is a temporary affiliated member or not, and its voting right to participate in the proposed election to the managing committee of the Association. Voters list prepared to elect the office bearers of the Association provided two votes to some clubs was canvassed for an interim relief of temporary injunction to restrain the conducting of the proposed election. The respondent in that arbitration petition was Thrissur District Cricket Association. The application, O.P.(Arb.)No.128/2008, was disposed passing an order of temporary injunction restraining the District Cricket Association from conducting the proposed election till finalisation of the arbitration proceedings. Pursuant thereto, the dispute whether some of the clubs of the District Cricket Association could exercise two votes in the election was referred to arbitration by the Kerala State Cricket Association. After commencement of that WPC.16984/09 3 arbitration proceeding, the District Cricket Association moved another application under Section 9 of the Act, to restrain the first respondent, namely, Kerala Cricket Association, from appointing an adhoc committee from taking charge of its management. In that proceeding, the District Court passed an order ex parte, restraining the adhoc committee appointed by the first respondent from taking charge of the District Cricket Association till the disposal of that petition. 3. The first respondent, Kerala Cricket Association, appeared and filed a counter contending that the period of the present office bearers of the District Cricket Association had already expired, that they have no right or authority to continue, and that serious allegations of misappropriation have been imputed against the present office bearers of that Association, and, therefore, its administration has to be handed over to the adhoc committee appointed. After hearing the parties, the District Court passed an order appointing a Commissioner as office bearer of the District Cricket Association, till the elections are over. A senior member of the Bar was appointed as the Commissioner by the court to WPC.16984/09 4 manage the affairs of the Association. The above order passed by the court on 13.8.2008 still continues to be in operation with the affairs of the District Cricket Association managed by a Commissioner appointed by the court in the place of the adhoc committee sought to be appointed by the first respondent, Kerala Cricket Association. The petitioner Association moved an application before the court for issuing directions to the Advocate Commissioner to conduct election to the post of the office bearers of the Association forthwith or in the alternative, to select three of its members as nominees by way of election to represent the Association in the election to the officer bearers of the first respondent, Kerala Cricket Association. The election to the office bearers of the first respondent is scheduled to be conducted soon, and if the petitioner Association is not represented in such election, it may harm its interest, was the grievance canvassed for the relief claimed in the petition. Ext.P3 is the copy of that petition. The petitioner had also moved another petition to restrain the arbitrator appointed by the Central Council of the first respondent, Kerala Cricket Association, contending that his appointment was without authority. Ext.P2 is the copy of WPC.16984/09 5 that application. The writ petition has been filed for issuing directions to the District Court for expeditious disposal of Exts.P2 and P3 applications invoking the supervisory jurisdiction vested with this Court under Article 227 of the Constitution of India. 4. I heard the counsel on both sides. Having regard to the submissions made and taking note of the facts and circumstances presented, the counsel on both sides were called upon to enlighten the court as to the competency and empowerment of the court in a proceeding under Section 9 of the Act to pass orders for appointment of an advocate commissioner to carry out the day today affairs of an Association like the District Cricket Association, and also to pass interim orders from time to time with respect to disputes between the parties, for the resolving of which the bye-laws governing them provided for arbitration. The counsel on both sides fairly conceded that the scope of Section 9 of the Act is very much limited and omnibus orders passed by the court in the present proceedings touching upon various disputes between the parties with respect to election and also the WPC.16984/09 6 management of the petitioner Association are not in consonance with the provisions of the Act. 5. When a dispute arose between one of the affiliated clubs of the petitioner Association with an affiliated club of that Association with respect to its affiliation, right to participate and exercise vote in election and the right conferred on some clubs to exercise two votes, admittedly, before the arbitral proceedings commenced, the aggrieved club moved O.P.(Arb.)No.128/2008, in which, the District Court passed an order restraining the petitioner Association by an order of temporary injunction from conducting the proposed election till the finalisation of the arbitral proceedings. Pursuant to that order, an arbitral proceeding commenced over the disputes related to the questions referred to above. In the present writ petition, the order Ext.P1, passed by the court in O.P.(Arb.).No.128/2008 has relevance only to the extent that arbitral proceeding commenced pursuant to that order was confined to the disputes between a club and the petitioner Association with respect to the election to the managing committee of the WPC.16984/09 7 Association. While the arbitration proceeding, as indicated above, continued between the affiliated club and the petitioner, Thrissur District Cricket Association, the first respondent Kerala Cricket Association appointed an adhoc committee for management of the petitioner Association since the term of its officebearers was over. The petitioner, District Cricket Association, imputing the appointment of adhoc committee as mala fide, approached the District Court and filed O.P.(Arb.)No.177/2008 under Section 9 of the Act, seeking an order of interim relief of injunction restraining the adhoc committee from taking charge of its managing committee. As indicated earlier, the court passed an ex parte order of injunction against the first respondent on 21.6.2008, as seen from Ext.P1. The first respondent entered appearance and filed a counter in the above petition challenging the proceedings and interim reliefs claimed raising contentions as referred to earlier. The District Court, after hearing both sides, passed Ext.P1 order appointing an advocate commissioner to be the office bearer of the petitioner Association subject to the terms and conditions specified. A senior member of the Bar was appointed as the advocate WPC.16984/09 8 commissioner for managing the petitioner Association on the following terms: 1) The Commissioner shall make an inventory of the entire records that will be handed over by the earlier office bearers to the Commissioner and shall file it before this Court. 2) The funds of the District Association shall be handed over to the Commissioner by the earlier office bearers forthwith and have to obtain an acknowledgment from the Commissioner. 3) The arbitrator already appointed by the KCA shall issue notices to the Commissioner also to participate in the arbitration proceedings and that arbitration proceedings shall be conducted as per the convenience of the Commissioner appointed by this Court. 4) The Commissioner can seek any timely directions from this Court as the OP is still pending. 5) The Commissioner shall participate in the arbitration proceedings as the District Association and act in the best interest of the District Association and shall forward the concern and cause of the District Association in the arbitration proceedings. 6) In the matter of selection of the teams, the earlier office bearers shall continue to assist the Commissioner and shall give recommendations and that the KCA also should intervene and give recommendations to the Commissioner regarding the selection. The Commissioner shall hear both parties and decide the mattes of selection of team WPC.16984/09 9 and the decision that would be taken by the Commissioner shall be final in that respect. 7) The KCA shall expedite the arbitration proceedings for making a proper atmosphere to have an election of the office bearers of the District Association at the earliest so that, the Commissioner can be relieved the duties at the earliest. 8) From this date onwards, no withdrawals from the account of the District Association in the bank can be made by any of the earlier office bearers of the association and the earlier office bearers of the association shall give a letter to the bank for permitting the operation of the accounts of the District Association by the Commissioner. 9) The Commissioner shall file an interim report regarding the activities to be carried out and the volume of work involved so that, this Court can fix the actual Commissioner's bata to be paid. 10) After the finalisation of the arbitration proceedings in the matter, the Commissioner shall conduct the election within a period of 30 days and report this court the results of the election along with the procedures for the election. 11) The Commissioner shall file monthly reports before this Court regarding the income and expenditure as well as the activities with copy to KCA. 12) The Commissioner can seek timely directions and the opinion of the court as and when required. 6. Ext.P1 order would also show that as on the date of WPC.16984/09 10 the appointment of the Commissioner by the court, the balance in the account of the petitioner Association was Rs.1,70,000/-. The court directed for payment of an amount of Rs.10,000/- per month to the Commissioner as batta till the finalisation of the fixation of the Commissioner's batta. Commissioner so appointed is still continuing, it is submitted by both sides, even after one year. In Ext.P1 order, the court has further stated thus: “This Court is not disposing of the arbitration proceedings at present and that this Court shall not become functus officio on passing this order” In the light of the above order as to the continuance of the proceedings in the O.P. before the court, even after the appointment of a Commissioner, petitioner association approached that Court and moved Exts.P2 and P3 petitions, for the reliefs claimed thereunder, and, later, for expeditious disposal of such petitions before this Court filing the present writ petition. WPC.16984/09 11 7. Though Ext.P1 order is not challenged before this Court by any of the parties to the proceedings when serious doubts as to its legality, propriety and correctness is brought to the notice of the court as to whether such omnibus orders could be passed in a proceeding under Section 9 of the Act, this Court in its visitorial jurisdiction over the subordinate courts/tribunals, enjoined under Article 227 of the Constitution of India, is bound to issue appropriate orders/directions to ensure that in exercise of the powers under Section 9 of the Arbitration Act, there is no transgression beyond what is empowered thereunder in passing of orders/directions, and also to ensure that such orders/directions are strictly in accordance with law and within the contours of that Section. 8. The questions emerging for consideration in the petition have to be appreciated with reference to Section 9 of the Arbitration and Conciliation Act, 1996, which reads thus: 9. Interim measures etc. by Court:- A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but WPC.16984/09 12 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 the 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. WPC.16984/09 13 “Power of the court to pass interim measures as enumerated under the section is exercisable. (i) before the arbitral proceedings. (ii) during the arbitral proceedings and (iii) at any time after the making of the arbitral award but before its enforcement in accordance with Section 36 of the Act. 9. I am afraid, the learned District Judge appears to have been mislead in forming a conclusion that the proceedings covered by Section 9 of the Act can be continued indefinitely, as seen from the view expressed, that after the appointment of a Commissioner under Ext.P1, it was not disposing 'the arbitration proceedings at present and that this Court shall not become functus officio on passing this order.” Section 9 of the Act empowering the court to pass interim measures in respect of the matters enumerated thereunder has application before or during arbitration proceedings or at any time after the making of the arbitral award, but, before its enforcement under Section 36 of the Act. In entertaining an application for interim relief, whatever be the stage it is applied for in relation to arbitration proceedings, and granting WPC.16984/09 14 of such interim relief, the court has to bear in mind the disputes of the parties are to be resolved by arbitration and not by its adjudication and orders, and its competence and empowerment to pass orders granting interim relief, if so satisfied, should be in consonance with the mandatory provisions of the Act, and that too only over matters enumerated under Section 9 of the Act. The empowerment of the court to pass interim measures as conferred under Section 9 of the Act is limited to those specified and it is primarily intended to preserve the subject matter, facilitate speedy completion of the arbitration proceedings etc. without in any way meddling with the dispute to be resolved by the arbitrator appointed in terms of the agreement between the parties. In Ext.P1 order, over and above, appointing the Commissioner to run the management of the District Cricket Association after restraining the adhoc committee appointed by the first respondent, Kerala Cricket Association, from taking over management, the court has issued directions that the arbitrator appointed has to conduct the arbitration proceedings suiting the convenience of the Commissioner. The arbitration proceedings in progress are confined to an WPC.16984/09 15 entirely different dispute, which was referred pursuant to orders passed by the court in O.P.(Arb.).No.128/2008. The counsel on both sides have stated before me that no arbitration proceeding is in progress other than the one for resolving the dispute over the finalisation of the voters list of the District Cricket Association. When that be the position, needless to point out, interim measures in relation to that arbitration proceeding, which is already in progress, can be passed by the arbitrator under Section 17 of the Act. It can pass appropriate orders at the request of any of the parties, in respect of interim measures, if so needed, for protection of the subject matter of the dispute. When the above said arbitration proceeding pertained to a different dispute, and that alone, unless there is a reference to the dispute as regards the appointment of an adhoc committee for management of the District Cricket Association by the first respondent, a Commissioner appointed by the court cannot be directed to take part in that arbitration proceedings, and the arbitrator directed to convene his sitting suiting the convenience of the Commissioner appointed by the court. WPC.16984/09 16 10. In considering the scope and ambit of Section 9 of the Act, especially with reference to the passing of interim orders before the arbitral proceedings, the apex court in M/s.Sundaram Finance Ltd. v. M/s.NEPC India Ltd. (AIR 1999 SC 565) has emphasised that when an interim relief is sought for under Section 9 of the Act before the commencement of the arbitral proceedings “there has to be manifest intention on the part of the applicant to take recourse to the arbitral proceedings if, at the time when the application under Section 9 of the Act is filed, the proceedings have not commenced under Section 21 of the 1996 Act. ................ If an application is so made the Court will first have to be satisfied that there exists a valid arbitration agreement and the applicant intends to take the dispute to arbitration. Once it is so satisfied the Court will have the jurisdiction to pass orders under Section 9 giving such interim protection as the facts and circumstances warrant. While passing such an order and in order to ensure that effective steps are taken to commence the arbitral proceedings, the Court while exercising jurisdiction under Section 9 can pass conditional order to put the applicant to such terms as it may WPC.16984/09 17 deem fit with a view to see that effective steps are taken by the applicant for commencing the arbitral proceedings.” The facts presented in the case would show that after the filing of the application under Section 9 of the Act, before the commencement of the arbitral proceedings, and pursuant to continuation of the advocate commissioner appointed by the court to manage the affairs of the District Cricket Association, none of the parties to the proceedings has taken any step to refer the dispute for arbitration. 11. The parties to the proceedings which gave rise to Ext.P1 order, it is conceded at the bar, have not taken any step to refer the dispute regarding the appointment of the adhoc committee over the management of the District Cricket Association till date, and the Commissioner appointed by the court continues to run the affairs of the District Cricket Association. In a case where interim measure is sought with respect to arbitration proceeding before its commencement, the court should be prima facie satisfied that the party has approached the court bona fide and he intends to commence arbitration proceedings very soon and the dispute raised with WPC.16984/09 18 the opposite party is referable to arbitration by an agreement in writing as contemplated under one of the modes covered by Section 7 of the Act. It is always safer to insist when an interim measure is ordered for protection of the subject matter in a proceeding under Section 9 of the Act, that it will cease to operate if arbitration proceedings in relation to that dispute are not commenced by the party who approached the court for the interim measure, within a reasonable time limit fixed by the court. If that be not so, after getting an order of interim measure from the court to the detriment of the opposite party, as in the present case, the petitioner who launched the proceedings can avoid taking steps for commencement of the arbitration proceedings and, thus, defeat the very purpose, for which, Section 9 is incorporated in the Act. Of course that may not be the situation, where a party approaches the court for interim measures under Section 9 of the Act, during the pendency of the arbitration proceedings or after an award is passed till it is enforced under Section 36 of the Act. I have adverted to these aspects because the facts presented in the case demonstrate that after the commencement of the present proceedings, both parties WPC.16984/09 19 have not taken any initiative to refer the dispute involved to an arbitrator, but, atleast one of them is approaching the court with petitions seeking its directions/orders, which are really outside the scope of Section 9 of the Act. Once the court disposed of O.P.(Arb.).No.128/2008 and the dispute raised was later referred to the arbitration, it does not follow that whatever disputes relating to one of the parties with the other, which is not covered by the arbitration proceedings already referred to, can be agitated by filing a fresh O.P. seeking interim measure from the court as if those disputes also formed part of the arbitration proceedings already in progress. 12. The appointment of an Adhoc committee over the management of the District Cricket Association, may have some nexus with the finalisation of the voters list, but it was not a dispute referred to the arbitration proceedings, and it can never be considered as a dispute forming part of that proceeding now in progress. Still, as seen from Ext.P1 order, the court has directed the Commissioner appointed to be in management of the District Cricket Association to take part in WPC.16984/09 20 that arbitration proceedings and the arbitrator further directed to arrange his sittings suiting the convenience of the Commissioner. I am afraid that the interdiction imposed under Section 5 of the Act restricting intervention by a judicial authority to matters subject to arbitration only, as covered by Part I of that Act was not taken notice when the application moved by the petitioner under Section 9 of the Act was entertained leading to the issue of Ext.P1 order. Section 5 of the Act reads thus: 5. Extent of judicial intervention:- Notwithstanding anything contained