1 IN THE HIGH COURT OF JUDICATURE AT MADRAS (ORDINARY ORIGINAL CIVIL JURISDICTION) FRIDAY, THE 10TH DAY OF JUNE 2011 THE HON'BLE MR. JUSTICE VINOD K.SHARMA O.A.No.588 of 2009 In the matter of the Arbitration & Conciliation Act, 1996 and In the matter of disputes arising out of agreements dt.19.03.2007 & 23.04.2008 GET WATER SOLUTIONS PVT.LTD., #1/134, Dhanakoti Raja Street, Sundar Nagar, Ekkaduthangal, Chennai 600 032. Represented by its Director A.Joseph Mathew ...Applicant -vs- 1. M/s. Ind Envir Systems & Engineering Pvt.Ltd., 616/1, Crown Apartments, 51st Street, 9th Sector, K.K.Nagar, Chennai 600 078. 2. Dr.Ramesh Babu, 77, Krishnan Street, Kannakadhara Nagar, Valasaravakkam, Chennai 600 087. 3. D.Sabitha Ramesh, 77, Krishnan Street, Kannakadhara Nagar, Valasaravakkam, Chennai 600 087. ...Respondent's This Original Application praying that this Hon'ble Court be pleased to grant an order of injunction restraining the third respondent from in any way encumbering, alienating or changing the schedule https://hcservices.ecourts.gov.in/hcservices/ 2 mentioned property. This Original Application coming on this day before this court for hearing the court made the following order: This application under Sec.9 of the Arbitration & Conciliation Act, has been filed for grant of an order of injunction restraining the third respondent from in any manner encumbering, alienating, changing the schedule mentioned property. 2 The pleaded case of the applicant in the affidavit is that the respondent company is Premier provider of solutions to the Effluent treatment requirements of various types of industries. It was unable to execute its Work orders due to lack of sufficient working capital and Engineering Project Management skills. To utilize and deliver the orders within the prescribed time, the parties decided to set up a joint venture Company to capitalise on the opportunities in the ETP market. 3 The applicant claims that under Memorandum of Understanding, the applicant invested a sum of Rs.50 lakhs (Rupees fifty lakhs only) towards working capital of the first respondent. The joint venture company agreed to pay a Technology fees of Rs.150 lakhs to the second respondent over a period of three years. Other conditions were also stipulated in the agreement. https://hcservices.ecourts.gov.in/hcservices/ 3 4 The case of the applicant is that the first respondent decided to resign from the new Company, but failed to make the payment as envisaged under Memorandum of Understanding. Thus, the claim of Rs.1,03,72,872/- (Rupes one crore three lakhs seventy two thousand eight hundred and seventy two only) was raised by the applicant under the terms of the agreement. 5 The case of the applicant is that the amount was not paid. It is also the case of the applicant that the third respondent is demanding return of documents, which stands in the name of the respondents. The applicant apprehends that the third respondent may alienate the property, without settling the dues of the applicant company. 6 In view of the fact that the parties had agreed to get their dispute settled by way of arbitration, the applicant has moved this Court for grant of injunction. 7 This Court vide order dated 16.06.2009 was pleased to pass the following order: "Under the Memorandum of Understandingdated 19.3.2007 between the applicant and respondents 2 and 3, the applicant company has come forward to infuse funds and to provide the company with necessary resources. Clause 17 provides for settlement of disputes by arbitration. Pursuant to the terms of the Memorandum of Understanding, the shareholders agreement was entered into on 19.3.2008 and a subsequent agreement dated https://hcservices.ecourts.gov.in/hcservices/ 4 23.4.2008 was entered into between the third respondent and the newly constituted company as per the original agreement dated 19.3.2007. 2 The Memorandum of agreement dated 23.4.2008 makes it clear that it is in continuation of the original Memorandum of Understanding dated 19.3.2007. 3 In such view of the matter, the property of the third respondent, which has been given as security, is forming part of the original agreement. The apprehension of the applicant is that the third respondent, who has handed over the documents in respect of the said property in favour of the applicant is seeking to get back the document with a view to alienate the property. Under such circumstances, the present application has been filed. 4 Having satisfied that the prima facie case and balance of convenience are in favour of the applicant, there will be an order of interim injunciton for a period of 8 weeks. Notice." 8 Till date, the applicant has not taken any steps to initiate arbitration proceedings. It is a clear case where the applicant has misused the process of this Court under Sec.9 of the Arbitration & Conciliation Act. 9 It is well estabilished law that the word 'prior' to arbitration in Sec.9 of the Act, means immediate prior to. It is also well settled law that after moving an application under Sec.9 of the Act and having obtained the order of injunction, no steps have been taken for initiating arbitration proceedings. The interim order deserves to be vacated and the application deserves to be dismissed on this ground alone. https://hcservices.ecourts.gov.in/hcservices/ 5 10 In this case, even after two years of the order of injunction, the applicant has not chosen to take steps to initiate arbitration proceedings. The applicant therefore cannot be said to have approached this court with clean hands, rather provisions of Sec.9 of the Act have been misused for some other ulterior motive. 11 Consquently, this application is ordered to be dismissed. But with no order as to costs. Sd/-V.K.S.J 10.06.2011 //Certified to be a true copy// Dated this the day of 2011. R.s/21.10.2011 COURT OFFICER From 25.09.2008 the Registry is issuing certified copies of the Order/Judgment Decree in this format. https://hcservices.ecourts.gov.in/hcservices/