THE HON'BLE SRI JUSTICE V.ESWARAIAH & THE HON’BLE SRI JUSTICE K.S. APPA RAO C.M.A. NO.601 of 2010 JUDGMENT: (per Hon’ble Sri Justice V. Eswaraiah) This appeal is filed against the order dated 1.4.2010 passed in A.O.P.No.38 of 2010 by the IV Additional District Judge, Tirupathi, making the earlier order of status quo dated 22.2.2010 as absolute. The appellant herein is the 1st respondent and respondents 1 and 2 herein are the petitioners in the said A.O.P. For the sake of convenience, the status of the parties will hereinafter be referred to as arrayed in the A.O.P. Respondents 1 and 2 herein filed the said A.O.P. seeking the following interim relief: (a) Stay of operations of the termination letter dated January 15, 2010 issued by the 1st respondent. (b) Injunction restraining the 1st respondent to take any further actions under the share subscription and shareholders Agreement dated June 5, 2008, Pledgment Agreement June 5, 2008 and Share Purchase Agreement June 5, 2008 and (c) Directing the third respondent not to release the amount of Rs.66,69,862/- lying with them till dispute between the petitioners and the 1st respondent is resolved before the competent arbitrators under Section 9(ii)(b)(d) and (e) of Arbitration and Conciliation Act, 1996. A counter was filed by the respondents therein. After filing the counter objecting to grant the aforesaid relief, the Court below granted order of status quo on 22.2.2010 till 25.3.2010 so as to take steps for moving the matter before Arbitrator by the petitioner in A.O.P. in the meanwhile. Thereafter, the impugned order 1.4.2010 was passed making the said order of status quo as absolute. It is not in dispute that as on the date of passing the order dated 1.4.2010, both the parties appointed the arbitrators and at the instance of the 1st respondent in the AOP, the Supreme Court appointed Presiding Arbitrator, and objections were also filed before the said Arbitrator. Thus, the arbitration proceedings have been initiated. The Court below either while granting order dated 22.2.2010 directing the parties to maintain status quo till 25.3.2010 or while making the said order as absolute by disposing of the said AOP, did not consider the rival contentions of both the parties with regard to the entitlement of the interim orders as prayed for, in detail and with regard to the prima facie case, balance of convenience or irreparable injury for granting injunction protecting the subject matter and the interest of both the parties. The learned Judge having rightly taken into account that the parties are at liberty to approach the Civil Court to seek interim orders under Section 9 of the Arbitration Act before, during and after arbitration proceedings and any such application filed under Section 9 of the Act shall be dealt on the same principles as required under Order 39 Rules 1 and 2 and Order 40 of CPC, failed to consider the contentions of both the parties. In that view of the matter, we set aside the impugned order and the matter is remitted back to the Court below to consider afresh after giving reasonable opportunity to both the parties and to pass appropriate orders in accordance with law, as expeditiously as possible, preferably, within a period of six weeks from the date of receipt of a copy of this order. Subject to the above direction, the CMA is allowed. No order as to costs. It is needless to mention that pending consideration of the matter afresh by the Court below, the earlier order of status quo dated 22.2.2010 granted by it, shall continue. __________________ Justice V. Eswaraiah __________________ Justice K.S. Appa Rao Dated: 5.12.2011 NOTE: Issue CC by Friday B/O Nn. THE HON'BLE SRI JUSTICE V.ESWARAIAH & THE HON’BLE SRI JUSTICE K.S. APPA RAO C.M.A. NO.601 of 2010 (Judgment delivered by the Hon’ble Sri Justice V. Eswaraiah) 5.12.2011 Nn