HON’BLE SRI JUSTICE V.ESWARAIAH AND HON’BLE SRI JUSTICE B.N.RAO NALLA C.R.P.NO.550 OF 2010 Dt.16.2.2010 Between: M/s.Anitha Nesanuru and another .. Petitioners And India Industrial Growth Fund Ltd., C/o.Multi Consult Limited and others .. Respondents HON’BLE SRI JUSTICE V.ESWARAIAH AND HON’BLE SRI JUSTICE B.N.RAO NALLA C.R.P.NO.550 OF 2010 ORDER: (Per Sri Justice V.Eswaraiah) Heard the learned counsel. This civil revision petition is filed under Article 227 of the Constitution of India, being aggrieved by non-passing of orders in Arbitration O.P.No.38 of 2010 by the IV Additional District Judge, Tirupati. It is stated that the matter was presented before the III Additional District Judge, Tirupati on 28.1.2010 and it was made over to the IV Additional District Judge, Tirupati, for disposal according to law. The matter came up before the IV Additional District Judge, Tirupati on 29.1.2010 and the learned Judge issued urgent notice against the respondents by 10.2.2010. It is stated that on 10.2.2010 respondent No.4 filed vakalat and respondents 1 and 3 were also entered appearance on 11.2.2010. It is stated that the 2nd respondent is only branch office of the 1st respondent and in that view the notices were served on all the parties. The said arbitration petition is filed by the petitioners under Section 9(II)(b)(d) and (e) of the Arbitration and Conciliation Act, 1996 (hereinafter for short referred to as ‘the Act’) for the grant of interim protection by way of ordering: (a) stay of operation of the termination letter dated 15.1.2010 issued by the 1st respondent, (b) injunction restraining the 1st respondent to take any further action under the share subscription and Shareholders Agreement dated June 5, 2008, Pledge Agreement dated June 5, 2008 and Share Purchase Agreement dated June 5, 2008, and (c) direct the 3rd respondent not to release the amount of Rs.66,69,862/- lying with them till the dispute between the petitioners and the 1st respondent is resolved before the competent arbitrators under Section 9(II)(b)(d) and (e) of the Act. It is the case of the petitioners that they are taking necessary steps for appointment of arbitrator under the agreements and under the Act for reconciliation of dispute arose between the petitioners and the 1st respondent and the 4th respondent. Since the said process of praying for appointment of an arbitrator will take some time and in the meanwhile as apprehended by the petitioners, the 1st respondent may get escrow amount released and take coercive action as stated in the 1st respondent’s letter dated January 15, 2010 and as such the petitioners are obliged to file the present petition praying the court below to pass interim stay on letter dated January 15, 2010 issued by the 1st respondent and injunction restraining the 1st respondent to take any further action under the share subscription and Shareholders Agreement dated June 5, 2008, Pledge Agreement June 5, 2008 and Share Purchase Agreement June 5, 2008 and a further direction to the 3rd respondent not to release the escrow amount till the dispute between petitioners and 1st respondent and 4th respondent is being resolved by an competent arbitrator. Learned counsel appearing for the petitioners submits that the said arbitration O.P filed under Section 9 of the Act even before the issuance of the notice for appointment of arbitrator is maintainable seeking for an order of interim protection and grant of interim injunction. In support of his contention he also relied on the judgment of the Apex Court in M/s.Sundaram Finance Ltd. v. M/s.NEPC India Ltd.,[1]. The Apex Court in the aforesaid case held that when a party applies under Section 9 of the Act before the commencement of the arbitral proceedings, such an application is maintainable and the courts are empowered to take appropriate interim measures even before issuing notice contemplated under Section 21 of the Act. But, however, 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 deem fit with a view to see that effective steps are taken by the applicant for commencing the arbitral proceedings. Thus, it was held that the Court is not debarred from dealing with an application under Section 9 merely because no notice has been issued under Section 21 of the 1996 Act. A reading of Section 9 of the Act itself indicates that a party may before the arbitral proceedings is entitled to approach the civil court for appropriate orders for interim measures. Admittedly, the said application filed under Section 9 of the Act is pending before the court below and the matter is posted to 19.2.2010. No doubt, the civil court has got power for an interim measure of protection to preserve the property and also grant appropriate interim injunction. Such powers are required to be exercised similar to under Order 39, Rules 1 and 2 C.P.C., and the petitioners have to show cardinal principles of prima facie case, balance of convenience and irreparable loss for seeking such an order of interim relief. We are not inclined to express any opinion with regard to the merits of the case and entitlement of the petitioners for getting appropriate orders as the same is pending before the court below which is posted to 19.2.2010. Having regard to the facts and circumstances of the case, we are of the opinion that it is just and proper for the court below to consider and pass appropriate orders in the said arbitration petition, which is posted on 19.2.2010, as expeditiously as possible without any undue delay. Notices have already been served on respondents 1, 3 and 4 and the 2nd respondent is only a branch office of the 1st respondent. Therefore, the learned IV Additional District Judge, Tirupati, may hear and consider to pass appropriate orders on 19.2.2010, the date on which the said Arbitration O.P.No.38 of 2010 is posted. The civil revision petition is accordingly disposed of. No order as to costs. ________________ V.ESWARAIAH, J. __________________ B.N.RAO NALLA, J. 16.2.2010 Note: Issue copy by today B.O. kpr [1] AIR 1999 SC 565