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Section 9 in The Arbitration Act, 1940
THE ARBITRATION AND CONCILIATION ACT, 1996
The Arbitration Act, 1940
Section 36 in The Arbitration Act, 1940
M/S Arvind Constructions Co. Pvt. ... vs M/S Kalinga Mining Corporation & ... on 17 May, 2007

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Madras High Court
M/S.L&T Finance Ltd vs Also At: on 6 September, 2013
       

  

  

 
 
 IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 06-09-2013

CORAM:

THE HONOURABLE MR. JUSTICE V.RAMASUBRAMANIAN

Application Nos.2686, 2687, 2688, 2689, 2690, 2691, 2692, 2693, 2766, 2803, 2805, 2815, 2879, 2880, 2923, 2924, 2925, 2926, 3001, 3012, 3044, 3052, 3053, 3054, 3055, 3063, 3064, 3065, 3066, 3067, 3068, 3069, 3070, 3071, 3072, 3073, 3074, 3100, 3114, 3115, 3117, 3118, 3120, 3244, 3245, 3246, 3247, 3248, 3249, 3250, 3251, 3252, 3253, 3254, 3255, 3272, 3273, 3340, 3354, 3355, 3356, 3357, 3399, 3447, 3448, 3449, 3450, 3451, 3452, 3453, 3454, 3539, 3544, 3545, 3546, 3547, 3548, 3549, 3551, 3552, 3553, 3566, 3567, 3568, 3569, 3570, 3571, 3572, 3573, 3579, 3595, 3596, 3597, 3598, 3600, 3601, 3602, 3603, 3604, 3605, 3606, 3607, 3608, 3609, 3689, 3690, 3749, 3750, 3751, 3752, 3753, 3761, 3775, 3776, 3777, 3778, 3779, 3780, 3785, 3802, 3806, 3807, 3808, 3809, 3810, 3811, 3812, 3813, 3814, 3815, 3816, 3817, 3818, 3851, 3852, 3892, 3904, 3906, 3907, 3908, 3909, 3910  and 3911 of 2013

A.No.2686 of 2013:

M/s.L&T Finance Ltd.,
Represented by its Zonal Legal Manager,
Mr.C.Balasubramanian,
Montieth Place,
47, Monteith Road,
Chennai-600 008.				..	Applicant 

vs.

M/s.G.G.Granites,
Prop: Mr.G.Gopalakrishnan,
No.3, Main Road,
Keelaiyur, Melur Taluk,
Madurai-625 102, Tamil Nadu.

Also at:
No.3, East 2nd Street,
K.K.Nagar (Near ICICI Bank),
Madurai-625 020, Tamil Nadu.			..	Respondent 

This is an application for appointment of an Advocate Commissioner to seize and deliver the vehicle morefully described in the schedule to the Judges Summons and entrust the custody of the same to the applicant, available at the respondent's premises.

For Applicant : Mr.T.Srinivasaraghavan C O M M O N O R D E R The decision rendered by Vinod Kumar Sharma, J., in Hinduja Leyland Finance Limited vs. Jaffer Khan and Others {2013 (2) LW 401}, holding that the practice of Finance Companies/Banks seeking the appointment of an Advocate Commissioners to seize and take possession of the hypothecated vehicles and equipment, is not a remedy envisaged under Section 9 of the Arbitration and Conciliation Act, has given rise to an impression as though such a procedure is never to be read into Section 9 at all under any circumstances. Therefore, when similar applications came up before the other learned Judges of this Court, the decision in Hinduja Leyland Finance, was taken to be a boulder on the track. Hence, when a batch of applications came up, the learned counsel appearing for various Finance Companies requested me to steer clear of the doubts raised by or in Hinduja Leyland Finance.

2. Since I am not dealing with individual cases, but merely testing a pure and simple legal question on the scope of Section 9 of the Arbitration and Conciliation Act, 1996, I shall not go into the factual details. However, it is necessary to state that I am proceeding on the basis of certain presumptions, which if present in a given case alone, would attract the principles of law that I seek to decode here. The presumptions are (i) that there is a valid agreement between the financier and the borrower, under which the purchase of a vehicle or equipment by the borrower is financed by the financier; (ii) that under the agreement, the vehicle or equipment is hypothecated to the financier; (iii) that there was a default by the borrower in making payment of the instalments stipulated under the agreement. I propose to examine the issue on hand, only in respect of cases in which the factual matrix contains the above 3 fundamental elements. But a brief prelude in imminent.

PRELUDE

3. At the outset, it should be pointed out that the Arbitration and Conciliation Act, 1996 merely enables the parties to a contract to have their disputes adjudicated by a Forum other than the normal Civil Courts. But at the same time, the Act recognises the fact that without the normal Civil Courts lending a helping hand to such alternative Fora, the enforcement of decisions rendered by them would remain a distant dream. The provisions of Section 9 (interim measures), Section 27 (Court assistance in taking evidence) and Section 36 (enforcement of awards falling under Part-I), are all instances where the indispensability of Civil Courts is recognised in the Statute. In respect of protection and preservation of the subject matter of a dispute pending arbitration and in respect of enforcement of the awards, the Arbitration Act, makes the normal Civil Court, a coalition partner of the Arbitral Tribunal. While Section 36 of the Arbitration and Conciliation Act, 1996, incorporates into the Arbitration Act, the provisions of Sections 36 to 74 and the provisions of Order XXI of the Code of Civil Procedure, to the extent that they could be invoked, the provisions of Section 9 can be said to have inbuilt within it, the provisions of Section 94 as well as Orders XXXVIII, XXXIX and XL of the Code of Civil Procedure.

4. If we have a careful look at the language employed in Section 9, it is seen that Section 9(i) of the Arbitration Act, is similar to the provisions of Order XXXII though both are not exactly identical. While Order XXXII of the Code contains detailed procedure relating to the next friend of a minor plaintiff, the appointment of a guardian for a minor defendant, the retirement or removal of such next friend or guardian etc., section 9(i) of the Arbitration Act, broadly enables the Court to appoint a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings.

5. Similarly, Section 9(ii) of the Arbitration Act, lists out the various types of the interim measures that could be ordered by a Court. A comparison of Clauses (a), (b), (c), (d) and (e) of Section 9(ii) with the relevant provisions of the Code of Civil Procedure, would show that the provisions of Clause (a) are similar to Rules 6 and 7 of Order XXXIX. The power conferred by Clause (b) is similar to the one found in Order XXXVIII, Rule 5. The power under Clause (c) of Section 9(ii) could be traced to the various Clauses contained in sub-rule (1) of Rule 7 of Order XXXIX. For the purpose of easy appreciation, the provisions of Section 9(ii)(c) of the Arbitration Act and the provisions of Order XXXIX, Rule 7 are furnished in a tabular form as follows:-

Provisions of Section 9(ii)(c) Provisions of Order XXXIX, Rule 7, CPC

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 before it is enforced in accordance with Section 36, apply to a Court:-

(i) .. .. .. .. .. .. ..

(ii) for an interim measures of protection in respect of any of the following matters, namely:-

(a) .. .. .. .. .. .. ..

(b) .. .. .. .. .. .. ..

(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.

7. Detention preservation, inspection, etc., of subject-matter of suit,--(1) The Court may, on the application of any party to a suit, and on such terms as it thinks fit,--

(a) make an order for the detention, preservation or inspection of any property which is the subject matter of such suit, or as to which any question may arise therein;

(b) for all or any of the purposes aforesaid authorise any person to enter upon or into any land or building in the possession of any other party to such suit; and

(c) for all or any of the purposes aforesaid authorise any samples to be taken, or any observation to be made or experiment to be tried, which may seem necessary or expedient for the purpose of obtaining full information or evidence.

(2) The provisions as to execution of process shall apply, mutatis mutandis, to persons authorised to enter under this rule.

6. A careful reading of the provisions of Section 9(ii)(c) of the Arbitration Act and the different Rules under Order XXXIX, Rule 7, would show that mostly the language used in the 1996 Act, is borrowed from the Code.

7. The power under Clause (d) of Section 9(ii) is similar to the power under Order XXXIX, Rules 1 and 2 and Order XL, Rule 1 of the Code. The power under Clause (e) of Section 9(ii) is similar to the one prescribed under Section 94(e) of the Code. Another interesting facet of Section 9 of the Arbitration Act, is that a large portion of what is contained therein is similar to what is contained in Section 94 of the Code, except that the power to issue a warrant to arrest the defendant and the power to commit a person to the civil prison for the violation of an order of injunction, found in Section 94, are not reproduced in Section 9 of the Arbitration Act.

8. One important aspect to be kept in mind is that a Court exercising jurisdiction under Section 9 of the Arbitration Act, does not cease to be a Civil Court merely because it exercises the power under Section 9. The definition of the expression "Court" appearing in Section 2(1)(e) of the Arbitration Act, makes this very clear. This is why an application under Section 9 on the file of the Original Side of this Court is presented only in a format as prescribed by the High Court Original Side Rules, in terms of Order XIV thereof. In Arvind Construction (P) Ltd vs. Kalinga Mining Corporation and others {2007 (6) SCC 798}, the Supreme Court took the same view, as seen from the following passage:-

"Prima facie, it appears that the general rules that governed the Court while considering the grant of an interim injunction at the threshold lare attracted even while dealing with an application under Section 9 of the Act. There is also the principle that when a power is conferred under a special statute and it is conferred on an ordinary Court of the land, without laying down any special condition for exercise of that power, the general rules of procedure of that Court would apply."

Again in Adhunik Steels Ltd vs. Orissa Manganese and Minerals Pvt. Ltd {AIR 2007 SC 2563}, the Supreme Court made it clear that the grant of an interim prohibitory injunction or interim mandatory injunction are governed by well known rules and that it is difficult to imagine that the Legislature intended to make Section 9 of the Act, de hors the accepted principles, governing the grant of such interim orders.

9. Therefore, what should be fundamentally borne in mind is that if the Civil Court has powers to do certain things in terms of certain specific provisions of the Code, those powers can as well be exercised by the Court while dealing with an application under section 9, if they fall within any of the Clauses of Section 9(ii) of the Arbitration and Conciliation Act, 1996. I do not know whether a Court exercising jurisdiction under Section 9 of the Arbitration Act, can do what a normal Civil Court is not competent to do. But there is no doubt that it can certainly do what a normal Civil Court can do, under analogous provisions of the Code.

10. With the above background in mind, if we now go to Order XXXIX, Rule 7, which I have already extracted in the tabular column above, it is clear that Clauses (a) and (b) of sub-rule (1) of Order XXXIX, Rule 7, enables a normal Civil Court to authorise any person to enter upon or into any land or building in the possession of any party to the suit and to make an order for the detention, preservation or inspection of such property. But there are certain restrictions on the exercise of such a power by the normal Civil Court. These restrictions are to be found in Rule 8 of Order XXXIX, which reads as follows:-

"8. Application for such orders to be after notice.--(1) An application by the plaintiff for an order under rule 6 or rule 7 may be made at any time after institution of the suit.

(2) An application by the defendant for a like order may be made at any time after appearance.

(3) Before making an order under rule 6 or rule 7 on an application made for the purpose, the Court shall, except where it appears that the object of making such order would be defeated by the delay, direct notice thereof to be given to the opposite party."

11. Before proceeding further, two interesting aspects of Rule 8 of Order XXXIX, are to be borne in mind. They are (i) sub-rules (1) and (2) of Order XXXIX, Rule 8, place both the plaintiff and the defendant on an equal footing, enabling both of them to seek orders for detention, preservation, inspection and interim sale of the property, which is the subject matter of the suit; and (ii) that the words "after notice to the defendant" appearing in both the sub-rules (1) and (2) were omitted by the CPC Amendment Act 104 of 1976. In other words, before Amendment Act 104 of 1976, an application seeking certain reliefs provided for in Order XXXIX, Rules 6 and 7, cannot even be made without notice to the other party. But the 1976 Amendment brought-forth a significant change.

12. Nevertheless, sub-rule (3) of Rule 8 of Order XXXIX, makes it mandatory for the Court to put the opposite party on notice before making an order under Rule 6 or Rule 7 of Order XXXIX, except in cases where it appears to the Court that the very object of such an order would be defeated by the delay.

13. Therefore, irrespective of whether the provisions of Order XXXIX, Rules 6, 7 and 8 are imported verbatim or read verbatim into Section 9(ii) of the Arbitration Act or not, a normal Civil Court that exercises jurisdiction under Section 9 can always take the rules found in Order XXXIX, at least as guidelines for the proper and fair exercise of the powers conferred by Section 9. The question as to whether a normal Civil Court can appoint a Commissioner to seize and possess a hypothecated property pending disposal of a suit, either in terms of Order XXVI or in terms of Order XXXIX, Rule 7, did not give rise to as much controversy as it has given rise to, in relation to Section 9. This is perhaps due to the fact that due to repeated warnings issued and corrective measures taken by superior Courts, the normal Civil Courts do not pass such orders without notice of hearing to the opposite party. One more reason is that the financial institutions gained notoriety for certain practices adopted by them, until the heat on their feet generated by the decision of the Supreme Court in Manager, ICICI Bank Ltd vs. Prakash Kaur {2007 (2) CTC 334} drove the Finance Companies to take recourse to Section 9.

14. But, once it is seen that a normal Civil Court has power, pending disposal of a suit, to authorise a person to take possession of a property and to detain or preserve the same until further orders, by virtue of Order XXXIX, Rule 7(1) (a) and (b) of the Code, I fail to understand as to how the very same Civil Court exercising jurisdiction under Section 9, is not competent to do so, despite Clauses (a) and (c) of Section 9(ii) of the Arbitration and Conciliation Act. With this prelude, let me now consider the contentions raised by various learned counsel appearing for the applicants.

CONTENTIONS:

15. It is a matter of history that law had always trailed behind the World of trade and commerce. The mercantile world had invented several methods by which money due from a person to another, could be secured. Though the World of Merchandise had always understood these terms clearly and unambiguously, the legal world has always created doubts over such understanding, by shifting the focus on semantics. The different methods by which the money due from a person to another could be secured are (i) by mortgaging an immovable property (ii) by pledging movable properties (iii) by hypothecating movables.

16. Though the expression "mortgage" is defined in Section 58 of the Transfer of Property Act, 1882, and the expression "pledge" is defined in Section 172 of the Contract Act, the expression "hypothecation" is not defined anywhere. Consequently, it is not governed by any Statute. After highlighting this aspect, a Division Bench of the Andhra Pradesh High Court pointed out in State Bank of India vs. S.B.Shah Ali, {AIR 1995 AP 134}, that hypothecation is a creation of a charge on movables, without parting with possession, while a pledge is the bailment of goods as security for the payment of a debt. The Division Bench pointed out that there was no provision in the Contract Act or in the Sale of Goods Act, dealing with hypothecation.

17. As rightly pointed out by Mr.T.Srinivasaraghavan, learned counsel appearing for one of the applicants, the expression "hypothecation" came to be defined for the first time in the Securitisation Act, 2002. The definition as found in Section 2(1)(n) is as follows:-

"(n) 'hypothecation' means a charge in or upon any movable property, existing or future, created by a borrower in favour of a secured creditor without delivery of possession of the movable property to such creditor, as a security for financial assistance and includes floating charge and crystallisation of such charge into fixed charge on movable property."

18. Therefore, there can be no doubt about the fact that hypothecation creates a charge, without delivery of possession of the movable asset. Since hypothecation is not a statutory creation, the rights of the hypothecatee are governed by the terms of the contract. Consequently, the Division Bench of the Andhra Pradesh High Court held in State Bank of India, that if there is a specific clause in the hypothecation agreement, empowering the hypothecatee to take possession and sell the same, in the event of default in payment, the hypothecatee can proceed ahead without the intervention of the Court. The Division Bench also pointed out that a clause contained in the hypothecation deed enabling the hypothecatee to take possession, appoint a Receiver and sell the goods by public auction or by private treaty, is not opposed to public policy.

19. Though the Division Bench of the Andhra Pradesh High Court held in no uncertain terms, with whose opinion I respectfully agree, the Supreme Court reserved its opinion on the same question in Indian Oil Corporation vs. NEPC India Limited {AIR 2006 SC 2780}, which arose under different circumstances. In paragraph 19 of the said decision, the Supreme Court referred to the definition of the term "hypothecation" as found in Ramanatha Aiyar's Advanced Law Lexicon and the definition of the expression as found in Section 2(1)(n) of the Securitisation Act, 2002. Thereafter, the Supreme Court made it clear that they were not expressing any opinion on the question whether possession can be taken by the creditor without or with recourse to a Court of Law.

20. Therefore, until the advent of Manager, ICICI Bank Ltd vs. Prakash Kaur, financial institutions were resorting to the practice of seizing and possessing the hypothecated goods, including vehicles and equipments by employing agents. But the system of engagement of agents for enforcing the terms of the contract, came under fire in Prakash Kaur. While Altamas Kabir, J., opined that the practice of hiring recovery agents is deprecated and that the Bank should resort to procedure recognised by law to take possession of vehicles, AR.Lakshmanan, J., incorporated certain suggestions in his concurrent opinion. One of the suggestions made by the learned Judge was that the financial institutions could adopt the arbitration route and seek the appointment of a Commissioner for seizing the vehicle and that a default of a maximum of 3 months could be taken to be a chronic default. It is only in the light of such observations that the financial institutions started taking the Arbitration route.

21. Once the Apex Court condemned the practice of the Banks hiring collection agents (described by the Supreme Court as "Goondas"), a financier came up before this Court, under Article 226, seeking a Mandamus, to direct the Police to assist him in taking possession of the vehicle taken by a borrower on hire purchase basis. While dismissing the said case in the decision reported in R.Omprakash Choraliya vs. Deputy Inspector of Police {2008 (1) MLJ 616}, I pointed out that it is open to such financiers to approach Civil Court and seek interim orders ex parte or otherwise for the appointment of Advocate Commissioners.

22. But very soon the practice of the financial institutions approaching the Court under Section 9 of the Arbitration Act, even when the default was just one month, became nauseating. Therefore, that this Court was again compelled to intervene. This was done in Cholamandalam DBS Finance Ltd vs. Sudheesh Kumar {2010 (1) LW 951}, by a Division Bench of this Court. The guidelines laid down by the Division Bench in that case are as follows:-

"a) If the pleadings in the affidavit make out that it is just and convenient to grant interim orders, and if, prima facie, the balance of convenience is in favour of the applicant, then an ex parte order appointing an advocate commissioner may be passed, but simultaneously notice shall be ordered to go to the respondent indicating the date of hearing of the application. It is open to the learned counsel for the appellant to get permission of the Court to also serve private notice on the respondents personally at the time when the vehicle is seized. But, an affidavit must be sworn to by the Advocate Commissioner that the person who received the notice was authorised to do so and that it was not given to some third party who was not responsible or who was not authorised to acknowledge any court notice on behalf of the respondents;

b) After the advocate commissioner reports to the Court that the vehicle has been seized, it shall be in the custody of the applicant. This custody is on behalf of the Court, i.e., the applicant will be holding it in custodia legis.

c) Of course, if even after notice, the borrower does not appear or if it appears to the Court that the borrower is deliberately evading notice, then it is open to the applicant to pray for such reliefs as are necessary, which may even include the sale of vehicle and the matter may be heard ex parte and orders passed in exercise of discretion of Court.

d) The application shall not be closed without hearing the other side after notice is served. Before closing the application, the Court shall also ascertain whether the applicant has taken steps to initiate the arbitral proceedings. If the applicant has not done so, then orders shall be passed putting the applicant on terms as laid down in Sundaram Finance's case (cited supra), because section 9 depends on a close nexus with the initiation of arbitral proceedings;

e) As regards the expenditure incurred for keeping the vehicle in custody, the applicant shall bear it until the respondent is served and appears. After that, the Court shall hear the parties and pass orders.

f) The remuneration for advocate commissioners appointed by this Court shall be commensurate with the work done, since the financiers will shift this burden only on the already beleaguered borrower."

23. The guidelines laid down by the Division Bench as above, hold the field as on date and there is neither a Full Bench decision of this Court nor a decision of the Apex Court declaring those guidelines to be improper or inadequate. As a matter of fact, Vinod Kumar Sharma, J., himself held in an earlier decision in Kogta Financial India Ltd vs. Jayesh Kishorlal Dawda {2011 (6) CTC 182}, that an ex parte interim order for the seizure of the vehicle could be passed without notice. Therefore, it cannot be said that there is a total embargo upon the power of this Court to appoint an Advocate Commissioner for seizing and taking possession of a hypothecated vehicle or equipment, in an application filed under Section 9 of the Arbitration and Conciliation Act, 1996.

24. A careful reading of the decision of Vinod K. Sharma, J., in Hinduja Leyland Finance Ltd., would show that the learned Judge culled out various principles governing the power of this Court under Section 9, from various decisions of the Apex Court or of other Courts. The principles so culled out can be summarised as follows:-

(i) From the decision of the Supreme Court in Sundaram Finance Ltd vs. NEPC India Ltd {AIR 1999 SC 564}, the learned Judge came to the conclusion that the power under Section 9 should be used sparingly and that too with conditions and that while passing an order, the Court should ensure that effective steps are taken to commence the arbitral proceedings.

(ii) From the decision of the Delhi High Court in National Building Construction Corporation Ltd vs. IRCON International Ltd {1997 (Supp.) Arb.L.R. 516}, the learned Judge came to the conclusion that the power under Section 9 is discretionary and that it cannot be used as a matter of course.

(iii) From the decision of the Supreme Court in Firm Ashok Traders vs. Gurmuk Das Saluja {AIR 2004 SC 1433} and the Division Bench of the Andhra Pradesh High Court in Sai Priya Construction Company vs. K.Anantha Kumari Satya Raju {2006 (1) Arb.L.R. 569}, the learned Judge came to the conclusion that no orders of permanent nature could be passed under Section 9.

(iii) From the decision of the Delhi High Court in Uppal Eng. Co. (P) Ltd vs. Cimmco Birla Ltd {2005 (2) Arb.L.R. 404}, the learned Judge came to the conclusion that an order of attachment, being a drastic remedy, cannot be granted as a matter of course and that the Court should act with utmost circumspection.

(iv) From the decision of the Supreme Court in Arvind Constructions Co. (P) Ltd vs. Kalinga Mining Corporation and others {2007 (6) SCC 798}, the learned Judge came to the conclusion that the power under Section 9 is not independent of the Specific Relief Act and that the restrictions placed by the Specific Relief Act, would certainly control the exercise of the power under Section 9.

(v) From the decision of the Supreme Court in Adhunik Steels Ltd vs. Orissa Manganese and Minerals Pvt. Ltd {AIR 2007 SC 2563}, the learned Judge came to the conclusion that the normal rules that guide and govern the Court while granting interim orders, are not jettisoned by Section 9.

(vi) From the decision of the Division Bench of this Court in In House Productions Pvt. Ltd vs. Media Plus {2005 (2) MLJ 256}, the learned Judge came to the conclusion that the grant of an injunction was a discretionary relief.

(vii) From the decision of the Supreme Court in Citicorp Maruti Finance Ltd vs. S.Vijayalakshmi {2012 (1) SCC 1}, the learned Judge came to the conclusion that though the ownership of a vehicle continues to be with the hirer, till it is changed, it does not entitle him to take back possession of the vehicle by use of force, on the strength of the agreement.

(viii) From the decision of this Court in R.Justin Arulappa vs. R.Xavier Arulappa {2010 (1) MLJ 1176}, the learned Judge came to the conclusion that this Court cannot appoint an Advocate Commissioner mechanically, without going into disputed questions and that for the purpose of taking custody, the principles for the appointment of Receiver should be followed.

25. It is interesting to note that all the principles culled out by the learned Judge from the various decisions referred to above, are time tested principles of law and there can be no quarrel about the same. But unfortunately, none of the decisions relied upon by the learned Judge, ever held that the power under Section 9 does not include a power that is normally conferred upon a Civil Court under Order XXXIX, Rule 7 of the Code of Civil Procedure.

26. As a matter of fact, the learned Judge has, in his decision in Hinduja Leyland Finance, referred to the guidelines issued by the Division Bench of this Court in para 25 of its decision in Cholamandalam DBS Finance Ltd {2010 (1) LW 951}. But while reaching a conclusion on the basis of those guidelines, the learned Judge held in para 19 of the report that the practice of the Finance Company in seeking appointment of an Advocate Commissioner, cannot be said to be a remedy envisaged under Section 9. This observation in para 19 of the decision in Hinduja Leyland Finance, is not actually in tune with the guidelines laid down by the Division Bench in Cholamandalam DBS Finance Ltd.

27. Therefore, with respect, I am of the view that the guidelines issued in para 25 of the decision of the Division Bench in Cholamandalam DBS Finance Ltd., still hold the field and that subject to those guidelines, it is well within the right of the Finance Companies to seek the appointment of Advocate Commissioner to seize and possess the hypothecated vehicles or equipments. It must be pointed out that the entire scheme of the Arbitration and Conciliation Act, 1996, rests on the fundamental premise of "party autonomy". Therefore, the Courts are obliged to honour the terms of the contract between the parties. To say on the one hand that the Courts respect such autonomy and to say at the same breadth that one party cannot even seek the intervention of the Court to enforce one of the terms of such contract, strikes at the root of the philosophy behind the Arbitration Act.

28. Therefore, it is clarified that the guidelines issued in para 25 of the decision of the Division Bench in Cholamandalam DBS Finance Ltd., still hold the field and that subject to those guidelines, it is well within the right of the Finance Companies to seek the appointment of Advocate Commissioner to seize and possess the hypothecated vehicles or equipments. Post the applications for orders individually on 10.9.2013.



							06-09-2013
Index    : Yes.
Internet : Yes.
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V. RAMASUBRAMANIAN, J.

Svn






Common Order in

Application Nos.2686, 2687, 2688, 2689, 2690, 2691, 2692, 2693, 2766, 2803, 2805, 2815, 2879, 2880, 2923, 2924, 2925, 2926, 3001, 3012, 3044, 3052, 3053, 3054, 3055, 3063, 3064, 3065, 3066, 3067, 3068, 3069, 3070, 3071, 3072, 3073, 3074, 3100, 3114, 3115, 3117, 3118, 3120, 3244, 3245, 3246, 3247, 3248, 3249, 3250, 3251, 3252, 3253, 3254, 3255, 3272, 3273, 3340, 3354, 3355, 3356, 3357, 3399, 3447, 3448, 3449, 3450, 3451, 3452, 3453, 3454, 3539, 3544, 3545, 3546, 3547, 3548, 3549, 3551, 3552, 3553, 3566, 3567, 3568, 3569, 3570, 3571, 3572, 3573, 3579, 3595, 3596, 3597, 3598, 3600, 3601, 3602, 3603, 3604, 3605, 3606, 3607, 3608, 3609, 3689, 3690, 3749, 3750, 3751, 3752, 3753, 3761, 3775, 3776, 3777, 3778, 3779, 3780, 3785, 3802, 3806, 3807, 3808, 3809, 3810, 3811, 3812, 3813, 3814, 3815, 3816, 3817, 3818, 3851, 3852, 3892, 3904, 3906, 3907, 3908, 3909, 3910 and 3911 of 2013 06-09-2013