# Shri Ramesh Kumar Agarwal v. Shri Naresh Kumar Agarwal & Anr

- **Citation:** (2021) 9 ILRA 422
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-08-19
- **Case number:** FAFO No. 748 of 2021
- **Bench:** Suneet Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/shri-ramesh-kumar-agarwal-v-shri-naresh-kumar-agarwal-anr-47596
- **Pages:** 6

## Headnote

Act-Once
Arbitration
proceeding has commencedand arbitral
tribnal constituted-interim relief to be
sought before the Tribunal as mandated
u/s 9(3) -jurisdiction of Court not ousted
completely but has been restricted to
impress the court of circumtances which
may not render the remedy u/s 17
efficacious-failed to prove circumstances
exist-Commercial
court
justified
in
declining
application
for
interim
measures.

Appeal dismissed. (E-9)

List of Cases cited:

## Text

422 INDIAN LAW REPORTS ALLAHABAD SERIES

ix.
Total
compensation
:Rs.41,26,000/-

32. No other grounds are urged orally
when the matter was heard.

33. In view of the above, the appeal is
partly allowed. Judgment and decree
passed by the Tribunal shall stand modified
to the aforesaid extent. The respondentInsurance Company shall deposit the
amount within a period of 12 weeks from
today with interest at the rate of 7% from
the date of filing of the claim petition till
the date of award and 6% thereafter till the
amount is deposited. The amount already
deposited be deducted from the amount to
be deposited.

DEDUCTIONS OF INCOME TAX
FROM
THE
COMPENSATION
AWARDED:

34. In view of the ratio laid down by
Hon'ble Gujarat High Court, in the case of
Smt. Hansagori P. Ladhani v/s The
Oriental
Insurance
Company
Ltd.,
reported in 2007(2) GLH 291 and this
High Court, total amount of interest,
accrued on the principal amount of
compensation is to be apportioned on
financial year to financial year basis and if
the interest payable to claimants in their
proportion for any financial year exceeds
Rs.50,000/-,
insurance
company/owner
is/are entitled to deduct appropriate amount
under the head of 'Tax Deducted at Source'
as provided u/s 194A (3) (ix) of the Income
Tax Act, 1961 and if the amount of interest
does not exceed Rs.50,000/- in any
financial year, the deduction is not
permissible, registry of the Tribunal is
directed to allow the claimants to withdraw
the
amount,
without
producing
the
certificate from the concerned Income- Tax
Authority. The aforesaid view has been
reiterated by this High Court in Review
Application No.1 of 2020 in First Appeal
From Order No.23 of 2001 (Smt. Sudesna
and others Vs. Hari Singh and another) and
in First Appeal From Order No.2871 of
2016 (Tej Kumari Sharma v. Chola
Mandlam M.S. General Insurance Co.
Ltd.)
decided
on
19.3.2021
while
disbursing the amount.

DISBURSEMENT BY TRIBUNAL:

35. The sole claimant being major and
not an illiterate person the judgment of
A.V. Padma Vs. Venugopal, [2012(1)
GLH (SC), 442] will be followed by
Tribunal as 11 years have already elapsed
since the time of appeal and amount be
granted.

36. We request the Registrar General
to forward this judgment to the concerned
Tribunal (Sri V.K. Srivastava, HJS.)
whenever he is posted with a request to be
more careful as he has not considered the
judgments of Apex Court.

37. This Court is thankful to both the
learned Advocates for getting this matter
disposed of during this pandemic.

38. Let record of court below be sent
back to the Tribunal concerned.
----------

(2021)09ILR A422
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.08.2021

BEFORE

THE HON'BLE SUNEET KUMAR, J.

FAFO No. 748 of 2021
9 All. Shri Ramesh Kumar Agarwal Vs. Shri Naresh Kumar Agarwal & Anr.
423
Shri Ramesh Kumar Agarwal ...Appellant
Versus
Shri Naresh Kumar Agarwal & Anr.
 ...Respondents

Counsel for the Appellant:
Ms. Aarushi Khare, Sri Vinay Khare (Senior
Adv.)

Counsel for the Respondents:
Sri Rishabh Agarwal

Arbitration
Act-Once
Arbitration
proceeding has commencedand arbitral
tribnal constituted-interim relief to be
sought before the Tribunal as mandated
u/s 9(3) -jurisdiction of Court not ousted
completely but has been restricted to
impress the court of circumtances which
may not render the remedy u/s 17
efficacious-failed to prove circumstances
exist-Commercial
court
justified
in
declining
application
for
interim
measures.

Appeal dismissed. (E-9)

List of Cases cited:

1. Benara Bearing & Pistons Ltd. Vs Mahle
Engine Components India Pvt. Ltd, 2018 AIR CC
3244

2.Tufan Chatterjee Vs Rangan Dhar, AIR 2016
Cal. 213

3. Martin & Harris Ltd. Vs 6th A.D.J., (1998) 1
SCC 732

(Delivered by Hon'ble Suneet Kumar, J.)

1. Heard Sri Vinay Khare, learned
Senior Advocate, assisted by Ms. Aarushi
Khare, learned counsel for the appellant
and Sri Rishabh Agarwal, learned counsel
for the respondents.

2. This appeal, filed under Section
37(1) of Arbitration and Conciliation Act,
1996,1 is directed against the judgment and
order dated 05.03.2021, passed by the
Commercial Court, Jhansi, in Misc. Case
No. 16 of 2020 (Ramesh Kumar Agarwal
Vs. Naresh Kumar Agarwal and another)
holding that the Commercial Court would
lack jurisdiction under Section 9 of Act,
1996, on the Arbitrator being appointed,
accordingly, ordered to return the record
under Order 7 Rule 10 of Code of Civil
Procedure, 19082.

3. The respondents executed a
partnership deed to constitute a firm in the
name and style, "M/s Shanti Construction",
for the business of stone crushing or any
other business as agreed. As per the deed,
the profit amongst partners was to be
divided at 33.34 per cent to appellant and
33.33 per cent to each respondent. A
dispute arose with regard to share of profit,
non payment of salary, denial to access
books of accounts, stock material and not
allowing the appellant to be involved in the
day to day working of the firm. The
appellant invoked the arbitration clause of
the deed. Respondents did not agree to the
Arbitrator proposed by the appellant and
also failed to propose an Arbitrator. The
appellant
approached
this
Court
for
appointment of an Arbitrator under Section
11 of the Act, 1996, by filing Arbitration
Application No. 57 of 2020. During
pendency of the application under Section
11, appellant filed a petition under Section
9 before Commercial Court, Jhansi, for
interim measure to protect the interest of
the appellant. The respondents filed written
statement.
The
Commercial
Court
adjourned the matter for 05.03.2021. In the
meantime,
this
Court
appointed
an
independent Arbitrator vide order dated
23.02.2021. On the matter being taken up,
Commercial Court passed the impugned
order holding therein that on appointment
of an Arbitrator, Commercial Court would
424 INDIAN LAW REPORTS ALLAHABAD SERIES
lack jurisdiction to proceed under Section 9
of Act, 1996, accordingly, ordered return of
the record under Order 7 Rule 10 CPC
relegating the parties to take remedy before
the Arbitrator under Section 17.

4. The order is being assailed, inter
alia, on the ground that the Commercial
Court committed an error in holding that it
lacks jurisdiction upon appointment of an
Arbitrator; impugned order is illegal and
against the provisions of Section 9 of the
Act, 1996; an application for interim relief
is maintainable before the Commercial
Court, before or during the pendency of
arbitral proceedings or at any time after the
making of the arbitral award till it is
enforced; Commercial Court failed to
exercise jurisdiction vested in it under
Section 9 of Act, 1996.

5. The learned counsel for the
appellant has placed reliance on Benara
Bearing and Pistons Ltd. Vs. Mahle
Engine Components India Pvt. Ltd.3

6. Learned counsel appearing for
the respondents opposed the appeal and
submits that the order is in accordance
with the law; once the arbitral tribunal
has been constituted, the Court shall not
entertain an application for interim
measures under Section 9 of Act, 1996;
the appellant has not pleaded before the
Court below or before this Court that the
circumstances existed which may not
render
the
remedy
provided
under
Section 17 efficacious. It is urged that
appeal being devoid of merit, is liable to
be dismissed at the admission stage
itself.

7.

Learned
counsel
for
the
respondents has placed reliance on Tufan
Chatterjee Vs. Rangan Dhar4.

8. The short question, that arises for
determination in this appeal, is whether
Commercial Court was justified in not
entertaining the petition under Section 9
filed for interim measure on constitution of
the arbitral tribunal.

9. Before examining the rival
submissions advanced by learned counsels
for the parties, it would be apposite to
consider the relevant provisions of Act,
1996.

10. Section 9, provides for "Interim
measure, etc. by Court". It reads thus:

"9. Interim measures, etc., by
Court.--(1) 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) for the appointment of a
guardian for a minor or 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
9 All. Shri Ramesh Kumar Agarwal Vs. Shri Naresh Kumar Agarwal & Anr.
425
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.

(2)
Where,
before
the
commencement of the arbitral proceedings,
a Court passes an order for any interim
measure of protection under sub-section
(1), the arbitral proceedings shall be
commenced within a period of ninety days
from the date of such order or within such
further time as the Court may determine.

(3) Once the arbitral tribunal
has been constituted, the Court shall not
entertain an application under sub-section
(1),
unless
the
Court
finds
that
circumstances exist which may not render
the remedy provided under section 17
efficacious." (emphasis added)

11. Sub-Section (3) came to be inserted
by Act No. 3 of 2016, with effect from
23.10.2015. On plain reading of the
provision, Section 9 mandates a party to
approach the Court before or during arbitral
proceeding or at any time after giving of
arbitral award but before it is enforced, for
interim measure in respect of preservation of
the subject matter, interim custody or sale of
any goods, appointment of a receiver or other
interim measures for protection as may
appear to the Court to be just and convenient,

12. Sub-Section (3) of Section 9
provides that upon constitution of arbitral
tribunal, Court shall not entertain an
application for interim measure under SubSection (1) unless the Court finds that the
circumstances exist which may not render
the remedy provided under Section 17
efficacious.

13. Section 17 provides for "Interim
measures ordered by arbitral tribunal". SubSection (1) provides that a party may,
during the arbitral proceedings, apply to the
arbitral tribunal for an interim measure of
protection. Sub-Section (2) of Section 17
provides that any order issued by the
arbitral tribunal under this Section (Section
17) shall be deemed to be an order of the
Court for all purposes and shall be
enforceable under the provisions of CPC.
Section 17 is extracted:

"17. Interim measures ordered
by arbitral tribunal.--(1) A party may,
during the arbitral proceedings, apply to
the arbitral tribunal--

(i) ....

(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;
426 INDIAN LAW REPORTS ALLAHABAD SERIES

(d) interim injunction or the
appointment of a receiver;

(e) such other interim measure of
protection as may appear to the arbitral
tribunal to be just and convenient, and the
arbitral tribunal shall have the same power
for making orders, as the court has for the
purpose of, and in relation to, any
proceedings before it.

(2) Subject to any orders passed
in an appeal under section 37, any order
issued by the arbitral tribunal under this
section shall be deemed to be an order of
the Court for all purposes and shall be
enforceable under the Code of Civil
Procedure,1908 (5 of 1908), in the same
manner as if it were an order of the Court."

14. Sub-Section (3) of Section-9,
inserted by Amendment Act of 2016,
mandates that once an arbitral tribunal has
been constituted, the Court shall not
entertain an application under Sub-Section
(1) of Section 9. After amendment, the
scope of Section 17 has considerably been
widened and the arbitral tribunal has
expressly been conferred the same power,
as the Court under Section 9. An order of
the tribunal under Section 17 is enforceable
in the same manner as an order of Court
under Section 9, under the provisions of
CPC. In other words, the Court and the
arbitral tribunal has been conferred same
power
to grant
interim
measure
of
protection and enforcement of the order.

15. Even though an application for
interim measure may have been filed in the
Court, once arbitration proceedings has
commenced and an arbitral tribunal has
been constituted, interim relief would have
to be sought before the arbitral tribunal, as
mandated under Sub-Section (3) of Section
9. The Court would be precluded of its
power to grant interim measure unless the
Court is satisfied that the circumstances
exist which may not render the remedy
provided under Section 17 efficacious. In
other words, though the jurisdiction of the
Court has not been ousted completely on
the constitution of arbitral tribunal, but has
been considerably restricted. Sub-Section
(1) of Section 9 has to be read with SubSection (3). The party pressing for interim
measure upon constitution of the arbitral
tribunal must impress upon the Court that
''circumstances' exist which may not render
the remedy under Section 17 efficacious.
The circumstances could be several which
a party has to plead, and, prima facie,
prove. But where such ''circumstances' do
not exist then in that event the Court is
precluded to entertain the application
instituted for interim measure of protection.

16. The introduction of the word
''circumstances exist' is intended to restrict
the power of the Court under Sub-Section
(1) of Section 9 to grant interim measure.
And although it is not easy to define what
the
''circumstances'
that
may
exist
rendering Section 17 inefficacious. It
would depend upon the particulars and/or
surroundings or accompanying act.

17. The expression ''entertain' and
''institute'
are
not
synonymous.
The
expression ''entertain' means to admit a
thing/petition for consideration. In other
words, it means entertaining the ground for
consideration
for
the
purpose
of
adjudication on merits and not any stage
prior thereto. (Refer: Martin & Harris
Ltd. Vs. 6th Additional District Judge5.
When a suit or proceeding is not thrown
out in limine but the Court receives it for
consideration and disposal according to
law, it must be regarded as entertaining the
suit or proceeding. The expression/phrase
''shall not entertain', in Sub-Section (3)
9 All. Smt. Asha Juneja & Ors. Vs. M/S Delhi Transport Corporation, I.S.B.T., Kashmiri Gate,
 Delhi & Ors.
427
means not to proceed to consider on merit
and/or
to
receive
and
take
into
consideration for adjudication. The word
''institute' in respect of legal proceedings
means, commenced; to begin an action. On
conjoint reading of Sub-Section (1) and (3)
of Section 9, it follows that a party to an
agreement may file/institute a petition for
interim measure but upon appointment of
an arbitral tribunal, the Court shall not
entertain the petition or proceed to consider
on merit until the condition provided
therein [Sub-Section (3)] is satisfied.

18. In the facts of the instant appeal,
on specific query, learned counsel for the
appellant failed to show that circumstances
exist that would have persuaded the Court
to grant interim relief on the constitution of
the arbitral tribunal. The application was
filed and notices were issued, respondents
put in appearance by filing written
statement and the matter was fixed
thereafter. In the meantime, arbitral tribunal
came to be constituted. The Court, in the
circumstances, was justified in declining to
entertain
the
application
for
interim
measure. The parties were rightly relegated
to the Arbitrator.

19. The learned counsel for the
appellant failed to point out any illegality,
infirmity or jurisdictional error.

20. The appeal, being devoid of merit,
is, accordingly dismissed.

21. No cost.
----------
(2021)09ILR A427
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 12.08.2021

BEFORE
THE HON'BLE DR. KAUSHAL JAYENDRA
THAKER, J.
THE HON'BLE SUBHASH CHAND, J.

FAFO No. 837 of 1998
with
FAFO No. 846 of 1998
with
FAFO No. 1785 of 2018

Smt. Asha Juneja & Ors. ...Appellants
Versus
M/S Delhi Transport Corporation, I.S.B.T.,
Kashmiri Gate, Delhi & Ors.
 ...Respondents

Counsel for the Appellants:
Sri R.B. Singhal, Sri Abu Bakht

Counsel for the Respondents:
Sri B.D. Mandhyan, Sri Sudhir Shanker, Sri
Vishesh Kumar Gupta

Motor
accident
claim-DTC
challenges
quantum of compensation being higherthe income was calculated without relying
upon the Income Tax returns of the year
prior to his death-wife earning -loss of
income contributed by the deceased has
to
be
considered-order
modifiedcompensation enhanced.

Appeal partly allowed. (E-9)

List of Cases cited:

1. Malarvizhi & ors. Vs United India Insurance
Co. Ltd.& anr., 2020 (4) SCC 228

2. United India Insurance Co. Ltd. Vs Indiro Devi
& ors., 2018 (7) SCC 715

3. Sarla Verma & ors. Vs Delhi Transport Corp. &
anr. , (2009) 6 SCC 121

4. Bajaj Allianz General Insurance Co. Ltd. Vs
Smt. Renu Singh & ors. decided on 19.7.2016 ,
First Appeal From Order No. 1818 of 2012

5. Smt. Kaushnuma Begum & ors. Vs The New
India Assurance Co. Ltd. (2001) 2 SCC 9