Case Note & Summary
The petitioner, INOX Leisure Limited, filed a commercial suit against Indo Pacific Projects Limited seeking recovery of security deposit and permission to remove assets, equipment, and machinery from the premises. The petitioner also filed an application for interim relief under Order 39 Rules 1 and 2 CPC read with Section 151 CPC. The respondent opposed the application, arguing that the civil suit was not maintainable due to an arbitration clause in the agreement. The trial court, by order dated 3 November 2018, dismissed the interim application and referred the parties to arbitration, accepting the respondent's objection raised in its reply. The petitioner challenged this order in Writ Petition No. 1107 of 2019, which was allowed by the High Court on 6 March 2019, holding that the trial court erred in referring parties to arbitration without a written application under Section 8 of the Arbitration and Conciliation Act, 1996. However, the High Court did not decide the interim application on merits. Subsequently, the trial court, by order dated 29 April 2019, again dismissed the interim application, holding that the civil suit was not maintainable due to the arbitration clause. The petitioner filed the present writ petition challenging this order. The High Court observed that the trial court had again erred by dismissing the interim application on the ground of maintainability, ignoring the earlier High Court judgment. The High Court set aside the impugned order and directed the trial court to decide the interim application afresh on its own merits, without being influenced by the maintainability issue. The court clarified that the trial court should not be influenced by any observations made in the impugned order or in the present judgment.
Headnote
A) Civil Procedure - Interim Relief - Maintainability - Order 39 Rules 1 and 2 CPC read with Section 151 CPC - The trial court dismissed the plaintiff's application for interim relief on the ground that the civil suit was not maintainable due to an arbitration clause. The High Court held that the trial court erred in accepting the objection without a written application under Section 8 of the Arbitration and Conciliation Act, 1996. The court directed the trial court to decide the interim application afresh on merits, uninfluenced by the maintainability issue. (Paras 1-6) B) Arbitration - Reference to Arbitration - Section 8 of the Arbitration and Conciliation Act, 1996 - The High Court reiterated that a party seeking reference to arbitration must file a written application before the first statement on the substance of the dispute. The defendant's objection in a reply to an interim application does not suffice. (Paras 3-4)
Issue of Consideration
Whether the trial court could dismiss an application for interim relief on the ground of maintainability due to an arbitration clause without a written application under Section 8 of the Arbitration and Conciliation Act, 1996
Final Decision
The High Court allowed the writ petition, set aside the trial court's order dated 29 April 2019, and directed the trial court to decide the interim application (Exh.5) afresh on its own merits, without being influenced by the maintainability issue or any observations in the impugned order or the present judgment.
Law Points
- Interim relief can be granted in a commercial suit even if arbitration clause exists
- Section 8 of Arbitration Act requires written application for reference
- Order 39 Rules 1 and 2 CPC apply to commercial suits
