Case Note & Summary
The appellants, M/s. Areeb Rolling Mills Pvt. Ltd. & Ors., filed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, challenging an order dated 5 July 2012 passed by the learned arbitrator. The arbitrator had rejected the appellants' application dated 16 September 2011, which sought a direction against the respondent bank to opt for only one remedy between proceedings under Section 84 of the Multistate Co-operative Societies Act, 2002 and the SARFAESI Act, 2002. The respondent raised a preliminary objection that the appeal was not maintainable because the impugned order was not passed under Section 17 of the Act (interim measures) nor under Section 16(2)/(3) (jurisdiction), which are the only orders appealable under Section 37. The court examined the application and found that it did not seek any interim measure of protection under Section 17 but merely sought a direction to choose between remedies. The court held that the order rejecting such an application does not fall within the ambit of Section 37(2) of the Act, which only allows appeals from orders under Section 16(2)/(3) or Section 17. Consequently, the court accepted the preliminary objection and dismissed the appeal as not maintainable, with no order as to costs.
Headnote
A) Arbitration Law - Maintainability of Appeal - Section 37 of the Arbitration and Conciliation Act, 1996 - Appeal lies only against orders under Section 16(2)/(3) or Section 17 - The appellant's application seeking direction to the respondent to opt for one remedy was not an application under Section 17 for interim measures, and the order rejecting it is not appealable under Section 37. The court upheld the preliminary objection and dismissed the appeal as not maintainable. (Paras 2-5)
Issue of Consideration
Whether an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is maintainable against an order of the arbitrator rejecting an application seeking direction to the respondent to opt for only one remedy between proceedings under Section 84 of the Multistate Co-operative Societies Act, 2002 and the SARFAESI Act, 2002.
Final Decision
The court accepted the preliminary objection and dismissed the appeal as not maintainable. No order as to costs.
Law Points
- Appeal under Section 37 of the Arbitration and Conciliation Act
- 1996 is maintainable only against orders under Section 16(2)/(3) or Section 17
- not against other interlocutory orders
Case Details
2013 LawText (BOM) (01) 41
Arbitration Appeal No. 48 of 2012
Mr. Bharat L. Gandhi i/b. K.C. Pandey for the Appellants; Mr. N.N. Bhadrashete for the Respondents
M/s. Areeb Rolling Mills Pvt. Ltd. & Ors.
NKGSB Co-operative Bank Ltd.
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Nature of Litigation
Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 challenging an order of the arbitrator rejecting an application for direction to opt for one remedy.
Remedy Sought
Appellants sought to challenge the order dated 5 July 2012 passed by the learned arbitrator rejecting their application dated 16 September 2011, which sought a direction against the respondent bank to opt only for one remedy between proceedings under Section 84 of the Multistate Co-operative Societies Act, 2002 and the SARFAESI Act, 2002.
Filing Reason
The appellants filed an application before the arbitrator seeking a direction to the respondent to choose only one remedy, which was rejected. They then filed the present appeal under Section 37 of the Arbitration and Conciliation Act, 1996.
Previous Decisions
The learned arbitrator rejected the appellants' application on 5 July 2012.
Issues
Whether the appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is maintainable against the order of the arbitrator rejecting the application for direction to opt for one remedy.
Submissions/Arguments
Respondent raised preliminary objection that the appeal is not maintainable because the impugned order is not under Section 17 or Section 16(2)/(3) of the Act, and thus not appealable under Section 37.
Appellants contended that the order was under Section 17, but the court found the application did not seek interim measures under Section 17.
Ratio Decidendi
An appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is maintainable only against orders under Section 16(2)/(3) (jurisdiction) or Section 17 (interim measures). An order rejecting an application seeking a direction to opt for one remedy between two statutory proceedings does not fall under these provisions and is not appealable under Section 37.
Judgment Excerpts
In my view such application for seeking inspection, interrogation filed by the petitioner does not fall under Section 17 of the Arbitration and Conciliation Act, 1996.
On plain reading of section 37(2) of the Act, it is clear that appeal is maintainable from the order of Arbitral Tribunal accepting the plea referred to sub-section 2 or sub-section 3 of Section 16 or granting or refusing to grant any interim measures under Section 17.
I am of the view that appeal is not maintainable and is therefore rejected.
Procedural History
The appellants filed an application before the arbitrator on 16 September 2011 seeking a direction to the respondent to opt for one remedy. The arbitrator rejected that application on 5 July 2012. The appellants then filed the present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 on an unspecified date. The High Court heard the appeal and dismissed it on 4 January 2013.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 17, Section 37, Section 16
- Multistate Co-operative Societies Act, 2002: Section 84
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act):
