Court affirms jurisdiction to grant interim measures before arbitral tribunal constitution, dismisses appeal challenging Section 9 order.
In a significant ruling, the Madhya Pradesh High Court has upheld the decision of the Commercial Court in Indore, granting interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. The appeal, filed by M/s MPM Homes Developers LLT, was dismissed, affirming the lower court's order that restrained the appellants from alienating or altering the nature of the disputed land, pending arbitration proceedings.
The case centers around a dispute between M/s MPM Homes Developers LLT and M/s Amarjot Developers And Finance Pvt. Ltd., concerning two sale deeds executed in April 2019 for agricultural land in Indore. The respondent, Amarjot Developers, had sought to declare the sale deeds void, citing non-payment of part of the sale consideration, which led to the initiation of civil proceedings for possession and injunction. However, the appellants contended that the non-payment did not invalidate the registered sale deeds, arguing that the respondent's remedy should be limited to recovery of the unpaid amount rather than cancellation of the deeds.
The Commercial Court, upon hearing the respondent's application under Section 9, granted interim measures, which were challenged by the appellants in the High Court. The appellants argued that the interim injunction effectively annulled a registered sale deed, which exceeded the scope of Section 9. They further contended that the respondent's claims were barred by limitation under Article 59 of the Limitation Act, 1963.
In its judgment, the High Court, led by Justices Vijay Kumar Shukla and Alok Awasthi, reiterated the legal position that non-payment of part of the sale consideration does not render a registered sale deed void, as per Section 54 of the Transfer of Property Act, 1882. The court emphasized that title passes upon execution and registration of the sale deed, and the seller's remedy lies in recovery of the balance amount.
Addressing the jurisdiction under Section 9, the court noted that the Commercial Court had rightly exercised its jurisdiction, as the arbitral tribunal had not been constituted at the time of granting interim relief. The court acknowledged the importance of maintaining the status quo and preventing irreparable injury, thereby affirming the interim injunction until the arbitral tribunal's constitution.
The High Court also addressed the issue of limitation, stating that it was a mixed question of law and fact to be determined by the trial court upon appreciation of evidence. The judgment cited precedents, including the Supreme Court's decision in Dahiben v. Arvind Kalyanji Bhasusali, which supported the principle that non-payment does not affect the validity of a registered sale deed.
In conclusion, the appeal was dismissed, affirming the Commercial Court's order, with the interim measures remaining in place until the arbitration proceedings are concluded. The judgment reinforces the court's jurisdiction in granting interim relief under Section 9 and clarifies the interplay between Sections 9 and 17 of the Arbitration and Conciliation Act, 1996.
Bottom line:-
Arbitration and Conciliation Act, 1996 - Interim measures under Section 9 - Jurisdiction of the Court to grant relief before the constitution of arbitral tribunal - Non-payment of part sale consideration does not invalidate a registered sale deed; seller's remedy lies in recovery of balance amount, not in cancellation of the deed.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Section 9, Arbitration and Conciliation Act, 1996 Section 17, Transfer of Property Act, 1882 Section 54, Limitation Act, 1963 Article 59
