Judgment:
In the High Court of Judicature at Madras Dated:
29. 08.2013 Coram: The Hon'ble Mr.Justice M.Jaichandren and The Hon'ble Mr.Justice M.M.Sundresh O.S.A.Nos.238 to 240 of 2013 1.M/s.Universal Shoe Company, rep.by its Partners. 2.V.Arshad Ahmed 3.M.G.Riyaz Ahmed 4.Glides Shoes Pvt. Ltd., rep. by its Directors, V.Arshad Ahmed. .. Appellants in all the Appeals vs. Belluti Simone .. 1st respondent in all Appeals INAC SPA DIFISIONE IGI, Italy. .. 2nd respondent in OSA No.239 of 2013 PRAYER: Appeal is filed under Order 36, Rule 9 of the O.S. Rules, r/w. Clause 15 of the Letters Patent, against the order, dated 7.1.2011, in O.A.No.482/2011, A.Nos.2532 and 3117 of 2011. For appellants : Mr.T.P.Sankaran For respondents : Mr.G.K.Muthukumar for M/s.GMS Law Associates -----
JUDGMENT
[Judgment of the Court was made by M.M.Sundresh, J.]. These Original Side Appeals have been preferred by the respondents in O.P.No.477 of 2011, being aggrieved against the order passed by the learned single Judge in allowing the Applications filed in O.A.No.482 of 2011, A.No.2532 of 2011 and the consequential dismissal of Application No.3117 of 2011. The respondents herein filed an application under Section 9 of the Arbitration and Conciliation Act, 1996. Pending the Application in O.A.No.482 of 2011, the respondents filed an application in A.No.2532 of 2011, by which an order of interim injunction restraining the 5th respondent/Garnishee, from making payment to the appellants, was sought for. In O.A.No.482 of 2011, the respondents sought for an order of interim injunction restraining the appellants from alienating or encumbering the schedule mentioned properties. Application No.3117 of 2011 has been filed by the appellants seeking to vacate the order of injunction granted in O.A.No.482 of 2011. As the learned single Judge ordered O.A.No.482 of 2011 and A.No.2532 of 2011 and consequently dismissed Application No.3117 of 2011 filed for vacating the order of injunction obtained in O.A.No.482 of 2011, the present Appeals have been preferred. 2.The learned counsel appearing for the appellants would submit that the learned single Judge has not considered the scope of Order 39, Rules 1 and 2 of the Civil Procedure Code. The principle laid down therein, viz., the balance of convenience, prima facie case and the likelihood of irreparable loss, have not been considered. Therefore, in view of the procedural violations, the order passed by the learned single Judge, has to be interfered with.
3. During the course of the arguments, the learned counsel for the appellants filed an affidavit of undertaking, stating that the appellants will not alienate item Nos.1 to 3 of the items shown in Schedule-A property mentioned in O.A.No.482 of 2011. A further submission has been made to the effect that insofar as the 4th item of the property is concerned, it is a house property in which the 3rd appellant was residing as a tenant and therefore, there was no necessity for passing an order by the learned single Judge. It has also been stated in the affidavit of undertaking that item No.4 of Schedule-A does not belong to any of the appellants. Insofar as item No.5 of Schedule-A is concerned, considering that it consists of raw materials, stocks-in-process, semi-finished and finished goods, the order of injunction will have be vacated so as to enable the appellants to do the business. A further submission has also been made that even the respondents would not be benefited by the said order of injunction.
4. Per contra, the learned counsel for the respondents would submit that here is a case, where the existence of the agreement is not in dispute. The appellants have committed fraud. In spite of the order of this Court, they went on with their business activities. A Contempt Petition has also been filed against the appellants, which is also pending consideration. Insofar as item No.5 of the Schedule-A property mentioned in O.A.No.482 of 2011 is concerned, the respondents are entitled to have commission in the said properties as well. Therefore, the learned counsel submitted that the appeals will have to be dismissed. 5.Insofar as item Nos.1 to 3 of Schedule-A property mentioned in O.A.No.482 of 2011 are concerned, there is an affidavit filed giving an undertaking that they will not be alienated or encumbered, pending disposal of the Arbitration Proceedings. Learned counsel for the appellants has also submitted that the appellants would not alienate or encumber the said properties. The affidavit of undertaking filed and the statement made by the learned counsel for the appellants, are hereby recorded. Nonetheless, we also make it clear that the appellants shall not alienate or encumber item Nos.1 to 3 of Schedule-A property mentioned in O.A.No.482 of 2011. However, we reject the contention of the learned counsel for the appellants that the principles laid down under Order 39, Rules 1 and 2 of the Civil Procedure Code, is not followed, as the adherence has to be seen from the order, which we find has taken note of the balance of convenience and prima facie case, insofar as item Nos.1 to 3 of Schedule-A property mentioned in O.A.No.482 of 2011 is concerned.
6. Now, coming to item No.4 of Schedule-A property mentioned in O.A.No.482 of 2011, since it is a rented property, the question of granting an order of injunction does not arise. In such view of the matter, we are of the view that the order granted by the learned single Judge, in O.A.No.482 of 2011, insofar as item No.4 is concerned, is liable to be vacated and it is accordingly vacated.
7. Insofar as item No.5 of Schedule-A property mentioned in O.A.No.482 of 2011 is concerned, admittedly, the appellants are doing business. Even the respondents would not be benefited by freezing the products mentioned therein. Therefore, we are of the view that the order of injunction granted, in respect of the said items, is not required, as it will not serve anyone's cause. We also feel that it would be sufficient, if the appellants are directed to file the statement of accounts for the export of the goods, with regard to their business, once in three months, before the Arbitrator, pending disposal of the Arbitration Proceedings. While doing so, the appellants will have to furnish sufficient copies to the 1st respondent, as well. The appellants shall also do the said exercise once in three months by furnishing the accounts to the 1st respondent, till the issue of appointment of an Arbitrator is over.
8. Insofar as Application No.2532 of 2011 is concerned, it deals with an order of attachment against the garnishee of the appellants. We find that there is absolutely no material to come to the conclusion that any amount, due to the appellants, is pending with the garnishee. In such view of the matter, we find that the order of the learned single Judge, in granting a prohibitory order against the garnishee, cannot be sustained. Therefore, the Appeal filed in O.S.A.No.239 of 2013, against A.No.2532 of 2011 will have to be allowed and accordingly, the same is allowed.
9. Accordingly, O.S.A.No.238 of 2013 is allowed in part and there shall be an order of interim injunction, insofar as item Nos.1 to 3 of Schedule-A of the property mentioned in O.A.No.482 of 2011. O.S.A.No.239 of 2013 is allowed. Consequently, O.S.A.No.240 of 2013 is disposed of, in terms of the orders passed in O.S.A.No.238 of 2013. No costs. Connected Miscellaneous Petitions are closed. gs. [M.J., J.]. [M.M.S.,J.]. 29th August, 2013 Index:Yes/No.Internet:Yes/No.M.Jaichandren, J.
and M.M.Sundresh, J.
gs. OSA Nos.238 to 240 of 2013 29.8.2013