Ashim Kumar Banerjee, J.
1. Appellants are owners of a piece of land situated in the town of Siliguri in the District of Darjeeling measuring an area of 6 kathas, 9 chhataks. They entered into a development agreement with the respondent whereby it was agreed that the respondent, at her own cost, would construct a building on the said land in question out of which 40% of the constructed area would be handed over to the owners being the appellants and 60% would be retained by the respondent as her share in the property. Under the agreement, if there was any dispute between the parties, those disputes were to be referred to the sole arbitration of one Mr. Arun Kumar Sarkar, an advocate of Siliguri Court.
2. The appellants also executed general Power of Attorney in favour of the respondent giving her right to do all acts necessary for the purpose of construction, development and sale of the flats after construction on behalf of the appellants. Accordingly, a five-storied building was constructed on the said land in question. The respondent also entered into agreements for sale with various intending purchasers including one Malabika Sarkar who is also an advocate of Siliguri Court. She happens to be the daughter of Sri Arun Kumar Sarkar the named arbitrator. According to the respondent, Mrs. Sarkar wanted certain additions and/or alterations in her flat. The respondent obliged her by doing so which gave rise to the dispute between the appellants and the respondent. According to the respondent, the appellants refused to execute conveyance in favour of Malabika Sarkar on the plea of authorized construction. According to them the sanctioned plan was deviated by the respondent. The appellants referred the dispute to the named arbitrator Shri Sarkar? The respondent, however, did not agree to submit to the jurisdiction of Shri Sarkar on the ground that he had personal interest in the property through his daughter. Moreover, he was also involved in the subject dispute between the parties through his daughter.
3. The respondent filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 before this Hon'ble Court. The said application was opposed by the appellants. It was pointed out before the learned single Judge that not only the arbitrator was named in the agreement but also he already entered upon reference as would appear from the minutes of the meeting held by the arbitrator. Considering the fact that the arbitration had already commenced, His Lordship dismissed the application made under Section 11 of the said Act of 1996 by judgment and order dated July 5, 2007.
The respondent also filed an application under Section 9 of the said Act of 1996 before the Siliguri Court, inter alia, praying for an order of injunction restraining the appellants from disturbing the respondent while continuing the remaining interior work in the said premises in question as also from disposing any of the flats allotted to the respondent under the agreement to any stranger or causing any encumbrance thereof. The said application was opposed by the appellants/ on the ground that the respondent deviated from the sanction plan by causing unauthorized construction in the premises. Hence, the said agreement was cancelled. The appellants also revoked the authority of the respondent given to her under the Power of Attorney. Hence, she was not entitled to any relief. The learned District Judge, Darjeeling by his judgment and order dated June 28, 2007 allowed the said application and restrained the appellants from disturbing the respondent and her men and machineries to continue remaining interior work in the premises in question as also from disposing and/ or any encumbering any flat or any portion of the said premises belonging to the -respondent's share to any stranger.
4. Being aggrieved by and dissatisfied with the judgment and order of the learned District Judge, the appellants preferred the instant appeal. The appeal was admitted by us on July 18, 2007. The appeal was finally heard by us on the above mentioned dates.
5. Mr. Pratap Chatterjee, learned Senior Counsel appearing for the appellants contended as follows:
i) The application under Section 9 was not maintainable as the respondent neither referred any dispute to the arbitrator nor did express her willingness to participate in the arbitration proceeding. '
ii) Assuming that the respondent did have a dispute to be referred to arbitration, such dispute was not maintainable to be brought under Section 9 in view of Section 14 of the Specific Relief Act where the suit for specific performance of a development agreement was barred at the instance of the developer.
iii) Personel of the arbitrator was not under challenge before the learned Judge. In any event, such issue could not have been brought before the learned Judge as the same was not permissible in law. The learned Judge erroneously considered such factor.
iv) The appellants being the owners of the properties were responsible for any violation under the Municipal Laws. Hence, they were within their right to terminate the agreement on the ground of deviation of the sanction plan.
In support of his contentions, Mr. Chatterjee relied upon All India Reporter 2006 Cal Page 209 (Vipin Bhimani v. Smt. Sunanda Das) and 2001 Volume - II Calcutta High Court Notes Page 104 (Goodrike Group Ltd. v. Agricultural Income-tax Officer, Calcutta Range-I).
6. Mr. Jayanta Mitra, learned Senior Counsel appearing for the respondent led by Mr. Aninda Kumar Mitra, learned Senior Counsel contended as follows:
i) The sanctioned plan was not deviated and, in any way, that was a subject-matter to be decided by the Corporation. The same could not be a relevant factor in an application under Section 9.
ii) Pre-requisite of Section 9 was expression of willingness for referring the dispute to arbitration. The respondent was willing to have the dispute resolved through arbitration. Her willingness was proved by the factum of filing of application under Section 11 of the said Act of 1996.
iii) The application made under Section 12 of the said Act of 1996 asking the named arbitrator to step down was pending for adjudication. The fact that the respondent did not agree to have the dispute resolved through sole arbitration of the named arbitrator, could not be termed as her unwillingness for resolution of dispute through arbitration.
iv) The dispute that arose between the parties was on the issue of completion of the rest of the building being the interior work. The respondent initiated the proceeding under Section 9 for prohibitory injunction as against the appellants so that they could complete their construction work. Such proceeding could not be termed as a proceeding within the meaning of Section 14 of the Specific Relief Act.
v) The proceeding under Section 9 was to enforce a negative covenant in the development agreement being Clauses 9.6, 11.1, 11.2 etc. which could not be termed as a proceeding for specific performance of the contract.
vi) Under Section 202 of the Contract Act, once by the agreement between the principal and agent, if the agent acquired any interest, such agreement could not be terminated at the option of the principal. Hence, the revocation of Power of Attorney was wrongful.
In support of his contentions Mr. Mitra relied on the following decisions:
i) 0043/1987 : [1987]2SCR805 (Ram Sarup Gupta (dead) by L.Rs. v. Bishun Narain Inter College).
ii) : [1999]1SCR89 (Sundaram Finance Ltd. v. NEPC India Ltd.).
iii) : AIR2001SC2367 (Anand Prasad Agarwalla v. Tarkeshwar Prasad).
iv) 2003, Volume-II, Calcutta Law Times, Page 463 : : (2003)2CALLT463(HC) (Bhaskar Aditya v. Smt. Minati Majumdar).
v) : AIR2004SC1433 (Firm Ashok Traders v. Gurumukh Das Saluja).
7. Since the issue of maintainability was raised by the appellants, let us first deal with such issue.
8. Section 9 of the said Act, of 1996, empowers a party to the arbitration agreement to approach the appropriate Court inter alia, before or after initiation of the arbitration proceeding to ask for interim protection of the properties involved in the subject dispute. It is really a power given to the plaintiff to seek interim protection under Order 39 in a civil suit. The only distinction is that in an application under Order 39, the pre-requisite was existence of a civil suit whereas under the said Act of 1996 there need not be any pending proceeding. The parties to the agreement can approach the appropriate Court at any time provided there is a valid arbitration agreement and an existence of a dispute. In the instant case, arbitration agreement was not in question. Both the parties accepted the said agreement. Existence of dispute was also not in question as would appear from the rival pleadings. This leaves us with the sole question of willingness. We are in complete agreement with Mr. Mitra that filing of application under Section 11 before the High Court, application under Section 12 before the arbitrator, apart from the pleadings in applications under Section 9 would expressly show that the respondent was willing to have the dispute resolved through arbitration. Hence, application under Section 9 was maintainable and the contentions to that extent raised by the appellants are rejected.
9. On the issue of maintainability, it was also contended that the application was not maintainable in view of the provisions of Section 14 of the Specific Relief Act. We have perused the Division Bench judgment in the case of Vipin Bhimani AIR 2006 Cal 209 (supra). We reserve our comment on the ratio decided by the Division Bench as we feel that the same may not be relevant to decree the subject controversy before us. On perusal of the pleadings, it would appear that the respondent did not ask for specific performance of the agreement. She was rather interested to have enforcement of the negative covenant under the agreement by graying for an order of injunction.
10. The matter may be looked into from another angle. Assuming that the respondent could not have authority to raise any dispute to the arbitrator the very fact that dispute had already been referred to arbitration by the appellants automatically entitled to respondent to approach the Court under Section 9 as would be evident on a plain reading of the said Section whereby any party to an arbitration agreement was entitled to approach the Court before or after initiation of the arbitration proceedings. In the instant case, the arbitration proceeding was initiated by the appellants. The respondent in that event was entitled to approach the Court under Section 9. V
11. The application made under Section 9 was filed in December 2006 and the same was disposed of by the judgment and order dated June 28, 2007. Before the said application was disposed of the appellants by letters dated May 9, 2007 referred the dispute to the named arbitrator. Hence, on the day when the said application was disposed of, there had been an arbitration proceeding pending which empowered the Court to give necessary protection to any of the parties to the said arbitration under Section 9.
12. In the Case of Vipin Bhimani AIR 2006 Cal 209 (supra) the suit was filed by the developer for specific performance of the development agreement as also for a decree directing the defendant to perform under the agreement. In the instant case, the respondent only prayed for an order of the injunction so that their remaining part of the work was not disturbed by the appellants as also to protect their right under the contract being 60% of the constructed area from being encumbered by the appellants. These reliefs, in our view could not be equated with the reliefs claimed in the case of Vipin Shimani (supra). Hence, the ratio decided therein, does not have any application herein.
13. Lot of arguments were made on the conduct of the arbitrator. Our attention was also drawn to the fact that the arbitrator lodged a caveat in this Hon'ble Court which was, however, denied by him through Mr. Chatterjee in course of hearing. We do not wish to make any comment on the conduct of the arbitrator as the same being not strictly relevant herein.
14. We have examined the well versed judgment and order of the learned District Judge and we do not find any scope of interference. The construction of the building is nearing completion as would appear from the photographs produced in Court. For the interest of both parties, the remaining work must be completed as it would enure benefit not only for preservation of the said property but also to the parties to the agreement. Similarly, the status quo with regard to the allocation of the respondent should also be maintained so that third party right is not created in between. Both such protections and/or interim measures were absolutely necessary for the interest of the parties. The learned District Judge very rightly gave those protections. The appeal fails and is hereby dismissed.
15. There would be no order as to costs.
16. Urgent xerox certified copy would be given to the parties, if applied for.
Tapas Kumar Giri, J.
17. I agree.