Team  SoOLEGAL

HC Expounds: Petition u/s 9 Arbitration Act cannot be disposed of ex-parte, especially when coercive orders are passed.

Team SoOLEGAL 20 Nov 2020 4:15pm

HC Expounds: Petition u/s 9 Arbitration Act cannot be disposed of ex-parte, especially when coercive orders are passed.

On 9th November, 2020, while hearing a petition, a single judge bench, Justice Prathiba M. Singh stated that passing an ad-interim order under Section 9 of Arbitration and Conciliation Act, 1996, is applicable, but dismissing a petition without hearing the other party and also directing coercive order is just a violation of principle of natural justice. The petitioner stated that the petitions were being disposed on the very first day without giving any notice to the petitioner along with a coercive order allowing the respondent to take possession of the vehicles of the petitioner.

According to the fact, on November 28th 2018, the petitioners had purchased a total of 16 vehicles under loan and hypothecation agreement with the Respondents. An arbitration clause was also being imposed in the said agreement. The petitioner defaulted in repaying the loan installments. Surprisingly, the petitioners came to know that total number of 16 petitions were filed by the Respondents under Section 9 of Arbitration and Conciliation Act, 1996. An impugned order was passed and the orders were placed under the record.

According to the petitioners, the total due is of only Rs 87 lakhs and if the respondents take possession of the vehicles as per the order then the business of the petitioners will come to an end. Also the petitioners stated that, the order under Section 9 of the Act has been passed without giving any notice to the petitioners and also they were not given a chance to speak. After reviewing the challenged orders, the Court held that Section 9 of the petitions could not be disposed of ex-parte without providing notice to the other side, in particular where oppressive orders were passed.

The Court finally held that, the Trial Court must hear the petitioners and must give a notice to the petitioners before passing any appropriate order as per the rules of the law, hence the Court had set aside the impugned order.



Tagged: Arbitration Act   Justice Prathiba M. Singh   judges bench   Conciliation Act   Section 9   Trial Court  
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