Arbitral Tribunal Can’t Direct Re-possession of Vehicle

The Kerala High Court on Wednesday, 16 March 2016 in Pradeep K.N. Vs. Station House Officer, Perumbavoor has declared that the Arbitral Tribunal cannot pass an order to enforce its order by directing the Advocate Commissioner/Receiver to repossess the vehicle from the opposite party.

Justice Muhamed Mustaque ruled that the Advocate Commissioner or Receiver as the case may be, can be appointed for any other purpose, but not to enforce an order of repossession passed by the Tribunal.

Any order of repossession can only be enforced through a civil court.

the Judgment said.

The writ petitioners have availed vehicle loans from finance companies.

Arbitral Tribunal

The common question of law in these writ petitions is regarding enforcement of the interim order issued under Section 17 of the Arbitration and Conciliation Act, 1996 (Act 26 of 1996) as amended by the Act 3 of 2016, by the Arbitral Tribunal.

The High Court held that the Legislature never had intended the Arbitral Tribunal’s order to be enforced by the Tribunal itself. The intention behind is only to ensure that the order is enforced in a manner provided under the Code of Civil Procedure, enforcing an order of such court.

The civil court while enforcing interim order of the Arbitral Tribunal has to treat the order as if it were issued under the Code of Civil Procedure.

There cannot be any doubt that after amendment, the Arbitral Tribunal would possess the same power for making orders as the Court had before the amendment for the purpose of, and in relation to, any proceedings before it.

The Arbitrator also can order repossession of the vehicle. But the question is, when an order is not obeyed or honoured by the parties, can the order be enforced like an order of the civil court, by the Tribunal or by the party.

The Tribunal, by its constitution or creation, inherently lacks power to deal with any sovereign function or public law in the sense that their authority is founded in a contract and power is regulated by the statute.

The interim orders in all these writ petitions are in the nature of appointment of an Advocate Commissioner/Receiver to repossess the vehicle either directly or with the assistance of police.

The enforcement itself signifies that there must be a force to put the order in motion, to ensure that the party bound by the order is complied with such order. The Arbitral Tribunal’s by very nature of its composition cannot exercise any such power vested with the court, which discharges sovereign function.

The repossession of the vehicles by enforcing the order of the Arbitral Tribunal without the intervention of the civil court, therefore, has to be treated as violation of Article 21 of the Constitution of India.

In the colour of statutory backing, the Tribunal’s order has been allowed to be enforced without any statutory authority.

The encroachment into a public law field in a private law remedy is nothing but a sheer abuse of process of law.

The citizen has to be safeguarded against such arbitrariness.

They have approached the High Court raising a grievance to the effect that the interim order passed by the Arbitral Tribunal is enforced/being attempted to be enforced without putting the orders for enforcement, following the procedures under the Code of Civil Procedure, before the Principal Civil Court.

Therefore, the writ petitions are maintainable to the extent nullifying an act done by encroaching into public law power, by exceeding power conferred under the private law.

All the writ petitions, therefore, are disposed of in the light of the facts involved in each case.

the Court said.