2001 PLP 664 (CLC)

In a situation like the above where both parties have admitted most of the facts but are contesting an interlocutory application when the main dispute is sub judice before the sole arbitrator then the Court has to consider whether by granting such an application or refusing to grant such an application, which side shall suffer irreparable loss and injury. The plaintiff insists that he is in possession. He also insists that the withdrawal from the partnership of Mst. Zubaida Kaleem has rendered the partnership null and void. The letter which is notice under section 43 of the Partnership Act is on the other hand challenged by the defendant as forged. Suit No.553 of 1997 was filed by Amna Khatoon and Suit No.222 of 1997 has been filed by Chauhdry Abdul Rauf, I am informed that there are at least 2 more suits pending between the parties. If the plaintiff is in possession and considering the fact that the value of the property is appreciating every day, the chances of the plaintiff loosing by the grant of stay are remote. On the other hand if the plaintiffs were to allot flats and given possession then there would be multiple litigation where more than the plaintiff and the defendant would be involved as each person shall be claiming right and interest in the property. Before I conclude 1 would like to reproduce section 41 of the Arbitration Act: "

41. Procedure and powers of Court.‑‑‑ Subject to the provisi#J of this Act and of rules made thereunder: (a) The provisions of the Code of Civil Procedure, 1908 shall apply to all proceedings before the Court, and to all appeals, under this Act, and (b) The Court shall have, for the purpose of, and in relation to arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court: Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making order with respect to any of such matters." I reproduce Order 39, Rules 1 and 2, C.P.C. "

1. Cases in which temporary injunction may be granted . ... Where in any suit it is proved by affidavit or otherwise . ... (a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or (b) that the defendant threatens, or intends, to remove or dispose of his property with a view to defraud his creditors, the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property as the Court thinks fit, until the disposal of the suit or until further orders." The Second Schedule of the Arbitration Act relates to section 41 and deals with powers of Courts in connection with interim injunction etc. It has been observed that powers of the Court under Second Schedule to the Arbitration Act can be exercised even in a case where reference to Arbitration has been made by intervention of the Court. The effect of the provision of section 41(b) of the Act is to clothe the Court with the same powers in relation to the Arbitration proceedings and to issue interim order for the preservation and safety of the subject‑matter of the dispute. In this respect I am fortified by the observation made in the case of Asadullah Khan & Company Ltd. v. Karachi Shipyard and Engineering Works Ltd. 1979 CLC 625. the relevant portion is reproduced as under:‑‑ "

4. Respondent No.1 has raised several objections to this application. The first one is as to the maintainability of the application. It is contended by Mr. Samiuddin Sarni that an application under section 41 could be made win if there are any proceedings pending before the Court or before the arbitrators. (b) the Court shall have for the purpose of and in relation to arbitration proceedings, the same power of making orders in respect of any of the matters set out the Second Schedule as it has for the purpose of and in relation to any proceedings before the Court. Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect of any of such matters. Para. 4 of Second Schedule to the Arbitration Act gives power to the Court to issue interim injunction or appoint receivers in cases covered by section 41 of the Arbitration Act. It will be noticed that the powers conferred on the Court under the Second Schedule to Arbitration Act could be exercised only if any proceedings were pending before the Court. " I am fortified also by the case of Island Textile Mills Limited, Karachi v. Technoexport and another 1979 CLC 307: "It may be observed that section 41(b) of the Arbitration Act provides that the Court shall have for the purpose of and in relation to arbitration proceedings, 'the same power of making orders in respect of any of the matters set out in the Second Schedule of the Act as it is for the purpose of and in relation to the proceedings before the Court. It also provides that nothing in the aforesaid clause (b) shall be taken to prejudice any power which may be vested in an Arbitrator or Umpire for making order with respect to any such matters. The Second Schedule to the Arbitration Act inter alia empowers the Court to grant interim injunction or to appoint a receiver etc. It is, therefore, clear that the Arbitration Tribunal in the instant case does not have the power to deal with the grant of an ad interim injunction which was prayed for by the plaintiffs in the present suit and, therefore, this Court was to deal with the injunction application even if the suit would have been stayed under section 34 of the Act." In view of the above alongwith the observations made, the application is granted. H.B.T./A‑104/K Application granted.