Miscellaneous Appeal No. 1414 of 2011 · High Court

(per THE HON’BLE SRI JUSTICE GODA RAGHURAM) Heard Sri E.Ajay Reddy, learned counsel for the appellants, and Sri Maruti Rao Srungarapu, learned counsel respondent.

This is a miscellaneous appeal by the respondents in Arbitration O.P.No.2346 of 2009, aggrieved by the order dated

30.09.2011 of the III Additional Chief Judge, City Civil Court,

Hyderabad. The respondent herein filed Arb.O.P.No.2346 of 2009 under Section 9(2) of the Arbitration and Conciliation Act, 1996, seeking an interim injunction restraining the appellants herein from alienating the Schedule ‘A’ property to third parties and to attach ‘A’ and ‘B’ schedule properties and to direct the appellants herein to furnish security of Rs.2,89,853-98ps; claiming that the first appellant borrowed Rs.8,00,000/= under a business loan account. Appellants 2 and 3 herein were said to be co-applicants, co- borrowers and co-guarantors to the first appellant. There was a default in payment of the instalments and according to the respondent there was an arbitration agreement which was intended to be pursued. In the affidavit accompanying Arb.O.P.No.2346 of 2009 the respondent claimed that it learnt that the first appellant, on the advice of his brothers who are also co-partners, is trying to sell the assets including the schedule properties to third parties to defraud it and therefore the court should pass an order to preserve the assets of the appellants for execution of the arbitral award.

Accordingly injunction, attachment and direction to pay costs incidental to the proceedings are sought. In the counter to the application, the appellants herein specifically mentioned that the schedule properties mentioned in the arbitration petition do not belong to them and therefore passing of interim orders against properties which do not belong to them is impermissible.

Sri Ajay Reddy submits that the schedule property in fact belongs to the father of appellants 2 and 3 who is an 80 years old person; the property does not belong to them and therefore the order of attachment passed by the court below is unsustainable. It is further contended that the court below erred in not considering that the schedule property does not belong to the first appellant and in a sketchy order recording no reasons or finding with respect to the ownership of the properties by the appellants, the order of attachment was passed.

The appellants themselves assert that the property attached by the order of the court below which is the subject matter of this appeal does not belong to them. They also claim that the property belongs to their father. In the circumstances it is open to the rightful owner take appropriate measures against attachment order passed by the court below by filing claim petitions or by pursuing any other appropriate remedy, if aggrieved by the order of attachment. For the aforesaid reasons we are not inclined to interfere in the matter at the instance of the appellants herein.

This miscellaneous appeal is accordingly dismissed. There shall however be no order as to costs. _______________________ GODA RAGHURAM, J _______________________ N. RAVI SHANKAR, J 29th February, 2012 CVRK