The High Court · 2026

Judgment

1. 2

3. 4 5 petition under Articre 226 of the constitution of rndia praying that in the circumstances stated in the affidavit filed therewith' the High court may be pleasedtoissueawritofmandamusoranyotherappropriatewrit,orderor direction decraring the actions of the Respondent No.2 in issuing directions dated 06-09-2022 in Memo No. 3600/A4118 PMl2o22 in Application No' TS107/36 oor2oz2tR, and consequenry directions dated 1r-og-2o22 in Apptication No. T5102144243t2o22, on the file of the Regional Transport Authority' lbrahimpatnam, Ranga Reddy District, pursuant to which the Respondent No'2 has cancetted the Finat Registration Certificate in the name of the Petitioner No'1 with respect to Vchint^ r,^ Responde., *".r,'ll|l: ffi:ne and thereafter issuirn and arbitrary and set aside tn"*,,uliorarive ", o,',",i",;TlJHil:Tll:;: No rs07uE3600, and issued the same to an application made by the R"rpono"nt No.4, ", ;il, :;*eins nsequenfly iresar I petition

under Section 151 cPc praying that in the circumstar the affidavit fired in support of the petition, the High court may be 0,""r;:":;:I the Respondent No.2 not to ent resistration or ttre vehicr" o"rringu#;ffi:IiT application in respect or the :r"d:' without notice to "i withour providins;,n::ffii""#ffi:-..,T,J COUNSCT fOr thE PEtitiONCrS: SRI ACHARYA BHARATH KRISHNA counset for the lrespondent No. 1 & 2:Gp FOR TRANS'.RT Counsel for the Flespondent No. 3 to 5: The Court made flre following: ORDER ;*:l HON'BLE SRI JUSTICE NAGESH BHEEMAPAI{A WRIT PETITf,ION 37S1a OE 2022 ORDER: Petitioner No.l is a partnership firm involved in the business of real estate and construction; petitioners 2 and 3 are partners of the said firm. Petitioners are the owners of vehicle bearing Registration No. TS 07 UE 3600 (subject vehicle) having purchased the same in 2016. Petitioner No.l purchased through a loan facitity given by Respondent No. 3 - Axis Bank Limited. They had repaid the said mount and the loan account was declared tlosed'. Further, in the course of business, on assessing the repayment history of petitioner No.1, Respondent No.3 offer ed, / granted additional loan facility. Petitioners 2 and 3 -are co-borrowers in-respect of -.the operational e:(penses-----.*-. incurred by Petitioner No.l. Pursuant to the additional loan facility, the subject vehicle was hypothecated with Respondent. No.3. 1l . : Petitioner No.l due, to outbreak of COVID-19 t their business could only resume the business in September 2021. They had paid EMI up to Febnrary 2O2O only pursuant to the additional loan facilit5r availe d. uid.e Agreement dated. 25.:06.2019. Due to 2 non-payment of the loan amount, disputes arose between Respondent No.3 and Petitioner No.l. Therefore, Respondent No.3 - bank initiated arbitration proceedings and in re5pect of the same, Sri K.C. Rirrtestr, Advocate was appointed as the sole arbitrttor for adjudication of the claims between petitioners and Respondent No.3.

1.2. On 18.09.2021, the sole Arbitrator passed an ex parte.:nterim order, upon an Interlocutory Application filedl by Respo:rdent No.3, permitting Respondent No.3 bank to take posses,sion of the subject vehicle and keep the same in their custoiy until further orders. The relevant portion of the interim order is extracted hereunder: "

6. The Tribunal has also carefully gone through the provi:;ions under Section 17 of the Arbitration and Conciliation (Amendment) Act, 20 15, which reads as follows: " L7(L) : A party may during the arbitral proceedings or at any time after the making of the arbitral award but before it is enclosed in accordance with Section 36, apply to the arbitral Tribunal. (i) For the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (ii) For an interim measure of protection in respect of any of the following matters, namely: (a) The trrreservation, interim custody or sale of any goods which are the matter of the arbitiation afreement - (b) Securing the amount in dispute in the arbitration (c) The detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitratiorr, t. as to which any quest.on may arise therein and authorising for any of the aforesaid 3 - purposes any per-son to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be ma!e, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence. (d) Interim injunction or the,agrintment of a receiver; (e) Such other interim measure of protection as may appear to the arbitral : tribunal to be just and convenient. And the arbitral tribunal shall have the same power for making orders, as the court has for the purpose of and in relation to any proceedings before it. 7. Under Section 17 of the Arbitration and conciliation (Amendment) Act, 2or5, the Arbitral rribunal shall have the same power as the court has for the purpose of and in relation to any proceeding before it for granting interim measure of preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement and such other interim measure of protection as may appear to the Arbitral Tribunal to be just and convenient. 8. In the case on hand, the subject mater of the dispute is that the claimant has extended financial facility to the re-qpondents for the purchase of the vehicle in reference. However, the respondent have been utilising the vehicle without complying with their terms bf :iruiii"ti"ro interim relief sought for is against the asset which is the subject mattbr of the Loan Agrbeinent in reference. Therefore, this Tribunal has ample power to pass such an ord.er of interim measure of custody. The claimant t "" esiauusn"a prima facie case. 9. =In the light of the above, in the interest ofjustice and for the of this claimant's interest in the dispute, this Tribunal ORDERS PERMITTING the claimant to of the tetii6kl being AsHoK-f,ElAAmfbeerflng-Registratiori No. -- TS 07 uE 3595 wherever it is found. in a lawful manner with porice protection, if ri:quired and keep the vehicle in their custody tifl further u 4

1.3. Pursuant to the said order, Respondent No.3 had taken possession of the subject vehicle on 24.09.2O2L. thereafter, they f,rled another Interlocutory Application seeking a direction:to sell the vehicle and deposit the proceeds to the loan account of Petitioner No.l pending disposal of the main arbitreLtion proceedings. On 26.O2.2022, the sole Arbitrator passec[ the order permitting Respondent No.3 to sell the vehicle and rr:alise the sale proceeds for repayment. Pursuant to the said order, Respondent No.3 scild the vehicle to a third party and isrsued post-sale notice dated 07.O4.2022 to Petitioner No.1 and also further directed them to pay amounts being payable towards additional loan facility pursuant to the Agreement dated i25.O6.2olg. L.4. Aggrieved with the said order, petitioner filed CMA No. 196 of 2022 and this Court by order dated 28.O4.2022 in I.A.No. L of 2022 suspended the order dated 26.02.2022 passed by the Sole Arbitrator. According to petitioner, despite the order dated 28.04.2022, Respondent No.3 had filed the Application before Respondent No.2 seeking cancellation of Final Registration Certificate (FRC) in the narne of Petitioner No. 1 and sc,ught for issuance of fresh registration in the name of ResporLdent No.3. Further, Respondent No.3 issued. Form 37 5 dated 27.O4.2O22 in respect of the said Application initiated by Respondent No.3 and the sarne was received by Petitioner No.1 on O6.05.2022. According to petitioners, this was belatedly I received by them that too at the wrong addiesses.

1.5. Petitioner No.l addressed letters dated 1O.O5.2O22 and L2.O5.2O22 to Respond.ent No.2 conve5ring objection for issuance of FRC to Respondent No.3, however, after several correspondence, Respondent No.2 on 22.08.2022 issued NOC for transfer of FRC in favour cif Respondent No.3. Further, Petitioner No.1 when conducted a regular check on O9.O9.2O22, it came to their knowledge that Respondent No.2 had already issued FRC in favour of Respondent No.3, as such, they immediately approached Respondent No.2 on 12.O9.2022 and, --- quesfioneA tiariSfer of FRC in fav6ui5f R@6ni1e-n't-Nd3;---'..

1.6. Further, Respo4dent No.3, in turn, had sold the ---gg$eg! vghicle to Respondent No.s ylPEd gbo fS9g51:g- IRC in his name. Therefore, the grievance of petitioners is that when the matter is already ceased of by this Court utde CMA No. 196 of 2022 by way of suspending the order passed by the sole Arbitrator on 26.02.2A^,2, the manner in which Respondent No.2 transferred FRC in favour of Respondent No.3 is bad in I 6 law, as such, the same is liable to be set hsid.e as being illegal and aI'bitrary.

2. This court by order dated 28.09.2022 in I.ANo. 1 of 2022,trdered that pending '6r6n"r orders, the 2"d respondent is directr:d not to affect further registration / transfer of subject vehicl,: bearing Registration No- TS 07 UE 3600'

3. Per contra, it is the contention of Respondent No.3 that petitioners availed additional loan facility and to that effect, an Ag;reement was executed oh 25.06.2019. Petitioner No.l made payments up to February 2O2O and thereafter despite severeil reminders from Respondents. Having left with no option, Respondent No.3 invoked arbitration clause which is very much subsir;ting in Agreement dated 25.06.2019 which was executed for additional loan facility between Petitioner No- 1 and Respondent No.3. Accordingly, Respondent No.3, after invoking arbitration clause, filed I.A. before the sole Arbitrator seeking interirn protection under Section 17 of the Arbitration and conciliation (Amendment) Act,2015. Vide order dated ----18.09.2021, the sble Arbitrator had permitted Respondent No.3 to tak:e possession of the subject vehicle. Thereafter, petitioner No.l did not clear the outstanding dues despite several reminders from Respondent No.3, as such they were No.3 was : ; i I t 7 constrained to move another Interlocutory Application before the Arbitrator who uide order dated 26.02.2022 permitted Respondent No.3 to sell the vehicle to realise the loan amount. Accordingly,: Respondent No.3 initiated- proceedings :before Respondent No.2 for tiansfer of FRC from Petitioner No.l on

22.08.2022, and Respondent No.3 also initiated proceedings before Respondent No.2. for selling the subject vehicle to third party for realisation of loan amount and accordingly, sold. the subject vehicle to Respondent No.S. Therefore, Respondent No.3 has not violated any law and pursuant to the orders obtained from the learned Sole Arbitrator only, they had initiated proceedings before Respondent No.2 for transfer as well as selling the subject vehicle to third parties for realisation of loan amounts actvanced to petltloner

4. Petitioners filed reply almost on similar in the -writ aflidavit.

5. Heard Sri Acharya Bharath Krishna, learned counsel for petitioner as well as learned Government Pleader for Transport on behalf of Respondents I and :2 and Sri P. Ramachandra, learned counsel for Respondents 3 and 4. 6 It is an admitted fact that dispute was between Petitioner No.l and Respondent No.3 with respect to non- I 8 paym,snt of loan amounts 'ad.vanced by Respondent No.3 pursuant to the Agreement dated 25.06.2019. Admittedly, agreernent contained the clause with respect to arbitration. As such, Respondent No.3 had initiated arbitral proceedings and accor<lingly, obtained order under Section 17 as an interim measure on 18.09.2O2L and thereafter, another interim order dated 26.02.2022. No doubt, Petitioner No.l filed CMA No. 196 of 2022 and obtained an ord.er wherein the order dated

26.02 2022 of the learned sole drbitrator was suspended. While that treing So, petitioners have chosen to hle the present Writ Petition challenging the action of Respondents 2 and 3.

7. It is apposite to refer Section 5 of the Arbitration and Conciliation Act, 1996 which read.s as under: -----( - --- ---5."-Extent of judicial intervention: - -Notwithstanding --- ---anything-contained -in -any-other law for the time -beingin-force,-in mattr:rs governed by this Part, no judicial authority shall intervene except where so provided in this Part." Section 5 of the Act minimises judicial interference 8. in art,itral proceedings, confining interventions -strictly to the - - --EFcffi e:- Thi;' grappled with circumstances whe,re exercising writ powers were deemed necessary to preserve justice. However, the Honble scope oI judicial interference t 9 affirming two fundamental principles. I) writ jurisdiction of high courts remain intact despite section 5 of the Arbitration Act; (ii) exercise must be limited to rare and exceptional cases such as those involving manifest lack of juristtiction, bad taith or violation of principles of natural justice.

9. It is to be noted that the Arbitration Act establishes a --*obust -legal framework designed to facilitate dispute resolution through arbitration. This legislation was drafted to minimise judicial intervention and promote party autonomy, thereby aligning Indian practice with international norms and expectations. In spite of section 5 of the Act, the courts are expressly prohibited from interfering in matters governed by the Arbitration Act, except as explicit situation within its 10 ln Deep Industries o. ON@t, the Hon,ble Supreme Court has 1n explicit terms, held that'writ should be exercised sparingly, primarity -when petitioner has no alternative remedies or when one party demonstrates clear bad faith. It is also to be noted that-section 5 of tlre Act stipulates : -that there shall be .no judicial interference in arbitration' proceedings -exdept where so provided. in lhisJart Jlndoubtedly, .-, t 1zozoy 15 scc 706 ,i. i l0 this p::ovision includes ion-obstante clause hotwithstanding anything contained in law'. This clause brings out the legislative intent to grant the Act overriding authority, reStricl.ing Court interference tO only those instAnces where the Act exolicitly provides for it. The clear'language of Section 5 reinfor,:es the self-corjLtained langUage of the Arbitration Act and explicit:ly prohibits any external judicial intervention unless specifir:ally provided for in the Arbitration Act.

11. Reference is also made to the judgments of the Honbl: Supreri're Court, in the following cases: 7) I\tnjrrb State Pouer Corporatlon Limited a. EMTA Coat Ltd.-z 2) Odisha Stolte Road Ttanqtor-t, Corporation u. ARSS Bus Tertninal ['ut. Ltd.3 3) I;BP & Co. a. Patet Etqg. Ltd..e L2 From legal precedents, it iS clear that Section 5 of the Act does not allow judicial intervention.

13. In the case on hand, admittedly, Respondent No.3 had iilready initiated arbitral proceedings by invoking arbitra tion -clause pursuant -to the agreement dated € 5il620 I 9 .-'-'' Petitioirers werrf a-[S<i party-:ta the same befoie-th. Sd. *b-i.&etoi and ttrey had suffered orders passed by the arbitrator mbre . (2020) 17 scc 93 3 z0zt Scc online ozu 898 4 lzoos;8 scc 618 t. b.r 4-- ..':..-. 'a-.' -' t1 particularly the order dhted 26.02.2022. Therefore petitioners chose to challenge the said order before this Court in CMA No. 196 of 2022 and by order dated 28.04.2022 obtained interim suspensioh of the order dated 26.02.2022. This, clearly demonstrates, petitioners have subjected themselves to the arbitration proceedings and thereupon, filed CMA No. L96 of 2}22--before .this Court and - obtained interim -ord.er-dated- -

28.04.2022. Petitioners are not remediless. If they feel that FRC is transferred to Respondent No.3'in contravention of the orders passed in CMA, they c€Ln as well move an Application complaining violation of the or.der of this Court. Though \ \ petitioners are having remedy of approaching this Court with respect to violations .that took place, they have not chosen to- -to'" while Arbitration proceedings are .subsisting. The law with regpgct t9.- .e-ntertainijrg_yrit petitionS against arbitration proceedings is very much clear from the above enunciation of law. Admittedly, Respondent No.3 as well as petitioners entered into aibitration proceedings- and whili" '' those proceedings is subsisting, entertaining the Writ Petition is not permissiblb-more-so,.when-thereisnopleaof1ackofjurisdiction--- or bad faith. Petitioneis"thdmselves have challenged the order i -'!. I I I I I i 1 ! i i I I ; I , i .i 1, .{', .. . l;;..:*...-..-. 'i :',: ' dated 26.02.2022 and obtained interim suspension of the said order, ,a's such, this Court feels that petitioners are having efficacious remedy of approaching this Court and complain about: violation committed by Respondent No.3. Without resorting to such procedure, paralelly filing Writ Petition : challen;3ing the action of Respondent No.3 is impermissible. L4. costs.

15. In the result, the:Writ -Pe.ti-f.ion is dismissed. No Consequently, miscellaneous Applications, if any shall stand closed. //TRUE COPY// One CC to SRI ACHARYA BHARATH KRTSH NA, Two CC:; to GP FOR TRANSPORT , High Court for Two CD Copies To, 1 2 3 MMT GJP W BHAVANI SWAMY ANT RE ON OFFICER loPUCl of Telangana _*i..:i:-j: ., ) HIGH COURT DATED:1011012025 I I -.----:-':-c.r ..:-\ i4* i5 o[ ttB ?tllt * c) .>... -1. i. ORDER WP.No.37518 of 2022 DISMISSING THE WRIT PETITION AS WITHDRAWN WITHOUT COSTS p j\