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        Companies Law

        2005 (8) TMI 400 - HC - Companies Law

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        Attachment before award is limited to property within the statutory reference, not expanded by civil court powers. The power of attachment before award under section 96 of the Multi-State Co-operative Societies Act, 2002 is confined by the Act's scheme and cannot be ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                            Attachment before award is limited to property within the statutory reference, not expanded by civil court powers.

                            The power of attachment before award under section 96 of the Multi-State Co-operative Societies Act, 2002 is confined by the Act's scheme and cannot be expanded by reference to the civil court's powers under Order XXXVIII Rule 5 or section 94 of the Code of Civil Procedure. Section 97 creates only a limited legal fiction for its stated purpose, and section 96(2) governs execution of a valid attachment rather than attachment of property outside the reference proceedings. On that construction, non-mortgaged property outside the reference could not be attached, and the attachment order was set aside.




                            Issues: Whether the Arbitrator under section 96 of the Multi-State Co-operative Societies Act, 2002 can order attachment before award of property that is not mortgage property and is outside the scope of the reference proceedings under section 84 of the Act.

                            Analysis: The power of attachment before award under section 96 is limited by the language and scheme of the Act. The provision authorises conditional attachment of the property concerned where the statutory conditions are met, but it does not confer the wide supplemental and inherent powers available to a civil court under Order XXXVIII Rule 5 and section 94 of the Code of Civil Procedure. Section 97 creates a legal fiction only for the limited purpose stated in that provision and cannot be used to enlarge the Arbitrator's powers. The attachment mechanism in section 96(2) concerns execution of an attachment already validly ordered under section 96(1); it does not authorise attachment of property beyond the reference.

                            Conclusion: The Arbitrator had no authority to attach the applicant's non-mortgaged property which was outside the reference proceedings, and the attachment order was unsustainable.

                            Final Conclusion: The challenge succeeded and the attachment order was set aside, with costs.

                            Ratio Decidendi: The Arbitrator's power of attachment before award under section 96 of the Multi-State Co-operative Societies Act, 2002 is confined to the property within the statutory reference and cannot be expanded by analogy with the civil court's powers under the Code of Civil Procedure.


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