Section 9 interim protection for charged assets upheld; receiver appointed to preserve secured property pending arbitration.

Section 9 of the Arbitration and Conciliation Act permits protective interim relief to preserve secured assets and secure disputed interests before an arbitral claim is filed. The Calcutta HC held that an application seeking to restrain dealing with charged and hypothecated flats, car parking spaces and the undivided share of land was not an enforcement action in rem merely because the assets were subject to security. As no statement of claim had yet been filed, it was speculative to treat the request as a mortgage enforcement proceeding. Interim injunction was granted and a receiver appointed to take symbolic possession of the specified properties.

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Issues: Whether interim protection under section 9 of the Arbitration and Conciliation Act, 1996 could be granted to restrain dealing with charged and hypothecated assets and appoint a receiver, despite the objection that the relief would amount to enforcement of a mortgage and that no final arbitral claim had yet been filed.

Analysis: The prayer was for preservation of the identified flats, car parking spaces and the undivided share of land, not for enforcement of any mortgage. The objection based on non-arbitrability and the nature of a mortgage action was held to be misplaced because no statement of claim had yet been filed and it was speculative to assume that the arbitration would seek mortgage enforcement. The Court treated section 9 as a broad protective jurisdiction enabling preservation of the subject matter and securing of disputed amounts, including by injunction and other interim measures, where the charged and hypothecated assets were shown to be at risk. The undisputed charge, hypothecation and continuing breach justified protection of the petitioner's security interest.

Conclusion: Interim injunction was granted and a receiver was appointed to take symbolic possession of the specified properties. The objection to maintainability of interim relief was rejected.

Final Conclusion: The application succeeded and the petitioner obtained interim protection over the secured assets pending commencement and progress of arbitration.

Ratio Decidendi: Section 9 empowers the Court to preserve secured assets and grant interim protective relief where no arbitral claim for mortgage enforcement has yet been made, and the relief sought is not itself an enforcement action in rem.

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