Section 17 interim relief remains protected absent perversity, and tribunal jurisdiction continues despite contractual time limits.

Interference in an appeal under Section 37 against an interim order under Section 17 of the Arbitration and Conciliation Act is limited to cases where the tribunal's discretion is perverse or contrary to law. Prior ex parte orders in related proceedings did not finally determine the parties' rights, and a consent order permitting recourse to the tribunal did not exclude the respondent's statutory right to seek interim relief. The tribunal's direction allowing operation of the outlet was consistent with the contractual position that the respondent owned the land, structure, apparatus and equipment, while the appellant was only a licensee. The tribunal was also not functus officio merely because the contractual time limit expired, since the parties continued the arbitration by conduct and the objection was not raised in time.

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Issues: (i) Whether the interim order under Section 17 of the Arbitration and Conciliation Act, 1996 could be interfered with in appeal on the ground that the respondent was not entitled to seek interim relief and the prior ex parte orders in related proceedings controlled the result; (ii) Whether the arbitral tribunal had become functus officio on account of expiry of the contractual time limit for making the order.

Issue (i): Whether the interim order under Section 17 of the Arbitration and Conciliation Act, 1996 could be interfered with in appeal on the ground that the respondent was not entitled to seek interim relief and the prior ex parte orders in related proceedings controlled the result?

Analysis: The scope of interference in an appeal against an order under Section 17 was treated as analogous to appellate interference with discretionary interim orders, so interference was warranted only if the discretion was exercised perversely or contrary to law. The earlier ex parte interim orders did not finally determine the parties' rights and had been passed with directions that the arbitrator decide the Section 17 application independently. The consent order permitting the appellant to approach the arbitral tribunal could not be read as barring the respondent from invoking Section 17, since no agreement excluded that statutory right. The tribunal's direction allowing the respondent to operate the outlet was consistent with the contractual position that the land, structure, apparatus and equipment belonged to the respondent and the appellant was only a licensee. The agreement was also not specifically enforceable and the claim, if successful, lay in compensation rather than continued operation. The tribunal's reference to public interest was also justified in light of the allegations of tampering and short delivery.

Conclusion: The interim order was valid and did not call for interference.

Issue (ii): Whether the arbitral tribunal had become functus officio on account of expiry of the contractual time limit for making the order?

Analysis: Although the agreement prescribed a period for making the award, the parties proceeded before the arbitral tribunal on the footing that the arbitration continued, and the appellant never raised the plea before the tribunal or invoked Section 14. The statutory scheme allowed the parties' mandate to be regulated by agreement and, if necessary, replacement of the arbitrator. The conduct of the appellant in seeking and retaining the benefit of the Section 17 proceedings was inconsistent with a later plea that the tribunal had ceased to exist for want of time. On the facts, the parties were treated as having extended the arbitration arrangement by conduct and the expiry clause did not invalidate the interim order.

Conclusion: The tribunal was not functus officio and the objection failed.

Final Conclusion: The appeal was found to have no merit because the impugned interim order was within jurisdiction and the tribunal remained competent to act under the arbitration agreement and the Act.

Ratio Decidendi: In an appeal under Section 37 against an interim order under Section 17, interference is justified only where the discretion is perverse or contrary to law, and a party that participates in the arbitration on the footing that it continues cannot later defeat the order by asserting that the tribunal had become functus officio without first raising that objection in accordance with the Act.

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