Calcutta High Court
Alok Saraf And Ors vs Shyam Sundar Nangalia And Ors on 24 September, 2025
Author: Sabyasachi Bhattacharyya
Bench: Sabyasachi Bhattacharyya
OD-12
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
APOT/269/2025
IN AP.COM/726/2025
IA NO: GA-COM/1/2025
ALOK SARAF AND ORS
VS
SHYAM SUNDAR NANGALIA AND ORS
BEFORE:
The Hon'ble JUSTICE SABYASACHI BHATTACHARYYA
And
The Hon'ble JUSTICE UDAY KUMAR
Date:24thSeptember, 2025.
APPEARANCE:
Mr. JishnuSaha, Sr. Adv.
Mr. JishanSaha, Adv.
Ms. Rishika Goyal, Adv.
..for the appellants.
Mr. Rudraman Bhattacharyya, Sr. Adv.
Mr. Saptarshi Banerjee, Adv.
Ms. Amrita PanjaMoulick, Adv.
Mr. Akash Munshi, Adv.
Mr. Siddhartha Banerjee, Adv.
..for the respondents.
The Court:-Certified copy of the impugned order is filed today in Court
and be taken on record.
At the outset, an objection as to maintainability of the appeal is taken by
the respondents on the ground that no intra-court appeal lies against ad
interim interlocutory orders within the contemplation of Order 43 of the Code
of Civil Procedure. It is submitted that by the impugned order, an ad interim
prayer of injunction has been refused by the learned Single Judge and as such,
by operation of the proposition laid down in ShyamSel And Power Limited And
Another Vs. Shyam Steel Industries Limited, reported at 2023 1 SCC 634, no
appeal is maintainable.
Learned senior counsel appearing for the respondents also relies on the
proviso to Section 13(1-A) of the Commercial Courts Act, 2015 in support of his
contention that the appeal is in the nature of one under Order 43 of the Code.
Learned senior counsel appearing for the appellant controverts such
submissions and argues that the proviso to sub-section (1-A) of Section 13
contemplates appeals both under Order 43 of the Code of Civil Procedure as
well as Section 37 of the Arbitration and Conciliation Act, 1996.
The present dispute arises out of a final order passed in a mediation
proceeding, which was disposed of in terms of a settlement arrived at between
the parties.
One of the clauses of the settlement incorporates an arbitration clause,
thereby lending a character of arbitrability to the matter. Thus, it is submitted
that the provisions of Section 9 of the 1996 Act are applicable.
As such, it is contended that an appeal lies under Section 37 of the 1996
Act.
Although, apparently, the learned Single Judge refused the prayer of the
appellant on the ground that previously the appellant had taken the stand that
the award passed in mediation was a final award and execution lies, the said
issue is a subject matter of the challenge in the appeal itself and as such, we
are not examining the same at length. However, we find from the provisions of
Section 13(1-A) proviso that a challenge under Section 37 of the 1996 Act is
also maintainable under the said provision against an interlocutory order
within the contemplation of Section 9 of the 1996 Act. Since the ad interim
order was passed by the learned Single Judge is appellable under Section 9 of
the 1996 Act or not, an appeal is maintainable against such an order.
The proposition laid down in ShyamSel (Supra) is not applicable per se,
since the said judgment was rendered in the context of Order 43 Rule 1 of the
Code of Civil Procedure and not Section 37 of the 1996 Act. Hence, we turn
down the objection as to the maintainability of the appeal and take up the
appeal for admission hearing.
The dispute involved in the appeal is in connection with a purported
memorandum of settlementdated September 10, 2024, arrived at between the
parties in a mediation proceeding.
Whereas the appellants contend that the same was in the nature of a
final award by way of a settlement in mediation proceeding, the respondents
dispute such contention and submit that the said agreement was merely a
preliminary step in attempts of the parties to arrive at a settlement but not a
conclusive award.
The appellants have admittedly sought to enforce the said settlement
agreement by deeming the same to be a final award passed in the mediation.
However, a learned Single Judge of this Court, while dismissing the said
enforcement application under Section 36 of the 1996 Act, bearing EC-
COM/9/2025, by a judgment dated May 20, 2025 observed, inter alia, that the
settlement did not tantamount to a final settlement within the contemplation of
the Arbitration and Conciliation Act, 1996, read with order 21 of the Code of
Civil Procedure.
The appellants, in the meantime, preferred a challenge against the said
order dated May 20, 2025 before a Division Bench, which challenge was
dismissed by the Division Bench, upon which a Special Leave Petition has been
preferred by the appellants before the Supreme Court, which is now pending.
Learned senior counsel appearing for the appellants argues that even if
the agreement is not construed as a final award, the provisions of Section 9 of
the 1996 Act are applicable and operate till the award is finally enforced.
Even otherwise, Section 36 of the 1996 Act would entitle the appellants
to execute the award.
By the impugned order, an application filed by the appellants for
injunction in terms of the Clause 20 of the agreement was turned down on the
ground that the appellants themselves having treated the agreement to be a
final award, cannot now resile from such position and treat the same to be an
arbitration agreement, leaving it open for the appellants to take recourse to
arbitration and seek a relief under Section 9 of the 1996 Act.
Upon a careful consideration of the argument of the parties, we find that
the respondents are prima facie justified in arguing that the appellants cannot
take the benefit of the best of both worlds, simultaneously treating the
agreement between the parties to be an enforceable final award passed in
mediation and on the other hand, treating the same to be merely an agreement
between the parties containing an arbitration clause, which would comprise
the genesis of a dispute in arbitration.
However, even if we accept such submission of the respondent, the
Court, when approached for protection in aid of reliefs sought on the basis of
aparticular clause of an agreement which contains an arbitration clause,
cannot shut its eyes due to the mandate of Section 9 of the 1996 Act.
The scope of Section 9 is wide enough to encompass disputes between
the parties where there is an arbitration agreement between them, "at any time
after the making of the arbitral award but before it is enforced in accordance
with Section 36".
In the present case, if we deem the agreement between the parties to be a
final mediation award, having the effect of a decree, still then, the award has
not yet been "enforced", thus leaving it open for the parties to take recourse to
Section 9 of the 1996 Act.
The initiation of an enforcement proceeding under Section 36 of the 1996
Act cannot be equated to an arbitral award having actually been enforced. The
term "enforced" used in Section 9 (1) contemplates, undoubtedly, a situation
where the award has already been enforced, thereby giving a terminus to the
arbitral proceeding, and not a situation where the award is yet to be enforced
and only an initiative has been taken for such enforcement.
Even otherwise, if we proceed on the premise that the agreement between
the parties is not a final settlement and/or a final award passed in mediation,
the respondents themselves have referred the dispute to arbitration by issuing
a request under Section 21 of the 1996 Act, apparently pursuant to an
observation made by the Division Bench in the challenge against the order
dated May 20, 2025. Even if the appellants have refused to accede to such
request, fact remains that the existence of the arbitration clause and/or the
agreement containing the same is not disputed by either of the parties. The
dispute is as to whether the said agreement tantamount to a final settlement in
mediation and has the effect of an award.
Thus, even if the agreement is not deemed to be a final settlement
between the parties in mediation, the existence of the agreement, including the
arbitration clause contained therein, justify protection being given by the Court
under Section 9 of the 1996 Act.
As such, either way, whether the agreement between the parties is
ultimately found to be a final award in mediation or not, the existence of the
arbitral clause remains and the disputes under the said agreement are
referable to arbitration.
Thus, a sufficiently strong prima facie and arguable case has been
made out to give rise to triable issue between the parties. As such, we are of
the prima facie opinion that learned Single Judge erred in law in refusing to
consider the grant of ad interim protection to the parties.
In view of the fact that the existence of the agreement comprised in the
purported settlement between the parties has not been disputed by and
between any of the parties and in view of the said agreement containing an
arbitration clause in Clause 50 thereof, we are of the opinion that till the issue
is resolved as to whether the agreement tantamounts to a final settlement or
not, the dispute between the parties under such agreement remains alive,
entitling the appellant to protective order as prayed for on the strength of
Clause 20 of the said agreement between the parties.
Even otherwise, the balance of convenience and inconvenience is in
favour of grant of injunction, since the appellants are running a commercial
enterprise on the strength of Clause 20.
Accordingly, we grant injunction restraining the respondents and/or
their men and agents from interfering with the business carried on by the
appellants with TOTAL and SUPERSPIRIT, either by seeking to terminate the
contract entered intowiththem, including by refusing to renew such contracts,
or by requiring them to stop using the tanks referred to in the said agreement
between the parties, or by seeking to recover the said tanks from them or by
bringing their access to or use of the tanks and related infrastructure for the
purpose of storing and handling petroleum products or in any other
mannerwhatsoever till November 30, 2025 or until further orders, whichever is
earlier.
The above injunction shall operate subject to the payment contemplated
under the agreement in question being made by the appellants. In the event of
default of such payment, the interim order shall stand automatically vacated
without reference to the Court.
The respondents shall file their affidavit in opposition to GA-
COM/1/2025 within November 7, 2025; affidavit in reply, if any, shall be filed
within November 14, 2025.
The application shall be listed next on November 19, 2025.
At this juncture, learned senior counsel appearing for the erstwhile
Mediator submits that the said Mediator is holding a sum of money deposited
with him during the mediation and also certain documents of importance.
Learned senior counsel submits that the said amount and the
documents may be directed to be handed over to any Special Officer appointed
by this Court in order to obviate any future allegations against the erstwhile
Mediator.
We do not see any particular reason as to why any aspersion should be
cast at this juncture by the Court on the erstwhile Mediator, who is a legal
professional, on any count.
Accordingly, we appoint the erstwhile Mediator Mr. Rajiv Ginodia as
Special Officer for the purpose of holding the amounts and documents
deposited with him in the capacity of erstwhile Mediator until further orders by
the Court.
(SABYASACHI BHATTACHARYYA, J.)
(UDAY KUMAR, J)
Arsad
