Delhi High Court
Sona Corporation India Pvt. Ltd. vs Ingram Micro India Pvt. Ltd. & Anr. on 20 January, 2020
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 09.12.2019
Date of decision: 20 .01.2020
+ ARB.A COMM 4/2019
SONA CORPORATION INDIA PVT. LTD ...... Appellant
Through Mr. A.K. Singla, Sr. Advocate
with Mr. Rahul Shukla,
Advocate.
versus
INGRAM MICRO INDIA PVT. LTD.
& ANR. .... Respondents
Through Mr. Sudhir Kumar, Mr. Pulkit
Srivastava and Ms. Ashna
Abool, Advocates.
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JYOTI SINGH, J.
ARB.A COMM 4/2019
1. The present appeal has been filed under Section 37(2) of the
Arbitration and Conciliation Act, 1996 (Act) against the order dated
26.02.2019 passed by the Arbitrator on an application filed by the
respondents herein under Section 17 of the Act, thereby recalling its
earlier order dated 11.12.2018.
2. Shorn of unnecessary details, the brief facts are that disputes
arose between the parties on a unilateral termination of two
registered Lease Deeds, both dated 18.06.2013, executed between
the appellant as a lessor and the respondents as lessees. The disputes
were also with respect to violation of certain terms and conditions of
the Lease Deeds, including vacating the premises in a damaged
condition.
3. The disputes were referred to the Arbitral Tribunal appointed
by this Court vide order dated 06.09.2018. The appellant has
submitted its statement of claim and claimed Rs.23,21,58,854/-
against the respondents making them jointly and severely liable. The
respondents filed a counter claim to the tune of Rs.2,70,00,000/-.
4. In the course of proceedings, the respondents preferred an
application under Section 17 of the Act dated 06.11.2018, praying
for directions against the appellant to refund a sum of
Rs.2,70,00,000/- being a sum equivalent to security deposit made
under terms of the Lease Deeds.
5. The application was disposed of by the Tribunal vide order
dated 11.12.2018 by taking on record the statement of the appellant.
The operative part of the order reads as under :-
"..........In order to secure the refund of Interest
Free Refundable Security Deposit in terms of the
clauses of the Lease Deed the learned counsel for
the Claimant has given a statement to the effect
that the Claimant Company shall not transfer by
way of sale or in any other manner except leasing
out the Property No. G-9 Block B-1, Mohan
Cooperative Industrial Estate, Mathura Road, New
Delhi-11 0044 or put the property under any
encumbrance without the orders of this Tribunal
till the decision of these Arbitration proceedings.
The Claimant shall comply with the requirements
of the Companies Act, 2013 in this regard. The
Claimant shall be bound by the undertaking. The
application U/S 17 of A&C Act, 1996 is disposed
off accordingly."
6. It is the case of the appellant that the immovable property
mentioned above is owned by the appellant company and is also
subject matter of the registered lease deeds executed between the
parties. The property was occupied by the respondents as lessees at a
rent of Rs.27 Lakhs per month, excluding taxes. The respondents
vacated the property on 02.11.2018.
7. After the said order was passed by the Tribunal, on 14.01.2019
the respondents filed a second application under Section 17 of the
Act praying for a fresh order on the ground that the property given as
security as recorded in the order dated 11.12.2018 was found to
have been mortgaged by the appellant for a total loan of
Rs.73,79,50,000/-. It is the case of the appellant that in its reply to
the application, the appellant clarified that no such loan was availed
and the property has a market value of Rs.44.79 Crores. The
property carried an encumbrance of value of Rs.13,22,00,529/-, as
per bank certificate dated 21.01.2019. It is averred in the appeal that
it was further stated in the reply that prime security for said loan
account with nomenclature as "V-Rent Account" was actually the
rent payable by the respondents and EMDTD of the property, valued
at Rs.44.79 Crores was the alternate primary security. It was also
clarified that the loans availed by the Directors were availed in their
personal capacity and secured by their other properties. The
appellant also claims to have produced a letter dated 25.10.2013 to
show that the respondents were well aware on 11.12.2018 about the
loan taken by the appellant and the statement of the appellant on
11.12.2018 was recorded in the presence of the respondents'
representative and its counsel.
8. As the chronology goes, the Arbitral Tribunal vide order dated
26.02.2019 recalled its earlier order dated 11.12.2018 and has
directed the appellant to either furnish Bank Guarantee of Rs.2.70
Crores valid for 12 months or deposit the said amount in a Fixed
Deposit with an endorsement on the FDR that it would be payable
only as per directions of the Tribunal.
9. Aggrieved with the said order, the appellant has filed the
present appeal.
10. The genesis of the impugned order are two applications both
dated 14.01.2019, filed by the respondents herein. The first
application was an application under Section 17 of the Act for
securing the sum equivalent to an amount of Rs.2.70 Crores towards
Interest Free Refundable Security Deposit (IFRSD) and the second
application was under Section 27(5) of the Act for initiating
contempt proceedings against the appellant and its Directors for
violating the order and undertaking, both dated 11.12.2018.
11. The grievance of the respondents in the said applications was
that on a perusal of the balance sheets, the Company Master Data,
Directors' report, as well as other documents filed by the appellant
company on the website of Ministry of Corporate Affairs, the
respondents discovered that the property with respect to which the
undertaking had been given on 11.12.2018 was already mortgaged
for total loan of Rs.73,79,50,000/- with Vijaya Bank and the said
Bank had first and exclusive charge on the property. Further, the
appellant was required to seek permission from the Bank before
creating any further charge / lien over the said property. It was
contended that the records also suggested that equitable mortgage
had also been created on the said property for loans taken by the
Promoters and Shareholders of the Company, aggregating to Rs.25
Crores. The property as per the valuation carried out by Vijaya Bank
as on 17.11.2017 was assessed at Rs. 39,37,00,000/-. It was further
alleged in the application that at the time of giving the undertaking
before the Tribunal on 11.12.2018, the appellant had deliberately
concealed the said mortgage and had played a fraud on the
respondent and the Tribunal. It was thus prayed that the appellant be
directed to give an effective and alternate security for the amount due
to the respondents and be punished for contempt.
12. The Tribunal heard both the applications. It came to a finding
that from the documents it was clear that the appellant had taken a
loan from Vijaya Bank for which the primary security was the rent
receivable from the said property and the property was a collateral
security. Since the rent payable by the respondents was the primary
security, the appellant had executed General Power of Attorney in
favour of the Bank, authorizing it to receive rent from the
respondents, and letters had been issued to the respondents, to
remit the rent to Vijaya Bank, directly. Thus, the respondents were
well aware of the loan taken against the said property. The Tribunal
also came to a finding that having been aware of the said loan, the
respondent had chosen not to object to the property being offered as
security when the undertaking was given on 11.12.2018 and on that
basis the order was passed by the Tribunal. Based on this finding the
Tribunal concluded that no case for reference of contempt to the
High Court was made out.
13. However, having arrived at the said finding, the Tribunal took
serious note of the fact that the appellant was obliged to inform the
Tribunal about the various loans taken by it and its Directors and any
lien on the property being offered as security before the order was
passed. The Tribunal in its wisdom felt that the property with its
encumbrances was not a security which inspired confidence and
therefore, directed the appellant herein to furnish a Bank Guarantee
or deposit Rs.2.70 Crores in a Fixed Deposit, with an endorsement as
aforementioned.
14. Learned senior counsel for the appellant submits that the
respondents had applied for recall of the earlier order dated
11.12.2018 by raising three grounds which are as under: -
"(i) On perusal of Company Master Data as well
as other documents on the website of Ministry of
Corporate Affairs states that property offered as
security is already mortgaged with various Banks
much before 11.12.2018, amounts to concealment.
(ii) The property is found to be mortgaged for a
total loan of Rs.73,79,50,000/- with Vijaya Bank
with charge created way-back on 11.12.2018.
(iii) The value of the property as on 17.11.2017 is
found to be Rs.39.37 Cr."
15. The appellant had opposed the applications on the following
grounds :-
"(i) 2nd Application for same relief is not
maintainable. Factum of mortgage of property
with the Bank was well in the knowledge of
respondents besides incorporated by way of
covenants in the lease deeds itself.
(ii) The plea of property mortgaged for loan
aggregating over Rs.73,79,50,000/- is against
record as certified by Bank. Reliance is placed on
correspondences with the Bank.
(iii) The value of property as on making of
statement is Rs.44.79 Cr. with loan outstanding
being Rs.13,22,00529/-. The other loan of
claimant company is against security of the vehicle
as stated in Bank‟s letter dated 21.01.2019."
16. It is argued that vide the impugned order, the Tribunal has
negated all the three grounds raised by the respondents. The Tribunal
concluded that none of the grounds made out in the application were
correct and there was no concealment by the appellant. Respondents
were not only well aware of the encumbrance on the property, but
also took no objection at the time when the undertaking was given.
In these circumstances, there was no ground for the Tribunal to recall
the order.
17. The next contention of the learned senior counsel is that even
otherwise the Tribunal has no power to recall its order as it amounts
to exercise of power of review on the merits of a case which is
impermissible and Review can only be for correcting errors apparent
on the face of the record. Reliance is placed on the judgment of the
Supreme Court in Srei Infrastructure Finance Limited v. Tuff
Drilling Private Limited reported as (2018) 11 SCC 470.
18. It is next contended by the appellant that when the first
application was filed by the respondents under Section 17 of the Act,
the Tribunal had directed that the appellant will not transfer by way
of sale or in any other manner the property in question and a detailed
order was passed on 11.12.2018 recording the undertaking of the
appellant. Learned senior counsel vehemently contends that the
Tribunal has adopted different yardsticks and different standards to
decide the application under Section 17 filed by the appellant and
that filed by the respondents. It is pointed out that vide an order
dated 26.02.2019, the same date as of the impugned order, the
Tribunal had decided the application filed by the appellant under
Section 17 of the Act. The stand of the appellant therein was that it
has a claim of about Rs.23 Crores against the respondents which is
covered by the clauses of the Lease Deeds. The respondents did not
have any registered office within the territorial jurisdiction of Delhi
and the balance sheet submitted to the ROC also indicated that there
was no property/asset in Delhi. Since the execution proceedings
would have to be filed in Delhi, interim order be passed directing the
respondents to secure the amounts.
19. The respondents in reply had taken a stand that the
respondents 1 and 2 are Group Companies and their balance sheet
reflects healthy state of affairs. In the financial year 2017-18,
respondent no.1 had generated a revenue of Rs.328 Crores and paid a
tax of Rs.117.6 Crores. The Tribunal while deciding the said
application had solely relied on the balance sheet of respondent no.1
and the fact that respondents were Group Company and confirming
party, respectively for each other under the lease deeds. On a mere
statement of the respondents that they will be able to satisfy the
awarded amount, the application was dismissed.
20. Per contra, learned counsel for the respondents submits that
during the course of arguments on the application under Section 17
of the Act before the Tribunal, the appellant had voluntarily given an
undertaking that it would not transfer or in any other manner create
third party rights in the property in question except for leasing out
the same. After the said undertaking was given, the respondents
came across documents relating to the appellant on the website of the
Ministry of Corporate Affairs which revealed that the property in
question had been mortgaged with Vijaya Bank against a loan of
Rs.14.60 Crores and the bank had the first charge over the property.
The respondents were thus compelled to file another application
under Section 17 to secure the IFRSD amount through an alternative
security of a Bank Guarantee or deposit in an FDR. Learned counsel
submits that there is no infirmity in the impugned order which was
passed by the Arbitrator after considering all the documents filed by
the parties and hearing them at length. The Tribunal was of the view
that the appellant was obliged to inform the Tribunal about the
various loans and the encumbrances with respect to the property in
question. The Tribunal in its wisdom felt that encumbered property
may not be sufficient security and therefore, modified its earlier
order. Learned counsel points out that since the Bank has first
charge over the property, the respondents can never have any right in
the same till the first charge of the Bank exists. Even as per the
SARFAESI Act, 2002 till the charge of the Bank is satisfied, no
Court or judicial Forum can exercise jurisdiction over the subject
matter.
21. Learned counsel for the respondents vehemently argued that as
on 21.01.2019 a loan of Rs.13,22,00,529/- exists on the property.
The property is a collateral security against the home loan of
Rs.24.46 Crores, obtained in the personal name of the Directors of
the Company and which is outstanding to the tune of
Rs.19,33,10,345.40/-. It is thus contended that as against the total
value of the property which is valued at Rs.41.29 Crores as per
valuation report dated 19.09.2017, it admittedly stands mortgaged
with the Bank to the extent of Rs.32.55 Crores.
22. Learned counsel for the respondents has relied upon various
judgments such as in the case of Indian Steel and Wire Products vs.
BIFR 110 (2004) DLT 186, Cont. Pet. (C) 148/2003 titled Rama
Narang vs. Ramesh Narang & Anr., decided on 15.03.2007 by
Supreme Court, Cont. Cas (C) 531/2015 titled Central Bank of
India vs. Suman Chaddha & Ors. decided by this Court, Cont.Pet.
782/2012 titled V. Thirulokachandar vs. E. Kanan & Anr. decided
by Madras High Court on 18.07.2013 and S.Balasubramaniyam vs.
P. Janakaraju & Anr. ILR 2004 KAR. 2442 to contend that breach
of an undertaking given to a Court is a serious misconduct
amounting to contempt and should be dealt with by awarding a
severe sentence to the contemnor.
23. I have heard the counsels for the parties.
24. The main contention of the learned senior counsel for the
appellant is that the respondents were all through aware that the
property which was sought to be offered as security, before the
Tribunal was mortgaged with Vijaya Bank. In fact, the rent payable
by the respondents was the primary security and the appellant had
executed a General Power of Attorney, in favour of the Bank
authorizing it to receive rent from the respondents. The Tribunal had
negated all the grounds on which the application for recall of the
order was filed and having held that the appellant was not guilty of
contempt could not have modified the order. Argument is also raised
on different yardsticks adopted by the Tribunal while dealing with
similar applications by the parties.
25. The respondents, on the other hand, contend that the appellant
ought to have disclosed the encumbrances on the property to the
Tribunal and in any case the encumbrances are of a nature that the
property would not be an adequate security to secure the amount due
and payable to the respondents, if ultimately the award was rendered
in their favour. It is also contended that the order calls for no
interference in a jurisdiction exercised by this Court under Section
37 of the Act as the impugned order is a well-reasoned order and has
been passed by the Tribunal considering all the facts and the
documents.
26. It is no doubt true that the Tribunal has negated the grounds on
which the second application under Section 17 of the Act was filed
by the respondents. The Tribunal has rightly come to a conclusion
that the respondents were aware of the property being mortgaged
with the Vijaya Bank. In fact, the prime security for the loan was the
rent payable by the respondents and the Bank had been authorized by
the appellant to receive the rent directly from the respondents. It is
in this context that the Tribunal had held that the appellant was not
guilty of any contempt. However, the question which the Tribunal
was required to examine was primarily, how to secure the amount
payable to the respondents in case they succeed in the arbitration
proceedings. The Tribunal while noticing that the respondents were
aware of the encumbrances observed that the appellants had not
disclosed the said fact to the Tribunal. The initial order was passed
by the Tribunal on 11.12.2018 recording the undertaking of the
appellant that it would not create any encumbrance on the property.
Looking at the valuation of the property and considering the fact that
the property was unencumbered, the Tribunal accepted the
undertaking as it was of the view that the property was sufficient
security. Once, however, it came to the notice of the Tribunal that the
property was mortgaged with Vijaya Bank, who had first charge on
the property and the fact that no charge could be created further
without the permission of the bank, the Tribunal in its wisdom was
of the opinion that the property was no longer a solvent security.
Various complications that are linked to the property under the
SARFAESI Act, were also brought to the notice of the Tribunal by
the respondents. Thus, it is not enough for the appellant to contend
that only because the respondents were aware of the encumbrances,
the impugned order is erroneous. As rightly contended by the
respondents if the fact of encumbrance would have been placed
before the Tribunal in the first application, perhaps the Tribunal may
not have accepted the undertaking of the appellant.
27. Vide the impugned order, the Tribunal has only directed the
appellant to furnish a Bank Guarantee or deposit the amount of
Rs.2,70,00,000/- in a Fixed Deposit which, in the opinion of the
Tribunal, is important to secure and preserve the subject matter of
the dispute during the arbitral proceedings.
28. Insofar as the contention of the appellant that the Tribunal has
applied different yardsticks to the two similar applications between
the parties, is concerned, the contention only merits rejection. The
contention of the appellant in defence to the application under
Section 17 of the Act filed by the respondents was that the
respondents did not have any registered office within the jurisdiction
of Delhi and even the balance sheets did not show any asset in Delhi.
It was not the stand of the appellant that the respondents had no
property in any part of the country which could be a security in case
the appellant was to succeed. It was also not the case of the
appellant that the respondents had taken loans and were indebted to
any bank and thus were not in a healthy condition financially to
satisfy the award, in case the same was in favour of the appellants.
The Tribunal had on a perusal of the balance sheets found as a matter
of fact that in the financial year 2017-2018, respondent no.1 had
generated a revenue of Rs.328 Crores and had paid a tax of Rs.117.6
Crores. Contrary to this, the status of the property of the appellant
and the encumbrances on the property sought to be offered as
security did not inspire confidence in the Tribunal. It is purely in
the domain of the Arbitral Tribunal to exercise its discretion in
deciding the nature and the extent of security to preserve the subject
matter involved in the arbitral proceedings.
29. Section 17 of the Act has been held akin to the jurisdiction of
this Court under Section 9 by the High Court of Bombay in the case
of Shakti International Private Limited v. Excel Metal Processors
2017 SCC OnLine Bom 321. Court has summed up the scope of
power under Section 17 of the Act as under:
"48. Even after the enactment of the 1996 Act, as
pointed out by Mr. Jagtiani, different Courts took
different views and approaches on the scope of the
arbitral tribunals' power to grant interim reliefs or
„interim measures of protection‟ under Section 17
of the 1996 Act. For instance, in the case
of Intertoll ICS Cecons O & M Co. Pvt.
Ltd. v. National Highways Authority of
India (supra), the Delhi High Court at paragraphs
15-18 on pages 1026-1027 dealt with the scope of
powers under Sections 9 and 17 of the Act. In
brief, the Court expressed the view that the powers
of an arbitral tribunal under Section 17 of the
1996 Act are much narrower than that of a Court
under Section 9 of the Act, although there may be
some overlap. The Court in Intertoll (supra), held
that an arbitral tribunal can only protect the
subject matter of the dispute, which must be
tangible property, and therefore it cannot order
the furnishing of a security for securing a money
claim.
49. As against this, this Court in Baker Hughes
Singapore Pte. v. Shiv-Vani Oil and Gas
Exploration Services Ltd. (supra) took a broader
view (at paragraphs 40, 50-51) of the arbitral
tribunals powers under Section 17 of the 1996 Act.
This Court also distinguished the Judgment in the
case of Intertoll (supra). This Court held, in Baker
Hughes (supra), that an arbitral tribunal can, in a
given case, make an appropriate order of security.
50. A perusal of these decisions is helpful because
it brings into focus the reason why Section 17 as
amended, was enacted.
51. Under the 1940 Act, the position was, as stated
by the Hon'ble Supreme Court in MD, Army
Welfare Housing Organization (supra), that an
arbitral tribunal is not a Court of law and its
orders are not judicial orders and its functions are
not judicial functions.
52. This position changed under the 1996 Act, but
in relation to Section 17 of the 1996 Act, the same
Judgment of Army Welfare (supra), says that the
power is a limited one, and that the arbitral
tribunal has no power to enforce its own order nor
is it made judicially enforceable.
53. Even though different Courts may have taken
different views on the scope of the powers under
Section 17 of the 1996 Act, it is very clear that the
powers were narrower than Section 9 of the 1996
Act. Ex facie, Section 17 of the 1996 Act did not
provide for any power for the appointment of a
Receiver. Also, as noted by the Hon'ble Supreme
Court, there were difficulties in matters relating to
the enforcement of order passed by an arbitral
tribunal under Section 17 of the Act.
54. Whereas Section 9 of the 1996 Act expressly
provided for various interim orders that a Court
could pass, Section 17 of the 1996 used the
expression „any interim measure of protection as
the arbitral tribunal may consider necessary in
respect of the subject matter of the dispute‟.
Therefore, it was always necessary for a party
applying for interim relief before an arbitral
tribunal to show that a specific interim orders,
covered by the express provisions of Section 9, was
also covered by the limited language of Section 17
of the 1996 Act. These challenges and difficulties
perhaps led to parties applying for interim
measures to a Court under Section 9 of the 1996
Act, even after a tribunal had been constituted.
55. It is in this background that Section 17 of the
Amended Act obviously came to be enacted.
Section 17 of the Amended Act is now in para
materia or very similar in content to the provisions
of Section 9 of the Amended Act. The powers to
make different types of interim orders of protection
are now enumerated in Section 17 of the Amended
Act, as they are under Section 9 of the Amended
Act.
56. The powers, of an arbitral tribunal, to make
orders is put on par with that of a court. The
language appearing after Section 17(1)(ii)(e) of
the Amended Act makes this clear. It states "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 proceeding before it."
57. The issue of enforceability of such orders is
now expressly addressed by Section 17(2) of the
Amended Act, which provides that such orders of
the arbitral tribunal, "... shall be deemed to be an
order of the Court for all purposes and shall be
enforceable under the Code of Civil Procedure,
1908 (5 of 1908), in the same manner as if it were
an order of the Court."
58. In light of the enhanced powers and efficacy of
recourse under Section 17 of the Amended Act,
there have been corresponding changes to Section
9 of the Amended Act as well. Section 9(3) of the
Amended Act states that, "once the arbitral
tribunal has been constituted, the Court shall not
entertain an application under sub-section (1),
unless the Court finds that circumstances exist
which may not render the remedy provided under
section 17 efficacious."
30. It is also no longer res integra that the scope of judicial review
under Section 37 is limited as held by a Co-ordinate Bench of this
Court in the case of Green Infra Wind Energy Limited vs. Regen
Powertech Private Limited 2018 SCC OnLine Del 8273. Relevant
para of the judgment reads as under :-
"16. In my view, the Arbitral Tribunal has balanced the
equity between the parties and has considered the
submissions made by the parties before the Arbitral
Tribunal. This Court in exercise of its power under
Section 37 of the Act cannot interfere with the order
passed by the Arbitral Tribunal under Section 17 of the
Act unless the discretion exercised by the Tribunal is
found to be perverse or contrary to law. As an
Appellate Court, the interference is not warranted
merely because the Appellate Court in exercise of its
discretion would have exercised the same otherwise."
xxx xxx xxx
"20. In view of the above, the Arbitral Tribunal having
exercised its discretion and found a balance of equity
between the parties, this Court in exercise of its power
under Section 37(2)(b) of the Act would not interfere
with the same unless it is shown that the discretion so
exercised is perverse in any manner or contrary to the
law. In the present case, no such exception has been
made out by the appellant."
31. The Court relied upon the various judgements as under:
"17. In Wander Ltd. v. Antox India P. Ltd., 1990 Supp
SCC 727, the Supreme Court while dealing with the
power of the Appellate Court under the Code of Civil
Procedure, 1908 has held as under:
"13. On a consideration of the matter, we are
afraid, the Appellate Bench fell into error on
two important propositions. The first is a
misdirection in regard to the very scope and
nature of the appeals before it and the
limitations on the powers of the Appellate
Court to substitute its own discretion in an
appeal preferred against a discretionary
order. The second pertains to the infirmities in
the ratiocinations as to the quality of Antox's
alleged user of the trade-mark on which the
passing-off action is founded. We shall deal
with these two separately.
14. The appeals before the Division Bench
were against the exercise of discretion by the
Single Judge. In such appeals, the Appellate
Court will not interfere with the exercise of
discretion of the court of first instance and
substitute its own discretion except where the
discretion has been shown to have been
exercised arbitrarily, or capriciously or
perversely or where the court had ignored the
settled principles of law regulating grant or
refusal of interlocutory injunctions. An appeal
against exercise of discretion is said to be an
appeal on principle. Appellate Court will not
reassess the material and seek to reach a
conclusion different from the one reached by
the court below if the one reached by that
court was reasonably possible on the
material. The appellate court would normally
not be justified in interfering with the exercise
of discretion under appeal solely on the
ground that if it had considered the matter at
the trial stage it would have come to a
contrary conclusion. If the discretion has been
exercised by the Trial Court reasonably and
in a judicial manner the fact that the appellate
court would have taken a different view may
not justify interference with the trial court's
exercise of discretion. After referring to these
principles Gajendragadkar, J. in Printers
(Mysore) Private Ltd. v. Pothan Joseph: (SCR
721)
"... These principles are well established,
but as has been observed by Viscount
Simon in Charles Osention &
Co. v. Jhanaton ...the law as to the
reversal by a court of appeal of an order
made by a judge below in the exercise of
his discretion is well established, and any
difficulty that arises is due only to the
application of well settled principles in
an individual case."
The appellate judgment does not seem to defer
to this principle."
18. Recently in Ascot Hotels and Resorts Pvt.
Ltd. v. Connaught Plaza Restaurants Pvt. Ltd.,
Arb.A.(Comm) 12/2017, this Court again reiterated the
above mentioned principle.
19. This Court in Bakshi Speedways v. Hindustan
Petroleum Corporation, 2009 SCC OnLine Del 2476,
has held that the same principles will apply even in case
of an appeal under Section 37(2)(b) of the Act.
Paragraph 4 of the said judgment is quoted herein
below:
"4. The principles applicable to an appeal
under Section 37(2)(b) in my view ought to be
the same as the principles in an appeal
against an order under Order 39 Rules 1 and
2, CPC i.e., unless the discretion exercised by
the Court against whose order the appeal is
preferred is found to have been exercised
perversely and contrary to law, the appellate
Court ought not to interfere with the order
merely because the appellate court in the
exercise of its discretion would have exercised
so otherwise. I had at the beginning of the
hearing itself inquired from the senior counsel
for the appellant as to what could be said to
be perverse in the exercise of discretion by the
Arbitral Tribunal in the exercise of powers
under Section 17 of the Act and as to how the
said interim measures granted by the Arbitral
Tribunal could be said to be contrary to law;
it was further pointed out that in the opinion
of this court, on the perusal of the
memorandum of appeal, the only ground
which appeared to have some force was the
ground taken in the memorandum of appeal of
the arbitrator as on the date of making of the
order having become functus officio."
32. Having analyzed the impugned order, this court is of the
opinion that no infirmity can be found in the exercise of discretion
by the Tribunal under Section 17 of the Act.
33. There is no merit in the appeal and the same is accordingly
dismissed with no order as to costs.
I.A. No.3985/2019
Present application is hereby dismissed in view of the order
passed in the appeal.
JYOTI SINGH, J
JANUARY 20th , 2020/
