Full Text
HIGH COURT OF DELHI
JUDGMENT
M/S SPLENDOR BUILDWELL PVT LTD & ANR. ..... Petitioners
For the Petitioners : Mr. Sudhir Nandrajog, Sr. Adv. with Mr. Gaurav Puri, Mr. Sarthak Gupta and Ms. Yashika Verma, Advs.
Advocates who appeared in this case:
For the Respondents : Mr.Siddhant Asthana, Mr. Chhetarpal and
Ms. Yashita Rastogi, Advs.
1. The petitioner challenges the judgement dated 02.02.2023 passed by the learned First Appellate Court in Arb. A (COMM) No.06/2022 titled “M/s Splendor Buildwell Pvt. Ltd. & Anr. v/s Mrs. Parminder Jit Kaur” and batch matters filed under Section 37 of the Arbitration and Conciliation Act, 1996 assailing the order dated 19.04.2022 passed by the learned Arbitrator under section 17 (1)(ii)(b) TUSHAR RAO GEDELA, J. CM(M) 371/2023 & conn. matters 3 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”), whereby the learned First Appellate Court dismissed the appeal and upheld the order of the Arbitrator.
2. FACTS IN BRIEF 2.[1] A Space Buyer Agreement dated 28.07.2017 and Memorandum of Understanding dated 28.07.2017 came to be entered into between the parties whereby space no. 404 in Tower D, Spectrum I, Sector 58, Village Behrampur, District Sohna, Gurugram (Haryana) was allotted to the respondent having super area of 765 sq. Feet, at a consideration amount of Rs.22,95,000/- with GST of Rs.2,75,400/. The respondent thus paid a total amount of Rs.25,70,400/- to appellant for purchase of the aforesaid office space. In the MoU dated 28.07.2017, the appellant assured the respondent to pay assured return @ Rs.71.50/- per sq. ft per month from 04.08.2017 till the obtaining the completion certificate and thereafter to pay Rs.60/- per sq. feet per month till the said unit is leased out to a prospective lessee.: 2.[2] It is not in dispute that assured return was paid by the appellant to the respondent from 01.08.2017 till 30.04.2018 but thereafter, the assured return was stopped being paid by the appellant to the respondent. It is also not in dispute that the completion certificate was issued on 25.09.2018 and occupancy certificate was issued to the appellant on 06.09.2019. 2.[3] It is the case of the respondent that although initially Unit NO. 404 was allotted to the Respondent, but the appellant unilaterally CM(M) 371/2023 & conn. matters 4 allotted a different unit bearing no. 615, admeasuring 765 sq. feet located at Tower D of the same project and subsequently respondent came to know that the appellant had sold the unit no. 404 in Tower D without his knowledge and consent in March 2020 to some other person. It is stated that the respondent in these circumstances filed a Petition under section 9 of the Act and on 08.07.2021, the appellant through its counsel, gave an undertaking not to create any third party interest / rights in the subsequent allotment and the said undertaking was recorded vide order dated 09.07.2021 by the then Ld. District Judge (Commercial Court01), South East, Saket, New Delhi. It is stated that the respondent got issued a legal notice dated 12.11.2020 calling upon the appellant to make the payment towards assured return along with future interest and also execution of conveyance deed in favour of the respondent with respect to the said unit. It is stated that the appellant replied to the said legal notice vide reply dated 29.12.2022 whereby appellant denied to pay the claims of the respondent and rather demanded an amount of Rs.29,00,479/- from the respondent. 2.[4] It is stated by the parties, that on an application filed u/s 11 of the Act by the Respondent, this Court, vide the Order dt. 20.09.2021 appointed the Sole Arbitrator. 2.[5] The respondents apprehending that the appellant may not pay the due amount as per the MoU as the assured returns were not paid since May 2018, coupled with the fact that the appellant was facing about 25 similar litigations with respect to the same project, filed an CM(M) 371/2023 & conn. matters 5 application u/s 17 of Act before the Arbitrator with the prayer to secure the amount of Rs.30,37,755/- by way of deposit till the passing of the award. 3 CONTENTIONS OF THE PARTIES: 3.[1] Mr. Sudhir Nandrajog, learned Senior Counsel appears for the appellant and at the outset invites attention of this court to the letter dated 6/1/2021 (stated to be actually 6/1/2022) at page 243 of the paperbook to submit that the petitioner has offered the possession of the subject premises (hereinafter referred to as the “Unit”) coupled with the fact that it had also informed the respondent that a reputed company was interested in taking on lease the said Unit and gave details of the proposed terms and conditions of the proposed lease. Mr. Nandrajog, learned senior counsel submits that despite offering physical possession as well as the offer to place the Unit on rent, the respondent did not revert. 3.[2] This offer was followed by another offer of yet another prospective lessee with similar terms and conditions vide its letter dated 30/6/2022, however this letter too was not responded to by the respondent. Based on that, learned senior counsel submits that the petitioner discharged its liability as per the terms of the Space Buyer Agreement as well as the Memorandum of Understanding both dated 28/07/2017. He further submits that once the petitioner has discharged its ultimate liability under the aforesaid agreements, the question of any further liability arising therein does not arise. He further submits CM(M) 371/2023 & conn. matters 6 that the respondent having refused the said offer, both in terms of taking over physical possession of the Unit as also placing the same on rent, it is the respondent who has breached the terms in the aforesaid agreements. 3.[3] Mr. Nandrajog, learned senior counsel next submits that the application under section 17(1)(ii)(b) of the Act filed on behalf of respondent could not have been filed or adjudicated upon by the Arbitrator for the reason that the Court had, in an application under section 9 of the Act, already granted interim relief protecting the interests of the respondent to the extent that the petitioner would not create third party interests in the Unit. Learned senior counsel submits that the said order would operate as Res Judicata so far as the application under section 17(1)(ii)(b) of the Act is concerned. Learned senior counsel submits that having regard to the fact that powers under Section 9 as well as those under Section 17 being pari materia, having exhausted one remedy, the respondents would be precluded from approaching the arbitrator under section 17 of the Act. 3.[4] On the issue of res judicata, learned Senior Counsel submits that it is fairly well settled that a decision on an issue concluded prior in time in the same proceeding, would act as res judicata to the subsequent proceeding and urges that the Arbitrator, therefore could not have exercised powers under section 17 of the Act, ignoring the previous adjudication between the parties. CM(M) 371/2023 & conn. matters 7 3.[5] Learned Senior Counsel submits that the application filed by the respondent purportedly under section 17 of the Act is actually an application akin to the one under Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 (hereinafter referred to as “the CPC”) since the prayers are to secure certain amounts even before the arbitration petition is decided on merits and judgement passed thereon. Learned Senior Counsel submits that the principles regarding applicability of the provisions of Order XXXVIII Rule 5 CPC are well settled in that, only when there is a clear case that the defendant in a case, with intent to obstruct or delay the execution is about to dispose of or remove the property from the local limits of the jurisdiction of that court, that the attachment is ordered even before the judgement is delivered and a decree drawn up. 3.[6] Submitting further, learned Senior Counsel points out that the interests of the respondent has already been secured vide the order dated 9/7/2021 passed by the District Judge while passing the orders under section 9 of the Act. Learned Senior Counsel thus submits that the exercise of powers under section 17 of the Act by the arbitrator is without jurisdiction and bereft of the essential requirements of the principles laid down for invoking Order XXXVIII Rule 5 CPC. 3.[7] Mr. Nandrajog, learned Senior Counsel further invites attention of this Court to Para 15 of the application under section 17 of the Act filed by the respondent before the arbitrator to submit that the respondent themselves had referred to the order dated 09/07/2021 passed by the learned District Judge under section 9 of the Act, albeit, CM(M) 371/2023 & conn. matters 8 after twisting the facts, yet the arbitrator ignored the security already provided to the respondent and proceeded to entertain the application and passed the order, ostensibly under Order XXXVIII Rule 5 CPC which was neither available nor exercisable in the given facts. 3.[8] Learned Senior Counsel draws attention of this court to Para 18 of the said application to submit that the emphasis of the respondents to secure an order, was on the basis that the petitioner before this Court was facing 25 more litigations and that the decree, if passed in their favour, would be rendered a “paper award” and thus, respondents would not be able to enjoy the fruits of the decree. Learned Senior Counsel submits that, it is this contention that appears to have weighed over the arbitrator rather than the principles of Order XXXVIII Rule 5 CPC, which, if at all, ought to have been the basis for passing the order impugned before the learned District Judge. 3.[9] Mr. Nandrajog, learned Senior Counsel submits that the direction to present Bank Guarantees to such extent would seriously affect the cash flow and keeping in mind that many entities have not been able to overcome the financial hardship faced due to worldwide crash of the real estate market on account of Covid 19, such a direction was neither necessary nor proper in the facts of the case.
3.10 Learned Senior Counsel further submits that pendency of number of cases is hardly a sustainable ground for passing such directions nor could the same be an impediment to execute any decree. Learned Senior Counsel further submits that directing the CM(M) 371/2023 & conn. matters 9 petitioner to submit Bank Guarantee would place unnecessary constraint on it and points out that the Unit is valued far more that the Bank Guarantee which is already secured under the orders of the District Judge.
3.11 Per contra, Mr. Asthana, learned counsel for the respondents submits, at the outset, that the present petition has been filed against the concurrent findings of the two fora below and need not be interfered with, specially in the Supervisory jurisdiction under Article 227 of the Constitution of India whereunder the High Court is ordained only to consider whether there has been an illegality or material irregularity in procedure or there has been a nonconsideration of facts obtaining on record or having considered facts extraneous to the record, and if not, the Court would be loath to interfere.
3.12 Learned counsel for the respondent submits that the assessment of payment by virtue of the Monthly Assured Return, which was a specific term of the contract, is neither speculative nor unascertainable and arises from a contractual obligation. Learned counsel submits that as per the said condition, the petitioner was, in fact, making such payments till April 2018, a fact which is undeniable. Learned counsel also submits that the using Covid 19 as a reason for non-payment of the Assured Return is lame since the pandemic struck worldwide in 2020 and not in 2018 or 2019. CM(M) 371/2023 & conn. matters 10
3.13 Learned counsel submits that initially appeals against the order of the arbitrator were filed in this Court, which were withdrawn subsequently, as the same were not maintainable. On that basis, he submits that it was only to delay the payment that the petitioner filed such appeals here and not the court of competent jurisdiction.
3.14 Learned counsel took this Court through relevant paragraphs of the impugned order and emphasized that each of the said appeals were dismissed with costs of Rs. 50,000/-.
3.15 Learned counsel handed over the bench, a compilation of judgements and referred to the judgement of the Hon’ble Supreme Court in the case of Deep Industries Ltd vs. Oil and Natural Gas Corporation Ltd and Ors., reported in (2020) 15 SCC 706, particularly paragraphs 7, 8, 10, 16, 17 and 22 to submit that the Hon’ble Supreme Court has laid down that the High Court in exercise of Article 227 of the Constitution of India would be extremely circumspect in interfering with the orders arising out of the appeals under Section 37 of the Act.
3.16 Learned counsel next submits that the powers exercised by the Arbitrator were those under section 17(1)(ii)(b) of the Act and not Order XXXVIII Rule 5 of CPC and therefore the submissions on behalf of the petitioner in that regard are baseless.
3.17 Learned counsel draws attention of this Court to clause 4 of the Space Buyer Agreement whereby the Assured Return to be paid by the petitioner to each of the respondents alongwith the rate, the date of CM(M) 371/2023 & conn. matters 11 commencement and the date of closure of such obligation, has categorically been mentioned. Learned counsel also submits that it is an admitted fact that no payments on above account have been made by the petitioner till date from the month of April 2018. It is only this amount which has been secured by way of the arbitrator’s order dated 19.04.2022.
3.18 Mr. Asthana, learned counsel for the respondents submits that the alarming aspect giving rise to the apprehension in the minds of the respondents was the fact that previously, surreptitiously and without any notice, the petitioner had created third party rights in the original space allotted to each of the respondents. That too after each of the respondents had paid up the complete sale consideration in respect of the original Unit. This compelled the respondents to secure themselves by filing the application under section 17 of the Act before the Arbitrator.
3.19 Learned counsel referred to paragraphs 10 of the impugned judgement to contend that the learned First Appellate Court had observed that there was no doubt that the Arbitrator was empowered and competent to pass an interlocutory order under section 17 of the Act to furnish security.
3.20 Learned counsel next referred to the judgement of the learned Coordinate Bench of this Court in Shabnam Dhillon vs. Zee Entertainment Enterprises Ltd. and Others reported in 2019 SCC Online Del 8905 to submit that while exercising powers under section CM(M) 371/2023 & conn. matters 12 37 of the Act, the Appellate court is not required to interfere with the discretion employed by an Arbitrator.
3.21 Learned counsel next referred to the judgement of the Hon’ble Supreme Court in Essar House Pvt Ltd. Vs. Arcellor Mittal Nippon Steel India Limited reported in 2022 SCC OnLine SC 1219; MANU/SC/1165/2022, particularly to Para 39 to submit that while exercising powers under section 9 of the Act, the Court is not bound by the provisions of the CPC.
3.22 Learned counsel submits that the provisions of sections 9 and 17 of the Act are pari materia in terms of the powers and the amplitude of jurisdiction conferred thereon.
3.23 Learned. counsel next refers to the order dated 8/2/2023 of the Executing Court in Ex.(Comm) No.91/22 handed over the Bench alongwith the compilation of judgements to submit that the financial condition of the petitioner is not stable and therefore, it is all the more imperative to secure the interests of the respondents who have all paid up the entire sale consideration to the petitioner.
3.24 Learned counsel prays that the present batch of petitions be dismissed with heavy costs.
4. 4.[1] This court has heard and considered the rival submissions of the parties, the judgements relied, the documentary material on record as also the impugned judgment/order. ANALYSIS, FINDINGS & CONCLUSION: CM(M) 371/2023 & conn. matters 13 4.[2] At the outset, it would be apposite to set out the pointers as urged and germane to the issue: 4.2.[1] The parties executed Space Buyer Agreement alongwith the Memorandum of Understanding, both dated 28/07/2017. 4.2.[2] Each of the respondents has paid up the entire sale consideration in respect of the original allotted Unit. (for more clarity and details, table drawn in para 2 of the impugned judgement at page 47 of the paperbook may be noted). 4.2.[3] The original Units allotted were alienated by the petitioner. (without any comments on legality of the action which is sub judice before the Arbitrator). 4.2.[4] Fresh allotments were made by the petitioner. (without any comments on legality of the action which is sub judice before the Arbitrator). 4.2.[5] In terms of the aforesaid agreement, assured returns at the rate as contained in clause 4 of the MoU dated 28.07.2017 was being paid by the petitioner to the respondent till April 2018 and has not been paid thereafter. 4.2.[6] It is also not disputed that the Completion Certificate was issued on 25/09/2018 and Occupancy Certificate was issued to the petitioner on 06/09/2019. 4.2.[7] Disputes in respect of payment of Assured Return etc. had arisen between the parties. CM(M) 371/2023 & conn. matters 14 4.2.[8] On an application filed by the respondents under Section 11 of the Act, this Court had appointed an Arbitrator who commenced the arbitral proceedings wherefrom the present impugned order arose. 4.[3] Before proceeding to deal with the rival submissions it would be appropriate to extract hereunder the provisions of section 9 and 17 of the Act and Order XXXVIII Rule 5 of CPC:
4.10 It is this sum, in the considered opinion of this Court, that the respondents sought security of by way of the application under section 17 of the Act. The order passed by the Arbitrator considered the facts as obtaining on record and evaluated the compelling circumstances CM(M) 371/2023 & conn. matters 20 under which the application was preferred by the respondent. The Arbitrator was aware of the financial impact the other cases of similar nature may have upon the capacity of the petitioner to discharge the same, and having considered the same, passed the order, which fulfil the requirements of section 17(1)(ii)(b) of the Act. The past conduct of the petitioner, in alienating the original units of the respondents, without obtaining consent, appears to have been a persuasive reason to pass the order.
4.11 Looked at, and considered from this point of view, the order passed by the Arbitrator, in these circumstances, is absolutely proper and correct exercise of the jurisdiction conferred upon the Arbitral Tribunal under section 17(1)(ii)(b) of the Act and there is no palpable error in jurisdiction, nor consideration of any extraneous material for this Court to come to a conclusion to interfere under Article 227 of the Constitution of India.
4.12 Having reached the aforesaid conclusion, the appeal thereagainst and the impugned judgement passed by the learned. District Judge (Commercial) appear to be within the confines of the law and procedure. In fact the impugned judgement has correctly appreciated the law on the subject and concised the principles in Para 13 succinctly.
4.13 Given the aforesaid findings and conclusion regarding the applicability of the provisions of section 9 and 17 of the Act, as applied in different circumstances of the same proceedings by two CM(M) 371/2023 & conn. matters 21 different authorities and predicated on different facts, the submission of Mr. Nandrajog, learned Senior Counsel regarding the 2nd application being barred by the principles of res judicata does not seem to be appropriate and are rejected. There was no similarity in the facts nor the prayers between both applications or even the reasons based whereon the orders were passed.
4.14 This Court shall now deal with the submission regarding the non application of the principles of Order XXXVIII rule 5 CPC by the fora below.
4.15 Mr. Nandrajog, learned Senior Counsel for the petitioner vociferously argued that the principles behind attachment before judgement conceived under Order XXXVIII Rule 5 CPC are similar to the powers exercised by the Arbitrator under section 17(1)(ii)(b) of the Act and with that understanding in the background, the Arbitrator must examine and consider an application under section 17 with the same rigours. On that basis, learned Senior Counsel submits that in the present case both, the Arbitrator as well as the First Appellate Court failed to consider and examine the facts and the prayers sought by the respondent. Learned Senior Counsel submits that both the Fora below had overlooked an essential ingredient before passing orders under section 17 and 37 of the Act, in that, the imminent threat of disposing off a property or to remove the same from the local limits of the jurisdiction of a Court, in the present case, are missing. Learned Senior Counsel submits that the order dated 9/7/2021 of the District Judge (Commercial) sufficiently protected and secured the interests of CM(M) 371/2023 & conn. matters 22 the respondents. That coupled with the fact that the value of the newly allotted Units is far greater than the value of the Bank Guarantee, thus the edifice of the consideration for the principles of Order XXXVIII Rule 5 CPC are conspicuous by their absence.
4.16 Learned Senior Counsel submits that in the facts of the case, keeping in view the security cover already provided under the order dated 9/7/2021, question of further measures to secure the interests of the respondents does not arise and therefore, both on facts and in law, the Arbitrator’s order as well as the impugned order are unsustainable and ought to be set aside.
4.17 On the aforesaid argument of the learned Senior Counsel, this Court considers it apposite to consider the ratio laid down in the judgements cited at Bar on behalf of the respondents. The first of those would be the ratio laid down by the learned Coordinate Bench of this Court in Shabnam Dhillon (supra), whereby in para 41, 42 and 43 has held as under:
41. Besides this, to my mind, what is most crucial is that the Court while exercising appellate jurisdiction under Section 37 of the 1996 Act is not required to interfere with discretion employed by an arbitrator while passing orders under Section 17 of the 1996 Act as long the course adopted is, broadly, wholesome, maintains a robust balance between the interest of warring parties, and is not arbitrary or capricious. In other words, the order passed by the learned arbitrator is not one which transcends the bounds of reasonableness. An appeal impugning the exercise of discretion by an arbitrator can only be an “appeal on principle”. (See Wander Ltd. v. Antox India
42. In my opinion, the learned arbitrator has kept in mind largely the principles analogous to the provisions of Orders 38 and 39 of the CPC. Zee not only has, in my view, a prima facie case but CM(M) 371/2023 & conn. matters 23 also the balance of convenience appears to be, presently, in its favour. If an order of a kind which the learned arbitrator has passed is not sustained, it could seriously jeopardise the interest of Zee.
43. The argument advanced on behalf of SD that there is no pleading whatsoever to the effect that Zee carries an apprehension that SD would transfer, alienate or dispose of its movable and immovable assets by creating third party rights or transferring the same to third parties is not correct, as there is a broad averment to that effect in paragraph 8 of the Section 17 application filed on behalf of Zee. The fact that the pleading is not in terms of the provisions of Order 38, in my view, cannot bind down the jurisdiction of the arbitrator to grant relief if the arbitrator otherwise based on the material placed before it gets a sense that the aggrieved party may end up with a paper-award if directions are not issued to the defendant in the action for furnishing a security. Undoubtedly, in arriving at this conclusion, the arbitral tribunal is neither bound by the provisions of CPC nor those of the Indian Evidence Act, 1872 —an aspect which emerges quite clearly upon reading the provisions of Subsection (1) of Section 19 of the 1996 Act.
4.18 On the question whether this Court ought to, under Article 227 of the Constitution of India, interfere with orders passed in appeal proceedings under section 37 of the Act is concerned, learned counsel for the respondents relied upon the judgement of the Hon’ble Supreme Court in Deep Industries Limited (supra) after considering the provisions of sections 5 and 37 of the Act, in para 16 and 17 of the said judgement held as under:
16. Most significant of all is the non obstante clause contained in Section 5 which states that notwithstanding anything contained in any other law, in matters that arise under Part I of the Arbitration Act, no judicial authority shall intervene except where so provided in this Part. Section 37 grants a constricted right of first appeal against certain judgments and orders and no others. Further, the statutory mandate also provides for one bite at the cherry, and interdicts a second appeal being filed [see Section 37(2) of the Act]. CM(M) 371/2023 & conn. matters 24
17. This being the case, there is no doubt whatsoever that if petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non obstante clause of Section 5 of the Act. In these circumstances, what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us hereinabove so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction. Further, in Para 22 of its judgement, the Hon’ble Supreme Court held as under: “Even otherwise, entering into the general thicket of disputes between parties does not behove a court exercising jurisdiction under Article 227, where only jurisdictional errors can be corrected”.
4.19 Taking a lead from the judgement in the case of Shabnam Dhillon (supra), it is clear that while dealing with an application under section 17(1)(ii)(b) of the Act, the Arbitrator is not bound by the Evidence Act nor the Code of Civil Procedure and only the principles analogous to Order XXXVIII Rule 5 CPC. In other words, so long as the Arbitrator has considered the facts and applied the principles generally, the Courts ought not to interfere on the ground that the ingredients of Order XXXVIII Rule 5 CPC have not been fulfilled. Applying the aforesaid to the facts of the present case, once the Arbitrator has appreciated the facts obtaining on record and has prima facie found that it would be in the interests of justice to direct CM(M) 371/2023 & conn. matters 25 the petitioner to submit Bank Guarantee, there could hardly be any ground for the Court to interfere, muchless for this Court under Article 227 of the Constitution of India. This would also be in consonance with the provisions of section 5 of the Act.
4.20 The Hon’ble Supreme Court in Deep Industries limited (supra) has categorically held that the High Courts should be extremely circumspect in interfering with orders passed by the Appellate Court under section 37 of the Act and has termed such exercise as “second bite at the cherry”. Applying the said ratio in the present case, the petitioner cannot be permitted to raise the same dispute which has already been tested by the First Appellate Court by a detailed judgement. Hence, this Court is of the opinion that the facts obtaining in the present case do not warrant any interference with the impugned order.
4.21 Another relevant aspect that needs consideration is the submission of learned Senior Counsel that the property had already been secured under section 9 of the Act vide the order dated 9/7/2021 which was having a value greater than that directed by the Arbitrator and thus, the exercise of jurisdiction under section 17 was unwarranted. This argument is unacceptable for two reasons. Firstly, that the property secured under the order dated 9/7/2021 was the Unit already purchased by the respondents, although not the original Unit allotted but the newly allotted Unit and therefore, does not fall within the ambit of a property belonging to the petitioner to test against the principles of Order XXXVIII Rule 5 CPC and, secondly, the CM(M) 371/2023 & conn. matters 26 mischievous and surreptitious sale of the original Units purchased by the respondents by paying full sale consideration, obviously led to the clear and present apprehension that the petitioner may not adhere to the decree and frustrate implementation of the contractual obligation as contained in clause 4 of the MoU.
4.22 The order of the Hon’ble Supreme Court in SLP (C) No.8643/2022 titled ‘Rajesh Kumar Pasricha vs. Splendor Buildwell Pvt. Ltd & Anr.’ passed on 08.08.2022, was placed on record wherein the Hon’ble Supreme Court had, in an SLP against a judgement of the Single Judge of this Court in similar facts passed under section 37 of the Act, directed petitioner herein, to furnish title deeds of fresh property not less than Rs.1.[5] crores as security. Though, it was not a detailed judgement, however, direction to furnish security appears to have been in accordance with the general principles of Order XXXVIII Rule 5 of CPC.
4.23 Thus, in view of the conclusion reached by this Court on the aspect that the facts and prayers in the applications under section 9 as well as section 17 being different, firstly, no bar under the principles of res judicata or even constructive res judicata can be made applicable, secondly, the strict principles of Order XXXVIII Rule 5 CPC is not applicable to proceedings under section 17 of the Act and only the general principles may be applied.
4.24 In view of the aforesaid findings of fact and law, this Court is of the considered opinion that the challenge to the impugned order CM(M) 371/2023 & conn. matters 27 dated 02.02.2023 passed by the First Appellate Court in Arb. A (COMM) No.06/2022 is unsustainable in law and this Court has not found any infraction of law, procedural or material irregularity or even exercise of jurisdiction not vested either upon the Arbitrator or the First Appellate Court.
4.25 The petitions being devoid of any merit are thus dismissed along with pending applications, with no order as to costs.
4.26 The observations made herein are only for the purposes of the lis before this Court and shall not tantamount to any expression on the merits of the case.
TUSHAR RAO GEDELA, J MARCH 13, 2023