Pravara Renewable Energy Ltd v. Padmashri Dr. Vitthalrao Vikhe Patil

15. The petitioner has contended that the Co-gen plant was set- up by the petitioner, and was made fully functional. The commercial operations of the Co-gen plant started on 6 November 2015, being the “Commercial operation date” as defined in the PDA, from which date the period of 25 years would be reckoned for the “assets transfer date” to be arrived. This was from the crushing season 2015-2016. The petitioner started producing steam and electricity in the Co-gen plant, which was being supplied to the respondent as per the PDA.

16. The petitioner contends that during the crushing season for the year 2015-2016, the respondent supplied only 174,380 metric tons of bagasse fuel as against the minimum assured quantity of 264,270 metric tons, in terms of the PDA. The short supply was of 90340 metric tons of bagasse. The petitioner, therefore, was required to source coal as a substitute fuel, which caused heavy financial burden on the petitioner. It is the petitioner’s contention that even for the next crushing season 2016-17, the respondent again supplied only 124031 metric tons of bagasse as against 264720 metric tons of bagasse, which was again a short supply of 140,689 metric tons. Further, the respondent also did not supply bio- gas fuel to the petitioner. Thus, even for such crushing season, the petitioner had to source coal as the substitute fuel as also source water from the open market, which again added to the heavy financial burden of the petitioner.

17. The respondent on such backdrop, addressed a letter dated 10 November 2017 to the petitioner on issues arising under the PDA, inter alia stating that the petitioner had not completed modification work of the boiler despite the crushing season for 2017-2018 having begun in November 2017. The petitioner by its letter dated 22 November 2017 responded to such letter denying the respondent’s contentions. In such letter, the petitioner inter alia stated that the operations of the 30 mega watt Co-gen plant as installed by the petitioner in the premises of the respondent, was fully dependent upon respondent making available the input fuels (bagasse and bio gas) as per the quantities under the PDA, which was the respondent’s primary obligation. The petitioner recorded that the petitioner had faced immense difficulties and challenges in running the plant with full capacity principally due to non-compliance of the obligation by the respondent on supply of such input fuels and in the process, the petitioner had suffered losses as also additional costs. The petitioner also stated that to mitigate the defaults of the respondent, the petitioner had been continuously exploring possible solutions in a manner which would be beneficial to the petitioner and the respondent. The petitioner also complained that the petitioner was not informed in advance by the respondent, of the commencement of the crushing season, so as to enable the respondent to get ready, of exact date when the plant was to be operationalized for the crushing season. It was recorded that despite such lapse on the part of the respondent, the petitioner had kept the boiler operational for a reasonable period of time, including to have an inspection and re-inspection of the boiler by the Government authorities. The petitioner also stated that the power supply to the respondent from the petitioner was never discontinued and that the petitioner was continuously supplying the required power to the respondent, throughout the year. The petitioner stated that although the operations of the respondent’s sugar factory for the crushing season commenced on 10 November 2017, however, till the time, such letter was being addressed by the petitioner, the respondent had not achieved the capacity of 6000 metric ton per day. It was stated that the respondent’s distillery plant could not commence its operations as the works on the distillery plant were still in progress. The petitioner accordingly, stated that the financial stress caused to the petitioner was due to failure of the respondent to fulfill the obligations and its nonadherence to the agreed conditions under the PDA. The petitioner thus on such counts, claimed from the respondent an amount of Rs.48.12 crores, towards the financial losses suffered by it, as a consequence of the non-compliance of its obligation by the respondent under the PDA and SA.

18. The petitioner has stated that despite such conduct, the respondent by its letter dated 26 October 2018, requested the petitioner for permission to dismantle the petitioner’s existing bio-gas pipeline from the Co-gen plant boiler, for the purpose of using it for the respondent factory. Such permission was not granted by the petitioner, however, the respondent dismantled the bio-gas stainless steel pipeline and installed the same within the respondent’s factory for captive use. The petitioner contends that since then the respondent has been using the said pipeline and continues to use it till date. The petitioner has contended that the said pipeline was installed by the petitioner for receiving bio-gas in compliance of the terms of the PDA, which the respondent for its own requirement and without permission or any authorization of the petitioner, had dismantled and removed in complete breach of the PDA. According to the petitioner, such coercive action of the respondent to dismantle the stainless pipeline supplying bio-gas was fatal to the PDA apart from the fact that this was a direct breach of the PDA.

19. In the aforesaid situation, on 30 October 2018, a second agreement titled as “Second Supplementary Agreement to the Project Development Agreement (PDA) dated 12 July 2010 and the first supplementary agreement dated January 2015” (for short ‘the Second SA’) was entered between the petitioner and the respondent. In the introductory paragraph of this agreement, the parties stated that since the commercial operation date of the project, certain events like drought had taken place which were beyond the control of either parties, thereby causing prejudice to the smooth running of the plant and affecting commercial interests of both the parties. It was stated that on such backdrop, the parties were desirous to resolve such situation on a mutually convenient basis so that the plant can be optimally operated by leveraging on efficient and appropriate utilization of synergies and local resources which the respondent could provide to operate the plant, and accordingly the parties mutually agreed to record the manner of operation, management and maintenance of the plant in the terms and conditions as set out in the second SA. The parties agreed that all the terms and conditions in the second SA shall mutatis mutandis stand deemed to be incorporated in the PDA, which shall also stand inter alia amended, to the extent as stated in such agreement, with a stipulation that all other provisions of the amended PDA shall remain the same. It was also agreed between the parties that the second SA read with the PDA and the first SA shall constitute the entire understanding between the parties. In Clause 8 of this agreement, the parties agreed on a ‘Modifying Operational Arrangement’, under which it was agreed that Co-gen plant then run by the petitioner will be operated, managed and maintained by the respondent for a period of one year, from the date of the modified operational commencement date. In clause 9, the parties agreed that the tenure of the modified operational arrangement shall commence from 1 November 2018 and shall continue till 31 October

2019. It was agreed that subject to Clause 12 (extension of the modified arrangement) of the Second SA, the modified operational term shall be extended from time to time by mutual consent of the parties, which shall be recorded in writing. In clause 12.4, it was agreed between the parties, that in the event the terms of the modified operational arrangement, were not to be extended, in that event, the respondent had categorically agreed to hand over the plant after completion of annual maintenance of the plant in good working condition to the petitioner at least in 15 calendar days prior to the start of the immediately succeeding crushing season. It was agreed and acknowledged between the parties that the respondent shall not have any right to maintain and operate the plant upon expiry of the modified operational arrangement term and that the modified arrangement including of provisions thereof, shall automatically stand terminated and shall fall away. Clause 15.[2] of the agreement stipulates that respondent no.1 agreed not to change, modify, alter, add or remove or do any such similar act to the existing technical set up or the structure of the plant without prior approval of the petitioner. The clauses of the Second Supplementary Agreement are noted in the subsequent paragraphs.

20. The petitioner has contended that for the next crushing season, that is 2019-2020, despite the petitioner’s account being classified as Non-Performing Asset (NPA), and the petitioner’s lenders unwilling to release funds for operational requirements of the Co-gen plant, the promoters of the petitioner infused an additional amount of more than Rs.[4] crores towards the maintenance of the Co-gen plant. The petitioner has stated that as per Clause 6.[6] of PDA the respondent had to intimate the petitioner three months in advance, of the tentative date of commencement of crushing season for the said year and provide a finalized schedule for supply of bagasse and biogas, at least one month prior to commencement of crushing season. However, the respondent did not provide the finalized schedule of the supply of baggasse and biogas, either before the commencement of crushing season or during the crushing season, thereby breaching the terms of the PDA.

21. The petitioner has stated that the respondent supplied only 109,498 MT of bagasse fuel during the crushing season 2019-20 as against 264,720 MT of bagasse fuel as per the terms of the PDA, which resulted in shortfall of about 155,222 MT of bagasse fuel. It is also stated that due to illegal dismantling and removal of biogas pipeline by the respondent, the petitioner could not receive biogas, hence, even the minimum guaranteed quantity of biogas was not supplied to the petitioner by the respondent. Thus, according to the petitioner, there was a forced outage for a period from 7 November 2020 to 23 January 2021 and 25 April 2021 to 6 May 2021 on account of technical difficulties like turbine breakdown and issues with the voltage control tap changer. It is contended by the petitioner that despite all these technical issues, the petitioner, as requested by the respondent, continued uninterrupted supply of steam through its boiler, as also electricity was supplied to the respondent through MSEDCL, thereby fulfilling its obligations during the forced outage period as per Clause

1.11 and 8.11 of the PDA.

22. It is the petitioner's case that for the next crushing season 2020- 21, the respondent supplied only 168,376 MT of bagasse fuel as against 2,64,720 MT of bagasse fuel in breach of its commitment as per the terms of the PDA, resulting in a shortfall of nearly 96,344 MT of bagasse fuel. The petitioner contends that also due to the illegal dismantling and removal of the bio-gas pipeline by the respondent, the petitioner was not supplied the bio-gas, hence, even bio-gas was not supplied by the respondent to the petitioner as per the terms of the PDA.

23. The petitioner contends that the respondent, however, by its letter dated 29 September 2020, intimated the petitioner about the start of crushing season 2020-21 from 15 October 2020, when as per Clause 6.6. of the PDA, the respondent was required to intimate the petitioner three months in advance of the tentative date of commencement of the crushing season and provide a finalized schedule of supply of bagasse and bio-gas at least one month prior to the commencement of crushing season. Although the respondent was bound to adhere to the schedule, however, it did not provide a finalized schedule of supply of bagasse and bio-gas either before the commencement of crushing season or during the crushing season, which the petitioner would contend, was clearly in breach of the terms of the PDA.

24. It is the petitioner's case that on 24 September 2020 and 25 September 2020, there were discussions between the parties inter alia on the issue of supply of biogas by the respondent to the petitioner, wherein, it was agreed that the respondent shall restore, the biogas supply and transportation pipeline arrangement, so that the respondent can resume supply of biogas to the petitioner as per the terms of PDA. The petitioner also requested the respondent to issue a written confirmation on the re-installation of the said biogas pipeline. However, no steps were taken by the respondent in that regard.

25. The petitioner has contended that on the above backdrop, an Addendum Agreement dated 14 October 2020 came to be executed wherein the respondent has explicitly admitted that over the earlier crushing seasons from 2015-16 to 2019-20, the respondent had failed in its obligations and had short-supplied bagasse equivalent fuel of about 474,435 MT of bagasse. The respondent agreed that over and above the contracted supply of 2,64,720 MT of bagasse fuel every crushing season, it will supply additional quantum of fuel of 1,05,000 MT each of crushing seasons 2020-21, 2021-22 and 2022-23 and 60000 MT in 2023-24. There was also a condition provided in the said Addendum Agreement in clause 8, that in the event there is a failure of supply of bagasse by the respondent as per such agreed terms.

26. The petitioner has contended that even for the crushing season 2020-21, the petitioner faced severe financial losses on account of the respondent's failure to supply bagasse and biogas to the petitioner in accordance with the said agreements, the details of which are set out in a chart as set out in paragraph (19) of the petition. From the chart, the petitioner contends that for the period from 2015-16 to 2020-21, there was a gross revenue loss of Rs.179.36 crores caused to the petitioner and that the cost of fuel payable and other operating expenses stood at Rs.39.06 crores and Rs.13.35 crores respectively, and the net loss of revenue suffered by the petitioner is of Rs.126.94 crores.

27. It is the petitioner’s case that in the above situation, the petitioner by its letter dated 29 May 2021 called upon the respondent to supply the agreed/contracted quantity of bagasse fuel in accordance with the Addendum Agreement. The petitioner again by its letters dated 3 August 2021 and 6 August 2021 called upon the respondent to compensate the petitioner for the short supply of the contracted bagasse fuel. The respondent replied to the said letters of the petitioner by its letter dated 4 September 2021, wherein to the surprise of the petitioner, the respondent inter alia denied the respondent entering into the said Addendum Agreement with the petitioner. The respondent also denied the short supply of bagasse fuel to the petitioner in accordance with the said agreements. This apart the respondent also restricted the access of the petitioner’s representatives to the Co-gen plant, by threat and intimidation, as contended by the petitioner, and instead permitted the movement of the respondent’s staff and employees.

28. It is on this backdrop, the petitioner has contended that a cause of action accrued to the petitioner to file the present proceedings in a glaring urgency. In this context, the following contentions of the petitioner raised in paragraph 22 of the petition are relevant, and need to be noted:- “22. Shortly thereafter, the Respondent has restricted the access of the Petitioner's representatives to the said Co-gen plant, through threat and intimidation, and has permitted the movement of the Respondent's personnel and staff into the Co-gen plant for carrying out repair and maintenance work of the plant, without the prior consent/permission of the petitioner. The petitioner address a letter dated 18.06.2021 to the Respondent, inter alia bringing forth the issues relating to the administration, safety and security of the Co-gen plant, as the petitioner apprehended serious threat and damages to the Co-gen plant and machinery and was concerned about its security and safety. However, the respondent has not replied to the said letter and has also not taken steps to remedy its actions. Hereto annexed and marked as EXHIBIT - “K” is a copy of the letter dated 18.06.2021.” (emphasis supplied)

29. It is hence the petitioner's case that the respondent had no authority whatsoever under the PDA and allied agreements to restrict the access of the petitioner's representative to the co-gen plant by threat and intimidation and only to force and permit the entry and movement of the respondent's personnel and staff into the co-gen plant. It is contended that the respondent could not have foisted their employees for carrying out repairs and maintenance of the plant, without prior consent/permission of the petitioner.

30. The petitioner's contention is that the respondent was intending to takeover and operate the petitioner's Co-gen plant for the crushing season 2021-22 without the involvement of the petitioner and for such purpose, also engaged some third parties to operate the petitioner's cogen plant. It is stated that the respondent had also placed multiple work orders/purchase orders for the repair and maintenance of the plant and machinery of the petitioner's Co-gen plant, with such purpose and intent, by excluding the petitioner. The petitioner contends that the respondent has no right under the said agreements to operate the Cogen plant of the petitioner, as the respondent does not have the expertise to do so, as also the respondent cannot in any manner engage any third parties, to operate the said co-gen plant which exclusively belongs to the petitioner. It is contended that all these actions of the respondent are in complete breach of the agreements which have seriously jeopardized the rights accrued to the petitioner under the said agreements.

31. It is in these circumstances, the petitioner contends that it is imperative and in the interest of justice that the respondent be restrained from operating and maintaining the petitioner’s Co-gen plant. It is contended that in the absence of any such interim orders, the petitioner would be put to irreparable losses of several crores and immense hardship which cannot be compensated in terms of money. Apart from this, the petitioner contends that it cannot suffer a brazen illegality of the respondent dis-housing the petitioner from its own cogen plant. It is in these circumstances, the petitioner has filed the present petition praying for interim measures as noted above.

32. There is an additional affidavit filed on behalf of the petitioner dated 26 October, 2021 inter alia placing on record that the respondent and their persons/employees who are entering upon the petitioner’s premises, who are also entering the co-gen plant and are inter alia dismantling/damaging the plant and machinery of the petitioner. To support such contention, the petitioner has referred to videos which are saved and stored in a pen drive and filed along with the said affidavit. There are six video recordings as set out in paragraph 3 of the said affidavit.

33. As this petition was filed on 12 October 2021, in view of the subsequent developments, an Interim Application bearing (Lodging) NO. 3343 of 2022 has been filed by the petitioner on 4 February, 2022 inter alia contending that the respondent has forcibly taken over the running and operation of the petitioner’s co-gen plant. The Co-gen plant being fully automated, it required a high level of expertise to run and operate it. It is contended that the respondent cannot foist the persons who severely lack technical expertise to run the fully automated co-gen plant. It is contended by the petitioner that repeated and continuous mishandling of the plant by the respondent and more particularly, of the boiler, was causing grave and irreparable harm and damage to the Cogen plant, and if the same is allowed to continue, it is likely that the boiler may explode and it will not only cause irreparable injury and damage to the plant but also lead to loss of human lives. It is stated that there have been several instances of boiler tube leakages of the co-gen plant in the crushing season of 2021-22 is the respondent’s foisted running of the co-gen plant. Also in December 2021, there was leakage in the economizer tube and the plant was required to shut down for 22 hours for repairing the leakages. Further, there were a leakages between 10 January 2022 to 13 January 2022 in the roof tube and the plant was shut down for about 51 hours for repairing the leakages. Subsequently, there was another leakage on 01 February 2022 in the front wall tube panel and the plant was shut town as on date of filing of the application. The petitioner has contended that the leakages are required to be fixed as per the Boilers Act,1923 read with the Indian Boiler Regulations (IBR), as also the respondent is using non IBR certificate workers to fix leakages without finding out the root cause of the persistent leakages. The petitioner has referred to the instances of boiler explosions in India which have claimed human lives in those instances. The petitioner has, therefore, contended that the respondent has been repeatedly causing damage to the co-gen plant. The petitioner has, therefore, prayed for the following reliefs in the interim application:- “(a) This Hon'ble Court be pleased to restrain the respondent and its servants/ agents from running and/or operating the petitioner's co-generation plant in any manner whatsoever.” Respondent’s Pleadings

34. The respondent has filed a reply affidavit dated 21 November, 2021 opposing the grant of ad-interim and interim reliefs as prayed for in the petition. The respondent has raised a preliminary objection that the reliefs claimed by the petitioners are barred under Section 41(ha) of the Specific Relief Act, 1963, in as much as the same would amount to interference with the continued provision of power supply under the facility created in the infrastructure project jointly undertaken by the petitioner and the respondent. It is their contention that Section 41(ha) of the Specific Relief Act expressly prohibits the grant of an injunction if the same would impede or delay the progress or completion of any infrastructure project or interfere with the continued provision of relevant facility related thereto or services being related to the matter of such project. It is the respondent’s contention that the petitioner intends to injunct the respondent to prevent any operation or maintenance of the Co-gen plant which has been created as part a part of an infrastructure agreement for electricity generation between the parties. Hence, granting of such relief would amount to closure of the facility, being the subject matter of the infrastructure project. Such relief, therefore, cannot be granted considering the provisions of Section 41(ha) of the Specific Relief Act. Supporting such contention, reliance is placed on Clause 8.11 of the PDA to contend that the parties have agreed for providing of continuous and uninterrupted power supply and steam to the sugar factory of the respondent.

35. The next contention as urged on behalf of the respondent is to the effect that the petitioner by such interim measures is jeopardizing the rights of the respondent under the PDA by failing to maintain and showing a constant lack of interest in running the co-generation power plant for the past years. It is contended that, in terms of the provisions of the PDA, the petitioner was to effect a transfer of the asset, i.e. the cogen power plant to the respondent after 25 years from the date of commencement of the operation of the plant in a normal working condition, this being the essence of the contract. However, according to the respondent, the facts demonstrate that the petitioner is not interested in running the power plant and has not been maintaining it since a long time causing a depreciation in its value. The respondent contends that this would render the PDA frustrated much to the detriment of the respondent. The respondent, hence, has contended that the respondent is entitled to protect its interests by preserving the Co-gen power plant by keeping it in a working condition as per the norms and guidelines specified by the State of Maharashtra.

36. The respondent has next contended that the petitioner is not entitled to any equitable relief on the principle that one who seeks equity, must do equity. The respondent would contend that the petitioner has approached the Court with unclean hands and has suppressed material and relevant facts in the petition. The suppression being that the fact that Co-gen plant is hypothecated to its lenders by the petitioner and is also being considered for attachment in a separate litigation before this Court with one of its creditors namely ‘Ask Energy Solutions Pvt. Ltd.’ has not been disclosed. It is contended that the petitioner has also failed to disclose that it has not made payment of its debts owed to the respondent under the PDA. It is contended that the intention of the petitioner is to stall the functioning of the respondent’s sugar factory, just before the crushing season in an attempt to extort money from the respondent knowing fully well that the functioning of the respondent’s sugar factory is completely dependent on the provision of power and steam as supplied by the co-gen plant. The respondent contends that the petition being filed just at the beginning of the crushing season, itself, is indicative of a coercive attempt on the part of the petitioner so that the respondent is made to purchase the Co-gen plant at an exorbitant price.

37. The respondent has next contended that the respondent has significantly altered its position upon the assurances of the petitioner. On this aspect, the respondent contends that the petitioner did not have any wherewithal to run the co-gen plant owing to its acute financial distress, hence it had requested the respondent to invest money and personnel, for the upkeep of the Co-gen plant. Pursuant to such request of the petitioner, the respondent had agreed to co-manage the co-gen plant with the petitioner and has made huge investment of monies towards the maintenance of the Co-gen plant over the past crushing seasons. Hence, the respondent had altered its position on the assurance of the petitioner that uninterrupted power and steam is supplied to the respondent. It is contended that, however, the petitioner, after profiteering at the cost of the respondent, has now reneged from its assurances, and is seeking to defeat the legitimate rights of the respondent. It is hence the respondent’s case that the petitioner is not entitled to seek ouster of the respondent from the premises of the power plant facility.

38. The respondent would next contend that the reliefs claimed by the petitioner are beyond the scope of Section 9 of the Act, in as much as the petitioner has claimed final reliefs in the garb of an ad-interim injunction in the instant petition, which is clear from the prayers as the petitioner has also inter-alia sought installation of the bio-gas pipeline. Such relief cannot be granted without proper adjudication of the petition on merits by the arbitral tribunal.

39. It is next contended that no irreparable loss or damage would be caused to the petitioner if the Co-gen power plant is continued to be operated by the respondent, moreover, if the Co-gen plant ceases to operate, the workers of the respondent would suffer irreparable losses and damage to their income and livelihood. In support of such contention, it is stated that the respondent’s business is a source of livelihood for thousands of people which include the respondent’s staff, workmen, employees, labour, local farmers and their families from whom the respondent purchases sugarcane, farming labour, transporters, harvest labour etc. It is stated that the entire sugar industry depends upon the ‘crushing season’. The start of the crushing season is in the month of October each year and continues till the end of April and beginning of May of the year thereafter. It is stated that the operations of the sugar factory are dependent upon the continuous and uninterrupted supply of electricity and steam. It is hence the respondent’s contention that with such intentions the PDA was entered into between the petitioner and respondent for setting up of Co-gen plant on a BOOT basis.

40. In paragraph 22 of the reply affidavit, setting out as to how the Co-gen plant is critical to the respondent’s sugar factory, the respondent has stated that it was the petitioner who had called upon the respondent to purchase spares, consumables and other materials required for maintenance activities from time to time, prior to the start of crushing season 2020-21. It is contended that the representatives of the petitioner invited/requested the respondent’s representatives to take steps to jointly carry out the maintenance activities in the co-gen plant, which was agreed by the respondent as it was critical for the respondent to keep the Co-gen plant working. It is stated that meetings were held from time to time between the representatives of the parties and various decisions were taken jointly as to the schedule of work to be undertaken and the payments to be made to the vendors. As the contention as urged by the respondent in this paragraph of the affidavit was subject matter of quite some discussion, the contents are required to be noted which read thus:- “The Respondent has thus been handling the maintenance activity of the Co-gen plant prior to the start of the crushing season of 2020-21 as well. Acting on the requests/ invitations of the Petitioner, the Respondent has deputed its labour, personnel, engineers at the Co-gen plant to look into the day-to-day operations of the Co-gen plant. The Co-gen plant has therefore been in the joint possession of the Petitioner and the Respondent, uninterruptedly for the past couple of years. The Respondent and the Petitioner have been provided unrestricted access to the Co-gen plant and the sugar factory. Further acting on the various representations of the Petitioner (including oral discussions between the engineers/staff of Petitioner and the Respondent), the Respondent has provided spares, consumables, paid salaries of staff of the Petitioner, provided operational support by deputing personnel from time to time to the Co-gen plant. In this entire endeavour (which is not the business of the Respondent) the Respondent has spent crores of Rupees in respect of the Co-gen plant’s operations and running at the instance and requests of the Petitioner, made from time to time. The Petitioner has not repaid the Respondent for these expenses and has thus earned the benefits of all the expenses/work put in by the Respondent. In these circumstances it is submitted that the Petitioner is now estopped from seeking the reliefs set out in the aforesaid Section 9 Petition against the Respondent.”

41. Further the reply affidavit thereafter sets out the details in regard to payments to vendors and supply of material, spares as required by the petitioner and the amount spent on this count by the respondent. The respondent has also referred to an arbitral award dated 15 June, 2019 passed against the petitioner and in favour of one Ask Energy Solutions Pvt. Ltd.. It is stated that in the execution proceedings filed by the said award creditor, the respondent has been joined as a garnishee, which according to the respondent clearly shows that the petitioner is not in a position to maintain the power plant.

42. The respondent contends that it had incurred vendor’s payments at the start of crushing seasons 2020-21 and 2021-22, having supplied material to the petitioner, from the respondent’s stores, which would also go to show that the petitioner is not in a position to run the co-gen plant. Also, the salaries of the petitioner’s staff were borne by the respondent, as also, the respondent has deputed its engineers and staff who have been maintaining the maintenance activity of the power plant much prior to the start of crushing season 2020-21. It is stated that even payment towards repair of the power plant turbine to an extent of Rs. 90,21,693/- was made by the respondent. The respondent has also stated that substantial payments were made by the respondent to MSEDCL aggregating to 2.72 crores on behalf of the petitioner. It is for such reasons, the respondent would contend that the reliefs be denied to the petitioner and the petition be rejected. Petitioner’s Rejoinder Affidavit

43. An affidavit in rejoinder dated 02 December, 2021 is filed on behalf of the petitioner inter alia denying the respondent’s case in its reply affidavit. The petitioner in paragraph 9 (xviii) has denied in totality the respondent’s case of any joint possession of the Co-gen plant of the petitioner and that of the respondent. The petitioner states that the statements, insinuations and allegations made in the said paragraph are false and baseless. The petitioner denies that the Co-gen plant has been in joint possession of the Petitioner and the Respondent for the past couple of years, as also the respondent’s contention that the respondent had provided spares, consumables, paid salaries of staff of the Petitioner, provided operational support by deputing personnel from time to time to the co-gen plant and that the Respondent has spent crores of Rupees in respect of the co-gen plant’s operations at the instance and requests of the Petitioner. The petitioner states that the respondent has withheld from this Court the fact that there was a mutual arrangement between the petitioner and the respondent wherein the respondent had agreed to make certain operational payments and bear certain operational expenses on behalf of the petitioner, in order to compensate the petitioner for the losses caused to it due to the shortsupply of bagasse fuel by the respondent. It is stated that the said arrangement was entered into keeping in mind the fact that the said operational expenses and operational payments made by the respondent on behalf of the petitioner, would eventually be set-off with the amounts that were due and payable by the respondent to the petitioner, due to the short-supply of bagasse fuel by the respondent to the petitioner. The petitioner has accordingly denied the case of the respondent and the allegations as made in the reply affidavit. Respondent’s Rejoinder Affidavit

44. The respondent although had filed a reply affidavit, as also when a rejoinder affidavit was filed on behalf of the petitioner, and what could be filed by the respondent was a sur-rejoinder, that too, with the leave of the Court, very unusually and the respondent again filed a second reply affidavit dated 15th February, 2022 titled as “Affidavit in reply on behalf of the respondent to the petition dated 12 October, 2021 and the rejoinder dated 02 December, 2021 and the Additional Affidavit dated 26 October, 2021 filed by the Petitioner dated 15 February, 2022”. On behalf of the petitioner, there was a vehement objection to this affidavit, being accepted and taken on record. The Court had accordingly passed an order to accept the affidavit to be taken on record subject to the objections as raised on behalf of the petitioner.

45. This affidavit is again a detailed affidavit to the petition, in which the respondent has inter alia repeated its plea that the petitioner was potentially an insolvent company and its accounts being classified as a ‘Non Performing Asset’ (NPA) by its lenders since December 2017. The respondent has stated that the petitioner is a wholly owned subsidiary of Gammon Infrastructure Private Limited (for short “GIPL ”), now known as AJR Infra and Tolling Limited. It is stated that also several subsidiaries of GIPL are facing insolvency proceedings under the Insolvency & Bankruptcy Code, 2016 (“IBC”) before the National Company Law Tribunal (“NCLT”). It is stated that some of them have already been admitted for corporate insolvency resolution process under the IBC. It is thus contended that evidently, the ‘Gammon group of companies’ of which the petitioner is a part, is under severe financial distress and is at the risk of being liquidated. It is hence contended that, the petitioner no longer has the wherewithal to run, operate or maintain the Co-gen plant. It is stated that the petitioner has not arranged any materials and had barely stationed 16 employees to run the power plant, whose salaries have also not been paid for more than 9 months. All these factors clearly indicate that the petitioner has not been maintaining the power plant for a long time or making any efforts to keep it in a functional state. The respondent has also set out that subsequent to its reply affidavit dated 21 November, 2021, there was agitation at the respondent’s factory by hundreds of persons and labourers. That the labourers also approached the Sugar Commissioner, Pune, who had convened a meeting on 17 November, 2021 to resolve the issues raised by the labourers on an urgent basis. The respondent has referred to the proceedings before the Sugar Commissioner culminating into an order dated 27 December, 2021 passed by the Sugar Commissioner recording that the dispute between the parties cannot be resolved amicably hence either party could refer the dispute to arbitration according to provisions of Clause 33.[2] of the PDA, and meanwhile directed status-quo to be maintained by the parties so that peaceful crushing operations of the sugar factory should not be obstructed by any of the parties. The Sugar Commissioner also observed that such order should not be construed so as to give any special right to either of the parties to the contract, to obstruct any rights of other party given under the contract. It is hence the respondent’s contention that in light of the order of the Sugar Commissioner, the status quo be directed to be maintained till the reference of the disputes before an arbitral tribunal, needs to be continued. It is also contended that the petitioner has not invoked arbitration against the respondent till date, hence it ought not to have initiated the present proceedings under Section 9.

46. The respondent has contended that, it was also constrained to file proceedings against the petitioner before the Debt Recovery Tribunal at Aurangabad under Section 17 of the SARFAESI Act. This, on the basis that the respondent had learnt that the petitioner had received financial assistance from Central Bank of India and Corporation Bank in July 2012 for the purposes of setting up of the power plant under the PDA and as there was a default such banks had a charge on the assets of the petitioner including on the plant and machinery. Also that by way of security, the petitioner had hypothecated all fixed assets, including furniture, fixtures, equipment, motor vehicles etc. (present and future) at the Co-gen plant’s premises and created a charge on the uncalled share capital, book debts etc, and had mortgaged the immovable property in favour of the banks. It is contended that such application was required to be made before the DRT at Aurangabad seeking relief against the lenders, the petitioner and the MSEDCL. It is stated that in such proceedings, the following order came to be passed by the DRT on 29 December, 2021:- “ ORDER In view of the above, I pass the following order through Video Conference:

I. Since the co-gent plant is being possessed and run by the applicant now such a position shall not be disturbed by any of the parties till further order except as per law."

47. The remaining contents of the Additional affidavit more or less are the contentions as urged by the respondent in its reply affidavit. Again an Additional Affidavit of the Respondent

48. Thereafter, despite earlier repeated affidavits of different descriptions being filed again an additional affidavit dated 21 February, 2022 titled as “Additional Affidavit on behalf of the respondent to place on record events and documents post the hearing dated 15 February, 2022 was sought to be filed by the respondent for the limited purpose of placing on record the events and documents stated to be relevant for the matter on the basis of what had transpired after hearing of the matter on 15 February, 2022. The gist of the affidavit is that the petitioner’s accounts are marked as Non Performing Assets by its creditors namely Central Bank of India and Union Bank of India being the lender banks since December 2017. It is stated that the lender banks had filed Original Application under section 19 of the Recovery of Debts and Bankruptcy Act, 1993 before the DRT, New Delhi against the petitioner in which the respondent was also arrayed as a party along with MSEDCL and Gammon Infrastructure Private Limited. Copy of the original application before the DRT, New Delhi is placed on record. It is stated that the said original application was heard by the DRT on 14 February, 2022 and thereafter on 15 February, 2022. It is the respondent’s contention that such Original Application had material bearing on the present proceedings. The respondent has referred the order dated 15 February 2022 passed by the DRT II, Delhi which was an order ex-parte to the petitioner. The said order reads thus:- Debts Recovery Tribunal-II, Delhi O.A. No. 69 of 2022 CENTRAL BANK OF INDIA & OTHERS Vs.

PRAVARA RENEWABLE ENERGY LIMITED 15.02.2022 Item no.08 Present: Mr J.Amal Anand alongwith Mr Elvin Joshy & Ms Kirtika Chhatwal, advocates for Applicant Bank. Mr Sandeep Defendant no 2 Das Advocate Defendant no. 2. Mr Anup Jain alonwith Mr Udit Gupta & Mr Akshay Goel for Defendant no 3. Due to Covid 19 situation the matter is taken through VC.

1. It is a fresh OA filed on behalf of Applicant Bank for recovery of Rs.227,81,73,396.43. The value of the properties is not stated but charge is on lease hold property and assignment of project documents specially rights under PDA (project development agreement between Defendant 1 & 2. Defendant no 1 is stated to be special purpose vehicle & the plant is operated on BOOT basis which means after certain period the plant will have to be transferred to Defendant no 2 and as such, they have interest in the plant and also Defendant no. 1.

2. I have heard the arguments of Ld. Counsel for Applicant Bank. Defendant no. 2 & 3 appears through counsels and accept the notice. Registry is directed to issue Notice to other defendants to show cause within 30 days of the service of Notice as to why the relief(s) prayed for should not be granted in favour of Applicant Bank. Notice and order along with complete Paper Book shall be served by Authorised Officer of Applicant Bank through all prescribed modes including by hand, registered post AD as well as email/Pen Drive etc.

3. Due to COVID-19 circumstances, the Registry shall forward the notice to the Applicant Bank through email for onward service to the defendants. After service, the Applicant Bank shall file affidavit of service in the Registry at least one week prior to the next date of hearing. Order should be downloaded from website of DRT.

4. Written Statement/reply to show cause be filed by the defendants within 30 days from date of service with directions to supply advance copy of the same to Ld. counsel for Applicant Bank/Applicant Bank. Thereafter within one week Bank shall file rejoinder, if any.

5. The pleadings shall be completed including evidence by both parties before the Registrar. It has been argued before me that the defendant no 3 is getting the electricity generated in the plant and pays the amount to defendant no.1 The money goes in escrow account from there it is transferred elsewhere instead of being paid to bank. The SPV was created for this generation plant to feed the sugar factories of Defendant no. 2 in the vicinity and the property on which plant is located also belongs to them. The account is NPA since 2018 but nothing is paid. Defendant no 3 submits that they are ready to make payment to Bank subject to assurance that they will be permitted to continue with their obligations and rights under various agreements which they have entered into with defendants no 1 & 2 and other commitments of supply to other parties and these operations should not be hampered. The present situation is that Defendant no. 2 submits that since more than two years they are running the plant as Defendant no 1 was not interested in doing so and all day today operations are handled by them though few employees of Defendant no. 1 are still there but all salaries/ maintenance and compliance of all statutory obligations are done by them and they face difficulty as defendant no. 1 is interested in syphoning of funds and not running the plant. They submit that PDA is sacrosanct and all obligations under it have to be complied and they have first right over the same, they also submit that they are interested in purchasing the plant and have approached the Bank who have sought a concrete proposal and shortly that will be submitting. They further submit that the plant cannot be closed as lively hood of more than one lakh family is dependent upon it besides various commitments of Defendant no 3. The material for plant comes from sugar factories and as such it is complete circle and all are dependent on each other and slightest disturbance may bring every thing to halt which will not be a welcome situation for any body and for the economy of state and country. The counsel for Bank submits that they are ready and willing and are complying with the orders passed in SA no. 209/2021 at DRT Aurangabad. Let them do so. It is admitted by appearing parties that defendant no. 2 is in possession of plant and running the same. The consent has been arrived at that Defendant no 3 is ready to pay money directly to Bank who shall remit the expenses to Defendant no. 2 and balance amount will be adjusted in the NPA liability. Defendant no. 2 will be entitled to do all necessary act in relations to running of the plant including getting appropriate approvals from various authorities as they may require for changing parts of plant or doing regular upkeep. For this purpose, the Bank will operate two accounts one in which money received from Defendant no 3 will be deposited and second from which the Defendant no. 2 will be entitled to get the expenses and other charges including maintenance of plant and or expenses for change of any part. The expenses can be paid directly to vendors or be reimbursed to Defendant no.2. The balance, if any in the escrow account shall after defraying the expenses above shall be adjusted in NPA liability of Defendant no. 1. These orders are passed keeping in view and balancing between recovery of Bank and running of plant, commitments of Defendant NO. 3, Lively hood of one lakh families and dispensing the fears of closure of plant & sugar factories. The STATUS QUO is granted and it is made clear that none of the parties will do any such act which comes in the way of restraining any party for compliance of its obligations under any agreements entered into.

ORDERED ACCORDINGLY. Defendants to maintain status quo in respect of assets as per section 19 sub-section 4(A) of The Recovery of Debts and Bankruptcy Act 1993. List the matter on 25.03.2022 for further proceedings. The parties may download the order from the official web-site which will be treated as a true copy as due to COVID 19 & staff constraints, the certified copies cannot be issued as of now till further orders. (VIMAL GUPTA)

49. The respondent has filed an additional affidavit dated 26 February, 2022 titled as “Additional Affidavit on behalf of the Respondent pursuant to order dated 25 February, 2022” by which the respondent places certain additional affidavit on record in regard to the credit facilities advanced to the petitioner by the lender banks, being Central Bank of India and Union Bank of India. The respondent has stated about the nature of mortgage created by the petitioner as also has commented on the Deed of Hypothecation. Referring to the recall notice issued to the petitioner by the lender banks dated 27 September 2021 and 15 December, 2021, it is contended that the petitioner has no right, title or interest in the co-gen plant. It is contended that there is suppression of all these materials, which would disentitle the petitioner from claiming reliefs in the present proceedings. Respondent’s Affidavit-in-Reply to the Interim Application.

50. To the interim application as filed on behalf of the petitioner, a reply affidavit dated 15th February, 2022 has been filed on behalf of the respondent. The contention in the reply affidavit is not different than what has been set out in the reply affidavit as filed by the respondent in the Section 9 petition. However, some of the aspects, as seen from such affidavit, which need to be referred, is the respondents contention that the respondent was constrained, to step in, and manage the Co-gen plant during the crushing season 2020-21, since, according to the respondent, the petitioner had abandoned its obligations under the PDA. It is contended by the respondent that as per the provisions of the PDA, the petitioner was to effect transfer of assets, that is Co-gen plant to the respondent after 25 years from the date of commencement of the operation of the plant, in a normal working condition and without encumbrances, and if the plant was not maintained and run for full 330 days, it would have deteriorated in value and found render the PDA frustrated. It is stated that as the petitioner failed to maintain the Cogen plant regularly, the respondent exercised its rights to protect and preserve the Co-gen plant, hence, it had to step in and incur all expenses including keeping the Co-gen plant in a working condition as per the provisions of the PDA and all other applicable laws. The respondent has also disputed that the Co-gen plant was required to run and managed by highly technical trained engineers and personnel. The petitioner's case that it has spent approximately Rs.274 crores for setting up the Co-gen plant has been denied by the respondent. It is contended that the cogen plant of such standard developed between 2010 and 2015 should cost Rs.125 crores or Rs.[4] crores per MW. Hence, the petitioner's contention of an investment of Rs.274 crores has been denied by the respondent. The respondent has also stated that they have an internal captive plant which is capable of generating 40 MT of steam per hour and maximum 1.[5] MW of electricity. It is stated that the internal captive plant is incapable of generating of steam required by the respondent due to its limited capacity and such high quantity of steam can only be sourced by the power plant as set up by the petitioner in conducting the operations of the sugar factory and thus, the respondent is completely dependent on the Co-gen plant. Respondent has accordingly denied the contention as raised by the petitioner that the internal captive plant of the respondent was sufficient to run the respondent's operation. It is contended that if the contentions as urged on behalf of the petitioner if accepted and the reliefs granted, the Co-gen plant would automatically cease to operate as the petitioner does not have financial capacity to run the co-gen plant and that would lead to a shut down of the respondent’s sugar factory. Petitioner’s Rejoinder to the Interim Application.

51. A rejoinder affidavit has been filed on behalf of the petitioner to the said reply affidavit filed by the respondent to the interim application, whereby the petitioner has contended that it is the owner of the Co-gen plant and is entitled to operate the said plant until the asset transfer date 30th June, 2014 being 25 years from the start of the commercial operations. It is stated that the petitioner is ready and willing and financially capable of running and operating the said co-gen plant subject to the respondent supplying minimum quantity of bagasse fuel as per the terms of the PDA and the additional bagasse fuel as per the Addendum Agreement dated 14 October 2020. The petitioner has stated that it is not only financially sound but technically sound to manage and operate its co-gen plant. While saying so, the petitioner states that it has spent more than Rs.274 crores for setting up the Co-gen plant and over the years had deputed / employed highly trained engineers and personnel for running, operation and maintenance of the said Co-gen plant. Hence, there was no reason for the petitioner to abandon and/or not run the said plant till the assets transfer dated 6 November 2040. It is also stated that by the present proceedings, the petitioner does not seek to disrupt or stop the continuous operation of the Co-gen plant but rather seeks to ensure that the Co-gen plant is not run by the respondent who is not only technically unfit and sound to do so, but also is not legally entitled to be in possession of the plant. The petitioner has stated that the forceful take over of the petitioner's co-gen plant by the respondent is completely illegal and infringes the petitioner's right to free enjoyment of its property which includes inter alia the right to maintain, run, operate and otherwise deal with the plant and machinery of the petitioner's Co-gen plant. It is stated that during the crushing season of 2018-19, the Co-gen plant was operated in terms of the second supplementary agreement dated 30 October 2018 which was entered between the parties for optimal operation of the power plant and under which the respondent could operate the plant for a limited period from 1 November 2018 till 31 October 2019 which was operated by the respondent under the monitoring and supervision of the petitioner and utilizing the petitioner's technically trained human resources. The petitioner has also contended that the respondent has sought to oust the petitioner from its own co-gen plant through threat and intimidation due to which the petitioner is unable to monitor and supervise the functioning of the co-gen plant. Petitioner’s Sur-Sur-Rejoinder.

52. There is a rejoinder affidavit dated 26 February, 2022 which has been filed by the respondent. There is an affidavit in reply filed by the petitioner to the said additional affidavit dated 26 February 2022 filed by the respondent. The petitioner in paragraph 6 of the said affidavit has denied the case of the respondent that the petitioner has transferred or assigned all properties under the land lease deed and/or the PDA (including co-gen plant) to the lender banks as alleged by the respondent. It is stated that a plain reading of the said indentures of mortgage dated 27 July 2012 and 19 May 2015 would show that there is no assignment whatsoever of the properties by the petitioner.

(III) Submissions

53. Mr. Andhyarujina, learned senior counsel for the petitioner has made the following extensive submissions referring to the pleadings and the documents as placed on record:-

(i) The petitioner under the PDA, has exclusive right to possess and operate the co-gen plant which is clear from several clauses of the PDA. It is on account of breaches of the respondent in supply of bagasse and the bio-gas, that there were difficulties on the part of the petitioner in achieving targets set out under the agreements. The respondent is aware that the petitioner has spent about Rs.274 crores for setting up and operating the Co-gen plant. However, the respondent is falsely stating that the petitioner's investment is about Rs.125 crores and that too, on some surmises of the market valuation of the relevant period. Any investment in a project of such magnitude is not a small investment. Under no provision of the PDA would the respondent be entitled to remain in possession of the Co-gen plant and oust the petitioner from the running and operation of the plant. It is submitted that it is clear from the respondent's own letter dated 4 September 2021 that the petitioner was operating and maintaining the plant as on 4 September 2021, as the respondent had called upon the petitioner to take all steps necessary to ensure that the Co-gen plant is fully ready and operational, well in advance before the commencement of the crushing season 2021-22. It is his contention that the contents of paragraph 14 of such letter clearly demonstrates that the petitioner was operating the plant before the respondent attempted to oust the petitioner from the premises of the Co-gen plant.

(ii) It is submitted that the respondent has sought to takeover the petitioner’s Co-gen plant by preventing the petitioner from entering the Co-gen plant since about 23 October, 2021. The petitioner hence called upon the respondent to vacate the Co-gen plant by its letter dated 11 November, 2021, clearly setting out that the persons/employees/representatives have trespassed into the petitioner’s Co-gen plant and started commencing the operations of the Co-gen plant without the permission of the petitioner. It is submitted that it was pointed out to the respondent that such actions were illegal, bad in law and manifestly malafide especially when the present petition was filed and pending before this Court. The petitioner also called upon the respondent to forthwith stop the operations of the Co-gen plant and to immediately vacate the said premises. It is submitted that the respondent by its letter dated 12 November, 2021 replied to the said letter of the petitioner purporting to justify the respondent remaining on the co-gen plant inter alia stating that about 50,000 small and marginalized farmers from Ahmednagar district, were dependent for their livelihood on the respondent-sugar factory and that the crushing season of sugarcane had already commenced on 15 October, 2021 in the State, for all the sugar factories, including the respondent-sugar factory, which according to the petitioner was an untenable plea.

(iii) It is submitted that the respondent’s plea that the petitioner was in financial trouble and was facing legal proceedings as also the petitioner’ account was marked as ‘NPA’ by the lenders was misconceived, if tested on the terms and conditions of the PDA in the context of the relief being sought by the petitioner. It is submitted that, in fact, there is no denial by the respondent to the petitioner’s statements as contained in the letter dated 11 November, 2021 that the persons, employees, representatives of the respondent have trespassed into petitioner’s Co-gen plant, and have commenced the operations of the co-gen plant without permission and the consent of the petitioner. It is submitted that there is no clear denial whatsoever as to how the respondent was legally entitled to run the co-gen plant.

(iv) It is submitted that it was clear from the record that the Cogen plant was taken over after the present petition was filed. It is submitted that the respondent is conducting itself, as if there was no breach whatsoever on its part when, contractually there was a manifest breach on the part of the respondent in not supplying the bio-gas and the bagasse to the petitioner, which was clearly admitted by the respondent in paragraph no.9(g) of its letter. dated 04 September, 2021 in the following terms:- “The Karkhana cannot be expected to supply bagasse to PREL and at the same time operate its captive plant by using bagasse as a fuel. The minimum supply of bagasse can be made to PREL, as long as PREL provides uninterrupted and continuous supply of electricity and steam (Clause 8.11) of the PDA). In view of what is mentioned hereinabove, there is no actionable shortfall in supply of bagasse by the Karkhana and no claim can be made by PREL against the Karkhana.”

(v) It is thus submitted that infact the bagasse and bio-gas was diverted by the respondent to the captive plant of the respondent. Thus, the case of the respondent is a false case that the respondent is wholly dependent on the co-gen plant for its operations. It is submitted that considering the clear provisions of the PDA, the respondent had no contractual authority whatsoever or any other authority de hors the contract which can be recognized in law, except force and intimidation to take over the operation of the cogen plant from the petitioner. It is thus submitted that the actions of the respondent are extremely serious inasmuch as by force and intimidation, the respondent cannot take over the co-gen plant without any authority in law and deprive the petitioner of its property. It is submitted that it is clear from the correspondence that at the most, any claim of the respondent, if at all, on the short supply of electricity and steam can be a monetary claim, and in no manner the respondent’s conduct can be justified for any reason to take over the co-gen plant and conduct the same.

(vi) It is submitted that even under clauses 8 and 9 of the second supplementary agreement, the respondent was permitted to undertake operations of the plant strictly in terms of the said agreement and for a limited period commencing from 01 November, 2018 to 31 October, 2019. It is submitted that clause 12.[4] of the second supplementary agreement clearly provides that in the event the modified operational agreement term was not extended, then the respondent categorically agreed to hand over the plant after completion of annual maintenance, in good working condition to the petitioner, at least 15 calendar days prior to the start of immediately succeeding crushing season. Hence, in light of the second supplement agreement, the parties had clearly agreed that the respondent was not to have any right to operate and maintain the plant upon the expiry of MOA term and the modified arrangement including the provisions thereof, shall automatically stand terminated and shall fall away.

(vii) It is submitted that the case of the respondent of the accounts of the petitioner becoming NPA and/or the parent company of the petitioners becoming a NPA is totally untenable in so far as the contractual relations between the parties are concerned, and the reliefs as prayed for in the present proceedings. In this context, it is submitted that the respondent has falsely contended that the respondent has recently come to know that the petitioner had mortgaged its assets to the lenders, including the land. According to the petitioner, such contention of the respondent is in the teeth of clause 8 of the land lease deed dated 12 July, 2010 which permitted the petitioner to create “any mortgage or charge” over the leased land in favour of the lenders or any trustees acting on their behalf or assign the lease deed in favour of the lenders by way of security for the implementation of the co-generation facilities and allied facilities. In the event a charge or mortgage was to be created or the lease deed was to be assigned to any person other than the lenders, the lessee (petitioner) was to do so only with a prior consent of the lessor (respondent no.1). Therefore, the respondent’s contention of suppression of information according to the petitioner is completely untenable and contrary to the record.

(viii) It is next submitted that the respondent was clearly aware about the petitioner’s borrowings, which is clear from the proceedings as filed by the respondent itself before the DRT at Aurangabad being Securitization Application No. 290 of 2021 filed on 23 December, 2021, wherein respondent no.1 in paragraph 7 had stated that the petitioner had obtained credit facilities to the extent of about 191.67 Crores for the purpose of financing construction development and implementation of the co-gen plant and which was secured by the hypothecation of all fixed assets including plant and machinery, furniture, fixtures, equipment, motor vehicles, etc. It is thus submitted that in the teeth of what was pointed out by the respondent in its own application, the respondent could not have taken a plea of being unaware about the petitioner’s borrowings and set up a farcical defence of financial difficulties as faced by the petitioner in the present proceedings. It is submitted that in fact, as to what the respondent has pleaded in regard to the ownership of the plant before the DRT is shocking. In this regard, the following paragraph of the grounds/reasons in the securitization application as filed by the respondent before the DRT at Aurangabad have been referred:- “(xxix) - It is submitted that ultimately the Co-gen plant has to be transferred to the Applicant as per the terms of the PDA without any charge or encumbrance even though the same may be hypothecated with the Respondent No.1 (Central Bank of India) and Respondent No.2 (Union Bank of India) by Respondent No.3 (petitioner). It is repeated that the Applicant is the absolute owner of the Property and has the right to use the same. Furthermore, the said Co-gen plant is fundamental to the existence and functioning of the Applicant’s sugar factory, which is being primarily run by the Applicant, jointly with Respondent No.3. As mentioned earlier, the sugar factory of the Applicant is a source of livelihood for more than 2 lakh stakeholders, whose life will be directly impacted if it ceases to operate. Therefore, even in equity, the Applicant has a right to continue to use the Property under all circumstances since the livelihood of lakhs of people is dependent on it. Moreover, the cessation of the same may also create a law and order issue, as witnessed in November 2021, when the Respondent No.3 failed to run the Co-gen Plant in time. Accordingly, enforcement rights to be exercised by the Respondent No.1 and 2 in respect of the use of the Property should be allowed, if at all, only with the direction that the Co-ten plant be kept in a running condition and in compliance of the terms and conditions of the PDA, neither less nor more. ” It is submitted that it is on the above averments, it is infact the respondent which has obtained ex-parte orders from the the DRT, Aurangabad on 29 December, 2021.

(ix) It is next submitted that neither of the orders passed by the

DRT at Aurangabad on the securitization application filed by the respondent, nor on the proceedings filed by the Central Bank of India before the DRT at Delhi can influence much less prevent this Court to consider the present proceedings and pass appropriate orders, as the orders passed by the DRT recognize the contractual position between the parties under the PDA and the allied agreements and such orders would not disturb the contractual rights of the parties under the PDA. It is submitted that even if the assets of the petitioner are mortgaged, the petitioner cannot be prevented from exercising its rights under the PDA.

(x) In so far as the respondent’s contention that the petitioner and the respondent are in joint possession of the co-gen plant, it is submitted that it is false for the respondent to so contend, as such a contention of the respondent is contrary to the record and from what can be revealed from several documents. It is submitted that the respondent’s contention of joint possession is a totally false defence which has been set up in the reply affidavit without any foundation.

(xi) In so far as the respondent’s contention on the section 9 proceedings being not maintainable is concerned, it is submitted that the petitioner was entitled to approach this Court and invoke the jurisdiction under Section 9 of the Act in terms of what is provided in Section 9 of the Act, namely, that a party may, before the arbitral proceedings, approach the Court in the circumstances as they exist in the present proceedings. It is submitted that as the present application is filed before the commencement of the arbitral proceedings, the petitioner is entitled to seek the reliefs of the nature as prayed for. It is submitted that the petition would be maintainable also considering the provisions of sub-sections (2) and (3) of Section 9 of the Act. It is submitted that even considering that this petition is filed on 12th October, 2021 there is no delay whatsoever on the part of the petitioner, when the petitioner has an intention to commence the arbitration. The situation in hand would not preclude the petitioner from seeking reliefs as contended under sub-section (2) of section 9 of the Act.

(xii) In the above context, it is submitted that by an order dated

11 November, 2021, the Sugar Commissioner had referred the parties to mediation and ultimately, the Sugar Commissioner by his order dated 27 December, 2021 ordered that the parties take recourse to arbitral proceedings. Thus the contention that the section 9 application is not maintainable, is thoroughly misconceived. It is submitted that the petitioner has already clarified that the petitioner has intended to proceed in arbitration and that the petitioners are very much inclined to appoint an arbitral tribunal. However, this would not mean that the petitioner is not entitled to the reliefs as prayed when there is a brazen breach of his contractual rights by the respondent. It is also submitted that there is not an iota of material suggesting that there is a delay on the part of the petitioner in referring the disputes to arbitration. Such is not the objection taken in any of the affidavits filed on behalf of the respondent.

(xiii) It is submitted that the petitioner’s case before the Sugar

Commissioner on the several illegalities of the respondent to pressurize the petitioner not to run the co-gen plant, was clear from the contents of the petitioner’s letter dated 08 December, 2021, addressed to the Sugar Commissioner, Maharashtra State, in which the petitioner pointed out that the respondent having political clout has used its influence on the MSEDCL. Further, the respondent had forcefully started operating the co-gen plant for the present crushing season (2021-22), and that too, completely contrary to the terms of the contract between the parties and has engaged a third party M/s. Energy, for operating and running the co-gen plant. It is thus submitted that the reliefs as prayed for by the petitioner be granted. In support of the above contentions on behalf of the petitioner, reliance is placed on the decisions of the learned Single Judge of this Court in Baker Hughes Singapore Pte v. Shiv-Vani Oil and Gas Exploration Services Ltd.[1] Submissions on behalf of the Respondents

54. Mr. Khambata, learned Senior Counsel appearing for the respondent has made the following submissions:

(i) At the outset, it is submitted that the present proceedings under Section 9 of the Act are not maintainable inasmuch as the respondent is not satisfied that the petitioner is ready and willing to refer the disputes to arbitration and/or the petitioner continues to have such willingness. It is his submission that it has already been five months since the dispute commenced between the parties, however, no inclination has been shown by the petitioner to refer the disputes to arbitration. At the threshold, the petitioner has not satisfied the basic requirement to seek relief under Section 9 of the Act, which the petitioner ought to satisfy to maintain the prayers for interim measures. It is hence submitted that a Section 17 application before the arbitral tribunal is the appropriate remedy for the petitioner. In support of his submissions, reliance is placed on the judgment of the Supreme 1 (2015) 1 Bom CR 377 Court in “Firm Ashok Traders and Anr. Vs. Gurmukh Das Saluja & Ors.”2, “Arcelor Mittal Nippon Steel India Ltd. Vs. Essar Bulk, and the decision of the Division Bench of Gujarat High Court in “Essar Bulk Terminal Ltd. Vs. Arcelor Mittal Nippon

(ii) In so far as the petitioner’s case that the respondent illegally took over the possession of the co-gen power plant is concerned, it is submitted that the parties are in joint possession of the plant, however, in view of mishandling of the plant by the petitioner, today the respondent is controlling the plant as pointed out by the respondent in paragraphs 52 to 54 of its reply. Also that the petitioner itself has stated in paragraph (9) (XLII) of the rejoinder affidavit that the turbine has broken down due to mishandling of the turbine, hence, the respondent was obligated to get the turbine repaired. This, according to the respondent, shows that the petitioner’s admission on the handling of the plant by the respondent.

(iii) It is next submitted that the respondent has denied the execution of the addendum agreement dated 14 October 2020 and hence, the petitioner is precluded from placing reliance on the same. The intention of the petitioner in seeking the relief that the respondent be prohibited from running the co-gen plant, is in fact,

4 R/First Appeal No.3040 of 2021, Dt. 03/02/2022 to stop the running of the sugar factory which would cause serious prejudice to the permanent employees and others like farmers, who are dependent on the sugar factory. The respondent is managing the co-gen plant as also the salaries are being paid by the respondent, which shows that the petitioner was not interested in conducting the co-gen plant.

(iv) The respondent is successfully running the co-gen plant, which the petitioner is not in a position to run due to severe financial constraints as the petitioner is indebted to the banks for the borrowings as made by it for setting up the co-gen plant, which itself indicates that it is not possible for the petitioner to manage and run the co-gen plant. There is no urgency as made out by the petitioner for any reliefs in the present petition which can be clearly seen from the averments as made in paragraphs 23 and 29 of the petition.

(v) The bonafides of the petitioner are extremely doubtful considering the averments as made in paragraph 29 of the petition inasmuch as its the petitioner’s own case that the plant is taken over by the respondent after the petition was filed on 12 October

2021. It is submitted that the respondent would not mind the representatives of the petitioner visiting and helping the management of the plant. However, they cannot seek reliefs as prayed in the petition.

(vi) It is submitted that the petitioner is not correct in its contention that there was mutual arrangement between the parties, under which, the respondent was permitted to use and operate the plant. This plea of the petitioner is belied by the record and the correspondence exchanged between the parties.

(vii) It cannot be said that the respondent has no right whatsoever to run the Co-gen plant, it is for the reason that the land belongs to the respondent and it has been leased in its favour for the purpose of installation of the plant under a valid lease deed.

(viii) The case of the petitioner of any breach of the PDA by the respondent and more particularly, in respect of supply of bagasse and bio gas cannot be accepted, in view of the clear clauses of the PDA being Clause (6) and (7). The nature of the dispute is such that it is appropriate that the petitioner seeks relief before the arbitral tribunal, as different complexities under the contract can be gone into, only before the arbitral. In fact, this is a case where the petitioner has dealt with the land in question without prior consent of the respondent and when the mortgage in respect of the land was created in favour of the financial institution.

(ix) It is submitted that by praying for such interim reliefs, the petitioner is in fact seeking specific performance of the agreement. It is submitted that no interlocutory relief can be granted when the petitioner itself has breached the essential terms of the contract disentitling itself for reliefs under section 9 as per the provisions of Section 16(b) and (c) of the Specific Relief Act.

(x) In any event, considering the precarious financial condition of the petitioner and that the petitioner was not capable to conduct the plant, there is no continuous readiness and willingness to perform the contract on the part of the petitioner. Substantial emphasis is laid on the proceedings as initiated by the consortium of the bank before the DRT at Delhi as also an application filed under the Securitization Act by the respondent before the DRT at Aurangabad and the orders passed thereunder, to contend that these proceedings would also clearly show that the respondent cannot maintain the prayers as made in the present proceedings, not only on merits but also considering the legal position.

(xi) In any event, the injunction which is prayed for is in the nature of an interim mandatory injunction which ought not to be granted in the Section 9 proceedings as none of the essential requirements as per the settled principles of law laid down by the Supreme Court, are present for this Court to grant such interim mandatory measures. To support this submission, reliance is placed on the decision of the Supreme Court in “Dorab Cawasji Warden Vs. Coomi Sorab Warden & Ors.”5

(xii) Lastly it is submitted that even the provisions of Section

41(1)(ha) of the Specific Relief Act would bar the petitioner to seek reliefs as prayed for in respect of an infrastructure project.

(IV) Intervention Applications

55. There are three intervention applications, the details of which are set out hereunder:-

(I) Interim Application (L) No. 4443 of 2022

This interim application is filed by one Alenka Dhrub Lanka and 15 others who are stated to be the employees of the petitioner. It is contended that the reliefs as prayed in the arbitration petition have a direct bearing on the the operation of the co-gen plant and their employment, hence an impleadment is prayed by these applicants. The principal contention of these applicants is that the petitioner has failed to pay the salaries of the applicants for several months. The applicants, therefore, have lodged complaints before the Labour Court, Ahmednagar for non-payment of the salaries. They have continued to attend work with the hope that the petitioner would pay their unpaid salary. They contend that their livelihood depends on the operation of the co-gen plant and they do not want the co-gen plant to be shut down in any manner. They apprehend that the petitioner, in view of the disputes with the respondent, would close down the facilities without any notice to these applicants. The applicant has made a categorical statement that the petitioner had paid the salary of the applicant in the month of October and November, 2021, however, the past salaries for February, 2021 to September, 2021 are yet to be paid. It is their contention that the Sugar Commissioner has rightly passed the order dated 27 December 2021 and directed to maintain “status quo” so that the crushing operation continues unhindered. It is contended that the applicants have severely suffered as they have not been paid by the petitioner. The affidavit in support of this application has been affirmed on 12 February 2022.

(II) There is a reply affidavit filed on behalf of the petitioner denying that the petitioner has been unable to pay the salaries of the applicants. It is contended that these applicants have no locus to intervene in the present proceedings as the applicants have nothing to do with the arbitral dispute between the petitioner and the respondent. It is denied that the petitioner has deliberately removed staff and that the petitioner was unable to pay the salaries. It is contended by the respondent that the disputes in that regard is sub judice before the Labour Court at Ahmednagar. It is contended that the applicants are not correct in their contention that the petitioner wants to close down the co-gen plant. The endeavour of the applicants is that the petitioner be prevented from conducting the co-gen plant, when they know that respondent is unfit and technically not sound to do so. The case of the petitioner is that it has invested Rs.274 crores to install and operate the co-gen plant and hence, it is obvious that the petitioner wants to run the co-gen plant and generate revenue. Interim Application (L) NO. 4426 of 2022

(I) This interim application is filed by the applicant-Pravara Oos Tod

Va Vahatuk Majoor Sanstha Pvt. Ltd., praying for intervention/to be impleaded in the present Section 9 proceedings, filed by the petitioner, on the ground that the interest of the applicant is likely to be affected. It is the case of the applicant that it is engaged in the process of harvesting, carting and transporting of sugarcane and engages around 15,000 labourers and other contractors who harvest and transport sugarcane from the farmers to the respondent sugar factory. It is contended that the functioning of the respondent-sugar factory is necessary for the sustenance of the harvesting labourers and their families. It is for this purpose, in the proceedings filed before the Sugar Commissioner, the Sugar Commissioner has passed an order dated 17 November 2021 directing “status quo” to be maintained regarding the respondent’s sugar factory. The apprehension of the applicant is that the petitioner may shut down the respondent – sugar mill thereby affecting the applicants. However, as the Sugar Commissioner thereafter passed an order on 27 December 2021 noting that the dispute cannot be resolved amicably, he had granted liberty to the petitioner and the respondent to resolve the disputes by arbitration. It is the applicants’ contention that it is before the Sugar Commissioner that the members of the applicant learnt about the pendency of the present petition and the reliefs as prayed for in the proceedings. It is contended that the present Section 9 proceedings filed by the petitioner are an abuse of the process of law, whereby the petitioner is seeking to unlawfully maximise its commercial gains at the expense of the interest of the applicant, farmers, harvesting labour and other workers. It is contended that in case the cogen plant is allowed to be closed, the operations of the respondent factory will cease, and the harvesting labour of the applicant would consequently have no income and hence, they become necessary parties to the present proceedings.

(II) A reply affidavit has been filed on behalf of the petitioner to contend that the applicant in no manner is likely to be affected either directly or indirectly by any order of interim measures passed on this petition. It is contended that the applicant is not a party to the arbitration agreement between the petitioner and the respondent, hence, this intervention application is not maintainable. It is next contended that the interim application is lacking in bonafides as it has been filed at the behest of the respondent, solely to prevent the urgent and expeditious hearing of the petition, and the same is abuse of the process of the Court and ought to be dismissed outright as such. It is also contended by the petitioner that the apprehension of the applicant that the petitioner would close down the co-gen plant, is totally misconceived and against the case of the petitioner in the interim application. It is further reiterated that the petitioner has invested an amount of Rs.274 crores in setting up the plant and hence, there is no question of the applicant being under any apprehension that the petitioner wants to shut down the plant. The petitioner has denied that the applicant has spent an amount of Rs.30 crores as alleged, in engaging harvesting labour, machines etc. The petitioner has also contended that the applicant lacks bonafides in moving this interim application and can have no interest in the subject matter of the instant dispute, mainly in regard to functioning of the co-gen plant, and hence, the prayer for intervention is misconceived and deserves to be rejected. Interim Application (L.) NO. 4446 of 2022

(I) This interim application is filed by one Sakhar Kamgar Union,

Shrirampur. The applicant in this application claims to be a Union comprising of 1409 members who are currently working with the respondent-sugar factory as labourers, workers and employees. Their contention is not different from what has been alleged in the previous two interim applications, namely, that the sustenance of the members of the applicant is dependent on the effective functioning of the respondent-sugar factory. It is contended that the applicant had previously filed a representation with the office of the Sugar Commissioner who had passed an order dated 27 December 2021 directing to maintain status quo, as also directed that the petitioner and respondent to resolve the disputes in arbitration proceedings. The case of the applicant is that the petitioner is not in good financial condition as it had failed to pay the electricity dues in consequence of which, the MSEDCL has issued disconnection notice to the petitioner on 29 November 2021. It is contended that the electricity for the respondent’s premises including the staff quarters and primary school is also dependent on the electricity generated by the co-gen plant. Thus, any action of the petitioner shutting down the co-gen plant would affect the applicant. It is for such reason the applicant contends that it was required to move a representation dated 10 November, 2021, before the Sugar Commissioner complaining that the co-gen power plant was not operational till 12 November 2021 and there was a delay in commencement of the crushing operation of about 27 days, which caused hardship and economic distress to the members of the applicantunion. The other contents of the application are similar to the other two interim applications. There is also a reply affidavit filed where the petitioner contended that the interim application is not bonafide and that the applicant in this interim application has nothing to do with the arbitral proceedings. It is contended that none of the rights of the applicant are affected by the subject matter of the proceedings between the petitioner and the respondent. It is also contended by the petitioner that all apprehensions of the applicant are incorrect and false and they are denied in totality. SUBMISSIONS:-

56. Dr. Saraf appearing for all the interveners has submitted that even if the applicants are third parties to the inter parte disputes between the petitioner and the respondent, however, the rights of the applicants would be vitally affected, if any orders adverse to the respondent is passed in the present Section 9 proceedings. In support of his contention that when the rights of the third parties are being affected, then such parties can be impleaded and infact become necessary parties to the proceedings, reliance is placed on the decision of the learned Single Judge of this Court in Prabhat Steel Traders Pvt. Ltd. Vs. Excel Metal Processors Pvt.Ltd.[6]

57. Mr. Andhyarijuna responding to the interventions and the submissions as made by Dr. Saraf for the intervenors would submit that the relief as prayed for in the Section 9 proceedings would in fact aid the applicants and not prejudice them. It is submitted that the legal test in regard to intervention in Section 9 proceedings has not been correctly formulated by the applicants. It is his submission that, in fact, the intervenors fail on such legal test, inasmuch as Section 9 per se is not available to the intervenors to assert their right, by stepping into the shoes of the respondent. It is his submission that it is for the Section 9 petitioner to implead a necessary party who might affect the rights of the Section 9 petitioner in regard to the reliefs as prayed for or who may be adversely affected. However, it is submitted that a converse situation is not, what Section 9 would provide. Insofar as the reliance of Dr. Saraf on the decision of Prabhat Steel Traders Pvt. Ltd. (supra) is concerned, Mr. Andhyarijuna’s would submit that such decision is not an authority for the propositions that intervention per se at the stage prior to any order being passed under section 9 can be permitted more particularly considering the provisions of Section 9(1)(c) of the Act.

58. It is next submitted by Mr. Andhyarijuna that the entire premise of the applicants to raise contentions that the petitioner is not in a good financial condition is wholly untenable, as there is no denial of the fact that the parent company of the applicant is a debt free company. Hence, the entire case of the applicants that the petitioner’s conducting co-gen plant will be prejudicial to the applicants interest is merely an apprehension and totally untenable. Mr. Andhyarijuna has submitted that the petitioner has invested an amount of Rs.247 crores in the cogen plant and certainly the intention of the petitioner is to run the plant and recover its investment as also make profits. Submissions of Mr. Andhyarijuna in rejoinder to submissions on behalf of respondent

(i) Mr. Andhyarijuna would submit that Mr. Khambata’s submission referring to the DRT proceedings is nothing but an attempt on the part of the respondent to deviate from the issue in question, namely, of the illegal takeover and running of the co-gen plant by the respondent without any authority in law. It is submitted that the orders passed by DRT at New Delhi as also the orders passed by the DRT at Aurangabad are ex-parte to the petitioner. It is submitted that whatever was observed by DRT- New Delhi in its order dated 15 February 2022 is on the basis of what the respondent (defendant no.2 therein) had pointed out before the DRT, which was completely a one sided affair. Hence, it was totally misconceived for the respondent to place reliance on the orders passed by the DRT, New Delhi. It is submitted that, similarly, the orders passed by the DRT-Aurangabad could not be relied by the respondent since such orders were passed ex-parte.

(ii) Insofar as the respondent’s contention that the mortgage of the land in favour of consortium of bank was illegal, it is submitted that it is an untenable contention, inasmuch as in the Land Lease Deed dated 12 July, 2010 in Clause 8, provided that the lessee (petitioner) may create any mortgage or charge over the leased land in favour of the lenders and/or assign the lease deed in favour of lenders by way of security for the implementation of the Co-Generation Facility and allied activities. Mr. Andhyarujina would thus submit that no permission was required to be taken to create a mortgage in favour of the financial institutions. He would submit that also read with Clause 8 of the Land Lease Deed, under Clause 4.[7] of the PDA, the petitioner was entitled to borrow money for setting up of the co-generation facility by offering the leased land as security. Thus, the case of the respondent that it was surprised to note that the land on which the co-generation plant was installed was leased to financial institutions is a false case of the respondent. Mr. Andhyarijuna would submit that the Lease Deed is still with the petitioner. The mortgage as created by the petitioner of the bank is an English mortgage.

(iii) Mr. Andhyarijuna referring to the provisions of Sections 58 and 67 of the Transfer of Property Act read with the clauses of the Land Lease Deed as also the PDA would submit that it was untenable for the respondent to argue that creating security of the land in favour of the financial institutions/banks is as good as transfer of ownership. It is his submission that even the financial institutions are not taking up such contention and it is only a charge on the property which is created so as to secure borrowings from the lenders. It is thus submitted that creation of mortgage does not amount to sale of the co-gen plant. Referring to the additional affidavit dated 26 February, 2022 filed on behalf of the respondent, it is submitted that the respondent at all material times was aware of the indenture of mortgage dated 27 July, 2012 and 19 May, 2015 entered between the lender-banks and the petitioner, which is also annexed to the original application as Annexures A-16 and A-25 respectively and thus, their case in the present proceeding that the creation of mortgage was a suppression to the respondent, is false and dishonest, when the respondent has made a submission in paragraph 10 of its reply that the petitioner is not entitled to any equitable relief as they have suppressed that the co-gen plant was hypothecated to its lenders.

(iv) In regard to the submissions as advanced on behalf of the respondent on joint possession of the co-gen plant, Mr. Andhyarijuna would submit that it is false for the respondent to urge such contention, since under the second supplementary agreement, the respondent was permitted to operate the plant for a limited period of time. It is submitted that there is not a single document as shown by the respondent which would go to show that there was any joint possession of the co-gen plant. The Court’s attention is drawn to paragraph no. 9(xviii) of the affidavit in rejoinder filed on behalf of the petitioner wherein the petitioner had specifically denied that the co-gen plant is in joint possession of the petitioner and respondent for the past couple of years, and that, the respondent had provided spares, consumables, paid salaries of staff of the petitioner, provided operational support by deputing personnel from time to time and/or the respondent has spent crores of rupees for the co-gen plant’s operations and running at the instance and requests of the petitioner. It is pointed out that the petitioner has specifically pleaded that the respondent had withheld from this Court a vital fact that there was a mutual arrangement between the petitioner and respondent, wherein, the respondent had agreed to make certain operational payments and bear certain operational expenses on behalf of the petitioner, in order to compensate the petitioner for the losses caused to it due to the short-supply of bagasse fuel by the respondent, which was with an understanding that the operational expenses and operational payments made by the respondent on behalf of the petitioner will eventually be set off with the amounts that were due and payable by the respondent to the petitioner, due to the short supply of bagasse fuel by the respondent to the petitioner. It is submitted that the possession of the co-gen plant in respect of which a serious grievance has been made by the petitioner in the present proceedings have in fact happened between 12 October, 2021 to 26 October, 2021, i.e., after filing of the Section 9 petition.

(v) Mr. Andhyarijuna would next submit that merely taking assistance from the respondent to manage the co-gen plant would not amount to joint possession. It is submitted that in fact when the petitioner requested for support, it would categorically show that the petitioners are running co-gent plant and certainly, the cogent plant is not in a situation of joint possession. At the most, the right to enter the co-gen plant as may be granted by the petitioner would be a permissive entry to the respondent. Hence, the petitioner would be justified in seeking reliefs as prayed for as an interim measure, if such rights are usurped by the respondent. Even the proceedings before the DRT Delhi, would show that the contention of the respondent of joint possession of the co-gen plant is totally untenable inasmuch as a specific plea has been taken by the respondent before DRT that the respondent is exclusively running the co-gen plant. As also before DRT, Aurangabad, a plea has been taken by the respondent that the petitioner has abandoned the co-gen plant. It is thus submitted that contrary to such contention on record of the said proceedings a theory of joint possession is being asserted by the respondent in the present proceedings. It is submitted that such inconsistent stand of the respondent itself proves the falsity of its contentions.

(vi) Mr. Andhyarijuna would next submit that considering the clauses of PDA it completely belies the case of the respondent that any of such clauses would permit the respondent to take over the plant even in the event there was any failure of the petitioner to comply with its obligations, as the consequences in that regard are provided for under clause 25 of the PDA.

(vii) Insofar as the respondent’s contention that the prayer as made in the petition is for an interim mandatory injunction, it is submitted that Court has powers to grant such interim orders when a strong prima facie case of a nature as made out in the present petition exists, as also that the balance of convenience is in favour of the petitioner coupled with the fact that if the prayers as made are not granted, grave and irreparable prejudice would be caused to the petitioner. It is also submitted that as to what is prayed for in the present proceeding is also for a temporary injunction as seen from prayer clause (b), so as to restrain the cogent plant from being usurped by the respondent.

(V) Analysis and Conclusion

59. I have heard learned counsel for the parties at length and with their assistance I have gone through the record. At the outset, it needs to be noted that the petitioner intends to press this petition for a relief as prayed for in terms of prayer clause (b) which is noted above. Insofar as the prayer clause (a) is concerned, Mr. Khambata on behalf of the respondent has made a statement that the respondent has no intention to engage any third party to undertake operation/maintenance and management of the petitioner’s co-gen plant.

60. On the above premise, following questions would fall for consideration of the Court in the present proceedings:-

(i) Whether the petitioner is entitled for an injunction as prayed for in prayer clause (b) of restraining the respondent from in any manner entering the premises of the petitioner’s co-generation plaint and from carrying out any work/activity for the repairs/maintenance/operation of the petitioner’s co-gen plant?

(ii) Whether the respondent has any legal right under the contractual scheme as the parties stand, to interfere in the petitioner’s managing and operating its Co-generation plant and make an attempt to lock, stock and barrel, oust the petitioner from operating and managing its own Co-generation power plant?

61. To aid the discussion it would be appropriate to recapitulate some of the admitted facts. The petitioner was created as a Special Purpose Vehicle (SPV) incorporated by Gammon Infrastructure Projects Ltd. to set up the co-gen plant to be used for generating power and steam inter alia to be supplied to the respondent’s sugar factory. On 12 July, 2010, the Project Development Agreement (PDA) was entered between the respondent and the petitioner whereunder the petitioner agreed to set up and run a bagasse fired Co-generation (Co-gen) plant on a Build Own Operate Transfer (BOOT) basis, on land to be provided by the respondent adjoining to the sugar factory. Bagasse and biogas which are the bi-products in the sugar manufacturing process, were to be utilized in the Co-gen plant for the production of power and steam.

62. The Co-gen plant was to function as agreed between the parties under the PDA subject to the respondent’s supplying bagasse and biogas as per the “agreed minimum assured quantity” to the petitioner, so as to enable the petitioner to produce electricity as per the quantity as agreed between the parties in Schedule-I of the PDA. Under the PDA, the petitioner was also free to sell to any third party surplus power and steam after meeting the requirements of the Kharkhana-respondent. The parties also agreed under the PDA, on an “Assets Transfer Date” when the assets of the Co-gen plant would be transferred in favour of the respondent, which was to be 25 years from the operation commencement date which was to be 30 June, 2041 (considering that the date of commencement of the operation of the plant was 6 November, 2015).

63. In the context of the controversy which is raised in the present proceedings, some of the clauses of the PDA, the Land Lease Deed are required to be noted, which are as under:- RELEVANT CLAUSES UNDER THE PDA 1.[2] "Assets Transfer Date" or "ATD" shall be 30th June after completion of 25 years of operation starting from COD. For example, if the COD is 28thFeb 2009, the ATD will be 30 June

2034. 1.[5] "Commercial Operation Date" or "COD" of the Co-generation Facility will be deemed to occur on the date PREL delivers to Maharashtra State Electricity Distribution Company Ltd (hereafter called "MSEDCL") or to the Karkhana a certificate stating that the Co-generation Facility has become operational by PREL.

1.10 “Fair Market Value” is the value of an entity by treating the entity as a going concern which thereby recognizes a stream of future cash flows upto the Assets Transfer Date.

4.0 PREL TO BUILD AND OPERATE CO-GENERATION FACILITY 4.[1] Subject to the fulfillment of the aforesaid conditions precedent, then in fulfillment of the responsibilities of GIPL under the Memorandum of Terms dated 23" August 2007, PREL will set up the Co-generation Facility at Pravaranagar using plant and equipment and consistent with the technical specifications necessary to meet its obligations under this Agreement. 4.[2] The installed capacity of the Co-generation Facility shall be decided by PREL in consultation with its technical consultants. However, it shall be sufficient to meet the process steam and power requirement of the Karkhana during the Crushing Season and Off Season. 4.[3] PREL shall be responsible for designing, development, procurement, installation, erection, commissioning and operation of the co-generation Facility and for arranging finance for setting-up the co-gen Facility. 4.[4] PREL shall operate and maintain the Co-generation Facility in accordance the Prudent Utility Practices, Operating Procedures and Interconnection Procedures. 4.[5] Subject to the supply of Bagasse and Bio-gas as per the agreed minimum assured quantity mentioned herein below and as per quality specified in Schedule-I by Karkhana to PREL and except for Forced Outage, PREL shall meet entire process steam and power requirement of the Karkhana up to the extent mentioned in Schedule-I during the Crushing Season and Off Season. PREL shall be free to sell surplus power and steam after meeting the requirements of the Karkhana to any third party. 4.[6] PREL will operate the Co-generation Facility until the Assets Transfer Date in accordance with the terms of this Agreement. 4.[7] PREL shall be entitled to borrow money for setting up of the Co-generation facility by offering the same including the Leased Land as security. 4.[8] PREL may take planned shutdown of its co-gen Facility for periodical maintenance on such occasions and at such intervals, as maybe finalized in consultation with the Karkhana. However, no such planned shutdown of co-gen Facility shall be scheduled during the Crushing Season. Provided however, the co-gen Facility can do a planned outage as and when the Karkhana is having a planned outage.

5.0 LAND FOR THE PROJECT 5.[1] The Karkhana shall grant Leased Land to PREL for the purpose of setting up and operating Co-generation Facility. 5.[5] The Karkhana shall grant lease of the Leased land for the period commencing on the date as mutually decided on or before the Appointed Date and ending on the Assets Transfer Date.

6.0 SUPPLY OF BAGASSE 6.[1] The Karkhana shall continuously supply to PREL entire bagasse (excluding bagacillo) as and when generated in its sugar plant at Pravaranagar during the period beginning with Crushing Season of the year in which the Co-gen Facility commences production and ending with the close of last Crushing Season Day until the Assets Transfer Date. 6.[4] PREL shall pay price for bagasse supplied by the Karkhana at the rate mentioned in Schedule – II. The price shall be paid by PREL on monthly basis. The Karkhana shall raise bill on PREL for bagasse supplied by the Karkhana to PREL during the previous month. PREL shall make payment for such supply within 30 (thirty) days. 6.[5] The Karkhana shall supply bagasse to PREL having quantity not less than 216,000 MT during each Crushing Season and as per quality specified in Schedule-l. The total quantity of supply of bagasse of 216,000 MT in a Crushing Season is arrived at considering 160 days in a Crushing Season (tolerance level of maximum 4 days). If the Crushing Season is longer than 160 days (tolerance level of maximum 4 days), a quantity of 1100 MT/day of bagasse at the contracted price shall be supplied by the Karkhana in addition to the 216,000 MT. Therefore, under such circumstances, the minimum assured quantity of bagasse to be supplied by the Karkhana shall stand increased accordingly. The Karkhana shall give all help to PREL in procuring sugarcane trash/biomass from the farmers for this project. The Parties agree that a detailed agreement for this purpose shall be executed within 6 months of signing of this 6.[6] The Karkhana shall intimate to PREL three months in advance the tentative date of commencement of Crushing Season and provide a finalized schedule of supply of bagasse and bio-gas at least one month prior to the commencement of Crushing Season. Karkhana shall adhere to. The said Schedule. If during any Crushing Season, the Karkhana is unable to adhere to its given schedule, the Karkhana shall procure the quantity equivalent to the shortfall from other sources at its own cost and supply the same to PREL to adhere to the schedule. PREL shall pay to the Karkhana at the contracted rate as mentioned in Schedule. II for such supply of bagasse. 6.[7] If the Karkhana fails to supply the minimum assured quantity of bagasse as mentioned above, PREL shall be entitled to recover and the Karkhana shall pay to PREL the loss due to the purchase price differential of the bagasse over and above the contracted rate incurred by PREL. PREL shall be free to purchase bagasse from the open market up to the quantity of shortfall. Cost incurred by PREL on purchase and transfer of the bagasse up to Hook Up Point on such shortfall over the contracted rate mentioned in Schedule - II shall be borne by the Karkhana. The Karkhana shall make payment to PREL for such loss every month before the end of the month. 6.[8] If PREL remains in default in making payment for the bagasse to the Karkhana for more than 3 months without prior written consent of the Karkhana, the Karkhana shall be free to sell its bagasse to any other party. In such situation, any short realization on sale of bagasse in comparison to the contracted rate mentioned in Schedule - II, shall be borne and paid by PREL to the Karkhana.

7.0 SUPPLY OF BIO-GAS 7.[1] The Karkhana shall supply entire bio-gas generated from the bio-gas plant during the period beginning from COD and till the Assets Transfer Date. 7.[3] The bio-gas shall be transferred by the Karkhana to PREL at the Hook Up Point mentioned in Schedule - I-B on continuous basis as it is generated and collected. PREL shall provide and install at a suitable position and at its own cost meters to measure flow of bio-gas on continuous basis. The meters shall be calibrated and serviced as per manufacturer's service schedule during which time representatives of the Karkhana and PREL shall remain present. The Karkhana shall provide pumping pressurization required to maintain the supply pressure of bio-gas. 7.[7] If PREL is unable for any reason to accept delivery of bio-gas from the Karkhana or remains in default in making payment for the bio-gas to the Karkhana for more than 3 months without prior written consent of the Karkhana, the Karkhana shall be free to divert and use its biogas in any other plant of the Karkhana. In case the Biogas is not used in any other plant of Karkhana, such non-supply of bio-gas to the cogen Facility shall be deemed to be in satisfaction of minimum assured quantity mentioned in Schedule -I however PREL will not be liable to pay for such non-supply of bio-gas.

8.0 SUPPLY OF POWER & STEAM 8.[1] Subject to the supply of Bagasse and Bio-gas as per the quantity and quality specified in Schedule-I by Karkhana and except for the Force Outage, PREL shall meet entire process steam and power requirement of the Karkhana up to the extent mentioned in Schedule - I during the Crushing Season and Off Season.

8.11 It is expressly provided that continuous and uninterrupted supply of power and steam by PREL to the Karkhana, in accordance with requirements mentioned in Schedule J is essence of this Agreement based on fulfillment of mutual obligations by the Parties. PREL should make best endeavors to ensure continuous and uninterrupted supply of power and steam to the Karkhana, particularly during the Crushing Season. In case of Forced outage, PREL would make best efforts to provide power up to the limits specified in Schedule – I to the Karkhana through MSEDCL or any alternative source at the sole costs of Karkhana. PREL shall make best endeavors to maintain supply of steam by keeping its boiler operational and supplying through Pressure Reducing and De-Superheating Station ("PRDS").

8.12 Without prejudice to above, in case of failure on the part of PREL to supply assured quantity of electricity and steam as mentioned in Schedule - I, the Karkhana shall be free to take such steps as it thinks appropriate including purchase of electricity/steam from any other party or generation thereof in captive facilities, if any. Any difference between the actual price paid or actual cost incurred by the Karkhana for purchase/ generation of electricity/steam and the contracted rate mentioned in Schedule - Il shall be borne by PREL. The Karkhana shall deduct such amount from any sums payable by it to PREL

13.0

MODIFICATIONS IN SUGAR PLANT 13.[3] Even after completion of.the.sugar plant modifications, the Karkhana shall not discard or dispose off its steam and power generating facilities and keep them as standby units for the duration of two ensuing Crushing Seasons.

15.0

TERM OF AGREEMENT 15.[1] The term of this Agreement shall be from the date of signing of this Agreement until the Assets Transfer Date. 15.[2] PREL will operate the Co-generation Facility until the Assets Transfer Date in accordance with the terms of this Agreement

16.0

TRANSFER OF CO-GENERATION PLANT 16.[1] On the Assets Transfer Date, PREL shall, subject to the provisions of clauses below, transfer the Co-generation Facility to the Karkhana in normal working condition. 16.[2] The Karkhana shall pay a lump sum consideration of Rs. 1,00,000/ (Rupees One Lakh) to PREL for transfer of the Co-generation Facility to the Karkirana. Any duty and taxes including stamp duty on assets transfer shall be borne and paid by the Karkhana. 16.[3] It is obligatory on the part of PREL to maintain Co-generation Facility normal working condition at the time of transfer to the Karkhana. PREL shall be required to demonstrate and establish this by running the generation Facility for a continuous period of 7 days any time during en month of operation before Assets Transfer Date. The Cogeneration Facility shall be said to be in normal working condition if it is operate at more than 60% of its rated power generation capacity and its fuel consumption is not more than 115% of the standard consumption with reference to actual power generation during demonstration period. 16.[4] If PREL fails to demonstrate and establish that the Co-generation Facility is in normal working condition by running it for a continuous period of 7 days and achieve performance parameters as mentioned above, then PREL shall repair and bring the Co-generation Facility to normal working condition at the cost of PREL.

25.0

EVENTS OF DEFAULT AND TERMINATION 25.[1] Events of Default Event of Default means either Karkhana Event of Default or PREL Event of Default or both as the context may admit or require. a. Karkhana Event of Default Any events that are solely attributable to the Karkhana shall constitute an event of default by the Karkhana (“Karkhana Event of Default”) unless caused by PREL Event of Default or any Force Majeure event. The Karkhana Event of Default shall mean to include as under:-

VI. In case Karkhana fails to fulfill its obligations of soPAung /I.v./ and biogas as per the provisions contained in this Agreement for two continuous Crushing Seasons.

IX. Any payment which have become due and payable by the Karkhana to PREL as per this Agreement and the same have not been paid for a period of 180 days. b. PREL EVENT OF DEFAULT Any events that are solely attlibutable to PREL shall constitute an event of default by PREL (“PREL Event of Default”), unless caused by Karkhana Event of Default or a Force majeure Event. The PREL Event of Default shall mean to include as under:

II. As part of a scheme of arrangement or composition with its creditors, PREL makes any assignment for the benefit of its creditors generally an which is not reversed within 90 days of a written notice from the terminating Party.

V. In case PREL fails to fulfill its obligations of supplying power steam as per the provisions contained in this Agreement continuous period of 120 days in a Crushing Season. 25.[2] TERMINATION a. Termination Procedure

I. In case of an Event of Default, the Affected Party may serve a notice to the defaulting party stating that an Event of Default under this Agreement has occurred and the same should be remedied within 60 days. In case the defaulting party fails to remedy such Event of Default within the notice period, the Affected Party shall have a right to terminate this Agreement by serving a termination notice. b Rights and obligations in case of Termination due to Events of Default or Force Majeure.

I. Termination for Karkhana Event of Default:

1) Continue to operate its Co-generation Facility situated on the Leased Land and in which case the Karkhana shall continues to supply quantity of bagasse and biogas required for the operation of the Co-generation facility as abovementioned in clauses 6 and 7, with the quality as mentioned in Schedule I to PREL; and PREL will generate power and steam therein up to the Assets Transfer Date and sell such power and steam to the Karkhana MSEDCL or other customers/consumers; or 2) Require the Karkhana to buy the Co-generation Facility at the Fair Market Value. Such Fair Market Value shall be determined by the independent Category I Merchant Banker to be appointed jointly by Karkhana and PREL;

3) Transfer the co-generation facility to any third party to recover its cost. And in any of the above rights being enforced the Karkhana hereby agrees, undertakes and covenants not to, in any manner, obstruct the working or the operation of the cogeneration facility and not to commit any acts or deeds which will have adverse effect on the operation and functioning of the co-generation facility and to extend full co-operation in enforcement of the rights by PREL.

II. Termination for PREL Event of Default

The Karkhana shall have the right to buy the Co-generation Facility at a 90% of the Fair Market Value. The Fair Market Value shall be determined by the independent Category I Merchant Banker to be appointed jointly by the Karkhana and PREL.”

28.0

NO OBSTRUCTION 28.[1] The Kharkhana shall not create any kind of obstruction or interference in the work of PREL till the subsistence of this

64. Having noted the clauses of the PDA, the clauses of Land Lease Deed dated 12 July, 2010 are required to be noted: “5(viii) That the lessor hereby grants the irrevocable power and authority to the lessee to construct on and under the Leased Land and all such construction shall be the property of the Lessee and/or its nominees/assignees.

(ix) That the lessor hereby agrees and undertakes that it shall not mortgage, sell, dispose of or otherwise alienate or encumber the Leased Land or any part of thereof in any manner whatsoever during the expiry or earlier termination of this agreement.

8. ASSIGNMENT The Lessee may create any mortgage or charge over the Leased Land in favour of the Lenders or any agent or trustee acting on their behalf or assign this lease deed in favour of the lenders by way of security for the implementation of the Co-Generation Facility and allied activities. Provided that if the charge or mortgage is created or the Lease Deed is required to be assigned to any person other than the Lenders, the Lessee shall do so only with the prior written consent of the Lessor.”

65. It is stated by the petitioner that as per the terms of the PDA, the petitioner had agreed to inter alia facilitate modernization of the sugar plant and had agreed to spend upto Rs.20 crores on such modernization. The petitioner had accordingly advanced an amount of Rs.13.[5] crores to the respondent. Subsequently, in January 2015, the parties entered into an agreement called as the “Supplementary Agreement”, wherein the respondent agreed to refund an amount of Rs.13.50 crores to the petitioner so as to facilitate the commissioning of the plant in all respects on or before 31 March, 2015. It is the case of the petitioner that on the refund of the said advance, both the parties were relieved of all obligations as required under clause 14 of the PDA. It is the case of the petitioner that under the Supplementary Agreement, the respondent had agreed that the petitioner would be required to avail borrowings from the banks or any other source for completing the installation of the Cogen plant.

66. It is not in dispute that the petitioner completed the setting up of the Co-gen plant and started commercial operations with effect from 6 November, 2015. The Co-gen plant started producing electricity and steam, which was being supplied to the respondent as per the PDA and the Supplementary Agreement.

67. It appears that discord and friction started to built up between the parties from the very first crushing season 2015-16. The petitioners have contended that in the crushing season 2015-16, the respondent did not supply the minimum assured quantity of bagasse fuel to the petitioner and there was a short supply of 90,340 metric tons of bagasse fuel. Consequently, the petitioner had to source coal as fuel, which caused a heavy financial burden on the petitioner. Further, for the crushing season 2016-17 as well, there was short supply of 140,689 metric tons of bagasse fuel, hence again the petitioner had to source coal to run the Co-gen plant. All these factors according to the petitioner were not attributable to the petitioner, caused heavy financial burden on the

68. In the above circumstances, the petitioner addressed a letter dated 22 November, 2017 to the respondent inter alia informing about the short supply of bagasse fuel as also of the non-supply of biogas in the preceding crushing seasons and highlighted the losses incurred by it. The petitioner appraised the respondent of the following issues: (i) power supply to respondent from the petitioner was never discontinued and the petitioner was continuously supplying the required power to the respondent, throughout the year; (ii) there was no clarity/intimation from the respondent about the commencement of the crushing season;

(iii) there was no delay in the boiler super heater coil work; (iv) the petitioner had completed the kind of quantum of work in less than 20 days; (v) the operations of respondent’s factory had started for the crushing season on 10 November, 2017 however, the respondent did not achieve the capacity of 6000 metric tons per day; (vi) also the operation of respondent’s distillery plant could not commence as work on the same was in progress; The petitioner in the said letter stated that for the successful running of the co-gen plant for both the parties and especially beneficiary being the respondent, following were the issues of concern: “a) Karkhana is able to monetize vacant land in the form land rentals being paid by PREL; b) Karkhana is receiving power and steam at concession/subsidized price/rates, which otherwise would have cost exorbitantly if it had to arrange on its own; c) Returns from bagasse are beneficial & economical. If Karkhana was to use it directly in its system, it would have cost more & expensive. With power & steam being supplied from PREL plant, more value is being realized by Karkhana out of bagasse; d) In the event of supply of agreed quantity of bagasse & biogas by Karkhana, it also stand to gain additional payment in the form of additional compensation, if the generation is more than agreed quantity; e) Karkhana will also get various grants & subsidies, including various tax exemptions on purchase of sugarcane, etc.”

69. As noted above, it is the petitioner’s case, that its financially stressed condition was primarily due to respondent’s failure to fulfill its obligation and non-adherence to agreed conditions in the PDA. In this situation, the petitioner requested the respondent to release the petitioner’s payment/compensation totaling to Rs.48.12 crores towards the financial losses suffered by the petitioner due to non-compliance of obligations/ commitment by the respondent. It prima facie appears that in the very first operational year 2015-16, the respondent did not fulfill the contractual requirement of supplying the agreed quantity of bagasse and bio-gas.

70. It appears that even thereafter in the crushing season 2017-18 again there was a shortfall on the part of the respondent in supplying of 67544 metric tons of bagasse fuel. Also the biogas fuel was not supplied to the petitioner. As the prices of coal were extremely high and unviable due to international marketing conditions, the petitioner could not procure coal as an alternate fuel. This again had a cascading effect on the petitioner’s finances, as on such failure of the respondent to supply the assured minimum quantity of the bagasse and biogas the production had adversely affected which was causing the petitioner further losses, eventually the petitioner defaulted on its commitment to service its debts towards its lenders, resulting in the petitioner’s account being classified as Non-Performing Asset (NPA) since December, 2017. In order to mitigate the situation, it was decided between the parties to try and amicably resolve the situation. The parties accordingly entered into a “Second Supplementary Agreement” dated 30 October, 2018 under which for a period of one year, i.e., from 1 November, 2018 to 31 October, 2019, the respondent was to operate and run the Co-gen plant for one year in a manner as agreed under the said agreement. The relevant clauses of such agreement are required to be noted which read thus:-

4. The Amended PDA shall stand amended to the extent as stated under this Agreement. All other provisions of the Amended PDA shall remain the same. The Parties agree that this Agreement when read together with the Project Development Agreement and the Supplementary Agreement shall constitute the entire understanding between the Parties. Unless otherwise expressly provided elsewhere in this Agreement, during the term of Agreement, the order of priority of this Agreement, the Supplementary Agreement and the Project Development Agreement shall in the event of any conflict between them be in the following: (a) this Agreement; (b) The Supplementary Agreement; and

(c) The Project Development Agreement.

i.e. the agreement/ document at (a) above shall prevail over the agreements and documents at (b) and (c), the agreement/ document at (b) above shall prevail over the agreements and documents at (c).

7. The provisions of Clause 32 (Notices), Clause 33 (Dispute Resolution). Clause 34 (Confidentiality), Clause 40 (Governing Law), Clause 38 (Further Acts and and Assurance), Clause 36 (Survival) and Clause 35 (Assignment and Novation of Amended PDA shall be deemed to have been incorporated herein and shall me mutandis apply to this

8. Modified Operational Arrangement (the "MOA", the "Modified Operation Arrangement" or the "Modified Arrangement"): The Parties agree that the Co-generation Plant developed and presently being run PREL will be operated, managed and maintained by Karkhana for a period of (one) year from the MOA Commencement Date.

9. Tenure of the Modified Operational Arrangement: The term / tenure ("MOA Term") of the Modified Arrangement shall commence from 015 November 2018 ("MOA Commencement Date") and shall continue til 31 October 2019. Subject to Clause 12 of this Agreement, the MOA Term shall be extended from time to time by the mutual consent of the Parties. Such mutual consent of the Parties shall be recorded in writing.

10. Responsibility/ Scope of Karkhana and PREL during the MOA Term: 10.[2] During the MOA Term, PREL shall be responsible for each of the following: a) Handing over of the plant to Karkhana after completion of full maintenance of the Plant; b) Managing banking relationship and banking transactions for the operation and maintenance of the Plant by Karkhana as per the terms of the Modified Arrangement; c) Monthly review and monitoring of Plant performance and other compliances as per the terms and conditions of the Modified Arrangement; and d) Supervise and inspect the operations of the Plant by Karkhana from time to time;

12. Extension of Modified Arrangement: 12.[4] In the event, that the MOA Term is not extended then Karkhana categorically agrees to handover the plant after completion of annual maintenance of plant in good working condition to PREL at least 15 (fifteen) calendar days prior to the start of the immediately succeeding crushing season. The parties hereby agree and acknowledge that Karkhana shall not have any rights to operate and maintain the plant upon the expiry of the MOA Term and the Modified Arrangement including all provisions thereof shall automatically stand terminated and shall fall away.

15. Addition/modification in the system of plant: 15.[2] Karkhana agrees not to change, modify, alter, add or remove or do any such similar act to the existing technical set up or structure of the plant without obtaining prior written approval from PREL.

16. General Conditions: 16.[2] The Parties expressly acknowledge that Karkhana has comprehensively inspected the Plant prior to taking over the Plant under this Modified Arrangement and warrants to PREL that the same is in good working condition and does not suffer from any patent and/or latent defects. 16.[9] PREL representatives shall be allowed access at all times in to the premises of the Plant without any restriction for monitoring, review, supervision of the functioning of the Plant, Karkhana shall at all-time grant PREL immeidate access to all system reports, data, information concerned with the Plant, machinery, equipment, fuel etc.

18. Termination of the Modified Arrangement: 18.[1] Parties agree that the Modified Arrangement shall automatically terminate in the event a) the expiry of the MOA Term unless extended in accordance with Clause 12 of this Agreement and / or b) Karkhana breaches any term as stated in this Agreement.

71. Thus, under Article 10.[2] and Article 16.[9] of the second supplementary agreement, the petitioner was responsible to supervise and inspect the operations of the co-gen plant from time to time. The petitioner nominated two representatives from its Head office for the smooth co-ordination and functioning of the plant. The human resources, including technical team of the petitioner was to be retained by the respondent. Also the respondent had agreed not to change, modify or alter or remove existing structure of the co-gen plant. Under Clause 11.1, the respondent was inter alia to pay the petitioner a minimum guaranteed amount every month from 1 March, 2019 amounting to Rs.48 crores in escrow account for discharging petitioner’s financial obligations towards the lenders. The respondent, however, breached in making payments as per Clause 11.1.

72. The petitioners have strenuously contended, and it appears to be not in dispute that in October-November, 2018, the respondent had requested for permission to dismantle the biogas pipeline from the cogen plant’s boiler for connecting the same to the respondent’s factory. The petitioner however did not grant such permission, as this would have amounted to the petitioner being deprived of the contractual supply of bio-gas as per clause 4.5, 6.6,7.[7] of the PDA and supplementary agreement. Despite which the respondent in patent breach of Article 15.[2] of the Second Supplementary Agreement dismantled the existing biogas pipeline from the co-gen plant boiler and installed the same within the respondent’s factory premises for captive use, and since then, the respondent has not restored the pipeline and continues to use the same for its captive use. It appears that in such disturbing circumstances, the one year term for the respondent to operate the co-gen plant under the Second Supplementary Agreement came to an end on 30 October, 2019.

73. The ensuing period was the crushing season 2019-20. The petitioner has stated that for the said crushing season, the petitioner pumped in a sum of Rs. 4 crores for the maintenance of co-gen plant, this was despite the petitioner’s account being classified as NPA in December, 2017 and even when the lenders were unwilling to release funds for operational requirement of the co-gen plant. However, although the financial constraints were so severe and when it was expected that the plant should be operated optimally and with particularity, it is the case of the petitioner that the respondent again put the petitioner into a serious disadvantage and this time by committing a breach of Clause 6.[6] of the PDA, namely that the respondent failed to intimate the petitioner three months in advance of the tentative date of commencement of the crushing season and to provide a finalized schedule of supply of bagasse and biogas at least one month prior to the commencement of crushing season. It appears to be an admitted position that for the crushing season 2019-20, there was a shortfall of 155,222 metric tons of bagasse fuel than the minimum assured quantity in terms of PDA. Also, biogas fuel was not supplied, as the respondent had dismantled and/or removed the biogas pipeline in or around October – November 2018.

74. There appears to be much substance in the petitioner’s contention on the respondent illegally dismantling and removing the biogas pipeline for captive use. This breach appears to be a serious breach. It is clear that the respondent has till date not restored the bio-gas pipeline and is using the same for captive use of the bio-gas in breach of the several conditions of the PDA. Further, it is also not clear as to under what right such pipeline could be dismantled by the respondent, thereby, disturbing the working of the co-gen plant to the serious prejudice and at the cost of losses being caused to the petitioner. As correctly contended on behalf of the petitioner the intention of the respondent clearly appears that the biogas need not be supplied to the petitioner, which certainly amounted to breach of Clauses 4.[6] of the PDA agreement and Clause 15.[2] of the second Supplementary Agreement whereby the respondent agreed not to change, modify, alter or removal or any such or similar act to existing technical set up/ structure of the plant, without obtaining prior written approval of the respondent. It was also clearly provided that the petitioner will operate the co-generation facility till the asset transfer date (30 June 2041). Further, none of the clauses in the second SA dated 30 October 2018 permitted the respondent to dismantle the biogas pipeline. The petitioner categorically pointed out to the respondent by its letter dated 14 October 2020 that the biogas pipeline has been dismantled by the respondent in the absence of the petitioner’s permission and has been installed within the respondent captive area for its own use. The petitioner not only by such letter but also in an earlier meeting which was held between the parties on 25 September 2020, requested the respondent to reinstall the stainless steel pipeline from the co-gen plant to the respondent’s bio-gas plant so that the petitioner’s co-gen plant starts receiving supply of biogas from the respondent. However, there was no response whatsoever to such request as also to the letter of the petitioner. This is one of the telling circumstances as to what was being intended by the respondent was to choke the petitioner’s production.

75. It appears that even for the next crushing season 2020-21, there was a short supply of 96,344 MT of bagasse fuel by the respondent, as also the bio-gas fuel was not supplied to the petitioner, as the respondent had dismantled the biogas pipeline. Thus, as rightly contended on behalf of the petitioner, prima facie, there was a clear breach of Clause 6.[5] of the PDA under which the respondent had agreed to supply the minimum quantity of bagasse to the petitioner of 216000 MT during each crushing season. Further, for the crushing period 2020- 21 the respondent failed to intimate the petitioner by a three months advance notice as agreed in Clause 6.[6] of the PDA prior to the commencement of the crushing season and to provide a finalized schedule of bagasse and biogas one month prior to crushing season. Thus, again, there was a breach of Clause 6.[6] of the PDA.

76. As to why with impunity the respondent was intending to be in breach of the several terms and conditions of the PDA and the second SA and still remain in the contract, may be felt quite intriguing at this stage.

77. It is in these circumstances, just prior to the commencement of the crushing season 2020-21, an addendum agreement was executed between the petitioner and the respondent on 14 October 2020, under which the respondent admitted that it was unable to provide to the petitioner, the assured quantity of fuel (bagasse and bagasse equivalent of shortfall of biogas, as per the agreed terms of the PDA) and that there was short supply of bagasse and bagasse equivalent of biogas to the extent of 474,435 Metric Tonnes and the co-generation facility hence was not able to run to its logical optimum original capacity, on account of which the petitioner was unable to comply its financial commitments to its consortium lenders. In clause (E) of the addendum agreement, the parties agreed that in full and final settlement of the claims of the petitioner, the parties agree that they were desirous to resolve the situation by bringing the loan account back to a “standard status” with its lenders within a reasonable time-frame. The respondent agreed on a mutually acceptable basis on certain terms to supply fuel (bagasse and biogas as per the agreed terms of the PDA) to enable the petitioner to continue its operations and achieve optimal capacity which will benefit both the parties. Accordingly, it was agreed between the parties under the said agreement that the respondent will supply additional bagasse to the petitioner over and above the quantity specified in the PDA in the following manner:- (a) During crushing season 2020-21 105,000 MT. (b) During crushing season 2021-22 105,000 MT.

78. It was also agreed in the addendum agreement that there shall be no change in the above quantities. Also for the crushing season 2022-23 it was agreed by the respondent to supply to the petitioner about 105,000 MT of bagasse and for the crushing season 2023-24 about 60,000 MT of bagasse, however, the exact quantity was to be decided mutually and recorded in writing within two months from the date of execution of the said addendum agreement. In clause (8) of the addendum agreement it was agreed that in the event the respondent failed to provide the bagasse aggregating to 210000 MT during the two crushing seasons 2020-21 and 2021-22, the respondent shall be liable to supply to the petitioner the balance of the 4,74,435 MT bagasse as set out in the said clause.

79. Although the addendum agreement is of such nature and appears to have originated from the respondent itself, and also as clearly seen from the document as placed on record that it has been signed by both the parties, however, the respondent has taken a peculiar stand on the addendum agreement. The respondent in its reply affidavit dated 21 November 2022 while not denying the execution of the said agreement has contended that the addendum agreement does not bind the respondent. The following statement of the respondent in paragraph 69 of the reply affidavit can be noted:- “The purported Addendum Agreement dated 14 October 2020 relied by the petitioner, does not form a binding and subsisting agreement and hence the Respondent is not under any obligation to make good any loss to the petitioner under the purported Addendum Agreement dated 14 October 2020”

80. It is surprising as to how the respondent can take this position, having already executed the addendum agreement.

81. In fact, the stand as taken by the respondent in the reply affidavit is replete with statements which show that the respondent at its convenience has been changing its stands, with a common theme, as reflected not only from the correspondence but also from its pleadings in the present proceedings, that the respondent’s intention is only to take over the co-gen plant, as if it is its own property, in complete deviation from what has been agreed between the parties on the take over of the plant, as on the “asset transfer date”. There are number of statements in different affidavits as filed on behalf of the respondent to this effect, however, one of such statements to this effect in the affidavit dated 21 November 2021 can be noted which reads thus:- “Various meetings have been held between the Chairman and senior management of the Petitioner and the Respondent in 2020 and 2021, wherein discussions have been held to arrive at an amicable settlement inter alia exploring the options whereby the Petitioner’s plant would be permanently taken over/acquired by the Respondent and the loans of the petitioner would be settled with the Bankers of the Petitioner.”

82. Prima facie it clearly appears from the reading of the pleadings on record that having breached the clauses in the agreement and having confirmed such breaches in the addendum agreement, the respondent wanted to wriggle out of such binding commitment and obligations under the addendum agreement. The above intention of the respondent, so as to remain in breach of the contractual terms as agreed in the PDA, is quite apparent from the fact, that the respondent despite entering into an addendum agreement for the crushing season 2020-21, the respondent defaulted in supplying minimum assured quantity of bagasse and there was a shortfall of 96344 MT on its part.

83. It needs to be also noted that the petitioner by its letter dated 29 May 2021 addressed to the respondent had clearly recorded that for the past five crushing seasons (2015 to 2020) there was a shortfall of bagasse to the petitioner which amounted to 474435 MT. It was also stated that in the addendum agreement dated 14 October 2020 the respondent had agreed to supply additional quantity of bagasse of totally 365000 MT for the period 2020-21 to 2023-24. It was stated that during the crushing season 2020-21, whcih was over and from 6 May 2021 the respondent had not supplied the agreed quantity of bagasse to the petitioner. It was also pointed out that the shortfall of bagasse for the crushing season 2020-21 was about 201344 MT. The petitioner also recorded that the respondent was in breach of the terms of supply of bagasse to the petitioner, both in terms of PDA as well as in terms of the addendum agreement. It was also stated that unless the shortfall is made good and the respondent does not provide bagasse to the petitioner, till the start of the next crushing season (2021-22), the petitioner will suffer huge financial losses. Another letter dated 3 August 2021 was addressed by the petitioner to the respondent pointing out failure of the respondent to supply the contracted bagasse fuel to the petitioner. It was again pointed out that the respondent was in breach of the terms of supply of bagasse to the petitioner in terms of the PDA as well as in terms of the addendum agreement and that short supply for crushing season 2020-21 was 201344 MT. It was also recorded that due to inability of the respondent to supply the entire quantum of bagasse fuel of 264720 MT per annum as per the PDA from the date of commencement of operations upto the end of the last financial year that is 31 March 2021, the petitioner was not able to generate electricity, because of which it suffered huge losses, the figures of which were detailed in a statement as set out in the said letter under the title “Details of Loss of Profit on account of short supply of Bagasse by Karkhana”. It was stated that it was clear from the said chart that there was a gross revenue loss of 170.19 crores and the net loss of Rs.120.41 crores, with a request to the respondent to henceforth honour the conditions under the PDA and the addendum agreement, so that the plant functions normally from the next crushing season. The petitioner also recorded that the petitioner was awaiting the release of Rs.120.41 crores by the respondent.

84. It is interesting to note the respondent’s stand in the reply of the respondent to the above referred letters of the petitioner. The respondent commonly replied to the petitioner’s letter dated 29 May 2021, 3 August 2021 and 6 August 2021 by its letter dated 4 September 2021, and as noted above, disowning the addendum agreement dated 14 October 2020 and thereby not accepting any obligation thereunder, with a justification as set out in paragraphs 7 and 8 as noted above. From the perusal of this long letter of the respondent, it is quite apparent that the respondent has not disputed that there was a short supply of bagasse for the last five crushing seasons. There is also no whisper on its conduct of dismantling the biogas pipeline. However, a picture was sought to be painted, as if the petitioner is solely responsible for the power supply and that too in the absence of adequate supply of bagasse and bio-gas which was the basic raw material on which the cogen plant was to operate and which was to be supplied by the respondent. In fact, the respondent surprisingly goes to the extent of denying that there was any short supply of bagasse for last five crushing seasons on its part. It is also indicative that the respondent was trying to make out a case of non maintenance of the plant as a reason for the respondent not to supply the bagasse. Ex facie, such a contention was absurd to say the least, as one could appreciate the respondent saying that the bagasse was available and was being continuously supplied to the petitioner and it was for some reason the petitioner refused to accept the bagasse for any technical deficiency in the co-gen plant, only then, the situation as being painted by the respondent could have been understood.

85. It also needs to be noted from the contents of the respondent’s letter dated 4 September, 2021 that the respondent stated that the parties had reconciled the accounts till 31 March, 2018 and it was agreed that the total amount to be paid to the respondent by the petitioner was Rs.5.01 crores towards full and final settlement of all dues/outstanding amounts. Paragraph 10(i) of the said letter reads thus:

(i) The claims made by the PREL are calculated from Crushing

Season of 2015-16 onwards. The 2nd Supplementary Agreement dated 30 October, 2018 was executed between PREL and the Karkhana. Under Clause 19.[1] and 19.[3] of the Supplementary Agreement dated 30 October, 2018, the parties had reconciled the accounts till 31 March, 2018 and it was agreed that the total amount to be paid to Karkhana by PREL is Rs.5.01 crores towards full and final settlement of all dues/outstanding amounts.”

86. It thus clearly appears from the respondent’s own statement as noted above that there can certainly be no justification for the respondent to take over the assets of the petitioner, in a manner not known to law. Further from paragraph 14 of the said letter, the occupation and possession of the petitioner of the co-gen plant to be with the petitioner as on 4 May 2021, can instantly be inferred. The said paragraph reads thus: “14. The Karkhana expects PREL to take all steps necessary to ensure that the co-gen plant is fully ready and operational well in advance before the commencement of the upcoming crushing season 2021-22 (i.e., tentatively from 15 October, 2021).”

87. The record also indicates that the petitioner by its letter dated 18 June, 2021 raised serious issues on the administration, safety and security of the co-gen plant, again reiterating that there was a gross noncompliance of the PDA by the respondent and that the respondent would need to take appropriate consent from the petitioner, in writing, before interfering in the affairs of the co-gen plant as set out in detail in the said letter.

88. On behalf of the petitioner, it was strenuously submitted, that after this petition was filed on 12 October, 2021 the respondent usurping the petitioner’s rights have foisted themselves on the co-gen plant and has prevented the petitioners, its officers, employees and representatives to enter and operate the co-gen plant. The pleadings on record as also the submissions as made on behalf of the respondent clearly indicates that the petitioner’s contention in this regard is correct, as the respondent has started asserting that as on date, it is operating the co-gen plant. The reply affidavit is also replete with diverse pleas of the respondent contending that it is only the respondent which ought to operate the co-gen plant by ousting the petitioner.

89. In the above circumstances, whether it was permissible for the respondent to act in such manner and takeover the management and operation of the co-gen plant under any of the conditions in PDA or in other agreements as entered between the parties has become the core issue. In my prima facie opinion, clearly none of the terms and conditions of either PDA or the Supplementary Agreement or the Second Supplementary Agreement would confer any such right on the respondent to takeover the co-gen plant and exclusively operate and manage the co-gen plant which admittedly belongs to the petitioner. If any such rights were to accrue to the respondent, it would be only under the “asset transfer mechanism” under the co-gen plant as per the terms and conditions of the PDA.

90. As noted above, under the PDA the parties have clearly agreed for an “Asset Transfer Date”(clause 1.2) which is after completion of 25 years from the commencement of the commercial operations date (clause[1].5). Further, the parties in Clause 25 have agreed to the “Events of Default and Termination”. The ‘events of default of respondent’ as also the ‘event of default of the petitioner’ have been separately defined in Clause 25.1. In Clause 25.2, the parties have agreed to the termination procedure. In the event, there was to be a termination on account of the respondent’s default, in that event it was clearly agreed under Clause 25.[2] (b)(I)(2) of the PDA that it would require the respondent to buy the Co-generation Facility at the “Fair Market Value” and such fair market value shall be determined by the independent Category I Merchant Banker, to be appointed jointly by the respondent and the petitioner, or failing which transfer the Co-generation facility to any third party to recover its cost. In doing so, what is most vital to be noted is, as to what has been agreed between the parties in the paragraph below Clause 25.[2] b (3), which reads thus: “And in any of the above rights being enforced the Karkhana hereby agrees, undertakes and covenants not to, in any manner, obstruct the working or the operation of the Co-generation Facility and not to commit any acts or deeds which will have adverse effect on the operation and functioning of the Co-generation Facility and to extend full co-operation in enforcement of the rights by PREL.”

91. Further it needs to be noted that under the PDA in the event of termination due to fault on the part of the petitioner, it was clearly agreed between the parties in Clause 25.2(b)(II) that the respondent shall have the right to buy the Co-generation Facility at a 90% of the Fair Market Value, which shall be determined by independent Category I Merchant Banker to be appointed jointly by the respondent and the petitioner. The said clause reads thus:

“II. Termination for PREL Event of Default The Karkhana shall have the right to buy Co-generation Facility at a 90% of the Fair Market Value. The Fair Market Value shall be determined by the independent Category I Merchant Banker to be appointed jointly by the Karkhana and PREL.”

92. Another clause which needs a special reference is clause 28 of the PDA which provides for “No Obstruction”. This clause provides that the respondent shall not create any kind of obstruction or interference in the work of the petitioner till the subsistence of the PDA. Clause 28 of the PDA reads thus:- “ 28.0. No Obstruction The Kharkhana shall not create any kind of obstruction or interference in the work of PREL till the subsistence of this agreement.”

93. It is thus crystal clear from the PDA that the only right which would be available and accrue in favour of the respondent to takeover the co-gen plant is in a manner as agreed under the PDA and that is only on the agreed procedure of determining the fair market value, being put into motion, and only, on such determination of the said value/amounts, and on the same being paid to the petitioners, the assets of the co-gen plant could be transferred to the respondent prior to the asset transfer date in the manner as agreed under clause 25.2.bI (2) or II of the PDA which is extracted below for convenience:- “Clause 25.2.bI (2) Termination for Kharkhana Event of Default 2) Require the Kharkhana to buy the cogeneration facility at the Fair Market Value. Such Fair Market Value shall be determined by the independent category I Merchant Banker to be appointed jointly by Kharkhana and PREL; ….” Termination for PREL Event of Default The Kharkhana shall have the right to buy the cogeneration facility at a 90% of the Fair Market Value. The Fair Market Value shall be determined by the independent category I Merchant Banker to be appointed jointly by Kharkhana and PREL ”

94. In my prima facie opinion, the attempt of the respondent however appears to be to give a complete go-by to the above agreed procedure under which the respondent could take over the assets of the petitioner only at the fair market value and in no other manner. The respondent therefore cannot take a position that the petitioner ought not to operate /manage its own co-gen plant. As clear from the record, the respondent in a coercive manner and taking undue advantage of the fact that the petitioner is in financial distress appears to be exploiting the situation to prepone the taking over of the plant, 15 years earlier to the Assets Transfer Date (30.06.2041). Various actions of the respondent suggest an attempt to grab this opportunity to its advantage and profiteer at the cost of huge investment as made on the co-gen plant by the petitioner.

95. Prima facie it is also gravely doubtful as to how the respondent could disown the addendum agreement by merely saying that it is not binding on the respondent, which if was to be implemented could have certainly changed the situation for the petitioner, and parties could have possibly avoided to litigate.

96. Now, the submissions as made by Mr. Khambata in opposing the reliefs prayed by the petitioner can be considered, so as to examine as to whether the petitioner would nonetheless become dis-entitled to such reliefs. The first submission of Mr. Khambata on the backdrop of the Sugar Commissioner passing an order dated 27 December, 2021, observing that “either party may refer the dispute to arbitration according to the provisions of Clause 33.[2] of the contract”, is to the effect, that the present petition filed under Section 9 of the Act ought to be held, to be not maintainable, on the ground that the petitioner has no inclination to commence arbitral proceedings. In my opinion, such contention is required to be stated to be rejected for more than one reason. Firstly, for the reason that the present petition was filed on 12th October 2021 that is, prior to the Sugar Commissioner passing the said order on 27th December 2021. Secondly, for the reason that Mr. Andhyarujina, at the outset, has stated that his clients are immediately intending to agree to nominate an arbitral tribunal, however, without prejudice to the petitioner’s right to press for the reliefs in the present petition. Thus, Mr. Khambata’s contention that there is no inclination for the petitioner to commence arbitration cannot be accepted. It is also not the case that the petitioner has invoked arbitration and the petitioner is dilly-dallying it. From a reading of Section 9 of the Act, it is clear that a party is entitled to approach the Court praying for interim measures inter alia before the commencement of the arbitral proceedings, as in the present case. Also a party in a given situation would be entitled to approach the Court even during or after making of an arbitral award but before it is enforced in accordance with Section 36 of the Act.

97. It is clear that the petitioner, complaining of patent breach of their contractual rights inter alia under the PDA and in order to seek protection of its arbitral interest and preservation of the subject matter of the arbitral agreement i. e. Co-gen plant, has approached the Court praying for interim measures. Once the petitioner approaches this Court raising such serious concerns, looked from any angle, it is not possible to accept Mr. Khambata’s submission that the petitioner deserves to be nonsuited either on account of its alleged non-willingness to proceed in arbitration or of any alleged dis-entitlement on the petitioner in not invoking the provisions of Section 11 of the Act. The respondents have also not invoked arbitration. Thus, in my opinion, in the facts and circumstances of the case, it would be required to be held that the petitioner was entitled to and has appropriately taken recourse to the provisions of Section 9, and as such there is no impediment for the Court, to consider the prayers as made in the Petition. Thus, in the facts of the present case, Mr. Khambata’s reliance on the decision of the Supreme Court in the case of Firm Ashok Traders And Anr. Vs. Gurumukh Das Saluja And Ors., reported in (2004) 3 SCC 155 is not well founded, as this is not a case, in which the petitioner in any manner, has slept over its rights and secondly it is not the case that the petitioner has no manifest intention to take recourse to arbitral proceedings. The circumstances fully justify the petitioner to approach this Court by taking recourse to Section 9 of the Act.

98. Prima facie the complexion of the case is such that after the present petition was filed, the respondent has left no stone unturned to usurp petitioner’s right to manage and operate Co-gen plant, and in fact, the respondent has attempted to take over the Co-gen plant, so as to foist removal of the petitioner and/or its employees and staff entering the co-gen plant. It is, in these circumstances, Interim Application (L) No. 3343 of 2022 was filed by the petitioner praying for further reliefs. Thus, to accept Mr. Khambata’s contention that the Section 9 petition be held to be not maintainable, and that petitioner should seek reliefs before the arbitral tribunal under Section 17 of the Act, in my opinion, is a hyper technical argument which if accepted in the present facts would amount to manifest derailment of justice. It may be observed that technicalities of law can never prevail and/or overcome the pursuits of justice. Thus, even applying the principles of law as laid down in the decision in Firm Ashok Traders (Supra), it is difficult to accept that the petitioner has not contemplated or is manifestly avoiding to commence arbitral proceedings in a reasonable time. In such decision, it is clearly held by the Supreme Court, that what is expected of a party is to commence arbitral proceedings within a reasonable time, and such reasonable time would depend on facts and circumstances of each case. It was also held that commencement of arbitral proceedings is not contemplated on the interim relief itself being allowed or denied and the Court while passing an order under Section 9 may put a party on terms and may also re-call the order, if the party commits breach of the terms. The observations of the Court in this context can be noted in paras 13, 17 and 18 which read as under:- “13. ……..The reliefs which the court may allow to a party under clauses (I) and (ii) of Section 9 flow from the power vesting in the court exercisable by reference to “contemplated”, “pending” or “completed” arbitral proceedings. The court is conferred with the same power for making the specified orders as it has for the purpose of and in relation to any proceedings before it though the venue of the proceedings in relation to which the power under Section 9 is sought to be exercised is the Arbitral Tribunal. Under the scheme of the A & C Act, the arbitration clause is separable from other clauses of the partnership deed. The arbitration clause constitutes an agreement by itself. In short, filing of an application by a party by virtue of its being a party to an arbitration agreement is for securing a relief which the court has power to grant before, during or after arbitral proceedings by virtue of Section 9 of the A & C Act. …….

17. There are two other factors which are weighing heavily with us and which we proceed to record. As per the law laid down by this Court in Sundaram Finance Ltd. An application under Section 9 seeking interim relief is maintainable even before commencement of arbitral proceedings. What does that mean ? In Sundaram Finance Ltd. Itself the Court has said: (SCC p. 488, para 19) “It is true that when an application under Section 9 is filed before the commencement of the arbitral proceedings, there has to be manifest intention on the part of the applicant to take recourse to the arbitral proceedings.” Section 9 permits application being filed in the court before the commencement of the arbitral proceedings but the provision does not give any indication of how much before. The word “before” means, inter alia, “ahead of; in presence or sight of; under the consideration or cognizance of”. The two events sought to be interconnected by use of the term “before” must have proximity of relationship by reference to occurrence; the later event proximately following the proceeding event as a foreseeable or “within-sight” certainty. The party invoking Section 9 may not have actually commenced the arbitral proceedings but must be able to satisfy the court that the arbitral proceedings are actually contemplated or manifestly intended (as Sundaram Finance Ltd. puts it) and are positively going to commence within a reasonable time. What is a reasonable time will depend on the facts and circumstances of each case and the nature of interim relief sought for would itself give an indication thereof. The distance of time must not be such as would destroy the proximity of relationship of the two events between which it exists and elapses. The purpose of enacting Section 9, read in the light of the Model Law and UNCITRAL. Rules is to provide “interim measures of protection”. The order passed by the court should fall within the meaning of the expression “an interim measure of protection” as distinguished from an all-time or permanent protection.

18. Under the A & C Act, 1996, unlike the predecessor Act of 1940, the Arbitral Tribunal is empowered by Section 17 of the Act to make orders amounting to interim measures. The need for Section 9, in spite of Section 17 having been enacted, is that Section 17 would operate only during the existence of the Arbitral Tribunal and its being functional. During that period, the power conferred on the Arbitral Tribunal under Section 17 and the power conferred on the court under Section 9 may overlap to some extent but so far as the period pre- and post- the arbitral proceedings is concerned, the party requiring an interim measure of protection shall have to approach only the court. The party having succeeded in securing an interim measure of protection before arbitral proceedings cannot afford to sit and sleep over the relief, conveniently forgetting the “proximately contemplated” or “manifestly intended” arbitral proceedings itself. If arbitral proceedings are not commenced within a reasonable time of an order under Section 9, the relationship between the order under Section 9 and the arbitral proceedings would stand snapped and the relief allowed to the party shall cease to be an order made “before” i. e. in contemplation of arbitral proceedings. The court, approached by a party with an application under Section 9, is justified in asking the party and being told how and when the party approaching the court proposes to commence the arbitral proceedings. Rather, the scheme in which Section 9 is placed obligates the court to do so. The court may also while passing an order under Section 9 put the party on terms and may recall the order if the party commits breach of the terms.”

99. Thus, the above decision of the Supreme Court would not support the proposition as canvassed by Mr. Khambata on his contention on readiness and willingness of the petitioner to commence arbitration as in the present case the petitioner is not disinclined to commence arbitration and about which I am wholly satisfied. It is also difficult to conceive that when the petitioner itself feels aggrieved by so many actions of the respondent, which have been urged to be in total breach of the PDA, the petitioner in such situation would remain content with the proceedings and not commence arbitration. The respondent hence is completely ill-advised to labour such contention to this extent, to nonsuit the petitioner from the Section 9 proceedings.

100. Further, the situation in hand is not such, as the parties stood, in the case of Arcelor Mittal Nippon Steel India Ltd. vs. Essar Bulk Terminal Ltd., (2021) SCC Online SC 718 on which reliance is placed by Mr.Khambata. In this case, the question which was raised, in the appeal, before the Supreme Court was as to whether the Court has the power to entertain an application under Section 9(1) of the Act once the arbitral tribunal was constituted, and if so, what is the true meaning and period of the expression “entertain” as used in Section 9(3) of the Act. Another question which was examined by the Supreme Court was whether the Court is obliged to examine the efficacy of the remedy under Section 17 before passing an order under Section 9(1) of the Act, once an arbitral tribunal was constituted. There cannot be two opinions, on what has been laid down in such context by the Supreme Court, namely, it is only when the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious, the Court in such situations may entertain the Section 9 proceedings. In the present case the arbitral tribunal is yet to be constituted. Hence, the Court is certainly not concerned with a situation, that an arbitral tribunal having being constituted the petitioner has invoked the jurisdiction of the Court under Section 9 of the Act and/or the provisions of sub-section (3) of Section 9 have become relevant, so as to consider a question, that the Section 9 proceedings are not maintainable. In the context of examining the questions which fell for consideration of the Supreme Court, as noted above, the Supreme Court has categorically held that even if an arbitral tribunal is constituted, there may be myriad of reasons why an interim application before an arbitral tribunal may not be an efficacious remedy to Section 9(1) proceedings. The Supreme Court observed that applications for interim relief are necessarily applications which are required to be disposed of urgently, as interim relief is granted in aid of final relief. The object of the provision being to ensure protection being granted in regard to the subject matter of arbitration and/or otherwise ensure that the arbitration proceedings do not become infructuous and the arbitral award does not become an award on paper of no real value. The following observations of the Court which re-iterate the position in law on the entitlement of the parties to invoke Section 9(1) is required to be noted, which reads thus: “96. Even after an Arbitral Tribunal is constituted, there may be myriads of reasons why the Arbitral Tribunal may not be an efficacious alternative to Section 9(1). This could even be by reason of temporary unavailability of any one of the Arbitrators of an Arbitral Tribunal by reason of illness, travel etc.

97. Applications for interim relief are inherently applications which are required to be disposed of urgently. Interim relief is granted in aid of final relief. The object is to ensure protection of the property being the subject matter of Arbitration and/or otherwise ensure that the arbitration proceedings do not become infructuous and the Arbitral Award does not become an award on paper, of no real value.

98. The principles for grant of interim relief are (I) good prima facie case, (ii) balance of convenience in favour of grant of interim relief and (iii) irreparable injury or loss to the applicant for interim relief. Unless applications for interim measures are decided expeditiously, irreparable injury or prejudice may be caused to the party seeking interim relief.

107. It is reiterated that Section 9(1) enables the parties to an arbitration agreement to approach the appropriate Court for interim measures before the commencement of arbitral proceedings, during arbitral proceedings or at any time after the making of an arbitral award but before it is enforced and in accordance with Section 36 of the Arbitration Act. The bar of Section 9(3) operates where the application under Section 9(1) had not been entertained till the constitution of the Arbitral Tribunal. Of course it hardly need be mentioned that even if an application under Section 9 had been entertained before the constitution of the Tribunal, the Court always has the discretion to direct the parties to approach the Arbitral Tribunal, if necessary by passing a limited order of interim protection, particularly when there has been a long time gap between hearings and the application has for all practical purposes, to be heard afresh, or the hearing has just commenced and is likely to consume a lot of time. In this case, the High Court has rightly directed the Commercial Court to proceed to contemplate the adjudication.”

101. The judgment of the the Gujarat High Court in the case of Essar Bulk Terminal v. Arcelor Mittal Nippon Steel India Limited (First Appeal No. 3040 of 2021 dated 03.02.2022) on which reliance is placed by Mr. Khambata, is also a decision which discusses the powers of the Court under Section 9 of the Act vis-a-vis the power of the tribunal under Section 17 of the Act. In para 113 of the said decision, while referring to the decisions in Ramniklal N. Bhutta vs. State of Maharashtra, reported in (1997)1 SCC 134 and Raunaq International Ltd. Vs. I.V.R. Construction Ltd., reported in (1999)1 SCC 492, it was held that in an appropriate case, the Court in ordering interim measures, must not hesitate in exercising its powers. The Court observed that in judging whether a case is ‘appropriate’ or not for the grant of interim measures, the Court is required to do some tightrope walking. The principles to be borne in mind while granting interim measures are the existence of a prima facie case, balance of convenience and the possibility of irreparable loss or prejudice.

102. It is, hence, difficult to conceive as to how in the fact situation, the Court can distance itself from exercising jurisdiction under Section 9, especially when a party such as the petitioner, has approached the Court with utmost expedition, when the situation eminently demanded it to so approach and admittedly when the invocation to arbitration had not happened. Thus, in the facts in hand, when affidavits after affidavits are already filed by the respondent in contesting the present proceedings, merely on the respondent raising a farcical issue of the petitioner not commencing arbitral proceedings, should not deter this Court, from entertaining this Section 9 petition. It cannot be overlooked that in an appropriate case, the need to grant of interim measures in exercise of the powers under Section 9, cannot be rendered illusory, merely because the opponent in such proceedings insists on arbitration. Such proposition would be in the teeth of the mandate which flows from section 9. This more particularly when the Court has exercised its sound discretion that the interest of justice overwhelmingly requires the Court to entertain proceedings under Section 9 of the Act.

103. Thus, in the facts of the case, Mr. Khambata’s submissions, if accepted would lead to not only have the effect of the Court not recognizing the mandate of sub-section (1) of section 9 but would also amount to prejudicially affecting the arbitral interest of the parties. It can never be the intent of law that merely because in the midst of the Section 9 proceedings, a party opposing Section 9 proceedings insists and shows intention to go to arbitration, in that event necessarily the Court, should mechanically dispose the Section 9 petition by compulsorily referring the parties to agitate their contentions on interim measures before the arbitral tribunal under Section 17 of the Act. If such an interpretation, as being canvassed on behalf of the respondent is accepted, it would not only defeat the provisions of Section 9(1) of the Act, but also in a given situation it would be contrary to the intent of the provisions of Sub-section (3) of Section 9. The observations of the Supreme Court paragraphs 96 and 107 in the case of Arcelor Mittal Nippon Steel India Limited (supra) would aid this conclusion.

104. In any event, Mr. Khambata’s contention that this petition ought not to be entertained and the petitioner be relegated to a remedy under section 17 of the Act, referring to the Sugar Commissioner’s order dated 27 December 2021 whereunder the Sugar Commissioner merely observed that ultimately it is the dispute between the petitioner and respondent which needs to be taken to arbitration, by no acceptable standard can be interpreted to mean a manifest intention of the petitioner not to invoke arbitration. By this logic even the respondent has not invoked the arbitration in a manner known to law i.e. by issuance of a notice, as contemplated by Section 21 of the Act. Such observation of the Sugar Commissioner cannot be any commencement of arbitral proceedings as Section 21 of the Act would ordain. It is, thus, too farfetched for the respondent to contend that this petitoin ought not to be entertained on the ground that there is no intention of the petitioner to refer the disputes to arbitration.

105. The next contention as urged by Mr. Khambata is to the effect that the petitioner is not entitled for the relief as prayed for in prayer clause (b), for the reason that the respondent is in “joint possession” of the cogen plant with the petitioner. It is Mr. Khambata’s submission that once there is a joint possession, there is no question of the petitioner taking a plea that the respondents be removed and restrained from the co-gen plant, hence there is no necessity of such a relief to the petitioner. To support such contention of joint possession, Mr. Khambata has drawn the Court’s attention to paragraph 22 of the reply affidavit, in which the respondent on such plea, has made the following statement, which needs to be reproduced: “The respondent has thus been handing the maintenance activity of the co-gen plant prior to the start of the crushing season 2020-21 as well. Acting on the requests/invitations of the petitioner, the Respondent has deputed its labour, personnel, engineers at the co-gen plant to look into the day-to-day operations of the co-gen plant. The co-gen plant has therefore been in the joint possession of the petitioner and the respondent uninterruptedly for the past couple of years. The respondent and the petitioner have been provided unrestricted access to the co-gen plant and the sugar factory. Further acting on the various representations of the petitioner (including oral discussions between the engineers/staff of petitioner and respondent), the respondent has provided spares, consumables, paid salaries of the petitioner, provided operational support by deputing personnel from time to time to the Cogen plant. In this entire endeavour (which is not the business of the respondent), the respondent has spent crores of rupees in respect of the co-gen plant’s operations and running at the instance and requests of the petitioner, made from time to time. The petitioner has not repaid the respondent for these expenses and has thus earned the benefits of all the expenses/work put in by the respondent. In these circumstances, it is submitted that the petitioner is now estopped from seeking the reliefs set out in Section 9 petition against the respondent.”

106. In my opinion, Mr. Khambata’s contention of the respondent to be in joint possession of the co-gen plant with the petitioner is not worthy of acceptance looked from any angle including on facts. This, firstly for the reason that such contention militates against express terms and conditions of the PDA (refer clause 25.[2] b(II), 25.[2] b(3) and clause 28 ) and Clause 12.[4] of the second Supplementary Agreement dated 30 October, 2018. Once such clauses expressly bring about the contractual relations between the parties, that the respondent shall not be interfering and/or obstructing in the conduct and operation of the cogen plant by the respondent, then a specious plea on affidavit to set up a case of joint possession, as one of the defences cannot be countenanced. There is no document whatsoever which would show that after the expiry of the period of the second Supplementary Agreement being 31 October 2019, the petitioner had handed over the co-gen plant to the respondent much less the possession as is normally and prudently understood in law. In the absence of any lawful handing over of the management and operation of the co-gen plant in favour of the respondent by the petitioner the only presumption is that the petitioner’s operation and management of the co-gen plant was sought to be usurped by the respondent in an unlawful manner and by intimidation, force or coercion as asserted by the petitioner. There can be no other method.

107. In any event, even on fact, such a plea of the respondent of joint possession appears to be extremely lame so as to warrant any acceptance, considering the materials as placed on record. It needs to be observed that even assuming that the petitioner permitted the respondent to carry out certain activities after the one year period under the second Supplementary Agreement (01.11.2018 to 30.10.2019) had come to an end, in the absence of any cogent material, the respondent cannot contend that the respondent are managing and operating the plant and/or that the petitioner was ousted to operate and manage the co-gen plant. There is not an iota of material which would support such contention of the respondent that the petitioner consciously and with full knowledge and in any manner known to law had put the respondent in possession of the co-gen plant, thereby giving up its rights to operate and manage the co-gen plant. The contentions of the respondent in this regard, in my opinion, are too overbearing, far-fetched and far from reality and bereft of an acceptable material whatsoever. It also needs to be observed that the respondent in its mighty and dominant local position cannot be heard to say that the respondent have taken over, operation and management of the co-gen plant in a manner not known to law.

108. As noted in the foregoing paragraphs, the present proceedings were filed on a clear apprehension as set out in paragraph 29 of the petition that the respondents or its agents may enter upon the premises of the co-gen plant to operate it for the benefit of the respondent and thereby causing immense loss and hardship to the petitioner, which the petitioner contended cannot be compensated in terms of money. The petitioner also categorically contended that the respondent had started mobilizing its manpower and security personnel on the site of the co-gen plant and may therefore take control of the entire plant to the ouster of the petitioner thereby depriving the petitioner of the lawful ownership of the co-gen plant. It was also apprehended that the petitioner strongly believed that the respondent would alienate, sell, destroy, damage, transfer, tamper, assign and/or create third party interest in respect of the assets with a view to prejudice the rights of the petitioner and hence, such being the subject matter of the arbitral proceedings, interim measures ought to be granted. Further in an Interim Application which was filed on behalf of the petitioner on 4 February 2022, the petitioner has referred to further events and thereafter the petitioner has categorically pleaded that the respondents have prevented the petitioner’s entry to the co-gen plant and has taken over the operation and management of the co-gen plant between 12 October, 2021 (i.e. the date of filing of the petition) till 26 October, 2021 thereafter in such situation the petitioner was required to move the Court to seek interim reliefs.

109. From the submissions as advanced on behalf of the respondent, it clearly appears that the respondent although has taken an untenable plea of joint possession, the respondent does not at all contest that the respondent is not operating and managing the plant. In fact the entire argument of Mr. Khambata is that it is imperative for the respondents to manage and operate the plant so that it becomes beneficial to the respondent and the respondent does not suffer any loss. This apart, all the intervenors have also supported Mr. Khambata in his contention that the respondents need to operate and manage the plant, so that the interest of thousands of stakeholders as alleged by the intervenors also stands protected.

110. In my opinion, it is unheard of in a civilized society and much less in a commercial transaction of such magnitude that when the parties have agreed to specific terms and conditions on transfer of assets, it would become permissible for a contracting party like the respondent to take over the assets/co-gen plant of the petitioner, for pure commercial gains, in a manner unknown to the process of law. Even in commercial transactions the parties are bound by the rule of law, apart from due adherence to the principles of trust, honesty, fairness and ethics, which are the backbone of any long commercial relation between the parties. Any untoward dent to such commercial relationship at the hands of a contracting party would lead to an instability not conducive to commerce and the commercial image of a contracting party. There is all the likelihood that for quick and undeserving gains or profits, a party may resort to such business tactics and unfair practices, however, in doing so, they are oblivious that in the longer run, it is no real commercial gain when it comes to such actions being tested in law. This, even assuming that the respondent has spent amounts on repairing or maintenance of the plant as alleged by the petitioner, which would entitle the respondent only to make a monetary claim against the

111. On the above conspectus, it needs to be stated that the entire conduct of the respondent is steered towards an early takeover of the cogen plant from the petitioner, than the agreed asset transfer date, which would be 30 June, 2041, as gathered from the record and the arguments advanced on behalf of the respondent. Such is the entire intention and object which is sought to be achieved by the respondent. This, more particularly, by exploiting and/or taking undue advantage of the petitioner running into financial difficulties on the project in question, which also prima facie is not solely attributable to the petitioner.

112. In fact, prima facie, it is quite apparent that there is a systematic commercial modus operandi on the part of the respondent to take over the co-gen plant. This firstly, by permitting the petitioner to set up the co-gen plant for which the petitioner incurred substantial expenditure of Rs.274 crores by borrowing funds fully to the knowledge of the respondent, and thereafter by not supplying the agreed amount of bagasse and biogas, the basic raw-material for generation of power and steam, thereby depriving the petitioner of a normal functioning of the plant to recoup its investments and earn profits. Added to this was the dismantling of biogas pipeline and using it for the captive generation facility, which was a clear indication that there was no intention to supply biogas thereby crippling the petitioner. All such actions which appear to be systematically planned, have resulted in serious financial difficulties for the petitioner, which also caused the petitioner’s account to be a non-performing asset, and thereafter, when the petitioner found itself in such financial distress, the respondent by adopting coercive methods, as noted above has attempted to take over the co-gen plant. As if this was not enough, the respondent appears to have used its local influences to pressurize the petitioner by making Trade Unions of farmers and workers to stand against the petitioner, not only before different authorities but also before this Court, in the present proceedings to canvass the case of the respondent, so as to succeed in its attempts to take over the co-gen plant. This more particularly, as if the co-gen plant to be operated by the respondent is so very imperative, that the respondent’s sugar factory was earlier never run on the electricity received from other sources.

113. Hence, I am in complete agreement with Mr. Andhyarujina when he submits that such was the sinister scheme of the respondent to take over the operation and management of the co-gen plant. It may be observed that this is a classic case where the Cooperative Sugar Factory stated to be of repute, is not only acting by taking law into its hands, in brazen breach of the terms and conditions of the PDA, but also completely oblivious to the rule of law as noted above. No contracting party howsoever mighty, is permitted to take law into its hands and act in a manner which would deprive the other contracting party (in the present case the petitioner) of its valuable assets and entitlement to its property, enjoyment of which is required to be reckoned as a guarantee under law.

114. If the conduct of the respondent was to be bonafide, there are categorical conditions under the PDA which would permit the respondent to take a fair position and terminate the contract in a manner as agreed between the parties. This is exactly what the respondent has intended to avoid, inasmuch as, the procedure of termination as agreed between the parties is considered by the respondent to be not beneficial to its commercial interest, because if the respondent intends to take over the co-gen plant, then necessarily a valuation of the plant at the fair market value on the date of termination would be required to be ascertained. It is for such reason, a calculated shortcut of the nature as pleaded by the petitioner was conceived by the respondent, so that the petitioner is suffocated and choked not only financially but also insofar as its valuable assets are concerned. In my opinion, there cannot be a better case where the demand for justice as in the present petition, would require the Court to interfere and by recognizing the justice in the case grant appropriate interim reliefs.

115. The other contention of Mr. Khambata, relying on the proceedings before the DRT at New Delhi and Aurangabad is on the financial distress of the petitioner. Mr. Khambata, referring to the proceedings before the DRT – Delhi, as also referring to the proceedings before the DRT at Aurangabad, has contended that the petitioner is a defaulter in making payments of the loans obtained from the Central Bank of India and the Union Bank of India, and that the banks have accordingly proceeded against the petitioner in the said proceedings before the DRT at New Delhi. He has referred to the order dated 15 February, 2022 in the proceedings of the DRT-II, Delhi in O.A. No.69 of 2022 filed by the Central Bank of India and others whereby the DRT has directed statusquo to be granted in the following terms:- “Defendants to maintain status quo in respect of assets as per section 19 subsection 4(A) of The Recovery of Debts and Bankruptcy Act 1993. List the matter on 25.03.2022 for further proceedings.”

116. A perusal of the above order passed by the learned Presiding Officer of the DRT, Delhi would clearly indicate that it is an order exparte to the petitioner. Secondly, such order has been obtained by the bank accepting the contentions of the respondent who were impleaded as defendant no.2 in the said proceedings who submitted before the said DRT that since more than two years (prior to the said order), it was the respondent which was running the co-gen plant on a premise that the petitioner was not interested in doing so and the day-to-day operations were being handled by the respondent. The respondent also contended before the DRT that the petitioner (defendant no.1) was interested in siphoning of funds and that the respondent is in possession of the plant and running the same. The observations as made by the tribunal for convenience are required to be re-noted which read thus:- “The present situation is that Defendant no. 2 submits that since more than two years they are running the plant as Defendant no 1 was not interested in doing so and all day today operations are handled by them though few employees of Defendant no. 1 are still there but all salaries/maintenance and compliance of all statutory obligations are done by them and they face difficulty as defendant no. 1 is interested in syphoning of funds and not running the plant. They submit that PDA is sacrosanct and all obligations under it have to be complied and they have first right over the same, they also submit that they are interested in purchasing the plant and have approached the Bank who have sought a concrete proposal and shortly that will be submitting. They further submit that the plant cannot be closed as lively hood of more than one lakh family is dependent upon it besides various commitments of Defendant no 3. The material for plant comes from sugar factories and as such it is complete circle and all are dependent on each other and slightest disturbance may bring every thing to halt which will not be a welcome situation for any body and for the economy of state and country.”

117. From the reading of the above order passed by the DRT, it is exfacie clear that the stand of the respondent as taken before this Court, is far from honest to say the least, for the reason, that on oath the respondent has taken a stand in paragraph 22 of the reply affidavit, that the respondent is in “joint possession” of the co-gen plant with the petitioner. However, before the DRT, Delhi, it has been clearly pleaded as alo categorically observed by the DRT, that it is the respondent who is in possession of the plant and running the same. It is thus not the case that when the second reply affidavit dated 19 February, 2022 was filed by the respondent before this Court, the respondent was not aware about the stand taken by it earlier and as recorded in the order dated 15 February, 2022 passed by the DRT, Delhi, nonetheless the argument of joint possession was canvassed with perseverance. Thus, the respondent clearly appears to have taken a stand as it suits its convenience before different forums for the reason which according to the petitioner are quite apparent. Mr. Andhyarujina would be correct to contend that even assuming that the petitioner was in financial difficulties, it does not mean that the respondent, without espousing remedies available to it in law, would maneuver things in such manner that the petitioner is left defending proceedings, the genesis of which is breaches on the respondent’s part. It is clear from the reading of the orders passed by both the DRT’s that it is at the instance of the respondent the observations against the petitioner as noted above have been made and that too ex-parte to the petitioner.

118. Before the DRT, Delhi proceedings, the respondent had also moved an application before the DRT at Aurangabad under Section 17 of the SARFAESI Act on the purported apprehension that the banks from whom the petitioner had taken loans, may initiate an action against the petitioner's co-gen plant for recovery of the amounts payable to these banks and which may cause a prejudice to the respondent. On such application, on 29 December, 2021, the DRT at Aurangabad passed an order directing that no status-quo can be granted on the securitisation proceedings and permitted the respondent to discuss and settle the disputes with the bank and to take the co-gen plant under its wing, under a private treaty at the market value. For convenience the relevant extract of the said orders in this context can be re-noted as under:- “

I. Since the co-gent plant is being possessed and run by the applicant now such a position shall not be disturbed by any of the parties till further order except as per law."

119. Thus, prima facie the respondent’s plan appears to be crystal clear, first, make the petitioner invest large sums of about Rs. 274 Crs to set up the plant which includes large borrowings from the banks. Secondly, suffocate the petitioner by non-supply of materials (bagasse and bio-gas) so that once the plant is not run optimally the petitioners would bleed financially. This situation was achieved by the respondent in 2017 when the petitioner’s account was classified as NPA. Thirdly, interfere in the running of the plant with an intention to take over the plant. Fourthly, attempt a total ouster of the petitioner from the co-gen plant and lastly, create circumstances conducive for a distress sale of the co-gen plant for which already negotiations are sought to be commenced by the respondent with the banks as seen from both the orders of the DRT so as to have wind fall gains.

120. It is thus clear from the orders passed by both the DRTs that the respondent has expressed before the DRT that the respondent is interested in purchasing the plant and for which the respondent has already approached the bank which has sought a concrete proposal. The respondent's intention is to ultimately take over the co-gen plant prematurely and not in a manner as agreed between the parties in the PDA as per the fair market value. It is for such reason the respondent has not left a single stone unturned to takeover the co-gen plant, so that it forms an integral part of the respondent’s sugar factory. No other intention can be culled out.

121. For the above reasons, in my opinion, it is totally untenable for the respondent to put up a case relying on the orders passed by the DRT and/or canvassing a case of financial distress of the petitioner to its advantage in the present circumstances. The respondent instead of giving a proposal to the bank could have invoked the conditions of the agreement (PDA) and given a proposal to the petitioner, however, such course of action does not appear to be profitable to the respondent. It is thus clear that the intention of the respondent is to defy and run away from the binding terms and conditions of the PDA and in the manner unknown to what was agreed between the parties, in order to take over the assets of the co-gen plant.

122. In so far as Mr. Khambata’s contention relying on the provisions of Section 16(b) and (c) of the Specific Relief Act, 1963 is concerned, that an order of an interim relief as prayed for cannot be made in favour of the petitioner in the facts of the case, is not well founded. Such argument proceeds on the assumption that in the substantive proceedings that the petitioner may initiate before the arbitral tribunal, it would be praying only for a relief of specific performance and nothing else. This is plainly a surmise at this stage of the proceedings to presume applicability of Section 16 of the Specific Relief Act. Also, these are proceedings where the petitioner has prayed for interim measures pending the arbitral proceedings in which the concern of the Court would be to protect the arbitral interest of the parties and protect the subject matter of the arbitration. The Court is certainly not precluded from considering the prayers made for interim measures when the proceedings are at a pre-arbitral stage, and in which the petitioner has asserted a case of several breaches on the part of the respondent, which are ex-facie apparent and which may damage the arbitral interest of the petitioner as also the subject matter of the arbitration, namely the cogen plant. Thus, it is difficult to accept the contention as urged by Mr. Khambata referring to Section 16(b) and (c) of the Specific Relief Act, that the Court cannot consider the prayers as made by the petitioner seeking an interim injunction. In any event, even assuming Mr.Khambata is right in his contention that section 16 (b) is attracted, in the facts of the case, it is prima facie clear that it is the respondent who has acted in breach of the essential terms of the contract by its short supply of bagasse and bio gas right from the crushing season of 2015-16. It is thus only an unsubstantiated plea on the part of the respondent that the petitioner has become incapable of performing the contract. In fact, the petitioner has clearly asserted its willingness to conduct the Co-gen plant under the contract PDA which has reciprocal promises. The basic conditions which the Court would weigh in applying the provisions of Section 16(b) and (c) of the Specific Relief Act is certainly absent in the present proceedings. Thus in the facts of the case, the respondent's contention relying on such provisions of the Specific Relief Act, in opposing the interim measures is certainly not tenable.

123. In so far as Mr. Khambata’s contention relying on Section 41(ha) of the Specific Relief Act is concerned, the same is not well founded, for the reason that the co-gen plant is in a working condition, which is being used for the purpose of the respondent's sugar factory. In any event, the relief as prayed for by the petitioner is not a relief which would in any manner stop the working of the plant, which can continue to run in the same manner in the petitioner’s hands, as per the terms of the PDA. The respondent cannot take a position that when the petitioners would conduct the plant the respondent would not supply the bagasse and the bio gas and when the respondent would run the plant on its own, all such materials would be available. This for the reason, that when the respondent at the relevant time was running the co-gen plant under the second supplementary agreement, the respondent had not stated that the respondent was running the plant only on the coal being purchased from outside sources, and no bagasse and bio-gas generated from the respondents sugar factory was used.

124. In so far as the respondent's contention that the relief as prayed for by the petitioner would amount to granting a relief of an interim mandatory injunction, which ought not to be granted under Section 9 of the Act also cannot be accepted even assuming that the relief being granted is of such nature. Section 9 confers powers on the court to grant interim measures which would certainly include a power to grant an interim mandatory injunction pending the arbitral proceedings. The powers of the Court under Section 9 are not different from the powers of a Civil Court to grant reliefs of a temporary injunction even in a mandatory form when a strong prima facie case of a high standard is made out by a party seeking such relief, coupled with the balance of convenience as also a case of irreparable injury, which cannot be compensated in monetary terms, being made out. Mr. Khambata in supporting his contention that no case has been made out by the petitioner for any relief for an interim mandatory injunction has relied on the decision of the Supreme Court in Dorab Cawasji Warden vs Coomi Sorab Warden & Ors.7.

125. To examine the respondent’s contention on the issue of an interim mandatory injunction, the peculiarity of the facts in the present context is required to be noted. As observed above, this petition came to be filed on 12 October, 2021 praying for interim measures inter alia of the directions to the respondent not to interfere in the conduct of the co-gen plant by the petitioners. Thus, the factual status at the time the petition was filed was certainly that the petitioner was operating and managing 7 1990 AIR 867 the plant. However, as categorically contended on behalf of the petitioners, after filing of the petition and upto 26 October, 2021, the respondent attempted to change the status quo and are now prohibiting the petitioner and/or its representative, officers from conducting the cogen plant. Thus, the situation is that the respondent is intending to take over the control of the co-gen plant by restraining the petitioner’s entry to the co-gen plant. The respondent is absolutely conscious of this position, and in fact it has conceded that it is controlling the co-gen plant to the exclusion of the petitioner. In my view, in a situation of such nature, certainly the Court is not powerless to pass an interim mandatory order directing the respondent to cease itself from entering and conducting the co-gen plant. It cannot be conceived that with open eyes, the Court would notice illegality of the respondent and yet be not able to grant a relief, which the facts of the case and interest of justice would warrant.

126. The present case is clearly a case where withholding of such a relief would prick the conscience of the Court. There are certainly strong circumstances which would warrant the Court to protect the arbitral interest of the parties and the subject matter of the arbitration, pending the arbitral proceedings. There is substantial prima facie material on record which would justify that the status quo has been attempted to be altered by the respondent and hence it has become imperative in such case to pass interim orders which can even be of a mandatory nature. The following position in law in such context, which has guided the Courts to grant interim mandatory injunction, is well settled and would aid the said conclusion.

127. In Baban Narayan Landge vs. Mahadu Bhikaji Tonchar & Ors., 1989 Mh. L.J. 146, a learned Single Judge of this Court referring to an earlier decision of this Court in Champsey Bhimji and Co. vs. Jamna Flour Mills Co. Ltd., AIR 1914 Bom. 195 and in Manoharlal vs. Seth Hiralal, AIR 1962 SC 527, held that injunctions are a form of equitable relief and they have to be adjusted or moulded in aid of equity and justice to the facts and circumstances of each particular case. The Court observed thus: “The subject of temporary injunction is mainly covered by Order 39, Rules 1 and 2, Code of Civil Procedure. In cases not covered by those provisions, an appropriate temporary injunction can be granted also in exercise of inherent power of a Court under S. 151, Code of Civil Procedure. After all Order 39, Rules 1 and 2 are not exhaustive of the circumstances under which interim injunction can be granted. The controversy on that aspect of the matter is set at rest by a majority decision of the Supreme Court in the leading case of Manoharlal v. Seth Hiralal, AIR 1962 SC 527. But that apart the language employed in those two Rules is clearly wide enough to include an order in the form of a mandatory injunction and admits of no exception with reference to a point of time to which it can be made. Injunctions are a form of equitable relief and they have to be adjusted or moulded in aid of equity and justice to the facts and circumstances of each particular case. Jurisdiction is thus undoubted even under Order 39, Rules 1 and 2. Even if it cannot be granted under the said Rules, Section 151 is the source of such jurisdiction. I see no reason to lay down an absolute proposition and forge unnecessary and unjustified fetters on the power of the equity Courts to grant appropriate relief even in a well deserving case and reduce its position only to a willing but helpless spectator - a situation not warranted by our equity jurisprudence.”

128. In a recent decision of the Supreme Court in Samir Narain Bhojwani vs. Aurora Properties and Investments and Anr., (2018) 17 SCC 203 referring to the decision of the Supreme Court in Dorab Cawasji Warden vs. Coomi Sorab Warden, (1990) 2 SCC 117, the Supreme Court has reaffirmed the law as laid down in the latter decision to hold that the relief of interlocutory mandatory injunction is granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing at which a full relief may be granted or to compel the undoing of those acts, that have been illegally done or the restoration of that, which was wrongfully taken from the party complaining. It is held that when a strong prima facie case is made out, coupled with a case that if such an interim mandatory relief is not granted, irreparable or serious injury which cannot be compensated in terms of money may be suffered by the applicant and when the balance of convenience is in favour of the party seeking such a relief, then in such situation certainly the Court would come to the aid to the party seeking the status quo ante. It was also recognized that the Court in passing such an order of interlocutory mandatory injunction would exercises a sound judicial discretion in the light of the facts and circumstances of the case. The observations of the Supreme Court in paragraphs 24 to 26 can be noted, which reads thus:

24. That apart, the learned Single Judge as well as the Division Bench have committed fundamental error in applying the principle of moulding of relief which could at best be resorted to at the time of consideration of final relief in the main suit and not at an interlocutory stage. The nature of order passed against the appellant is undeniably a mandatory order at an interlocutory stage. There is marked distinction between moulding of relief and granting mandatory relief at an interlocutory stage. As regards the latter, that can be granted only to restore the status quo and not to establish a new set of things differing from the state which existed at the date when the suit was instituted. This Court in Dorab Cawasji Warden Versus Coomi Sorab Warden (1990) 2 SCC 117, has had occasion to consider the circumstances warranting grant of interlocutory mandatory injunction. In paragraphs 16 & 17, after analysing the legal precedents on the point as noticed in paragraphs 11-15, the Court went on to observe as follows: (SCC pp. 126-27) “16. The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm, courts have evolved certain guidelines. Generally stated these guidelines are: (1) The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction. (2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money. (3) The balance of convenience is in favour of the one seeking such relief.

17. Being essentially an equitable relief the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive nor complete or absolute rules, and there may be exceptional circumstances needing action, applying them as prerequisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion.”

25. The Court, amongst others, rested its exposition on the dictum in Halsbury’s Laws of England, 4th Edition, Volume 24, paragraph 948, which reads thus:

26. The principle expounded in this decision has been consistently followed by this Court. It is well established that an interim mandatory injunction is not a remedy that is easily granted. It is an order that is passed only in circumstances which are clear and the prima facie material clearly justify a finding that the status quo has been altered by one of the parties to the litigation and the interests of justice demanded that the status quo ante be restored by way of an interim mandatory injunction. (See Metro Marins Versus Bonus Watch Co. (P) Ltd., (2004) 7 SCC 478, Kishore Kumar Khaitan Versus Praveen Kumar Singh (2006) 3 SCC 312 and Purshottam Vishandas Raheja Versus Shrichand Vishandas Raheja (2011) 6 SCC 73: (2011) 3 SCC (Civ) 204.

129. In Hammad Ahmed vs. Abdul Majeed & Ors., (2019) 14 SCC 1, the Supreme Court has reiterated the principles as laid down in Dorab Cawasji Warden (supra) and Samir Narain Bhojwani (supra) to hold that ad-interim mandatory injunction can be granted when strong circumstances are present so as to protect the rights and interest of the parties. The Court in pararagraph 58 observed that: “58. The ad interim mandatory injunction, is to be granted not at the asking but on strong circumstance so that to protect the rights and interest of the parties so as not to frustrate their rights regarding mandatory injunction. In Deoraj vs. State of Maharashtra and Others, (2004) 4 SCC 697, this Court held that Court would grant such an interim relief only if it is satisfied that withholding of it would prick the conscience of the Court and do violence to the sense of justice, resulting in injustice being perpetuated throughout the hearing, and at the end the Court would not be able to vindicate the cause of justice. Therefore, in appropriate case, adinterim injunction in mandatory form can be granted. The Court held as under:-

130. A useful reference can also be made to the decision of the Division Bench of this Court in Omkar Realtors and Developers Pvt. Ltd. & Anr. vs. Shahveer Padam Kapadia & Ors. (Commercial Appeal (L) No. 9850 of 2022 dated 30 March, 2022) wherein following the principles of law as laid down in Hammad Ahmed (supra), the Division Bench held as under: “33. Should the argument be that the impugned order is ‘mandatory’ in nature and, for the reason, vulnerable, we would have hesitation in repelling the submission directly. Such an order, even as an ad-interim one, and even if described as ‘mandatory’, is always possible where strong circumstances indicate that the order would protect the rights and interests of both sides, and that refusing relief would be unjust:Hammad Ahmed vs. Abdul Majeed.”

131. The above discussion would show that apart from the strong circumstances, the petitioner in the present case has certainly made out a strong prima-facie case for the Court to proceed to pass an interim order which is necessary to prevent irreparable or serious injury to the petitioner which cannot compensated in terms of the money even to pass an interim order of mandatory injunction for which the balance of convenience is also overwhelmingly in favour of the petitioner.

132. This case would also be required to be considered from the perspective of an exception being carved out to Section 41, namely, the provisions of Section 42 of the Specific relief Act, which reads thus: “42. Injunction to perform negative agreement.—Notwithstanding anything contained in clause (e) of section 41, where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement: Provided that the plaintiff has not failed to perform the contract so far as it is binding on him.”

133. This is clearly a case wherein there is an affirmative obligation on the respondent to run the co-gen plant and a negative agreement under Clause 28 of the PDA on the respondent whereunder there is an obligation on the respondent not to obstruct or interfere in the work of the petitioner till the subsistence of the PDA. In my opinion, clause 28 in the PDA would be required to be regarded to be a clause of a situation which Section 42 would recognise, to enable the Court to grant an injunction. This as Section 42 provides that even if the Court is unable to compel the specific performance of the affirmative agreement read with other clauses, it shall not preclude the Court from granting an injunction to perform the negative agreement. It is not the case that in the peculiar circumstances in hand, the petitioner could be said to have not performed the contract, as the present contract was certainly based on reciprocal promises and its mutual performance by both the parties. It is infact quite clear that right from the inception of the commencement of operation of the co-gen plant that the respondent has defaulted in supplying bagasse and biogas. In these circumstances, also Mr. Khambata’s submission relying on Section 41(ha) certainly deserves to be rejected.

134. The above conclusion would stand fortified by referring to the decision of the Supreme Court in Gujarat Bottling Co. Ltd. & Ors. vs. Coca Cola Co. & Ors., (1995) 5 SCC 545 wherein the Supreme Court has held that Section 42 of the Specific Relief Act would certainly become applicable where a contract comprises an affirmative agreement to do a certain act coupled with a negative agreement, express or implied, not to do a certain act, and in such a situation, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude the Court from granting an injunction to perform the negative agreement. The Court in the facts of the case held that having regard to the negative covenant contained in the agreement in question before it (which was subsisting), the respondent therein (Coca Cola Co.) had made out a prima facie case for grant of an injunction. In paragraphs 42 and 43, the Court observed thus: “42. In the matter of grant of injunction, the practice in England is that where a contract is negative in nature, or contains an express negative stipulation, breach of it may be restrained by injunction and injunction is normally granted as a matter of course, even though the remedy is equitable and thus in principle a discretionary one and a defendant cannot resist an injunction simply on the ground that observance of the contract is burdensome to him and its breach would cause little or no prejudice to the plaintiff and that breach of an express negative stipulation can be restrained even though the plaintiff cannot show that the breach will cause him any loss. In India Section 42 of the specific Relief Act, 1963 prescribes that notwithstanding anything contained in clause (e) of Section 41, where a contract comprises an affirmative agreement to do a certain act coupled with a negative agreement, express or implied, not to do a certain act, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement. This is subject to the proviso that the plaintiff has not failed to perform the contract so far as it is binding on him. The Court is, however, not bound to grant an injunction in every case and an injunction to enforce a negative covenant would be refused if it would indirectly compel the employee either to idleness or to serve the employer.

43. The grant of an interlocutory injunction during the pendency of legal proceedings is a matter requiring the exercise of discretion of the court. While exercising the discretion the court. While exercising the discretion the court applies the following tests - (i) whether the plaintiff has a prima facie case; (ii) whether the balance of convenience is in favour of the plaintiff; and (iii) whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is disallowed. The decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right assailed by the plaintiff and its alleged violation are both contested and uncertain and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. Relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection has, however, to be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the 'balance of convenience' lies. In order to protect the defendant while granting an interlocutory injunction in his favour the Court can require the plaintiff to furnish an undertaking so that the defendant can be adequately compensated if the uncertainty were resolved in his favour at the trial.”

135. The next contention as urged on behalf of the respondent is on suppression of facts by the petitioner namely of suppressing its financial position in invoking jurisdiction of this Court under Section 9 of the Act. Such contention is required to be stated to be rejected. The case on suppression as alleged by the respondent of the financial condition of the petitioner, is to the effect that proceedings against the petitioner as adopted by the banks and orders passed thereon are suppressed by the petitioner. The documents of hypothecation and the document of Indenture of Mortgage has not been placed on record by the petitioner. In my opinion, such charge of suppression as made by the respondent is wholly untenable inasmuch as the petitioner has already pointed out in the petition that an account of default on the part of the respondent in supplying the agreed quantity of bagasse and biogas, the petitioner has suffered losses, which culminated into the petitioner’s account being categorized as a Non-Performing Assets (NPA). It is also clear from the record that such a plea of suppression as urged by the respondent is totally hollow, as the respondent at all material times right from the inception was aware that the petitioner had set up the plant after substantial borrowings and that there was already a mortgage as permitted under the agreement in question as created by the petitioner for availing financial facilities from the banks. The record also clearly shows that the orders dated 29 December, 2021 and 15 February, 2022 passed by the DRT, Aurangabad and by the DRT, Delhi respectively, were passed ex-parte to the petitioner and in the presence of the respondent, and in fact accepting the plea of the respondent. Moreover the orders passed by DRT are post filing of the present proceedings and hence there are subsequent events which have taken place and are well to the knowledge of the respondent. Thus, in no manner whatsoever it can be said that the petitioner has suppressed anything of relevance to the present proceedings so as to gain an unfair advantage over the respondent. Even otherwise the reliefs which are prayed by the petitioner are not reliefs which in any manner would affect the rights of the lenders to proceed against the petitioner.

136. Coming to the next contention of Mr. Khambata that prejudice would be caused to the respondent if any order is passed in favour of the petitioner, as the respondents have spent substantial amounts on the maintenance of co-gen plant also cannot be accepted. This is an argument of a purported equity. Equity can never override law. Thus any plea which is intended to eclipse a patent illegality cannot be accepted. The respondent is attempting to illegally takeover the management and operation of the plant and that too in a coercive manner by preventing the petitioner from legitimately operating the plant which indisputedly belongs to the petitioner. If this be the case, the argument of prejudice to the respondent has no legs to stand. Something which is of the ownership of the petitioner cannot be taken away by the respondent except in a manner known to law, even if the case of the respondent was that it has purportedly spent amounts for the maintenance of the co-gen plant. Thus, to recover such amounts which are claimed to have been spent by the respondent, the only course open for the respondent, was to raise a money claim against the petitioner in a manner known to law. Even otherwise, these are all matters of evidence wherein the genuineness of such claims of the respondent spending any amounts on the maintenance of the plant would be required to be established in the trial before the arbitral tribunal. Thus, in my opinion, the respondent having spent certain amounts on maintenance etc, can be no argument to deny any relief to the petitioner when prima facie the illegality of the respondent, acting in patent breach of the contractual condition is as clear as the sun light. Intervention Applications:

137. Insofar as the intervention applications are concerned, there is an intervention application filed on behalf of employees of the co-gen plant, who are employees of the petitioner who have already espoused their grievances in regard to non-payment of wages, for a certain period, before the Labour Court at Ahmednagar. Once these applicants have taken recourse to the remedy available to them in law which can only be confined to their contract of employment, I do not see how their intervention can be permitted and in any manner would be relevant in the present proceedings, and that too in supporting the case of the respondent. The only recourse which was available to these workers was to adopt appropriate remedy as was available to them in law against the petitioner qua their employment, which they have already availed.

138. The position qua the other intervenors who claim to be workers associated with the sugar factory or farmers supplying sugarcane to the respondent is also not different. They cannot maintain their intervention applications in the present proceedings which are filed under section 9 of the Act between parties to the contract (PDA), for the reason that any plea advanced by these interveners are pleas primarily against the petitioner on an apprehension of these applicants that the respondent may stop the activities of the sugar factory for want of power to be generated by the co-gen plant. However, these interveners cannot be oblivious to the independent rights of the parties to the agreement (PDA), and contend that dehors such rights of the parties under the PDA, the co-gen plant ought to be kept operational and that too by the respondent and not by the petitioner. Such a plea as urged by these interveners is totally untenable. In fact, such plea militates against the express terms and conditions of the PDA as also the Land Lease Agreement as entered between the petitioner and the respondent. They have no privity with the petitioner. They also do not appear to have any privity touching the PDA between the petitioner and the respondent. In any event, the plea as urged in the Intervention Application apart from being merely on apprehension is too remote to be considered as any substantive plea to admit of any intervention of these applicants.

139. It also needs to be observed that it is eminent that the interveners have been put up at the behest of the respondent so as to advance an argument of equity and fortify the position that the running of the cogen plant by the respondent is more effective than the petitioner conducting its own plant. These are the basic arguments which are urged by Dr. Saraf in supporting the contentions of the respondent. In my opinion, it would be too far-fetched for the Court adjudicating the proceedings under section 9 of the Act to consider interventions by persons who are not only alien to the contractual dispute between the petitioner and the respondent but also remote to the present proceedings between the contracting parties. For such reasons, none of the Intervention Applications can be held to be maintainable. In view of the above discussion, Dr. Saraf’s reliance on the decision of a learned Single Judge of this Court in Prabhat Steel Traders Pvt. Ltd. Vs. Excel Metal Processors Pvt. Ltd. is not well founded. The present case is not such where any interim order passed in arbitral proceedings is prejudicially affecting any third parties like the intervenors. It is also not the case that these third parties are likely to be directly affected if the reliefs as prayed for are granted by the Court. It is also not a case that the Court is passing any order against these parties. (Re.: Para. 45 – 46 of the said judgment).

140. In view of the above discussion, the petition needs to succeed. The question as posed in paragraph 59 would stand answered in the above terms.

141. As a sequel, to the above discussion, the petitioner is imminently entitled to interim reliefs. The petition is accordingly allowed by the following order: O R D E R

(i) The petition is allowed in terms of prayer clause (b), which reads thus: “b. That pending the hearing and final disposal of the arbitral proceedings, making of the arbitral Award and until final execution of the arbitral Award, this Hon'ble Court be pleased to restrain the Respondent, its board of directors, promoters, partners, employees, agents, representative and any one acting on behalf of the Respondent, in any manner from entering the premises of the Petitioner's Co-generation plant and from carrying out any work/activity for the repairs/ maintenance/ operation of the Petitioner Co-generation plant”

(ii) The parties are directed to commence the arbitral proceedings within a period of one month from today.

142. Before parting, the conduct of the respondent in the present proceedings is required to be commented. Despite filing an affidavit in reply dated 21 November, 2021, the respondent under the garb of rejoinder, filed a further affidavit in reply dated 15 February, 2022 peculiarly titled as “Affidavit in reply on behalf of respondent to the petition dated 12 October, 2021 and the rejoinder dated 2 December, 2021 and the Additional Affidavit dated 26 October, 2021 filed by the petitioner. Further an additional affidavit dated 19 February, 2022, was sought to be tendered before the Court when it was seriously objected by Mr. Andhyarujina, learned senior counsel for the petitioner. However, things did not stop at this. When the hearing of the petition commenced on 21 February, 2022 and when it had remained part-heard on 23 February, 2022 and 24 February, 2022, in the midst of the oral arguments, the respondent to support its pleas intended to place on record the petitioner’s financial documents by a further affidavit, hence leave of the Court was taken to file further affidavit which for the reasons are set out in the order dated 25 February, 2022 was granted. Mr. Andhyarujina’s objection to the affidavit dated 15 February, 2022 and 19 February, 2022, in my opinion, needs to be accepted considering the fairness of the proceedings before the High Court. The respondent could not have taken the process of the Court, for granted so as not to maintain its sanctity and the procedural discipline and cause a serious prejudice to the litigant who has knocked the doors of the Court to seek urgent reliefs, by subverting the proceedings and/or delaying the proceedings by repeated pleadings possibly to divert the focus of proceedings. Such attempts of filing successive affidavits that too in the midst of hearing of the proceedings also of a nature not permitted by the Court, cannot go unnoticed. Such attempt of the respondent is required to be reprimanded. It cannot be said that no prejudice was caused to the petitioner by filing of such affidavits being swung, in the midst of the hearing, but also the insurmountable inconvenience which was caused to the Court in adjudicating the present proceedings, was of least concern to the respondent. The conduct of the respondent, thus requires this Court to pass an order of costs, as such conduct of a litigant and that too in commercial matters cannot be accepted. The respondents are accordingly directed to deposit costs of Rs.2,00,000/with the Dean, J.J. Hospital to be utilized for the terminally ill and the poor Cancer patients which shall be deposited within one week from today.

143. The Petition as also the Interim Application filed by the petitioner accordingly stands disposed of in the above terms.

144. The interim applications for intervention stand rejected. No costs.

145. At this stage, Mr. Setalvad, learned senior counsel for the respondent prays for stay of this order. However, considering the peculiar and strong circumstances of the case and the paramount duty of the Court to preserve and protect the rule of law, even in the contractual sphere, a request for stay needs to be rejected. Also there would be no prejudice whatsoever to the respondent or even for that matter, to the interveners who are not even remotely connected with the contractual dispute between the parties, if the petitioner under its contractual rights operates and manages its own co-gen plant and/or its assets. In any event merely because some time was taken to deliver the judgment, which was on account of the immense pressure of work on the Court, it can be no ground to accept Mr.Setalvad’s request, when the matter itself was argued for days together. [G.S. KULKARNI, J.]