Delhi High Court: In a case wherein an instant petition under Section 9 of the Arbitration and Conciliation Act, 1996 r/w Section 2(1) of the Commercial Courts Act, 2015 had been filed by the petitioner seeking mandatory injunction to direct the respondent to reimburse/release the amount which had been deducted illegally and arbitrarily by the respondent in breach of the Arbitral Award, a Single Judge Bench of Chandra Dhari Singh, J. dismissed the petition and held that considering the limitations delineated under Section 9 of the Act, this Court could not grant a permanent relief to the petitioner, especially when an Award had already been made highlighting the extent of claims and reliefs that the parties were legally entitled for.
Background
The parties entered into a Concession Agreement in 2006 for the design, construction, development, finance, operations, and maintenance of K.M. 367.00 (Adloor Yellareddy) to K.M. 447.000 (Kalkallu) covering 85,745 km and improvement, operation, and maintenance of K.M. 447.000 (Kalkallu) – 464.000 (Gundla-Pochanpalli) covering 17,000 km on NH-7 in the State of Andhra Pradesh. The petitioner was involved in construction, operation and maintenance of the Project arising out of the Concession Agreement between the parties. The respondent was the National Highways Authority of India responsible for maintenance, management and development of National Highways or stretch of the National Highways vested in or entrusted to it by the Central Government. The final Completion Certificate was also obtained by the petitioner in 2009. Thereafter, disputes arose between parties regarding the requirement to do renewal work every five years. After several attempts of resolution of such disputes, with the intervention of this Court in GMR Pochanpalli Expressways Ltd. v. National Highways Authority of India, OMP(I)(COMM) No. 421 of 2018, an Arbitral Tribunal was constituted by the Indian Council of Arbitration and, the Award was passed in 2020.
Accordingly, in 2020, the petitioner raised an invoice for the payment of the 22nd Annuity and thereafter, also submitted the work plan for undertaking renewal work as per the respondent, subject to the release of payment by the respondent in terms of the Arbitral Award. It was the case of the petitioner that the respondent issued a letter recommending the payment of Rs. 54,18,00,000/-, however, a few days later the respondent recommended the damages of Rs. 27,37,86,366/- and that Rs. 1,73,75,807/- be imposed on for causing delay in completing the 2nd renewal work and non-compliance of operation and maintenance obligations. In pursuance thereto, the petitioner received Rs. 38,79,15,763/- after the deductions made by the respondent, by which the petitioner was aggrieved and was hence, praying the rest of the amount, i.e., Rs. 12,56,72,430/- be released in its favour by way of this instant petition seeking mandatory injunction.
Analysis, Law, and Decision
The Court noted that the preliminary objection taken on behalf of the respondent was that the relief sought by the petitioner could not be granted under Section 9 of the Act and the petitioner before this Court was seeking remittance and release of amount allegedly withheld by the respondent illegally on the ground of delay for carrying out the 2nd renewal work.
The issue for consideration before this Court was “whether the relief sought by the petitioner may be granted by a Court exercising powers under Section 9 of the Arbitration and Conciliation Act, 1996?”.
The Court noted that “a bare reading of Section 9 of the Act revealed that this Court had the power to make orders granting interim measure of protection under the Act. An interim relief may be granted by the appropriate court at any point of time but before the Arbitral award becomes enforceable under Section 36 of the Act. The intention was to grant relief to the party in the intervening period from the till the Award attains finality and was enforced as per the provisions of the Act”.
The Court further noted that “the words ‘such other interim measure of protection’ had been inserted in Section 9(1)(ii)(e) of the Act to define and narrow down the scope of the nature of interim relief that might be granted by the Court adjudicating upon petition under Section 9 of the Act. The words used thereto were ‘as may appear to the court to be just and convenient’ which was a testament to the power vested with the Court to pass an order that it deemed fit, just, and convenient, in accordance with the provisions of the Act, specifically Section 9”.
The Court opined that a relief beyond the final relief as an interim measure, at the preliminary stage, should not be granted and even if granted had to be with utmost caution and vigilance. The Court further opined that an intervention and interference of the Court in an arbitral proceeding should be only to such an extent that it should not render the entire process of arbitration proceedings infructuous by overstepping and granting a relief which the mandate of the legislation did not permit and the role of the Courts, to an extent, was supervisory when it came to the proceedings under the Act.
The Court noted that the petitioner was seeking relief in the nature of a permanent order praying for directions to the respondent to remit the amount deducted by it once and for all. Therefore, the Court dismissed the petition and held that considering the limitations delineated under Section 9 of the Act, this Court could not grant a permanent relief to the petitioner, especially when an Award had already been made highlighting the extent of claims and reliefs that the parties were legally entitled for. The Court further held that the mandate of the provision did not permit passing of an order in the nature of a permanent measure in favour of either party under the Act.
[GMR Pochanpalli Expressways Ltd. v. National Highways Authority of India, 2023 SCC OnLine Del 395, decided on 10-1-2023]
Advocates who appeared in this case :
For the Petitioner: Advocate Atul Sharma;
Advocate Harshita Agarwal;
For the Respondent: Advocate Ankur Mittal;
Advocate Abhay Gupta.
ORDER BY: Justice Chandra Dhari Singh*
*Simranjeet Kaur, Editorial Assistant has reported this brief.
