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2020 (8) TMI 875 - DELHI HIGH COURTSeeking pre-arbitration interim relief - Sinister sequence of events - Section 9 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Section 9 of the 1996 Act contemplates "interim measures, etc.", by the Court. The expression "etc.", used at the end of a definition clause has been held, in several decisions, to be required to be interpreted noscitur a sociis and ejusdem generis (the latter principle applying where the words, preceding the word "etc.", constituted a genus, and the former principle applying more universally, in all cases), the words preceding it. The Court, while exercising its power under Section 9 of the 1996 Act, has to be acutely conscious of the power, vested in the arbitrator/arbitral tribunal, by Section 17 of the same Act. A reading of Section 9, and Section 17, of the 1996 Act, reveals that they are identically worded. The "interim measures", which can be ordered by the arbitral tribunal, under Section 17, are the very same as those which can be ordered by the Court under Section 9. It is for this reason that sub-section (3) of Section 9 proscribes grant of interim measures, by the Court, consequent on constitution of the arbitral tribunal, save and except where the Court finds that circumstances exist, which may not render the remedy, under Section 17, to be efficacious. The Court, while exercising jurisdiction under Section 9, even at a pre-arbitration stage, cannot, therefore, usurp the jurisdiction which would, otherwise, be vested in the arbitrator, or the arbitral tribunal, yet to be constituted. There is no whisper of any denial, in the aforesaid response, dated 8th July, 2020, from the petitioner to the Respondent, of the allegations that the petitioner had failed to maintain the Required Security Cover, and to liquidate all Outstanding Amounts by the final Redemption Date, i.e. 10th July, 2019. The fact of failure, on the part of the petitioner, to pay the Outstanding Amounts by the cutoff date of 10th July, 2019, stands, in fact, expressly acknowledged and admitted, by the petitioner, in its letter dated 30th June, 2020. The approach of the petitioner, in its response dated 8th July, 2020, was to maintain a studied silence thereon, and, instead, to allege "market manipulation" by KKR and its confederates. Even in the present petition, before this Court, the petitioner has remained completely silent, regarding the allegation of non-maintenance of the Required Security Cover, and of failing to repay all Outstanding Amounts, to the Debenture Holders, on or before 10th July, 2019. Prima facie, therefore, "Events of Default" had taken place, within the meaning of Clause 1.1.41 of the Debenture Trust Deeds, read with Clause 3.4 and S. No. 2 and 14 of the "Events of Default", enumerated in Schedule 3 to the Debenture Trust Deed. The very contention, of the petitioner, that the price of the CGP shares had fallen owing to a misleading report, by Vaish & Co., too, is entirely presumptuous in nature, amounting to nothing more than speculation. There are myriad and manifold considerations, which operate to raise, or lower, the prices of stocks in the stock market. Fluctuation of the stock market, as is axiomatic in macroeconomic theory, is one of the most unpredictable of all unpredictable sciences - the dispute is entirely foreign to the issue of default, by the petitioner, to honour its obligations under the Debenture Trust Deeds, and the resultant right, of the Respondent to invoke the pledged shares, and sell them in the stock market, for realisation of the outstanding amounts. The dispute, between the petitioner and the respondent, which could legitimately form the basis of an arbitral proceeding and, consequently, of the present proceedings under Section 9 of the 1996 Act, is the alleged infraction, by the petitioner, of the covenants of the Debenture Trust Deeds, and the right of the respondents, on that basis, to proceed against the shares, pledged by the petitioner by way of security. That dispute has nothing to do with good faith or bad faith. The "want of good faith", on the part of the respondents-as alleged by the petitioner-is in the manner in which the respondents allegedly depressed, artificially, the price of the CGP shares, before purchasing them in the open market - the prayers of the petitioner, in the present petition cannot, therefore, be granted, in exercise of the power conferred on this Court by Section 9 of the 1996 Act. Petition dismissed.
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