TMI Blog2020 (6) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... Arbitration Agreement. This limitation is not applicable to a Court exercising power under Section 9 of the Act. As brought out by IFCI, pursuant to Order dated 27.08.2018, SEBI has already written to IFCI seeking release of the money and the same is pending due to a communication of Respondent No.1 that it would be taking steps in the pending writ petition against the release of money. Petition filed by Respondent No.1 in Bombay High Court for redemption of his property is still pending and its claims are yet to be adjudicated against Respondent No.2. Therefore, at present it cannot be argued by the Petitioner that Respondent No.2 is holding the sum of ₹ 85 Crores as a Custodian of Respondent No.1, so as to be entitled to the reliefs sought herein. The objection raised by Respondent No.2 on its being a non-party and non-signatory to the Arbitration Agreement, becomes irrelevant and does not require any further adjudication - Reliefs sought by the petitioner cannot be granted by this Court - Petition dismissed. - O.M.P. (I) (COMM) No. 35/2020 and I.A. 3251/2020 - - - Dated:- 10-6-2020 - HON'BLE MS. JUSTICE JYOTI SINGH Petitioner Through: Mr. Sandeep Sethi, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Project. 5. Petitioner avers that acting under the JDA, Petitioner raised monies from various investors and allotted them commercial shops and premises in the Aerocity Project. Majority of the investors invested their monies between the years 2010-2013. 6. It is further averred that pursuant to the aforesaid events, a Letter of Comfort and Recourse dated 15.03.2010 was issued by Respondent No. 1 in favour of the Petitioner undertaking as under: - a. That the monies collected by the Petitioner for the development of the Aerocity Project by Silver Resorts will be put to use for the specified purposes and shall not be utilized for any other purpose; b. That in the event Silver Resorts in unable to deliver the Aerocity Project to the space holders within the stipulated time (subject to force majure), the Respondent No. 1 will suitably compensate the Petitioner; c. That the Respondent No. 1 shall indemnify the Petitioner for any loss/damage including however limited to refund of monies arranged by the Petitioner for the Aerocity Project; d. That as the original allottee of the plot at Delhi Aerocity and owners of Silver Resorts, the Respondent No. 1 under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity Project. Vide order dated 31.07.2015, Court directed Respondent No. 2 herein not to disburse an amount of ₹ 85 crores, out of the surplus funds available with it from the auction of the Goa property and to place the same in a Fixed Deposit for six months. At that stage, an amount of ₹ 195,20,08,434/- was lying with Respondent No. 2, after appropriation of sale proceeds towards its outstanding dues and those of the State Bank of Mysore. Accordingly, Respondent No. 2, transferred the balance sale proceeds of ₹ 126,78,37,602/- to SEBI and ₹ 8,52,07,142/- to State Bank of Mysore. 11. In 2018, an application was filed by SEBI being IA No. 9292/2018, seeking recall of the order dated 31.07.2015, to enable Respondent No. 2 to release ₹ 85 crores in favour of SEBI. Vide order dated 27.08.2018, Court recalled the order dated 31.07.2015 but directed Respondent No. 2 and SEBI not to disburse the amount for a period of six weeks, giving liberty to the parties to file independent legal proceedings for their claims. 12. It is further averred that Petitioner was informed by Respondent No. 1 that it has filed a writ petition being W.P. (C) No. 924/2018 befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Petition of Respondent No. 1 pending before the Bombay High Court for redemption of the Goa property. Learned Senior Counsel further submits that referring to the earlier two Letters of Comfort as well as the letter of Respondent No. 2 dated 06.02.2019, Respondent No. 1 issued another letter dated 08.02.2019 and assured the Petitioner that any amount remitted by Respondent No. 2 will be passed on to the Petitioner. 16. Learned Senior Counsel draws the attention of the Court to the JDA dated 10.03.2010 between the Petitioner and Silver Resorts, more particularly, recital A and recital E which are as under: - A. Silver Resort Hotel India Private Limited (hereinafter referred to as Developer) has entered into a Development Agreement with Delhi International Airport Private Limited ( DIAL ) whereby Developer has been granted the right and authority to design, develop, finance, construct, own, operate and maintain the Assets ( hereinafter defined ) in Asset Area 3 ( hereinafter defined ) at the hospitality district, Delhi Aerocity. Indira Gandhi International Airport, New Delhi together with the full and free right and liberty of way and passage and other rights in relation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a loan from Respondent No. 2 and the property at Goa had been mortgaged as a first charge. Respondent No. 2 has auctioned and sold the mortgaged assets under the provisions of SARFAESI Act in favour of ITC Limited. From the sale proceeds, Respondent No. 2 has appropriated the amounts due to it towards the loan taken by Respondent No. 1. Some portion of the amount has been released in favour of the second charge holder of the mortgaged assets i.e. the State Bank of Mysore. Pursuant to the directions of this Court in CS (OS) No. 176/2015 Respondent No. 2, after retaining ₹ 85 crores had released ₹ 126,78,37,602/- in favour of SEBI. Respondent No. 1 had filed the above mentioned Writ Petition in the Bombay High Court seeking redemption of the mortgage property and other reliefs. The High Court while issuing notice to Respondent No. 2 had directed that in case Respondent No. 2 proceeds to disburse the balance amount, it shall give notice of 8 working days to Respondent No. 1. Vide letter dated 31.10.2018, SEBI raised a demand of ₹ 85 crores payable to PACL and pursuant thereto Respondent No. 2 gave advance notice of 8 working days to Respondent No. 1, in terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Senior Counsel relies on the judgment of this Court in M/s Value Advisory Services v. M/s ZTE Corporation Ors., 2009 SCC OnLine Del 1961 , where the Court has held that no general principal of maintainability or non-maintainability of a petition under Section 9 of the Act against a third party can be laid down. It is also held by the Court that if as a general Rule, it is laid down that in exercise of power under Section 9 of the Act, no direction can be issued to non-parties to an Agreement containing the Arbitration Clause or non-parties to Arbitration Proceedings, the same will hamper the efficacy of the said provision. Attention is specifically drawn to para 16 of the judgment where the Court while dealing with the provisions of CPC, at pre-decretal stage held that the attachment under Order 38 Rule 6 CPC can also be of the property of the Defendant, not in possession of the Defendant, but belonging to it and is for the present in possession of another person in trust for or on behalf of the Judgment Debtor. Such attachment of property is permissible under Section 60 CPC. The Court further held that there is no reason for holding that if the Claimant, in an Arbitration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of a Court from passing orders against non-signatories to the Arbitration Agreement. The Court did notice that there was a divergence of opinion of this Court on the maintainability of a petition under Section 9 of the Act against the third party and referred to a few of those judgments in which divergent views were taken. The Court then referred to another judgment of this Court in the case of Value Advisory (supra), which has been relied upon by the Petitioner in this case and has been noticed in the earlier part of this judgment. Relevant paras of the judgment in Gatx India (supra) are as under: - 66. While the section explicitly provides that only a party to the arbitration agreement can apply to the court for interim measures, it does not say against whom any such relief can be claimed. Unlike section 17 which specifically allows for measures to be directed only against parties to arbitration, there is nothing in section 9 which expressly restricts a court from passing orders against non-signatories to arbitration agreement. Pertinently, there has been a divergence of opinion in this Court on the aspect of maintainability of a petition under section 9 of the Act against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances of a particular case have been making interim orders in respect of third parties, such as: interim injunction restraining third party- banks from honouring bank guarantees; attaching defendant's monies/property in hands of third party trustee, debtor, agent etc; restraining third party-subsequent transferee/person claiming rights in suit property from disposing of the same, and the like. As a corollary, the power of the court to issue interim orders under section 9 cannot be confined only to the parties to arbitration agreement. However, a significant parameter inherent in section 9, for exercise of this power against a nonsignatory to arbitration agreement, is that the purpose of section 9 is to aid arbitration between the parties thereto, and the interim orders there under have to be with regard to subject matter of arbitration/in connection with the arbitral proceedings. In this context, it is relevant to draw a distinction between orders granting interim relief against a party to the arbitration agreement which incidentally affects a third party, on one hand, and orders granting relief directed against a third party, on the other. While the former is or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nture outside the contract to issue directions to parties who are non-parties to the Arbitration Agreement. This limitation is not applicable to a Court exercising power under Section 9 of the Act. 28. In so far as the principal of Order 38 Rule 6 CPC is concerned, the Court in Value Advisory (supra) has clearly observed that the right of a Claimant in an Arbitration Proceeding to seek Attachment before Judgment against a third party who holds possession on behalf of the Respondent cannot be inferior to a right if he was a Plaintiff in a Suit. 29. The proposition in my view is well settled and can hardly be debated. Thus, on the legal proposition Mr. Sethi is right that it cannot be contended by Respondent No.2 that in no case interim directions can be passed against a non-party to the Arbitration Agreement, under Section 9 of the Act. 30. Relevant facts are also more or less undisputed in the present case. Respondent No. 1 pursuant to a tender floated by DIAL had submitted a bid for commercial spaces in the Aerocity Project. For the purpose of development, it had constituted Silver Resorts as an SPV. Admittedly, through the GDA, Silver Resorts had authorized the Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by it from the ITC group after conducting an auction of a hotel property situated at Goa and owned by the defendant No.3. 2. Counsel for the plaintiffs states that the aforesaid hotel property has been purchased by the ITC group in an auction held by the IFCI for a total sale consideration of ₹ 515 crores and after adjusting the amounts payable to it, a sum of ₹ 178.46 crores is still left as surplus with the IFCI and it is vital that to secure the interest of the plaintiffs, the said amount may be directed to be deposited in court. 3. Notice was issued on this application as long back as on 13.3.2015. However, no reply has been filed by the IFCI till date. 4. Learned counsel appears on behalf of the non-applicant/IFCI and seeks further time to file a reply. On a query, she submits that she is unaware as to the status of the surplus amount, if any, presently available with IFCI. 5. Mr. Rajive Mehra, learned Senior Advocate appears for the defendants No.1 2 and states on instructions that after adjusting the amounts receivable by the IFCI from the defendant no.3, presently, a sum of a sum of ₹ 189 crores (approx.) is available with it. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the jurisdiction of this Court but also wholly inappropriate. Contention of the Petitioner to secure this sum of ₹ 85 crores in aid of Arbitration between the Petitioner and Respondent No.1 is thus rejected. Relevant part of the order dated 27.08.2018 is as under: I.A. 9292/2018 Present application has been filed for recall of the order dated 31stJuly, 2015 to enable release of ₹ 85 crores by IFCI in favour of SEBI. Learned senior counsel for the plaintiffs as well as learned counsel for defendant no. 3 state that they have no objection if the order dated 31stJuly,2015 restraining IFCI from disbursing an amount of ₹ 85 crores from out of the surplus funds available with it after conducting the auction of the Hotel property, is vacated, provided they are given liberty to file independent legal proceedings in accordance with law and for a period of six weeks the said amount is not disbursed by either IFCI or SEBI. In the opinion of this Court, the request made by learned senior counsel for by the plaintiffs and learned counsel for defendant no. 3 is fair, and reasonable. Accordingly, the order dated 31st July, 2015 is vacated. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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