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TMI Blog2021 (10) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... Gupta and Shilpa Gupta (Respondents 3 and 4, referred to, hereinafter, as "the Guptas") qua a loan availed by Appellant No. 2, M/s RBT Pvt. Ltd. ("RBT") from South Indian Bank ("the Bank"), against which a property located at C-11/4, Arjun Marg, DLF City, Phase-1 - 122002 ("the Gurgaon property"), belonging to Rajan Chadha and his wife, stood mortgaged. (For sake of convenience, Sanjay Arora would hereinafter be referred to as "the appellant") 4. The impugned order has been passed on a petition, filed by Respondents 1 and 2, before this Court, under Section 9(1)(ii) of the 1996 Act2, treating it as an application under Section 17(1)(ii)3. An objection has been raised, by the appellant, regarding the jurisdiction and authority of the learned Arbitral Tribunal to do so; however, I will deal with that objection somewhat later in this judgment. Suffice it to state, at this stage, that, of the various prayers contained in the Section 17 application of Respondents 1 and 2, the only prayer which was pressed, and which has been granted by the learned Arbitral Tribunal vide the impugned order, is for a direction to the appellant to continue to pay, into the loan account of RBT, the equated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No.1 shall continue to pay the EMIs into the loan account of the company as per the terms and conditions of the loan account." 6. The very first argument advanced before me by Mr. Jayant Mehta, learned Counsel for the appellant, was that, irrespective of the merits of the case, no such urgency existed, as would justify issuance of the impugned direction at this stage. The assertion, to this effect, as contained in para 1(iv) of the present appeal, on which pointed reliance was placed by Mr. Mehta, reads as under: "The Respondent No.1 and 2 have pleaded fake urgency as there is no evidence of any impending threat of irreparable damage. The Application under Section 9 is based solely on the premise that interim direction for payment of Bank EMI is required as the loan account of RBT will be declared NPA if payments are not made urgently. It is submitted that in light of the spread of COVID -19, the Reserve Bank of India has vide circulars dated 27.03.2020 and 22.05.2020 already clarified that no accounts can be declared NPA till 31.08.2020. Further, no communication/notice has been issued by South Indian Bank stating that the loan account will be declared NPA if paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciples of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) Private Ltd. v. Pothan Joseph, (1960) 3 SCR 713: AIR 1960 SC 1156:" "These principles are well established, but as has been observed by Viscount Simon in Charles Osenton & Co. v. Jhanaton, 1942 AC 130 '...the law as to the reversal by a court of appeal of an order made by a judge below in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy as would justify grant of the impugned interim protective measures. 12. I am unable to agree. Once the possibility of the loan account of RBT being declared NPA, and SARFAESI proceedings, being initiated in that regard, loomed large, if the learned Arbitral Tribunal sought to grant interim protection in order to avoid such an exigency, I can hardly interfere with the exercise of such discretion, in exercise of my appellate jurisdiction under Section 37(2)(b) of the 1996 Act. 13. It cannot be said that the learned Arbitral Tribunal ought to have waited for a 60-day notice under the SARFAESI Act to be issued in the first instance, before granting interim protection. One does not close the stable doors after the horses have bolted. In any event, once there was a real and live possibility of the bank account of RBT being declared an NPA, owing to non-infusion of EMIs into the account, that, even by itself, in my view, would have justified the passing of the interlocutory protective order by the learned Arbitral Tribunal. 14. The objection of Mr. Mehta, to the finding of urgency, as returned by the learned Arbitral Tribunal in paras 36 and 37 of the impugned order, is rejected. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RBT. Respondent No. 4 Shilpa Gupta did not hold any shares in RBT. 23. According to the MoU, the parties would jointly manage the affairs of RBT till 31st October, 2019, and, with effect from 1st November, 2019, the appellant undertook to manage its affairs. All accounts stood reconciled till 31st October, 2019. This position is recognised by Clauses 3, 4 and 8 of the MoU, which read as under: "3. The parties agree that the Fourth Party is ready and willing to take over the entire shares of the First Party and therefore he has represented to the Second, Third, Fifth Party to transfer their respective shares in his favour or in favour of his nominees subject to the fulfillment of the obligations agreed upon between the parties in this MOU. The Parties have agreed that the cut-off date in order to assess the liabilities and assets shall be 31.10.2019. 4. The Fourth Party further agrees that he is solely handling the affairs of the First Party since 01.11.2019 and that he is ready and willing to continue to do the same as per his own perils and wishes. The Second, Third, Fifth and the Sixth Party have agreed to exit from the First Party on the terms and conditions mentioned here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filment of these obligations, particularly in the context of clause 4 of the MoU, which reads as under: "4. The Fourth Party further agrees that he is solely handling the affairs of the First Party since 01.11.2019 and that he is ready and willing to continue to do the same as per his own perils and wishes. The Second, Third, Fifth and the Sixth Party have agreed to exit from the First Party on the terms and Conditions mentioned hereinbelow: - a) The Second and Third Party, hereinafter to(sic) referred to as the 'Exiting Parties', have agreed to exit and transfer their entire shareholding as mentioned in Clause 2 of the recitals of this MOU in favour of the Fourth Party or his nominees subject to the First Party/Fourth Party getting released the Collateral Security i.e. house bearing No. C11/4, Arjun Marg, DLF City, Phase-I, Gurgaon, Haryana-122002 from the South Indian Bank, i.e. where the Loan Accounts of the First Party are being maintained. b) That in order to fulfill its obligation of releasing the Collateral Security from the Bankers the Fourth Party shall within 30 (Thirty) Days of the execution of this MOU:- (i) Either Replace the entire collateral and infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th effect from 1st November, 2019 and that, the Chadhas would have no role to play therein. It read thus: "5. The parties agree that in the meantime as to when the Fourth Party shall be arranging for completion of his obligation as mentioned in the Clause 4 hereinabove, the Fourth Party shall be solely liable for handling the day to day affairs of the First Party from 01.11.2019 the Second and Third Party shall not have any form of say in the affairs of the First Party." 29. Clause 7, as already noted hereinabove, required the appellant to, till successful completion of MoU, continue to pay all statutory dues and accounts overhead, including bank instalments and other day-to-day expenses of RBT from 1st November, 2019. The Chadhas and the Guptas were entirely absolved from responsibility in this regard after 1st November, 2019. 30. Clause 10 of the MoU noted the fact that the Chadhas had handed over, to Mr. Raman Arora, the signed documents of transfer of their shares, resignations from RBT, etc. and that these documents would be handed over to the appellant consequent on successful release of the collateral securities/guarantees, in accordance with Clause 4 of MoU (reproduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts from disposing off/alienating, siphoning off or in any manner creating any third-party interest or charge in the assets of respondent No. 1; b. Restrain the respondents from using the premises of respondent No. 1 company for business operations of any other entity except for respondent No. 1; c. Direct the respondents to file before this Hon'ble Court all the books of accounts of the respondent No. 1 from 01.11.2019 till dated; d. Direct the respondent No. 2 to provide and execute all such documents as required for filing a claim for TUFF subsidy and to also provide for the Login credential of the GST filing account for filing of the GST refund to the tune of Rs. 90,00,000/- (Rupees Ninety Lakhs Only); e. Direct the respondents to forthwith pay the Loan Liability of respondent No. 1 and release the collateral security provided for by the petitioners for the loan facilities availed by respondent No. 1; f. Pass any further order(s) as this Hon'ble Court may deem fit, proper and necessary in the facts and circumstances of the present case and in the interest of justice." 2. It is the case of the petitioners and so contended by Mr. Darpan Wadhwa, learned Senior C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the respondent No. 1 company in Faridabad. That apart, he also states that the premises of the respondent No. 1 company is being used for third parties and not for respondent No. 1, which must be restrained. Mr. Mehta dispute the submissions. He on instructions also state that neither any material nor any machinery is being taken away. He qualifies the submission by stating that the pending reference to the Arbitrator, the petitioners shall not take away any raw material or machinery from the premises of the respondent No. 1 company. He also state that the premises is not being used for third parties and shall not be used so in future. 7. Having noted the submissions made by the counsels for the parties and their agreement for appointment of a new Arbitrator, this court deem it appropriate to appoint Justice Indermeet Kaur, a retired Judge of this Court as a Sole Arbitrator, who shall adjudicate the dispute between the parties. The fees of the learned Arbitrator shall be regulated by the provisions of Fourth Schedule to the Arbitration & Conciliation Act, 1996. 8. As the counsels have shown urgency in this matter, I deem it appropriate to list this matter before Justice Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. on or before 21.6.2020 with a copy to the counsel for the petitioner. Rejoinder be filed within 4. days thereafter i.e. on or before 25.6.2020. List before the undersigned on 26.6.2020 at 4.30 p.m. at AB-84, Shahjahan Road, New Delhi. The court notes that apart from Respondent No. 1 & 2 there are 2 other respondents i.e. Respondent No. 3 & 4. Today at about 4 p.m. an email was received from respondent No. 3 informing the undersigned that due to the Covid situation he is unable to appear. It is noteworthy to note that the said respondents (No. 3 & 4) had not appeared before the Hon'ble High Court. Reliefs claimed in the pending application are even otherwise not directed against respondent No. 3 & 4. Be that as it may let respondent No. 3 & 4 be served through email for the next date of hearing. They may file the reply to the pending application within the same time period i.e., 4 days and appear on the next date. The statements made by the learned counsel for the respondent No. 1 & 2 before the Hon'ble High Court (while recording the order dated 11.6.2020), will needless to state, be binding upon the said respondents. Dates for completion of pleadings will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and states "once the Arbitral Tribunal has been constituted the Court shall not entertain an application under sub-Section(l) unless the Court finds that circumstances exist which may not render the remedy provided under Section 17 efficacious." 27. Section 17 which is contained in Chapter IV of the said Act presupposes the pendency of "arbitral proceedings before the interim measures/reliefs as contained in the said section can be granted and these powers are within the domain of the Arbitrator". The undersigned is of the view that the arbitral proceedings were pending before the undersigned on 17.6.2020 when a statement had been made by the claimants that the application under Section 9 of the said Act be treated as an application under Section 17 of the said Act and the reliefs sought by him in the application under Section 9 be treated as the reliefs claimed under Section 17. The undersigned had been appointed as an Arbitrator by the Hon'ble High Court in terms of its order dated 11.6.2020, On this date the Arbitral Tribunal had been constituted. This order while appointing the undersigned as an Arbitrator had directed the undersigned to adjudicate the dispute between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, it is difficult to treat the objection of the appellant, regarding the exercise of jurisdiction by the learned Arbitral Tribunal vis-a-vis its power to convert a Section 9 petition into a Section 17 application, as fatal to the impugned order. 43. Paras 2 to 4 of the order dated 11th June, 2020, set out the original dispute between the appellant and respondents. 44. Para 6 notes, at the outset, the submission, of learned Senior Counsel for the Chadhas, that he had no objection to the appointment of a new arbitrator "to adjudicate the dispute between the parties". Any power to adjudicate the dispute between the parties, needless to say, also includes the power to adjudicate on any prayer for interim relief, if raised under Section 17 of the 1996 Act. 45. Para 6 goes on to record the submissions advanced by the Chadhas, in support of the prayers in its Section 9 petition, as well as the submissions of learned Counsel for Sanjay Arora by way of response thereto. Having noted the said submissions, para 7 of the order records thus: "Having noted the submissions made by the counsels for the parties and their agreement for appointment of a new Arbitrator, this court deem it appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal was questioned, was the non-existence, on the date when the Section 17 application was preferred before the learned Arbitral Tribunal, of any statement of claim under Section 23, having been preferred by the Chadhas. The contention advanced before the learned Arbitral Tribunal - which was reiterated by Mr. Mehta before me - was that, in the absence of a statement of claim, no application under Section 17 of the 1996 Act was maintainable. The statement of claim, admittedly, came to be filed only after the impugned order was passed. This, according to Mr. Mehta, was fatal to the impugned order. Reliance has been placed by Mr. Mehta, in this regard, on the judgment of this Court in BPL Ltd. v. Morgan Securities & Credits Pvt. Ltd. 2008 (1) Arb. LR 325. Additionally, before the learned Arbitral Tribunal, reliance was also placed on the judgment of the High Court of Bombay in Moser Baer Entertainment Ltd. v. Goldmines Telefilms Pvt. Ltd. 2013 (2) Arb. LR 448. 52. The learned Arbitral Tribunal has rejected this submission. The grounds for rejection, as set out in the impugned order, are in my view, unexceptionable. 53. The legal proposition, as advanced by Mr. Mehta appears, at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 23 cannot be treated as a sine qua non for the maintainability of an application for interim protection under Section 17. 56. The decision in BPL Ltd. 2008 (1) Arb. LR 325 relates to a period prior to the amendment of Section 17 by Section 10 of the Arbitration and Conciliation (Amendment) Act, 2015. Section 17, prior to amendment (by way of substitution) read thus: "17. Interim measures ordered by arbitral tribunal. - (1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute. (2) The arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered under sub-section (1)." 57. After amendment, Section 17(1) reads as under: "17. Interim measures ordered by arbitral tribunal. - (1) A party may, during the arbitral proceedings, apply to the arbitral tribunal - (i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure of protection in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended Section 17, I may note that a Single Bench of this Court of Hon'ble Mr. Justice Vikramjit Sen (as he then was), in NTPC Ltd. v. BALCO Ltd. MANU/DE/1204/2004 opined that an application under Section 17 would lie even in the absence of a prior Statement of Claim. Para 6 of the report, in which it is so held reads thus: "6..... As has already been seen, the impugned Orders had been passed in April 2004, before the Claims had been filed before the learned Arbitrator. Predicated on this sequence of events the Award has been assailed on the ground of its being coram non judice since the learned Arbitrator could not have assessed the boundaries or the subject matter of the dispute. A comparison of the two Sections will immediately reveal that the powers of the Court to pass interim orders/measures is of wider amplitude than those of the Arbitrator whose role is circumscribed to the subject matter of the dispute only. However, the powers "in respect of the dispute" are coextensive. So far as the present case is concerned, the parties have not directly approached the learned Arbitrator. BALCO had filed a petition praying for interim orders under Section 9 of the A and C Act whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Essar Bulk Terminal 2021 SCC OnLine SC 718 The decision in BPL 2008 (1) Arb. LR 325, which is also of a learned Single Judge of this Court does not take into account, the earlier decision in NTPC and cannot, therefore, be followed, even for this reason. 61. The objection, of the appellant, to the Arbitral Tribunal having condescended to entertain the Section 17 application of the Chadhas, even before a statement of claim was filed by it, is also, therefore, rejected. On merits 62. On the merits of prayer (e) in the Section 17 application of the Chadhas, the learned Arbitral Tribunal has held, in paras 32 to 37 of the impugned order, thus: "32. This document runs into several pages and at this stage while dealing with this application it would not be relevant to refer to the other clauses contained in the said MOU (at page 20). A perusal of the aforenoted clauses of the MOU make one thing crystal clear. It is clear that the 2nd, 3rd, 5th and 6th party had agreed that their liability vis-à-vis the company would be only upto 01.11.2019. After this cut off Le, w.e.f. 31.10.2019 the company would be run by Mr. Sanjay Arora. The collateral security for the loan amount of resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich have been deposited into the loan account of the company. No money by Shri Sanjay Arora has been deposited into the account of the company. Admittedly balance confirmation has also not been received from the bankers. The obligation on the part of the claimants to infuse any money at this stage into the loan account of the company would thus not arise; it would arise only when the respondents have fulfilled their obligation. 34. Clause 5 stipulated that in the meanwhile till the 4th party is arranging for the funds, he alone is responsible for the day to day handling of the affairs of the company. Clause 6 cast an obligation upon the 4th party that till the successful closure of this arrangement, all post dated cheques issued for and on behalf of the company would be honoured and the second and third party would have no personal liability. Clause 7 further detailed that till the successful completion of the present MOU all statutory duties as also bank instalments, w.e.f. 1.11.2019 would be paid by the 4th party/Mr. Sanjay Arora; the exiting parties would not be liable in any form. In terms of clause 8 the parties had recorded that the accounts of the company stood reconciled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto the loan account of the company was upon Shri Sanjay Arora. The claimant had done this only on an apprehension that the property might become the target of SARFESI proceedings. 37. Learned counsel for the claimant further submits that he is only pressing prayer (e) of his application. The undersigned notes this submission. The undersigned also notes the statement/concession granted before Hon'ble High Court by the respondent on 11.6.2020 which would continue till the disposal of the arbitral proceedings. The undersigned is of the view that an irreparable loss and injury would be suffered by the claimant at this stage if the loan liability is not discharged (as per the terms and conditions of the loan) and if the EMIs are not paid by the respondents the collateral security (house owned jointly by claimant No. 1 and his wife) could become the subject matter of summary proceedings under the SARFESI Act. This apprehension of the claimant at this stage has been prima facie established and balance of convenience is thus in favour of the claimant. Accordingly the undersigned is of the view that till the disposal of this petition respondent No. 2 acting for and on behalf of Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14th February, 2020 vis-à-vis the status which stood on 31st October, 2019, which showed that the loan liability of RBT had been reduced from Rs. 9,72,96,977.97 to Rs. 6,11,76,074.37. This, it was submitted, was because of the infusion of monies, by Sanjay Arora, the appellant, into the loan account. (iv) Subsequently, during arguments, however, responding to the findings of the learned Arbitral Tribunal that there was no evidence to show that these monies had been infused into RBT's loan account by the appellant, Mr. Mehta submitted that it really made no difference whether the monies were paid by the appellant out of his own pocket or were infused from the accounts of the company, as all assets of RBT vested in the appellant after 1st November, 2019. This aspect has been emphasized, in the written submissions, filed by the appellant, in the following words: "The Impugned Order has erroneously observed that under the MoU, obligation was upon Appellant No. 1 to infuse money in the loan account and he could not use the receivables/income of RBT for the said purpose. The Ld. Arbitrator failed to appreciate that no distinction could be created between the funds infused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank directly. He has also referred to a communication dated 23rd February, 2019, from Rajan Chadha to the Bank and to a response dated 2nd March, 2020, from the Bank to Rajan Chadha, regarding the outstanding loan amounts. (vi) In these circumstances, the onus to show willingness to infuse the amounts, into the loan account of RBT, proportionate to their respective shareholdings, was on the Guptas and the Chadhas which they failed to do. (vii) The learned Arbitral Tribunal materially erred in requiring the appellant to continue to pay the EMIs against the loan advanced by the Bank to RBT, without calling on the Guptas and the Chadhas to infuse, into the loan account of RBT, the amounts required to be paid by them. In this regard, he placed reliance on an e-mail dated 14th February, 2020 from the Chadhas to the appellant, in which they expressed their readiness to take over the remainder of the Bank Loan "post the payments made by (the appellant) in reference to (the appellant's) share of the loan amount". Mr. Mehta submits that the appellant would have no objection to continuing to pay the EMIs as directed by the learned Arbitral Tribunal provided, concomitantly, the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the infusion of monies into the loan account of RBT had, in the first instance, to be by the appellant in his personal capacity. No exception can, therefore, according to Mr. Rao, be taken to the finding, of the learned Arbitral Tribunal, that there was no material to indicate that the appellant had infused any money into the loan account of RBT. Mr. Rao has also referred, in this context, to the bank statement filed by the appellant himself, which indicates that the total infusion of monies into the loan account of RBT by the appellant was an amount of Rs. 90,50,000/- during the period 1st November, 2019 to 29th February, 2020. Mr. Rao contends that, therefore, the assertion of Mr. Sanjay Arora that he had paid an amount of Rs. 3,97,44,267/- is totally incorrect and that, in fact, all other infusions, which resulted in reduction of the remaining loan liability of RBT were by other third parties which owed money to RBT. 67. Mr. Rao has also drawn attention to the opening recitals in Clause 4 in the MoU, which reads thus: "4. The Fourth Party further agrees that he is solely handling the affairs of the First Party since 01.11.2019 and that he is ready and willing to continue to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich may have come from third parties. 70. Mr. Mehta also contends that the impugned order amounts to a mandatory injunction at an interlocutory stage, which the learned Arbitral Tribunal was not competent to grant and which, even otherwise, was not justified in the facts before the learned Arbitral Tribunal. He also submits that the impugned order amounts to a direction for specific performance of the contract between the parties, which could not have been issued by the learned Arbitral Tribunal in exercise of its power under Section 17 of the 1996 Act, for which purpose he relies on the judgment of this Court in Lanco Infratech Ltd. v. Hindustan Construction Company Ltd. 2016 SCC OnLine Del 5365 In view thereof, Mr. Mehta contends that the impugned order cannot sustain legal scrutiny and requires, therefore, to be set aside. Analysis on merits 71. The reasoning of the learned Arbitral Tribunal, as contained in paras 32 to 37 of the impugned order is, in my considered opinion, unexceptionable. 72. Clause 4 of the MoU set out the modalities for exit, by the Guptas and the Chadhas from RBT, and for release of the Gurgaon property, pledged as collateral with the Bank. The position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligation under the said option. This required the appellant himself to deposit, in the loan account of RBT, the share required to be contributed by him, and to produce documentary proof of such deposit having been made "by him", in the said loan account. 75. The submission of the appellant, that this requirement stood satisfied by the production, by him, of the statement of account of RBT, showing a reduction of its loan liability from Rs. 9,81,48,864.97 on 1st November, 2019 to Rs. 6,11,68,882 on 1st March, 2020, was rejected by the learned Arbitral Tribunal, on the ground that the mere reduction of loan liability did not indicate that the amounts had been infused into the loan account by the appellant. Indeed, the statement of account on which the appellant relied, does not disclose the source from which amounts were infused into the loan account of RBT, resulting in the reduction of its loan liability. The requirement of such infusion having to be made by the appellant himself was an express covenant in Clause 4(b)(iii) of the MoU and, if the learned Arbitral Tribunal held that strict compliance therewith was required, the decision is, at the very least, a plausible one, not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount and the profits/income/assets of RBT. 80. Nor am I able to accept the contention that the mere use of the words "First Party/Fourth Party" in Clause 4(a) of the MoU would operate to entitle the appellant to treat receivables infused into the loan account of RBT from other sources as equivalent to payments made "by him" for the purposes of Clause 4(b)(iii). In fact, the use of the expression "First Party/Fourth Party" in Clause 4(a) of the MoU may militate against the contention being advanced by Mr. Mehta. There is a clear distinction between the expressions used in Clauses 4(a) and 4(b). Whereas Clause 4(a) refers to release of the collateral security by the "First Party/Fourth Party", Clause 4(b) requires all acts and contributions, in that regard, to be made by the Fourth Party, i.e. the appellant. In case, infusion of monies from other sources, into the loan account of the RBT, were to be sufficient for the purposes of Clause 4(b)(iii) of the MoU, the contract could very well have used the expressions "First Party/Fourth Party" in Clause 4(b)(iii) as well. That the contract has not done so indicates a clear intent that infusion of moneys, into the loan account of RBT, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the statement of loan account of RBT did not evince reduction of the loan liability consequent upon infusion of any amount by the appellant in excess of Rs. 90,50,000/-, the finding of the learned Arbitral Tribunal on this issue, too, does not merit interference. 84. The submission that the respondent could have contacted the Bank and obtained a clarification, in the circumstances, fails to retain significance. The contractual position remains, that the first responsibility was on the appellant to deposit his share in the loan account of RBT and, thereby, reduce its loan liability. It was for the appellant to establish that he had done so. That not having been done, the appellant can hardly be heard to contend that the respondents could have obtained a clarification from the Bank. 85. At the highest, the submissions of Mr. Mehta relate to the manner in which the terms of the MoU were to be interpreted. The interpretation advanced, by the learned Arbitral Tribunal cannot be said, by any stretch of imagination, to be contrary to the contractual provisions. Rather, if anything, the learned Arbitral Tribunal has interpreted Clause 4(b)(iii) of the MoU literally. The appellant seek ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs on merits, on the issues in controversy, as the Court is effectively sitting in judicial review over the findings of the learned Arbitral Tribunal. These findings have the potentiality of effecting, to some extent, the future course of the arbitral proceedings, as well as the final award that may come to be passed, even if the Court enters the usual cautionary caveat, that the findings are intended only to dispose of the appeal against the Section 17 order. The fact that observation made by the High Court, even if, without prejudice, do affect the future course of arbitral proceedings, is an aspect that has been noted by a Division Bench of this Court in N.H.A.I. v. Bhubaneswar Expressways Pvt. Ltd 2021 SCC OnLine Del 2421 and D.L.F. Ltd. v. Leighton India Contractors Pvt. Ltd 2021 SCC OnLine Del 3772 Parties, who have chosen to refer their disputes to arbitration and, thereby have the distinct advantage of a speedy resolution of the disputes without having to undergo a protracted litigative process may, therefore, be well advised to consider whether orders passed under Section 17 of the 1996 Act should routinely be challenged by way of appeal. This also clogs the docket of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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