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2017 Supreme(SC) 1611

SUPREME COURT OF INDIA
Jagdish Singh Khehar, CJI., D.Y. Chandrachud, J.
Ultratech Cement Limited – Petitioner
Versus
Rajasthan Rajya Vidyut Utpadan Nigam Limited – Respondent
Civil Appeal No. 679 of 2017 (Arising from SLP(C) No. 37709 of 2013) with Civil Appeal No. 678 Of 2017 (Arising From SLP(C) No.37702 of 2013) Civil Appeal No. 680 of 2017 (Arising From SLP(C) No.1130 of 2014) Civil Appeal No. 681 of 2017 (Arising From SLP(C) No.2420 of 2014) Civil Appeal No. 682 of 2017 (Arising From SLP(C) No.3628 of 2014) Civil Appeal No. 683 of 2017 (Arising From SLP(C) No.6512 of 2014) Civil Appeal No. 684 of 2017 (Arising From SLP(C) No.7012 of 2014) Civil Appeal No. 685 of 2017 (Arising From SLP(C) No. 2128 of 2017) @ CC No. 8835 of 2014
Decided On : 19-01-2017

Advocates Appeared:
For the Petitioner:Dr. A.M. Singhvi, Sr. Advocate, Mr. Amit Pawan, Ms. Suruchi Kasliwal, Mr. Amit Bhandari, Mr. Akshat Shrivastava and Mr. Gaurav Singh, Advocates, Mr. Gourab Kr. Banerji, Sr. Advocate, Mr. Amit Pawan, Ms. Suruchi Kasliwal, Mr. Sahil Tagotra, Mr. Akshat Shrivastava and Mr. Gaurav Singh, Advocates, Mr. Amit Pawan, Advocate, Mr. U.A. Rana, Mrs. Mrinal Elkar Mazumdar and Mr. Himanshu Mehta, Advocates for M/s Gagrat & Co., Mr. V. Shekhar, Sr. Advocate and Mr. Praveen Kumar, Advocate, Mr. Praveen Kumar, Mr. Shantanu Kumar and Mr. Smarhar Singh, Advocates
For the Respondent:Mr. K.K. Venugopal, Sr. Advocate, Mr. Ajay Choudhary and Mr. Puneet Taneja, Advocates

The nature of the prayer made by the appellant in the Section 9 application determines the continuation of the interim order.

Headnote:

Arbitration - Interim Measures - Arbitration and Conciliation Act, 1996 - Section 9

Fact of the Case:

The appellant and respondent entered into an agreement allowing the appellant to take away fly ash without payment for 5 years. Dispute arose when the respondent invited tenders for the sale of fly ash. Appellant filed an application under Section 9 of the Act seeking interim injunction.

Finding of the Court:

The High Court reversed the District Judge's order granting interim injunction. The Supreme Court allowed the appellant to purchase fly ash at a specified rate and determined the payment terms based on the arbitral awards.

Issues: Whether the proceedings under Section 9 of the Act survive after the arbitral proceedings come to a closure.

Ratio Decidendi: Interim measures under Section 9 can be allowed before, during, and after the arbitral proceedings but before enforcement of the arbitral award. The nature of the prayer made by the appellant in the Section 9 application determines the continuation of the interim order.

Final Decision: The Supreme Court directed the appellant to pay for the fly ash at the rate determined by the arbitral award till the determination of the proceedings under Section 34 of the Act.

ORDER :

Civil Appeal @ SLP(C) No. 37709/2013

Leave granted.

2. The appellant – Ultratech Cement Limited, and the respondent - Rajasthan Rajya Vidyut Utpadan Nigam Limited, entered into an agreement in 2004. The respondent allowed the appellant to take away fly ash, without any payment, for a period of 5 years. It is not a matter of dispute, that the agreement commenced effectively in the year 2007, and as such, free supply of fly ash would continue up to the year 2012. The agreement, which was for a period of 10 years, allowed the respondent to raise a charge for taking away fly ash, after the initial period of 5 years.

3. In order to determine the commercial value of fly ash, the respondent issued notice, inviting tenders for the sale of fly ash, in the year 2011. Since the dispute between the parties was arbitrable, an application was filed by the appellant, under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act'), with the following prayers:

"Therefore, filing application along with affidavit, it is humbly prayed that allowing the application of the applicant company the respondent may be restrained by way of interim injunction that till adjudication of the dispute arises between the parties by appointing Arbitrator by the applicant as per Clause No.9 of the Agreement dated 15.10.2004 signed by and between the applicant and the respondent, passing of the award by the Arbitrator and also till enforcement of the said Award, the respondent may be restrained not to cancel the agreement dated 15.10.2004 and not to invite NIT in pursuance to the NIT No. SE (CAM) TN-3692 published on 24.8.2011, not to organize proposed pre-bid meeting on 26.9.2011, not to open the NIT on 10.10.2011, not to do any other act in this regard, not to create any hurdle or obstruction in utilization and disposal of fly ash generated in Unit No. 4 & 5 of Kota Thermal Power Station by the applicant company and also not to do any such act contrary to the terms and conditions mentioned in the Agreement dated 15.10.2014 and also not to do such act through his agent, servant, representative etc."

(emphasis is ours)

4. The District Judge, before whom that application came to be filed, passed an order dated 18.02.2012, accepting the prayer made by the appellant. Dissatisfied with the order passed by the District Judge, the respondent raised a challenge before the High Court of Rajasthan, by preferring S.B. Civil Miscellaneous Appeal No. 1859/2012. The High Court, by its order dated 18.11.2013, reversed the order passed by the District Judge on 18.02.2012.

5. Order dated 18.11.2013 was assailed by the appellant before this Court. This Court passed two orders, which are relevant for the present controversy, dated 13.12.2013 and 14.03.2014. Order dated 13.12.2013 is reproduced below:

"Taken on Board.

Application seeking exemption from filing official translation is allowed.

Issue notice returnable by the 2nd week of January, 2014.

Dasti service, in addition, is permitted.

In the meanwhile, the respondent-Nigam will not finalise the tenders pursuant to the Notice Inviting Tender dated 24th August, 2011."

Likewise, order dated 14.03.2013 is extracted hereunder:

"Heard learned counsel for the parties. By interim order passed by this Court on 31st January, 2014, we had directed that there shall be no sale of fly ash without leave of this Court. In modification of the said order, we direct that the respondent-Nigam will sell fly ash to the petitioners at the rate of Rs.250/- per metric tonne. The question as to whether the petitioners will be entitled to refund of the said Rs. 250/- per MT or any lesser amount will be considered at a later stage.

The contempt proceedings are dropped. The supplies of the fly ash in terms of the interim order passed today will be commenced immediately."

Under the above order, the appellant was allowed to purchase fly ash from the respondent – Nigam at the rate of Rs.250/- per metric tonne.

6. We are informed, tha




















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