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2026 Supreme(SC) 903
SUPREME COURT OF INDIA
K. V. VISWANATHAN, ALOK ARADHE, JJ.
National Projects Construction Corporation Ltd. – Appellant
Versus
Ishvakoo (India) Pvt. Ltd. – Respondent
Civil Appeal No. 5819 of 2025
Decided On : 11-08-2026
Important Points
Subject
Arbitration Law - Interim Measures
Act Referred
Headnote
(B) Interim Measures - Discretion of Court - Power to grant measures is not strictly bound by provisions of procedural code, but should be exercised judiciously to promote the efficacy of dispute resolution - Mere apprehension is insufficient to deny access to remedy if the subject matter requires protection against unfair financial retention. (Paras 21-23)
Facts of the case:
Disputes arose between parties regarding a project. Financial guarantees were provided as an advance. During early proceedings, a court order was passed restraining the invocation of these guarantees subject to them being kept alive, conditional on an executable award. The prevailing party later invoked the guarantees upon non-renewal. Following the final award dismissing claims, the unsuccessful party sought a refund via an interim application, arguing there were no counterclaims and no factual findings to support retention of the money.
Findings of Court:
The Court found that prohibiting the retention of funds is justified to prevent inequity where no counterclaims were substantiated and the retention runs contrary to the original court-mandated conditions. It held that the unsuccessful party successfully demonstrated a need for interim protection.
Issues: Whether an unsuccessful party in proceedings can maintain a petition for interim measures post-award and whether, in the absence of counterclaims, the retention of encashed financial guarantees is justified pending challenge proceedings.
Ratio Decidendi: The court established that interim protective measures are not exclusively for the prevailing party; in rare and compelling circumstances, a losing party can seek interim relief if it prevents irreparable harm or preserves the efficacy of secondary challenge proceedings, applying the test of what is just and convenient.
Result: Appeal dismissed.
For the Appellant(s) : Mr. Rajat Arora, AOR (through VC)
For the Respondent(s): Mr. Ajay Bansal, Adv. Mr. Kuldip Singh, AOR Mrs. Veena Bansal, Adv. Mr. Sourav Jindal, Adv. Mr. Gaurav Yadava, Adv. Mr. Aditya Gupta, Adv.
| Table of Content |
|---|
| 1. procedural history and factual background leading to the appeal. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14) |
| 2. conflicting contentions regarding section 9 applications post-award. (Para 15 , 16) |
| 3. maintainability and scope of section 9 for unsuccessful parties post-award. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24) |
| 4. judicial exercise of discretion to prevent unjust enrichment and balance equities. (Para 25 , 26 , 27) |
JUDGMENT
K. V. Viswanathan, J.
1) The present appeal calls in question the correctness of the order dated 21.05.2019 passed by a Division Bench of the High Court of Delhi at New Delhi in FAO(OS)(COMM) No. 113/2019. By the said order, the Division Bench dismissed the appeal filed by the appellant and confirmed the order of the learned Single Judge dated 05.04.2019 in OMP(I)(COMM.) No. 57/2019 filed under Section 9 of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as ‘the 1996 Act’).
2) The respondent filed OMP (I)(COMM.) No. 57/2019 before the High Court seeking the following reliefs:-
"(a) Allow the present application and further direct the Respondent to immediately refund the amount of Rs.3,50,00,000/- to the Petitioner (in terms of order dated 20.09.2018) being the amount appropriated by it by wrongfully encashing the Bank Guarantees in question, along with interest at the rate of 18% per annum from 14.09.2017 till the amount is refunded, and
(b) Award costs of the proceedings in favour of the Petitioner and against the Respondents, and/or ... "
BRIEF FACTS: -
3) On 16.08.2002, the appellant and the respondent entered into a Memorandum of Understanding (MoU) for the work of Bus Terminus at Taj Mahal Bus Stand, UPST Bus Stand, Idgah Bus Stand and development of Taj Trapezium Zone (TTZ) Heritage Corridor for Agra, Government of Uttar Pradesh. In December 2002, the respondent was provided Rs. 3.5 crores as Mobilisation Advance against the bank guarantees furnished by it.
4) Disputes arose between the parties. The arbitration clause was invoked by the respondent and an Arbitrator came to be appointed to adjudicate the disputes.
5) At that stage, a Section 9 application came to be filed in OMP No. 363/2003 before the High Court, by the respondent. The prayer made in the application was to restrain the appellant from invoking Bank Guarantee Nos. 109/2002 to 124/2002 for a total sum of Rs. 3,50,00,000/- issued by the Canara Bank. The said Section 9 application was disposed of on 15.12.2005, in the following terms: -
“OMP No. 363/2003
Present petition is filed under Section 9 of the Arbitration and Conciliation Act, 1996 (in short 'the Act') seeking restraint against the respondent from invoking bank guarantees No.109 to 124/2002 for a total sum of Rs. 3 crores 50 lacs issued by Canara Bank, H-Block, Connaught Circus, New Delhi in favour of the respondent. The arbitration proceedings are underway. On 16th September, 2003 order was passed recording the undertaking of the petitioner to renew these bank guarantees and directing the respondent not to press for encashment of these bank guarantees during the extended period of the bank guarantees. This order was extended from time to time and on 19th August 2004, it was directed that the bank guarantees shall be kept alive by the petitioner till the disposal of this petition. Since the counsel for the petitioner thereafter on 7th July 2005 gave an undertaking that the bank guarantees shall be kept alive till the arbitrator gives the award, the learned counsel for the respondent sought time to have the instructions in the matter.
Mr. Taneja, learned senior counsel appearing for the respondent, states on instructions that the respondent shall not invoke these bank guarantees provided the bank guarantees are kept alive till the arbitrator gives the award and further till the award becomes enforceable as a decree under Section 36 of the Act. However, it is subject to the condition that if after adjudication by the arbitrator it
