Court has the discretion to pass a limited order of interim protection under section 9 of the 1996 Act if the application had been entertained before the constitution of the tribunal and thereafter direct the parties to approach the arbitral tribunal.

JUDGMENT :

(Moushumi Bhattacharya, J.)

1. The petitioner has filed 4 applications under section 9 of The Arbitration and Conciliation Act, 1996 for orders of injunction restraining the respondent from transferring or dealing with the amounts in the escrow accounts in the respondent Bank bearing the account number stated in the prayer b of each of the applications.

2. The 4 agreements entered into between the same parties in 2019 contain arbitration clauses. Since the issues involved in all the 4 applications are identical, the said applications are being disposed of by way of this judgment.

3. The petitioner seeks a restraint on the respondent Bank from dealing with the amounts in the Escrow accounts the particulars of which have been provided respectively in the 4 applications. The accounts are maintained in the respondent Bank. The petitioner also seeks appointment of a Receiver over the escrow account in the respondent Bank.

4. The petitioner also intends to approach the arbitral tribunal in an application under section 17 of the Act. The petitioner seeks this interim relief until formation of the arbitral tribunal in accordance with the arbitration agreement contained in clause 8.3 of the Agreement for Assignment executed between the petitioner and the respondent Bank on 17.1.2019, 4.11.2020, 4.8.2020, 30.8.2019. All the 4 applications are for interim relief.

5. Clause 2.3 of the Assignment Agreement reflects the terms as to collection of receivables between the parties described as the “assignor” (petitioner) and the “assignee” (the respondent) and that the assignee was entitled to receive all receivables from the guarantors/borrowers under the Original Master Operating Lease Agreement which had been assigned by the petitioner (assignor) to the respondent (assignee). Clause 2.3 (a) reflects the obligation of the assignee/respondent to keep the said receivables in a Designated Account in terms of a Designated Account Agreement dated 30.8.2019/4.8.2020/4.11.2020. Clause 2.3(c) provides that such amounts shall be transferred by the respondent (assignee) to the petitioner (assignor) and that the petitioner shall ensure that these amounts are deposited in the relevant government/regulatory authorities. Clause 2.3 also provides that the amounts deposited in the Designated Account shall be withdrawn in accordance with the terms and conditions of the Designated Account Agreements.

6. Clause 1.1 of the said Agreement defines “tax” to mean any direct or indirect tax, cess rate or duty on sale or lease of or any provision for goods or services and includes tax deducted at source, excise duty, import duty, export duty on import, etc. “Excluded amounts” is also defined in clause 1.1 to mean and include any indirect taxes paid by the renter under the Renting Agreement and the relevant Rental Schedules.

7. On a plain reading of the Clauses of the Agreements for Assignment, it is clear that pursuant to the assignment made by the assignor/petitioner in favour of the assignee/respondent of the Master Operating Lease Agreement, the assignee/respondent was to collect the receivables and transfer the tax component to the assignor/petitioner who thereafter would deposit the same with the statutory authorities.

8. Learned counsel for the petitioner places demand notices from 6.8.2021 till 6.6.2023 whereby the petitioner demanded transfer of the tax component from the receivable to the Designated Account of the petitioner and submits that the respondent did not reply to any of these demand notices. Counsel hence submits that since the Assignment Agreement contains an arbitration clause, this is a fit case for a prayer for interim relief to the extent that the respondent be restrained from dealing with any amount from the Designated Accounts maintained with the respondent Bank till disposal of a requisite application before the arbitral tribunal.

9. Admittedly, the respondent/assignee did not comply with the clauses of the Agreement despite sever