Point of Law : Arbitration - Interim measure – Interim measure should be with respect to entire amount with order for amount in excess of amount being subject to attachment vide order in suit supra instituted by HarcompAirflex Private Limited.

ORDER :

[VIA VIDEO CONFERENCING]

CM No.24438/2021(for exemption)

1. Allowed, subject to just exceptions and as per extant Rules.

2. The application is disposed of.

FAO (COMM) 52/2021

3. The appellant is aggrieved from dismissal of its application, being OMP (I) (COMM) No.129/2020, under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Arbitration Act”) vide order dated 27th June, 2020 of the District Judge (Commercial)-01, South-East, Saket Courts, New Delhi.

4. The appellant filed the application aforesaid under Section 9 of the Arbitration Act, pleading (i) that the respondent no.2 Punjab National Bank had entered into a contract with the respondent no.1 Vector Projects (India) Private Limited for renovation of premises of the respondent no.2 Bank; (ii) that the respondent no.1 had appointed the appellant as a sub-contractor for the said works; and, (iii) that an amount of Rs.1,20,45,603/-was due from the respondent no.1 to the appellant, which the respondent no.1 was not paying inspite of the respondent no.2 bank having released payments under the contract aforesaid to the respondent no.1. Interim measure, of freezing of the amount of Rs.1,20,45,603/-lying in the account of the respondent no.1 with the respondent no.2 bank, was sought.

5. The District Judge (Commercial)-01 vide the impugned judgment, giving detailed reasons, dismissed the application under Section 9 of the Arbitration Act supra preferred by the appellant, inter alia reasoning that the Courts at Delhi did not have jurisdiction and the Courts at Mumbai had the jurisdiction to entertain applications under the Arbitration Act.

6. Aggrieved therefrom, the present appeal was filed and came up before the Single Judge of this Court first on 9th July, 2020, when, while issuing notice thereof, recording the statement of the counsel for the respondent no.2 Bank (i) that a sum of Rs.1,73,76,000/-was lying in the account of the respondent no.1 with the respondent no.2 Bank; (ii) that vide order in another case titled Harcomp Airflex Pvt. Ltd. Vs. Vector Project (I) Pvt. Ltd. of the Court at Saket, a sum of Rs.85,93,325/-out of the total sum of Rs.1,73,76,000/-, already stood frozen, the Single Judge of this Court restrained the respondent no.2 Bank from disbursing to the respondent no.1 or to any other party the remaining amount of Rs.87,83,000/-in the said account of the respondent no.1, after adjusting the amount of Rs.85,93,325/-which had already been frozen vide interim order in another suit. The said interim order is continuing till now. Vide order dated 23rd February, 2021 of the Single Judge, this appeal, in view of the Section 13(1A) of the Commercial Courts Act, 2015 requiring the appeals to be heard by a Commercial Appellate Division, was directed to be listed before the Commercial Appellate Division.

7. The appeal so came up before us first on 26th February, 2021, when recording as under:

“2. The counsel for the appellant, on enquiry as to how Courts at Delhi have territorial jurisdiction, inasmuch as the respondent No.1, with whom the appellant has an arbitration agreement, is at Mumbai and the works which the appellant had agreed to undertake as a sub-contractor of the respondent No.1 were also to be executed at Mumbai, draws our attention to Section 18(4) of the Micro, Small and Medium Enterprises Development Act, 2006 and contends that the appellant being at Delhi, has approached the Micro and Small Enterprises Facilitation Council at Delhi for arbitration and the said request of the appellant is pending consideration.

3. On enquiry, how the Courts at Delhi would qualify as 'Court' within the meaning of Section 2(1)(e) of the Arbitration Act, the counsel for the appellant has no answer. Moreover the admitted agreement between the parties also provides for exclusive jurisdiction of the Courts at Mumbai.

4. We have informed the counsel for the appellant that merely to examine the legal question we may issue notice but in the inter