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2021 Supreme(Del) 691
IN THE HIGH COURT OF DELHI AT NEW DELHI
SURESH KUMAR KAIT, J.
Vijay Shukla and Another – Petitioners
Versus
Career Launcher Infrastructure Pvt. Ltd. and Others – Respondents
Arb. A. (COMM.) Nos. 51, 52, 53, 54 of 2021, I.A. Nos. 12443-12444, 12445-12446, 12447-12448, 12449-12450 of 2021
Decided On : 03-12-2021
Advocate Appeared:
For the Petitioners: Mr. Jayant Mehta, Mr. Mani Gupta, Ms. Aishwarya Nabh, Mr. Rajshekhar Rao, Ms. Samiksha Godiyal, Mr. Govind Manoharan.
For the Respondents: Mr. Akhil Sibal, Mr. Rajat Arora, Mr. Ekansh Bansal, Ms. Asavari Jain, Ms. Deboshree Mukherjee.
Point of Law: It is settled that in exercising discretion while granting an interim relief under Section 17 of Act, Tribunal should be extremely cautious and power should be exercised for purpose of safeguarding interests of parties to proceedings, so that subject matter of Arbitration is preserved.
Headnote:
Arbitration and Conciliation Act, 1996 - Section 37(2) (b), 11(6), 16 and 17 - Commercial Courts Act, 2015 - Section 10 - Code of Civil Procedure Code, 1908 - Order XXXIX R 10 - License Agreement - Arbitration Proceedings - Interim Award/order - Power of Arbitral Tribunal to pass interim Awards - arbitration proceedings between the parties relate to rent which allegedly became due and payable by Nalanda Foundation to respondent No. 1/Career Launcher (claimant) in respect of aforesaid Agreements read with Addendums - Respondent No. 1 - Career Launcher, who is claimant in arbitral proceedings, has jointly and severally claimed recovery of rent from Nalanda Foundation, along with some former Trustees - Since parties to these appeals and before Arbitral Tribunal, are common and challenge in these appeals is to common impugned interim arbitral Award/order, therefore, with the consent of learned counsel for parties, these appeals have been heard together and are being disposed of by this common judgment.
Finding of the Court:
Court opinion that the relief based upon a disputed admission, that too without trial, cannot be permitted on basis of piecemeal consideration of a document. Moreover, this court fails to understand on what premise learned Arbitrator has directed that respondents (appellants herein) shall jointly and severally pay claimant/respondent No. 1 the amount of R. 3 crores. The reason is obvious, learned Arbitrator in the impugned order has observed that claimant i.e. respondent No. 1-Career Launcher cannot “cherry pick” Trustees to be made party to the arbitration proceedings and has therefore directed the respondent No. 1/Nalanda Foundation to disclose its Trustees since 2017 till date of filing of claim petition - Courts finds that learned Arbitrator has directed appellants to file separate affidavit disclosing their personal assets and income or to furnish bank guarantee/fixed deposit receipt to tune of Rs. 4,08,24,688/- before this Court - Opinion of this Court, such a direction is passed to secure disputed amount. However, prior to passing of such direction, the learned Arbitrator was not only required to fix liability in specific but also to establish that there is likelihood of escaping person liable, which is not case in hand.
Result: Appeals are allowed.
JUDGMENT :
SURESH KUMAR KAIT, J.
1. The above captioned four appeals have been filed under the provisions of Section 37(2) (b) of the Arbitration and Conciliation Act, 1996 read with Section 10 of the Commercial Courts Act, 2015 against the interim Award/order dated 25.08.2021 passed by the learned Arbitrator.
2. Appellants-Mr. Vijay Shukla and Mr. Sanjeev Kumar in the above captioned first appeal [Arb. A. No. 51/2021] are respondents No. 2 and 6 and appellant-Mr. Bharat Parmar in the above captioned second appeal [Arb. A. No. 52/2021] is respondent No. 3 in the arbitration proceedings. Appellant-Nalanda Foundation in the above captioned third appeal [Arb. A. No. 53/2021] is a public charitable trust, which was formed by Mr. Rakesh K. Sehgal, Mr. Puneet Rathi and Mr. Gopinathan C.P. who are associated with respondent No. 1 herein and its group of companies, Career Launcher Educate Ltd., and is also respondent No. 1 in the arbitral proceedings. Appellants-Shivendra Misra and Gautam Bhasin in the above captioned fourth appeal [Arb. A. No. 54/2021], who are respondents No. 4 and 5 in the arbitral proceedings, were Trustees of Nalanda Foundation from 11.04.2017 to 12.02.2019 and 11.04.2017 to 28.01.2019,who is respondent No. 1 in the arbitration proceedings. Pertinently, Bharat Parmar, Shivendera Misra, Gautam Bhasin, Vijay Shukla and Sanjeev Kumar are erstwhile Trustees of Nalanda Foundation.
3. Respondent No. 1-Career Launcher in the above captioned appeals is a private limited company, which owns several parcels of land and provides land, building and infrastructure services.
4. The above captioned four appeals are directed against the interim order dated 25.08.2021 passed by the learned Arbitrator vide which application filed by the respondent No. 1 under the provisions of Section 17 of the Arbitration and Conciliation Act, 1996 read with Order XXXIX R 10 CPC as well as three applications filed by the petitioners [one jointly filed by Vijay Parmar, Sanjeev Kumar and Bharat Parmar and two separately filed by Shivendra Misra and Gautam Bhasin] under Section 16 of the Act, have been disposed of.
5. Since parties to these appeals and before the Arbitral Tribunal, are common and challenge in these appeals is to the common impugned interim arbitral Award/order dated 25.08.2021, therefore, with the consent of learned counsel for the parties, these appeals have been heard together and are being disposed of by this common judgment.
6. The foundation of these appeals rests upon License Agreement dated 01.04.2009 executed between Nalanda Foundation with Career Launcher Infrastructure Private Limited (henceforth referred to “Career Launcher”) in respect of a school to be operated in Raipur, Chhattisgarh for a period of 30 years, whereunder on consideration of License Fee and Infrastructure Charges, respondent No. 1-Career Launcher agreed to provide infrastructure, including provision of Open Space (Land), Covered Space (Building etc.) and other necessary infrastructure services including premises to run the schools with necessary fixtures, furniture for students and buses for transportation of students to and from School. The said License Agreement stood amended on various dates i.e. 01.04.2010, 01.11.2017, 15.04.2018 and 01.04.2019. Further, a similar License Agreement was also entered between the same parties for operating a school in Indore, which also stood amended several times i.e. 01.11.2017, 15.04.2018 and 01.04.2019 to revise the rental/license fee to be paid by Nalanda Foundation to respondent No. 1-Career Launcher.
7. The arbitration proceedings between the parties relate to rent which allegedly became due and payable by the Nalanda Foundation to respondent No. 1/Career Launcher (claimant) in respect of aforesaid Agreements dated 01.04.2009 (as amended on 01.04.2010) and 01.04.2011 read with Addendums dated 01.11.2017, 15.04.2018 and 01.04.2019. Respondent No. 1-Career Launcher, who is claimant in arbitral proceedings, has jointly and
