JUDGMENT :

MANMOHAN, J.

CM APPL. 2222-2223/2023 in FAO(OS) (COMM) 8/2023

CM APPL. 3967-3968/2023 in FAO(OS) (COMM) 17/2023

CM APPL. 3977-3978/2023 in FAO(OS) (COMM) 18/2023

Exemption allowed, subject to all just exceptions.

Accordingly, the applications stand disposed of.

FAO(OS) (COMM) 8/2023

FAO(OS) (COMM) 17/2023 & CM.APPL. 3969/2023

FAO(OS) (COMM) 18/2023 & CM APPL. 3979/2023

1. Present appeals have been filed challenging the orders of the learned Single Judge dated 17th October, 2022 passed in O.M.P. (COMM) 425/2022 & O.M.P. (COMM) 426/2022 and 28th October, 2022 passed in O.M.P. (COMM) 422/2022 whereby the appellants’ petitions under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) challenging the interim award dated 03rd January, 2022 were dismissed. The relevant portion of the impugned award dated 03rd January, 2022 and the order passed by the learned Single Judge in one of the matters are reproduced hereinbelow:-

Interim Award dated 03rd January, 2022

“16. From the foregoing narration of facts and submissions it is clear that:

(1) the issue of validity of termination of the agreements has been finally settled by the decision of the Division Bench of the Hon’ble High Court of Delhi;

(2) the termination of the said agreements have, therefore, to be taken as valid;

(3) accordingly, the Respondents were required to purchase the said rakes for which purpose they were to be valued;

(4) the Respondents have valued the said rakes of wagons at Rs. 13,14,69,178.08;

(5) therefore, the Respondents admit the said value of the said rakes of wagons;

(6) the Claimant does not accept this valuation and has put forth a much higher valuation and

(7) the Respondents have indicated that they have a counterclaim but no such counterclaim has been preferred.

17. The disputes between the parties are with regard to the claimant’s claim in excess of Rs. 13,14,69,178.08 and the interest thereon. There is no dispute that the value of the said rakes is at least Rs. 13,14,69,178.08. The only question sought to be raised by the Respondents is that they have a huge counterclaim, much in excess of the said value of the rakes. But no such counterclaim has been preferred that would be the subject matter of dispute. Insofar as the Respondents are concerned, on the one hand there is the admitted value of the said rakes and on the other hand there is disputed (though yet non-existent) counterclaim based on an alleged breach of contract.

18. In Raman Foundaries (supra) it has been held that :

“..Now the law is well settled that a claim for unliquidated damages does not give rise to a debt until the liability is adjudicated and damages assessed by a decree or order of a Court or other adjudicatory authority. When there is a breach of contract, the party who commits the breach does not eo instanti incur any pecuniary obligation, nor does the party complaining of the breach becomes entitled to a debt due from the other party. The only right which the party aggrieved by the breach of the contract has is the right to sue for damages.”

Clearly, the respondents, in the present case, are not entitled to any amount from the Claimant. At best, they only have a right to sue for the damages (counterclaim), which right also has been opted for.

19. In Numero Uno (supra), a Division Bench of the Hon’ble High Court of Delhi, inter alia, held as under:

“Such being the legal nature and character of a counter claim, its pendency does not denude the arbitrator of the power to make an interim award in the original suit/claim if such an interim award is otherwise justified. What is significant is that the legality of an interim award may be tested by reference to the material on which it is based rather than the areas of dispute that may still call for adjudication between the parties. If an interim award on the basis of material available on record is not justified, the Court may set aside the same under Section 34 of the Act. No interference with an inter