The main legal point established in the judgment is the court's authority to grant interim protection under Section 9 of the Arbitration and Conciliation Act, 1996, to secure the awarded amount and prevent substantial alienation of assets by the Respondent.

JUDGMENT

Jyoti Singh, J. (Oral)

CAVEAT 423/2022

1. Ms. Rashmeet Kaur, learned counsel had entered appearance on behalf of caveator/Respondent on 21.02.2023.

2. Caveat stands discharged.

O.M.P.(I) (COMM.) 351/2022

3. Present petition has been filed under Section 9 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `1996 Act') seeking the following prayers:

"A. Direct the Respondent not to alienate the properties specified in clause 14 above wherein the learned arbitrator has already passed a restraint order for a period of one month from the date of the award.

B. Freeze all the bank accounts of the Respondent so that the funds may not be further alienated or transferred.

C. Direct the Respondent to disclose on affidavit as on date, the list of movable and immovable properties including the bank accounts and restrain the Respondent, its agents, associates, employees, successors, nominees, assigns and agents from dealing/creating third party right with the said immovable and movable assets;

D. Direct the Respondent to furnish security before this Hon'ble Court to a sum of Rs.12,78,34,139/- (Rupees Twelve Crores Seventy Eight Lacs Thirty Four Thousand One Hundred Thirty Nine Only) in terms of the award dated 02.11.2022 passed by the Ld. Arbitrator or in the alternative, furnish a bank guarantee of equivalent amount, to enable the Petitioner to secure the said awarded amount of Rs.12,78,34,139/-(Rupees Twelve Crores Seventy Eight Lacs Thirty Four Thousand One Hundred Thirty Nine Only);

E. Pending the hearing and final disposal of the present Petition, this Hon'ble Court may be pleased to direct the Respondent not to leave the country, without due permission of this Hon'ble Court or in the alternative the passport of the Respondent may be asked to be deposited in the registry of this Hon'ble Court;

F. Award the costs of the proceedings;

G. Pass/make such other appropriate orders and/or directions as this Hon'ble Court may deem fit and proper in the facts and SEE circumstances of the present case."

4. Petitioner is a Company incorporated under the Companies Act, 1956 engaged in business of manufacture of ductile iron/saw/seamless pipes at its various manufacturing plants. Respondent is a sole proprietor of M/s. SMSK Mineral Trading Company and had approached the Petitioner for supply of iron ore (raw material). Petitioner placed purchase orders on the Respondent and remitted payments in advance from time to time and according to the Petitioner total sum of Rs.16,11,60,000/- was paid to the Respondent. However, against the receipt of the money from the Petitioner, Respondent supplied iron ore only for a sum of Rs.8,94,42,415/-. Hence, a balance sum of Rs. 7,17,17,585/-, is admittedly outstanding from the Respondent. On 31.08.2011, Respondent had assured that he would pay the balance amount and in furtherance of this assurance a settlement deed was executed between the parties along with an affidavit dated 22.07.2013, wherein Respondent admitted and acknowledged the dues and undertook to pay the same immediately after vacation of the order of attachment of his bank account.

5. When the Respondent did not fulfill his promises and assurances, Petitioner invoked the arbitration agreement existing between the parties, in the year 2016. During the arbitration, Petitioner learnt that Respondent was alienating his properties. The appointment of the Arbitrator was however challenged by the Respondent under Section 16 of the 1996 Act. The application was allowed by the Arbitral Tribunal and proceedings were closed on 22.09.2017.

6. Petitioner thereafter filed Arb. P. No. 685/2017 in this Court under Section 11(5) for appointment of an Arbitrator and vide order dated 20.03.2018 a sole Arbitrator was appointed. Respondent again filed an application under Section 16 of the 1996 Act on the ground that the claims were premature and there were no arbitrable disputes. The learned Arbitrator disposed of the claims as premature on 1