IMPORTANT POINT
An arbitral tribunal has no jurisdiction to affect the rights and remedies of third-party secured creditors, and the principle of natural justice must be adhered to.

JUDGMENT

Yogesh Khanna, J. - The instant appeal has been preferred by the appellant seeking setting aside of an interim order dated 12.10.2021 passed by the learned sole arbitrator, Mr.Justice Swatanter Kumar (Retd.), under Section 17 of the Arbitration and Conciliation Act, 1996 (`Act') in an arbitration proceedings inter-se the respondents where the appellant was not a party, nor had any notice of such proceedings. It is alleged the impugned order directly interferes with the contractual rights and entitlements of the Appellants.

2. The following observation of the learned arbitrator in the impugned order dated 12.10.2021 are challenged:

VI. OPERATIVE PART OF THE ORDER

In view of the undisputed factual matrix of the case,, for reasons and discussions afore-recorded, the Arbitral Tribunal hereby passes the following orders and directions:

1. The Claimants are hereby directed to furnish security by way of bank guarantees from a nationalized bank, to the extent and in favour of, as follows:

2. The Claimants are further directed to furnish the list of flats/units to the extent and in favour of, as directed hereinafter.

The list of the flats/units so furnished along with allotment letters, shall be of the flats/units which are unencumbered, free of charge In all respects and the third parties have no interest, whatsoever, in those flats/units. The details thereof are as follows:

3. These flats/units will remain as security in favour of the Respondents and will not be alienated, transferred or possession parted with in any manner, whatsoever, till disposal of the present proceedings.

4. The Claimants should comply with the above directions within a period of three weeks from today.

5. The Claimants are hereby restrained from alienating, transferred or parting with the possession of any flat/unit, in favour of any third party/financial institution, out of the seven stated projects, i.e. ATS Picturesque Reprieves, ATS Rhapsody, ATS One Hamlet, ATS Dolce, ATS Triumph, ATS Tourmaline and Pristine Golf Villas, without specific orders of the Tribunal for which the Claimants are at liberty to tile appropriate application with complete details.

5.1 This direction would remain in force till a period of three weeks or earlier, till the time the Claimants comply with the above direction in its entirety.

6. However, in the event of default, the injunction granted under this clause shall remain operative and effective in all respects. The Claimants are hereby injuncted and restrained from transferring, conveying or selling in any manner, whatsoever, and/or parting with the possession of any of their flats/units in favour of any party, till compliance of the directions contained in this order in regard to the above seven projects.

3. It is alleged the impugned order directs the creation of security on certain apartments on `ATS Triumph' and `ATS Tourmaline" being constructed by respondents No. 2 and 3 i.e., the borrowers of the appellant, on which the borrowers had already created security in favour of the appellant. Further, it is alleged the impugned order interferes with the contractual rights of the appellant under its loan agreements (`Financing documents') with the Borrower i.e., respondents No. 2 and 3, to have the loans granted by it serviced from the sale of apartments developed by the borrowers inasmuch as the impugned order places a complete bar on the borrowers from undertaking sale of any units (even in the ordinary course of their business), thereby directly impacts the appellant's right to recover its dues from such sale.

4. The learned senior counsel for the respondent argued Dalmia Group/respondent nos.5 to 7 had invested in nine projects of ATS group and there were different agreements executed while making the investment to the ATS group by the respondent. All the agreements can be divided into three parts a) case nos.1 to 3 viz. investment agreements; b) case nos.4 to 6 viz. agreements of flat buyers and buy back agreements and c) loan ag