IMPORTANT POINT
The arbitral tribunal has broad powers to issue interim measures under the Arbitration and Conciliation Act, ensuring protection of claims during ongoing proceedings.

JUDGMENT :

SACHIN DATTA, J.

IA No.44833/2024 (Exemption)

1. Allowed, subject to all just exceptions.

2. Application stands disposed of.

IA No.44834/2024 (delay of 13 days in filing the appeal)

3. For the reasons stated in the application, the same is allowed.

4. The application stands disposed of.

ARB. A. (COMM.) 55/2024 and IA No.44832/2024 (Stay)

5. Issue notice. Learned counsel, as aforesaid, accepts notice on behalf of the respondent.

6. The present appeal filed under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996 (hereafter ‘the A&C Act’) assails an order dated 14.08.2024 passed by the arbitral tribunal (hereafter ‘the impugned order’) while disposing of an application under Section 17 of the A&C Act.

7. The ongoing arbitral proceedings are in the context of a Business Loan Agreement dated 18.01.2021 along with a number of financial documents including a personal guarantee deed dated 18.01.2021, cheques, a promissory note dated 18.01.2021, an Addendum to the Business Loan Agreement dated 24.11.2022, entered into between the parties for the purpose of the appellant expanding its advertising business.

8. Under the said loan agreement dated 18.01.2021, the appellant availed a loan of Rs. 75,00,000/- payable within six months. Since the appellant defaulted in repaying the aforesaid loan amount within the stipulated time, by an Addendum dated 24.11.2022 to the said loan agreement, this period was extended till 31.03.2023. However, the respondent again defaulted in repaying the loan amount within the extended period of time.

9. It is the case of the respondent/claimant in the arbitration proceedings that the aforesaid loan was secured by a property admeasuring 9000 sq. ft. at Mauza Raichak, Pargana-Panchkuli, West Bengal. For this purpose, reliance is also placed on an Agreement to Sell dated 02.12.2022 (hereinafter ‘the agreement to sell’) in respect of the said property. The relevant portion of the agreement to sell is reproduced as under:-

“This property is presently encumbered and equitably mortgaged with NBFC - M/S SM FINLEASE LIMITED (LENDER), 504, Cinema Complex, Greater Kailash- II, New Delhi- 110048 against a Loan taken by M/S ACCORD ADVERTISING PVT. LTD having office at Unit No. 7/12, Acropolis Office Complex, 1858/1 Rajdanga Main Road Kolkata 700107.The property needs to be unencumbered and released before execution of the registered Sale-Deed in favour of the PURCHASER. The SELLER agrees for the same and will do the needful at his end in the event SELLER is not in position to do it, in that case the SELLER authorises the PURCHASER to pay the entire dues of the LENDER directly and adjust/deduct the amount so paid from the agreed total sale consideration. That apart from this, there is-no other defect in title of the SELLER or any impediment in law or under any contract to enter into this Agreement or to transfer the property being dealt under this agreement, further, the property is free from litigation, injunction, encumbrance except above mentioned, prior sale, prior agreement, gift, sale, mortgage, acquisition proceedings, attachment, charge, lien, etc. and if it is found otherwise, the SELLER shall compensate the PURCHASER adequately and besides, will also be liable for all kind of consequences because of his misrepresentation/s. The SELLER confirms that as per local laws, the use of the property being transferred is farm house and further the construction done on the property is authorised and the land is neither a forest land government land nor suffers from any prohibition of any nature. The SELLER confirms that he is absolute owner of the property and is in peaceful possession of the property since the time the SELLER has purchased it.”

10. A notice of demand dated 07.04.2023 was issued by the respondent/claimant, calling upon the appellants to repay an amount of Rs. 1,17,20,412/- (Rupees one crore seventeen lakhs twenty thousand four hundred and twelve rupees only) along with further interest in lieu of th