The court emphasized that an interim order under Section 9 must be granted when there is evidence of admitted liability to avoid making arbitration proceedings infructuous.

JUDGMENT

Manmohan, J.

CM APPL. 5043/2021

Allowed, subject to just exceptions.

Accordingly, the application stands disposed of.

FAO (COMM) 29/2021 & CM APPL. 5042/2021

1. Present appeal has been filed challenging the order dated 08th January, 2021 passed in OMP (I) (Comm.) No. 116/2020 (hereinafter referred to as `the impugned order') whereby the petition filed by the appellant/petitioner under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Act, 1996') was dismissed with costs.

ARGUMENTS ON BEHALF OF THE APPELLANT

2. Learned counsel for the appellant/petitioner stated that the respondent had itself in its ledger sent along with email dated 28th August, 2020 admitted liability towards the appellant/petitioner to the tune of Rs.14,73,292.99/- out of Rs.31,55,228/-. He submitted that discretionary relief enshrined under Section 9 of the Act, 1996 should have been exercised in the present case as there was adequate material on record leading to a definite conclusion that the respondent had "admitted its liability". In support of his submission, he relied upon the following judgments:

A. Rajendran and Others Vs. Shankar Sundaram and Others, (2008) 2 SCC 724, wherein it has been held as under:

"12. The appellants, in our opinion, are not seriously prejudiced thereby. The court while exercising its jurisdiction under Order 38 Rule 5 of the Code of Civil Procedure is required to form a prima facie opinion at that stage. It need not go into the correctness or otherwise of all the contentions raised by the parties. A cheque had been issued in the name of the firm. The appellants are partners thereof. A pronote had been executed by a partner of the firm. Thus, even under the Partnership Act prima facie the plaintiff could enforce his claim not only as against the firm but also as against its partners."

B. M/s. Value Source Mercantile Ltd. Vs. M/s. Span Mechnotronix Ltd., 2014(143) DRJ 505, wherein it has been held as under:

"14. The question which thus arises is that if the dispute as aforesaid had been brought before this Court by way of a suit, whether this Court could have, during the pendency of the suit, granted the relief as has been granted in the impugned order. Order XXXIX Rule 10 of the CPC empowers the Court to direct deposit/payment of admitted amounts. The appellant, as aforesaid does not controvert that it continued to be the tenant of office unit B-1 and had not terminated the tenancy with respect thereto. There is thus an admission by the appellant of the liability for rent at least of office unit B-1. The appellant, if had been a defendant in a suit, could have thus been directed by an interim order in the suit to make such payment to the respondent. Order XV-A added to the CPC as applicable to Delhi and which was added, as held by us in judgment dated 15th May, 2014 in FAO (OS) 597/2013 titled Raghubir Rai v. Prem Lata, to empower the Court to direct payment during the pendency of the suit at a rate other than admitted rate also, empowers the Civil Court to direct payment which is apparently wrongfully disputed. The denial by the appellant of the entire rent as agreed, on the ground of having determined the tenancy of one of the two office units taken on rent, is clearly vexatious, as in law the appellant as a tenant could not determine tenancy of part of the premises taken on rent. It is not the case of the appellant that it was entitled to do so as part of terms of its tenancy. In that view of the matter, the appellant could under Order XV-A of the CPC have been directed to pay the rent of the entire pre