Section 9 allows protective interim deposit of title deeds pending Section 34 challenge without enforcing award.

JUDGMENT :

P.VELMURUGAN, J.

This Original Side Appeal is directed against the order dated 30.01.2026 passed in Arb. Appln.No.756 of 2025, whereby the learned Single Judge, in exercise of powers under Section 9 of the Arbitration and Conciliation Act, 1996, directed the appellant to deposit the original title deeds relating to the subject property before the Court, pending adjudication of proceedings arising out of the arbitral award dated 20.09.2024.

2. The facts leading to the present appeal, in brief, are as follows:

2.1. The respondents are the undisputed owners of the subject property. On 23.05.2008, they entered into a Development Agreement with the appellant, a company engaged in construction and infrastructure development. Under the terms of the agreement, the respondents were entitled to 36% of the built-up area, while the appellant was entitled to 64%. The agreement also provided for payment of an interest-free refundable security deposit of Rs.3 Crores by the appellant to the respondents.

2.2. Pursuant to the Development Agreement, the respondents handed over possession of the property along with the original title deeds to the appellant for the limited purpose of carrying out development of the project. However, the project did not progress as originally envisaged. According to the appellant, the delay was due to factors beyond its control, including delays in obtaining statutory approvals, regulatory and corporate impediments, infrastructure requirements imposed by authorities, and supervening circumstances such as the Covid-19 pandemic. It is the appellant’s case that these factors rendered performance of the contract impracticable and that the agreement stood frustrated.

2.3. In view of the disputes that arose between the parties, the respondents invoked the arbitration clause contained in the Development Agreement. A Sole Arbitrator was appointed by order dated 18.06.2021. The arbitral proceedings culminated in an award dated 20.09.2024, by which the learned Arbitrator, inter alia, directed forfeiture of the security deposit of Rs.3 Crores, payment of certain monetary sums by the appellant, and return of the original title deeds to the respondents.

2.4. Aggrieved by the said award, the appellant has filed Arb.O.P. (Com. Div.)No.83 of 2025 under Section 34 of the Arbitration and Conciliation Act, 1996 challenging its validity, and the same is pending adjudication.

2.5. During the pendency of the said proceedings, the respondents initiated steps to enforce the award, including the filing of execution proceedings. In addition, they filed Arb.Appln.No.756 of 2025 under Section 9 of the Act seeking, among other reliefs, directions regarding the custody of the original title deeds.

2.6. By order dated 30.01.2026, the learned Single Judge directed the appellant to deposit the original title deeds before the Court. The said direction is under challenge in the present appeal.

3. The learned counsel appearing for the appellant would submit that the impugned order is contrary to law, the materials on record, and the settled principles governing the grant of interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. It is contended that the arbitral award dated 20.09.2024 is under challenge under Section 34 of the Act and, therefore, the learned Single Judge ought not to have granted a direction which has the effect of disturbing the existing position between the parties. The learned counsel would further submit that the learned Single Judge has failed to consider the well-settled principles governing interim relief, namely, prima facie case, balance of convenience, irreparable injury, and whether the relief sought is just and convenient. In this regard, reliance is placed on the judgment of the Hon’ble Supreme Court in Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd., [(2007) 7 SCC 125] wherein it has been held that the power under Section 9 is to be exercised in accordance with the settled principles