DELHI HIGH COURT
Prathiba M. Singh and Shail Jain, JJ.
Rahul Bhargava and Anr. – Appellants
versus
Neo Developers Pvt. Ltd. – Respondent
FAO (Comm) 210/2025, CM Appl. 47810/2025, CM Appl. 65305/2025 and CM Appl. 65306/2025 with FAO (Comm) 204/2025and CM Appl. 47782/2025 with FAO (Comm) 211/2025 and CM Appl. 47813/2025 with FAO (Comm) 237/2025 and CM Appl. 53581/2025 with FAO (Comm) 238/2025 and CM Appl. 53584/2025 FAO (Comm) 210/2025, FAO (Comm) 239/2025 and CM Appl. 53587/2025
Decided on 24.12.2025

IMPORTANT POINT
Interim injunction – Jurisdiction under Section 9 of Arbitration and Conciliation Act, 1996, is not an adjudicatory substitute for final determination of rights, but a supportive mechanism to facilitate effective dispute resolution through arbitration – Mere fact that a party has availed a statutory remedy under a special enactment does not, by itself, denude Court of jurisdiction to grant interim protection.

Headnote:

(A) Arbitration and Conciliation Act, 1996 – Section 9 – Interim injunction – Grant of – Power of Court under Section 9 of Act of 1996, is quite broad and would permit grant of relief in cases where, prima facie, balance of convenience and irreparable injury is made out in favour of Petitioner – Jurisdiction under Section 9 of Arbitration and Conciliation Act, 1996, is not an adjudicatory substitute for final determination of rights, but a supportive mechanism to facilitate effective dispute resolution through arbitration – Mere fact that a party has availed a statutory remedy under a special enactment does not, by itself, denude Court of jurisdiction to grant interim protection, particularly where reliefs sought do not overlap in substance or effect. (Paras 31 and 33)

(B) Arbitration and Conciliation Act, 1996 – Section 9 – Interim injunction – Grant of – Courts exercising such jurisdiction under Section 9 of the Act do not determine merits of underlying dispute, but intervene to ensure that arbitral process is not rendered futile by unilateral or irreversible acts of one party – This supportive role of Court is integral to arbitral framework and is premised on recognition that arbitration, unlike traditional civil litigation, lacks coercive powers to immediately restrain actions that may cause irreparable harm – In disputes involving immovable property, particularly in real estate sector, need for interim protection assumes heightened significance – Property, once alienated, encumbered or subjected to third-party rights, may become impossible to restore to its original position – Law recognises that preservation of same is central to ensuring that final adjudication, whether by arbitral tribunal or a statutory authority, remains effective and enforceable – In cases where one party is in a position of dominance, such as a developer exercising control over possession, allotment, or documentation, absence of interim restraint may permit actions that effectively foreclose other party’s remedies – Section 9 enables Court to neutralise such an imbalance, ensuring procedural fairness and preserving sanctity of arbitral process. (Paras 35, 36 and 38)

(C) Arbitration and Conciliation Act, 1996 – Section 9 – Interim injunction – Grant of – Interim injunctions under Section 9 serve multiple protective functions – They maintain status quo, prevent dissipation or alienation of property, restrain coercive actions such as cancellation of allotment, and ensure that disputed claims are not enforced in a manner that would cause irreversible prejudice – Such injunctions are not granted as a matter of course, but are guided by well-established principles of prima facie case, balance of convenience, and irreparable harm, adapted to arbitral context – Monetary compensation may not always be an adequate remedy where immovable property is involved, particularly when property is unique, commercially significant, or forms core of contractual relationship – Injunctive relief operates as a means of preventing harm rather than compensating for it after the fact. (Paras 40 and 41)

Result: Appeals allowed.