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2025 Supreme(Telangana) 808
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
MOUSHUMI BHATTACHARYA, B.R. MADHUSUDHAN RAO, JJ.
Progressive Constructions Ltd., Hyderabad - Appellant
Versus
Rithwik Projects Pvt. Ltd., Hyderabad and others - Respondents
IA No.1 of 2025 in/and CCA No.4 of 2025
Decided on : 20-03-2025
For the Appellant : Vivek Kohli for P. Srinivas
For the Respondents: A. Venkatesh for P. Vamshi Krishna, Jeevesh Nagrath for N. Aravind; K. Bhaskar Rao, A. Venkatesh for P. Vamshi Krishna, Jeevesh Nagrath for N. Aravind, K. Bhaskar Rao
A non-party may appeal from an order only if they demonstrate direct and independent prejudice; mere identity of interest with an affected party is insufficient.
Headnote:(A) The Arbitration and Conciliation Act, 1996 - Section 9 - Powers of Attorney - Appellant seeks leave to appeal a Commercial Court order restraining the revocation of two Powers of Attorney executed in favor of a respondent pending arbitration - Appellant was not a party in the original proceedings - Court outlines principles of 'Leave to Appeal' for non-parties, emphasizing the necessity of demonstrating prejudice directly impacting the party seeking appeal. (Para 21-24)
(B) The court concludes that the proposed appellant failed to establish any independent prejudice suffered due to the impugned order, recounting that the affected party, the Joint Venture, refrained from challenging the order itself - Consequently, the application for leave to appeal is denied due to the lack of direct and irrefutable prejudice. (Para 41-44)
Facts of the case:
The appellant, Progressive Construction, was not a party to the original Commercial Court petition but claims to be affected by an order restraining the revocation of Powers of Attorney involved in ongoing arbitration.
Findings of Court:
The proposed appellant's identity of interest with the respondent JV does not suffice for leave to appeal due to lack of independent injury.
Issues: The main issues involved were whether a non-party may appeal a decision and the need for demonstrating direct prejudice.
Ratio Decidendi: The court held that merely sharing interests with the affected party is insufficient for leave; the appellant must show independent injury and cannot act as a proxy for another party.
Result: Leave to appeal is denied.
ORDER :
Moushumi Bhattacharya, J.
The proposed appellant/Progressive Construction Limited, seeks leave to assail an order dated 14.10.2024 passed by the Commercial Court in Commercial Original Petition (COP.No.70 of 2023) filed by the respondent Nos.1 and 2 in the present Appeal. The Commercial Court passed the impugned order restraining the respondent Nos.3 and 4 from revoking the Powers of Attorney dated 27.12.2006 and 17.02.2011 executed by the respondent No.3 in favour of the respondent No.2 in the present Appeal.
2. To simplify matters, the proposed appellant (Progressive) was not a party before the Commercial Court. An application to implead Progressive was ultimately not decided and the COP was instead disposed of. The Commercial Court records in paragraph 44 of the impugned order that the COP was taken up for hearing at the instance of the respondent Nos.3 and 4 and disposed of without issuing notice to Progressive.
3. The respondent Nos.1 and 2 in the present Appeal were the petitioner Nos.1 and 2 in the COP before the Commercial Court. The respondent No.3 in the Appeal was the respondent No.1 in the COP and the respondent No.4 herein (authorized representative of the respondent No.3) was the respondent No.2 in the COP.
4. The respondent Nos.1 and 2 in the Appeal filed the COP under section 9 of The Arbitration and Conciliation Act, 1996 (1996 Act), for restraining the respondent Nos.3 and 4 herein from terminating/revoking the POAs dated 17.02.2011 and 27.11.2006 executed by the respondent Nos.3 and 4 in favour of the respondent No.2, pending disposal of the arbitration proceedings initiated by the respondent No.1 herein.
5. The Commercial Court allowed the petition and granted the prayer of the respondent Nos.1 and 2 i.e., restrained the respondent Nos.3 and 4 from terminating/revoking the POAs dated 17.02.2011 and 27.11.2006.
6. First and foremost, it should be stated that although the impugned restraint is against the respondent Nos.3 and 4 i.e., PCL Intertech Lenhydro Consortium Joint Venture (‘JV’) and its authorized representative K. Bhaskar Rao, the said respondents have not challenged the impugned order passed by the Commercial Court. The only challenge as on date is by Progressive/the proposed appellant who was not a party to the COP before the Commercial Court.
7. Learned Senior Counsel appearing for the proposed appellant places the relevant facts leading to the present Appeal and submits that the proposed appellant is vitally affected by the impugned order. It is submitted that the respondent Nos.1 and 2 are acting to the detriment of the JV (the respondent No.3) by fastening liabilities on the JV without authority. Counsel submits that the respondent No.2 has opened a Bank Account without any authority in law which is also causing severe prejudice to the proposed appellant and the JV. Counsel urges that the proposed appellant is a necessary and proper party to the proceedings since the appellant is a constituent of the respondent No.3/JV and is materially affected by the impugned order restraining the respondent No.3 from terminating the POAs. It is also submitted that the POAs, which formed the subject matter of the COP, were superseded by a POA dated 18.05.2018.
8. Learned Senior Counsel appearing for the respondent No.3/JV supports the case of the proposed appellant and urges that the POA dated 18.05.2018 given on behalf of the JV mandated that all acts on behalf of the JV will be done under the joint signatures of the respondent No.2 and the Managing Director of the proposed appellant. Counsel submits that the impugned order restrained the revocation of superseded POAs which would inevitably affect the POA dated 18.05.2018 mandating joint action by the respondent No.2 and the Managing Director of the proposed appellant. Counsel adopts the submissions made on behalf of the proposed appellant by stating that the respondent No.2 has opened a Bank Account in the name of the JV and that the respondent Nos.1 and 2
