1. Petition under Section 9, Arbitration Act seeking interim measures before arbitration arising from Purchase Order. (Para 1 , 2 )
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2026 Supreme(Online)(Bom) 1093
HIGH COURT OF BOMBAY
HON'BLE SHRI JUSTICE SANDEEP V. MARNE
Calcutta Spring Limited – Appellant
Versus
Union of India Western Railway thr Principal – Respondent
CARBPL/34593/2025
Advocates:
For the Appellants/Petitioners: Sumit Rai, Nitin Jain, Ratan Singh, Ankit Ujjwal
For the Respondents: Smita Thakur
For the Appellants/Petitioners: Sumit Rai, Nitin Jain, Ratan Singh, Ankit Ujjwal
For the Respondents: Smita Thakur
Where disputes persist due to partially withdrawn rejection notices, the court may appoint an arbitrator and extend Section 9 interim protection until the Arbitral Tribunal decides on an application under Section 17 of the Arbitration and Conciliation Act, 1996.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 - Section 17 - Interim measures before commencement of arbitral proceedings - Dispute arising from purchase order for supply of goods - Rejection of goods and deduction of payments - Where some rejection notices are withdrawn but others persist, disputes are deemed to exist - Court to constitute Arbitral Tribunal for adjudication - Interim protection granted by Court to continue until decided by the Arbitral Tribunal under Section 17. (Paras 1, 5, 9)
Facts of the case:
The petitioner supplied goods pursuant to a purchase order, but the respondent rejected a portion of the goods and issued warranty rejection notices, claiming the price of the goods and a penalty. The respondent deducted amounts from other payments due to the petitioner based on these notices. While one rejection notice was subsequently withdrawn and a partial refund was made, another rejection notice remained active, which the petitioner contended meant that disputes still existed between the parties.
Findings of Court:
The court found that since one warranty rejection notice remained active and had not been withdrawn, disputes and differences between the parties persisted. Consequently, it was appropriate to constitute an Arbitral Tribunal for the adjudication of the disputes arising from the purchase order.
Issues: Whether the withdrawal of a part of the rejection notices resolved the entire dispute between the parties and whether the ad-interim protection granted by the court should continue after the appointment of the arbitrator.
Ratio Decidendi: The court ruled that the persistence of even a single active warranty rejection notice signifies that disputes exist, warranting the appointment of an arbitrator. Additionally, the court held that ad-interim protection granted under Section 9 of the Act shall continue to operate until the appointed Arbitral Tribunal decides on an application for further interim measures under Section 17 of the Act.
Result: Petition disposed of with the appointment of a sole arbitrator and the continuation of ad-interim protection until decided by the Arbitral Tribunal under Section 17.
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2. Petitioner contended disputes remain as one Warranty Rejection Advice not withdrawn; Respondent argued nothing survives as Advice withdrawn. (Para 5 )
3. Court found disputes still exist due to unwithdrawn Warranty Rejection Advice, warranting constitution of an Arbitral Tribunal. (Para 6 )
4. Withdrawal of one Warranty Rejection Advice does not extinguish disputes when another Advice remains unwithdrawn. (Para 5 , 6 )
5. Appointed arbitrator; directed continuance of ad-interim protection until Section 17 application decided; petition disposed of. (Para 8 , 9 , 11 )
6. Can interim protection granted under Section 9 of the Arbitration Act continue after appointment of an Arbitral Tribunal?
Yes, the ad-interim protection continues to operate until the party's application under Section 17 of the Arbitration Act is decided by the Arbitral Tribunal. (Para 7 , 9 )
7. Does withdrawal of one warranty rejection advice extinguish all disputes between parties under a contract?
No, disputes still exist if another warranty rejection advice remains unwithdrawn, warranting constitution of an Arbitral Tribunal. (Para 5 , 6 )
PC:
1) This is a Petition under Section 9 of the Arbitration and Conciliation Act of 1996 seeking interim measures before commencement of arbitral proceedings. The disputes and differences between the parties have arisen out of Purchase Order dated 7 October 2024 for supply of 26,63,557 Elastic Rail Clips MK-V.
2) It appears that the Petitioner supplied the requisitioned goods. However, Western Railway has rejected some of the goods and has issued Warranty Rejection Advices dated 21 August 2025 and 30 September 2025. By the said Warranty Rejection Advices, an amount of Rs.1,71,68,295/- is claimed against the Petitioner towards price of the goods in addition to penalty of Rs.50,00,000/-. By the time the present Petition was moved, it appears that an amount of Rs.1,17,95,075/- was already deducted in respect of the amounts payable to the Petitioner in respect of other purchase orders. By ad-interim order dated 20 November 2025 this Court restrained the Respondent-Western Railways from effecting any further deductions.
3) It appears that the order was not communicated to other zonal Railways and Eastern Railways and Northern Railways effected deduction of further amount of Rs.1,03,73,220/- in respect of amounts payable to the Petitioner for other purchase orders. By order dated 18 December 2025 this Court took note of the communication indicating withdrawal of the Warranty Rejection Advice dated 30 September 2025. This Court accordingly took note of expectation of the Petitioner that the deducted amount would be refunded to him. It appears that the Railways have refunded amount of Rs.52,98,887/- to the Petitioner.
4) Ms. Thakur, the learned counsel appearing for the Respondent -Western Railways submits that the balance deducted amount after passing of order dated 20 November 2025 shall also be refunded to the Petitioner.
5) Mr. Rai, the learned counsel appearing for the Petitioner submits that the Petitioner is willing to go for arbitration in terms of arbitration agreement. Ms. Thakur, submits that nothing survives in the Petition since Warranty Rejection Advice has been withdrawn. Mr. Rai submits that however, Warranty Rejection Advice dated 25 August 2025 is yet to be withdrawn and therefore the disputes still exist between the parties.
6) In my view, therefore, it would be appropriate to constitute Arbitral Tribunal for adjudication of disputes and differences arisen between the parties out of Purchase Order dated 7 October 2024.
7) Mr. Rai submits that the Petitioner is partially protected by ad-interim order dated 20 November 2025. If he is granted liberty, he will file Application under Section 17 of the Arbitration Act before the Arbitral Tribunal, for seeking further interim measures.
8) I accordingly, proceed to pass the following order:-
(A) Mr. Justice Rajesh G. Ketkar (Retd.), former Judge of this Court is appointed as Sole Arbitrator to adjudicate upon the disputes and differences between the parties arising out of Purchase Order dated 7 October 2024. The contact details of the learned Arbitrator are as under :-
Office Address : 202, Dalmal Chambers, behind Income Tax Building, near Balwas Restaurant New Marine Lines, Churchgate, Mumbai-400 020.
Mobile No. :- 9821116740
(B) A copy of this order be communicated to the learned sole Arbitrator by the Advocates for the Petitioner within a period of one week from the date of uploading of this order. The Petitioner shall provide the contact and communication particulars of the parties to the Arbitral Tribunal alongwith a copy of this order.
(C) The learned sole Arbitrator is requested to forward the statutory Statement of Disclosure under Section 11(8) read with Section 12(1) of the Act to the parties within a period of 2 weeks from receipt of a copy of this order.
(D) The parties shall appear before the learned sole Arbitrator on such date and at such place as indicated by him, to obtain appropriate direction with regard to conduct of the arbitration including fixing a sch
