47. Ms. Kapadia has pressed prayer (e), which is for a direction to
the respondent to furnish a solvent security for the amount payable
Signature Not Verified O.M.P. (I) (COMM.) 255/2020 Page 27 of 31Digitally Signed By:SUNILSINGH NEGISigning Date:10.12.202021:02:03
against Lot A, which is US$ 133,878.31. Mr. Lohia has, on the other
hand, relied on the judgment of the Division Bench of this Court in
Ajay Singh v. Kal Airways Pvt. Ltd.4 as well as the recent decision of
this Court in Dinesh Gupta v. Anand Gupta5, to contend that
furnishing of security, for the amount involved in the arbitration, can
only be directed, where the facts indicate that, were such security not
directed to be furnished, there is a danger of the arbitral proceedings
being frustrated.
In BMW India Private Limited (supra), the learned Single Judge
of this Court, while holding that the power under Section 9 of the Act
should be principled and premised on some known guidelines, and that
hence the analogy of Order XXXVIII and XXXIX of the CPC is certainly
applicable, on the facts of that case, found that various disputes had been
raised by the respondent in challenge to the claim made by the petitioner.
It further found that the petitioner had already encashed the bank
guarantees for a substantial amount claimed by it. The same cannot be
said in the present case.
33. I have also considered the decisions in Adhunik Steels (supra),
Bhubaneshwar Expressways (supra), Forbes Facility (supra) and
Ajay Singh (supra) and find that all of them turn on their facts and do
not forward the case of the petitioner. In fact, these decisions only
reiterate the settled position that a Court, seized with a petition under
Section 9 of the Act, is empowered to pass protection orders as may
appear to be just; the power of a Court under this provision is very
wide and only exercised for the purpose of safeguarding the rights of
the parties. This may include not only grant of restraint orders but also
directions to the respondent to make payments to the petitioner as an
OMP(I)(COMM) 117/2020 & 118/2020 Page 19 of 21
interim measure, till final determination of the dispute between the
parties by way of arbitration. There can be no quarrel with this
proposition but ultimately, as observed earlier, the grant of relief under
Section 9 is entirely dependent on the facts of each case.
86. Learned Senior Counsels for the Petitioner have rightly placed
reliance on the judgment of the Division Bench of this Court in Ajay
Singh & Ors. (Supra). Propounding the scope of Power under Section 9
of the Act in the light of the principles under Order XXXVIII Rule 5 CPC
Court held as under:-
58.2 Undoubtedly, Steel Authority of India Ltd31 says so. That
position has, however, altered, subsequently, with the judgement, of a
Division Bench of this Court in Ajay Singh v. Kal Airways Pvt Ltd32,
paras 25 to 28 of which read thus:
8. Having heard learned counsel for the parties, this Court is of the
opinion that Section 9 grants wide powers to the Courts in granting an
appropriate interim order based on the relevant facts of the case at all stages
of the arbitration proceedings namely before, during or after the arbitration
proceedings. However, this Court is in agreement with the submission of
learned counsel for respondent that the discretion under Section 9 of Act,
1996 should be exercised in exceptional cases when there is adequate
material on record leading to a definite conclusion that the respondent is
likely to render the entire arbitration proceedings infructuous or where there
is an admitted liability. Needless to state, though exercise of such powers is
premised on the underlying principles of Orders XXXVIII and XXXIX of
the C.P.C, yet it is settled law that the Court is not unduly bound by the text
of these provisions. A Coordinate Bench of this Court in Ajay Singh v. Kai
Airways Private Limited, 2017 SCC OnLine Del 8934 has held as under:-
8. Having heard learned counsel for the parties, this Court is of the
opinion that Section 9 grants wide powers to the Courts in granting an
appropriate interim order based on the relevant facts of the case at all stages
of the arbitration proceedings namely before, during or after the arbitration
proceedings. However, this Court is in agreement with the submission of
learned counsel for respondent that the discretion under Section 9 of Act,
1996 should be exercised in exceptional cases when there is adequate
material on record leading to a definite conclusion that the respondent is
likely to render the entire arbitration proceedings infructuous or where there
is an admitted liability. Needless to state, though exercise of such powers is
premised on the underlying principles of Orders XXXVIII and XXXIX of
FAO (COMM) 29/2021 Page 8 of 12the C.P.C, yet it is settled law that the Court is not unduly bound by the text
of these provisions. A Coordinate Bench of this Court in Ajay Singh v. Kai
Airways Private Limited, 2017 SCC OnLine Del 8934 has held as under:-