Cal HC | Scope of S. 9 of A&C Act cannot be extended to enforcement of award or granting fruits of award to award holder as an interim measure; application dismissed

Calcutta High Court: Ravi Krishan Kapur, J. dismissed an application which was filed under Section 9 of the Arbitration and Conciliation Act, 1996 (‘the Act’) wherein liberty to withdraw a sum of Rs 4,11,89,759/- deposited by the award debtor, State of West Bengal, with the Registrar, Original Side of this Court upon furnishing of appropriate security was sought.

The petitioner was awarded a sum of Rs 2,66,69,73/- on account of various claims and a further sum of Rs 1,37,85,395/- on account of costs alongwith interest @18% per annum from 25 December, 2018 till the date of payment. Being aggrieved by the award, the respondent had filed an application under Section 34 of the Act which is pending. In an application under Section 36(2) of the Act, by an order, a Coordinate Bench had directed the award debtor to furnish security. It was submitted on behalf of the parties, that security had since been furnished by the respondent. Hence, this application.

The State submitted a preliminary point of maintainability and contended that the reliefs sought for by the petitioner are beyond the scope and ambit of Section 9 of the Act. On behalf of the petitioner, it was contended that the applicability of Section 9 was no longer res integra citing a decision passed by the Division bench in connected proceedings.

The Court explained that true object and intention behind Section 9 of the Act is to provide for interim or provisional measures to a party before or during or any time after making an award which are protective in nature. The orders contemplated under Section 9 inter-alia pertain to preservation, interim custody or sale of goods which are the subject matter of the arbitration agreement, securing the amount in dispute in the arbitration, detention, preservation or inspection of any property or thing which is the subject matter of the arbitration, interim injunction or appointment of a Receiver or such other interim measures of protection which may appear to be just and convenient relying on the decision in Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd., (2007) 7 SCC 125.

The Court was of the view that the scope of Section 9 of the Act cannot be extended to enforcement of the award or granting the fruits of the award to the award holder as an interim measure. The Court also acknowledged that there have been a number of decisions passed by the Supreme Court wherein the petitioner has been permitted to withdraw the amount deposited. However, none of the decisions have been passed in applications arising under Section 9 of the Act.

The application was dismissed and prayer for withdrawal was rejected.[Satyen Construction v. State of West Bengal, 2022 SCC OnLine Cal 708, decided on 08-04-2022]


For the Petitioner : Mr Jayanta Mitra, Senior Adv., Ms Nilanjana Adhya, Mr Aniruddha Mitra, Mr N. Das

For the State: Mr S. N. Mookerji, Advocate General, Mr Suman Dutta, Mr Paritosh Sinha


Suchita Shukla, Editorial Assistant has reported this brief.

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