MANU/DE/0247/2020

IN THE HIGH COURT OF DELHI

Arb. A. COMM. 4/2019
Decided On: 20.01.2020
Appellants: Sona Corporation India Pvt. Ltd.
Vs.
Respondent: Ingram Micro India Pvt. Ltd. and Ors.
Hon'ble Judges/Coram:
Jyoti Singh, J.
Counsels:
For Appellant/Petitioner/Plaintiff: A.K. Singla, Sr. Advocate and Rahul Shukla, Advocate
For Respondents/Defendant: Sudhir Kumar, Pulkit Srivastava and Ashna Abool,
Advocates
Case Note:
Arbitration - Bank Guarantee - Section 17 of Arbitration and Conciliation Act,
1996 (A&C Act) - Arbitral Tribunal directed Appellant to furnish Bank
Guarantee of Rs. 2.70 Crores or deposit said amount in a Fixed Deposit that it
would be payable only as per directions of Tribunal - Hence, present appeal -
Whether any infirmity can be found in exercise of discretion by Tribunal under
Section 17 of A&C Act - Held, Tribunal has rightly come to a conclusion that
Respondents were aware of property being mortgaged with Vijaya Bank -
Thus, it is not enough for Appellant to contend that only because Respondents
were aware of encumbrances, impugned order is erroneous - It is purely in
domain of Tribunal to exercise its discretion in deciding nature of security to
preserve subject matter involved in arbitral proceedings - Therefore, no
infirmity can be found in exercise of discretion by Tribunal under Section 17
of A&C Act - Appeal dismissed. [28], [32]
DECISION
Jyoti Singh, J.
ARB. A COMM 4/2019
1 . The present appeal has been filed under Section 37(2) of the Arbitration and
Conciliation Act, 1996 (Act) against the order dated 26.02.2019 passed by the Arbitrator
on an application filed by the respondents herein under Section 17 of the Act, thereby
recalling its earlier order dated 11.12.2018.
2 . Shorn of unnecessary details, the brief facts are that disputes arose between the
parties on a unilateral termination of two registered Lease Deeds, both dated
18.06.2013, executed between the appellant as a lessor and the respondents as lessees.
The disputes were also with respect to violation of certain terms and conditions of the
Lease Deeds, including vacating the premises in a damaged condition.
3. The disputes were referred to the Arbitral Tribunal appointed by this Court vide order
dated 06.09.2018. The appellant has submitted its statement of claim and claimed Rs.

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23,21,58,854/- against the respondents making them jointly and severely liable. The
respondents filed a counter claim to the tune of Rs. 2,70,00,000/-.
4. In the course of proceedings, the respondents preferred an application under Section
17 of the Act dated 06.11.2018, praying for directions against the appellant to refund a
sum of Rs. 2,70,00,000/- being a sum equivalent to security deposit made under terms
of the Lease Deeds.
5 . The application was disposed of by the Tribunal vide order dated 11.12.2018 by
taking on record the statement of the appellant. The operative part of the order reads as
under: -
"..........In order to secure the refund of Interest Free Refundable Security
Deposit in terms of the clauses of the Lease Deed the learned counsel for the
Claimant has given a statement to the effect that the Claimant Company shall
not transfer by way of sale or in any other manner except leasing out the
Property No. G-9 Block B-1, Mohan Cooperative Industrial Estate, Mathura
Road, New Delhi-110044 or put the property under any encumbrance without
the orders of this Tribunal till the decision of these Arbitration proceedings. The
Claimant shall comply with the requirements of the Companies Act, 2013 in this
regard. The Claimant shall be bound by the undertaking. The application U/S.
17 of A&C Act, 1996 is disposed off accordingly."
6 . It is the case of the appellant that the immovable property mentioned above is
owned by the appellant company and is also subject matter of the registered lease
deeds executed between the parties. The property was occupied by the respondents as
lessees at a rent of Rs. 27 Lakhs per month, excluding taxes. The respondents vacated
the property on 02.11.2018.
7. After the said order was passed by the Tribunal, on 14.01.2019 the respondents filed
a second application under Section 17 of the Act praying for a fresh order on the ground
that the property given as security as recorded in the order dated 11.12.2018 was found
to have been mortgaged by the appellant for a total loan of Rs. 73,79,50,000/-. It is the
case of the appellant that in its reply to the application, the appellant clarified that no
such loan was availed and the property has a market value of Rs. 44.79 Crores. The
property carried an encumbrance of value of Rs. 13,22,00,529/-, as per bank certificate
dated 21.01.2019. It is averred in the appeal that it was further stated in the reply that
prime security for said loan account with nomenclature as "V-Rent Account" was
actually the rent payable by the respondents and EMDTD of the property, valued at Rs.
44.79 Crores was the alternate primary security. It was also clarified that the loans
availed by the Directors were availed in their personal capacity and secured by their
other properties. The appellant also claims to have produced a letter dated 25.10.2013
to show that the respondents were well aware on 11.12.2018 about the loan taken by
the appellant and the statement of the appellant on 11.12.2018 was recorded in the
presence of the respondents' representative and its counsel.
8 . As the chronology goes, the Arbitral Tribunal vide order dated 26.02.2019 recalled
its earlier order dated 11.12.2018 and has directed the appellant to either furnish Bank
Guarantee of Rs. 2.70 Crores valid for 12 months or deposit the said amount in a Fixed
Deposit with an endorsement on the FDR that it would be payable only as per directions
of the Tribunal.
9. Aggrieved with the said order, the appellant has filed the present appeal.

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10. The genesis of the impugned order are two applications both dated 14.01.2019,
filed by the respondents herein. The first application was an application under Section
17 of the Act for securing the sum equivalent to an amount of Rs. 2.70 Crores towards
Interest Free Refundable Security Deposit (IFRSD) and the second application was
under Section 27(5) of the Act for initiating contempt proceedings against the appellant
and its Directors for violating the order and undertaking, both dated 11.12.2018.
11. The grievance of the respondents in the said applications was that on a perusal of
the balance sheets, the Company Master Data, Directors' report, as well as other
documents filed by the appellant company on the website of Ministry of Corporate
Affairs, the respondents discovered that the property with respect to which the
undertaking had been given on 11.12.2018 was already mortgaged for total loan of Rs.
73,79,50,000/- with Vijaya Bank and the said Bank had first and exclusive charge on
the property. Further, the appellant was required to seek permission from the Bank
before creating any further charge/lien over the said property. It was contended that the
records also suggested that equitable mortgage had also been created on the said
property for loans taken by the Promoters and Shareholders of the Company,
aggregating to Rs. 25 Crores. The property as per the valuation carried out by Vijaya
Bank as on 17.11.2017 was assessed at Rs. 39,37,00,000/-. It was further alleged in
the application that at the time of giving the undertaking before the Tribunal on
11.12.2018, the appellant had deliberately concealed the said mortgage and had played
a fraud on the respondent and the Tribunal. It was thus prayed that the appellant be
directed to give an effective and alternate security for the amount due to the
respondents and be punished for contempt.
1 2 . The Tribunal heard both the applications. It came to a finding that from the
documents it was clear that the appellant had taken a loan from Vijaya Bank for which
the primary security was the rent receivable from the said property and the property
was a collateral security. Since the rent payable by the respondents was the primary
security, the appellant had executed General Power of Attorney in favour of the Bank,
authorizing it to receive rent from the respondents, and letters had been issued to the
respondents, to remit the rent to Vijaya Bank, directly. Thus, the respondents were well
aware of the loan taken against the said property. The Tribunal also came to a finding
that having been aware of the said loan, the respondent had chosen not to object to the
property being offered as security when the undertaking was given on 11.12.2018 and
on that basis the order was passed by the Tribunal. Based on this finding the Tribunal
concluded that no case for reference of contempt to the High Court was made out.
13. However, having arrived at the said finding, the Tribunal took serious note of the
fact that the appellant was obliged to inform the Tribunal about the various loans taken
by it and its Directors and any lien on the property being offered as security before the
order was passed. The Tribunal in its wisdom felt that the property with its
encumbrances was not a security which inspired confidence and therefore, directed the
appellant herein to furnish a Bank Guarantee or deposit Rs. 2.70 Crores in a Fixed
Deposit, with an endorsement as aforementioned.
14. Learned senior counsel for the appellant submits that the respondents had applied
for recall of the earlier order dated 11.12.2018 by raising three grounds which are as
under: -
"(i) On perusal of Company Master Data as well as other documents on the
website of Ministry of Corporate Affairs states that property offered as security
is already mortgaged with various Banks much before 11.12.2018, amounts to

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 concealment.
(ii) The property is found to be mortgaged for a total loan of Rs.
73,79,50,000/- with Vijaya Bank with charge created way-back on 11.12.2018.
(iii) The value of the property as on 17.11.2017 is found to be Rs. 39.37 Cr."
15. The appellant had opposed the applications on the following grounds: -
"(i) 2nd Application for same relief is not maintainable. Factum of mortgage of
property with the Bank was well in the knowledge of respondents besides
incorporated by way of covenants in the lease deeds itself.
(ii) The plea of property mortgaged for loan aggregating over Rs.
73,79,50,000/- is against record as certified by Bank. Reliance is placed on
correspondences with the Bank.
(iii) The value of property as on making of statement is Rs. 44.79 Cr. with loan
outstanding being Rs. 13,22,00529/-. The other loan of claimant company is
against security of the vehicle as stated in Bank's letter dated 21.01.2019."
16. It is argued that vide the impugned order, the Tribunal has negated all the three
grounds raised by the respondents. The Tribunal concluded that none of the grounds
made out in the application were correct and there was no concealment by the
appellant. Respondents were not only well aware of the encumbrance on the property,
but also took no objection at the time when the undertaking was given. In these
circumstances, there was no ground for the Tribunal to recall the order.
1 7 . The next contention of the learned senior counsel is that even otherwise the
Tribunal has no power to recall its order as it amounts to exercise of power of review
on the merits of a case which is impermissible and Review can only be for correcting
errors apparent on the face of the record. Reliance is placed on the judgment of the
Supreme Court in Srei Infrastructure Finance Limited v. Tuff Drilling Private Limited
reported as MANU/SC/1272/2017 : (2018) 11 SCC 470.
18. It is next contended by the appellant that when the first application was filed by the
respondents under Section 17 of the Act, the Tribunal had directed that the appellant
will not transfer by way of sale or in any other manner the property in question and a
detailed order was passed on 11.12.2018 recording the undertaking of the appellant.
Learned senior counsel vehemently contends that the Tribunal has adopted different
yardsticks and different standards to decide the application under Section 17 filed by
the appellant and that filed by the respondents. It is pointed out that vide an order
dated 26.02.2019, the same date as of the impugned order, the Tribunal had decided
the application filed by the appellant under Section 17 of the Act. The stand of the
appellant therein was that it has a claim of about Rs. 23 Crores against the respondents
which is covered by the clauses of the Lease Deeds. The respondents did not have any
registered office within the territorial jurisdiction of Delhi and the balance sheet
submitted to the ROC also indicated that there was no property/asset in Delhi. Since the
execution proceedings would have to be filed in Delhi, interim order be passed directing
the respondents to secure the amounts.
19. The respondents in reply had taken a stand that the respondents 1 and 2 are Group
Companies and their balance sheet reflects healthy state of affairs. In the financial year
2017-18, respondent no. 1 had generated a revenue of Rs. 328 Crores and paid a tax of

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Rs. 117.6 Crores. The Tribunal while deciding the said application had solely relied on
the balance sheet of respondent no. 1 and the fact that respondents were Group
Company and confirming party, respectively for each other under the lease deeds. On a
mere statement of the respondents that they will be able to satisfy the awarded amount,
the application was dismissed.
20. Per contra, learned counsel for the respondents submits that during the course of
arguments on the application under Section 17 of the Act before the Tribunal, the
appellant had voluntarily given an undertaking that it would not transfer or in any other
manner create third party rights in the property in question except for leasing out the
same. After the said undertaking was given, the respondents came across documents
relating to the appellant on the website of the Ministry of Corporate Affairs which
revealed that the property in question had been mortgaged with Vijaya Bank against a
loan of Rs. 14.60 Crores and the bank had the first charge over the property. The
respondents were thus compelled to file another application under Section 17 to secure
the IFRSD amount through an alternative security of a Bank Guarantee or deposit in an
FDR. Learned counsel submits that there is no infirmity in the impugned order which
was passed by the Arbitrator after considering all the documents filed by the parties and
hearing them at length. The Tribunal was of the view that the appellant was obliged to
inform the Tribunal about the various loans and the encumbrances with respect to the
property in question. The Tribunal in its wisdom felt that encumbered property may not
be sufficient security and therefore, modified its earlier order. Learned counsel points
out that since the Bank has first charge over the property, the respondents can never
have any right in the same till the first charge of the Bank exists. Even as per the
SARFAESI Act, 2002 till the charge of the Bank is satisfied, no Court or judicial Forum
can exercise jurisdiction over the subject matter.
21. Learned counsel for the respondents vehemently argued that as on 21.01.2019 a
loan of Rs. 13,22,00,529/- exists on the property. The property is a collateral security
against the home loan of Rs. 24.46 Crores, obtained in the personal name of the
Directors of the Company and which is outstanding to the tune of Rs. 19,33,10,345.40/-
. It is thus contended that as against the total value of the property which is valued at
Rs. 41.29 Crores as per valuation report dated 19.09.2017, it admittedly stands
mortgaged with the Bank to the extent of Rs. 32.55 Crores.
22. Learned counsel for the respondents has relied upon various judgments such as in
the case of Indian Steel and Wire Products vs. BIFR MANU/DE/1282/2003 : 110 (2004)
DLT 186, Cont. Pet. (C) 148/2003 titled Rama Narang vs. Ramesh Narang & Anr.,
decided on 15.03.2007 by Supreme Court, Cont. Cas (C) 531/2015 titled Central Bank
of India vs. Suman Chaddha & Ors. decided by this Court, Cont. Pet. 782/2012 titled V.
Thirulokachandar vs. E. Kanan & Anr. decided by Madras High Court on 18.07.2013 and
S. Balasubramaniyam vs. P. Janakaraju & Anr. MANU/KA/0140/2004 : ILR 2004 KAR.
2442 to contend that breach of an undertaking given to a Court is a serious misconduct
amounting to contempt and should be dealt with by awarding a severe sentence to the
contemnor.
23. I have heard the counsels for the parties.
2 4 . The main contention of the learned senior counsel for the appellant is that the
respondents were all through aware that the property which was sought to be offered as
security, before the Tribunal was mortgaged with Vijaya Bank. In fact, the rent payable
by the respondents was the primary security and the appellant had executed a General
Power of Attorney, in favour of the Bank authorizing it to receive rent from the

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respondents. The Tribunal had negated all the grounds on which the application for
recall of the order was filed and having held that the appellant was not guilty of
contempt could not have modified the order. Argument is also raised on different
yardsticks adopted by the Tribunal while dealing with similar applications by the
parties.
2 5 . The respondents, on the other hand, contend that the appellant ought to have
disclosed the encumbrances on the property to the Tribunal and in any case the
encumbrances are of a nature that the property would not be an adequate security to
secure the amount due and payable to the respondents, if ultimately the award was
rendered in their favour. It is also contended that the order calls for no interference in a
jurisdiction exercised by this Court under Section 37 of the Act as the impugned order is
a well-reasoned order and has been passed by the Tribunal considering all the facts and
the documents.
26. It is no doubt true that the Tribunal has negated the grounds on which the second
application under Section 17 of the Act was filed by the respondents. The Tribunal has
rightly come to a conclusion that the respondents were aware of the property being
mortgaged with the Vijaya Bank. In fact, the prime security for the loan was the rent
payable by the respondents and the Bank had been authorized by the appellant to
receive the rent directly from the respondents. It is in this context that the Tribunal had
held that the appellant was not guilty of any contempt. However, the question which the
Tribunal was required to examine was primarily, how to secure the amount payable to
the respondents in case they succeed in the arbitration proceedings. The Tribunal while
noticing that the respondents were aware of the encumbrances observed that the
appellants had not disclosed the said fact to the Tribunal. The initial order was passed
by the Tribunal on 11.12.2018 recording the undertaking of the appellant that it would
not create any encumbrance on the property. Looking at the valuation of the property
and considering the fact that the property was unencumbered, the Tribunal accepted the
undertaking as it was of the view that the property was sufficient security. Once,
however, it came to the notice of the Tribunal that the property was mortgaged with
Vijaya Bank, who had first charge on the property and the fact that no charge could be
created further without the permission of the bank, the Tribunal in its wisdom was of
the opinion that the property was no longer a solvent security. Various complications
that are linked to the property under the SARFAESI Act, were also brought to the notice
of the Tribunal by the respondents. Thus, it is not enough for the appellant to contend
that only because the respondents were aware of the encumbrances, the impugned
order is erroneous. As rightly contended by the respondents if the fact of encumbrance
would have been placed before the Tribunal in the first application, perhaps the Tribunal
may not have accepted the undertaking of the appellant.
27. Vide the impugned order, the Tribunal has only directed the appellant to furnish a
Bank Guarantee or deposit the amount of Rs. 2,70,00,000/- in a Fixed Deposit which, in
the opinion of the Tribunal, is important to secure and preserve the subject matter of
the dispute during the arbitral proceedings.
28. Insofar as the contention of the appellant that the Tribunal has applied different
yardsticks to the two similar applications between the parties, is concerned, the
contention only merits rejection. The contention of the appellant in defence to the
application under Section 17 of the Act filed by the respondents was that the
respondents did not have any registered office within the jurisdiction of Delhi and even
the balance sheets did not show any asset in Delhi. It was not the stand of the appellant
that the respondents had no property in any part of the country which could be a

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security in case the appellant was to succeed. It was also not the case of the appellant
that the respondents had taken loans and were indebted to any bank and thus were not
in a healthy condition financially to satisfy the award, in case the same was in favour of
the appellants. The Tribunal had on a perusal of the balance sheets found as a matter of
fact that in the financial year 2017-2018, respondent no. 1 had generated a revenue of
Rs. 328 Crores and had paid a tax of Rs. 117.6 Crores. Contrary to this, the status of
the property of the appellant and the encumbrances on the property sought to be
offered as security did not inspire confidence in the Tribunal. It is purely in the domain
of the Arbitral Tribunal to exercise its discretion in deciding the nature and the extent of
security to preserve the subject matter involved in the arbitral proceedings.
29. Section 17 of the Act has been held akin to the jurisdiction of this Court under
Section 9 by the High Court of Bombay in the case of Shakti International Private
Limited v. Excel Metal Processors MANU/MH/0452/2017. Court has summed up the
scope of power under Section 17 of the Act as under:
"48. Even after the enactment of the 1996 Act, as pointed out by Mr. Jagtiani,
different Courts took different views and approaches on the scope of the arbitral
tribunals' power to grant interim reliefs or 'interim measures of protection'
under Section 17 of the 1996 Act. For instance, in the case of Intertoll ICS
Cecons O & M Co. Pvt. Ltd. v. National Highways Authority of India (supra), the
Delhi High Court at paragraphs 15-18 on pages 1026-1027 dealt with the scope
of powers under Sections 9 and 17 of the Act. In brief the Court expressed the
view that the powers of an arbitral tribunal under Section 17 of the 1996 Act
are much narrower than that of a Court under Section 9 of the Act, although
there may be some overlap. The Court in Intertoll (supra), held that an arbitral
tribunal can only protect the subject matter of the dispute, which must be
tangible property, and therefore it cannot order the furnishing of a security for
securing a money claim.
49. As against this, this Court in Baker Hughes Singapore Pte. v. Shiv-Vani Oil
and Gas Exploration Services Ltd. (supra) took a broader view (at paragraphs
40, 50-51) of the arbitral tribunals powers under Section 17 of the 1996 Act.
This Court also distinguished the Judgment in the case of Intertoll (supra). This
Court held, in Baker Hughes (supra), that an arbitral tribunal can, in a given
case, make an appropriate order of security.
5 0 . A perusal of these decisions is helpful because it brings into focus the
reason why Section 17 as amended, was enacted.
51. Under the 1940 Act, the position was, as stated by the Hon'ble Supreme
Court in MD, Army Welfare Housing Organization (supra), that an arbitral
tribunal is not a Court of law and its orders are not judicial orders and its
functions are not judicial functions.
52. This position changed under the 1996 Act, but in relation to Section 17 of
the 1996 Act, the same Judgment of Army Welfare (supra), says that the power
is a limited one, and that the arbitral tribunal has no power to enforce its own
order nor is it made judicially enforceable.
53. Even though different Courts may have taken different views on the scope
of the powers under Section 17 of the 1996 Act, it is very clear that the powers
were narrower than Section 9 of the 1996 Act. Ex facie, Section 17 of the 1996
Act did not provide for any power for the appointment of a Receiver. Also, as

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 noted by the Hon'ble Supreme Court, there were difficulties in matters relating
to the enforcement of order passed by an arbitral tribunal under Section 17 of
the Act.
54. Whereas Section 9 of the 1996 Act expressly provided for various interim
orders that a Court could pass, Section 17 of the 1996 used the expression 'any
interim measure of protection as the arbitral tribunal may consider necessary in
respect of the subject matter of the dispute'. Therefore, it was always necessary
for a party applying for interim relief before an arbitral tribunal to show that a
specific interim orders, covered by the express provisions of Section 9, was
also covered by the limited language of Section 17 of the 1996 Act. These
challenges and difficulties perhaps led to parties applying for interim measures
to a Court under Section 9 of the 1996 Act, even after a tribunal had been
constituted.
55. It is in this background that Section 17 of the Amended Act obviously came
to be enacted. Section 17 of the Amended Act is now in pari materia or very
similar in content to the provisions of Section 9 of the Amended Act. The
powers to make different types of interim orders of protection are now
enumerated in Section 17 of the Amended Act, as they are under Section 9 of
the Amended Act.
56. The powers, of an arbitral tribunal, to make orders is put on par with that
of a court. The language appearing after Section 17(1)(ii)(e) of the Amended
Act makes this clear. It states "and the arbitral tribunal shall have the same
power for making orders, as the court has for the purpose of, and in relation to,
any proceeding before it."
57. The issue of enforceability of such orders is now expressly addressed by
Section 17(2) of the Amended Act, which provides that such orders of the
arbitral tribunal, "... shall be deemed to be an order of the Court for all
purposes and shall be enforceable under the Code of Civil Procedure, 1908 (5
of 1908), in the same manner as if it were an order of the Court."
58. In light of the enhanced powers and efficacy of recourse under Section 17
of the Amended Act, there have been corresponding changes to Section 9 of the
Amended Act as well. Section 9(3) of the Amended Act states that, "once the
arbitral tribunal has been constituted, the Court shall not entertain an
application under sub-section (1), unless the Court finds that circumstances
exist which may not render the remedy provided under section 17 efficacious."
30. It is also no longer res integra that the scope of judicial review under Section 37 is
limited as held by a Co-ordinate Bench of this Court in the case of Green Infra Wind
Energy Limited vs. Regen Powertech Private Limited MANU/DE/1348/2018. Relevant
para of the judgment reads as under: -
"16. In my view, the Arbitral Tribunal has balanced the equity between the
parties and has considered the submissions made by the parties before the
Arbitral Tribunal. This Court in exercise of its power under Section 37 of the Act
cannot interfere with the order passed by the Arbitral Tribunal under Section 17
of the Act unless the discretion exercised by the Tribunal is found to be
perverse or contrary to law. As an Appellate Court, the interference is not
warranted merely because the Appellate Court in exercise of its discretion
would have exercised the same otherwise. "

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 xxx xxx xxx
"20. In view of the above, the Arbitral Tribunal having exercised its discretion
and found a balance of equity between the parties, this Court in exercise of its
power under Section 37(2)(b) of the Act would not interfere with the same
unless it is shown that the discretion so exercised is perverse in any manner or
contrary to the law. In the present case, no such exception has been made out
by the appellant."
31. The Court relied upon the various judgments as under:
"17. In Wander Ltd. v. Antox India P. Ltd., MANU/SC/0595/1990 : 1990 Supp
SCC 727, the Supreme Court while dealing with the power of the Appellate
Court under the Code of Civil Procedure, 1908 has held as under:
"13. On a consideration of the matter, we are afraid, the Appellate
Bench fell into error on two important propositions. The first is a
misdirection in regard to the very scope and nature of the appeals
before it and the limitations on the powers of the Appellate Court to
substitute its own discretion in an appeal preferred against a
discretionary order. The second pertains to the infirmities in the
ratiocinations as to the quality of Antox's alleged user of the trade-
mark on which the passing-off action is founded. We shall deal with
these two separately.
14. The appeals before the Division Bench were against the exercise of
discretion by the Single Judge. In such appeals, the Appellate Court
will not interfere with the exercise of discretion of the court of first
instance and substitute its own discretion except where the discretion
has been shown to have been exercised arbitrarily, or capriciously or
perversely or where the court had ignored the settled principles of law
regulating grant or refusal of interlocutory injunctions. An appeal
against exercise of discretion is said to be an appeal on principle.
Appellate Court will not reassess the material and seek to reach a
conclusion different from the one reached by the court below if the one
reached by that court was reasonably possible on the material. The
appellate court would normally not be justified in interfering with the
exercise of discretion under appeal solely on the ground that if it had
considered the matter at the trial stage it would have come to a
contrary conclusion. If the discretion has been exercised by the Trial
Court reasonably and in a judicial manner the fact that the appellate
court would have taken a different view may not justify interference
with the trial court's exercise of discretion. After referring to these
principles Gajendragadkar, J. in Printers (Mysore) Private Ltd. v. Pothan
Joseph: (SCR 721)
"... These principles are well established, but as has been
observed by Viscount Simon in Charles Osention & Co. v.
Jhanaton ...the law as to the reversal by a court of appeal of an
order made by a judge below in the exercise of his discretion is
well established, and any difficulty that arises is due only to
the application of well settled principles in an individual case."
The appellate judgment does not seem to defer to this principle."

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 1 8 . Recently in Ascot Hotels and Resorts Pvt. Ltd. v. Connaught Plaza
Restaurants Pvt. Ltd., Arb. A. (Comm) 12/2017, this Court again reiterated the
above mentioned principle.
1 9 . This Court in Bakshi Speedways v. Hindustan Petroleum Corporation,
MANU/DE/2046/2009, has held that the same principles will apply even in case
of an appeal under Section 37(2)(b) of the Act. Paragraph 4 of the said
judgment is quoted herein below:
"4. The principles applicable to an appeal under Section 37(2)(b) in my
view ought to be the same as the principles in an appeal against an
order under Order 39 Rules 1 and 2, CPC i.e., unless the discretion
exercised by the Court against whose order the appeal is preferred is
found to have been exercised perversely and contrary to law, the
appellate Court ought not to interfere with the order merely because
the appellate court in the exercise of its discretion would have
exercised so otherwise. I had at the beginning of the hearing itself
inquired from the senior counsel for the appellant as to what could be
said to be perverse in the exercise of discretion by the Arbitral Tribunal
in the exercise of powers under Section 17 of the Act and as to how the
said interim measures granted by the Arbitral Tribunal could be said to
be contrary to law; it was further pointed out that in the opinion of this
court, on the perusal of the memorandum of appeal, the only ground
which appeared to have some force was the ground taken in the
memorandum of appeal of the arbitrator as on the date of making of
the order having become functus officio."
32. Having analyzed the impugned order, this court is of the opinion that no infirmity
can be found in the exercise of discretion by the Tribunal under Section 17 of the Act.
33. There is no merit in the appeal and the same is accordingly dismissed with no order
as to costs.
I.A. No. 3985/2019
Present application is hereby dismissed in view of the order passed in the appeal.
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