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TMI Blog2025 (3) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Hindustan Petroleum Corpn. [2009 (8) TMI 1306 - DELHI HIGH COURT], this Court imported the principles governing appeals arising from interim injunctions given under Order 39 Rules 1 and 2 CPC to the appeals under Section 37 (2) (b) A&C Act, holding that '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'. The SPA in question pertains to an ostensible sale of shares, though, for all intent and purpose, the underlying Plot, which is the only immoveable property, in which Appellant No 1 has interest, is being conveyed, in favour of Respondent, by ceding ownership and control over the Appellant No 1 Company in favor of the Respondent by the Appellant Nos. 2 and 3 - There is no provision for termination of SPA until the sale is consumm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent. 4 Appellant Nos. 2 and 3 terminated the SPA, before the consummation of the sale of shares in favour of the Respondent, which was challenged by the Respondent by invoking arbitration. In the interim, the Respondent moved court, under Section 9 of the A&C Act, seeking interim protection restraining the Appellant Nos. 2 and 3 from selling their shares to any third party pending arbitration. 5. By way of an order dated 24.07.2024, passed in O.M.P. (I) Comm. No.233/2024, the court referred the disputes to the Arbitrator appointed by the court with the consent of the parties, and enabled them to approach the Learned Arbitrator under Section 17, to seek interim protection sought for from the court under Section 9 of the A&C Act. 6. Subsequently, the AT, vide impugned order dated 14.11.2024, restrained the Appellant Nos. 2 and 3 from alienating their shareholding in Appellant No. 1, pending conclusion of arbitration. 7. Aggrieved by the AT's order, the present appeal has been preferred. 8. In order to appreciate the circumstances under which the interim order was passed by the AT, it is necessary to examine the nature of transaction that the parties undertook under the SPA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Clause 1(iv)(d) and Clause 8 (iv) of the SPA by the Respondent, by failing to pay the balance sale consideration, which constrained the Appellant Nos. 2 and 3 to issue a termination notice dated 05.07.2024 consequent upon which they entered upon an agreement dated 15.07.2024 with one M/s Radha Rani Infra Projects for the sale of its shareholding in the Appellant No. 1. 16. Respondent have disputed the termination and denied having received any communication from the Appellants for making the balance payment. Respondent has claimed it has always been ready and willing to perform its part of the bargain in the SPA by paying the remaining sale consideration, both for the shares and the Plot. 17. Appellants disputed the Respondent's ability to seek specific performance of the SPA on the ground that SPA is a contingent contract. Appellant's obligation to transfer shares and the Plot was contingent upon it acquiring the Plot in its name with the confirmation of sale by the OL, which could not be achieved. In the absence of occurrence of contingent event, there cannot be a specific performance of the SPA. 18. It is further contended by the Appellant, that the SPA was determinable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . I have heard learned counsel for the parties and gone through the records. 23. This Court while dealing with an appeal under Section 37 (2) of the A&C Act, especially one arising from discretionary orders passed at an interlocutory stage, has to be circumspect in its approach, keeping in view the principle of least intervention. The A&C Act is intended to provide an alternative avenue for dispute resolution and any interpretation of the act which tends to multiply disputes must be avoided. An appellate court will ordinarily not interfere with the discretion exercised by the AT in the first instance, unless the said discretion is proved to have been exercised arbitrarily, capriciously, perversely or ignoring the settled principles of law regulating grant or refusal of interlocutory injunctions. It is also pertinent to note that Section 5 of the A&C Act crystallizes the legislative philosophy permeating throughout the Act, which is that there should be minimal judicial interference with arbitral proceedings. At this stage, it is deemed apposite to refer to a few decisions of Co-ordinate Benches of this Court dealing with the issue at hand. 24. In Bakshi Speedways v. Hindustan Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s be questioned. While examining such a challenge, however, the Court has to be mindful of its limitations, in interfering with the decision of the arbitrator, especially a decision taken at the discretionary level, and at an interlocutory stage. xxx 68. It is, no doubt, possible to argue that the intent, of Section 5, is to restrict judicial intervention, with arbitral proceedings, and orders passed therein, to the avenues for such interference, as provided by Part I of the 1996 Act, and not to restrict the scope of the Sections and the provisions contained in Part I. Perhaps. Section 5 remains, however, a clear pointer to the legislative intent, permeating the 1996 Act, that judicial interference, with arbitral proceedings, is to be kept at a minimum. Significantly, in Venture Global Engineering v. Satyam Computer Services Ltd., (2008) 4 SCC 190, it was opined that the scheme of the 1996 Act was "such that the general provisions of Part I, including Section 5, will apply to all Chapters or Parts of the Act". In State of Kerala v. Somdatt Builders Ltd., (2012) 3 Arb LR 151 (Ker) (DB), a Division Bench of the Kerala High Court held that the jurisdiction of the Court, under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " xxx 35. From a conspectus of the aforesaid judgments, it is explicitly and luminously clear that while exercising power under Section 37 (2) (b), the Court is required to maintain an extremely circumspect approach keeping in mind the object and purpose of the legislation and Section 5 of the 1996 Act which is a clear pointer to the legislative intent of keeping the Court's interference at the minimum." 27. A similar view has been taken by Co-ordinate Benches of this Court in World Window Infrastructure (P) Ltd. v. Central Warehousing Corpn., (2021) 3 HCC (Del) 731, GLS Foils Products (P) Ltd. v. FWS Turnit Logistic Park 2023 SCC OnLine Del 3904, and Dinesh Gupta v. Anand Gupta. 2020 SCC OnLine Del 2099. 28. Keeping in view, the import of the decisions discussed hereinabove, I would now make an endeavour to see whether the impugned order suffers from any infirmity or arbitrariness. 29. The Appellants have contended that the Contract is inherently determinable in nature, even in the absence of a provision for termination therein, and hence, not capable of specific performance on account of bar of Section 14 (d) read with Section 41 (e) of the Specific Relief Act. 30. App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, the interim injunction granted by the AT staying the SPA, amounts to a granting specific performance of the SPA, which the Respondent itself has not claimed. 37. This contention is specious. The Respondent by seeking to get the termination of SPA declared as null and void is in effect claiming that the SPA is valid and subsisting and binding on it. This shows Respondent's willingness to conclude the sale by making the payments payable under the SPA and pending the conclusion of sale it sought to preserve the shares from being sold to a third party, for which consequential relief of injunction was sought. 38. If the Respondent had asked for a simpliciter injunction, without seeking any other substantive prayer to declare the purported termination of SPA bad in law, the Appellant may have been correct in opposing the interim injunction in the ground, that without showing any willingness to abide by the SPA, the Respondent could not injunct the Appellant from dealing with the shares in question. 39. AT has dealt with the objection raised by the Appellant in the impugned order by relying on clause 12 to hold that the appellant had authorized Mr. Arvind Kumar for holding commu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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