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TMI Blog2018 (4) TMI 2008X X X X Extracts X X X X X X X X Extracts X X X X ..... e the bank guarantee of a higher amount, including the interest at a higher rate than the interest being earned in the fixed deposit. 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. This Court in Bakshi Speedways v. Hindustan Petroleum Corporation [2009 (8) TMI 1306 - DELHI HIGH COURT], has held that the same principles will apply even in case of an appeal under Section 37(2)(b) of the Act. Conclusion - 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peration and Management Agreement dated 12.08.2015 and the Maintenance Agreement dated 12.08.2015 with respect to the setting up and operation of 60MW Wind Farm Project comprising of 40 Wind Turbine Generators (WTGs) at Rojwas, District: Shajapur and Ujjain, in the State of Madhya Pradesh. The respondent, in terms of the Agreement(s) had given bank guarantee(s) to the appellant for a sum of Rs. 26,75,70,000/-. Alleging defaults in their performance of the obligations under the Agreement(s), the appellant invoked and encashed the bank guarantee(s). On the other hand, the respondent claiming proprietary right over the Flash Cards removed the same from the site in a manner disabling the Wind Turbine. The respondent claimed that the Flash Cards were not removed in order to disable the Wind Turbine, but were removed for maintenance purposes and as disputes arose, the same were not returned. This led to the filing of the cross petitions under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') being OMP(I)(COMM) 485/2017 by the appellant and OMP(I)(COMM) 84/2017 by the respondent. 4. On 22.12.2017 an ad-interim arrangement was arrived at b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g submission on behalf of the appellant was recorded by the Arbitral Tribunal: "11. After some protracted arguments the Learned Counsel for the Respondent has submitted to the release of money to the Claimant on the following conditions : i. That the balance Original Sale Deeds in possession of the Claimant be released to it forthwith; ii. That the Respondent's easement rights be secured by the Claimant; And iii. That the Claimant will furnish a Bank Guarantee to the Respondent securing the principal amount along with interest at a rate higher than the applicable rate in the FDR, which rate may be determined by the Arbitral Tribunal. The Bank Guarantee is to be kept alive during the pendency of these proceedings and to be made over to the Respondent in the event that this Tribunal holds in its favour." 7. The applications thereafter came before the Arbitral Tribunal on 15.03.2018 and have resulted in the Impugned Order. In paragraph 2 of the Impugned Order, the Arbitral Tribunal records the submissions of the learned counsel for the appellant that he had not consented to the release of the money deposited with the Registrar General of this Court to the claimant/res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal gave his separate reasons for affirming the directions issued by the Arbitral Tribunal, the relevant extracts of which are quoted below: "Having said that, I must immediately refer to two distinct attendant circumstances which persuade me to go with the view expressed by brother Vikramjit Sen. The first and foremost is that the amount covered by the bank guarantee was voluntarily deposited in the court by the respondent. That is evident from the consent Order passed by the High Court and extracted above. The second and an equally important circumstance is that the respondent has not prayed for return of the amount to it. While the deposit of the amount was subject to further orders that the High Court or the Arbitral Tribunal may have passed in the matter, nothing prevented the respondent from claiming the return of the amount on the principles stated earlier. Significantly however the respondent has made no application before us seeking return of the amount deposited by it. The net result therefore is that while the amount covered by the guarantees has gone out from the claimant, it has not in effect reached the respondent either. The amount is lying in deposit before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presently this is only a vague and unsubstantiated apprehension without any justification and in any case, the bank guarantee that would be furnished pursuant to the order of the Arbitral Tribunal shall be subject to its further orders. It further holds that in any case, the appellant would not be prejudiced if the money is kept deposited with the Registrar General of this Court or the money is converted and secured in form of a bank guarantee in favour of the appellant. The Arbitral Tribunal further balances the equity by directing the respondent to give the bank guarantee of a higher amount, including the interest at a higher rate than the interest being earned in the fixed deposit. 13. 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 Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 15. Recently in Ascot Hotels and Resorts Pvt. Ltd & Anr v. Connaught Plaza Restaurants Pvt. Ltd, Arb.A.(Comm) 12/2017, this Court again reiterated the above mentioned principle. 16. This Court in Bakshi Speedways v. Hindustan Petroleum Corporation, 2009 SCC OnLine Del 2476, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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