Whether court can direct interim relief of deposit of money while granting relief U/S 9 of arbitration Act?

 The second argument canvassed by Mr. Andhyarujina was that before any order of deposit is made, the principles underlying the provisions of Order 38 Rules 1, 2 & 5 must be complied with by the Petitioner. He submitted that in the facts of the present case, there is nothing on record to show that the Petitioner has complied with the aforesaid provisions and therefore the Petitioner is not entitled to an order of deposit. I do not think that this argument holds any substance. It is true that the broad principles of Order 38 ought to be kept in mind whilst passing an order under Section 9 for securing the amount in dispute in the proposed arbitration. As far as Section 9 of Indian Arbitration Act is concerned, whilst considering a relief thereunder, it cannot be said that the Court is strictly bound by the provisions of Order 38 Rules 1, 2 and/or 5. The scope of Section 9 of the Act is very broad and the Court has the discretion to grant thereunder a wide range of interim measures of protection as may appear to the Court to be just and convenient. Of course, the discretion to be exercised by the Court under Section 9 has to be judicious and not arbitrary. Though, for considering interim measures, the Court would be guided by the principles which the Civil Courts ordinarily employ for considering grant or refusal of interim relief, particularly Order 39 Rules 1 & 2 and Order 38 Rule 5, the Court, however, is not unduly bound by their texts. Whilst exercising its power under Section 9, the Court must have due regard to the underlying purpose of the conferment of the power in the Court which is to promote the efficacy of arbitration as a form of dispute resolution. In an appropriate case, where the Court is of the view that there is practically no defense to the payability of the amount and where it is in the interest of justice to secure the amount, which forms part of the subject matter of the proposed arbitration reference, even if no case strictly within the letter of Order 38 Rules 1 or 2 is made out, though there are serious allegations concerning such a case, it is certainly within the power of the Court to order a suitable interim measure of protection. There is no requirement that for a relief of deposit, an ironclad case under Order 38 Rule 5 must be made out. The provisions of Order 38 are guides to a Section 9 Court and not fetters upon its discretion. To my mind, the position in law, is that, when there is a clear and unequivocal admission of liability or there is no real dispute with reference to the amounts payable, then in such a case an order of deposit may not only be made, but in the interest of justice, ought to be made. Where the defense raised is prima facie untenable and the Petitioner has a good chance of success, an order of deposit to secure the claim can and indeed should be made under Section 9. {Para 21}

22. In the view that I take, I am supported by several decisions of this Court. A Division Bench of this Court, in the case of Jagdish Ahuja v. Cupino Limited [2020 SCC OnLine Bom 849] held as under:—

“6. As far as Section 9 of the Act is concerned, it cannot be said that this court, while considering a relief thereunder, is strictly bound by the provisions of Order 38 Rule 5. As held by our Courts, the scope of Section 9 of the Act is very broad; the court has a discretion to grant thereunder a wide range of interim measures of protection “as may appear to the court to be just and convenient”, though such discretion has to be exercised judiciously and not arbitrarily. The court is, no doubt, guided by the principles which civil courts ordinarily employ for considering interim relief, particularly, Order 39 Rules 1 and 2 and Order 38 Rule 5; the court, however, is not unduly bound by their texts.

 In the High Court of Bombay

(Before B.P. Colabawalla, J.)

Ultra Deep Subsea Pte Ltd. Vs Hindustan Oil Exploration Company Ltd.

Commercial Arbitration Petition (L) No. 22272 of 2021

Decided on December 13, 2021

Citation: 2021 SCC OnLine Bom 5481

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