Case Note & Summary
The petitioner, BNP Paribas Securities India Pvt. Ltd., filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim measures against the respondent, Cable Corporation of India Ltd. The petitioner had entered into a leave and license agreement with the respondent for premises, and had paid a deposit of Rs. 5,99,11,376. The petitioner claimed that the respondent had failed to refund the deposit after the termination of the agreement, and sought an injunction restraining the respondent from selling or transferring the premises, and a direction to deposit the balance deposit amount or secure the same. The court heard the parties at length and considered the nature of the claim. The court held that the claim for refund of the deposit was essentially a monetary claim, and that under Section 9 of the Act, the court cannot pass an order to secure a monetary claim unless there is a specific agreement or clear evidence of an intention to create a charge. The court noted that the power under Section 9 is discretionary and is meant to preserve the subject matter of the arbitration, not to create new rights or grant final relief at an interim stage. The court found that there was no such agreement or evidence in this case, and therefore dismissed the petition. The court also noted that the petitioner had an alternative remedy by way of arbitration, and that the petition was premature as no arbitration proceedings had been initiated. The court concluded that the petitioner had not made out a case for grant of any interim relief under Section 9 of the Act.
Headnote
A) Arbitration Law - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Monetary Claim - The court held that a claim for refund of a deposit is a monetary claim and cannot be secured by way of an interim measure under Section 9 unless there is a specific agreement or clear evidence of intention to create a charge. The court cannot pass orders which would have the effect of granting final relief at an interim stage. (Paras 1-10) B) Arbitration Law - Interim Measures - Discretion - Section 9 of the Arbitration and Conciliation Act, 1996 - The court held that the power under Section 9 is discretionary and is meant to preserve the subject matter of the arbitration. It cannot be used to create new rights or to secure a monetary claim in the absence of a specific agreement. (Paras 1-10)
Issue of Consideration
Whether the court can pass an interim order under Section 9 of the Arbitration and Conciliation Act, 1996 directing the respondent to deposit the balance deposit amount or secure the same, pending arbitration, when the claim is essentially for refund of a deposit.
Final Decision
The petition is dismissed. No order as to costs.
Law Points
- Interim measures under Section 9 of the Arbitration and Conciliation Act
- 1996 are discretionary
- Monetary claims cannot be secured by way of interim measure unless there is a specific agreement or clear evidence of intention to create a charge
- Court cannot pass orders which would have the effect of granting final relief at an interim stage
- The power under Section 9 is to preserve the subject matter of the arbitration and not to create new rights
