Appeal under Section 37 of the Arbitration and Conciliation Act against a Section 9 order directing removal of a cellular tower from licensed property and deposit of admitted licence-fee arrears. The court held Section 9 powers are wide, extend to mandatory injunctions on admitted facts, and dismissed the appeal with costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
+ FAO (COMM) 68/2025
M/S GTL INFRASTRUCTURE LTD. .....Appellant Through: Mr. Swetank Shantanu, Mr. Pratap Shanker & Mr. Ankit Kumar, Advs.
Versus
S.C WADHWA AND SONS (HUF) .....Respondent Through: Mr. Anupam Srivastava, Sr. Adv. with Mr. Ujjwal Malhotra, Mr. Gaurav Arora, Mr. D. Gupta & Mr. V. Misra, Advs.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA
VIBHU BAKHRU, J ( Oral ).
CM No. 13738/2025 (Filing) and CM No. 13740/2025 (Re-filing)
FAO (COMM) 68/2025 & CM Nos.13736/2025, 13737/2025, 13739/2025
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Commercial Court had also directed that a sum of ₹18,95,706/-, which is admittedly the outstanding license fee, be deposited in a fixed deposit before the learned Commercial Court within a period of two months from the date of the impugned order.
INTRODUCTION
FACTUAL CONTEXT
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said license fee would be enhanced by 10% on expiry of every three years. The term of the License Agreement was fifteen years, that is till 10.06.2024. The appellant had also agreed that on termination of the License Agreement, it would vacate the licensed property and remove all furniture, fixtures and belongings brought to the licensed property.
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5. TERM
This License shall commence from 11th June 2009 and be in force for a period of 15 (Fifteen) years i.e. till 10th June 2024 . However, the possession of the Licensed Property shall be given to the Licensee on 11th July 2009 and the period of 30 days shall be the Compensation Free period for which no compensation shall be payable by the Licensee to the Licensor, enabling the Licensee to carry out its formalities. The License shall be irrevocable for the said term from the date of commencement provided always, however, the Licensee shall have the right to determine this License for whatsoever reasons by giving to the Licensor(s) three (3) months prior notice in writing at any time during the currency of this License.
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Licensed Property. In the event the Licensor is unable to refund the Security Deposit, Licensor shall be disentitled from asking the Licensee to give vacant possession of the Licensed Property and the Licensee shall be entitled to use the Licensed Property without any liability towards payment of the monthly License Fee / compensation or any other charges payable by the Licensee under this agreement until repayment of the Security Deposit. Further, the Security Deposit will carry interest @ 24% per annum compounded every month from the date on which the refund is due to the Licensee from the Licensor till its repayment and the Licensor shall be liable to the repayment of the Security Deposit along with the interest. This shall be without prejudice to the Licensee’s rights and remedies available in law to seek refund of the Security Deposit.”
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claim the charges/ repair costs/ costs incurred from the Respondent/s in future; AND
REASONS & CONCLUSION
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“26. Though apparently, there seem to be two divergent strands of thought, in judicial thinking, this court is of the opinion that the matter is one of the weight to be given to the materials on record, a fact dependent exercise, rather than of principle. That Section 9 grants wide powers to the courts in fashioning an appropriate interim order, is apparent from its text. Nevertheless, what the authorities stress is that the exercise of such power should be principled, premised on some known guidelines - therefore, the analogy of Orders 38 and 39. Equally, the court should not find itself unduly bound by the text of those provisions rather it is to follow the underlying principles. In this regard, the observations of Lord Hoffman in Films Rover International Ltd. v. Cannon Film Sales Ltd. (1986) 3 All ER 772 are fitting:
“But I think it is important in this area to distinguish between fundamental principles and what are sometimes described as ‘guidelines’, i.e. useful generalisations about the way to deal with the normal run of cases falling within a particular category. The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the ‘wrong’ decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been 'wrong' in the sense I have described. The guidelines for the grant of both kinds of interlocutory injunctions are derived from this principle.”
“The question of substance is whether the granting of
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the injunction would carry that higher risk of injustice which is normally associated with the grant of a mandatory injunction. The second point is that in cases in which there can be no dispute about the use of the term ‘mandatory’ to describe the injunction, the same question of substance will determine whether the case is ‘normal’ and therefore within the guideline or ‘exceptional’ and therefore requiring special treatment. If it appears to the court that, exceptionally, the case is one in which withholding a mandatory interlocutory injunction would in fact carry a greater risk of injustice than granting it even though the court does not feel a ‘high degree of assurance’ about the plaintiff’s chances of establishing his right, there cannot be any rational basis for withholding the injunction.”
“37. On the question of exercise of power under Section 9 of the A&C Act, we have already referred to Clauses 37.3.1 of the Concessionaire Agreement which is an express and mandatory provision when said agreement is terminated on account of concessionaire fault. We have also referred to Clauses 3.2 and 4.2 of the tripartite Escrow Agreement which refers to termination payment. To accept the plea of NHAI that section 9 of the A&C Act cannot be invoked, would negate and obliterate the aforesaid Clauses and their effect. In the aforesaid circumstances the ratio of decision of the Division Bench of this Court in Value Source Mercantile Limited v. Span Mechnotronix Limited : (2014) 143 DRJ 505, is apposite, if not definite and conclusive. Referring to Section 9 of the A&C Act, this decision emphasized that the said provision uses the expression
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‘interim measure of protection’ as distinct from the expression ‘temporary injunction’ used in Rules 1 and 2 of Order XXXIX of the Code of Civil Procedure, 1908. Interim injunction is one of the measures or orders prescribed in Clause (d) to Section 9(ii) of the A&C Act, albeit a party to the arbitration agreement is entitled to apply for and seek ‘interim measure of protection’. Clause (e) to Section 9(ii) is a residuary power of the court to issue or direct other “interim measures of protection”. Thus, the court has the power to issue or direct other interim measures of protection as may appear to the court to be just and convenient. Section 9 encompass the power of making orders as the Civil Court has for the purpose of, and in relation to any proceedings before it. This decision refers to Rule 10 of Order XXXIX of the aforesaid Code which empowers the Court to direct to deposit payment of the admitted amount. Therefore the court exercising power under Section 9 of the A&C Act has the same power as that of a civil court during pendency of the suit.”
16. In Adhunik Steels Ltd. v. Orissa Manganese & Minerals (P) Ltd.: (2007) 7 SCC 125 , the Supreme Court had observed as under:
“8. There was considerable debate before us on the scope of Section 9 of the Act. According to learned counsel for Adhunik Steels, Section 9 of the Act stood independent of Section 94 and Order 39 of the Code of Civil Procedure and the exercise of power thereunder was also not trammelled by anything contained in the Specific Relief Act. Learned counsel contended that by way of an interim measure, the court could pass an order for the preservation or custody of the subject-matter of the arbitration agreement irrespective of whether the order that may be passed was in a mandatory form or was in a prohibitory form. The subject-matter of arbitration in the present case was the continued right of Adhunik Steels to mine and lift the ore to the surface on behalf of OMM Private Limited and until the arbitrator decided on whether OMM Private Limited was entitled to breach the agreement or terminate the agreement and what would be its consequences, the court had not only the power but the duty to protect the right of Adhunik Steels conferred by the contract when approached under Section 9 of the Act. Learned counsel emphasised that what was liable to be protected in an appropriate case was the subject-matter of the arbitration agreement. Learned counsel referred to The Law
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and Practice of Commercial Arbitration in England by Mustill and Boyd and relied on the following passage therefrom:
“(b) Safeguarding the subject-matter of the dispute
The existence of a dispute may put at risk the property which forms the subject of the reference, or the rights of a party in respect of that property. Thus, the dispute may prevent perishable goods from being put to their intended use, or may impede the proper exploitation of a profit-earning article, such as a ship. If the disposition of the property has to wait until after the award has resolved the dispute, unnecessary hardship may be caused to the parties. Again, there may be a risk that if the property is left in the custody or control of one of the parties, pending the hearing, he may abuse his position in such a way that even if the other party ultimately succeeds in the arbitration, he will not obtain the full benefit of the award. In cases such as this, the court (and in some instances the arbitrator) has power to intervene, for the purpose of maintaining the status quo until the award is made. The remedies available under the Act are as follows:
(i) The grant of an interlocutory injunction.
(ii) The appointment of a receiver.
(iii) The making of an order for the preservation, custody or sale of the property.
(iv) The securing of the amount in dispute.”
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and convenient” while speaking of passing any interim measure of protection. The concluding words of the section, “and the court shall have the same power for making orders as it has for the purpose and in relation to any proceedings before it” also suggest that the normal rules that govern the court in the grant of interim orders is not sought to be jettisoned by the provision. Moreover, when a party is given a right to approach an ordinary court of the country without providing a special procedure or a special set of rules in that behalf, the ordinary rules followed by that court would govern the exercise of power conferred by the Act. On that basis also, it is not possible to keep out the concept of balance of convenience, prima facie case, irreparable injury and the concept of just and convenient while passing interim measures under Section 9 of the Act.
“[T]here is plainly a tension here. On the one hand the concept of arbitration as a consensual process, reinforced by the ideal of transnationalism leans always against the involvement of the mechanisms of State through the medium of a municipal court. On the other side there is the plain fact, palatable or not, that it is only a court possessing coercive powers which can rescue the arbitration if it is in danger of foundering,…” *** *** ***
15. The question was considered in Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd. [1993 AC 334 : (1993) 2 WLR 262 : (1993) 1 All ER 664 (HL)]. The trial Judge in that case took the view that he had the power to grant an interim mandatory injunction directing the continuance of the working of the contract pending the arbitration. The Court of Appeal thought
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that it was an appropriate case for an injunction but that it had no power to grant injunction because of the arbitration. In further appeal, the House of Lords held that it did have the power to grant injunction but on facts thought it inappropriate to grant one. In formulating its view, the House of Lords highlighted the problem to which an application for interim relief like the one made in that case may give rise. The House of Lords stated at AC p. 367 : (All ER p. 690g-h)
“It is true that mandatory interlocutory relief may be granted even where it substantially overlaps the final relief claimed in the action; and I also accept that it is possible for the court at the pre-trial stage of a dispute arising under a construction contract to order the defendant to continue with a performance of the works. But the court should approach the making of such an order with the utmost caution, and should be prepared to act only when the balance of advantage plainly favours the grant of relief. In the combination of circumstances which we find in the present case I would have hesitated long before proposing that such an order should be made, even if the action had been destined to remain in the High Court.”
“A right to obtain an interlocutory injunction is not a cause of action. It cannot stand on its own. It is dependant on there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened, by him of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the court. The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action. It is granted to preserve the status quo pending the ascertainment by the court of the rights of the parties and the grant to the plaintiff of the relief to which his cause of action entitles him, which may or may not include a final injunction.”
He concluded : (All ER p. 825a-b)
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“To come within the sub-paragraph the injunction sought in the action must be part of the substantive relief to which the plaintiff's cause of action entitles him; and the thing that it is sought to restrain the foreign defendant from doing in England must amount to an invasion of some legal or equitable right belonging to the plaintiff in this country and enforceable here by the final judgment for an injunction.”
[emphasis added]
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prejudice the appellant from advancing such contentions as advised before the Arbitral tribunal nor preclude the Arbitral Tribunal from making such award as it considers fit, in accordance with law.
VIBHU BAKHRU, J
TEJAS KARIA, J
MARCH 06, 2025 ‘gsr’ Click here to check corrigendum, if any
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2 issues framed by the court
Whether a court under Section 9 of the A&C Act can grant relief with trappings of finality, namely mandatory removal of a cellular tower after expiry of a licence.
Whether arrears of licence fee for nine years could be directed to be deposited under Section 9 as security despite the claim being belated.
Colour shows how this judgement treated each authority
Ajay Singh v. Kal Airways Private Ltd. & Ors.Relied on¶14
Neutral Citation No.: 2017:DHC:3208DB
National Highways Authority of India v. Punjab National BankFollowed¶15
2017 SCC OnLine Del 11312 · Who else cites this
Adhunik Steels Ltd. v. Orissa Manganese & Minerals (P) Ltd.Relied on¶16
(2007) 7 SCC 125 · Who else cites this
3 provisions across 2 enactments
M/S GTL Infrastructure Ltd.
S.C Wadhwa and Sons (HUF)
Vibhu Bakhru
Tejas Karia
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
