Discretionary interim relief and licence fee adjustment upheld where no arbitrariness or unjust interference was shown.

Appellate interference with an interim order under section 9 of the Arbitration and Conciliation Act is warranted only where the discretion is arbitrary or wholly unjust. The Delhi High Court held that a licence clause aimed at ensuring continuity of service was enabling, not mandatory, and did not require asset takeover and compensation in every case. It also upheld adjustment of the deposited amount across all licences because the appellant had treated it as relatable to all licences. The discrimination and hardship objections failed because the appellant had accepted the migration package and the dues arose from its own default. The interim conditions were therefore sustained.

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Issues: Whether the conditions imposed while granting interim protection under section 9 of the Arbitration and Conciliation Act, 1996, including payment of outstanding licence fee, adjustment of the amount of Rs. 100 crores, and the alleged discrimination and hardship pleaded by the appellant, were unjustified or arbitrary so as to warrant interference in appeal.

Analysis: The appeal challenged the interim arrangement by which the appellant was required to clear the principal licence fee due up to 31 May 2002 and to pay an increased interim amount thereafter, with the excess to be adjusted against interest and liquidated damages. The Court found no merit in the contention that clause 15.3 of the licence agreement compelled the authority in every case to take over assets and pay compensation, holding that the clause was only enabling and not exhaustive, and that continuity of service was already secured through other licensees. It also held that the respondent was justified in adjusting the Rs. 100 crores against dues across all licences, since the appellant itself had treated the amount as relatable to all licences. The plea of discrimination under the migration package was rejected, as the appellant had accepted the package and was bound by it. The Court further held that the hardship alleged by the appellant did not justify interference because the default and accumulation of dues were attributable to the appellant, and appellate interference with a discretionary interim order is not warranted unless the discretion is shown to be wholly unjust or arbitrary.

Conclusion: The conditions imposed by the learned Single Judge were upheld and the appeal failed.

Ratio Decidendi: Appellate interference with a discretionary interim order is justified only where the discretion is shown to be arbitrary or wholly unjust, and a contractual clause framed to ensure continuity of service will not be read as mandating asset takeover and compensation in every case unless its language clearly so requires.

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