TaxTMI 
TaxTMI 
2026 (8) TMI 146
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....td., 2013 SCC OnLine Bom 481), Delhi High Court (Nussli Switzerland Ltd. vs. Organizing Committee Commonwealth Games, 2010, 2014 SCC OnLine Del 4834 as well as National Highways Authority of India vs. Punjab National Bank and Anr., 2023 SCC OnLine Del 4810), Madras High Court (A. Chidambaram vs. S. Rajagopal and Ors., OA No. 843 of 2024) and Karnataka High Court (Smt. Padma Mahadev & Ors. vs. M/s. Sierra Constructions Private Limited, COMAP No. 2 of 2021, dated 22nd March 2021) have held that a party unsuccessful in arbitral proceedings cannot maintain a petition under Section 9 of the Act, Telangana High Court [M/s Saptarishi Hotels Pvt. Ltd & Anr. vs. National Institute of Tourism & Hospitality Management (NITHM), 2019 SCC OnLine TS 1765], Gujarat High Court [GAIL (India) Ltd. vs. Latin Rasayani Pvt. Ltd., 2014 SCC OnLine Guj 14836] and Punjab & Haryana High Court [M/s DLF Home Developers Ltd. vs. M/s Orris Infrastructure Pvt. Ltd. & Ors., FAO-CARB-51-2024 (O&M), dated 21st February, 2025] have taken a contrary view and held that a party unsuccessful in arbitral proceedings can maintain a petition under Section 9 of the Act. ARGUMENTS ON BEHALF OF MR. K.M. NATARAJ, ASG AND MR.....
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.... vs. ISG Novasoft Technologies Limited, 2025 SCC OnLine SC 986 has recently held that modification of an award is permissible in limited circumstances by sustaining it in relation to severable parts and setting aside the remainder. Therefore, according to them, the fundamental premise of Dirk India (supra) that the Court can only uphold or set aside an award stands vitiated. 9. They emphasised that once the Court, exercising jurisdiction under Section 34 of the Act, can modify an award, a party whose claim was rejected in arbitration cannot be left remediless during the pendency of the petition under Section 34 of the Act. 10. They also relied upon the judgments of the Gujarat High Court in GAIL (supra) and the Telangana High Court in M/s Saptarishi Hotels Pvt. Ltd. & Anr. (supra), which hold that interim measures are available to all parties who demonstrate a bona fide apprehension of injury or dissipation of the subject matter pending Section 34 proceedings. 11. They repeatedly stated that Section 9 of the Act uses the expression 'party' which is defined in Section 2(h) of the Act. They relied upon the decision of this Court in Firm Ashok Traders and Anr. vs. Gurumukh Da....
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....nsuccessful party under Section 9 of the Act was merely the continuation of confidentiality of certain documents during the pendency of its Section 34 application. Nevertheless, the Bombay High Court, relying upon Dirk India (supra), dismissed the application, despite the fact that the relief sought did not in any manner prejudice or impede the rights of the successful party in respect of the subject matter of the dispute. PER CONTRA, ARGUMENTS ON BEHALF OF DR. MENAKA GURUSWAMY 15. Per contra, Dr. Menaka Guruswamy, learned senior counsel, contended that arbitral process is a consensual mechanism of dispute resolution, culminating in a final and binding arbitral award, which is subject only to the limited grounds of challenge envisaged under Section 34 of the Act. She submitted that although Section 9 of the Act empowers the Court to grant interim measures at three distinct stages, yet the said provision cannot be construed so as to dilute or undermine the finality attaching to an arbitral award. 16. According to her, prior to the conclusion of arbitral proceedings, the parties stand on an equal footing and may independently seek to establish a prima facie case for interim ....
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....ed to safeguard the fruit of the proceedings until the eventual enforcement of the award. Here again the measure of protection is a step in aid of enforcement. It is intended to ensure that enforcement of the award results in a realisable claim and that the award is not rendered illusory by dealings that would put the subject of the award beyond the pale of enforcement." 37. This being the legislative intent, the observation in Nalco [National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd., (2004) 1 SCC 540] that once a Section 34 application is filed, "there is no discretion left with the Court to pass any interlocutory order in regard to the said award..." flies in the face of the opening words of Section 9 of the Arbitration Act, 1996, extracted above." 19. She also relied upon the judgment of the Madras High Court in A. Chidambaram (supra), wherein it has been held that interim relief under Section 9 of the Act cannot be sought by an unsuccessful party, which would include a claimant whose claims in arbitral proceedings have been dismissed simpliciter. 20. She submitted that once an award has been rendered, the only remedy available to the losing party i....
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.... scheme within which it operates. In this regard, she relied upon the judgment of the Delhi High Court in Nussli Switzerland Ltd. (supra), wherein, relying on State of West Bengal v. Union of India, AIR 1963 SC 1241, the Court interpreted the expression "party" under Section 9 in the following terms: "18. A plain textual reading of the above indicates that at any stage of the proceedings, before, during or after the making of the arbitral award (but before it is executed) a party to an arbitration agreement may approach the Court seeking interim measures. The word 'but' can either be a conjunction or a proposition or a noun or an adverb. In the textual setting in which the word 'but' finds itself in the section, it is obviously not used as a noun or an adverb. Whether the word 'but' is read as a conjunction or proposition would make no difference because if read as a conjunction, the section would read : 'A party may, before or during arbitral proceedings or at any time after the making of the arbitral award and not before it is enforced' and if read as a proposition, the section would read : A party may, before or during arbitral proceedings or at any time after the makin....
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....is bound to construe them in their natural, ordinary, and grammatical sense, giving effect to the legislative intent without resort to any interpretative embellishment [In R.S. Nayak v. A.R. Antulay, AIR 1984 SC 684, the Supreme Court held, "Where the language of a statute is clear and unambiguous, the Court has to give effect to the plain meaning of the words used therein; it is not for the Court to add or subtract words." Further, in Grasim Industries Ltd. v. Collector of Customs, Bombay, (2002) 4 SCC 297, the Supreme Court held, "The intention of the legislature is primarily to be gathered from the language used. When the language is plain and unambiguous, it is not open to add words to a statute on the basis of presumed intention."]. In R. v. Oakes, [1959] 2 Q.B. 350, Lord Parker C.J. said, "Where the literal reading of a statute... produces an intelligible result... there is no ground for reading in words or changing words according to what may be the supposed intention of Parliament." 29. Section 9 of the Act commences with the expression 'a party', which, by virtue of Section 2(h) of the Act, is defined as 'a party to an arbitration agreement'. Neither Section 2(h) nor Se....
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.... ENSURE THAT PARTIES HAVE THE RIGHT TO APPROACH THE COURT FOR INTERIM MEASURES TILL THE JUDICIAL PROCESS HAS REACHED ITS CULMINATION. 34. Additionally, Section 9 of the Act expressly permits any party to an arbitration agreement to approach the Court for interim measures at three distinct stages: (i) prior to the commencement of arbitration, (ii) during the pendency of arbitral proceedings, and (iii) after the award has been rendered but before it is enforced in accordance with Section 36 of the Act. 35. On its plain language, the provision does not distinguish between a successful or unsuccessful party. It does not expressly bar a party whose claims have been rejected by the arbitral tribunal from seeking interim reliefs after the award is rendered. A literal interpretation of Section 9 of the Act would indicate that the right to seek interim relief is available to any party to the arbitration before or during arbitral proceedings or at any time after the award is delivered but before it is enforced in accordance with Section 36 of the Act. 36. Indeed, while construing Section 9 of the Act in Sundaram Finance Ltd. vs. NEPC India Ltd., (1999) 2 SCC 479, this Court categori....
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....ntroduces a limitation unsupported by the language of Section 9 of the Act. If the legislature, while consciously deviating from the UNCITRAL Model Law, intended to impose such a restriction, it would have done so expressly. 41. Consequently, this Court is of the considered view that the object and purpose of Section 9 of the Act is to ensure that parties retain the right to approach the Court for interim measures until the judicial process has reached its culmination. SECTIONS 34 AS WELL AS 36(2) AND SECTION 9 OPERATE IN DISTINCT SPHERES 42. The mere availability of recourse under Section 34 of the Act or of a stay under Section 36(2) of the Act cannot operate as a bar to seeking protection under Section 9. 43. Sections 34 as well as 36 provide remedies against an award or a stay thereof, whereas Section 9 ensures protection of the subject matter or the amount in dispute. An unsuccessful party cannot secure protection of its claim under Section 34 or Section 36. To deny interim relief under Section 9 would leave such a party remediless. In fact, if the Court declines to entertain an application of a losing party for interim relief, there would be no forum available for....
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....unt in dispute, the Court in Dirk India, Nussli Switzerland Ltd., Padma Mahadev and A. Chidambaram (supra) could not have restricted its ambit to securing an enforceable claim of the successful party. Such a restrictive interpretation is impermissible when the language of the provision is plain and categorical. 48. It is noteworthy that under Section 18 of the Arbitration Act, 1940, the grant of interim measures was expressly confined to the successful party and directed solely towards ensuring enforcement of the award. In contrast, under the Act, the Legislature, in its wisdom, has imposed no such restriction or qualification upon the Court under Section 9 of the Act. Consequently, the legislative intent is manifest. EVEN IF PURPOSIVE INTERPRETATION IS APPLIED, THE EXPRESSION 'A PARTY' MEANS ANY PARTY TO THE ARBITRATION AGREEMENT 49. Even applying the test of purposive interpretation, 'a party' must mean any party to the arbitration agreement. This Court can envisage situations where a party that has lost in arbitration may nonetheless require interim protection. For instance, where an arbitral award has been rendered without proper notice to a party, or where a party is ....
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....portion of the award'. JUDGMENT IN HINDUSTAN CONSTRUCTIONS COMPANY LTD. AND ANR. (SUPRA) IS NOT BINDING PRECEDENT ON PRESENT ISSUE 53. This Court in Hindustan Constructions Company Ltd. and Anr. (supra), while rejecting the argument that an award when challenged under Section 34 of the Act becomes unexecutable merely by virtue of such challenge being made, has quoted the judgment by the Bombay High Court in Dirk India (supra). Accordingly, this Court in Hindustan Constructions Company Ltd. and Anr. (supra) did not consider whether an unsuccessful party may seek Section 9 relief post-award. It is settled law that observations of Courts must be read in the context in which they appear and not as provisions of a Statute. [Escorts Ltd. Vs. Commissioner of Central Excise, Delhi-II, (2004) 8 SCC 335] 54. Consequently, a decision which does not proceed on consideration of an issue cannot be deemed to be law declared to have a binding effect as contemplated by Article 141 of the Constitution [MCD Vs. Gurnam Kaur (1989) 1 SCC 101 & State of U.P. Vs. Synthetics & Chemicals Ltd., (1991) 4 SCC 139]. COURTS INTERPRET THE LAW, BUT THEY DO NOT ALTER IT 55. It is equally well settle....
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....evel would constitute a breach of the doctrine of separation of powers. As Craies on Statute Law (Seventh Edition) cautions, "It is not, however, competent to a judge to modify the language of an Act of Parliament in order to bring it into accordance with his own views as to what is right or reasonable. Boni judicis est dicere, non jus dare. "No doubt", said Willes J., In Abel v. Lee (1871) L.R. 6 C.P. 365, 371 "the general rule is that the language of an Act is to be read according to its ordinary grammatical construction unless so reading it would entail some absurdity, repugnancy, or injustice...But I utterly repudiate the notion that it is competent to a judge to modify the language of an Act in order to bring it in accordance with his views of what is right or reasonable." Even this Court in DLF Qutab Enclave Complex Educational Charitable Trust vs. State of Haryana and Ors., (2003) 5 SCC 622 has similarly held, "Basic rule of interpretation of statute is that the Court shall not go beyond the statute unless it is absolutely necessary so to do". 57. The test of whether the plain meaning of words leads to repugnancy, injustice, or absurdity is of a very high threshold and ma....