ARB. A. (COMM.) 71/2025 Page 1 of 34

$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment reserved on: 11.02.2026

Judgment pronounced on: 26.02.2026

+ ARB. A. (COMM.) 71/2025 & I.A. 32778/2025 (Stay)

KHURANA EDUCATIONAL SOCIETY (REGD.)

.....Petitioner

Through: Ms. Diya Kapur, Senior

Advocate along with Mr.

Mayank Bhargava, Ms. Aarushi

Singh, Mr. Parth Khurana, Mr.

Rajdeep Saraf, Mr. Aditya

Ladha and Mr. Naibedya Dash,

Advocates.

versus

SMT. SHASHI BALA .....Respondent

Through: Ms. Shriya Maini, Mr. Rajive

Maini, Mr. Neeshu

Chandpuriya and Mr. Yash

Gupta, Advocates.

CORAM:

HON'BLE MR. JUSTICE HARISH VAIDYANATHAN

SHANKAR

J U D G M E N T

HARISH VAIDYANATHAN SHANKAR, J.

1. The present Appeal under Section 37(2)(b) of the Arbitration

and Conciliation Act, 1996

1

has been preferred by the Appellant-

Society assailing the Order dated 16.09.2025

2

passed by the learned

Sole Arbitrator in arbitral proceedings titled ―Smt. Shashi Bala v.

Khurana Educational Society (Regd.)‖, whereby certain interim

1

A&C Act

2

Impugned Order

ARB. A. (COMM.) 71/2025 Page 2 of 34

measures under Section 17 of the A&C Act came to be granted in

favour of the Respondent-Claimant, including directions for deposit of

usage charges and ancillary protective reliefs.

BRIEF FACTS:

2. Shorn of unnecessary details, the facts germane to the

institution of the present Appeal are as follows:

I. The Respondent-Claimant asserts ownership over land bearing

Khasra No. 13/7 admeasuring approximately 4840 sq. yds.

situated in Village Goyla Khurd, New Delhi

3

, on the basis of

a registered sale deed executed in her favour. It is averred that a

registered lease deed dated 02.05.2000 came to be executed

between the parties whereby the Subject Property was let out to

the Appellant-Society at a monthly rent of ₹1,000/-, the

property being utilized by the Appellant for purposes connected

with the functioning of the educational institution run by it.

II. Subsequently, disputes arose inter se the parties concerning the

validity of termination of the lease, the nature of possession of

the Appellant after issuance of Termination Notice dated

09.04.2018, and the entitlement of the Respondent to damages

or mesne profits for continued occupation of the Subject

Property.

III. The Respondent thereafter instituted a commercial suit before

this Court, being CS(COMM) 10/2023, seeking possession and

other allied reliefs. By Order dated 14.09.2023, the said suit

was referred to arbitration pursuant to an application filed by

the Appellant herein under Section 8 of the A&C Act, read with

3

Subject Property

ARB. A. (COMM.) 71/2025 Page 3 of 34

Order VII Rule 11 and Section 151 of the Code of Civil

Procedure, 1908

4

. Consequent thereto, the learned Arbitrator

entered upon reference.

IV. During the arbitral proceedings, the Respondent filed an

Application under Section 17 of the A&C Act seeking interim

measures, inter alia, for payment of usage charges/mesne

profits, permission for inspection of the Subject Property, and

restraint against the creation of third-party rights.

V. The Appellant contested the said Section 17 Application by

placing reliance upon its Statement of Defence, disputing the

Respondent‘s entitlement to ownership and asserting rights

arising out of alleged family arrangements, subrogation

pursuant to proceedings before the Debt Recovery Tribunal, and

the alleged invalidity of the termination notice.

VI. Upon consideration of the rival pleadings and material placed

on record, the learned Arbitrator, by the Impugned Order,

directed the Appellant to deposit usage charges at the rate of

₹3,00,000/- per month with effect from 15.10.2018 during the

pendency of the arbitral proceedings, with the amount to be

secured in a joint interest-bearing arrangement, and further

permitted monthly inspection of the Subject Property upon

notice while restraining the creation of any third-party interests

therein. The learned Arbitrator clarified that the issues relating

to title, validity of termination, and final determination of mesne

profits would be adjudicated upon evidence at the appropriate

stage of the arbitral proceedings.

4

CPC

ARB. A. (COMM.) 71/2025 Page 4 of 34

3. Aggrieved by the aforesaid directions, the Appellant has

preferred the present Appeal under Section 37(2)(b) of the A&C Act,

contending that the Impugned Order travels beyond the permissible

contours of interim relief, virtually grants final relief without trial, and

fixes occupation charges arbitrarily without an evidentiary basis; it is

in these circumstances that the legality and propriety of the interim

measures granted by the learned Arbitrator fall for consideration

before this Court.

CONTENTIONS ON BEH ALF OF THE APPELLANT:

4. Learned senior counsel appearing for the Appellant would

contend that the Impugned Order, though styled as an interim measure

under Section 17 of the A&C Act, in substance amounts to a final

adjudication of the principal disputes between the parties. It would be

urged that questions relating to the validity of termination of the lease

deed dated 02.05.2000, the alleged unauthorized possession of the

Appellant, and the determination of mesne profits are issues which are

intrinsically triable and require adjudication upon evidence; however,

the learned Arbitrator has prematurely fixed a substantial monthly

liability, thereby pre-empting the final outcome of the arbitral

proceedings.

5. It would further be contended that the learned Arbitrator failed

to appreciate the Appellant‘s case arising out of the family settlement

and the proceedings before the learned Debt Recovery Tribunal.

According to the Appellant, Group ‗B‘ members had redeemed the

mortgage in favour of Punjab National Bank by making payment of

₹1,01,00,000/- and stood subrogated to the rights of the mortgagee

under Sections 91 and 92 of the Transfer of Property Act, 1882. In the

ARB. A. (COMM.) 71/2025 Page 5 of 34

absence of any challenge to such subrogation or any claim for

redemption by the Respondent, it would be argued that the

Respondent could not assert exclusive proprietary rights over the

Subject Property solely on the basis of the lease deed, and the learned

Arbitrator erred in proceeding on a contrary prima facie premise.

6. Learned senior counsel for the Appellant would also contend

that, even assuming that some interim arrangement was warranted, the

learned Arbitrator could at best have directed the deposit of the last

admitted rent or an amount analogous to relief under Order XXXIX

Rule 10 of the CPC. Instead, the learned Arbitrator proceeded to

determine an alleged market rental value of ₹3,00,000/- per month

without any trial, expert assessment, cross-examination, or

opportunity to lead evidence, and in the absence of any admission

regarding valid termination or unauthorized occupation.

7. It would further be urged that the reliance placed by the learned

Arbitrator on lease deeds of the years 2021 and 2025 for determining

usage charges retrospectively from October 2018 is wholly

misconceived and arbitrary. According to the Appellant, such reliance

disregards the substantial temporal gap and fluctuations in rental

values over the years. It would be submitted that the exemplars relied

upon were neither comparable in nature nor subjected to evidentiary

scrutiny, and that other lease instances reflecting significantly lower

rentals were ignored.

8. Learned senior counsel would additionally contend that the

Impugned Order fails to record any cogent finding with respect to the

settled principles governing the grant of interim relief, namely the

existence of a prima facie case, balance of convenience, and

ARB. A. (COMM.) 71/2025 Page 6 of 34

irreparable injury. The direction to deposit substantial sums with

retrospective effect from 15.10.2018 is stated to be an arbitrary

exercise of jurisdiction, causing grave financial prejudice to the

Appellant, which is a non-profit educational society engaged in

imparting education.

9. It would also be argued that the learned Arbitrator has

overlooked that the disputes regarding ownership, family settlement,

and alleged subrogation are fundamental issues going to the root of

the Respondent‘s entitlement, and until such issues are finally

adjudicated, fixation of market-based usage charges is legally

unsustainable. The Appellant would thus submit that the Impugned

Order travels beyond the permissible contours of interim jurisdiction

under Section 17 of the A&C Act and warrants interference under

Section 37 by this Court.

CONTENTIONS ON BEHALF OF THE RESPONDENT :

10. Per contra, learned counsel appearing for the Respondent

would contend that the present Appeal is devoid of merit and is

nothing but an attempt to re-agitate disputed questions of fact under

the guise of appellate scrutiny under Section 37 of the A&C Act. It

would be submitted that the learned Arbitrator has exercised

jurisdiction within the four corners of Section 17 of the A&C Act and

has granted a balanced and protective interim arrangement without

adjudicating upon the final rights of the parties.

11. Learned counsel would contend that the Respondent is the

lawful owner of the Subject Property by virtue of a registered sale

deed and that the existence of the lease deed dated 02.05.2000, as well

as the service of termination notice dated 09.04.2018, are not in

ARB. A. (COMM.) 71/2025 Page 7 of 34

dispute. Despite the termination of the lease, the Appellant has

continued to occupy and utilise the land for its institutional purposes

without paying any reasonable usage charges, thereby causing

continuing financial prejudice to the Respondent. It would be urged

that the balance of convenience squarely lies in favour of the

Respondent, as continued deprivation of possession without adequate

compensation cannot be countenanced during the pendency of the

arbitral proceedings.

12. It would further be contended that the Appellant‘s reliance upon

alleged family settlement, subrogation, or proceedings before the Debt

Recovery Tribunal pertains to disputed questions of title which are yet

to be adjudicated upon evidence in arbitration. The learned Arbitrator

has consciously refrained from finally deciding such issues and has

only fashioned an interim arrangement to protect the subject matter of

the dispute; therefore, the Appellant cannot seek interference under

Section 37 of the A&C Act by inviting this Court to undertake a re-

appreciation of those contentious issues.

13. Learned counsel for the Respondent would also contend that the

fixation of interim usage charges at ₹3,00,000/- per month is neither

arbitrary nor excessive, particularly when the Respondent had claimed

higher amounts and had placed on record registered lease deeds of

comparable properties in the same vicinity. It would be urged that the

learned Arbitrator, after considering the surrounding circumstances

and the interim nature of the proceedings, consciously reduced the

amount claimed and directed that the sums be secured in a joint

interest-bearing arrangement, thereby safeguarding the interests of

both parties.

ARB. A. (COMM.) 71/2025 Page 8 of 34

14. It would further be submitted that the Appellant cannot avoid its

liability to pay reasonable occupation charges merely by disputing the

landlord-tenant relationship or by raising pleas of financial hardship.

It would be contended that a person continuing in possession after

termination of tenancy cannot claim equitable indulgence while

enjoying the property without payment of fair compensation. The

Respondent would also submit that the nature of the Appellant as an

educational institution does not absolve it of contractual or equitable

obligations arising from continued use of another‘s property.

15. Learned counsel would finally contend that the Impugned Order

reflects due consideration of the material on record and strikes a

balance between the competing claims by securing the amount rather

than directing immediate payment to the Respondent. The directions

permitting inspection of the Subject Property and restraining creation

of third-party interests are stated to be standard protective measures

intended to preserve the property during the pendency of arbitration. It

would thus be urged that no case for interference within the limited

scope of Section 37 of the A&C Act is made out and the present

Appeal deserves to be dismissed.

ANALYSIS:

16. This Court has heard learned counsel for the parties at

considerable length and, with their assistance, carefully perused the

record of the present Appeal, including the pleadings and the

Impugned Order passed by the learned Arbitrator.

17. This Court considers it apposite, at the outset, to delineate the

scope and ambit of appellate jurisdiction under Section 37 of the A&C

Act, particularly in the context of interference with interlocutory

ARB. A. (COMM.) 71/2025 Page 9 of 34

orders rendered by an Arbitral Tribunal under Section 17 of the A&C

Act. The contours of such jurisdiction are necessarily circumscribed,

for the legislative scheme underlying the A&C Act evinces a clear

intent to accord primacy to the autonomy of the arbitral process and to

minimise judicial intervention, save in narrowly tailored situations

expressly contemplated by statute.

18. A plain reading of Section 37 of the A&C Act reveals that the

provision merely enumerates the categories of orders that are

amenable to appellate scrutiny; it does not, in express terms, define

the breadth or intensity of such scrutiny. Equally, the statute is

conspicuously silent as to the parameters governing the Court‘s

exercise of appellate power while examining an order passed by the

Arbitral Tribunal under Section 17 of the A&C Act. This legislative

silence is neither accidental nor inconsequential; rather, it signifies

that the appellate jurisdiction is intended to be supervisory and

corrective in nature, and not an avenue for rehearing the matter on

merits or substituting the discretionary determination of the Arbitral

Tribunal with that of the Court. For the sake of completeness, Section

37 of the A&C Act is reproduced hereunder:

―Section 37. Appealable orders. — (1) Notwithstanding anything

contained in any other law for the time being in force, an appeal

shall lie from the following orders (and from no others) to the

Court authorised by law to hear appeals from original decrees of

the Court passing the order, namely:—

[(a) refusing to refer the parties to arbitration under section 8;

(b) granting or refusing to grant any measure under section 9;

(c) setting aside or refusing to set aside an arbitral award under

section 34].

(2) Appeal shall also lie to a court from an order of the arbitral

tribunal—

(a) accepting the plea referred to in sub-section (2) or subsection

(3) of section 16; or

(b) granting or refusing to grant an interim measure under section

17.

ARB. A. (COMM.) 71/2025 Page 10 of 34

(3) No second appeal shall lie from an order passed in appeal under

this section, but nothing in this section shall affect or take away

any right to appeal to the Supreme Court.‖

(emphasis supplied)

19. At this juncture, this Court finds it apposite to delineate the

contours and ambit of the jurisdiction exercisable under Section 37 of

the A&C Act, as expounded by this Court in Indo Spirits v. Pernod

Ricard India Pvt Ltd and Ors

5

, which reads as follows:

―16. At the outset, this Court notes that it is fully conscious of the

limited scope of appellate jurisdiction under Section 37(2)(b) of the

A&C Act. The legislative intent underlying Section 5 of the A&C

Act mandates minimal judicial interference in arbitral proceedings.

17. A Coordinate Bench of this Court in NHAI v. HK Toll Road

(P) Ltd. has reiterated that an appellate court does not ordinarily

interfere with discretionary orders passed by an Arbitral Tribunal.

Interference is justified only where such discretion has been

exercised arbitrarily, perversely, or in disregard of settled

principles governing the grant or refusal of interim relief. The

appellate court is not expected to substitute its own view merely

because another view is possible; rather, it must confine itself to

examining whether the Arbitral Tribunal adhered to settled legal

principles. The relevant portion of the said judgment reads as

follows:

―56. A perusal of the aforesaid judgments show that the

appellate court while exercising powers/jurisdiction under

Section 37 of the 1996 Act and more particularly under

Section 37(2)(b) of the 1996 Act has to keep in mind the

limited scope of judicial interference as prescribed under

Section 5 of the 1996 Act. Section 5 of the 1996 Act

clearly reflects the legislative intent to minmize judicial

interference in the arbitration process. Unlike the appeals

under other statutes, the appeals under the 1996 Act

against the orders passed by the Arbitral Tribunal are

subject to strict and narrow grounds. The 1996 Act aims at

minimal court involvement, thereby to uphold the

autonomy and efficiency of the arbitration process.

(Reference: paras 64, 66, 68-70 of Dinesh Gupta case

13

).

57. The appellate court is not required to substitute its

views with the view taken by the Arbitral Tribunal which

is a reasonable or a plausible view except where the

discretion is exercised arbitrarily or where the AT has

ignored the settled principles of law. In fact, the whole

5

2026:DHC:1413

ARB. A. (COMM.) 71/2025 Page 11 of 34

purpose to bring the 1996 Act is to give supremacy to the

discretion exercised by the AT. The appellate court is not

required to interfere in the arbitral orders especially a

decision taken is at an interlocutory stage. The appellate

court is only required to see the whether the AT has

adhered to the settled principles of law rather than

reassessing the merits of the AT's reasoning.

58. A coordinate Bench of this Court in Tahal Consulting

Engineers India (P) Ltd. [2023 SCC OnLine Del 2069]

case has observed as under: (SCC OnLine Del paras 36

and 38)

―36. L & T Finance lays emphasis on the need

of the appellate court to bear in mind the basic

and foundational principles of the Act and that

being of judicial intervention being kept at the

minimal. It also correctly finds that the power

conferred by Section 37(2)(b) is not to be

understood as being at par with the appellate

jurisdiction which may otherwise be exercised

by courts in exercise of their ordinary civil

jurisdiction. This clearly flows from the

foundational construct of the Act which

proscribes intervention by courts in the arbitral

process being kept at bay except in situations

clearly contemplated under the Act or where

the orders passed by the Arbitral Tribunal may

be found to suffer from an evident perversity

or patent illegality.

∗∗∗

38. It would thus appear to be well settled that

the powers under Section 37(2)(b) is to be

exercised and wielded with due

circumspection and restraint. An appellate

court would clearly be transgressing its

jurisdiction if it were to interfere with a

discretionary order made by the Arbitral

Tribunal merely on the ground of another

possible view being tenable or upon a

wholesome review of the facts the appellate

court substituting its own independent opinion

in place of the one expressed by the Arbitral

Tribunal. The order of the Arbitral Tribunal

would thus be liable to be tested on the limited

grounds of perversity, arbitrariness and a

manifest illegality only.‖

59. To sum up, it is clear that in view of the limited

judicial interference, the appellate court has to exercise its

power only if the arbitral order suffers from perversity,

ARB. A. (COMM.) 71/2025 Page 12 of 34

arbitrariness and a manifest illegality.‖

18. A similar exposition of law is found in World Window

Infrastructure (P) Ltd. v. Central Warehousing Corpn, wherein it

has been held that the scope of interference under Section 37 of the

A&C Act against orders passed under Section 17 is extremely

limited. The Co-ordinate Bench emphasized that Interlocutory

Orders of an Arbitral Tribunal are inherently tentative and

protective in nature, subject to modification at the stage of final

award. Judicial restraint operates with even greater vigour at the

interlocutory stage, as unwarranted interference may impede the

arbitral process itself. The relevant portion of the said judgment

reads as follows:

―66. The scope of interference, in appeal, against orders

passed by arbitrators on applications under Section 17 of

the 1996 Act is limited. This Court has already opined in

Dinesh Gupta v. Anand Gupta, 2020 SCC OnLine Del

2099, Augmont Gold (P) Ltd. v. One97 Communication

Ltd., (2021) 4 HCC (Del) 642] and Sanjay

Arora v. Rajan Chadha, (2021) 3 HCC (Del) 654, that

the restraints which apply on the court while examining a

challenge to a final award under Section 34 equally apply

to a challenge to an interlocutory order under Section

37(ii)(b). In either case, the court has to be alive to the fact

that, by its very nature, the 1996 Act frowns upon

interference, by courts, with the arbitral process or

decisions taken by the arbitrator. This restraint, if

anything, operates more strictly at an interlocutory stage

than at the final stage, as interference with interlocutory

orders could interference with the arbitral process while it

is ongoing, which may frustrate, or impede, the arbitral

proceedings.

67. Views expressed by arbitrators while deciding

applications under Section 17 are interlocutory views.

They are not final expressions of opinion on the merits of

the case between the parties. They are always subject to

modification or review at the stage of final award. They do

not, therefore, in most cases, irreparably prejudice either

party to the arbitration. Section 17 like Section 9 is

intended to be a protective measure, to preserve the

sanctity of the arbitral process. The pre-eminent

consideration, which should weigh with the arbitrator

while examining a Section 17 application, is the necessity

to preserve the arbitral process and ensure that the parties

before it are placed on an equitable scale. The

interlocutory nature of the order passed under Section 17,

therefore, must necessarily inform the court seized with an

appeal against such a decision, under Section 37.

Additionally, the considerations which apply to Section 34

ARB. A. (COMM.) 71/2025 Page 13 of 34

would also apply to Section 37(ii)(b).‖

(emphasis supplied)

20. To augment the aforesaid position, it is apposite to refer to the

decision of this Co-Ordinate Bench of this Court in Dinesh Gupta and

Others v. Anand Gupta and Others

6

, wherein the scope of appellate

interference under the A&C Act has been succinctly delineated as

follows:

―71. Section 37 is, in a sense, a somewhat peculiar provision as,

against the decision of the arbitrator, it provides for a first appeal,

as well as a second appeal, to the High Court. Sub-section (1)

provides for an appeal, to the High Court, from the decision of the

Section 34 Court, before which the final award has, in the first

instance, been tested. Sub -section (2), on the other hand, provides

for a first appeal, against interlocutory orders of the arbitral

tribunal under Section 16 or Section 17. There is, necessarily, a

qualitative difference between these two challenges, though both

would lie to the High Court. The challenge under Section 37(1),

which is directed against a final award of the arbitrator/arbitral

tribunal, is akin to a second appeal, as was observed by this Court

in M.T.N.L. v. Fujitshu India Pvt. Ltd.. The challenge under

Section 37(2), on the other hand, is directed against the decision of

the arbitral tribunal and has therefore, in my opinion, necessarily to

conform to the discipline enforced by Section 5. It would,

therefore, be improper for a Court to treat an appeal, under Section

37(2) of the 1996 Act, as akin to an appeal under the CPC, or as

understood in ordinary - or extraordinary - civil law. An appeal

against an order by an arbitrator, or by an arbitral tribunal, is an

appeal sui generis, and interference, by the Court, in such appeals,

has to be necessarily cautious and circumspect.

72. This position would stand especially underscored where the

order, under challenge, is discretionary in nature. Orders of

arbitrators, or Arbitral Tribunals, which are amenable to appeal,

under Section 37 (2), have, statutorily, to have been issued either

under Section 16(2) or (3) or under Section 17. Section 16(2) and

16(3), essentially, deal with rulings on the jurisdiction and

authority of the arbitral tribunal, to arbitrate. Any order, passed

under either, or both, of these provisions has, therefore, necessarily

to partake of a purely legal character. Such an order would not,

ordinarily, be discretionary in nature.‖

(emphasis added)

21. Having outlined the limited scope of interference under Section

6

2020 SCC OnLine Del 2099

ARB. A. (COMM.) 71/2025 Page 14 of 34

37(2)(b) of the A&C Act, this Court also deems it apposite to briefly

advert to the nature and ambit of the jurisdiction exercisable by an

Arbitral Tribunal under Section 17 of the A&C Act. The contours of

such power, being interlocutory and equitable in character, warrant

consideration in principle before this Court proceeds to examine the

rival submissions on merits. The law in this regard has been succinctly

enunciated by the Co-Ordinate Bench in Dinesh Gupta and Others

(supra), wherein the scope and ambit of the jurisdiction exercisable

under Section 17 of the A&C Act were examined in detail.

22. The said judgment clarifies that the power of an Arbitral

Tribunal to grant interim measures under Section 17(1) is analogous

and co-extensive with that of a civil court while exercising jurisdiction

under Section 9 of the A&C Act, and consequently the well-

established principles governing grant of interim injunctions,

including those embodied in Order XXXIX of the CPC, would equally

guide the exercise of such power. The relevant observations as made

in Dinesh Gupta and Others (supra) are reproduced hereunder:

―Section 17(1), and applicability of Order XXXIX, CPC, thereto

73. As against this, orders which are appealable under Section

37(2)(b) are orders granting, or refusing to grant, interim measures

under Section 17. Section 17(1), for its part, reads thus:

―17. Interim measures ordered by arbitral tribunal.-

(1) A party may, during the arbitral proceedings, apply to

the arbitral tribunal – (i) for the appointment of a guardian

for minor or person of unsound mind for the purposes of

arbitral proceedings; or

(ii) for an interim measure of protection in respect of any

of the following matters, namely:—

(a) the preservation, interim custody or sale of any

goods which are the subject-matter of the arbitration

agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any

property or thing which is the subject-matter of the

dispute in arbitration, or as to which any question may

ARB. A. (COMM.) 71/2025 Page 15 of 34

arise therein and authorizing for any of the aforesaid

purposes any person to enter upon any land or building

in the possession of any party, authorizing any samples

to be taken, or any observation to be made, or

experiment to be tried, which may be necessary or

expedient for the purpose of obtaining full information

or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may

appear to the arbitral tribunal to be just and convenient,

and the arbitral tribunal shall have the same power for

making orders, as the court has for the purpose of, and in

relation to, any proceedings before it.‖

74. The concluding caveat, in Section 17(1), makes it abundantly

clear that the power of an arbitrator, to grant interim measures,

under Section 17(1), is analogous and equivalent to the power of a

Court, to pass such orders. Section 9 of the 1996 Act grants co-

equal jurisdiction, worded in identical terms, on the Court, to pass

interim orders, concluding with a parallel caveat, to the effect that

―the Court shall have the same power for making orders as it has

for the purpose of, and in relation to, any proceedings before it‖.

75. The scope and ambit of Section 9, especially in the light of this

concluding caveat, was examined by the Supreme Court in Arvind

Constructions Co. (P) Ltd. v. Kalinga Mining Corporation and

Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd..

In Arvind Constructions Co. (P) Ltd.29, it was held thus (in para

15 of the report):

―The argument that the power under Section 9 of the Act

is independent of the Specific Relief Act or that the

restrictions placed by the Specific Relief Act cannot

control the exercise of power under Section 9 of the Act

cannot prima facie be accepted. The reliance placed on

Firm Ashok Traders v. Gurumukh Das Saluja, (2004) 3

SCC 155 in that behalf does not also help much, since this

Court in that case did not answer that question finally but

prima facie felt that the objection based on Section 69(3)

of the Partnership Act may not stand in the way of a party

to an arbitration agreement moving the court under

Section 9 of the Act. The power under Section 9 is

conferred on the District Court. No special procedure is

prescribed by the Act in that behalf. It is also clarified that

the court entertaining an application under Section 9 of the

Act shall have the same power for making orders as it has

for the purpose and in relation to any proceedings before

it. Prima facie, it appears that the general rules that

governed the court while considering the grant of an

interim injunction at the threshold are attracted even while

dealing with an application under Section 9 of the Act.

ARB. A. (COMM.) 71/2025 Page 16 of 34

There is also the principle that when a power is conferred

under a special statute and it is conferred on an ordinary

court of the land, without laying down any special

condition for exercise of that power, the general rules of

procedure of that court would apply. The Act does not

prima facie purport to keep out the provisions of the

Specific Relief Act from consideration. … we may

indicate that we are prima facie inclined to the view that

exercise of power under Section 9 of the Act must be

based on well-recognized principles governing the grant of

interim injunctions and other orders of interim protection

or the appointment of a Receiver.‖

(Emphasis supplied)

76. In Adhunik Steels Ltd., P.K. Balasubramanyan, J. (who had

also authored Arvind Constructions Co. (P) Ltd.), after a somewhat

longer and more detailed discussion, reiterated the position that ―it

would not be correct to say that the power under Section 9 of the

Act is totally independent of the well known principles governing

the grant of interim injunction that generally governed the courts in

this connection‖.

77. The principles governing Order XXXIX of the CPC have,

therefore, also to guide the Court, while granting interim protection

under Section 9(1), or the arbitrator, while granting such protection

under Section 17(1), of the 1996 Act.‖

(emphasis added)

23. The scope of Section 17 of the A&C Act has also been

discussed by the Co-Ordinate Bench of this Court in Indian Railway

Catering & Tourism Corpn. Ltd. v. Sujata Hotel (P) Ltd.

7

, which

reads as under:

―21. The aforesaid provision confers powers akin to those vested

upon the Court by virtue of Section 9 except that in case of the

latter, the Court stands vested with the authority to direct interim

measures being taken before, during or for that matter even after

the Arbitral proceedings have come to a close and culminated in

the making of an award. As would be evident from a reading of

Section 17, the interim measures are concerned with the

preservation of goods which may form the subject matter of

arbitration, securing any amounts which may be in dispute, the

detention, preservation or inspection of property, the appointment

of a receiver and directing such other interim measures of

protection as may appear to the Arbitral Tribunal to be just and

convenient.

7

2022 SCC OnLine Del 4478

ARB. A. (COMM.) 71/2025 Page 17 of 34

22. As would be evident from the decisions on which reliance was

placed by the claimant itself, the power conferred by Section 17

upon the Arbitral Tribunal is essentially akin to the powers vesting

in a court to grant an interim prohibitory or mandatory injunction.

Section 17 in any case cannot be construed as either conferring a

power on the Arbitral Tribunal to either render an interim award or

to grant one of the final reliefs which may be sought by a claimant.

One of the principal considerations which courts and tribunals

weigh in mind while considering the question of grant of interim

protection, is to be wary of passing orders which amount to the

grant of final reliefs that may be claimed by parties. However, and

as would be manifest from the aforesaid recital of facts as well as

the direction which was ultimately framed by the Arbitral Tribunal

in the present case, it is exactly that basic and underlying principle

governing the grant of interim injunction which has been evidently

ignored and violated by the Arbitral Tribunal.‖

(emphasis added)

24. At this stage, before proceeding further, this Court considers it

apposite to extract the relevant portions of the Impugned Order passed

by the learned Arbitrator. The said extracts are reproduced

hereinbelow:

―9. I have heard the Ld. Counsel for both the parties on this

application. Though substantially the claimant counsel had

addressed the arguments on this application but on one occasion,

the authorized representative of the claimant requested for personal

hearings which was granted to him. Since the respondent choose

not to file the reply to this application but desired the tribunal to

treat the statement of defence as a reply to this application

therefore, it has become necessary first to go through the statement

of claim so that the statement of defence and rejoinder can be

appreciated in the light of the statement of claim.

10. Needless to say that what is before me an application U/s 17 of

the Act and therefore I have to focus on this application alone at

this juncture and find out if Interim Relief as claimed by the

claimant can be given or not.

11. It is emphatically urged the Ld. Counsel for the respondent that

the claimant is seeking final relief at the interim stage which

cannot be granted as that will tantamount to deciding the case

finally. It is urged by him that it is settled principle that while

granting the interim injunction, which is in the form of final prayer

should only be granted after adjudication of the dispute and after

appraisal of the evidence and since no evidence has yet been lead

by the parties, and therefore according to the Ld. Counsel for the

respondent the question of granting interim relief which is nothing

ARB. A. (COMM.) 71/2025 Page 18 of 34

but a final relief can-not be granted. In this regard he has referred

to a judgment rendered by Apex Court in "Arvind Construction

Pvt. Ltd. Vs. Kalinga" and also an another judgment "Adhunik Steel

Ltd. Vs. Orissa Manganese & Minerals Pvt.Ltd." where their

lordship where dealing of the Section 9 of the Act held that "It

would not be correct to say that the power U/s 9 of the Act is

totally independent of the well known principles governing the

grants of an interim injunction that generally governed the courts

in this connection". On the other hand the Ld. Counsel for the

claimant urged that the claimant while claiming usage charges and

occupation charges has not claimed the possession of the property

and therefore it cannot said that the interim relief as claimed by the

claimant is of alike nature as claimed in the statement of the claim.

12. As I observed above that the Tribunal will not adjudicate on the

main pleas taken by the claimant and that of the respondent where

the respondent has alleged that the property in question is owned

by the society in terms of settlement deed, which settlement deed

has been empathically denied by the claimant who indeed have

claimed ownership on the basis of registered sale deed executed in

her favour. The claimant counsel also urged that the respondent did

not file any Declaration Suit for cancellation of the registered Sale

Deed executed in favour of the claimant but on the other hand the

respondent's society while moving the different authorities viz.

Income Tax Authorities, Central Board of Secondary Education

and also in its balance sheet after execution of the Lease

Agreement admitted the existence of the Lease Deed and their

liability to pay monthly rent as stipulated in the Lease Deed. It is

also urged by the Ld. Counsel for the claimant, that the

respondent's representatives after making payment to the bank, a

demand notice dated 10.12.2015 was given by the respondent's

representative to the claimant to pay this amount and redeem this

property. What else is urged before me that the respondent's

representative and their family members filed Four Writ Petitions

bearing Writ Petition No.10068/2016, 10069/2016, 10070/2016

and 10072/2016) before the Hon'ble Delhi High Court, where the

respondent's representatives and their wives categorically admitted

that the property in question belonged to the other family members

i.e. the claimant and not to them. They also pleaded that they are

the Bhumidars of the land and other family members were also

Bhumidars. My attention has also been drawn to the family

settlement dated 30.01.2025 executed between Smt. Bimla

Khurana, Saroj Khurana, Nisha Khurana, Santosh Khurana,

Ashwani Kumar Khurana and Tilak Raj Khurana, where they

stated that all the six properties as detailed in the settlement deed

were their personal and self acquired properties which they had

purchased from their own funds, savings and earning and that all

the properties stand mutated in the name of its respective owners,

whereas while filing the statement of defence they have taken a

ARB. A. (COMM.) 71/2025 Page 19 of 34

contrary stand than what has been mentioned in the settlement

deed pleading that the properties as mentioned in the settlement

deed were a joint family properties. It is on the basis of these

contradictory stand, Ld. Counsel for the claimant has urged that

there have been inconsistent pleas taken by the respondent and

therefore such pleas cannot be accepted.

13. What is before me right now is an application filed U/s 17 of

the Act to which no specific reply was filed and also having looked

into the statement of defence where although the respondent have

laid emphasis on the family settlement but at the same time did not

deny the existence of execution of lease deed and also not denied

having received the termination notice but denying its validity on

the ground of pre-mature termination. The tribunal has to

determine if the claimant has been successful in making out a case

for grant of interim relief by claiming damages/usage charges after

termination of the tenancy. The interim relief as claimed by the

claimant when weighed judiciously and consciously there is no

denial of fact that the Lease Deed was duly executed between the

parties and also there is no denial of fact that termination notice

was sent by the claimant to the Respondent which was received by

the Respondent but as I find, no reply to this notice was given by

the respondent. Whether it was valid notice or not is a matter

which will be looked into in depth when occasion arises but as on

date, admittedly termination notice stood served on the

respondent's society and once notice stand served, the contractual

obligations between the parties come to an end and the person to

whom notice is given ceases to acquire the status of a contractual

tenant and indeed he becomes a statutory tenant and in case the

statutory tenant does not leave or vacate the premises, he becomes

liable to pay the damages/mesne profits and/or usage charges and

occupation charges of the premises as per market value as

prevalent. The provisions of Section 17 are quite wide and

exhaustive in nature giving ample power to the tribunal to pass

interim orders as envisaged under this provision.

14. To prove as to how much is the rental value of such premises,

the claimant has filed Registered Lease Deed dated 10.09.2021

executed in favour of respondent's society, another piece of land in

the same vicinity measuring 2366 Sq. Yds. at a monthly rent of

Rs.6,00,000/- with 15% enhancement after every five years and

another Lease Deed dated 06.03.2025 measuring 8870 Sq. Yds. in

the same vicinity leased at monthly rent of Rs.9,00,000/- with

annual escalation of 5%, it is noticed such lease deeds indicate that

these two properties are just at a stone throw away distance from

the school out of which, one property is being run by the

respondent's society. What else is coming to my mind is that the

piece of land in dispute of about 1 Acres is not just a piece of land

but a play ground being used by the school institution for the

purposes of outdoor activities which are so essential for physical

ARB. A. (COMM.) 71/2025 Page 20 of 34

and mental growth of the students that the school may not able to

run at all without such playground which is an integral part of the

school building. Classes can be held in open but sport activities

and outdoor games cannot take place in class rooms and for that

reason playground is not more important but is equally important

for running the educational institution. Therefore, looking to all the

aspects and more particularly where the claimant prima facie is the

owner by virtue of Registered Sale Deed dated 19.05.1988 and is

only getting Rs.1,000/ per month for her 1 Acre of piece of land

and in actuality, the prevailing market rent of the abutting land of

2366 Sq. Yds. has been shown as let out at a monthly rent of

Rs.6,00,000/- whereas the land of the claimant is about 1 Acre and

also looking to another Lease Deed dated 06.03.2025 where the

monthly rent shown as Rs.9,00,000/- which is abutting the school

of the respondent and therefore, to my mind the interim relief

needs to be determined in the light of these two lease deeds which

are close by to the land of the claimant.

15. Now coming the quantum of such usage charges, though the

claimant has claimed Rs.6,00,000/- per month and thereafter

Rs.7,50,000/- per month, I feel that looking at all the circumstances

and also taking into consideration that it is an application seeking

interim relief only, the usage charges as claimed by the claimant in

their claims being of the same amount cannot and should not be

granted as that will tantamount to granting final relief and not the

interim one. Looking to all circumstances and the peculiar facts of

the case where so many issues as raised by the Respondent and

repudiated by the claimant, which are yet to be gone into, when the

parties would be given opportunity to adduce evidence and also by

interpretation of such documents, the claimant should not be

allowed Rs.6,00,000/- per month, it being a final relief claimed by

the claimant in the statement of claim and also evidence yet to be

led in this regard but since the claimants have made out case for

grant of interim relief qua usage charges, it shall be just and

expedient that the claimant shall be entitled to Rs.3,00,000/- per

month as mesne profit/usages charges from the date when the six

months period of termination of lease deed expired. I am further of

the opinion that this amount should not be paid straightaway to the

claimant as fate of the case is yet to be decided. I therefore

consider it appropriate that the respondent shall open a saving

Bank account in UCO Bank, Delhi High Court Branch in joint

name of the claimant and the respondent within 30 days from the

date of the order and shall deposit the usage charges at the rate of

Rs.3,00,000/- per month commencing from 15.10.2018 till the date

of order by creating a joint FDR as stated above so as to fetch

interest on it and that the FDR shall be deposited with Tribunal and

neither party shall withdraw this amount and further the respondent

shall keep on depositing the said amount by 7th of each English

calendar month with the Bank and the Tribunal shall issue

ARB. A. (COMM.) 71/2025 Page 21 of 34

instructions to the Bank not to permit the Claimant and Respondent

to withdraw any amount being deposited by them till the disposal

of this arbitral proceedings.

16. As regard prayer of the claimant for inspection of the land in

question and also her prayer restraining the respondent from

creating third party interest, I am of the view that such interim

prayer(s) are bonafide in nature as the claimant being the Lessor,

shall have the right to inspect the property in question not weekly

but monthly after giving 3 days notice to the Lessee. As regards the

relief of creating third party interest, it is considered expedient that

in order to protect the property so as not to change hands during

the pendency of proceedings, it is ordered that no third party

interest of any nature shall be created by the respondent in any

manner.

Accordingly the application of the claimant is disposed off.‖

25. In order to appreciate whether the learned Arbitrator has acted

within the permissible contours of discretion while exercising

jurisdiction under Section 17 of the A&C Act, it is necessary to briefly

advert to the reasoning recorded in the Impugned Order. A perusal

thereof reveals, inter alia, the following findings:

(a) The learned Arbitrator noted that the disputes between the

parties arise out of rival claims concerning ownership,

termination of the lease deed dated 02.05.2000, and entitlement

to usage charges/mesne profits, which are contentious issues

requiring adjudication upon evidence and, therefore, cannot be

conclusively determined at the interlocutory stage.

(b) It was expressly observed that the arbitral proceedings are at a

nascent stage and that the rival pleas raised in the Statement of

Claim and Statement of Defence involve disputed questions of

fact and law necessitating a full-fledged trial.

(c) The learned Arbitrator considered that the execution of the lease

deed and service of the termination notice were not denied, and

that continued possession of the Subject Property by the

ARB. A. (COMM.) 71/2025 Page 22 of 34

Appellant warranted an equitable interim arrangement pending

final adjudication.

(d) The Tribunal examined registered lease deeds of nearby

properties placed on record by the Claimant for the limited

purpose of forming a prima facie view regarding prevailing

rental value in the vicinity, without treating such material as

determinative of final mesne profits.

(e) While the Claimant had sought substantially higher amounts

towards usage charges, the learned Arbitrator declined to grant

the claimed sums in entirety, observing that such a direction

would amount to granting substantive final relief at the interim

stage.

(f) Instead, a moderated amount of ₹3,00,000/- per month was

fixed as an interim measure, with a direction that the same be

secured through a joint interest-bearing arrangement.

(g) The learned Tribunal further considered that the Subject

Property formed an integral part of the functioning of the

Appellant‘s educational institution and that an outright

deprivation of interim protection to the Claimant during

pendency of arbitration would result in inequity.

(h) Protective directions permitting periodic inspection of the

property and restraining the creation of third-party interests

were considered necessary to preserve the subject matter of the

arbitration and to prevent multiplicity of proceedings.

(i) The learned Arbitrator clarified that all observations were prima

facie in nature and that the parties would be afforded full

opportunity to lead evidence on issues of title, validity of

ARB. A. (COMM.) 71/2025 Page 23 of 34

termination, and final determination of mesne profits at the

appropriate stage.

26. Having bestowed anxious consideration on the Impugned

Order, rival submissions, and the material placed on record, this Court

is constrained to observe that the Impugned Order, though ostensibly

passed in exercise of jurisdiction under Section 17 of the A&C Act,

travels beyond the permissible contours of interim protection and

partakes, in substance, the character of a partial final adjudication. The

jurisdiction under Section 17 of the A&C Act is essentially

preservative and protective; it is neither intended to prejudge

contentious issues nor to fasten substantive monetary liability where

the foundational entitlement itself remains seriously disputed.

27. At the threshold, it is evident that the learned Arbitrator

proceeded on the premise that the lease had been validly terminated

and that the Appellant had consequently assumed the status of an

unauthorized occupant, even while acknowledging that the

termination notice itself was under a cloud. These findings, however,

lie at the very core of the arbitral dispute and necessarily require

adjudication on the basis of evidence yet to be led.

28. The validity of the termination notice dated 09.04.2018, the

rival claims of ownership, and the alleged family settlement are all

issues that necessarily require a full-fledged trial. In the absence of

even a prima facie determination on these foundational questions, the

direction to deposit substantial mesne profits, in effect, amounts to

granting a part of the final relief at an interlocutory stage.

29. This Court also finds considerable force in the submission that

the reliefs sought by the Claimant in the application under Section 17

ARB. A. (COMM.) 71/2025 Page 24 of 34

of the A&C Act are, in substance, identical to the monetary reliefs

claimed in the Statement of Claim itself.

30. The prayers seeking direction to deposit accumulated

damages/mesne profits as well as recurring monthly usage charges

mirror the final reliefs sought in arbitration and are predicated upon

the assumption that the lease stands validly terminated and that the

Appellant is an unauthorized occupant. Such reliefs, by their very

nature, cannot be granted at an interlocutory stage without

adjudication of the foundational disputes. The exercise of jurisdiction

under Section 17 of the A&C Act is intended to be preservative and

not determinative; it cannot be employed as a vehicle to secure, in

advance, what is essentially the subject matter of final adjudication.

31. It is well settled that the grant of interim measures under

Section 17 of the A&C Act must be guided by the triad of principles

governing interim injunctions, namely, existence of a prima facie

case, balance of convenience, and irreparable injury. The law in this

regard has been succinctly summarised by this Court in Indo Spirits

(supra), which reads as under:

―28. In Skypower Solar India (P) Ltd. v. Sterling and Wilson

International FZE, Division Bench of this Court has held interim

protection akin to Order XXXVIII Rule 5 of the CPC can be

granted only upon a prima facie finding of a real and imminent risk

of asset alienation or conduct intended to frustrate enforcement of a

prospective award, and not merely on the existence of a prima

facie case or balance of convenience, which is extracted as follows:

―47. There is no finding (prima facie or otherwise) by the

learned Single Judge that, if S&W prevails in the arbitral

proceedings, it would be unable to enforce the arbitral

award in its favour if the amounts as claimed are not

secured. There is no allegation that Appellants 2 to 6 are

alienating their assets and are acting in a manner that

would frustrate the enforcement of an arbitral award that

may be delivered in favour of S&W.

****

ARB. A. (COMM.) 71/2025 Page 25 of 34

49. We have carefully examined the impugned judgment.

Whilst, the learned Single Judge has found that S&W has

established a prima facie case and that the balance of

convenience is also in its favour, there is no finding to the

effect that Appellants 2 to 6 are alienating their assets or

would do so and frustrate S&W's recourse to enforce the

arbitral award if it prevails in the arbitral proceedings.

There is no finding that absent an order for securing the

amounts in dispute, S&W would be unable to enforce the

arbitral award that may be made in its favour. The learned

Single Judge had accepted that any change in the

shareholding pattern of original Respondents 2 to 8 would

have a bearing on the arbitration proceedings as well as

the execution of the arbitral award. The observations to

the said effect are contained in para 74 of the impugned

judgment, which reads as under: (Sterling & Wilson

International FZE v. Sunshakti Solar Power Projects (P)

Ltd., 2020 SCC OnLine Del 2414, SCC OnLine Del 74)

―74. It is clear that under Section 9, the court

has the power to issue interim directions to

non-parties to arbitration agreement. Keeping

in view the judgments referred to above, in my

opinion, petitioner is right in its contention

that if the shareholding pattern of respondents

changes by transferring shares, there is

likelihood of changes in the management,

overall control and the decision-making

power. This would have a significant bearing

on the arbitration proceedings as well as the

ultimate execution of the award. Thus, interim

directions are required to be issued against

Respondents 2 to 8. The judgments relied

upon by respondents are distinguishable on the

facts of this case and thus of no avail to them.‖

****

63. The principle for granting orders under Order 38 Rule

5CPC are now well-settled. In Raman Tech. & Process

Engg. Co. v. Solanki Traders, (2008) 2 SCC 302, the

Supreme Court had observed that the power under Order

38 Rule 5 are drastic and extraordinary powers and are

required to be used sparingly and in accordance with the

rule. The Supreme Court also observed that the purpose of

Order 38 Rule 5 was not to convert an unsecured debt as a

secured one. The object of Order 38 Rule 5 was to prevent

any defendant from defeating the realisation of a decree

that may ultimately be passed in favour of the plaintiff.

The relevant extract of the said decision is set out below:

(SCC p. 304, paras 4 and 5)

ARB. A. (COMM.) 71/2025 Page 26 of 34

―4. The object of supplemental proceedings

(applications for arrest or attachment before

judgment, grant of temporary injunctions and

appointment of receivers) is to prevent the

ends of justice being defeated. The object of

Order 38 Rule 5 CPC in particular, is to

prevent any defendant from defeating the

realisation of the decree that may ultimately be

passed in favour of the plaintiff, either by

attempting to dispose of, or remove from the

jurisdiction of the court, his movables. The

Scheme of Order 38 and the use of the words

‗to obstruct or delay the execution of any

decree that may be passed against him‘ in Rule

5 make it clear that before exercising the

power under the said Rule, the court should be

satisfied that there is a reasonable chance of a

decree being passed in the suit against the

defendant. This would mean that the court

should be satisfied that the plaintiff has a

prima facie case. If the averments in the plaint

and the documents produced in support of it,

do not satisfy the court about the existence of a

prima facie case, the court will not go to the

next stage of examining whether the interest of

the plaintiff should be protected by exercising

power under Order 38 Rule 5CPC. It is well-

settled that merely having a just or valid claim

or a prima facie case, will not entitle the

plaintiff to an order of attachment before

judgment, unless he also establishes that the

defendant is attempting to remove or dispose

of his assets with the intention of defeating the

decree that may be passed. Equally well-

settled is the position that even where the

defendant is removing or disposing his assets,

an attachment before judgment will not be

issued, if the plaintiff is not able to satisfy that

he has a prima facie case.

5. The power under Order 38 Rule 5CPC is a

drastic and extraordinary power. Such power

should not be exercised mechanically or

merely for the asking. It should be used

sparingly and strictly in accordance with the

rule. The purpose of Order 38 Rule 5 is not to

convert an unsecured debt into a secured debt.

Any attempt by a plaintiff to utilise the

provisions of Order 38 Rule 5 as a leverage for

ARB. A. (COMM.) 71/2025 Page 27 of 34

coercing the defendant to settle the suit claim

should be discouraged. Instances are not

wanting where bloated and doubtful claims are

realised by unscrupulous plaintiffs, by

obtaining orders of attachment before

judgment and forcing the defendants for out of

court settlements, under threat of attachment.‖

****

70. The principles underlying the object of Order 38 Rule

5CPC are, as noticed earlier, well-settled. Such orders are

required to be issued in case where the court is satisfied

that the party has established a strong prima facie case and

that the respondents are acting in a manner that would

defeat the realisation of the decree. These principles must

be equally satisfied for securing protective orders under

Section 9 of the A&C Act, which are in the nature of

orders under Order 38 Rule 5CPC.‖

(Emphasis supplied)

*****

33. With respect to the application of the well-settled ‗triple test‘

governing the grant of interim injunctions, it is trite that the

exercise of such jurisdiction is conditioned upon the satisfaction of

three foundational requirements namely, (i) the existence of a

prima facie case; (ii) the balance of convenience tilting in favour of

the applicant; and (iii) the likelihood of irreparable injury in the

absence of interim protection. These jurisdictional preconditions

cannot be presumed or invoked as a matter of course. They must be

the subject of a conscious and reasoned judicial determination,

founded upon an objective evaluation of the material placed on

record.

34. The Hon‘ble Supreme Court in Bloomberg Television

Production Services India Pvt. Ltd. v. Zee Entertainment

Enterprises Ltd., has underscored that the grant of interim relief

must rest upon a careful and reasoned application of the aforesaid

threefold test and not upon a mechanical or conclusory invocation

thereof. The Court cautioned that a mere reproduction of

submissions or precedents is insufficient; the adjudicatory

authority must expressly analyse how each limb of the test stands

satisfied on the facts of the case and furnish cogent reasons in

support of its conclusion. Relevant paragraph of the said judgment

has been extracted as under:

―4. The threefold test of establishing: (i) a prima facie

case, (ii) balance of convenience, and (iii) irreparable loss

or harm, for the grant of interim relief, is well-established

in the jurisprudence of this Court. This test is equally

applicable to the grant of interim injunctions in

defamation suits. However, this threefold test must not be

applied mechanically [DDA v. Skipper Construction Co.

ARB. A. (COMM.) 71/2025 Page 28 of 34

(P) Ltd., (1996) 4 SCC 622, para 38], to the detriment of

the other party and in the case of injunctions against

journalistic pieces, often to the detriment of the public.

While granting interim relief, the court must provide

detailed reasons and analyse how the threefold test is

satisfied. A cursory reproduction of the submissions and

precedents before the court is not sufficient. The court

must explain how the test is satisfied and how the

precedents cited apply to the facts of the case.‖

35. To augment, the Hon‘ble Supreme Court in ArcelorMittal

(supra) has reiterated that these foundational principles are equally

applicable in proceedings under Sections 9 of the A&C Act. By

necessary extension, the same discipline in reasoning must inform

the exercise of power under Section 17 of the A&C Act by an

Arbitral Tribunal.

(emphasis added)

32. A careful and meaningful reading of the Impugned Order, in the

considered opinion of this Court, does not disclose any discernible

satisfaction of the essential parameters governing the grant of interim

relief under Section 17 of the A&C Act. The learned Arbitrator has

not recorded any cogent or reasoned finding to demonstrate the

existence of an imminent threat to the subject matter of the arbitration,

nor has any urgency been articulated so as to justify the issuance of

monetary directions of such magnitude at an interlocutory stage.

Further, there is no finding indicating any immediate danger or

compelling circumstance warranting a direction for deposit of

substantial mesne profits, particularly when numerous and serious

disputed questions of fact remain pending adjudication. The Impugned

Order is also conspicuously silent on how the balance of convenience

tilts in favour of the Claimant or how irreparable loss or injury would

ensue in the absence of the interim relief granted.

33. It is no doubt true that an application under Section 17 of the

A&C Act is not strictly bound by the procedural rigours of the CPC.

Nevertheless, the foundational principles governing the grant of

ARB. A. (COMM.) 71/2025 Page 29 of 34

interim relief, namely, the existence of a prima facie case, balance of

convenience, and irreparable injury, should be satisfied.

34. The power under Section 17 of the A&C Act cannot be invoked

merely upon the assertion of a claim. It is to be exercised judiciously

and only in circumstances where the preservation of the subject matter

of the arbitration or the efficacy and enforceability of the eventual

Arbitral Award is demonstrably at risk. In the absence of such

findings, the grant of substantial monetary relief at an interim stage

cannot be sustained.

35. This Court is of the considered opinion that the reliance placed

by the learned Arbitrator on lease deeds of 2021 and 2025 to

retrospectively determine mesne profits from 2018 further underscores

the overreach. The fixation of ₹3,00,000/- per month has been

undertaken without any evidentiary scrutiny regarding comparability,

temporal relevance, amenities, size, or nature of use of the Subject

Property. Such a mechanical adoption of exemplars, divorced from

trial or expert assessment, transforms an interlocutory order into an

adjudicatory determination, thereby trenching upon the domain

reserved for final award. The approach adopted overlooks that

quantification of mesne profits is inherently fact-intensive and cannot

be presumed at an interim stage.

36. The nature of the Appellant‘s activities also assumes relevance

in balancing equities. The imposition of heavy monetary liabilities at

an interim stage, without a conclusive determination of rights, carries

the potential to disrupt the functioning of an educational institution

catering to students. The learned Arbitrator, in directing retrospective

and prospective deposits, has not sufficiently weighed the

ARB. A. (COMM.) 71/2025 Page 30 of 34

disproportionate prejudice that may be occasioned to the Appellant

vis-à-vis the absence of any demonstrable urgency or necessity on the

part of the Claimant. In such circumstances, the impugned directions

cease to be protective and assume the character of a coercive measure,

thereby falling outside the legitimate ambit of Section 17 of the A&C

Act.

37. The decision of the Hon‘ble Supreme Court in Evergreen Land

Mark Pvt. Ltd. v. John Tinson & Company Pvt. Ltd.

8

assumes

particular significance. The Apex Court has authoritatively held that

an Arbitral Tribunal, while exercising jurisdiction under Section 17 of

the A&C Act, cannot, under the guise of granting interim protection,

direct the deposit of disputed monetary amounts, including rentals or

mesne profits, where the very liability to pay remains seriously

contested and awaits adjudication on merits. The relevant portions of

the said judgment are reproduced hereunder:

―10. At the outset, it is required to be noted that the dispute is with

respect to the rental amount for the period between March 2020 to

December 2021, for which the Arbitral Tribunal has directed the

appellant to deposit while passing the order by way of an interim

measure on the applications under Section 17 of the Arbitration

Act. The liability to pay the lease rental for the period between

March 2020 to December 2021 is seriously disputed by the

appellant by invoking the force majeure principle contained in

Clause 29 of the lease agreement.

11. It is the case on behalf of the appellant that for a substantial

period there was a total closure due to lockdown and for the

remaining period the appellant was allowed with 50% capacity and

therefore, the force majeure principle contained in Clause 29 shall

be applicable. When the same was submitted before the Arbitral

Tribunal, no opinion, even a prima facie opinion on the aforesaid

aspect was given by the Arbitral Tribunal. In para 39, it is observed

that ―it would not be fair at this stage of the proceedings, where

evidence is yet to be adduced by the parties in support of their rival

contentions on the issues that arise, to record any definitive opinion

on the import and effect of the force majeure clause (Clause 29)

8

(2022) 7 SCC 757

ARB. A. (COMM.) 71/2025 Page 31 of 34

contained in the lease deed‖. Therefore, applicability of the force

majeure principle contained in Clause 29 is yet to be considered by

the Arbitral Tribunal at the time of final adjudication.

12. Hence, the liability to pay the rentals for the period during

lockdown is yet to be adjudicated upon and considered by the

Tribunal. Therefore, no order could have been passed by the

Tribunal by way of interim measure on the applications filed under

Section 17 of the Arbitration Act in a case where there is a serious

dispute with respect to the liability of the rental amounts to be paid,

which is yet to be adjudicated upon and/or considered by the

Arbitral Tribunal. Thus, no such order for deposit by way of an

interim measure on applications under Section 17 of the

Arbitration Act could have been passed by the Tribunal.‖

(emphasis added)

38. The present case stands on a similar footing as that considered

in Evergreen Land Mark Pvt. Ltd. (supra), inasmuch as, inter alia,

the alleged obligation to pay mesne profits remains seriously disputed

and is intrinsically intertwined with issues relating to title, validity of

termination, and the nature of possession, all of which are yet to be

adjudicated upon evidence.

39. By directing recurring monetary deposits at the interlocutory

stage, the learned Arbitrator has, in effect, ventured into the realm of

adjudication and granted a relief which bears the trappings of a

provisional decree, thereby transgressing the limited and preservative

scope of jurisdiction under Section 17 of the A&C Act.

40. Equally, the Impugned Order fails to demonstrate how the

alleged non-payment of mesne profits would frustrate or render

nugatory the eventual award. Section 17 of the A&C Act is designed

to preserve the fruits of arbitration where a real and imminent risk is

established; it is not intended to secure a claimant against speculative

future contingencies. The record does not disclose any material

indicating dissipation of assets, imminent frustration of enforcement,

or any circumstance warranting such intrusive financial directions.

ARB. A. (COMM.) 71/2025 Page 32 of 34

41. As stated, in the Impugned Order, the balance of convenience,

too, does not appear to have been weighed in its proper perspective.

The Appellant is an educational society running a school, and the

imposition of substantial recurring financial liability is likely to inflict

grave prejudice which cannot be adequately restituted should the

Appellant ultimately succeed. Interim measures ought to maintain

equilibrium between the parties; they cannot tilt the scales so

decisively in favour of one side that the arbitral proceedings

themselves stand prejudiced.

42. At this stage, this Court also finds it apposite to note that the

record of the present case discloses the existence of numerous and

substantial disputed questions of fact. These issues, which bear

materially upon the rights and liabilities of the parties, do not appear

to have been adequately noted by the learned Arbitrator while passing

the Impugned Order at the interim stage. It is, however, clarified that

this Court is consciously refraining from undertaking any detailed

examination of such disputed facts or expressing any opinion thereon,

lest any observation made herein either way prejudice the parties in

the pending arbitral proceedings.

43. Thus, viewed holistically, this Court is of the considered

opinion that the learned Arbitrator, while purporting to grant interim

protection, has traversed beyond the permissible limits of Section 17

of the A&C Act and has, in effect, granted a form of final monetary

relief without trial. The absence of satisfaction of the settled triple test,

coupled with the premature quantification of mesne profits on

disputed premises, renders the Impugned Order unsustainable in law.

ARB. A. (COMM.) 71/2025 Page 33 of 34

CONCLUSION:

44. In view of the foregoing discussion, this Court is satisfied that

the Impugned Order dated 16.09.2025, insofar as it directs the

Appellant Society to deposit mesne profits/usage charges at the rate of

₹3,00,000/- per month with effect from 15.10.2018 and imposes

recurring financial obligations during the pendency of the arbitral

proceedings, travels beyond the permissible contours of interim

jurisdiction under Section 17 of the A&C Act, and consequently

warrants interference under Section 37(2)(b) of the A&C Act, and

therefore, to that extent, the Impugned Order is set aside.

45. However, the ancillary directions issued by the learned

Arbitrator, namely, permitting periodic inspection of the Subject

Property upon three days‘ prior notice and restraining the Appellant

from the creation of any third-party interests therein, are essentially

protective in nature and are intended to preserve the subject matter of

the arbitration.

46. In the considered opinion of this Court, such directions neither

determine the substantive rights of the parties nor cause any prejudice

to the Appellant itself. Accordingly, the said directions are upheld and

shall continue to operate during the pendency of the arbitral

proceedings.

47. At this stage, it is clarified that nothing contained in this

Judgment shall be construed as an expression of opinion by this Court

on the merits of the disputes between the parties. The observations

made herein are confined strictly to the adjudication of the present

Appeal and shall not be treated as a final opinion on the substantive

issues arising in the arbitral proceedings.

ARB. A. (COMM.) 71/2025 Page 34 of 34

48. Accordingly, the rights and contentions of both parties are kept

open and reserved to be urged before the learned Arbitrator, in

accordance with law.

49. Accordingly, the present Appeal stands partly allowed in the

aforesaid terms. Pending application(s), if any, also stand disposed of.

50. There shall be no order as to costs.

HARISH VAIDYANATHAN SHANKAR, J.

FEBRUARY 26, 2026/sm/kr