HIGH COURT OF ANDHRA PRADESH

* * * *

I.A. No. 2 of 2025

in

COM.CA. No.19 of 2025

Between:

Oil and Natural Gas Corporation Ltd (ONGC)

New Delhi, rep. by its authorized signatory

Shri Vairpraakasam K, GM (Instrumentation)

.....PETITIONER

AND

Deep Industries Ltd.

Gujarat and 3 others

.....RESPONDENTS

DATE OF JUDGMENT RESERVED : 29.04.2026

DATE OF JUDGMENT PRONOUNCED : 07.05.2026

DATE OF JUDGMENT UPLOADED : 07.05.2026

SUBMITTED FOR APPROVAL:

THE HON'BLE SRI JUSTICE RAVI NATH TIL HARI

&

THE HON'BLE SRI JUSTICE BALAJI MEDAMALLI

1. Whether Reporters of Local newspapers may

be allowed to see the Judgments?

Yes/No

2. Whether the copies of judgment may be

marked to Law Reporters/Journals

Yes/No

3. Whether Your Lordships wish to see the fair

copy of the Judgment?

Yes/No

_______________________

RAVI NATH TILHARI, J

____________________

BALAJI MEDAMALLI, J

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

2

* THE HON'BLE SRI JUSTICE RAVI NATH TILHARI

&

THE HON'BLE SRI JUSTICE BALAJI MEDAMALLI

+ I.A. No. 2 of 2025

in

COM.CA. No.19 of 2025

% 07.05.2026

Between:

Oil and Natural Gas Corporation Ltd (ONGC)

New Delhi, rep. by its authorized signatory

Shri Vairpraakasam K, GM (Instrumentation)

.....PETITIONER

AND

Deep Industries Ltd.

Gujarat and 3 others

.....RESPONDENTS

! Counsel for the Petitioner : Sri Tushar Mehta, Solicitor General of India

For D.S.Sivadarshan

Counsel for the Respondent No.1 : Sri S. Sriram, Senior Advocate

Assisted by Sri A. Akash

For Sri Vivek Chandrasekhar

< Gist :

> Head Note:

? Cases Referred:

1. (2015) 5 SCC 267

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

3

THE HON’BLE SRI JUSTICE RAVI NATH TILHARI

&

THE HON’BLE SRI JUSTICE BALAJI MEDAMALLI

I.A. No. 2 of 2025

in

COM.CA. No.19 of 2025

JUDGMENT: (per Hon‟ble Sri Justice Ravi Nath Tilhari)

Heard Sri Tushar Mehta, learned Solicitor General of India, appearing

through virtual mode, for Sri D. S. Sivadarshan, learned counsel for the

appellant/petitioner and Sri S. Sriram, learned senior Advocate, assisted by Sri

A. Akash, learned counsel, , for Sri Vivek Chandrasekhar, learned counsel

appearing for the 1

st

respondent in I.A.No.2 of 2025.

2. The present appeal has been filed under Section 37 (1) (c) of the

Arbitration and Conciliation Act, 1996 (in short „Act 1996‟) read with Section 13

of the Commercial Courts Act, 2015 (in short „CC Act‟).

3. The 1

st

respondent - M/s. Deep Industries Limited (in short „DIL‟) is

the claimant, in whose favour the Arbitral Tribunal (Panel of Arbitrators) passed

the Award dated 19.05.2022, allowing Claims A, B, C & D and dismissing the

Claims E, F and G with a direction that the parties shall bear their own costs

under Claim-H. The award is against the appellant – ONGC.

4. ONGC filed application for setting aside the arbitral award. The

Special Court for Trial and Disposal of Commercial Dispute, Visakhapatnam (in

short „the Special Court‟) in CAOP.No.18 of 2022 dismissed the application of

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IA 2 of 2025

in ComCA No.19 of 2025

4

ONGC by Order dated 30.12.2024 and thereby refusing to set aside the arbitral

award under Section 34 of the Act 1996.

5. The Coordinate Bench of this Court on consideration of the

submissions advanced, by a detailed Order dated 18.07.2025 granted interim

order and provided that subject to the appellant furnishing security for the

remaining amount under the Award i.e., 25% within a period of three weeks

from that date to the satisfaction of the learned Special Court, Visakhapatnam,

the further proceedings for execution of the Award/Decree dated 19.05.2022

shall remain stayed until further orders of the Court.

6. Paragraphs 13 and 14 of the Order dated 18.07.2025 are reproduced

as under:

“34. In our view, case for grant of interim relief is made out.

35. Keeping in view the principles under Order 41 Rule 5 (3) CPC, the

judgment of the Hon’ble Apex Court in International Seaport Dredging

Pvt.Ltd. (supra) and that the appellant has already deposited 75% of the

awarded amount, which has also been withdrawn by the respondent-DIL, to

meet the ends of justice, as an interim measure, it is provided that subject to the

appellant furnishing security for the remaining amount under the award, i.e.,

25% within a period of three weeks from today to the satisfaction of the learned

Special Court, Visakhapatnam, the further proceedings for execution of the

award/decree dated 19.05.2022 shall remain stayed, until further orders of the

Court.”

7. In the proceedings under Section 34 of the Arbitration and Conciliation

Act the appellant had already deposited 75% of the awarded amount which had

also been withdrawn by the respondent-DIL and the said fact was also taken

due consideration in passing the interim order dated 18.07.2025.

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

5

8. The appellant/petitioner complied with the interim order and on that

aspect there is no dispute. Memo of compliance was also filed.

9. I.A.No.2 of 2025 has been filed by the appellant-ONGC with prayer to

direct the 1

st

respondent-DIL to either deposit Rs.39,64,64,936/- along with

interest at market rate or furnish security in the form of bank guarantee

equivalent to Rs.39,64,64,936/- plus interest at market rate pending the final

disposal of the appeal. To the said application, DIL has filed counter and the

appellant/petitioner-ONGC has also filed rejoinder affidavit.

10. In the proceedings under Section 34, CAOP No.18 of 2022, ONGC

(present appellant/petitioner) filed an application for stay of the execution of

the arbitral award being I.A.No.213 of 2022 which was disposed of by the Court

of the Special Judge for Trial and Disposal of Commercial Dispute,

Visakhapatnam on 30.09.2022. The petition was allowed and stay was granted

for execution of award dated 19.05.2022 subject to the condition that the

petitioner shall deposit 75% of the awarded amount by the arbitral tribunal

within the specified time. Para-12 of the said Order is reproduced as under:

“12. In the result, this petition is allowed and stay is granted for execution of

award, dated 19.05.2022, subject to condition of the petitioner shall deposit

75% of the awarded amount by the three arbitrators granted within six weeks.

But be sans costs.”

11. The Order dated 30.09.2022 was complied and the

appellant/petitioner deposited the said amount in the Special Court after

extension of time by Order dated 18.04.2023.

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

6

12. The DIL filed I.A.No.201 of 2023 in CAOP No.18 of 2022 requesting

the Special Court to order payment of a sum of Rs.39,64,64,936-43 ps to DIL

by way of online transfer to its account.

13. To I.A.No.201 of 2023 ONGC filed counter dated 08.05.2023. It

submitted in para-3 that ONGC had no objection for DIL, the claimant, to

withdraw the amount. It was also stated that DIL had given an undertaking in

the Cheque Petition (I.A.No.201/2023) promising to re-deposit the amount in

future as and when so directed by the said Court. ONGC further stated that the

claimant-DIL was still working as contractor with ONGC doing works worth of

crores of rupees, hence ONGC had no objection to allow the claimant-DIL for

withdrawal of the amount. Para-3 of the counter dated 08.05.2023 is as under:

“3. The allegations in Para No.6 are true and this Respondent has no

objection for the Petitioner-Claimant to withdraw the amount, as the same was

deposited by this Respondent-Owner, as per the orders of this Honourable

Court. Further, I submit that the Petitioner-Claimant was given permission by

the Honourable Court, in I.A.No.175/2023, for withdrawing the amount

deposited by this Respondent, in the above matter and the Petitioner-Claimant

has also given an undertaking, in the cheque petition, as per law, promising to

re-deposit the same, in future, as and when the Honourable Court so directs.

Further, this Respondent-Owner submits that, the Petitioner-Claimant, is still

working as Contractor with this Respondent-O.N.G.C.Ltd. doing work worth

Crores of Rupees. Hence, this Respondent-Owner has “NO OBJECTION”, to

allow the Petitioner-Claimant, for withdrawing the amount from the

Honourable Court, in the above matter.”

14. The learned Special Judge, on consideration, also the aforesaid,

allowed I.A.No.201 of 2023 and permitted DIL to withdraw the deposited

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IA 2 of 2025

in ComCA No.19 of 2025

7

amount of Rs.39,64,64,936.43ps by way of online transfer into its account, by

Order dated 08.05.2023, which reads as under:

“Counter filed by Respondent. Heard Sri MRD and Sri CSSR. Sri CSSR

submitted that Respondent ONGC has no objection for the petitioner

withdrawing the entire amount deposited by ONGC without furnishing

any security. He submitted that the reasons for ONGC reporting no objection

are stated in counter. Petitioner has already given undertaking to redeposit the

amount as and when directed by the court and that the petitioner is still working

as a contractor with ONGC doing work worth crores of rupees and hence

ONGC has no objection for the petitioner withdrawal the amount. Learned

counsel for ONGC has submitted the same reasons as stated in the counter and

reported to the court that ONGC has no objection for the petitioner to

withdraw the entire amount deposited by ONGC without furnishing any

security.

In the above circumstances, the entire deposited amount i.e.,

Rs.39,64,64,936.43 ps (Rupees Thirty Nine Crores Sixty Four Lakhs Sixty Four

Thousand Nine Hundred and Thirty Six rupees and Forty Three paise only)

shall be paid to the petitioner-M/s.Deep Industries Limited by way of online

transfer directly to its account bearing no.921030003077930 i.e., the Axis

Bank, CBB Ahmadabad. IFSC Code UTI8000150.

Petition is accordingly allowed. No costs.”

15. Thus, the amount of 75% as aforesaid deposited by ONGC in

proceedings under Section 34 pursuant to the interim order dated 30.09.2022

was withdrawn by DIL under the Order of the Special Judge, dated 08.05.2023

in its bank account by transfer.

16. Sri Tushar Mehta, learned Solicitor General of India, appearing for

the appellant/petitioner, submitted that the deponent of the counter affidavit,

filed on behalf of ONGC in I.A.No.201 of 2023 in proceedings under Section 34

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

8

of the Act, was not duly authorized to represent ONGC or to make any

statement conceding the withdrawal of the amount by the DIL without security.

The statement was made without proper authorization. The ONGC cannot be

bound by that statement. Appropriate disciplinary action is also being initiated

against that concerned Officer. The DIL cannot derive any advantage from an

authorized act of the Officer without authority. He submitted that the „no

objection‟ as recorded in the Order and also in the counter in I.A.No.201 of

2023 was in a limited sense which did not grant consent for unconditional

withdrawal without furnishing security. He submitted that the counter did not

state that the respondent may withdraw the amount without security. He

referred to para-11 of the rejoinder affidavit filed in this Court in I.A.No.2 of

2025.

17. Sri Tushar Mehta, learned Solicitor General of India submitted that

the withdrawal of the amount without furnishing security during pendency of

the proceedings under Section 34 of the Act 1996 was contrary to the settled

principles of law. While granting stay under Section 36 (2) and (3) of the Act

1996 regard must be had to the provisions of the Code of Civil Procedure

relating to the stay on the money decree. He submitted that permitting an

award holder to withdraw the deposited money without furnishing any security

is prejudicial to ONGC and in case of success of ONGC in appeal, it may not be

able to easily realize the said amount from DIL.

18. Sri Tushar Mehta, learned Solicitor General of India further submitted

that as per financial statements of DIL, its profit after tax for the financial year

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

9

2023-24 was Rs.125 crores whereas for the statement of financial year 2024-25

the company suffered a loss of Rs.78-76 crores and therefore the DIL is facing

severe financial stress from its core business operations and therefore, the

ONGC has to ensure that the amount withdrawn by DIL is adequately

safeguarded by directing the DIL either to re-deposit the amount or to furnish

the security for the amount withdrawn as prayed in the application I.A.No.2 of

2026.

19. Sri S. Sriram, learned senior counsel for DIL submitted that the

withdrawal of the amount by online transfer to the account of DIL of the

amount, 75% of the award, deposited by ONGC pursuant to the interim order

dated 30.09.2022 passed by the learned Special Judge in I.A.No.213 of 2022 in

CAOP.No.18 of 2022 was under the Order of the Special Court dated

08.05.2023. On the petition filed by the DIL, the ONGC in clear words

consented to such withdrawal for which the counter was filed making such a

clear stand. He submitted that the order also recorded such consent and „no

objection‟ on behalf of ONGC. The Order dated 08.05.2023 was passed almost

3 years back and during the said period any objection to the withdrawal was

not raised. Any further counter or application, etc., was not filed before the

Special Judge disputing the consent or „no objection‟ given by the authorized

officer of the ONGC who filed counter. No such stand was taken by ONGC

which is being taken for the first time in the appeal and that too only by way of

the rejoinder affidavit in I.A.No.2 of 2025, that the Officer of the ONGC was not

authorized to give „no objection‟. He submitted that even while filing the appeal

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

10

in this Court, there was no such stand taken neither in the memo of appeal nor

any affidavit or application filed along with the appeal. Even in I.A.No.2 of

2025, referring to para-5 thereof, learned Senior Advocate submitted that the

stand taken was “it was erroneously recorded that ONGC had „No Objection‟ to

such withdrawal without security”. Learned senior Advocate submitted that

what has been stated in para-5, is that the Court of Special Judge erroneously

recorded. It was not the stand even in the I.A that there was no authorization

of the Officer who filed counter and gave „no objection‟ for withdrawal before

the Special Judge. Such a stand is being taken for the first time in the reply

affidavit, which in his submission, is an afterthought.

20. Sri S. Sriram, learned senior Advocate, further submitted that the

Order dated 08.05.2023 was never challenged. It attained finality.

21. He further submitted that after CAOP.No.18 of 2022 filed by ONGC

was dismissed and the Special Judge did not find the award to be set aside, the

order permitting the withdrawal without furnishing security, also came to an

end. So, he submitted further that the undertaking which was given by DIL

that DIL shall re-deposit the amount as and when directed by the Court also

came to an end. The said undertaking was in the Court of the Special Judge

and on conclusion of the proceedings before the Special Judge, it cannot be

said that the undertaking to re-deposit the amount, continues in appeal. He

however submitted that the DIL shall be bound by the ultimate decision taken,

in the present appeal, subject of course to the further remedies available to the

aggrieved parties.

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

11

22. With respect to the financial status of DIL and the argument of the

learned Solicitor General of India for the appellant, about precarious financial

situation of DIL, he submitted that the same is not correct referring to the

stand taken in various paragraphs of the counter affidavit of DIL. He submitted

that the DIL is a listed company with a longstanding reputation and deep

rooted business operations in the oil and gas sectors. It continues to be a

going concern with significant liquidity and operational capability. Referring to

para-9 also, Sri S. Sriram, learned senior counsel for the respondent, explained

with particulars about the assets; the active contracts between ONGC and DIL

exceeding Rs.1,000 crores. He submitted referring to para-10 that the ONGC

for every one of its contract with DIL is already holding substantial bank

guarantee towards Performance Security and processes monthly running bills to

the DIL, substantially.

23. We have considered the aforesaid submissions and perused the

material on record.

24. What is not in dispute is that 75% of the amount under award was

deposited in Special Court in proceedings under Section 34 of the Act 1996

under Order 18.04.2023 granting stay of the execution of the Award. The

same was deposited by the appellant within the extended time. The same was

also permitted to be withdrawn by DIL vide Order dated 08.05.2023. The

Order dated 08.05.2023 was passed considering the „no objection‟ raised by

ONGC for which counter was filed clearly stating that ONGC had no objection to

withdrawal of the amount deposited. The Order also recorded that the DIL had

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

12

undertaken to re-deposit the amount if the Court passes such an order and the

same was also clearly stated in the affidavit in support of the application

seeking withdrawal of the amount vide I.A.No.201/2023. The Order of the

learned Special Judge dated 08.05.2023 granting permission to withdraw the

deposited amount without furnishing any security in the circumstances of the

case mentioned in the said order was not challenged by ONGC on any ground

neither before the higher Court nor before the same Court of Special Judge.

The proceedings under Section 34 in CAOP No.18 of 2022 were decided on

30.12.2024 i.e., almost after two years and in the meantime any application or

affidavit raising objection to what was stated in the counter of ONGC that the

DIL may withdraw and ONGC had „no objection‟, was not disputed nor

controverted. In spite of such observation and recording thereof in the Order

08.05.2023 that, was also not disputed before the learned Special Judge.

25. From the aforesaid, we observe that it cannot be said that the said

„no objection‟ to withdraw the deposited amount by DIL was not in the

knowledge of the ONGC, as the same is reflected from the counter affidavit as

also the very Order dated 08.05.2023. The present appeal was filed on

16.04.2025 and it could not be pointed out from the record of the appeal with

its application and affidavit filed that the grant of „no objection‟ before the

learned Special Judge by filing the counter by the ONGC was disputed in any

manner, either that no such „no objection‟ was given or that the person filing

the counter on behalf of ONGC had no such authorization. Even in the

application I.A.No.2 of 2025 filed for direction to DIL either to re-deposit the

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IA 2 of 2025

in ComCA No.19 of 2025

13

amount withdrawn by furnishing security thereof any such stand was not taken.

As rightly pointed out by the learned senior counsel for DIL, in the affidavit in

support of the application, what was sought to be urged was the illegality

committed by the learned Special Judge in its Order permitting withdrawal to be

erroneous for not directing to furnish security. It is for the first time after filing

the counter in I.A.No.2 of 2025 that the stand has been taken in the rejoinder

affidavit that, the deponent of the counter, official of ONGC had not been

instructed to give „no objection‟ to withdraw the amount by DIL. Under the

circumstances, the plea taken appears to us to be well afterthought to get over

the „no objection‟ made before the learned Special Judge by way of writing in

the counter to permit withdrawal to DIL.

26. The submission of Sri Tushar Mehta, learned Solicitor General of

India that in such cases where the amount is permitted to be withdrawn, the

person so permitted should be imposed condition for furnishing security/bank

guarantee. He referred to Kanpur Jal Sansthan v. Bapu Constructions

1

.

May it be correct that in appropriate cases, the person may be asked to furnish

security to the amount permitted to be withdrawn. But when, as in the present

case, the ONGC had itself given „no objection‟ to the withdrawal to the Court, in

writing in the counter affidavit, there could have been no occasion for the Court

to impose condition while permitting withdrawal of the amount to furnish the

security. In Kanpur Jal Sansthan (supra) the Order of the High Court

permitting withdrawal of 50% without furnishing security, was under challenge.

1

(2015) 5 SCC 267

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

14

Here there is no challenge ever made to the Order dated 08.05.2023, may be

for the reason that the „No Objection‟ was given by the ONGC. That order is

not under challenge and is not the subject matter of the present appeal.

27. Sri Tushar Mehta, learned Solicitor General of India, submitted that

ONGC in its counter affidavit submitted only „no objection‟ to withdrawal of the

amount to DIL but not that it should be without furnishing security. The

learned Special Judge in its Order erroneously recorded that ONGC had „no

objection‟ to the withdrawal of the amount by DIL without furnishing any

security.

28. In this respect, on perusal of the application filed by DIL, I.A.No.201

of 2023, it is evident that the DIL prayed for withdrawal of the amount and also

gave an undertaking to the Special Court to re-deposit the amount as and when

directed. In I.A.No.201 of 2023 the permission sought by DIL was for

withdrawal and furnishing undertaking to re-deposit, but DIL did not say

withdrawal on furnishing of the security by DIL. In the counter affidavit filed by

ONGC to IA No.201 of 2023, the ONGC submitted „no objection‟ to such

withdrawal by DIL. The ONGC did not oppose for withdrawal by submitting in

the counter affidavit that the Court should impose condition of furnishing

security. So, the prayer of the DIL for withdrawal of the amount vide its

application had „no objection‟ from the ONGC, on the terms for withdrawal i.e.,

undertaking as requested by DIL. If the ONGC had any objection to the

unconditional withdrawal and only on undertaking of DIL, it ought to have

clearly raised such an objection in its counter, i.e., to impose certain conditions

RNT, J & BM, J

IA 2 of 2025

in ComCA No.19 of 2025

15

or to grant withdrawal subject to furnishing the security. The prayer as made

by the DIL in its application had written „no objection‟ by ONGC in the counter

affidavit.

29. Perusal of the Order of the learned Special Judge, dated 08.05.2023,

as reproduced above, shows that the counsel for ONGC submitted before the

Special Court “that respondent ONGC has no objection for the petitioner

withdrawing the entire amount deposited by ONGC without furnishing any

security.” He also submitted as quoted in the Order that “…….the reasons for

ONGC reporting no objection are stated in counter. Petitioner has already given

undertaking to redeposit the amount as and when directed by the court and

that the petitioner is still working as a contractor with ONGC doing work worth

crores of rupees……”. So, the learned counsel for ONGC had also stated to the

Special Court that the ONGC had no objection for withdrawal and that was

being given in view of the undertaking furnished by DIL and also that the DIL

was still the contractor with ONGC. So, it is clear that the ONGC neither in its

counter asked for furnishing the security, and had given the no objection as the

DIL had given the undertaking, nor during arguments ONGC‟s counsel asked for

furnishing of security by DIL as a condition of withdrawal but stated „no

objection‟ by ONGC for the undertaking given by it. It has not been contended

before us, nor is the stand taken in the application that the counsel of ONGC

had no such instructions or that he did not make that statement.

30. It is a settled principle of law that if any statement in any Order of

the Court is disputed as not being correct and recorded wrongly by the Court,

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IA 2 of 2025

in ComCA No.19 of 2025

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the appropriate course open to such a party is to approach the same Court.

The ONGC did not approach the same Court of Special Judge nor ever

challenged the Order dated 08.05.2023.

31. Thus, from the affidavit, counter affidavit and the Order, it is evident

that the ONGC did not ask for furnishing the security for the prayer of DIL to

withdraw the amount of 75%. Rather it was satisfied with the undertaking

given by the DIL and for that reason „no objection‟ was given. If the ONGC felt

aggrieved by permission granted without furnishing security or from any of the

contents of the Order dated 08.05.2023, it certainly would have approached

immediately against the said Order in appropriate proceedings, may be before

the same Court during the pendency of the petition under Section 34 of the Act

1996 or by challenging the said Order in the higher Forum. Such an inaction on

the part of ONGC for more than 3 years also shows that it had „no objection‟ to

withdrawal of the amount by DIL without furnishing any security.

32. Sri Tushar Mehta, learned Solicitor General of India, further

submitted that independent of the Order dated 08.06.2023 and the contents

thereof i.e., undertaking or without furnishing security, the present application

may be considered for direction to the DIL to furnish the security for the

amount withdrawn or to re-deposit the amount. We are of the view that some

sanctity is to be attached to the Court proceedings, and its Orders to the Order

dated 08.05.2023, which was passed almost three years back, recording

thereunder what could not be proved to be incorrect. The finality is also to be

given to the Court‟s order which should not be reopened on unfounded

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IA 2 of 2025

in ComCA No.19 of 2025

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averments and that too, without any challenge to the said order. We are of the

further view that no doubt, the Court may pass the Order, as prayed and may

also considering the undertaking given by DIL to the Special Court pass such

order but there must be some justifiable reasons to pass that order as prayed in

I.A.No.2 of 2025 i.e., either showing the illegality in the Order dated 08.05.2023

or the change in the circumstance so as to persuade the Court, under changed

circumstances the necessity to pass orders either directing the DIL to re-deposit

the entire amount or part thereof or to furnish the security for the said amount

or any part thereof.

33. The changed circumstance, according to ONGC, as stated in the

application is that the DIL has suffered a loss of Rs.78.76 crores in the financial

year 2024-25 whereas in the financial year 2023-24 there was profit. Such an

averment has been made in para-11 of the affidavit, which was referred to and

which is reproduced as under:

“I respectfully submit that as per the financial statements of Deep

Industries, its profit after tax for the financial year 2023-24 was Rs.125 crores,

whereas for the subsequent financial year 2024-25, the company suffered a loss

of Rs.78.76 crores. Therefore, it is evident that Deep Industries is presently

facing severe financial stress from its core business operations. In view of this

precarious financial situation, it is imperative for ONGC to ensure that the

amount withdrawn by Deep Industries is adequately safeguarded.”

34. Contrary to the aforesaid, the case of the DIL is of denial. In para-7

of the counter, DIL has submitted that the loss in the financial year 2024-25 is

primarily due to an exceptional item which is purely non-cash accounting loss

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IA 2 of 2025

in ComCA No.19 of 2025

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and has absolutely no impact on the liquidity or operational solvency of the DIL.

In paras-8 and 9 also the DIL has mentioned that it continues to be a going

concern with significant liquidity and operational capability. Paragraphs 7 to 10

of the counter which were referred by the learned senior counsel for DIL read

as under:

“7. It is further respectfully submitted that the “loss” of Rs.78.76 Crores

appearing in the Consolidated Financial Results for FY 2024-25 is primarily

due to an “Exceptional Item” of Rs.251.05 Crores for the quarter and year

ended 31

st

March 2025. This amount represents a one-time, non-cash loss

incurred due to the cleaning up exercise post-acquisition of Kandla Energy and

Chemicals Ltd (from liquidation) and Dolphin Offshore Shipping Limited

(under CIRP). This exceptional item is purely a non-cash accounting loss and

has absolutely no impact on the liquidity or operational solvency of the

Answering Respondent Group. Therefore, the premise of the Petitioner’s

application – that the Answering Respondent is in financial distress – is wholly

baseless.

8. Furthermore, the Petitioner had conveniently ignored the massive asset

base, the reserves, and most importantly, the robust order book of the

Answering Respondent. The Answering Respondent is a listed company with a

longstanding reputation and deep-rooted business operations in the oil and gas

sector. A temporary fluctuation in profitability in one financial year does not

equate to insolvency or an inability to repay. The Answering Respondent

continues to be a going concern with significant liquidity and operational

capability.

9. It is respectfully submitted that the most vital aspect that renders the

Petitioner’s demand for security redundant is the substantial volume of ongoing

business the Answering Respondent conducts with the Petitioner (ONGC)

itself. As admitted by the Petitioner at Paragraph No.3 in its Counter filed in IA

No.200 of 2023 in C.A.O.P.No.17 of 2022 on the file of the Hon’ble

Commercial Court, the Answering Respondent is executing works worth crores

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in ComCA No.19 of 2025

19

of rupees. Currently, the Answering Respondent is executing multiple high-

value contracts for ONGC across various assets including Rajahmundry,

Ahmedabad, Tripura, and Bokaro. The total value of these live contracts runs

into hundreds of crores. For instance, the Answering Respondent is executing

the “Hiring of Gas Compression Services at Balol GGS I” with a contract value

of approximately Rs.135 Crores, and the “Charter Hiring of Compressor of 6.0

LSCMD HP for a period of 3 years” valued at over Rs.107 Crores.

Furthermore, the Answering Respondent have recently been awarded the

contract for “Charter Hiring of 01 number 100 MT Work Over Rig for

production test for PEL/ML Area of Mehsana Asset for a period of 03 Years

against e-tender No.BN6RC23002, Cat III” valued at approximately Rs.27.35

Crores. In total, the cumulative value of the active contracts between the

Petitioner and the Answering Respondent exceeds Rs.1,000/- Crores. A copy

of the details of the active contracts between the Petitioner and the Answering

Respondent as on date are filed herewith as Annexure R/1-2.

10. It is submitted that for every one of these contracts, the Petitioner

(ONGC) is already holding substantial Bank Guarantees towards Performance

Security and processes monthly running bills payable to the Answering

Respondent. The monthly average payments disbursed by the Petitioner to the

Answering Respondent for the “Hiring of Gas Compression Services at Balol

GGS I” alone is approximately Rs.1.83 Crores. Similarly, for the contract at

Linch GGS, the monthly disbursement is over Rs.2.34 Crores. The Answering

Respondent receives steady, substantial cash flows from the Petitioner month

on month. In the unlikely event that the Petitioner succeeds in the present

appeal and the Answering Respondent fails to redeposit the amount, the

Petitioner has ample recourse to recover the said amount from the running bills

and retention monies available with them under these numerous contracts.

Therefore, the Petitioner is already fully secured by virtue of being the

Answering Respondent’s largest debtor.”

35. So, on the aspect of the alleged precarious financial condition of

DIL, as mentioned in the affidavit filed in support of the application, there is

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in ComCA No.19 of 2025

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counter affidavit denying and disputing the same and also an affirmative

assertion that there is no such condition of the DIL so as to direct to furnish

security. Those questions of fact cannot be finally adjudicated with respect to

precarious financial capacity of DIL or otherwise, by this Court in the exercise of

the present jurisdiction. For an order directing to re-deposit the entire amount

or to furnish the bank guarantee it will have to be shown a very strong case by

ONGC against the DIL, especially, for the reason that 75% amount was directed

to be deposited by ONGC while granting stay by the Special Court and the same

was permitted to be withdrawn as aforesaid by DIL without furnishing security

on the „no objection‟ given by ONGC and for the further reason that the petition

for setting aside the award, CAOP No.17 of 2022 filed by ONGC, has finally

been dismissed, finding no ground to interfere with the award by the Arbitral

Tribunal. In the present appeal also taking into account that circumstance of

deposit of 75% already made in the Special Court and its withdrawal by the

DIL, the interim order dated 18.07.2025 was passed in favour of the appellant,

for direction to furnish security, of the rest of the 25% by the ONGC.

Additionally, we are of the view that imposing the condition of furnishing the

security for withdrawal of the amount at the initial stage while granting the

permission to withdraw, stand on a different footing than in a case where the

withdrawal has been made with the consent or „no objection‟ and application is

filed later on for direction either to re-deposit the amount or to furnish the bank

guarantee for the amount already withdrawn.

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36. For the aforesaid, the stand of the ONGC with respect to the financial

status of DIL of an alleged precarious financial status cannot be accepted by us

nor determined in the exercise of the present jurisdiction. On the said ground,

in our view, no case is made out to direct the DIL either to re-deposit the

amount withdrawn by it or to furnish the security for the same, particularly,

when the Section 34 petition filed by ONGC against the award has been

dismissed. No case for grant of prayer as in I.A.No.2 of 2025 has been made

out at least at this stage on the ground taken and the submissions advanced.

37. Sri S. Sriram, learned Senior Advocate, submitted that on termination

of the proceedings under Section 34 by rejecting the challenge to the award

against the ONGC and in favour of DIL maintaining the arbitral award, the

undertaking given by the DIL before the learned Special Judge also comes to an

end. We are not convinced and are not in agreement with the submission. The

reason is that, firstly, there is no denial that the undertaking was given by DIL

that it shall re-deposit the amount as and when directed by the Court.

Secondly, when such undertaking was given and subject to which, the amount

was withdrawn, though there was also „no objection‟ from ONGC, it cannot be

said in the present appeal that, DIL shall not be bound by such undertaking and

that has come to an end on dismissal of CAOP.No.17 of 2022 under Section 34.

In our view, the DIL shall still be bound by its undertaking to deposit the

amount withdrawn by it if so directed by the Court. Appeal it is well settled is

continuation of the original proceedings, though may not be for all the

purposes, but when the order itself, passed under Section 34 is under challenge

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in ComCA No.19 of 2025

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in the present appeal filed under Section 37, if and when this Court directs to

re-deposit the amount, or consequent upon the result of this appeal the DIL

comes under liability to repay either wholly or partly the amount withdrawn by

DIL, it cannot say „not bound by undertaking‟. The DIL in such circumstances

will have to follow either on its undertaking or even otherwise under the

directions/orders of the Court, the directions if issued in that regard.

38. However, for any such direction as prayed by the ONGC, we are of

the view that no case is made out, for the aforesaid reasons.

39. Thus considered. We are of the view that I.A.No.2 of 2025 deserves

rejection.

40. I.A.No.2 of 2025 is accordingly rejected.

Pending miscellaneous petitions, if any, shall stand closed in

consequence.

_______________________

RAVI NATH TILHARI, J

______________________

BALAJI MEDAMALLI, J

Date: .05.2026

Dsr

Note:

LR copy to be marked

B/o

Dsr