IN THE HIGH COURT AT CALCUTTA

COMMERCIAL DIVISION

ORIGINAL SIDE

RESERVED ON: 04.02.2026

DELIVERED ON: 01.04.2026

PRESENT:

THE HON’BLE MR. JUSTICE GAURANG KANTH

APOT 259 OF 2025

GA-COM 2 OF 2025

SALTEE INFRASTRUCTURE LIMITED

VS

M/S. SHIVAM INDUSTRIAL PARKS AND ESTATES LTD.

Appearance: -

Mr. Sakya Sen, Sr. Adv.

Mr. Amritam Mandal, Adv.

Ms. Swati Agarwal, Adv.

………….. for the appellant

Mr. Jishnu Chowdhury, Sr. Adv.

Ms. Ujjaini Chatterjee, Adv.

Ms. Rekha Dey, Adv.

….……. … for the respondent

JUDGMENT

Gaurang Kanth, J. :-

1. The Appellant has preferred the present Arbitration Petition under Section

37(2)(b) of the Arbitration and Conciliation Act, 1996, challenging the

interim award dated 16.05.2025 passed by the learned Sole Arbitrator in

the arbitral proceedings arising between the parties.

2. The facts relevant for adjudication of the present petition are briefly noted

below.

3. The Respondent is the owner of land measuring 91.5 decimals (55 cottahs)

situated at Municipal Holding No. 148, Block–A, Gopalpur, Jagardanga

Main Road, Rajarhat Six Lane Expressway, Kolkata. By a Development

Agreement dated 07.04.2014, the Appellant was appointed as the

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developer in respect of the said property, while the Respondent remained

the landowner. In furtherance thereof, a registered Power of Attorney was

executed by the Respondent in favour of two representatives of the

Appellant to facilitate implementation of the development project.

4. Under the terms of the Development Agreement, the Respondent’s

obligation was limited to contributing the land, whereas the Appellant was

responsible for undertaking and financing the development of the project,

including construction and marketing.

5. On 20.03.2018, the Appellant obtained building sanction for construction

of two blocks, namely: (i) Basement + Ground + 7 floors, and (ii) Ground +

5 floors. The first block (B+G+7), forming part of the project known as

“Saltee Splendora”, was completed in 2019, following which construction

of the second phase commenced.

6. In terms of the agreed sharing arrangement, the Appellant handed over

four flats with car parking spaces and four shops to the Respondent,

which were duly accepted. The Appellant also offered seven additional flats

to the Respondent; however, the Respondent declined to accept the same

and disputes arose between the parties in relation to deductions towards

marketing charges, incidental expenses and 10% additional proceeds in

respect of the increased saleable area.

7. On 21.12.2022, the Respondent issued a notice terminating the

Development Agreement on the ground of delay in completion of the

project. Disputes having arisen between the parties in relation to the

project and their respective rights and obligations under the Development

Agreement, the Respondent invoked the arbitration clause contained

therein and the disputes were referred to arbitration.

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8. Prior to commencement of the arbitral proceedings, the Respondent filed

Misc. Case No. 32 of 2023 under Section 9 of the Arbitration and

Conciliation Act, 1996 before the Commercial Court at Rajarhat. By an

order passed therein, it was directed that any prospective sale of flats or

shops in the project would be executed with the Respondent as a

confirming party, and that the Respondent would be entitled to 40% of the

sale proceeds, pending disposal of the application. Upon constitution of

the Arbitral Tribunal, the said arrangement was continued by the

Tribunal.

9. During the arbitral proceedings, both parties filed applications under

Section 17 of the Arbitration and Conciliation Act, 1996. By an order dated

16.08.2023, the learned Arbitrator modified the earlier interim order and

restrained the Appellant from entering into fresh agreements for sale or

creating third party rights in respect of the remaining unsold flats.

10. Thereafter, upon further applications filed by the Respondent, the Arbitral

Tribunal, by an order dated 26.02.2024, directed the parties to maintain

status quo, restrained the Appellant from creating any encumbrance in

respect of the title deeds, and further directed the Appellant to deposit the

admitted amount of Rs. 11,54,09,382/- in a nationalised bank, subject to

the final outcome of the arbitral proceedings.

11. The Appellant challenged the said order dated 26.02.2024 by filing Misc.

Appeal (Commercial) No. 3 of 2024 under Section 37 of the Arbitration and

Conciliation Act, 1996 before the Commercial Court at Rajarhat. By an

order dated 08.07.2024, the said appeal was dismissed.

12. On 02.03.2024, the Respondent filed a further application under Section

17 alleging non compliance with the order dated 26.02.2024. By an order

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dated 24.04.2024, the Arbitral Tribunal appointed Shri Sarbananda

Sanyal, Advocate, as Receiver with directions to take possession of the

unsold flats and parking spaces, sell the same and distribute the proceeds

in accordance with the terms of the Development Agreement. The Receiver

was also authorised to execute supplementary agreements in the event of

failure on the part of the Appellant to do so.

13. By further directions issued on 24.04.2024, the Tribunal directed the

Appellant to hand over the original title deeds to the Receiver and

authorised the Receiver to take possession of 42 car parking spaces.

14. It appears from the record that, pursuant to the supplementary agreement

executed by the Receiver, the Respondent was authorised to sell four flats

together with four car parking spaces and four shops, the aggregate value

of which has been admitted to be Rs. 6,61,01,000/-.

15. The Arbitral Tribunal thereafter recommended initiation of contempt

proceedings against the Appellant for alleged non compliance with the

direction to deposit the amount of Rs. 11,54,09,382/-. On the basis of the

said recommendation, the Respondent initiated contempt proceedings

before the Commercial Court at Rajarhat. In view of the Judgment dated

08.12.2025 passed by this Court, the Respondent withdrew the said

contempt petition from the Commercial Court at Rajarhat and filed the

same before this Court, where the matter is presently pending.

16. In the meantime, the Appellant filed an application before the Arbitral

Tribunal seeking modification of the order dated 26.02.2024, particularly

the direction requiring deposit of Rs. 11,54,09,382/-, in view of the

subsequent developments including the realisation of Rs. 6,61,01,000/-

and the Receiver having taken possession of the remaining unsold units.

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By the impugned order dated 16.05.2025, the Tribunal rejected the said

application.

17. Aggrieved by the said order dated 16.05.2025, the Appellant has preferred

the present petition under Section 37(2) of the Arbitration and Conciliation

Act, 1996.

18. At the outset, the Respondent raised an objection as to the maintainability

of the present petition on the ground of territorial jurisdiction. By a

Judgment dated 08.12.2025, this Court held that it is the Court within the

meaning of Section 2(1)(e) of the Arbitration and Conciliation Act, 1996 for

the purpose of the present matter.

Submission on behalf of the Appellant

19. Mr. Sakya Sen, learned senior Counsel appearing on behalf of the

Appellant, submits that the Arbitral Tribunal passed the order dated

16.05.2025 without taking into consideration the subsequent

developments and changed circumstances. It is submitted that pursuant

to the supplementary agreement executed by the Receiver, the Respondent

was authorised to sell four flats together with four car parking spaces and

four shops, the aggregate value whereof has been admitted to be Rs.

6,61,01,000/-. Learned Counsel further submits that the Receiver was

appointed by order dated 24.04.2024 and has since taken possession of 13

unsold flats. According to the Appellant, the value of the said flats,

calculated on the basis of the base rate of the last sold unit, works out to

Rs. 15,64,61,500/-, out of which the Appellant’s share would be Rs.

10,35,05,300/-. It is further submitted that, as per the Statement of

Claim, the total claim of the Respondent is Rs. 14,73,58,358/-. In view of

the aforesaid developments, learned Counsel contends that the

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Respondent’s claim already stands sufficiently secured. It is therefore

submitted that directing the Appellant to furnish an additional security of

Rs. 11,54,09,382/- would result in the Respondent’s claim being secured

far in excess of the amount claimed.

20. Learned Senior Counsel for the Appellant further submits that the

Respondent’s claim already stands secured in several ways. First, the

Respondent has been authorised to sell four flats together with four car

parking spaces and four shops, valued at Rs. 6,61,01,000/-. Secondly, a

sum of Rs. 1,50,00,000/- is stated to be lying with the Respondent as

security. Thirdly, the Appellant’s share in the 13 unsold flats presently in

the custody of the Receiver is valued at Rs. 10,35,05,300/-.

21. Learned Senior Counsel appearing for the Appellant submits that, as per

the Statement of Claim, the total value of the Respondent’s claim is Rs.

14,73,58,358/-. However, the learned Sole Arbitrator, while passing the

impugned order, erroneously proceeded on the basis that the claim

amount was Rs. 20,39,25,591/-.

22. It is further submitted that, while adjudicating the application under

Section 17 of the Arbitration and Conciliation Act, 1996, the learned

Arbitrator ought not to have been influenced by the alleged past conduct of

the Appellant, including the alleged non compliance with earlier directions

of the Arbitral Tribunal. According to learned Senior Counsel, the relevant

consideration under Section 17 is confined to ensuring that the claim

amount in the arbitral proceedings is adequately secured, and not to

penalise a party for past instances of non compliance. Accordingly, it is

contended that the direction requiring the Appellant to furnish security

ought to have been determined solely with reference to the extent

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necessary to secure the claim amount. In order to substantiate this point,

the learned counsel for the Appellant relies upon the Judgment of Delhi

High Court in World Window Infrastructure Pvt Ltd Vs Central

Warehousing Corporation reported as 2021(3) High court Cases (Del)

731, and Judgment of the Calcutta High Court in Shivananda Pandey Vs

Bhagwandas Harlalka reported as 1999 SCC Online Cal 246,

23. It is contended that the object of granting interim protection under Section

17 of the Arbitration and Conciliation Act, 1996 is only to secure the claim

amount during the pendency of the arbitral proceedings. According to the

Appellant, there is no requirement in law to secure an amount in excess of

the claim made in the Statement of Claim. In the present case, since the

Respondent’s claim of Rs. 14,73,58,358/- already stands adequately

secured, the learned Arbitral Tribunal ought to have modified the earlier

direction requiring the Appellant to deposit Rs. 11,54,09,382/-,

particularly in view of the subsequent developments.

Submission on behalf of the Respondent

24. Mr. Jishnu Chowdhury, learned Senior Counsel appearing on behalf of the

Respondent, at the outset submits that it is not correct to contend that the

Respondent’s claim before the Arbitral Tribunal is confined to Rs.

14,73,58,358/-. According to him, the said amount represented only a

partial quantification of the claim at the relevant point of time. Learned

Senior Counsel submits that from the very beginning the Appellant has

failed to disclose the actual sale consideration received from the

prospective purchasers of the units, with the result that the Respondent

was kept in the dark regarding the true sale value of the units sold by the

Appellant.

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25. It is submitted that the Respondent had initially quantified its claim at Rs.

14,73,58,358/- on the basis of the disclosures made by the Appellant at

that stage. However, during the course of the arbitral proceedings, the

Respondent obtained copies of several registered sale deeds, from which

the actual consideration received by the Appellant came to light. On the

basis of the said materials, the Respondent contends that the value of its

claim stands enhanced. Learned Senior Counsel submits that the

Respondent is entitled to 40% of the sale consideration in terms of the

Development Agreement and that the final quantification of the claim

would ultimately be determined by the Arbitral Tribunal at the time of the

final award. At present, based on the documents available on record, the

Respondent estimates its claim to be approximately Rs. 20,39,25,591/-,

which, according to him, ought to be secured.

26. Learned Senior Counsel for the Respondent further submits that the

conduct of the Appellant throughout the proceedings demonstrates a lack

of bona fides. According to him, the Appellant has repeatedly failed to

comply with the directions passed by the Arbitral Tribunal. In such

circumstances, it is submitted that the conduct of the Appellant does not

inspire confidence and that, in the event an award is ultimately passed in

favour of the Respondent, there is a serious apprehension that the

Respondent may not be able to realise the awarded amount, thereby

rendering the award a mere paper award.

27. Learned Senior Counsel for the Respondent, however, fairly submits that

certain amounts have already been received by the Respondent. According

to him, the Respondent has received Rs. 3,73,48,976/- from the Appellant,

Rs. 6,61,13,820/- towards eight units, and Rs. 1,50,00,000/- towards a

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security deposit. It is submitted that the security deposit of Rs.

1,50,00,000/- has already been refunded and therefore cannot be adjusted

towards the Respondent’s claim.

28. Learned Senior Counsel submits that, even if the aforesaid amounts are

taken into account, the total amount presently secured would be Rs.

11,84,62,976/-, whereas the Respondent’s claim, based on the presently

available materials, is approximately Rs. 20,39,25,591/-, leaving a balance

of about Rs. 8,54,62,795/- unsecured. It is further submitted that the

amount of Rs. 6,61,13,820/- calculated towards eight units cannot be

treated as entirely belonging to the Respondent, since under the

Development Agreement only 40% thereof represents the Respondent’s

share, while 60% belongs to the Appellant. Consequently, the said amount

cannot be taken into account in a manner so as to suggest that the

Respondent’s claim is fully secured.

29. Learned Counsel further submits that the order under challenge is a

discretionary order passed by the learned Arbitrator in exercise of powers

under Section 17 of the Arbitration and Conciliation Act, 1996. The scope

of interference by this Court with such an order is extremely limited and

would arise only in cases of patent illegality or manifest arbitrariness.

Reliance is placed on the judgments of the Hon’ble Supreme Court in C &

C Constructions Ltd. v. Ircon International Ltd. reported as 2025 (4)

SCC 234 and Somdutt Builders NCC–NEC (JV) v. National Highways

Authority of India reported as 2025 (6) SCC 757.

30. In the aforesaid circumstances, learned Senior Counsel for the Respondent

contends that the Arbitral Tribunal rightly rejected the Appellant’s

application seeking modification of the earlier order and directed the

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Appellant to deposit a sum of Rs. 11,54,09,382/-, the same being

necessary to adequately secure the Respondent’s claim during the

pendency of the arbitral proceedings. In support of the said submissions,

reliance is placed upon the judgments of the Delhi High Court in Lava

International Ltd. v. Mintellectuals LLP, reported as 2024 SCC OnLine

Del 6908, and Shamlalji Expressway Pvt. Ltd. v. NHAI, reported as

2024 SCC OnLine Del 7131 .

Legal Analysis

31. This Court has considered the rival submissions advanced on behalf of the

parties and has perused the materials placed on record.

32. The present appeal has been filed under Section 37(2) of the Arbitration

and Conciliation Act, 1996, challenging the order dated 16.05.2025 passed

by the learned Arbitral Tribunal whereby the Appellant’s application

seeking modification of the earlier order directing deposit of Rs.

11,54,09,382/- came to be rejected.

33. At the outset, it is necessary to note that the scope of interference under

Section 37 of the Act is limited. An appellate court exercising jurisdiction

under Section 37 does not sit in appeal over the merits of the interim order

as a court of first instance. Interference is warranted only where the order

impugned is shown to be arbitrary, perverse, or contrary to the settled

principles governing the grant of interim measures.

34. The impugned order arises from the exercise of powers by the Arbitral

Tribunal under Section 17 of the Arbitration and Conciliation Act, 1996,

which empowers the Tribunal to grant interim measures during the

pendency of the arbitral proceedings, including directions for securing the

amount in dispute in the arbitration. The purpose of such an order is

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essentially protective, namely to ensure that the successful party is not left

with an arbitral award which cannot be effectively enforced. At the same

time, the power under Section 17 is not intended to operate as a penal

measure, nor to direct security beyond what is reasonably necessary to

safeguard the claim pending adjudication. The limited scope of judicial

interference with such discretionary orders of the Arbitral Tribunal has

been recognised by the Hon’ble Supreme Court and most recently in C & C

Constructions Ltd. (supra) and Somdutt Builders NCC–NEC (JV) (supra).

35. The principal contention of the Appellant is that the Respondent’s claim, as

reflected in the Statement of Claim, was Rs. 14,73,58,358/-, and that

subsequent developments have already secured the said claim. It is

submitted that the Receiver appointed by the Arbitral Tribunal has taken

possession of 13 unsold flats, the value of which, based on the base rate of

the last sold unit, is stated to be Rs. 15,64,61,500/-, out of which the

Appellant’s share would be approximately Rs. 10,35,05,300/-. The

Appellant also relies upon the admitted claim towards the sale of four flats

together with four car parking spaces and four shops, amounting to Rs.

6,61,01,000/-, as well as other amounts received by the Respondent, to

contend that the Respondent’s claim already stands adequately secured. It

is therefore argued that directing deposit of an additional amount of Rs.

11,54,09,382/- results in the claim being secured more than once over.

36. The Respondent disputes the aforesaid contention. According to the

Respondent, the amount of Rs. 14,73,58,358/- mentioned in the

Statement of Claim was only a provisional quantification based on the

disclosures made by the Appellant at the relevant time. It is contended

that the Appellant had failed to disclose the actual consideration received

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from the purchasers of the units, and that during the arbitral proceedings

the Respondent obtained copies of several registered sale deeds, which

indicated that the sale consideration received was higher than what had

been disclosed earlier. On the basis of the materials presently available,

the Respondent asserts that its claim stands at approximately Rs.

20,39,25,591/-, subject to final determination by the Arbitral Tribunal.

The Respondent has also emphasised the alleged non compliance by the

Appellant with earlier directions of the Arbitral Tribunal, contending that

the impugned order was necessary to ensure that the Respondent’s claim

does not remain unsecured.

37. Having considered the rival submissions, it is evident that the controversy

essentially concerns the extent to which the Respondent’s claim presently

stands secured, and whether the direction requiring the Appellant to

deposit Rs. 11,54,09,382/- is disproportionate in light of the subsequent

developments relied upon by the Appellant.

38. The materials on record indicate that the Receiver appointed by the Arbitral

Tribunal has taken possession of certain unsold units. However, the

precise valuation of the said units and the ultimate entitlement of the

Respondent are matters that necessarily fall for final adjudication before

the Arbitral Tribunal upon appreciation of the evidence. At this

interlocutory stage, the Court is not required to undertake a detailed

examination of the competing valuations or to finally determine the extent

of the parties’ respective entitlements.

39. Learned Senior Counsel for the Respondent relied upon the judgments of

the Delhi High Court in Lava International Ltd. (supra) and Shamlalji

Expressway Pvt. Ltd. (supra) to contend that the Arbitral Tribunal, while

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exercising powers under Section 17 of the Arbitration and Conciliation Act,

1996, is empowered to direct furnishing of security so as to ensure that

the successful party is not ultimately left with a mere paper award. On the

other hand, learned Senior Counsel for the Appellant relied upon World

Window Infrastructure Pvt. Ltd. (supra) and Shivananda Pandey

(supra) to contend that an order directing furnishing of security ought not

to result in securing an amount in excess of the claim as reflected in the

Statement of Claim.

40. The legal principles enunciated in the aforesaid decisions are not in

dispute, and this Court respectfully concurs with the propositions laid

down therein. However, as also emphasized in the said judgments, the

exercise of the power to grant interim protection must necessarily depend

upon the facts and circumstances of each case, and any direction for

securing the claim must bear a reasonable nexus with the claim sought to

be protected. In the present case, the Respondent has contended that the

amount reflected in the Statement of Claim represented only a provisional

quantification based on the disclosures made by the Appellant at the

relevant time, and that subsequent materials obtained during the course

of the arbitral proceedings indicate that the claim amount may be higher.

The final determination of the Respondent’s entitlement and the precise

quantification of the claim are matters that fall within the domain of the

Arbitral Tribunal and would be adjudicated at the stage of the final award.

In such circumstances, the applicability of the aforesaid decisions must

necessarily be assessed in the context of the factual matrix of the present

case.

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41. Upon considering the factual matrix in detail, the Arbitral Tribunal arrived

at the conclusion that a sum of Rs. 11,54,09,382/- was required to be

secured in order to protect the claims raised by the Respondent. The

determination of the quantum of security to be furnished, in the context of

an application under Section 17 of the Arbitration and Conciliation Act,

1996, squarely falls within the domain and discretion of the Arbitral

Tribunal. It is also pertinent to note that the said amount has been

directed to be deposited in a nationalised bank and would remain intact

pending the final adjudication of the disputes between the parties. Upon

the final determination of the claims, the amount would be released to the

party found entitled thereto. In these circumstances, it cannot be said that

the Arbitral Tribunal has exercised its discretion arbitrarily or

unreasonably. This Court does not find any perversity or arbitrariness in

the impugned order warranting interference in exercise of appellate

jurisdiction under Section 37 of the Act.

42. In view of the foregoing discussion, this Court is of the considered view that

the impugned order dated 16.05.2025 passed by the learned Arbitral

Tribunal does not warrant interference in exercise of appellate jurisdiction

under Section 37 of the Arbitration and Conciliation Act, 1996. The order

impugned is essentially an interim protective measure passed in exercise

of powers under Section 17 of the Act with the object of securing the

Respondent’s claim pending adjudication of the arbitral proceedings.

43. The discretion exercised by the Arbitral Tribunal does not suffer from any

arbitrariness, perversity, or violation of settled principles governing interim

measures, so as to justify interference by this Court in appeal.

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44. The exact quantification of the Respondent’s claim and the respective

entitlements of the parties are matters which fall within the domain of the

Arbitral Tribunal and shall be determined on the basis of the evidence

adduced before it at the stage of the final award. Any observations made in

the present order are confined to the adjudication of the present appeal

and shall not influence the Arbitral Tribunal while deciding the disputes

on merits.

45. The present appeal under Section 37(2) of the Arbitration and Conciliation

Act, 1996 is accordingly dismissed. All pending applications, if any, also

stand dismissed.

(Gaurang Kanth, J.)

SAKIL AMED (P.A)