RELIANCE INFRATEL LTD. vs ERICSSON INDIA PVT. LTD. AND 2 ORS.

R.D. Dhanuka, J.

[1] By this petition filed under Section 37 of the Arbitration and Conciliation Act, 1996 (for short ""the said Act), each of the petitioners has impugned

the order dated 5th March 2018 passed by the arbitral tribunal thereby restraining each of the petitioners and its affiliates from transferring, alienating,

encumbrance or disposing off any of its assets without specific permission/leave of the arbitral tribunal. The arbitral tribunal has also made it clear that

the said impugned order is without prejudice to any order that may be passed by the Board/Courts of competent jurisdiction. It is further made clear

that the said order is an interim order and common finding recorded in the said order are subject to final award/order that may be passed by the

arbitral tribunal. By consent of parties, all three matters were heard together and are being disposed of by a common order :-

[2] Learned senior counsel for the petitioners and the learned senior counsel for the respondent no.1 have argued the Commercial Arbitration (L)

No.253 of 2018 as a lead matter and thus the facts of the said matter are summarized in the latter part of this judgment.

[3] The respondent no.1 had entered into a separate Master Service Agreements (MSAs) with the petitioner and the respondent nos.2 and 3 on 25th

January 2013. The dispute arose between the parties under the said MSAs.

[4] The respondent no.1 had issued three notices all dated 7th May 2017 under the provisions of the Insolvency and Bankruptcy Code, 2016 to each of

the petitioners. It is the case of the petitioners that the parties thereafter discussed the matter and exchanged the proposals. The petitioners vide its

letter dated 29th June 2017 recorded the revised payment schedule agreed between the parties. The respondent no.1 filed an application under Section

9 of the Insolvency and Bankruptcy Code, 2016 against all Reliance Group on the ground of non-payment of purported admitted amounts.

[5] On 7th September 2017, the respondent no.1 terminated the said MSAs entered into between the petitioner and the respondent nos.1 and 2. There

was further correspondence exchanged between the parties. On 10th October 2017, the respondent no.1 through its advocates' letter refused to

comply with the MSAs. On 1st November 2017, the petitioner in each of these petitions i.e. ""Reliance Group"" invoked arbitration agreement under the

provisions of the said MSAs for a declaration that termination of the MSAs by the respondent no.1 was unlawful and was not in accordance with the

terms of the MSAs and for claiming damages from the respondent no.1 etc. The dispute was accordingly referred to the arbitral tribunal. On 15th

November 2017, the Reliance Group appointed their nominee arbitrator. The respondent no.1 also nominated its nominee arbitrator. Pursuant to the

letter dated 1st November 2017 and 30th November 2017, the arbitral tribunal came to be constituted. On 10th February 2018, the arbitral tribunal held

a preliminary meeting.

[6] The respondent no.1 filed an application under Section 17 of the said Act before the arbitral tribunal inter alia praying for various interim measures.

The respondent no.1 thereafter filed a counter claim on 17th February 2018 before the arbitral tribunal claiming substantial amount from each of the

petitioners. On 13th February 2018, the Reliance Group through their lawyers addressed a letter to the lawyer representing the respondent no.1 stating

that each of the petitioners no longer seek redressal of the dispute referred to in the order dated 1st November 2017 and cancelled the invocation of

the arbitration. Similar letter was also addressed by the Reliance Group to the arbitral tribunal inter alia requesting for an order of termination of the

arbitral proceedings. The Reliance Group also filed an affidavit-in-reply to the application filed by the respondent no.1 under Section 17 of the said Act

and resisted the said application on various grounds.

[7] The arbitral tribunal thereafter heard the application under Section 17 filed by the respondent no.1. The arbitral tribunal did not terminate the

arbitral proceedings. The arbitral tribunal passed an impugned order on 5th March 2018 thereby disposing of the said application filed by the

respondent no.1. The arbitral tribunal did not grant interim measures in so far as the reliefs prayed under clause A of paragraph 44 of the application

under Section 17 of the said Act. The arbitral tribunal however restrained each of the petitioners and its affiliates from transferring, alienating,

encumbering or disposing off any of its assets without specific permission/leave of the arbitral tribunal. The arbitral tribunal also made it clear that the

said impugned order is without prejudice to any order that may be passed by the Board/Courts of competent jurisdiction. It was further made clear

that the said order is an interim order and common finding recorded in the said order are subject to final award/order that may be passed by the

arbitral tribunal.

[8] Being aggrieved by the said order passed by the arbitral tribunal under Section 17 of the said Act, each of the claimants filed three separate

commercial arbitration petition under Section 37 of the said Act impugning the part of the order in so far as the reliefs are granted against the

petitioners.

[9] Mr.Tulzapurkar, learned senior counsel for the petitioner in Commercial Arbitration (L) No.253 of 2018 invited my attention to certain averments

made by the respondent no.1 in its application filed under Section 17 of the said Act. Learned senior counsel invited my attention to Media Release

annexed to the arbitration petition and would submit that the respondent no.1 was fully aware of formation of the Joint Lender Forum (JLF). He

submits that due to significant loans from financial creditors comprising of both domestic and foreign banks and financial institution as also bond

holders of the Reliance Group, amounting to Rs.38,000 crore, certain lenders had constituted the said JLF in the month of June 2017 in accordance

with the guidelines of the Reserve Bank of India. He submits that the proposed sale of the assets from the Reliance Group to Reliance Jio Infocomm

Limited was involuntary and was being directed by the secured lenders of the Reliance Group.

[10] It is submitted that it was neither the case of the respondent no.1 that the petitioners were selling or about to sell their properties or assets and/or

were trying to remove the properties from the local limits of the jurisdiction of this Court, with the intention to delay or defeat the claim of the

respondent no.1 nor the arbitral tribunal rendered any such prima facie finding before granting an injunction against each of the petitioners. Learned

senior counsel submits that the principles of Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 (CPC) apply to the application under Section

17 of the said Act. The principles of Order XXXVIII Rule 5 of CPC are not at all satisfied in this case. The impugned order passed by the arbitral

tribunal is thus contrary to the principles of Order XXXVIII Rule 5 of CPC. In support of this submission, learned senior counsel placed reliance on

the judgment of the Supreme Court in the case of Raman Tech & Process Engg. Co. & Anr. Vs. Solanki Traders, 2008 2 SCC 302, the judgment of

this Court in the case of Saraswat Co-operative Bank Ltd., Mumbai Vs.Chandrakant Manganlal Shah & Ors., 2002 1 MhLJ 581 and the judgment of

this Court in the case of Tata Capital Financial Services Ltd. Vs. Unity Infraprojects Ltd. & Ors.,2015 SCCOnLineBom 3597.

[11] It is submitted by the learned senior counsel that all the assets of each of the petitioners have already been encumbered or charged with those

lenders much prior to the date of execution of the MSAs between the parties. It is submitted that the respondent no.1 being one of the unsecured

creditors, cannot stop the process started by the JLF initiated by the large number of secured lenders of the Reliance Group. The respondent no.1

could not have applied for any injunction in respect of those assets which are proposed to be transferred in favour of the secured creditors. He

submits that the amount would be directly paid to the secured creditors towards their dues by the transferees and would not be paid to the Reliance

Group.

[12] Learned senior counsel submits that in this process, the respondent no.1 being one of the unsecured creditors, even in ordinary course would not

get anything out of those assets as they are encumbered or charged with the secured creditors. He submits that the amount that is going to be

received on transfer of the assets is not sufficient to satisfy even the debts of the secured creditors and thus the respondent no.1 is not likely to get

any amount even if all such assets are sold and transferred in favour of the transferee, even in future if the respondent no.1 succeeds in the arbitral

proceedings. He submits that in view of the injunction order granted by the arbitral tribunal, the large number of secured creditors of the Reliance

Group would be seriously affected with no benefit of any nature whatsoever to the respondent no.1.

[13] It is submitted by the learned senior counsel that the arbitral tribunal totally overlooked the fact that it was not the Reliance Group which was

dealing with their assets at all, but the sale/transfer of those assets was an involuntary act and was initiated by the JLF consisting of the secured

creditors of the Reliance Group. The principles of Order XXXVIII Rule 5 and Order XXXIX of CPC were thus not at all attracted.

[14] It is submitted by the learned senior counsel that the balance of convenience is in favour of the petitioners and not the respondent no.1. Learned

senior counsel placed reliance on some of the averments made by the respondent no.1 and more particularly paragraphs 27, 36 and 37 of the

application made under Section 17 of the said Act filed by the respondent no.1. It is submitted by the learned senior counsel that even though the

petitioner has not disputed the liability of the respondent no.1, merely on that ground, the principles of Order XXXVIII Rule 5 of CPC cannot be

extended to the facts of this case. He also invited my attention to some of the averments made in the affidavit-in-reply filed by the petitioners before

the arbitral tribunal to the application under Section 17 of the said Act filed by the respondent no.1. He submits that the proposed sale of the assets by

the Reliance Group cannot be considered as clandestine sale only for the purpose of payment to the lenders who are the secured creditors. He

submits that as on today, the lenders' claims is about Rs.44,000 crore against the Reliance Group whereas the claim of the respondent no.1 is a smaller

claim and that also as an unsecured creditor.

[15] Mr.Chinoy, learned senior counsel for the petitioner in Commercial Arbitration Petition (L) No.254 of 2018 adopted the submissions made by

Mr.Tulzapurkar, learned senior counsel in Commercial Arbitration Petition (L) No.253 of 2018. In addition to those submissions, it is submitted by the

learned senior counsel that all the assets of the Reliance Group are either hypothecated or pledged or mortgaged. The unsecured claim of the

respondent no.1 cannot be converted in to a secured claim by the impugned order passed by the arbitral tribunal. Learned senior counsel strongly

placed reliance on the judgment of this Court in the case of Tata Capital Financial Services Ltd. and more particularly paragraphs 8 and 11 and would

submit that the disposal of the assets of the Reliance Group pursuant to the decision taken by the JLF cannot be termed as disposal with an intention to

defeat any award against the Respondents.

[16] It is submitted that in these circumstances, the principles of Order XXXVIII Rule 5 of CPC could not have been extended by the arbitral tribunal

to the facts of this case. It is submitted that though the arbitral tribunal in the impugned order has summarized the principles of Order XXXVIII Rule 5

of CPC and has held that the same would be attracted to the facts of this case, the said principles, however, are not applied while dealing with the

application filed by the respondent no.1 under Section 17 of the said Act. He submits that the claim of an unsecured creditor cannot be considered at

part with the claim of the secured creditor and thus the respondent no.1 being outside the JLF, could not seek any relief in respect of those properties

of the Reliance Group having been already encumbered or charged or mortgaged in favour of such secured creditors.

[17] Mr.Seervai, learned senior counsel for the petitioner in Commercial Arbitration Petition (L) No.252 of 2018 adopted the submissions made by

Mr.Tulzapurkar, in Commercial Arbitration Petition (L) No.253 of 2018 and Mr.Chinoy, learned senior counsel for the petitioner in Commercial

Arbitration Petition (L) No.254 of 2018. It is submitted by the learned senior counsel that the sale of all the assets of each of the petitioners would not

even fetch the amount to clear the entire liability of the secured creditors. Since the respondent no.1 would not get any amount out of sale of those

assets of the Reliance Group, the respondent no.1 could not have been granted any interim measures by the arbitral tribunal.

[18] Mr.Kher, learned senior counsel for the respondent no.1 in all the three petitions, on the other hand, invited my attention to some of the

correspondence exchanged between the parties at pages 394, 396, 400 and 406 annexed to the Commercial Arbitration Petition (L) No.252 of 2018

and would submit that the Reliance Group had been all throughout making promises to release the dues of the respondent no.1 and had furnished

several payments schedule from time to time with promises and undertakings to make such payments to the respondent no.1. The respondent no.1

relied upon the said promises and undertakings rendered by the Reliance Group and based thereon continued to provide services to the Reliance Group

from time to time. The Reliance Group however did not make any payment inspite of such promises and undertakings and providing payment schedule

from time to time.

[19] Learned senior counsel invited my attention to paragraph 25 of the affidavit-in-reply dated 16th February 2018 filed by the Reliance Group before

the arbitral tribunal contending that it was not the case of the respondent no.1 that the sale/monetization of a part of the assets of the petitioner and its

group companies will make these companies a shell without any material assets. It is contended by the petitioner in the said paragraph that even after

the asset monetization, the petitioner and its group companies will have sufficient assets to satisfy any claim duly adjudicated by the appropriate forum.

[20] It is submitted by the learned senior counsel that the submissions advanced before this Court today by the learned senior counsel appearing for

the petitioners in each of the aforesaid petitions that even if the respondent no.1 succeeds in the arbitral proceedings, the respondent no.1 being an

unsecured creditor, cannot recover any amount from any of the assets of the Reliance Group is totally contrary to the stand taken in the affidavit-in-

reply filed before the arbitral tribunal. He submits that in any event, an unsecured creditor cannot be without a remedy of seeking interim measures in

respect of the assets of the Reliance Group so as to secure the claim of the respondent no.1 to recover its dues from the Reliance Group upon the

respondent no.1 succeeding in the arbitral proceedings. It is submitted that the petitioner has admittedly admitted the dues of the respondent no.1 to the

tune of more than Rs.1000 crore.

[21] Learned senior counsel invited my attention to various averments made by the petitioners in their affidavit-in-reply before the arbitral tribunal, the

averments made in the application filed by the respondent no.1 under Section 17 of the said Act before the arbitral tribunal and also the prima facie

findings rendered by the arbitral tribunal in the impugned order. He submits that several cheques issued by the Reliance Group in favour of the

respondent no.1 were dishonoured. He submits that the respondent no.1 had not only made sufficient averments in the application filed under Section

17 of the said Act so as to meet the requirements under the principles of Order XXXVIII Rule 5 of CPC but also satisfied the said requirements

before the arbitral tribunal. He submits that the arbitral tribunal had considered this crucial aspect including the averments made by both the parties

and had rightly rendered various prima facie findings that if the injunction as prayed was not granted by the arbitral tribunal, the respondent no.1 would

seriously suffered even if the respondent no.1 succeeds in the arbitral proceedings. The arbitral tribunal also held that the claim of the respondent no.1

has been disputed by the Reliance Group.

[22] It is submitted by the learned senior counsel that the arbitral tribunal has granted injunction against the Reliance Group from transferring,

alienating, encumbrance or disposing off any of its assets without specific permission/leave of the arbitral tribunal. It is submitted that there is thus no

blanket injunction granted in favour of the respondent no.1. If any assets of the Reliance Group are required to be sold, the same would be subject to

the specific permission or leave of the arbitral tribunal. It is submitted by the learned senior counsel that the assets of the petitioners' companies which

are being controlled by one of the member of the Ambani family are being sold to the company owned by another member of the Ambani family. It is

submitted by the learned senior counsel that after invoking the arbitration agreements by the Reliance Group and after constitution of the arbitral

tribunal and after the respondent no.1 filing an application under Section 17 of the said Act, the Reliance Group purported to address a letter to the

arbitral tribunal deliberately withdrawing their notice invoking arbitration agreements and prayed for termination of mandate of the arbitral tribunal.

The respondent no.1 has filed substantial counter claim against the Reliance Group.

[23] It is submitted by the learned senior counsel that since it was the case of the petitioner before the arbitral tribunal that the Reliance Group had

sufficient assets, it was parting with only part of the assets, liability of the respondent no.1 was not disputed and factum of sale being not disputed, in

these circumstances, the arbitral tribunal was fully justifying in granting interim measures of injunction in favour of the respondent no.1 with a rider

that the property would not be transferred, alienated, encumbered or disposed off any of its assets without specific permission/leave of the arbitral

tribunal. The arbitral tribunal had rightly held that balance of convenience was in favour of the respondent no.1 and not in favour of the Reliance

Group.

[24] Learned senior counsel for the respondent no.1 placed reliance on the following judgments :-

(i) Judgment of the Supreme Court in the case of Raman Tech & Process Engg. Co. & Anr. Vs. Solanki Traders (paragraphs 4 and 6).

(ii) Judgment of this Court in the case of Baker Hughes Singapore Pte. Vs. Shiv-Vani Oil and Gas Exploration Services Ltd, 2015 1 BCR 377

(paragraphs 36 to 38, 43, 46, 47, 50, 51 and 52.

(iii) Judgment of this Court in the case of Acron Developers Private Limited Vs. Patel Engineering Limite,d2015 SCCOnLineBom 4739 (Paragraphs

11, 25, 30 and 35 to 40).

(iv) Judgment of this Court in the case of Caps & Tabs Trading Company Vs. Elder Pharmaceuticals Limited,2015 SCCOnLineBom 5629 -

(Paragraphs 36 to 45).

(v) Judgment of the Delhi High Court in the case of ATC Telecom Infrastructure Private Limited Vs. Reliance Communications Limite,d2017

SCCOnLineDel 12252 (paragraphs 15 and 26 to 28).

(vi) Judgment of the Delhi High Court in the case of Reliance Communication Limited & Anr. Vs.Bharti Infratel Limite,d2018 SCCOnLineDel 6564

(paragraphs 10, 13, 22 and 23).

(vii) Unreported judgment of the Delhi High Court in the case of GTL Infrastructure Limited Vs. M/s. Aircel Limited &O rs., delivered on 29th

January 2018 in O.M.P.(I) (COMM.) 40 of 2018.

[25] Learned senior counsel distinguishes the judgments relied upon by Mr.Tulzapurkar, learned senior counsel for the petitioners in Commercial

Arbitration Petition (L) No.253 of 2018. Learned senior counsel for the respondent no.1 submits that the arbitral tribunal has rendered various prima

facie findings in the impugned order after considering the facts and law and thus this Court shall not interfere with such prima facie findings in these

petitions filed under Section 37 of the said Act.

[26] Mr.Tulzapurkar, learned senior counsel for the petitioners in Commercial Arbitration Petition (L) No.253 of 2018 in rejoinder submits that though

the arbitral tribunal has correctly laid down the test under Order XXXVIII Rule 5 of CPC, however has totally overlooked the said principles while

actually applying the test in the impugned order. He distinguishes the judgments relied upon by Mr.Kher, learned senior counsel for the respondent

no.1 on the ground that the facts before this Court in those judgments were totally different and the view have been taken by the Courts in the facts of

those cases. It is submitted by the learned senior counsel that though the arbitral tribunal in the impugned order has granted injunction without leave or

permission of the arbitral tribunal, the said condition imposed by the arbitral tribunal is a fetter on the sale of assets proposed by the Reliance Group.

[27] Mr.Chinoy, learned senior counsel in Commercial Arbitration Petition (L) No.254 of 2018 in rejoinder submits that all the properties and assets of

the Reliance Group in respect of the injunction is granted by the arbitral tribunal were already secured in favour of various lenders much prior to 2010

whereas MSAs were entered into between the parties only in the year 2013.

REASONS AND CONCLUSIONS :-

[28] A perusal of the correspondence exchanged between the parties prima facie indicates that though the Reliance Group had made promises and

assurances and had given undertakings to pay the respondent no.1 its dues and had submitted payment schedule from time to time, the Reliance Group

did not make any payment. The cheques issued by the Reliance Group were dishonoured. The arbitral tribunal has considered these correspondence in

the impugned order and has observed that the correspondence and the minutes placed on record show that the claim of the respondent no.1 had been

subjected to the consideration of the referred persons of the companies and was agreed to be paid in installment schedule of payments attached with

the recorded minutes dated 10th March 2017.

[29] A perusal of the averments made in the application filed under Section 17 of the said Act by the respondent no.1 clearly indicates that it was a

specific case of the respondent no.1 that the Reliance Group was trying to transfer their assets with the intention to defeat the decree if passed in

favour of the respondent no.1. The respondent no.1 had also averred in that application as well as in the counter claim that its claims were much in

excess of the admitted debt of Rs.1012 crore. Despite the admitted liability, the Reliance Group failed to pay the amount due to the respondent no.1.

The respondent no.1 had also averred that the financial position of the Reliance Group was precarious and they had taken contradictory stands in

relation to their liability and had defaulted in payment of their dues. The Reliance Group had reported loss of Rs.2709 crore compared with a profit of

Rs.62 crore in the previous year.

[30] The arbitral tribunal thus after considering the material on record rendered a prima facie finding that the respondent no.1 had made out a prima

facie case and was likely to succeed and would not be in a position to realise the said outstanding amount if they were permitted to transfer their

assets. The arbitral tribunal also rendered a prima facie finding that the Reliance Group was now trying to transfer the assets. I am thus not inclined to

accept the submission of the learned senior counsel for the Reliance Group that neither there was any pleadings in the application filed by the

respondent no.1 under Section 17 of the Act to this effect nor was any prima facie finding rendered by the arbitral tribunal that the Reliance Group

was trying to transfer the assets with the intention to defeat the decree, if any, passed in favour of the respondent no.1.

[31] A perusal of the reply filed by the Reliance Group in the application filed under Section 17 of the said Act by the respondent no.1 clearly indicates

that in reply itself, the Reliance Group has admitted the fact that the Reliance Group is in precarious and/or insolvent circumstances or in acute

financial embarrassment though contended that though the same is a relevant circumstance, but not by itself sufficient to grant interim measures. In

paragraph 16 of the said affidavit, it is averred that due to significant loans from financial creditors comprising of both domestic and foreign banks and

financial institution as also bond holders of the Reliance Group, amounting to Rs.38,000 crore, certain lenders had constituted the said JLF in the month

of June 2017 in accordance with the guidelines of the Reserve Bank of India. It is averred by the Reliance Group that there is a huge debt which is

being restructured, which involves substantial financial sacrifice on the part of the lenders so as to bring the debt position of the Reliance Group and its

group companies back on rails.

[32] In paragraph 20 of the said affidavit, it is averred that the Reliance Jio Infocomm Limited emerged as the highest bidder in a transparent process

conducted under the supervision of a high-powered Bid Evaluation Committee appointed by JLF. The Reliance Group and the Reliance Jio Infocomm

Limited had entered into a definitive agreements for the transfer of the assets which is expected to be concluded by 31st March 2018.

[33] During the course of arguments, learned senior counsel appearing for all the three petitioners vehemently argued before this Court that even if the

respondent no.1 succeeds in the arbitral proceedings and the substantial part of claim of the respondent no.1 is not denied by the Reliance Group, the

respondent no.1 will not be able to recover any amount from the Reliance Group. It is thus clear that the liability of the Reliance Group towards the

respondent no.1 had not been disputed. It is also not disputed that the respondent no.1 is likely to succeed in the arbitral proceedings.

[34] The arbitral tribunal has considered this aspect at great length in the impugned order and has made it clear that the arbitral tribunal was not

exercising jurisdiction to bring an unsecured creditor into the list of secured creditors and its affiliates as also not to delete and adversely impact rights

of the secured creditors particularly when it was an admitted case that the proceedings before the Insolvency and Bankruptcy Board under the Court

were stated to be pending. The arbitral tribunal has also clarified in paragraph 37 of the impugned order that the said interim order was without

prejudice to any order that may be passed by the Board/Courts of competent jurisdiction. I am thus not inclined to accept the submission of the learned

senior counsel of the Reliance Group that though the arbitral tribunal has rightly summarized the principles of Order XXXVIII Rule 5 of CPC, the said

principles however are not applied to the facts of this case. It is made clear by the arbitral tribunal that the arbitral tribunal is neither altering the

financial status of the respondent no.1 nor the inter se relationship of the parties in that regard directly, or even impliedly. It is made clear in the

impugned order that the respondent no.1 shall continue to maintain its status as a creditor.

[35] The arbitral tribunal has adverted to the principles of the law laid down in the case of Raman Tech & Process Engg. Co. & Anr. Vs. Solanki

Traders in the impugned order. It is held by the arbitral tribunal that where the plaintiff satisfies the Court that he has a prima facie case and that the

defendant is attempting to remove or dispose off his assets with the intention of defeating the decree that may be passed, the plaintiff would be entitled

to an order under the provisions of Order XXXVIII Rule 5 of CPC. The applicant should satisfy the Court or tribunal that it has a bona-fide claim and

there is a fair chance of the applicant succeeding in the proceedings finally. The arbitral tribunal has rightly rendered a prima facie finding that the

emails and correspondence placed on record clearly show that the Reliance Group has failed to discharge its liability despite making promises and

though had given an undertaking. Partial payment was made but the schedule of the payment committed by the Reliance Group was not adhered to

and there were persistent defaults in payment. In my view, in these circumstances, grant of relief to the respondent no.1 would not amount to

converting financial status of the respondent no.1 from unsecured creditor to secured creditor. The arbitral tribunal has rightly held that a creditor who

establishes a prima facie case that there was recently a likelihood of succeeding in the claim and shows that the other party was likely to defeat the

claim by transferring of assets, such claim would be entitled to protection under the provisions of Order XXXVIII Rule 5 of CPC. The said protection

was directed against a non-applicant seeking to defeat the execution of a decree or enabling a successful decree holder from executing the decree in

its favour.

[36] The arbitral tribunal has also taken a cognizance of the admitted fact that the proceedings under the Insolvency and Bankruptcy Code has been

initiated against the Reliance Group, however the said application is yet to be admitted by the National Company Law Tribunal. The arbitral tribunal

ultimately held that the respondent no.1 has made out an arguable case and thus the arbitral tribunal was of the opinion that in the event, the

respondent no.1 is denied any relief, it would be an irretrievable injury to the respondent no.1. The balance of convenience is also in favour of the

respondent no.1 and not in favour of the Reliance Group.

[37] I am not inclined to accept the submission of the learned senior counsel appearing for the petitioners in each of the aforesaid three petitions that

since the respondent no.1 being an unsecured creditor, even if the liability of the respondent no.1 is not disputed by the petitioners and even if the

respondent no.1 succeeds in the arbitral tribunal, since the respondent no.1 may not be able to recover any amount in execution of the said award

and/or decree, the respondent no.1 is not entitled to seek any interim measures under Section 17 of the said Act on that ground. In my view, if this

argument of the learned senior counsel for the petitioner is accepted, an unsecured creditor who has though undisputed claim and is likely to succeed

in the arbitral proceedings if filed, shall not have even right to pursue its remedy of recovering its legitimate dues and to seek interim protection on the

ground that even if such unsecured creditor succeeds in the arbitral tribunal, such unsecured creditor will not be able to recover to any amount. In my

view, merely on the basis of such presumption that though such unsecured creditor succeeds, such unsecured creditor will not be able to recover any

amount, no relief of interim measures can be refused to such unsecured creditor. In my view, that is not the legislative purpose and intent of Order

XXXVIII Rule 5 of CPC. If such an argument as advanced by the learned senior counsel for the petitioners is accepted, no unsecured creditor will be

entitled to even file any proceedings for recovery of its legitimate dues and pray for interim measures by way of injunction or otherwise against such

debtors to secure its claims. Such debtors cannot be allowed to deal with its properties with such intention of depriving the unsecured creditors of the

fruits of success in the arbitral proceedings.

[38] Supreme Court in the case of Raman Tech & Process Engg. Co. & Anr. Vs. Solanki Traders has held that 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. It is held that

the plaintiff has to show prima facie case that his claim is bonafide and valid and also satisfy the court that the defendant is about to remove or dispose

of the whole or part of his property, with the intention of obstructing or delaying the execution of any decree that may be passed against him, before

power is exercised under Order XXXVIII Rule 5 CPC. In this case, the respondent no.1 has satisfied all these criteria laid down by the Supreme

Court in the said judgment. The Reliance Group admitted the substantial part of the claim of the respondent no.1 and has boldly urged before this

Court that even if the respondent no.1 succeeds, the said party would not be able to recover any amount from the Reliance Group. In my view, this

type of stand taken by the Reliance Group has to be rejected at the threshold.

[39] Learned senior counsel for the respondent no.1 is right in placing reliance on the correspondence exchanged between the parties which clearly

shows that the Reliance Group went on making promises and undertakings to pay legitimate dues of the respondent no.1 according to the payment

schedule but failed to pay such amount. The petitioners thus cannot be allowed to take such stand before this Court that even if the respondent no.1

succeeds in the arbitral proceedings, since the respondent no.1 will not be able to recover any amount from the Reliance Group, no interim measures

can be granted by the arbitral tribunal. In my view, such defence raised by the Reliance Group is not bonafide and is most unreasonable.

[40] In so far as the judgment of the Division Bench of this Court in the case of Saraswat Co-operative Bank Ltd., Mumbai Vs.Chandrakant

Manganlal Shah & Ors. (surpa) is concerned, the principles of the Division Bench of this Court are not in dispute. However, the respondent no.1 has

made out a case for grant of interim measures. The said judgment would not assist the case of the petitioners.

[41] In so far as the judgment of this Court in the case of Tata Capital Financial Services Ltd. Vs. Unity Infraprojects Ltd. & Ors. strongly relied upon

by the learned senior counsel for the petitioners is concerned, the facts before this Court in the said judgment were totally different. The respondent

no.1 admittedly is not being a part of JLF and thus cannot be deprived of protecting its claim once having made out a prima facie case and balance of

convenience being in favour of such creditor. The judgment of this Court in the case of Tata Capital Financial Services Ltd. Vs. Unity Infraprojects

Ltd. & Ors. would not assist the case of the petitioners.

[42] This Court in the case of Baker Hughes Singapore Pte. Vs. Shiv-Vani Oil and Gas Exploration Services Ltd. has adverted to various judgments

of the Supreme Court and also the judgment of the Division Bench of this Court in the case of Nimbus Communications Ltd. Vs. Board of Control for

Cricket in India & Anr., 2012 5 BCR 114 and has laid down the principles on which the arbitral tribunal is empowered to grant interim measures even

to an unsecured creditor. The principles laid down by this Court in the said judgment would squarely apply to the facts of this case. In paragraph 51 of

the said judgment, it is held by this Court that since the arbitral tribunal is also empowered to make an interim award and to grant money claim on the

basis of admitted claim and/or acknowledged liability, the arbitral tribunal has also power to grant interim measures so as to secure the claim which is

subject matter of the dispute before the arbitral tribunal if such case is made out by the applicant. In the said matter, this Court has held that for the

purpose of granting interim measures, the arbitral tribunal has to consider whether the claimant has made out a prima facie case that he would

succeed finally in the arbitration proceedings and whether had made out a case for grant of interim measures.

[43] In my view, the arbitral tribunal in this case, has rightly rendered a prima facie finding that the respondent no.1 has made out a case that it would

succeed finally in the arbitral proceedings and the balance of convenience was in favour of the respondent no.1. The principles of law laid down in the

case of Baker Hughes Singapore Pte. Vs. Shiv-Vani Oil and Gas Exploration Services Ltd. squarely applies to the facts of this case. I am respectfully

bound by the said judgment.

[44] In so far as the other judgments relied upon by the learned senior counsel for the respondent no.1 referred to aforesaid are concerned, this Court

need not multiply the authorities on the same issue and thus though all such judgments would assist the case of the respondent no.1, this court need not

deal with each and every such judgments relied upon by the learned senior counsel for the respondent no.1.

[45] In my view, the arbitral tribunal has considered all the relevant facts and principles of law and have rightly granted interim measures in favour of

the respondent no.1. The arbitral tribunal has granted such interim measures restraining the Reliance Group from transferring, alienating, encumbrance

or disposing off any of its assets without prior permission/leave of the arbitral tribunal. The impugned order passed by the arbitral tribunal is well

reasoned order. I do not find any infirmity in the impugned order passed by the arbitral tribunal.

46] I therefore pass the following order :-

(i) All the three commercial arbitration petitions are dismissed.

(ii) There shall be no order as to costs.