Calcutta High Court
Orissa Steel Expressway Private … vs Prathyusha – Amr Jv on 22 April, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OCD-42
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
IN AN APPEAL FROM AN ORDER PASSED BY THE LEARNED TRIBUNAL
COMMERCIAL DIVISION
AO-COM/10/2025
IA NO: GA-COM/1/2025
ORISSA STEEL EXPRESSWAY PRIVATE LIMITED
VS.
PRATHYUSHA - AMR JV
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 22ndApril, 2025.
Appearance:
Mr. Jishnu Chowdhury, Sr. Advocate
Mr. Sanjiv Kr. Trivedi, Advocate
Ms. Iram Hassan, Advocate
Mr. Sanket Sarawgi, Advocate
Mr. Satrajeet Sen, Advocate
Ms. Yukti Agarwal, Advocate
...for petitioner.
Mr. Ranjan Bachawat, Sr. Advocate
Mr. Shourjyo Mukherjee, Advocate
Mr. Sourojit Dasgupta, Advocate
Mr. Vishwarup Acharyya, Advocate
... for respondent.
1. This is an appeal under Section 37 of the Arbitration and Conciliation Act,
1996.
2. The petitioner is aggrieved by the order dated December 12, 2024 passed
by the learned arbitrator under Section 17 of the said Act. By the order
impugned, the learned arbitrator directed the petitioner to deposit a sum
of Rs.76.32 crores in its name in any short term fixed deposit / term
deposit account in a nationalised bank, after realisation/withdrawal of the
2
amount of the award deposited with the Delhi High Court by the National
Highway Authority of India [NHAI]. The petitioner was further restrained
from utilising the amount of Rs.76.32 crore by encashing the fixed deposit
/ short term deposit till the completion of the arbitral proceeding. The
petitioner was further directed to send a photocopy of the receipt /
certificate / advice of fixed deposit / term deposit of Rs.76.32 crore to the
office of the Tribunal within a period of two weeks from the date of
creation of such fixed deposit / term deposit. With the above directions,
the application filed by the respondent under Section 17 of the said Act
was disposed of.
3. Mr. Jishnu Chowdhury, learned senior advocate appears on behalf of the
petitioner (respondent in the arbitration proceedings) and submits that the
order suffers from various irregularities.
(a) Un-liquidated claim for damages cannot be secured and the order
passed by the learned arbitrator amounted to an order of attachment.
(b) Payments of the bills and invoices raised by the respondent were
made. The remaining claim of Rs.76.32 crores was only in the form
of damages and unless a breach was proved, the claim for damages
was illusive and imaginary. The quantification of the sum was made
without any basis.
3
(c) The respondent would have to prove that it had sustained loss on
account of some breach committed by the petitioner before the
learned arbitrator could secure the amount.
(d) The learned arbitrator erred in holding that only because the
petitioner had asked the respondent to submit its claim against the
petitioner, which the petitioner proposed to pass through in the
arbitral proceeding between the petitioner and NHAI, the same was
an admission of the dues payable by the petitioner to the respondent.
(e) The finding of admission was contrary to the settled principles of law
with regard to claims for damages and the learned arbitrator had also
made up his mind with regard to the liability of the petitioner to pay
money to the claimant even before the arbitration proceeding had
been concluded.
(f) The learned arbitrator was proceeding with a closed mind and the
petitioner apprehends that the issues which have been raised by the
petitioner with regard to admissibility of the claims of the respondent
will not be adjudicated in the property manner.
4. Several decisions have been relied upon by Mr. Chowdhury in support of
such contentions and it is submitted that the order impugned must be set
aside.
5. Mr. Bachawat, learned senior advocate, opposes the application and
submits that the respondent has a claim on the award received by the
4
petitioner in the arbitration proceeding between the petitioner and NHAI.
The respondent was a sub-contractor who was required to execute the
work awarded to the petitioner by NHAI. A portion of the work that was
completed under the contract with NHAI was executed by the respondent.
Thus, a proportionate amount of the awarded sum in the arbitral
proceeding between NHAI and the petitioner is payable to the respondent
and as such, the claim cannot be treated as an unascertained claim in
damages.
6. According to Mr. Bachawat, NHAI had filed an application for setting aside
the award before the Delhi High Court. During the pendency of the said
application, the awarded sum was deposited in the registry of the Court
and a part of that money was withdrawn by the petitioner by order of
Court. The application under Section 34 of the said Act was dismissed
and NHAI preferred an appeal before the Delhi High Court. Ultimately the
appeal was withdrawn upon the Court recording that the issues between
the petitioner and NHAI had been settled.
7. Mr. Bachawat submits that the respondent had legitimate apprehension
that the remaining money lying in the registry of the Delhi High Court
would be withdrawn by the petitioner before the claim of the respondent
against the petitioner was decided by a proper adjudicating authority.
Moreover, the petitioner being a special purpose vehicle, will be dissolved
after the money is withdrawn as all issues pending with the NHAI would
be settled. The respondent then would have no opportunity follow
5
through its claim. Relying on the orders passed by this Court in the
application under Section 9 of the said Act, Mr. Bachawat submits that
both the Learned Single Judge and the Hon’ble Division Bench had
secured the sum and the learned arbitrator was appointed by this Court.
Similar prayerswere again made under Section 17 of the said Act, for
security of the amount and the learned arbitrator granted a similar
protection to the respondent upon discussing the, prima facie, case and
the balance of convenience and inconvenience.
8. Under such circumstances, as elaborate arguments are being advanced by
the learned advocates for the respective parties, the appeal shall be heard
after the ensuing vacation. Considering the submission that the issues
pending between NHAI and the petitioner have been settled and the appeal
before the Delhi High Court has been disposed of, this Court is of the view
that at this stage the interim directions in paragraph 34 of the order
impugned cannot not be stayed. Further, there has always been orders of
like nature, securing the claim of the respondent.
9. However, the observations of the learned arbitrator on merits, while
passing the order impugned are tentative and not a final determination of
the issues involved. The findings shall be considered as reasons which
have been assigned in justification of the order. The matter will be heard
on its own merits, without the learned arbitrator being influenced by the
findings and observations in the order impugned.
6
10. Let this matter appear on 16th June 2025 at 12 noon for hearing of the
appeal.
11. The apprehensions of Mr. Bachawat with regard to the terms and
conditions of settlement between NHAI and the petitioner and the
likelihood of the petitioner not having complied with the orders that were
passed by the High Court or by the learned arbitrator, are not to be
decided in this proceeding. The respondent is at liberty to take such steps
as may be permissible in law and make appropriate prayers either before
the learned Arbitrator or any other competent forum.
12. Accordingly, GA-COM 1 of 2025 is disposed of. The papers annexed to GA-
COM 1 of 2025 shall be treated as the records in the appeal.
(SHAMPA SARKAR, J.)
S. Kumar / R.D. Barua