Delhi High Court
Indiabulls Housing Finance Limited vs Sara Estates Private Limited & Anr. on 23 December, 2024
Author: C. Hari Shankar
Bench: C. Hari Shankar
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 18 September 2024
Pronounced on: 23 December 2024
+ O.M.P.(I) (COMM.) 401/2023, I.As. 4358/2024 & 34878/2024
INDIABULLS COMMERCIAL CREDIT LTD. .....Petitioner
Through: Mr. Anirudh Bakhru, Mr. Ankit
Banati, Mr. Adith Nair, Mr. Naman Gowda,
Mr. Nikhil Rathi and Ms. Mallika Kamal,
Advs.
versus
AMBIENCE PRIVATE LTD. .....Respondent
Through: Mr. Rajeeve Mehra, Sr. Adv.
with Mr. Anush Raajan, Mr. Madhusudan,
Mr. Pradyumn Yadav and Mr. G.S.
Sachdeva, Advs.
+ O.M.P.(I) (COMM.) 405/2023, I.A. 34882/2024
INDIABULLS HOUSING FINANCE LIMITED .....Petitioner
Through: Mr. Karan Bharihoke, Mr.
Ankit Banati, Mr. Adith Nair, Mr. Naman
Gowda, Mr. Nikhil Rathi and Ms. Mallika
Kamal, Advs.
versus
SURABHI GEHLOT ....Respondent
Through: Mr. Rajeeve Mehra, Sr. Adv.
with Mr. Anush Raajan, Mr. Madhusudan,
Mr. Pradyumn Yadav and Mr. G.S.
Sachdeva, Advs.
+ O.M.P.(I) (COMM.) 406/2023, I.As. 30160/2024 &
34867/2024
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 1 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
INDIABULLS COMMERCIAL CREDIT LTD. .....Petitioner
Through: Mr. Rajiv Nayar, Sr. Adv. with
Mr. Ankit Banati, Mr. Adith Nair, Mr.
Saurabh Seth, Mr. Naman Gowda, Mr.
Nikhil Rathi and Ms. Mallika Kamal, Advs.
versus
AMBIENCE PROJECTS AND INFRASTRUCTURE PVT.
LTD. .....Respondent
Through: Mr. Rajeeve Mehra, Sr. Adv.
with Mr. Anush Raajan, Mr. Madhusudan,
Mr. Pradyumn Yadav and Mr. G.S.
Sachdeva, Advs.
+ O.M.P.(I) (COMM.) 407/2023, I.A. 34872/2024
INDIABULLS HOUSING FINANCE LIMITED .....Petitioner
Through: Mr. Karan Bharihoke, Mr.
Ankit Banati, Mr. Adith Nair, Mr. Naman
Gowda, Mr. Nikhil Rathi and Ms. Mallika
Kamal, Advs.
versus
SARA ESTATES PRIVATE LIMITED & ANR ...Respondents
Through: Mr. Rajeeve Mehra, Sr. Adv.
with Mr. Anush Raajan, Mr. Madhusudan,
Mr. Pradyumn Yadav and Mr. G.S.
Sachdeva, Advs.
+ O.M.P.(I) (COMM.) 408/2023, I.As. 30159/2024 &
34883/2024
INDIABULLS HOUSING FINANCE LTD. .....Petitioner
Through: Mr. Dayan Krishnan, Sr. Adv.
with Mr. Ankit Banati, Mr. Adith Nair, Mr.
Naman Gowda, Mr. Nikhil Rathi and Ms.
Mallika Kamal, Advs.
versus
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 2 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
AMBIENCE PROJECTS AND INFRASTRUCTURE
PVT. LTD. .....Respondent
Through: Mr. Rajeeve Mehra, Sr. Adv.
with Mr. Anush Raajan, Mr. Madhusudan,
Mr. Pradyumn Yadav and Mr. G.S.
Sachdeva, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
JUDGMENT
%
1. The petitioner Indiabulls Housing Finance Ltd1 is a financier.
Against monies lent by the petitioner to the respondent Ambience
Projects and Infrastructure Pvt Ltd2, Ambience agreed to sell housing
units, in various housing projects of theirs, to Indiabulls. The projects
in question are Ambience Tiverton3, Caitriona Residential Apartment
Complex4 and Ambience Creacion5, of which Tiverton is located at
NOIDA and Caitriona and Creacion are located in Gurugram.
Subsequently, by different Cancellation Deeds, the ATSs, in respect of
some of the units, were cancelled. A total of 17 Agreements to Sell6
were, therefore, executed between Indiabulls and Ambience, the basic
details of which, petition-wise, may be provided thus:
Sr. Date of No. of Sale Amount No of Amount Amount OMP
No ATS housi- Consideratio paid (₹)* units payable by paid by (I)
ng -n (₹)* cancelle- Ambience Ambience (Comm)
units d* against towards
cancelled cancellation
units*§ *§
1 18 20 484120000/- 484120000/- 14 338884000/- 126824000/ 401/202
November 3
20221 “Indiabulls” hereinafter
2 “Ambience” hereinafter
3 “Tiverton” hereinafter
4 “Caitriona” hereinafter
5 “Creacion” hereinafter
6 “ATSs” hereinafter
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 3 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
2 12 October 1 79327528/- 75361152/- – – – 405/202
2021 3
3 12 October 1 93271076/- 88607522/- – – –
2021
4 27 April 37 959385457/- 70.68 crores 3 2120541462/- –
2022
5 20 July 38 960034045/- 70.70 crores – –
2022
6 20 July 22 626347171/- 44.42 crores 1 17987690/- –
2022 406/202
7 29 July 8 202206932/- 14.89 crores – – – 3
2022
8 28 October 13 329825378/- 18.95 crores 2 15386027/- –
2022
9 28 October 132 3681581974/- 242.28 9 191889397/- –
2022 crores
10 4 October 1 78330972/- 74414423/- - - -
2021
11 4 October 1 81443948/- 77371750/- - - -
2021
12 4 October 1 78327492/- 74411117/- - - -
2021 407/202
13 4 October 1 81475152/- 77401394/- - - - 3
2021
14 4 October 1 81475152/- 77401394/- - - -
2021
15 4 October 1 81475152/- 77401394/- - - -
2021
16 30 51 1277081863/- 84.52 crores 3 80275048/- -
September
2020 408/202
17 12 April 10 253987746/- 15.05 crores 1 25323940/- - 3
2021
* The figures in the above chart have been collated from the pleadings, the ATSs and the cancellation deeds.
§
In respect of cancellations, as the figures pertaining to the cancellations which took place after the OMPs were filed are
not forthcoming, they are not reflected in the table.
Resultantly, the ATS, which were in respect of a total 306 housing
units, out of which Cancellation Deeds were executed in respect of 33
units, thereby resulting in 273 surviving units.
2. Also, out of a total sale consideration of ₹ 8935445055/-,
covering all the ATSs, an amount of ₹ 6380775728/- stands paid by
Indiabulls to Ambience. Letters from Indiabulls, acknowledging
receipt of the entire said payment, have been placed on record by
Indiabulls in the relevant OMP files. As such, there is no dispute
regarding the factum of the said payments having been made.
Signature Not Verified Signature Not Verified OMP (I) (COMM.) 401/2023 and other connected matters Page 4 of 60 Digitally Signed Digitally Signed By:AJIT KUMAR By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:24.12.2024 Signing Date:24.12.2024 16:03:54 16:01:54
3. It is also not in dispute that no Sale Deeds, in respect of a single
unit, in any of the projects forming subject matter of these petitions,
has been executed between the parties. As such, the uncontested
position that results is that a total amount of ₹ 6380775728/- stands
paid by Indiabulls to Ambience, but not a single unit has been
transferred by Ambience to Indiabulls against the said payment.
4. The terms of the ATSs are, to all intents and purposes, identical.
For ready reference, the terms of the ATS dated 30 September 2020
executed in respect of the Creacion project, forming subject matter of
OMP (I) (Comm) 408/2023, may be reproduced thus, eschewing those
that are of no consequence:
“AGREEMENT TO SELL
THIS AGREEMENT TO SELL alongwith its Annexures is made
and executed at New Delhi, Haryana on this 30th Day of
September, 2020 (“AGREEMENT”);
BETWEEN
M/s. Ambience Projects and Infrastructure Private Limited, a
company as defined in the Companies Act, 2013. having its
registered office at L – 4, Green Park Extension New Delhi DI-
110016 & having the Corporate Identity Number
U7010IDL2010PTC209128 and having PAN AAICA8660R &
GSTIN 06AAICA8660R2ZW through its authorized signatory, Mr.
Raj Singh Gehlot, authorized vide board resolution dated
29.09.2020 (hereinafter referred to as the “Seller”, which
expression shall unless it be repugnant to the context or meaning
thereof be deemed to mean and include its successors- in- interest
and assigns) of the FIRST PART;
AND
M/s lndiabulls Housing Finance Limited, a company as defined in
the Companies Act, 2013, and having its registered office at M – 62
& 63, 1st Floor, Connaught Place, New Delhi l10001, and having
Corporate Identity Number L65922DL2005PLCl36029(hereinafter
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 5 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
referred to as the “Purchaser”), which expression shall un less
repugnant to the context or meaning thereof be deemed to mean
and include its successor(s) and permitted assign(s) through its
authorized signatory, Mr. Jitesh Mor, authorized vide board
resolution dated 15th September, 2020 being the party of the
SECOND PART;
The Seller and the Purchaser shall, hereinafter be jointly referred to
as the “Parties” and individually as a “Party”.
WHEREAS:
*****
B. The Director General, Town & Country Planning, Haryana,
Chandigarh has granted the approval/ sanction to develop the
Residential Group Housing Colony Project on the said Plot vide
license bearing dated 48 of 2012.
C. The Seller has obtained approval on the layout plan/
demarcation/ zoning/ site plan/ building plan for the Project from
Directorate of Town & Country Planning, Haryana, Chandigarh.
*****
E. The Seller has represented that the Group Housing Colony
project on the Plot currently named as “Ambience Creacions”
construction and development is in process in accordance of the
sanctioned building plans issued by the relevant competent
authorities (“Project”).
*****
G. The Seller is desirous to sell and the Purchaser has agreed
to purchase total 51 (Fifty One) number of
apartment(s)/flat(s)/unit(s) (along-with the specifications and lay
out of Property as per Annexure-B) admeasuring 161461 square
feet super built-up area (53,622.70 sq. ft. carpet area along with
16,283.91 sq. ft. of Balcony Area) in the aggregate along with 1
(one) car parking for each apartment(s)/flat(s)/unit(s) along with
the proportionate share, rights, title and interests in the common
area , amenities, facilities and car parking space etc. described
more particularly in Schedule-I attached hereunder (hereinafter
referred to as the ‘Property’), free from all encumbrances,
easements, privileges and charges, subject to the Seller getting all
the required permissions/ approvals/no-objection certificates from
the existing lender(s)/charge holders, if any, connected with the
Property and completion of all the condition precedents as
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 6 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
mentioned hereunder and to the satisfaction of the Purchaser for
transfer of Property in favor of Purchaser, for a total sale
consideration of INR 1,27,70,81,863/- (Indian Rupees One
Hundred Twenty Seven Crore Seventy Lakh Eighty One Thousand
Eight Hundred Sixty Three Only) alongwith applicable Goods and
Services Taxes subject to deduction of TDS under applicable laws
and on the terms and conditions hereinafter appearing.
“NOW THIS AGREEMENT WITHNESSETH AND IT IS
HEREBY AGREED BY AND BETWEEN THE PARTIES
HERETO AS FOLLOWS:-
All the recitals as stated above, the annexures annexed hereto and
the schedules appearing hereunder shall form integral part of this
Agreement as if the same were set out herein verbatim.
1. In pursuance of the foregoing and in pursuance of
the total agreed consideration as mentioned hereinbefore,
the Seller hereby agrees to sell, transfer and convey to the
Purchaser and the Purchaser (i) based on the representations
and warranties of the Seller contained herein including
those in the recitals above; and (ii) after having completed
and concluded the due diligence of total 51 (Fifty One)
number of apartment(s)/flat(s)/unit(s) (alongwith the
specifications and lay out of Property as per Annexure B)
admeasuring 161461 square feet super built-up area
(53,622.70 sq. ft. carpet area along with 16,283.91 sq. ft. of
Balcony Area) in the aggregate along with l (one) car
parking for each apartment(s)/flat(s)/unit(s) (said Property),
agrees to purchase and acquire from the Seller the said
Property together with proportionate share, rights, title and
interests in the common area, amenities, facilities and car
parking space etc. more particularly described in Schedule I
along with the common area, amenities, facilities etc. in the
Group housing project currently named as “Ambience
Creacions” constructed/to be constructed on plot
admeasuring 14.82 acres forming part of khasras more
specifically mentioned in Annexure A attached herewith
situated at the revenue estate of Village Mullahera, Tehsil
& District Gurgaon, Haryana, free from all encumbrances
(except in favour of existing lenders) and with a clear and
marketable title, for the total sale consideration of INR
I,27,70,81,863/(Indian Rupees One Hundred Twenty Seven
Crore Seventy Lakh Eighty One Thousand Eight Hundred
Sixty Three Only) as per the break-up enclosed herewith as
Annexure C [“Sale Consideration”] on the terms and
conditions recorded herein which shall be subject to
deduction of applicable taxes.
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 7 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
*****
3. Subject to the terms and conditions of the
Agreement, the Balance Sale Consideration of INR
38,15,29,853/- (Indian Rupees Thirty Eight Crore Fifteen
Lakh Twenty Nine Thousand Eight Hundred Fifty Three
Only) (after deduction of tax deducted at source) shall be
paid by the Purchaser to the Seller by or before Eighteen
(18) months from the date of this Agreement. Proof of
payment of the TDS with Form 16-B of Income Tax Act,
1961 will be made available by the Purchaser to the Seller.
4. The Sale Consideration is an all-inclusive price for
the Property including all applicable taxes, e.g. goods and
services taxes (GST), security deposits etc. under this
Agreement (other than stamp duty etc. to be borne and paid
by the Purchaser as per Law) and will not be subject to any
variation. The Sale Consideration will be inclusive of all
taxes payable under Applicable Laws and all other charges,
costs and payments, except the payment and expenses
towards Stamp Duty and registration of the Conveyance
Deed for the Property. The First Transfer of the Units under
consideration / Property by the Purchaser in favour of its
nominee/assigns shall be free of all Costs and Charges.
5. The Seller, in addition to the representations and
warranties made in the recitals above, hereby represents,
warrants, unde1takes and assures the Purchaser as follows:
i. That Seller has authority to sell and in
possession of the Plot/Property and has a valid and
marketable title to the Plot/Property and none other
than the Seller has any right, title or interest in
respect of the Property and that there are no
easement rights over the property in favour of any
other person.
ii. That other than the charge in favour of the
existing lender(s), the Property is free from all
encumbrances, attachments, liens, charges, prior
sale, mortgage, acquisition or notification etc. and is
not afinancial asset of any Bank or Institution and
no proceedings whatsoever in respect of the
Property are pending before any Debt Recovery
Tribunal or any other Court or other Tribunal or
statutory authority and the Seller confirms that it has
also not received any notice from any Bank or
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 8 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
Institution under the Securitisation and
Reconstruction of Financial Assets and
Enforcement Act. The Seller further undertakes not
to create any encumbrances, mortgages, charges,
liens or liability of any kind whatsoever in respect
of the Property subsequent to execution of this
Agreement.
*****
viii. The Seller shall, within a period of 30 days
from the date of this agreement and at its own cost,
get all the required approvals from the concerned
entities for transfer of Property in favor of Purchaser
and make out a clear and marketable title to the
satisfaction of the Purchaser. The aforesaid
permissions / approvals/ consents shall include but
not be limited to the following:
a. Shareholders’ approval u/s 180 of the
Indian Companies Act, 2013, if applicable;
b. NOC from existing
lender(s)/creditor(s)/ chargeholder(s), duly
supported with proof of discharge/ release of
the Property;
c. Any other permission/approval/
consent/certificate etc., if any.
*****
8. Simultaneously with the execution of this Agreement, the
Seller has delivered to the Purchaser copies of all the title deeds
and all the relevant documents in respect of the Property. The
Seller shall forthwith furnish copies of all necessary permissions
and consents obtained from concerned authorities for transfer of
the Property by the Seller to the Purchaser. In addition to the
aforesaid, the Seller shall provide to the Purchaser all other
documents, information, records, sanction plans, certificates,
agreements etc. pertaining to the Property for carrying out
necessary due diligence of the Property. The Seller shall co-operate
with the Purchaser in the course of investigation of title in respect
of the Property and shall clear all encumbrances, if any.
9. On fulfillments of terms and conditions of this Agreement,
both the Parties mutually agree to complete the transaction in its
entirety on or before Eighteen (18) months from the date of the
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 9 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
agreement and the time is the essence of this Agreement. On
receipt of balance Sale Consideration by the Seller from the
Purchaser, the Seller shall execute and cause the execution of all
documents, deeds and any other document including the
registration of Conveyance Deed/s in respect of the Property in
favour of the Purchaser on or before Eighteen (18) months from
the date of this agreement and simultaneously hand over the vacant
peaceful and unencumbered possession of the Property to the
Purchaser. However, in the event of the Purchaser not being
satisfied with title and possession of the said Property of the Seller
or noncompliance of conditions mentioned herein, the Purchaser at
its sole discretion shall be entitled to terminate this Agreement and
the Seller shall without any further delay or demur refund the
payment made under this Agreement with an interest @2% (Two
Percent) per annum from the date of this Agreement till the date of
refund.
*****
16. The Purchaser hereby agrees that in case it commits the
breach of any of the terms and conditions of this agreement hereby
agreed to be sold or it acts prejudicial to the interest of the
Complex and the neighborhood, then the same shall be rectified at
the cost and expense of the Purchaser.
*****
21. The parties hereto agree that if any dispute and/or
difference arise between the parties in respect of the present
Agreement then the same shall be settled and resolved through
arbitration by sole arbitrator to be jointly appointed by the Party.
The seat/place and venue of arbitration shall be New Delhi and the
language used shall be English. It is also agreed between the
parties that the arbitration process shall be in accordance to the
Arbitration and Conciliation Act, 1996 (as amended). The award so
made by the sole arbitrator shall be final and binding on the parties.
*****
24. This Agreement is binding upon the Parties herein and shall
be governed by, and construed in accordance with the laws of India
and further all disputes arising out of this Agreement to sell are
subject to the Jurisdiction of Courts at Delhi only.
25. The Parties to this Agreement agree that, to the extent
permitted under applicable laws, and notwithstanding any other
right or remedy available under this Agreement, the rights and
obligations of the Parties under this Agreement shall be subject to
the right of specific performance and may be specifically enforced
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 10 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
against a defaulting party. The Parties acknowledge that any breach
of the provisions of this Agreement will cause immediate
irreparable harm to the adversely affected party for which any
compensation payable in damages shall not be an adequate remedy.
Accordingly, the Parties agree that the affected party shall be
entitled to immediate and permanent injunctive relief, specific
performance or any other equitable relief from a competent court in
the event of any such breach or threatened breach by any other
party. The Parties agree and covenant unequivocally and
unconditionally that the affected party shall be entitled to such
injunctive relief specific performance or other equitable relief
without the necessity of proving actual damages. The affected
party shall, notwithstanding the above rights, also be entitled to the
right to any remedies at law or in equity, including without
limitation the recovery of damages from the defaulting party.
26. This Agreement together with all documents executed
contemporaneously with it or referred to in it constitutes the entire
Agreement between the Parties in relation to its subject matter.
27. This Agreement and the annexures together constitute a
complete and exclusive understanding of the terms of this
Agreement between the Parties on the subject hereof and no
amendment or modification hereto shall be valid and effective
unless agreed to by all the Parties hereto and evidenced in writing.
28. No variation of this Agreement shall be binding on any
Party unless such variation is in writing and signed by each Party.
29. The Seller shall not be entitled to at any point of time to
assign / transfer any of its rights and obligations contained herein
to any person, without prior written consent of the Purchaser. The
Purchaser shall also be entitled to assign / transfer any of its rights
and obligations contained herein to any of its associates and/or
group company(ies) without payment of any
transfer/administrative charges to the Seller and without prior
written consent of the Seller and same shall not be treated as First
transfer.
*****
33. The Parties shall sign and execute the Apartment Buyers
Agreement in the standard format of the Seller.”
5. On 18 November 2022, Indiabulls and Ambience entered into a
Settlement Deed, of which the following covenants are relevant:
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 11 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
THIS SETTLEMENT DEED is signed and executed on this 18th
day of November, 2022 at New Delhi between M/s Indiabulls
Housing Finance Limited, having its registered office at 5th floor,
27, KG Marg, New Delhi-110 001 and M/s Indiabulls Commercial
Credit Ltd., having its registered office at 5th Floor, Building No.
27, K G Marg, Connaught Place, New Delhi-110001 (hereinafter
jointly referred to as the ‘Lenders’) being the Party of the First Part.
AND
M/s Ambience Projects and Infrastructure Pvt. Ltd., M/s Ambience
Pvt. Ltd., M/s Ambience Commercial Developers Pvt. Ltd. and
other associated and group companies of Ambience, duly
mentioned in Annexure-A to this Settlement Deed, all having their
registered office at L-4, Green Park Extension, New Delhi
(hereinafter jointly referred to as the ‘Borrowers’) being the Party
of Second Part.
WHEREAS the Lenders have extended various loan facilities to
the Borrowers from time to time as per detail given in Annexure-A
to this Settlement Deed, mainly/broadly summarized under four
head/categories mentioned below at Sr. Nos. 1, 2 & 3. These loans
are property/project loans which are secured against mortgage of
various immovable properties as per details given in Annexure- B
to this Settlement Deed and the Retained Security (defined later in
this Settlement Deed) and loan accounts mentioned below at Sr.
No.4 are lease rental discounting (LRD) loans which are secured
against mortgage of receivables and property of Ambience Mall
alongwith land underneath, admeasuring 8.25 acres situated at Plot
No.2, Vasant Kunj Shopping Mall Complex, Vasant Kunj, Phase II,
New Delhi. Details of the credit facilities and outstanding therein
as on 30.09.2022 are given hereunder:
Table I
Sr. Name of Principal Borrowers Amount of loan
No. O/s (Rs. In
Crores)
1. M/s Ambience Projects and 1248.00
Infrastructure Pvt. Ltd. & Others
2. M/s Ambience Pvt Ltd. & Others 923.00
3. Sh. Raj Singh Gehlot & Smt. 99.00
Sheela Gehlot
2270.00
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 12 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
Add: Gross Interest till 218.00
30.09.2022
Total ‘A’ 2488.00.
4. Ambience Commercial 448.00
Developers Pvt Ltd.
Total 'B' 448.00
*****
AND WEHREAS the Lenders and Borrowers have mutually
agreed to settle their outstanding dues in the property/project loans
mentioned at Sr. No.1, 2 & 3 of Table I in full and final at the
amount worked out in the manner mentioned in Table-II
hereinafter.
Table II
Sr. Particulars Amount
No. (Rs. In
Crores)
1. Dues in property/project loans 2488.00
No.1, 2 & 3 as worked out in
Table-I above Total ‘A’
Add:
– Amount payable by Borrowers
in lieu of arrears in TDS dues of
Lenders upto 31.03.2022 118.00
-EMI outstanding till the month
of September, 2022 in loan 34.00
account at Sr.No.4 above (net of 152.00
TDS)
Total of all dues payable by Ambience 2640.00
Less:
-Rebate towards Settlement on
the basis of mutual consensus 296.00
and agreement between
Borrowers and Lenders
Net Settlement Amount
payable/recoverable by
Borrowers to/from the Lenders
towards full and final payment
of all dues of Lenders in relation
to Property/Project Loan
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 13 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
mentioned at Sr. No.1,2 & 3 of
Table I and other claims/dues of
Lenders and Borrowers against
each other (other than and 2344.00
excluding the LRD loan account
mentioned at Sr. No.4 of Table I)*****
AND WHEREAS in order to settle and pay the mutually agreed
Net Settlement Amount of Rs. 2344 crore (inclusive of income tax
to be deducted at source, which tax the Lenders have undertaken to
deposit of its own), in the Lenders loan account at Sr. No.1, 2 & 3
in Table I above, the Borrowers have agreed to arrange the
requisite amounts by way of selling/transferring/ monetizing
various projects/properties/assets, listed in Table III below, owned
by the Borrowers or their associated/group
companies/concerns/individuals and utilize the amount realized
therefrom after repayment of the dues against the properties
concerned per se for settlement of all dues of the Lenders from the
Borrowers in the property/project loan accounts mentioned at Sr.
No.1, 2 & 3 of Table I above and other claims/dues of Lenders and
Borrowers against each other as mentioned in Table-II above
(excluding the dues in the LRD loan account mentioned at Sr. No.4
of Table I above). The Net Settlement Amount payable by the
Borrowers to the Lenders is worked out at Rs.2344 crore as
mentioned in Table-II above which amount includes an amount of
Rs. 34 crore towards LRD loan account mentioned at Sr. No.4 of
Table I above. Details of the properties proposed to be sold by the
Borrowers and the corresponding realizable consideration thereof
towards payment of Net Settlement Amount of Rs.2344 crore in
full and other details are mentioned below in Table-III:
Sr. Particulars Purchase
No value of
. Sale
conside-
ration
(Net of
Statutory
and Other
Dues/Ch-
arges/
Fees etc.)
(Rs. in
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OMP (I) (COMM.) 401/2023 and other connected matters Page 14 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
Crore)
1. Panipat Project (undertaking as a 1325.00
going concern) comprising of
314.808 acres of licenced land
and 24.862 acres unlicenced
land, owned by 18
companies/individual details of
which are given in Annexure-C
to this Settlement Deed and
Licence No.6 of 2010 issued in
the name of the Developer M/s
Ambience Pvt. Ltd.
Less: Deduction of TDS on 1.51
Purchase of property
(undertaking as a going concern)
Less: TDS to be deducted by 14 35.75 1287.74
LOCs of Panipat Project on
interest component charged to
Ambience Pvt. Ltd. & other
2. 28 acres of land at Sector-115, 425.00
Noida allotted in the name of
M/s Ambience Pvt. Ltd. by
Noida Authority for residential
with ancillary development by
way of JDA
Less: Deduction of TDS on JDA 4.25 420.75
3. Commercial Complex at Plot 325.00
No.10, at Community Centre,
Block-B, Shalimar Bagh, New
Delhi developed and owned by
M/s Ambience Towers Pvt. Ltd.
Less: Security Deposit received 2.47
from tenants
Less: Deduction of TDS on 3.23 319.00
Purchase of property
4. Farm House at D-17, 165.00
Pushpanjali Farms, New Delhi,
developed and owned by M/s
Indus Sor Urja Pvt. Ltd.
Less: Security Deposit received 2.78 162.22
from tenants
5. Apartment at Residential 264.62
(a) Complex at Sector 22, Gurgaon
developed and owned by M/s
Ambience Projects and
Infrastructure Pvt. Ltd.
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 15 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
Less: Deduction of TDS on 2.65 261.97
Purchase of property
5.( Apartment at Residential 48.50
b) Complex at Sector 50, NOIDA
developed and owned by M/s
Ambience Pvt. Ltd.
Less: Deduction of TDS on 0.48 48.02
Purchase of property
Total Sales Consideration 2500.00
Less:
Existing Dues in the loan 156.00
payable to banks in respect of
Panipat Project, Shalimar Bagh
and Farm House
Net amount realizable by the 2344.00
Borrower from
sale/transfer/monetization of the
assets/properties/projects owned
by the Borrowers or their
associated/group companies /
concerns / Individuals.
*****
"NOW THIS SETTLEMENT DEED WITNESSETH AS
FOLLOWS:
1. The Lenders and Borrowers have mutually agreed to settle
all their outstanding loan, dues, claims, counter claim, or disputes
etc. of whatsoever nature against each other in respect of the Loans
mentioned at Sr. No.1, 2 & 3 of Table I, only upon an amount of
Rs.2344 crore (Rupees Two Thousand Three Hundred Forty Four
Crore Only) inclusive of amount of TDS as worked out and
mentioned in Table II above is remitted by the Borrowers to the
Lenders and received by the Lenders from/on behalf of the
Borrowers. The funds for such remittance are being arranged by
the Borrowers by selling/transferring/monetizing the properties as
mentioned in Table III in consultation with the Lenders. Out of the
aforesaid amount of Rs. 2344 crore an amount of Rs. 260.18 crore
has already been remitted by the Borrowers and received by the
Lenders.
*****
3. That the Borrowers undertake that all amounts aggregating
Rs. 2344 crore (including Rs. 25 crore by way of cheque dated
25.12.2022) to be received by the Lenders from/on behalf of the
Borrowers under the loans mentioned at Sr. No.1, 2 & 3 of Table I
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 16 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
above shall be received within 5 (five) working days from the date
of this Settlement Deed subject to payment of total sale
consideration by the respective buyers to the respective owners of
the respective property, as mentioned at Sr. No.1 to 5 in Table-III
above failing which this Settlement Deed shall be null and void
unless otherwise extended with mutual consent of both the parties
in writing and on this Settlement Deed becoming null and void the
amounts received till such date shall automatically stand
appropriated towards the outstanding and continuing loans
(towards principal and/or interest) referred to at Sr. No.1, 2 & 3 of
Table I above.
4. That upon the Lenders receiving the net amount of Rs.2344
crore (Rupees Two Thousand Three Hundred Forty Four Crore
Only) inclusive of TDS in accordance with this Settlement Deed
under the loans as mentioned under Sr. Nos.1, 2 & 3 of Table I
above, the Lenders shall not lay any further claim of any nature or
demand or any interest, penalty or compensation in lieu from the
Borrowers in respect of various loans/facilities extended by it as
mentioned under Sr. Nos. 1, 2 & 3 of Table I above and the amount
of Rs.2344 crore (Rupees Two Thousand Three Hundred Forty
Four Crore Only) is full and final payment, which includes TDS on
interest, all interest, charges and penalty or other amounts or claims
etc. by whatever name it may be called and shall never be called in
question and reviewed on any ground whatsoever.
*****
6. That upon receipt of net amount of Rs.2344 crore (Rupees
Two Thousand Three Hundred Forty Four Crore Only) inclusive of
TDS by the Lenders from/on behalf of the Borrowers in
accordance with this Settlement Deed all dues, charges, mortgages,
liens and encumbrances etc. of whatsoever nature of the Lenders
against the properties mortgaged in respect of the Loans mentioned
at Sr. No.1, 2 & 3 of Table I above along with personal/corporate
guarantees of the companies/concerns/individuals in the
abovementioned three loan accounts at mentioned in the Annexure-
B to this Settlement shall stand paid and satisfied and the Lenders
will release all the title deeds of the properties mortgaged in
respect of the Loans mentioned at Sr. No.1, 2 & 3 of Table I above
along with personal /corporate guarantees of the
companies/concerns/individuals in the abovementioned three loan
accounts as mentioned in the Annexure-B to this Settlement Deed
immediately and the respective owners shall collect the envelop of
title deeds etc. in relation to their respective property and the
Borrowers shall collect the No Dues Certificates/NOCs/letters for
release of charge/mortgage, original Share Certificates, PDCs,
letters to trustee/agent to release original title deeds/share
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 17 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
certificates etc. as per list given hereinabove and the Lenders shall
collect the bank drafts aggregating Rs.147.87 crore from the
custodian Mr. Mukul Rohtagi. The Lenders shall thereafter
facilitate the Borrower in obtaining the original title deeds of the
properties mortgaged/share certificates (that are deposited with the
trustee/agent IDBI Trusteeship) in respect of the Loans mentioned
at Sr. No.1, 2 & 3 of Table I and also for filing satisfaction of
charge with ROC, New Delhi.
*****
11. That in relation to the inventories at Sector 22, Gurgaon
being purchased by the Lenders as part of this Settlement Deed and
inventories purchased on earlier occasions in the project being
developed by the Borrowers at Sector 22 Gurgaon, (“Sec-22
Inventories”), the Borrowers shall be entitled to buy-back the Sec-
22 Inventories over the said period of 14 months i.e. w.e.f.
November, 2022 to December, 2023 on the Borrower remitting and
the Lender receiving buy-back consideration of not less than the
price paid by the Lenders to the Borrowers (without any interest)
as given in Annexure G. In the event the Borrowers require
transfer of any part of the Sec-22 Inventories directly in favour of
any third party buyer, the same shall be done on receipt of actual
consideration, being an amount not less than the price paid by the
Lenders to the Borrowers, being received by the Lenders directly
from such third party buyer.
12. That in case of failure of Borrower to buy-back the
projected sale of Sec-22 Inventories in a particular month the
Lenders shall be at liberty to sell the inventory so left from the
buy-back for that particular mouth at its free will. This will be
applicable for each month independent of the previous month
performance. Further, the Sec-22 Inventory sold in excess in a
particular month will be counted as buy-back of the Sec-22
Inventory to be purchased in the following month and amount of
that inventory to be brought-back in the following months will
stand reduced by the amount of excess sale of Sec-22 Inventory in
the preceding mouths.
13. That in the event the Borrowers defaults in its buy-back
obligations for three consecutive months and/or delays/defaults in
remittance of buy-back consideration and/or fails to record transfer
of any inventory within 7 (seven) working days from its resale by
the Lender in terms of this Settlement Deed, then the right to buy-
back on and from the date of such default shall automatically stand
terminated and extinguished.
*****
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 18 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
19. That this Settlement Deed supersedes all previous
negotiations and understandings on the subject matters dealt with
herein. Any amendment to this Settlement Deed shall be valid only
if mutually agreed in writing between the parties to this Settlement
Deed.”
6. An Addendum, to the aforesaid Settlement Agreement dated 18
November 2022, was executed between Ambience and Indiabulls on 6
December 2022. Clause 2(c) of the Addendum read thus:
“On or before March 31, 2023, the Borrowers will procure the
NOC’s from their bankers (Punjab National Bank) for the 20 units
in ‘Ambience Tiverton’ a residential complex situated at Sector-50,
Noida, for which ATS has already been executed in favour of the
Lenders and execute and register the lease deeds for such units in
accordance with such ATS;”
Trajectory of these proceedings
7. Relevant petitions/applications filed, and orders passed, during
the course of proceedings in the present five OMPs, to the extent
relevant, may be noted thus:
(i) OMP (I) (Comm) 401/2023 was filed on 7 December
2023.
(ii) On 8 December 2023, while issuing notice in OMP (I)
(Comm) 401/2023, Ambience was restrained from creating any
third party interest in respect of the 12 units forming part of the
said OMP.
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 19 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
(iii) On 14 December 2023, notice was issued in the
remaining OMP (I) (Comm) 405/2023, OMP (I) (Comm)
406/2023, OMP (I) (Comm) 407/2023 and OMP (I) (Comm)
408/2023, while declining to pass any interim orders.
(iv) On 19 February 2024, Ambience filed IA 4358/2024, for
vacation of the interim order dated 8 December 2023 passed in
OMP (I) (Comm) 401/2023. This application is pending.
(v) On 23 February 2024, Ambience submitted that the
disputed units in OMP (I) (Comm) 401/2023 were subject
matters of a settlement between the parties which had not been
placed on record.
(vi) On 22 April 2024, Ambience undertook not to create any
third party interest in respect of the 6 surviving units in OA (I)
(Comm) 401/2023.
(vii) On 27 July 2024, Indiabulls filed
(a) IA 34878/2024, for a direction to Ambience to
deposit, pending arbitration, the amount of ₹
19,87,44,000/- paid by Indiabulls towards the 6 surviving
units in OMP (I) (Comm) 401/2023,
(b) IA 34882/2024, for a direction to Ambience to
deposit, pending arbitration, the amount of ₹
24,55,06,635/- paid by Indiabulls towards the 2 surviving
units in OMP (I) (Comm) 405/2023,
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 20 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
(c) IA 34867/2024, for a direction to Ambience to
deposit, pending arbitration, the amount of ₹
1,119,87,12,000/- paid by Indiabulls towards the 235
surviving units in OMP (I) (Comm) 406/2023,
(d) IA 34872/2024, for a direction to Ambience to
deposit, pending arbitration, the amount of ₹
68,63,54,295/- paid by Indiabulls towards the 6 surviving
units in OMP (I) (Comm) 407/2023 and
(e) IA 34883/2024, for a direction to Ambience to
deposit, pending arbitration, the amount of ₹
25,088,98,000/- paid by Indiabulls towards the 57
surviving units in OMP (I) (Comm) 408/2023.
(viii) On 17 May 2024, Ambience filed IA 30160/2024 in OMP
(I) (Comm) 406/2023 and IA 30159/2024 in OMP (I) (Comm)
408/2024 for dismissal of the OMPs.
(ix) On 30 July 2024, OMP (I) (Comm) 401/2024 was tagged
with OMP (I) (Comm) 405/2023, OMP (I) (Comm) 406/2023,
OMP (I) (Comm) 407/2023 and OMP (I) (Comm) 408/2023.
Thereafter, all five OMPs were always listed together.
(x) On 12 August 2024, apropos the Settlement Deed dated
18 November 2022, the rival contentions were noted thus:
“4. … Mr Nayar’s contention is that, if one peruses the
Settlement Agreement, there is breach by the respondents
of Clauses 11 to 13 of the Settlement Agreement which,Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 21 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
therefore, disentitles the respondents to rely on the
Settlement Agreement as a defence to the petitions.
5. Mr Mehra, learned Senior Counsel for the
respondents emphatically disputes this contention and
submits that, in fact, the petitioner cannot, by relying on the
Settlement Agreement, seek to change the cause of action
set up in the OMPs.”
Nonetheless, Ambience undertook not to create any third party
interest in respect of any of the surviving units in OMP (I)
(Comm) 405/2023, OMP (I) (Comm) 406/2023, OMP (I)
(Comm) 407/2023 and OMP (I) (Comm) 408/2023.
(xi) Judgment was reserved, in all OMPs and pending
applications, on 18 September 2024. The pending applications,
I may note, are`
(a) IA 4358/2024 filed by Ambience in OMP (I)
(Comm) 401/2023, for vacation of the stay granted by
this court in the said OMP on 8 December 2023,
(b) IA 30160/2024 in OMP (I) (Comm) 406/2023 and
IA 30159/2024 in OMP (I) (Comm) 408/2023, seeking
dismissal of the Section 9 petitions, and
(c) IA 34878/2024 in OMP (I) (Comm) 401/2023, IA
34882/2024 in OMP (I) (Comm) 405/2023, IA
34867/2024 in OMP (I) (Comm) 406/2023, IA
34872/2024 in OMP (I) (Comm) 407/2023 and IA
34883/2024 in OMP (I) (Comm) 408/2023, whereby
Indiabulls has sought a direction for Ambience to deposit,
with this Court, the sale consideration paid by Indiabulls
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 22 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
to Ambience in respect of the surviving units forming
subject matter of the said OMPs, which have not been
cancelled and of which no Sale Deeds, transferring the
units to Indiabulls, have been executed by Ambience.
8. The surviving units, covered by the ATSs and not cancelled, and
of which no Sale Deeds have been executed, or any steps taken by
Ambience in terms of the ATSs, would, for the sake of convenience,
be collectively referred to, hereinafter, as “the disputed units”.
Rival Stands
9. I have heard Mr. Rajiv Nayar and Mr. Dayan Krishnan, learned
Senior Counsel for Indiabulls and Mr. Rajeeve Mehra, learned Senior
Counsel for Ambience, at length over several days. Post reserving of
judgment, written submissions have also been filed, by Indiabulls and
Ambience, under cover of Indexes dated 25 September 2024.
Submissions of Mr. Nayar and Mr. Dayan Krishnan
10. The case of the petitioner Indiabulls, in these petitions under
Section 9(1)7 of the Arbitration and Conciliation Act, 1996, is
7 9. Interim measures, etc. by Court. –
(1) A party may, before or during arbitral proceedings or at any time after the making of the
arbitral award but before it is enforced in accordance with Section 36, apply to a Court:–
(i) for the appointment of a guardian for a minor or a person of unsound mind for
the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters,
namely:–
(a) the preservation, interim custody or sale of any goods which are the
subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 23 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
predicated on the arbitration clause, which is contained in all the
ATSs, and the fact that, despite substantial payments having been
made by Indiabulls to Ambience towards the ATSs, no Sale Deed, in
respect of any unit, has been executed by Ambience in favour of
Indiabulls. Interlocutory protective orders have, therefore, been
sought. By way of example, the prayer clause in OMP (I) (Comm)
401/2023 may be reproduced:
“In the circumstances stated herein above, it is humbly prayed that
this Hon’ble Court may be pleased to:
(a) Restrain the Respondents from transferring, selling,
alienating, encumbering or creating any third party rights or
interest in the following 12 Units, more particularly defined
in Schedule 1 of the Agreement to Sell dated 18.11.2022:
S. Apartment No. Block Super Area
No. (sq. ft)
1. G-101 G 2547.95
2. G-201 G 2547.95
3. G-202 G 2547.95
4. G-301 G 2547.95
5. G-302 G 2547.95
6 G-401 G 2547.95
7 G-501 G 2547.95
8 G-502 G 2547.95
(c) the detention, preservation or inspection of any property or thing
which is the subject-matter of the dispute in arbitration, or as to which any
question may arise therein and authorising for any of the aforesaid purposes any
person to enter upon any land or building in the possession of any party, or
authorising any samples to be taken or any observation to be made, or
experiment to be tried, which may be necessary or expedient for the purpose of
obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the Court
to be just and convenient,
and the Court shall have the same power for making orders as it has for the purpose of,
and in relation to, any proceedings before it.
(2) Where, before the commencement of the arbitral proceedings, a court passes an order for
any interim measure of protection under sub-section (1), the arbitral proceedings shall be
commenced within a period of ninety days from the date of such order or within such further time
as the court may determine.
(3) Once the arbitral tribunal has been constituted, the court shall not entertain an application
under sub-section (1), unless the court finds that circumstances exist which may not render the
remedy provided under Section 17 efficacious.
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 24 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
9 G-601 G 2547.95
10 F-102 F 2547.95
11 F-201 F 2547.95
12 A-201 A 2547.95
b) Restrain the Respondents from transferring, selling,
alienating, encumbering or creating any third party rights or
interest in Unit Nos. A-301, G-1801, G-1201, G-702, G-
901, G-1301, G-801 and G-402 in the Group Housing
Complex known as “Ambience Tiverton Residential
Apartment Complex” situated at Plot No. F-033, Sector 50,
Noida, Gautam Budh Nagar, Uttar Pradesh, till such time
the Respondent pays the balance amount of Rs.
6,68,24,000/- to the Petitioner due under Cancellation
Deeds;
(c) In the alternative to prayer (b), direct the
Respondent to deposit a sum of Rs. 6,68,24,000/- with the
Registrar General of this Hon’ble Court;
(d) Pass ad-interim ex-parte Order(s) in terms of prayer
(a) and (b) above;
(e) Pass such other further order/orders as this Hon’ble
Court may deem fit and proper in the facts and
circumstances of the case.”
The prayers in other OMPs are similar, except that, in OMP (I)
(Comm) 405/2023 and OMP (I) (Comm) 407/2023, as there is no
cancellation deed involved, no prayer for deposit of the amounts
payable by Ambience to Indiabulls under the Cancellation Deeds is
made. In OMP (I) (Comm) 406/2023 and OMP (I) (Comm) 408/2023,
there are prayers for directing deposit, by Ambience, of the entire
amounts payable under the Cancellation Deeds, of ₹ 5.82 crores and ₹
13,26,21,945/-, pending the decision in the arbitral proceedings to
follow.
Signature Not Verified Signature Not Verified OMP (I) (COMM.) 401/2023 and other connected matters Page 25 of 60 Digitally Signed Digitally Signed By:AJIT KUMAR By:CHANDRASHEKHARAN HARI SHANKAR Signing Date:24.12.2024 Signing Date:24.12.2024 16:03:54 16:01:54
11. Mr. Nayar contends that Ambience is clearly in breach of the
ATSs, which required Ambience to obtain all necessary permissions,
approvals and No Objection Certificates from the statutory authorities
and from existing lenders, to execute a Deed of Conveyance and sub-
lease deed in favour of Indiabulls and to issue an allotment letter in
respect of the disputed units in favour of Indiabulls. No steps, in this
regard, have been taken by Ambience. Rather, Ambience has retained,
with itself, the entire amount, towards the consideration under the
ATSs, paid by Indiabulls, as well as the units, for the conveyance of
which the amounts were so paid. The prima facie merits of the case,
therefore, he submits, are entirely in favour of Indiabulls.
12. He further submits that Indiabulls has come to learn that
Ambience is creating third party rights in respect of the disputed units.
In the facts of the present case, Mr. Nayar’s contention is that a mere
undertaking not to alienate the disputed properties would not afford
adequate protection, and a case stands made out for a direction to
Ambience to deposit, with this Court, the entire amount of sale
consideration paid by Indiabulls to Ambience under the ATSs, in
respect of units which have neither been cancelled, nor of which
conveyance has been made to Indiabulls.
13. Mr. Nayar submits that the reliance, by Ambience, on the
Settlement Deed dated 18 November 2022 is merely intended to cast a
smokescreen. In actual fact, the Settlement Deed has no impact on the
present proceedings. There is nothing, in the ATSs, which indicates
that they are intended merely to provide security for satisfaction of the
Signature Not Verified Signature Not Verified
OMP (I) (COMM.) 401/2023 and other connected matters Page 26 of 60 Digitally Signed
Digitally Signed By:AJIT
KUMAR By:CHANDRASHEKHARAN
HARI SHANKAR
Signing Date:24.12.2024 Signing Date:24.12.2024
16:03:54 16:01:54
obligations under the Settlement Deed. Ambience is, therefore,
needlessly invoking the Settlement Deed, so as to conflate
unconnected issues and create confusion.
14. Besides, submits Mr. Nayar, it is also not open to Ambience to
rely on the Settlement Deed in view of Clause 13 thereof, which
extinguishes the right of buy back, envisaged in Clause 11. Mr. Nayar
submits that three months’ default, on the part of Ambience, in
exercising the buyback option ipso facto extinguishes its right to
exercise the option. He submits that Indiabulls wrote to Ambience on
23 January 2023, 21 February 2023 and 22 March 2023, calling on
Ambience to exercise the buy back option. Ambience, however, did
not respond on any of the said occasions, thereby surrendering its right
to avail of the buy back option.
15. Mr. Nayar submits that Ambience itself acknowledges this
position, as is apparent from the fact that, having defaulted in
exercising its buy back option for three months and having,
consequently, extinguished its right to exercise the said option,
Ambience itself wrote to Indiabulls on 29 March 2023, calling on
Indiabulls to pay the balance consideration under the ATSs. He also
places reliance on para 11 of the reply filed by Ambience to OMP (I)
(Comm) 406/2023 , in which it is thus averred:
“In this context, it may be noted that the Respondent has itself
issued a Notice of Default on 29.03.2023 upon the Petitioner
seeking the balance of advances agreed upon under the ATSs to be
released, failing which the Respondent will exercise its right to
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Petitioner has not released the balance advances under the ATSs
which were subsumed in the Settlement Deed.”
Mr. Nayar also places reliance, in this context, on Clause 2(c) of the
Addendum Agreement dated 6 December 2022, which specifically
required Ambience to procure NOCs from the Punjab National Bank
for the 20 units in Tiverton, for which the ATS already stood executed
in favour of Indiabulls. He further draws attention to Clause 27 of the
ATSs in OMP (I) (Comm) 408/2023, which clearly stated that the
ATSs, and the Annexures thereto, constituted “a complete and
exclusive understanding of the terms of this Agreement between the
parties on the subject here of”, further clarified that “no amendment or
modification here to shall be valid and effective unless agreed to by
all the Parties hereto and evidenced in writing”.
16. In the circumstances, Mr. Nayar’s contention is that it would be
just and convenient, in the interests of justice, for Ambience to be
directed to deposit, with this Court, the entire amount paid by
Indiabulls under the ATSs, pending resolution of the disputes between
the parties to arbitration. He relies, for this purpose, on the judgment
of this Court in Honasa Consumer Ltd v RSM General Trading
LLC8 .
Submissions of Mr. Rajeeve Mehra in reply
17. Responding to the submissions of Mr. Nayar, Mr. Mehra
submits that the ATSs were in fact not intended to be instruments of
8 2024 SCC OnLine Del 5631
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sale, whereunder housing units were to be sold and purchased.
According to Mr. Mehra, the loans of ₹ 2344 Crores, earlier availed
from Indiabulls, have been repaid by Ambience, out of amounts
advanced by Indiabulls under the ATSs. The ATSs were, therefore,
according to Mr. Mehra, merely instruments whereunder advances
were extended by Indiabulls to Ambience, secured against the housing
units forming subject matter of the ATSs. Inasmuch as the loan
amount of ₹ 2344 Crores has been paid back to Indiabulls, Mr.
Mehra’s contention is that the ATSs have worked themselves out, and
Indiabulls could no longer seek to enforce the security in the form of
the housing units forming subject matter of the ATSs.
18. Mr. Mehra submits that Mr. Nayar’s plea that Indiabulls could
seek specific performance of the ATSs stands negated by Clause 10 of
the Settlement Deed dated 18 November 2022, which permits
Ambience to sell the disputed units, once the advances extended by
Indiabulls under the ATSs, against security of the said units, is repaid
by Ambience to Indiabulls. It was for this reason that, from time to
time, units have been removed from the scope of the ATSs by
executing cancellation deeds.
19. Mr. Mehra also sought to place reliance on the buy back
provision, in respect of the units situated at Sector 22 Gurugram, as
contained in Clause 11 of the Settlement Deed. He refutes Mr.
Nayar’s contention that the right of buy back stood novated by clause
2(c) of the Addendum dated 6 December 2022. He emphasises that
the respondent is willing to complete its obligations under Clause 11
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and avail the facility of buy back, in respect of which e-mail dated 5
July 2024 stands addressed by Ambience to Indiabulls.
20. For all these reasons, Mr. Mehra submits that the prayers in the
OMPs, as well as the prayer that Ambience should be directed to
deposit the amounts paid by Indiabulls under the ATSs. relating to the
units which are yet to be cancelled, has no merits and cannot sustain.
21. Apart from merits, Mr. Mehra has also contested the OMPs and
the prayers in the IAs filed by Indiabulls on other grounds. He submits
that Indiabulls has not provided any material to substantiate its
allegation that Ambience was alienating the housing units forming
subject matter of the ATSs. In the absence of any such legitimate
apprehension, Mr. Mehra’s contention is that Indiabulls cannot be
entitled to any interlocutory protection under Section 9 of the 1996
Act.
22. Insofar as the prayer for a direction to Ambience to deposit,
with the Court, the amounts paid by Indiabulls to Ambience under the
ATSs, is concerned, Mr. Mehra submits that the said prayer travels
beyond the prayers contained in the OMPs and cannot, therefore, be
introduced in interlocutory applications. IAs cannot, submits Mr.
Mehra, contain prayers which are beyond the scope of the OMPs.
23. Mr. Mehra also disputes the applicability of the judgment of
this Court in Honasa Consumer, to the facts of the present case, as it
is distinguishable.
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24. Regarding the plea of Mr. Mehra that the prayer for direction to
Ambience to deposit the amounts paid by Indiabulls under the ATSs
is concerned, Mr. Nayar, in rejoinder, submits that while the plea may
be technically attractive, a prayer for a direction to Indiabulls to
deposit, pending arbitration, the amounts paid by Indiabulls under the
ATSs, is maintainable under Section 9 of the 1996 Act. It would
always have been open to Indiabulls to amend the OMPs and
introduced the said prayer. Irrespective of whether the Court would or
would not, be inclined to grant the prayer, Mr. Nayar’s contention is
that the maintainability of the prayer cannot be questioned. Inasmuch
as Ambience has responded, on merits, to the said prayer, and the
parties have been heard at length, Mr. Nayar submits that the prayer
ought not to be rejected solely on the ground that it was not contained
in the OMPs.
Analysis
The nature of the consideration by the Court
25. Having heard Mr. Nayar and Mr. Mehra at great length, the
Court has to be conscious of the fact that it is dealing with
applications under Section 9 of the 1996 Act. Section 9 is a provision
which can be invoked either before, during, or after arbitration.
However, the considerations which apply, would vary, depending on
the stage at which the provision is invoked.
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26. Where an arbitral tribunal is already in place while there is no
absolute embargo on a Court granting interlocutory protection under
Section 9, the approach ordinarily would be to relegate the parties to
remedies under Section 17 of the 1996 Act, the scope of which is co-
equal with the scope of Section 9. Expressed otherwise, the arbitral
tribunal, under Section 17, has the same power to grant relief as a
Court has, under Section 9. Where an arbitral tribunal is already in
place, therefore, the Court would pass orders under Section 9 only in
the rarest of circumstances, where exigencies are such that the matter
cannot await a decision by the tribunal.
27. I, however, am dealing with the situation in which no arbitral
tribunal is yet in place to decide the disputes between Indiabulls and
Ambience. The consideration before the Court is, therefore, whether
the facts make out a case for grant of interlocutory protection to
Indiabulls.
28. While adjudicating on the issue, the Court has to be conscious
of the fact that the examination by it is only prima facie. A Court
cannot, by returning detailed findings on merits in a Section 9
petition, prejudice the arbitral proceeding which has yet to commence.
Ergo, while considering an application under Section 9 of the 1996
Act, the scope of examination by the Court is limited to two aspects.
The Court has first to consider whether, in the facts of the case, the
Section 9 applicant is deserving of, and is entitled to, interim
protection; in other words, whether a case for grant of interim
protection is made out, pending the constitution of the arbitral
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tribunal. The second aspect, which arises only if the answer to the
first aspect is in the affirmative, is the scope and extent of interim
protection, which ought to be granted.
Scope of power to direct deposit by way of security, under Section 9
29. Section 9 is wide and compendious in its scope. The Court is
empowered, under Section 9, to preserve the property or goods
forming subject matter of the arbitral dispute, as also to, for which
purpose, a Receiver may also be appointed; to secure the amount in
dispute in the arbitration; to grant interim injection and, under Clause
9(1)(ii)(e), to grant any such other interim measure of protection as
may appear to the Court to be just and convenient.
30. There is, therefore, no statutory or precedential embargo on the
extent of relief which a Court can grant under Section 9. Even on the
aspect of whether the provisions of Order XXXVIII Rule 59 of the
CPC would apply, where the relief sought is under Section 9
9 5. Where defendant may be called upon to furnish security for production of property. –
(1) Where at any stage of a suit, the Court is satisfied, by affidavit or otherwise, that the
defendant, with intent to obstruct or delay the execution of any decree that may be passed against
him,–
(a) is about to dispose of the whole or any part of his property, or
(b) is about to remove the whole or any part of his property from the local limits of
the jurisdiction of the Court,
the Court may direct the defendant, within a time to be fixed by it, either to furnish security, in such
sum as may be specified in the order, to produce and place at the disposal of the Court, when
required, the said property or the value of the same, or such portion thereof as may be sufficient to
satisfy the decree, or to appear and show cause why he should not furnish security.
(2) The plaintiff shall, unless the Court otherwise directs, specify the property required to be
attached and the estimated value thereof.
(3) The Court may also in the order direct the conditional attachment of the whole or any
portion of the property so specified.
(4) If an order of attachment is made without complying with the provisions of sub-rule (1)
of this rule, such attachment shall be void.
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(1)(ii)(b), to secure the amount in dispute there is a cleavage of
opinion. The ultimate eventuate appears to be that while the Court
may be guided by the principles that govern Order XXXVIII Rule 5,
while considering a prayer for directing the respondent to secure the
amount in dispute, the interest of justice and the overall facts of the
case must ultimately pre-dominate, and the strict tests laid down by
the Supreme Court in the judgments rendered in the context of Order
XXXVIII Rule 5 may not always apply.
31. The question of whether the power of the Court, in a pre-
arbitral Section 9 petition, to direct deposit of the amount involved in
the dispute, or “attachment before judgement”, has been subject
matter of considerable debate, and, perhaps, the last word on the issue
is yet to be said. There appears, however, with greatest respect, to be
some cleavage of opinion in the decisions of the Supreme Court on
the issue, between the view expressed in Essar House Pvt. Ltd. v
Arcellor Mittal Nippon Steel India Ltd.10 and Sepco Electric Power
Construction Corporation v Power Mech Projects Ltd11 on the one
hand, and Sanghi Industries Ltd v Ravin Cables Ltd12, which was
rendered between Essar House and Sepco, on the other, in each case
by a Bench of two learned Judges. While, in Sanghi Industries, the
Supreme Court has held unequivocally, that a prayer for securing the
amount in dispute, can be passed under Section 9(1)(ii)(e) of the 1996
Act only if the pre-requisites of Order XXXVIII Rule 5 CPC are met,
Essar House opines that a possibility of diminution of assets would
10 2022 SCC OnLine SC 1219
11 2022 SCC OnLine SC 1243
12 2022 SCC OnLine SC 1329
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suffice and that relief, by way of direction for deposit, should not be
refused only because requisite averments, incorporating ground for
attachment before judgment under Order XXXVIII Rule 5, are not
forthcoming in the pleadings. Essar House and Sepco affirm and
approve, in this context, the following passage from the judgement of
a Division Bench of this Court in Ajay Singh v Kal Airways Pvt Ltd13,
as enunciating the correct law. The following passages from Essar
House, which also figure in Sepco, merit reproduction in this context:
“37. Mr. Shyam Divan argued that while deciding a Section 9
application filed under the provisions of the Arbitration Act, the
principles of the CPC are to be strictly followed. The principles
enunciated by this Court in Raman Tech. & Process Engg. Co.14
were required to be followed in letter and spirit.
38. In this case, however, the High Court has taken note of the
pleadings for invoking the principles of Order 38 Rule 5 CPC and
observed :-
“31. In our view, the paragraphs of the aforesaid
pleadings of the respondent in arbitration petition filed
under section 9 filed by the respondent were sufficient to
secure the claim of the respondent under section 9 of the
Arbitration Act and to invoke the principles of Order 38
Rule 5 of the Code of Civil Procedure even if it is strictly
made applicable to the facts of this case.”
39. In deciding a petition under Section 9 of the Arbitration
Act, the Court cannot ignore the basic principles of the CPC. At
the same time, the power Court to grant relief is not curtailed by
the rigours of every procedural provision in the CPC. In exercise
of its powers to grant interim relief under Section 9 of the
Arbitration Act, the Court is not strictly bound by the provisions of
the CPC.
40. While it is true that the power under Section 9 of the
Arbitration Act should not ordinarily be exercised ignoring the
basic principles of procedural law as laid down in the CPC, the
technicalities of CPC cannot prevent the Court from securing the
ends of justice. It is well settled that procedural safeguards, meant
13
2017 SCC OnLine Del 8934
14 (2008) 2 SCC 302
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to advance the cause of justice cannot be interpreted in such
manner, as would defeat justice.
41. Section 9 of the Arbitration Act provides that a party may
apply to a Court for an interim measure or protection inter alia to
(i) secure the amount in dispute in the arbitration; or (ii) such other
interim measure of protection as may appear to the Court to be just
and convenient, and the Court shall have the same power for
making orders as it has for the purpose of, and in relation to, any
proceedings before it.
42. As argued by Mr. Kaul, besides the specific power of
securing the amount in dispute, the Courts have been empowered
to pass any interim measure of protection, keeping in view the
purpose of the proceedings before it. The said provision confers a
residuary power on the Court to pass such other interim measures
of protection as may appear to be just and convenient.
43. Many High Courts have also proceeded on the principle
that the powers of a Court under Section 9 of the Arbitration Act
are wider than the powers under the provisions of the CPC.
44. In Ajay Singh v. Kal Airways Private Limited the Delhi
High Court correctly held:
“…Section 9 grants wide powers to the courts in fashioning
an appropriate interim order, is apparent from its text.
Nevertheless, what the authorities stress is that the exercise
of such power should be principled, premised on some
known guidelines – therefore, the analogy of Orders 38 and
39. Equally, the court should not find itself unduly bound
by the text of those provisions rather it is to follow the
underlying principles…”
45. In Jagdish Ahuja v Cupino Limited15, the Bombay High
Court correctly summarised the law in Paragraph 6 extracted
hereinbelow:–
“6. As far as Section 9 of the Act is concerned, it cannot
be said that this court, while considering a relief
thereunder, is strictly bound by the provisions of Order 38
Rule 5. As held by our Courts, the scope of Section 9 of the
Act is very broad; the court has a discretion to grant
thereunder a wide range of interim measures of protection
“as may appear to the court to be just and convenient”,
though such discretion has to be exercised judiciously and15 2020 SCC OnLine Bom 849
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not arbitrarily. The court is, no doubt, guided by the
principles which civil courts ordinarily employ for
considering interim relief, particularly, Order 39 Rules 1
and 2 and Order 38 Rule 5; the court, however, is not
unduly bound by their texts. As this court held in Nimbus
Communications Limited v. Board of Control for Cricket
in India16 (Per D.Y. Chandrachud J, as the learned Judge
then was), the court, whilst exercising power under Section
9, “must have due regard to the underlying purpose of the
conferment of the power under the court which is to
promote the efficacy of arbitration as a form of dispute
resolution.” The learned Judge further observed as follows:
“Just as on the one hand the exercise of the power
under Section 9 cannot be carried out in an
uncharted territory ignoring the basic principles of
procedural law contained in the Code of Civil
Procedure 1908, the rigors of every procedural
provision in the Code of Civil Procedure 1908
cannot be put into place to defeat the grant of relief
which would subserve the paramount interests of
justice. A balance has to be drawn between the two
considerations in the facts of each case.”
46. In Valentine Maritime Ltd. v Kreuz Subsea Pte. Ltd.17, the
High Court held:–
“88. … It is now a well settled legal position, that at least
with respect to Chartered High Courts, the power to grant
temporary injunctions are not confined to the statutory
provisions alone. The Chartered High Courts had an
inherent power under the general equity jurisdiction to
grant temporary injunctions independently of the provisions
of the Civil Procedure Code, 1908…”
*****
93. Insofar as judgment of Supreme Court in case
of Raman Tech. & Process Engg. Co. relied upon by Mr.
Narichania, learned senior counsel for the VML is
concerned, it is held by the Hon’ble Supreme Court that
merely having a just or valid claim or a prima facie case,
will not entitle the plaintiff to an order of attachment before
judgment, unless he also establishes that the defendant is
attempting to remove or dispose of his assets with the
intention of defeating the decree that may be passed. The
16 2012 SCC OnLine Bom 287
17 2021 SCC OnLine Bom 75
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Hon’ble Supreme Court has further held that the purpose of
Order 38 Rule 5 is not to convert an unsecured debt into a
secured debt. The said judgment of the Hon’ble Supreme
Court was not in respect of the powers of court under
section 9 of the Arbitration and Conciliation Act, 1996 but
was in respect of power under Order 38 Rule 5 of the Civil
Procedure Code, 1908 in a suit. Even otherwise, the said
judgment is distinguishable in the facts of this case.
*****
95. Insofar as judgment of this Court delivered by the
Division Bench of this court in case of Nimbus
Communications Limited v. Board of Control for Cricket
in India relied upon by the learned senior counsel for the
VML is concerned, this Court adverted to the judgment of
Hon’ble Supreme Court in case of Adhunik Steels
Ltd. v Orissa Manganese and Minerals (P) Ltd.18, and
held that in view of the decision of the Supreme Court in
case of Adhunik Steels Ltd. the view of the Division Bench
in case of National Shipping Company of Saudi
Arabia19 that the exercise of power under section 9(ii)(b) is
not controlled by the provisions of the Civil Procedure
Code, 1908 cannot stand. This court in the said judgment
of Nimbus Communications Limited (supra) held that the
exercise of the power under section 9 of the Arbitration Act
cannot be totally independent of the basic principles
governing grant of interim injunction by the civil Court, at
the same time, the Court when it decides the petition under
section 9, must have due regard to the underlying purpose
of the conferment of the power upon the Court which is to
promote the efficacy of arbitration as a form of dispute
resolution.
96. This court held that just as on the one hand the
exercise of the power under Section 9 cannot be carried out
in an uncharted territory ignoring the basic principles of
procedural law contained in the Civil Procedure Code,
1908, the rigors of every procedural provision in the Civil
Procedure Code, 1908 cannot be put into place to defeat the
grant of relief which would sub-serve the paramount
interests of justice. A balance has to be drawn between the
two considerations in the facts of each case. The principles
laid down in the Civil Procedure Code, 1908 for the grant
of interlocutory remedies must furnish a guide to the Court
18 (2007) 7 SCC 125
19 National Shipping Company of Saudi Arabia v Sentrans Industries Ltd, AIR 2004 Bom 136
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when it determines an application under Section 9 of the
Arbitration and Conciliation Act, 1996. The underlying
basis of Order 38 Rule 5 therefore has to be borne in mind
while deciding an application under Section 9(ii)(b) of the
Arbitration Act.
*****
104. The Division Bench of this court in case of Deccan
Chronicle Holdings Limited v. L & T Finance
Ltd.20, after adverting to the judgment of Supreme Court in
case of Adhunik Steel Ltd. (supra), judgment of the
Division Bench of this court in case of Nimbus
Communications Ltd. (supra) held that the rigors of every
procedural provision of the Code of Civil Procedure cannot
be put into place to defeat the grant of relief which would
sub-serve the paramount interests of the justice. The object
of preserving the efficacy of arbitration as an effective form
of dispute resolution must be duly fulfilled. This would
necessarily mean that in deciding an application under
Section 9, the Court would while bearing in mind the
fundamental principles underlying the provisions of the
Code of Civil Procedure, at the same time, have the
discretion to mould the relief in appropriate cases to secure
the ends of justice and to preserve the sanctity of the
arbitral process. The Division Bench of this Court in the
said judgment did not interfere with the order passed by the
learned Single Judge directing the parties to furnish
security so as to secure the claim of the original petitioner
in arbitration by applying principles of Order 38 Rule 5 of
the Code of Civil Procedure. …”
47. In Srei Infrastructure Finance Limited v Ravi Udyog Pvt.
Ltd.21, the Calcutta High Court, speaking through one of us (Indira
Banerjee, J.), as Judge of that Court, said:–
“An application under section 9 of the Arbitration &
Conciliation Act, 1996 for interim relief is not to be judged
as per the standards of a plaint in a suit. If the relevant facts
pleaded, read with the documents annexed to the petition,
warrant the grant of interim relief, interim relief ought not
to be refused by recourse to technicalities…”
48. Section 9 of the Arbitration Act confers wide power on the
Court to pass orders securing the amount in dispute in arbitration,
whether before the commencement of the arbitral proceedings,
during the arbitral proceedings or at any time after making of the
20 2013 SCC OnLine Bom 1005
21 2008 SCC OnLine Cal 974
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arbitral award, but before its enforcement in accordance with
Section 36 of the Arbitration Act. All that the Court is required to
see is, whether the applicant for interim measure has a good prima
facie case, whether the balance of convenience is in favour of
interim relief as prayed for being granted and whether the
applicant has approached the court with reasonable expedition.
49. If a strong prima facie case is made out and the balance of
convenience is in favour of interim relief being granted, the Court
exercising power under Section 9 of the Arbitration Act should not
withhold relief on the mere technicality of absence of averments,
incorporating the grounds for attachment before judgment under
Order 38 Rule 5 of the CPC.”
32. As against this, in Sanghi Industries, the Supreme Court held:
“4. Having heard learned counsel appearing on behalf of the
respective parties and in the facts and circumstances of the case,
more particularly, when the bank guarantees were already invoked
and the amounts under the respective bank guarantees were already
paid by the bank much prior to the Commercial Court passed the
order under Section 9 of the Arbitration Act, 1996 and looking to
the tenor of the order passed by the Commercial Court, it appears
that the Commercial Court had passed the order under Section
9(ii)(e) of the Arbitration Act, 1996 to secure the amount in
dispute, we are of the opinion that unless and until the pre-
conditions under Order XXXVIII Rule 5 of the CPC are satisfied
and unless there are specific allegations with cogent material and
unless prima-facie the Court is satisfied that the appellant is likely
to defeat the decree/award that may be passed by the arbitrator by
disposing of the properties and/or in any other manner, the
Commercial Court could not have passed such an order in exercise
of powers under Section 9 of the Arbitration Act, 1996. At this
stage, it is required to be noted that even otherwise there are very
serious disputes on the amount claimed by the rival parties, which
are to be adjudicated upon in the proceedings before the arbitral
tribunal.
6. The order(s) which may be passed by the Commercial Court
in an application under Section 9 of the Arbitration Act,
1996 is basically and mainly by way of interim measure. It
may be true that in a given case if all the conditions of Order
XXXVIII Rule 5 of the CPC are satisfied and the
Commercial Court is satisfied on the conduct of
opposite/opponent party that the opponent party is trying to
sell its properties to defeat the award that may be passed
and/or any other conduct on the part of the
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opposite/opponent party which may tantamount to any
attempt on the part of the opponent/opposite party to defeat
the award that may be passed in the arbitral proceedings, the
Commercial Court may pass an appropriate order including
the restraint order and/or any other appropriate order to
secure the interest of the parties. However, unless and until
the conditions mentioned in Order XXXVIII Rule 5 of the
CPC are satisfied such an order could not have been passed
by the Commercial Court which has been passed by the
Commercial Court in the present case, which has been
affirmed by the High Court.”
(Emphasis supplied)
33. Thus, regarding the strict applicability of Order XXXVIII Rule
5 of the CPC to Section 9 of the 1996 Act, the Supreme Court has, in
Sanghi Industries, advocated implicit adherence, whereas, in Essar
House and Sepco, the Supreme Court has held that, while the Court
may be guided by Orders XXXVIII and XXIX of the CPC, a decision
in an application under Section 9 is not strictly restrained by Order
XXXVIII Rule 5.
34. On the question of which judgement would be required to be
followed, we are guided by the judgement of the Constitution Bench
of the Supreme Court in National Insurance Co Ltd v Pranay Sethi22,
which has subsequently been followed and and reaffirmed in Union
Territory of Ladakh v Jammu & Kashmir National Conference23,
and which holds that the earlier judgement would have precedence.
35. The interlocutory reliefs sought by Indiabulls have, therefore, to
be examined in the light of the aforestated law.
22 (2017) 16 SCC 680
23 2023 SCC OnLine SC 1140
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Applying the law to the facts
36. At the very outset, certain undisputed facts stare one in the face.
These may be enumerated as under:
(i) Agreements to sell stand executed between Indiabulls
and Ambience, whereunder, against amounts which are payable
by Indiabulls, residential units in the Tiverton, Caitriona and
Creacion housing units of Ambience are to be sold to
Indiabulls.
(ii) The ATSs, on their face, are standalone agreements.
There is no reference, in any of the ATSs, to the Settlement
Deed dated 18 November 2022 or to the Addendum dated 6
December 2022. Nor, in the Settlement Deed, is there any
reference to the ATSs. The attempt by Mr. Mehra to conflate
the ATSs and the Settlement Deed, by submitting that the ATSs
were not actually intended to be instruments of sale, but were
only agreements whereunder the residential units of Ambience
were provided as security towards the advances extended by
Indiabulls, is not borne out by any recital either in the ATSs or
in the settlement deed. While it would always be open to
Ambience to demonstrate this interconnect in the arbitral
proceedings, no prima facie case to that effect can be set to
have been made out at this stage.
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(iii) Against the aforesaid payment of ₹ 638,07,75,728/- made
by Indiabulls to Ambience under the ATSs, no sale deed has
been executed by Ambience, in respect of even a single unit
covered by the ATSs.
(iv) The incontrovertible position is, therefore, that Ambience
has retained, with itself, the entire amount paid by Indiabulls
under the ATSs, without executing any document of sale, in
respect of any of the units forming subject matter of the ATSs,
in favour of Indiabulls.
Regarding the Settlement Deed
37. Apart from the fact that there is no perceptible interconnect
between the ATSs and the Settlement Deed/Addendum forthcoming
on the record, there are at least three other reasons why Ambience
cannot seek to escape its liabilities by seeking recourse thereto.
38. Firstly, as Indiabulls has correctly pointed out – and Ambience
has not chosen to deny – the benefit of the buy back Clause 11 in the
Settlement Deed would not be available to Ambience in view of
Clause 13 and in view of the three successive defaults, by Ambience,
of exercise of its right of buy back, despite Indiabulls having called on
it to do so on 23 January 2023, 21 February 2023 and 22 March 2023.
39. Secondly, Ambience itself apparently acknowledged this
position, as it wrote to Indiabulls on 29 March 2023, calling on
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Indiabulls to pay the balance consideration under the ATSs. This
request, coming as it did on the heels of Indiabulls’ communication
dated 22 March 2023, clearly indicates Ambience’s awareness that its
right of buy back no longer survived, and all that survived were the
ATSs.
40. Thirdly, Clause 2(c) of the Addendum clearly required
Ambience to fulfil its obligations under the ATSs. The Addendum,
being a contract inter partes, also reflects the joint understanding, of
Indiabulls and Ambience, that the Settlement Deed did not dilute, or
efface, their rival obligations under the ATSs.
The equities of the case
41. The ATSs entitle Indiabulls to seek specific performance
thereof. Whether it would, or would not, succeed in this endeavour,
only time, and the due course of arbitral proceedings, can tell. What
cannot be disputed is, however, the fact that a major portion of the
payment under the ATSs stand paid by Indiabulls to Ambience,
whereas Ambience has not budged an inch towards performance of its
obligations under the ATSs buy executing Sale Deeds in respect of the
disputed units in Indiabulls’ favour.
42. The equities of the case are, therefore, decidedly
overwhelmingly in favour of Indiabulls and against Ambience.
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43. The entitlement of Indiabulls, to be secured under Section 9
cannot, therefore, be substantially denied.
44. Ambience has already undertaken, before this Court, not to
alienate any of the remaining units under the ATSs, in respect of
which no cancellation deeds have been executed. The question that
arises is, therefore, whether Indiabulls is nonetheless entitled to a
direction to Ambience to deposit the amount paid by Indiabulls to
Ambience under the ATSs.
Mr Mehra’s objections
45. Mr. Mehra has advanced three objections to this claim. The
first is preliminary; the other two on merits.
46. The first objection of Mr. Mehra is that, as there is no prayer in
the OMPs, for securing the amounts paid by Indiabulls to Ambience
under the ATSs by directing deposit by Ambience, such a prayer
cannot be made in interlocutory applications filed in the OMPs.
Expressed otherwise, Mr. Mehra is pressing, into service, the classical
principle that a prayer in an interim application cannot exceed the
prayer in the main petition.
47. The second objection of Mr. Mehra, to the interim protection
sought by Indiabulls, is that there is no corroborative material to
substantiate the submission of Indiabulls that Ambience was
alienating or creating any third party rights in respect of the units
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forming subject matter of the ATSs. This was a mere allegation, and
no more. The apprehension of Indiabulls that, if it is not secured, the
arbitral proceedings may be rendered a futility, is therefore, he
submits, imaginary.
48. Mr. Mehra’s third objection is that Indiabulls stands sufficiently
secured by the undertaking, of Ambience, that it would not alienate or
create any third party rights in respect of the surviving units covered
by the ATSs. Once Indiabulls thus stands sufficiently secured, any
prayer for further security, by way of deposit by Ambience with the
Registry of this Court must, therefore, according to Mr. Mehra, merit
rejection.
49. I proceed to examine each of these three contentions.
Re. objection that prayer for deposit, contained in IAs, exceeds prayer
in the OMPs
50. The submission of Mr. Mehra that Indiabulls could not, in
interlocutory applications, expand the scope of the prayer in the main
petitions is, undoubtedly, facially attractive. There can, however, be
no dispute about the fact that, in view of Section 9(1)(ii)(b) of the
1996 Act a prayer by Indiabulls to direct Ambience to deposit the
amounts paid by Indiabulls to Ambience under the ATSs, would
certainly be maintainable. It is also indisputable that all the material,
on the basis of which the Court can decide the said prayer, is on
record and that Ambience has not only submitted substantive replies
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to the IAs filed by Indiabulls seeking securing of Indiabulls’ claim by
deposit, but has also been heard at length on the point. Written
submissions have also been filed by both sides. The question is
whether, even so, the Court must refuse to examine Indiabulls’ claim
for a direction to Ambience to deposit the amounts paid by Indiabulls
to Ambience under the ATSs in relation to the disputed units, or
consider the said prayer on merits.
51. Keeping in mind the overwhelming interests of justice, and the
undeniable fact that the equities of the situation are entirely in favour
of Indiabulls and against Ambience, I am of the opinion that
Ambience cannot oppose an adjudication of Indiabulls’ prayer for a
direction of deposit to Ambience merely on the ground that such a
prayer that was not contained in the OMPs, but only in the IAs.
52. In so holding, I am also persuaded by the fact that the present
case is not, classically, one of substantive prayers in a main petition
and interlocutory reliefs sought in IAs filed therein.
53. The OMPs are themselves seeking interlocutory relief, pending
disposal of the arbitral proceedings. They are styled as substantive
OMPs only because of the original jurisdiction that vests in this Court
to decide claims for interim protection under Section 9 of the 1996
Act. This position can be understood by a simple illustration. If, for
example, the prayer in the OMPs have been advanced before an
Arbitral Tribunal under Section 17 of the 1996 Act, could it be said
that the claimant was barred from seeking further interim protection
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by way of deposit, by a further Section 17 application? The answer,
clearly, has to be in the negative. Were arbitral proceedings between
Indiabulls and Ambience to have been ongoing, Indiabulls would
clearly be within its right in filing two applications under Section 17
before the Arbitral Tribunal, seeking, in the first, a restraint against
Ambience creating third party rights in respect of the disputed units
and, in the second, a direction to Ambience to secure Indiabulls’
claims by way of deposit. It would not be open, in such an eventuality,
for Ambience to contend that the second application was not
maintainable and that the prayers in the second application could not
be entertained, as it went beyond the prayer in the first application.
The Arbitral Tribunal would have to consider and decide both
applications. Of course, it would always be open to the Arbitral
Tribunal to hold that only one of the two prayers could be granted, or
even that neither prayer had merit. The Tribunal could not, however,
refuse to consider the second prayer for deposit merely because, in the
first application, the prayer was for a direction to Ambience not to
create third party interests in respect of the disputed units.
54. The same principle, in my considered opinion, would apply
here. The interlocutory prayer contained in the OMPs was for a
direction to Ambience not to create third party interest in respect of
the disputed units. A further prayer was contained in the IAs filed by
Indiabulls, for a direction to Ambience to deposit, with the Court, the
amounts paid by Indiabulls to Ambience under the ATSs, relating to
the disputed units. Both are interlocutory prayers, seeking interim
protection pending arbitration. Each of them is individually
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maintainable under Section 9. The Court cannot refuse to consider the
second prayer merely because it goes beyond the first prayer. Both
prayers have, therefore, to be considered on merits and decided.
55. That said, I am clearly of the opinion that both the prayers
cannot simultaneously be granted. In other words, Ambience cannot
be restrained from alienating any of the disputed units and
simultaneously be directed to deposit, with the Registry of the Court,
the amounts paid by Indiabulls under the ATSs. If a direction for
deposit is passed, on the deposit being made, the restraint against
alienation of the units must come to an end. Both cannot co-exist.
56. Ambience had already undertaken not to alienate or create third
party interests in respect of any of the disputed units.
57. The Court has, therefore, only to consider whether Indiabulls
has made out a case for a direction to Ambience to deposit the
amounts paid by Indiabulls under the ATSs.
58. This disposes of the first objection of Mr. Mehra, which is that
Indiabulls was not entitled, in the interlocutory applications filed in
the OMPs, to seek a deposit by Ambience, of the disputed amount
with this Court, in the absence of any such prayer in the OMPs.
Re. objection that there was no evidence of Ambience disposing of the
disputed units
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59. The second submission of Mr. Mehra is that the OMPs are
predicated on bald allegation that Ambience is creating third party
interest in respect of the disputed properties, with no corroborative
material.
60. In this context, it is worthwhile to note the assertion in the
OMPs, regarding the apprehension of Indiabulls that Ambience is in
the process of alienating the disputed units and Ambience’s response
thereto. I may note that the pleadings in this regard are similar, across
the OMPs. For ready reference, one may reproduce the assertion in
OMP (I) (Comm) 401/2023, and the reply filed by Ambience thereto,
thus:
Assertion in OMP
“15. However, in the 1st week of December, the Petitioner has
learnt from market sources that the Respondent contrary to its
assurances and representations to the Petitioner and more
significantly in breach or Clause 8(ii) of the ATS is seeking to
alienate and create third party rights in the Units which arc a
subject matter of the ATS dated 18.11.2022. The Petitioner has
reliably learnt from brokers dealing in Units relating to the
Tiverton Project of the Respondent, that the Units agreed to be sold
and transferred to the Petitioner under the ATS have been placed
on the market by the Respondent and are being offered for sale by
the Respondent. It is therefore clear that the Respondent is acting
in breach of the terms of the ATS and seeking to resile therefrom
in a clandestine manner and behind the back of the Petitioner.
While on the Petitioner’ race the Respondent is assuring to perform
the terms or the ATS and fulfill its obligations, while on the other
hand, the Respondent is seeking to alienate the units behind the
Petitioner’s back.
Reply by Ambience
11. The Petitioner has wrongly averred that the Respondent
was attempting to alienate the Noida Apartments without the
knowledge of the Petitioner which resulted in passing of the ex-
parte ad-interim Order dated 08.12.2023 whereby a blanket stay
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was issued restraining the Respondent from dealing with the Noida
Apartments, even though the Settlement Deed provides for such a
right of sale.
12. The Petitioner does not have any right to restrain the
Respondent from exercising its right to sell the Noida Apartments.
The only obligation on the part of the Respondent is to release the
advance payments made by the Petitioner immediately upon selling
the Noida Apartments to prospective buyers. In this context, it may
be noted that even after obtaining the ad-interim stay, the Petitioner
has executed Deeds of Cancellation whereby the Respondent has
repaid the advances under the ATS to the Petitioner. A copy of the
acknowledgments issued by the Petitioner acknowledging the
receipts of payments for the units cancelled pursuant to the ad-
interim Order dated 08.12.2023 are herein annexed as Document-4
(Colly).
*****
15. Further it is trite law that a party approaching this Hon’ble
Court for interim reliefs under Section 9, Arbitration and
Conciliation Act, 1996 must satisfy the requirements of Order
XXXIX Rule 1 and 2, Code of Civil Procedure, 1908. From the
submissions above, it is abundantly clear that the Petitioner has
made out no prima facie case whatsoever to restrain the
Respondents from selling the Noida Apartments. Therefore, the
Petitioner cannot seek any injunction against the Respondent
restraining them from dealing with the Noida Apartments.
16. It may also be noted that the Petitioner has not justified any
apprehension regarding sale of the Noida Apartments without the
knowledge of the Petitioner. The Respondent has not in one
instance transferred or created any encumbrance diluting the
collateral offered to the Petitioner, and none pointed out by the
Petitioner. Therefore, the apprehension of the Petitioner that third
party encumbrances are being created without the knowledge of
the Petitioner is demonstrably false.
17. The Petitioner has not pleaded any ground for tilting the
balance of convenience in its favour. As provided in the Settlement
Deed and the Addendum thereto, as mutually agreed between the
Parties, the Respondent has unfettered right to sell the Noida
Apartments. In fact, the balance lies squarely in favor of the
Respondent against grant of any injunction, as the Respondent’s
right to sell the Noida Apartments in terms of Clause 10 of the
Settlement Deed will be rendered meaningless and otiose if any
injunction is granted and the Respondent is restrained from selling
its apartments.
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19. The Petitioner has further failed to establish that any
irreparable loss or damage will be caused to the Petitioner if the
injunction is refused. As categorically set out in the Settlement
Deed, the Petitioner’s only sole surviving claim against the
Respondent is to compel the Respondent to sell the Noida
Apartments and return the advances contemplated in the ATS. At
the maximum, should any dispute arise between the Parties, the
Petitioner can seek a money decree for return of the advance
payments as recorded in the ATS. Therefore, the Petitioner cannot
seek any injunctive relief as its loss is quantifiable, even assuming
there is any.”
(Emphasis supplied)
61. These pleadings contain two interesting assertions. The first, as
already noted, is that Ambience has a right to sell the disputed units.
The second is an acknowledgement of Indiabulls’ right to seek return
of the payments made by it, to Ambience, under the ATSs.
62. Further, even in para 9 of its written submission, Ambience has
contended thus:
“9. The Petitioner without making any reference to the
Settlement Deed dated 18.11.2022 and the Addendum to
Settlement Deed dated 06.12.2022, providing a right to the
Respondent to sell the ATS units, obtained an ex-parte ad-interim
injunction against the Respondent from this Hon’ble Court.”
63. Thus, even while averring that Indiabulls had not provided any
categorical material to indicate that the Ambience was in the process
of alienating the disputed units, the right to sell the disputed units has
been repeatedly stressed by Ambience in its pleadings and in its
written submissions. There is, therefore, prima facie substance in
Indiabulls’ apprehension that, were interim protection not to be
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granted, the possibility of the disputed units being alienated by
Ambience looms large.
64. The second objection of Mr. Mehra, that there is no foundation
for Indiabulls’ apprehension that Ambience may alienate the disputed
units is also, therefore, rejected.
Re. submission that Indiabulls stands sufficiently secured
65. Which leaves, for consideration, Mr. Mehra’s third objection,
which is that Indiabulls stands sufficiently secured by Ambience’s
undertaking not to alienate the disputed units and that, therefore, no
case for a direction for deposit exists.
66. I have applied my mind to this contention, keeping in mind the
principles of law applicable to grant of relief in terms of Section 9
(1)(ii)(b) and Section 9(1)(ii)(e) of the 1996 Act.
67. The position of law, in this regard, already stands noted in paras
29 to 34 supra.
Essar House
68. In my opinion, it is necessary, given the nature of the dispute in
the present case, also to note the facts, which were before the Supreme
Court in Essar House.
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69. The appeal before the Supreme Court arose out of two orders
passed by the Division Bench of the High Court of Bombay, one in
Commercial Arbitration Appeal (L) 1022/2021 filed by Essar House
Pvt. Ltd.24 against Arcellor Mittal Nippon Steel India Ltd.25 and the
second in Arbitration Appeal 1023/2021 filed by Essar Services
against Arcellor. Commercial Arbitration Appeal (L) No. 1022/2021,
in turn, arose out of Commercial Arbitration Petition (L) 6602/2020
filed by Arcellor against Essar House, and Arbitration Appeal
1023/2021 arose out of Commercial Arbitration Petition (L)
6607/2020 filed by Arcellor against Essar Services. Both original
petitions had been filed by Arcellor under Section 9 of the 1996 Act.
70. Arcellor had, in its Section 9 petitions against Essar House and
Essar Services, prayed for a direction to Essar House and Essar
Services to deposit, with the Court, ₹ 35,51,89,875/- and ₹ 47.41
crores. The learned Single Judge of the High Court allowed Section 9
petitions and directed the Essar House to deposit ₹ 35,51,89,875/- and
Essar Services to deposit ₹ 47.41 crores. The Commercial Appeals
filed against the said decisions of the learned Single Judge, were
dismissed by the Division Bench of the High Court. Essar House and
Essar Services, therefore, approached the Supreme Court by way of
Civil Appeals, which were dismissed by the judgment under
discussion.
71. It is not necessary to inter into the intricacies of the facts, which
are extensive and convoluted. Suffice it to state that the amounts of ₹
24 “Essar House” hereinafter
25 “Arcellor” hereinafter
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35,51,89,875/- and ₹ 47.41 crores represented the security deposits
which Essar Steel had to make in agreements executed with Essar
Services and Essar House respectively. Pursuant to proceedings under
Section 7 of the Insolvency and Bankruptcy Code, 201626 having been
initiated against Essar Steel by the Standard Chartered Bank and the
State Bank of India, Corporate Insolvency Resolution Process27 was
initiated against Essar Steel by the National Company Law Tribunal28.
72. The NCLT appointed Arcellor as the resolution applicant of the
Essar Steel. In its capacity as such resolution applicant, Arcellor
entered into disputes with Essar House and with Essar Services, with
respect to the agreements executed by Essar Steel with each of them.
Arcellor staked a claim, in these disputes, for being refunded the
security deposit amounts paid by Essar Steel, of ₹ 35,51,89,875/- and
₹ 47.41 crores.
73. As the disputes were amenable to resolution by arbitration,
Arcellor, pending the arbitral proceedings, filed the aforenoted
Section 9 petitions before the High Court of Bombay, seeking a pre-
emptive deposit, by Essar House and Essar Services, of the security
deposit amounts of ₹ 35,51,89,875/- and ₹ 47.41 crores deposited by
Essar Steel.
74. As already noted, the prayer for deposit was allowed by the
learned Single Judge as well as by the Division Bench of the High
26 “IBC” hereinafter
27 “CIRP” hereinafter
28 “NCLT” hereinafter
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Court against, which Essar House and Essar Services appealed to the
Supreme Court.
75. One of the principal contentions advanced before the Supreme
Court by Essar House and Essar Services was that a prayer for
deposit, under Section 9 of the 1996 Act, could be granted only if the
ingredients of Order XXXVIII Rule 5 of the CPC was satisfied.
However, the extant legal position, as already noted, does not mandate
strict compliance with the pre-requisites of Order XXVIII Rule 5
before a direction for deposit can be made, whether under clause (b)
or (e) – as both clauses seem to be applicable in this regard – of
Section 9(1)(ii) of the 1996 Act. The Court has to be mindful of the
overall circumstances of the case, and the tilting equity balance.
76. Moreover, and significantly, in the present case, the prayer for
deposit as made by Indiabulls, is only in respect of the amounts which
Indiabulls has admittedly paid to Ambience under the ATSs.
Ambience, in the passages from its reply to OMPs filed by Indiabulls,
has conceded the position that Indiabulls has a right to claim return
of the said amount, in the event that sale deeds are not executed in
respect of the disputed units, as already noted earlier in this
judgment.
77. The right of Indiabulls to seek return of the amount deposited
by it with Ambience, therefore, stands conceded. It is also a conceded
position that Ambience has in fact not executed any sale deeds, in
respect of the disputed units forming subject matter of ATSs, despite a
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substantial part of the sale consideration, towards the said ATSs,
having been paid by Indiabulls to Ambience. Moreover, Clause 31 of
the ATSs specifically entitles Indiabulls to apply for specific
performance of the ATSs. A prima facie case is clearly made out in
that regard, as a substantial part of the sale consideration stands paid
by Indiabulls to Ambience and, despite such payment, no sale deeds,
in respect of even a single unit forming subject matter of the
seventeen ATSs has, till date, been executed by Ambience to
Indiabulls.
78. These facts, seen in the backdrop of the insistence, by
Ambience, in its replies to the OMPs as well as in its written
submissions, that it is at liberty to sell the disputed units, in my
opinion, makes out a case to direct Ambience to deposit, with the
Registry of this Court, the amounts paid by Indiabulls to Ambience
under the ATSs. Ambience has no legal or even moral right to hold
on to the said amounts, as it has not executed a single sale deed in
favour of Indiabulls, for the units in respect of which the said amounts
were paid by Indiabulls to it.
79. Allowing Ambience to continue to retain the said amounts,
pending arbitral proceedings, would, in the circumstances, be grossly
inequitable.
80. I may note, in this regard, that during the course of arguments,
Mr. Nayar repeatedly suggested that the whole affair could be brought
to a close by Ambience returning the said amounts to Indiabulls and
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retaining control over all the disputed units with which it would then
be free to do as it liked. To my mind, the suggestion was wholesome.
Mr. Mehra, however, on instructions, was unable to accede to the said
offer.
81. In the present case, even the requisites of Order XXXVIII Rule
5 of the CPC would, in a sense, stand satisfied, in view of Ambience’s
repeated insistence, predicated on the Settlement Deed, that it has a
right to sell the disputed units. In view of the repeated assertion, by
Ambience, of the said right, and given the position, conceded by
Ambience, that, if the units are sold, Indiabulls would have a right to
seek to be returned the amounts paid by it to Ambience, the least that
Ambience can be directed to do is to deposit the amounts paid by
Indiabulls to Ambience towards transfer of ownership of the said units
to Indiabulls.
82. Viewed any which way, therefore, I am of the opinion that a
case for directing Ambience to deposit, with the Registry of this
Court, the amounts received from Indiabulls under the ATSs, is made
out. On compliance with the said direction, needless to say,
Ambience would stand released from its undertaking not to alienate
the disputed units.
Conclusion
83. Resultantly, these OMPs, as well as all pending interlocutory
applications, stand disposed of in the following terms:
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(i) Ambience shall deposit, with the Registry of this Court,
the entire amount paid by Indiabulls under the ATSs, relating to
the units covered by the ATSs which have not been cancelled
till date, total to ₹ 638,07,75,728/-29 within a period of four
weeks from the date of uploading of this judgment on the
website of this Court.
(ii) Till then, Ambience shall continue to remain restrained
from creating any third party rights in respect of the disputed
units. On deposit being made as aforesaid, the restraint against
dealing with the disputed units shall stand lifted.
(iii) These directions shall abide by further orders, if any, to
be passed in the arbitral proceedings, as and when they are
initiated.
84. The OMPs, as well as all pending interlocutory applications,
stand disposed of in the aforesaid terms with no order as to costs.
85. All observations contained in this judgment are intended only to
dispose of the present OMPs preferred under Section 9 of the 1996
Act. They should not be read as a substantive opinion on the merits of
the dispute and would not influence the arbitral proceedings as and
when they are instituted.
C. HARI SHANKAR, J.
29 As taken from Indiabulls’ written submissions dated 25 September 2024, and not disputed by Ambience in
its written submissions
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DECEMBER 23, 2024/aky
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