NCLAT has no authority to prevent the High Court from considering a Section 9 appeal or any other claim brought under the Arbitration Act: Bombay High Court

 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCAtul IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONARBITRATION PETITIONNO. 10089 OF 2020Bay Capital Advisors Pvt Ltd…PetitionerVersusIL & FS Financial Services Ltd & Ors…RespondentsMr Nikhil Sakhardande Senior Advocate with Ravichandra S Hegde Ashish Venugopal Ankita Roy & Yash Bajaj i b Parinam Law Associates for the Petitioner.Dr Birendra Saraf Senior Advocate with Rohan Sawant & Chandrajit Das i b M s. Manilal Kher Ambalal & Co. for Respondent No. 1.Mr Aman Vijay Dutta for Respondent No. 2.Mr Debopriya Maulik i b Vishal Hegde for Respondent No. 5.CORAM:G.S. PATEL J(Through Video Conferencing)DATED:9th April 2021PC: 1.Heard through video conferencing.2.The Petition under Section 9 of the Arbitration and Conciliation Act 1996 seeks interim protection pending arbitration to restrain the 1st Respondent IL&FS Financial Services Ltdfrom acting on its Event of Defaultnotice of 23rd July 2019. The second prayer is for a temporary injunction Page 9th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCrestraining IFIN from acting in furtherance of a pledge invocation notice of 20th August 2020.3.The background to the Petition is this. The PetitionerIFIN Respondent No. 2and Respondent No. 5 Zon Investment Advisors Pvt Ltdentered into agreements on 31st March 2017 to secure repayment of an earlier loan that Respondent No. 3took in the amount of Rs. 40 crores from IFIN. There was a previous loan agreement of 17th May 2014Respondent No. 4 — held by its promoters a frst charge of mortgage of land at Palitana an exclusive charge on the current assets of Champion Agro World a pledge of the entire equity shares of Champion Agro World by its shareholders and various personal guarantees. There was also a Comfort Letter of 19th May 2013 from Bay Capital undertaking to provide the necessary funds should there be any payment default by Champion Agro World.4.In 2015 Champion Agro World defaulted. In 2016 IFIN fled Commercial Suit No. 4616 in this Court against Champion Agro World and the personal guarantors.5.Meanwhile IFIN approached Bay Capital on the basis of this Comfort Letter and sought enforcement that is to say it called upon Page 9th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCBay Capital to pay the amount of the default. A similar demand was made to Mehta a promoter of Bay Capital. Mehta and Bay Capital did not have sufcient funds to meet this demand. This led to a restructuring of the original fnance facility. IFIN was to assign Rs. 30 crores of the original Rs. 40 crores fnance facility to Zon together with the proportionate right title and interest for a purchase consideration of Rs. 33.60 crores. Zon would in turn appoint IFIN as its collection agent to manage and recover the fnance facilities to Champion Agro World. IFIN would subscribe to 44 Optionally Convertible Debenturesof Bay Capital aggregating to Rs. 44 crores by way of a private placement. The proceeds of these OCDs were to be used solely and exclusively to secure repayment of the amount due under the Champion Agro World loan facility. Of this amount of Rs. 44 crores an amount of Rs. 34 crores was to be used by Bay Capital to subscribe to OCDs issued by Zon and these were in turn to be used to repay the Champion Agro World facility. The remaining amount of Rs. 10 crores was to be deposited with IFIN. There is an amount of Rs. 10 crores with IFIN. Mr Sakhardande for Bay Capital maintains that this is the deposit under the restructuring arrangement. Dr Saraf for IFIN says the amount is deposited under another facility. 6.The OCDs clearly represented a repayable debt. The repayment was secured by creating a hypothecation and frst charge of Zon’s book debts and receivables and secondly by Mehta pledging his entire shareholding in Bay Capital. 7.It is an admitted position that Mehta has never created this pledge. This is one of the components of the EoD invoked by IFIN. Page 9th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOC8.There was then an assignment agreement of 31st March 2017 between IFIN and Zon a collection agency agreement of 31st March 2017 and then a subscription agreement dated 31st March 2017 by which IFIN agreed to subscribe to Bay Capital’s OCDs. 9.There was also a deed of hypothecation of 31st March 2017 executed by Zon and a pledge agreement of the same date by which Mehta agreed to pledge 100% of his equity in Bay Capitalas and by way of frst exclusive charge in favour of Bay Capital. The pledge agreement does not seem to have been registered and as I noted the actual pledge has never been efected.10.I am leaving aside for the moment the other narrative in the plaint. I come immediately to the EoD notice of 23rd July 2019 a copy of which is at Exhibit ‘A’ from page 39. This is addressed to Bay Capital Mehta and Zon Software. It briefy sets out the background in paragraphs 1 to 3 with reference to the subscription agreement of 31st March 2017. Paragraph 4 sets out the distinct events of default that IFIN invoked. It claimed that on 1st July 2019 an aggregate amount of Rs. 3 46 81 650 was overdue and unpaid. It said that Bay Capital had failed to take IFIN’s approval for a merger of the 1st Respondent with another entity. Certain necessary documents including audited fnancial and statutory auditor certifcates for the fnancial year 2018 were not produced. Lastly it said that the hypothecation charge that was agreed to be created was not registered. In paragraph 5 IFIN then said that since Bay Capital had continuously failed and neglected to cure all events of default within the cure period in accordance with clause 33 of the Page 9th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCannexure to the subscription agreement the entire amount under that agreement had become due and payable. In short it accelerated the repayment. The total amount claimed was Rs. 47 46 81 650 . The note below that also said that other charges including penal interest will continue to run. IFIN called upon all the obligors to make payment of the outstanding amount within seven days.11.Leaving aside for a moment the merits of this EoD notice a material circumstance that intervened is an order made by the National Company Law Appellate Tribunal on 15th October 2018 i.e. before the EoD notice of 23rd July 2019. This was in a proceeding between the Union of India and IL&FS Ltd and some 348 other entities in the IL&FS group. There It seems to be an accepted position at present that IFIN is one of those group concerns. Invoking the provisions of Sections 241 and 242 of the Companies Act 1956 the NCLAT passed an order apparently in the larger public interest and ‘economy of the nation’ directing that there would be stay inter alia of the institution or continuation of suits or any other proceedings by any party or person or bank or company etc against IL&FS and its 348 group companies in any court of law tribunal arbitration panel or arbitration authority.12.I address this immediately. It is one of the principal defences taken by IFIN in its Afdavit in Reply. IFIN says that on account of the NCLAT ‘stay’ this Section 9 Petition is not maintainable. 13.Mr Sakhardande for the Petitioner Bay Capital submits that the NCLAT could not have made any such order. It is not a Tribunal Page 9th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCor a judicial authority empowered to issue a high prerogative remedy. It is not a constitutional Court. Whatever be the wording of Sections 241 and 242 of the Companies Act 1956 they do not give the NCLAT a power of superintendence of other courts and most emphatically not over Courts that are neither subordinate to the NCLAT nor subject to its superintendence. An order of this kind may be made by the Supreme Court or by the High Court in regard to Courts over which the High Court has judicial superintendence but certainly not the NCLAT. He submits that the order is in the teeth of the prohibition contained in Section 41(b) of the Specifc Relief Act. This has been interpreted in a very similar context by the Supreme Court in Cotton Corporation of India Ltd v United Industrial Bank Ltd & Ors.1 Section 41 of the Specifc Relief Act reads thus: “41.Injunction when refused.— An injunction cannot be granted—(a)to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought unless such restraint is necessary to prevent a multiplicity of proceedings4 SCC 625.Page 9th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOC(f)to prevent on the ground of nuisance an act of which it is not reasonably clear that it will be a nuisancein these words:“8.It is therefore necessary to unravel the underlying intendment of the provision contained in Section 41is not at all attracted because it deals with perpetual injunction and the temporary or interim injunction is regulated by the Code of Civil Procedure specially so provided in Section 37 of Page 9th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCthe Act. Expression ‘injunction’ in Section 41is not qualifed by an adjective and therefore it would comprehend both interim and perpetual injunction. It is however true that Section 37 specifcally provides that temporary injunctions which have to continue until a specifed time or until further order of the court are regulated by the Code of Civil Procedure But if a dichotomy is introduced by confning Section 41 to perpetual injunction only and Section 37 read with Order 39 of the Code of Civil procedure being confned to temporary injunction an unnecessary grey area will develop. It is indisputable that temporary injunction is granted during the pendency of the proceeding so that while granting fnal relief the court is not faced with a situation that the relief becomes infructuous or that during the pendency of the proceeding an unfair advantage is not taken by the party in default or against whom temporary injunction is sought. But power to grant temporary injunction was conferred in aid or as auxiliary to the fnal relief that may be granted. If the fnal relief cannot be granted in terms as prayed for temporary relief in the same terms can hardly if ever be granted. In State of Orissa v. Madan Gopal RungtaSCR 28 : AIR 1952 12 : 1951 SCJ 764 a Constitution Bench of this Court clearly spelt out the contours within which interim relief can be granted. The Court said that ‘an interim relief can be granted only in aid of and as ancillary to the main relief which may be available to the party on fnal determination of his rights in a suit or proceeding’. If this be the purpose to achieve which power to grant temporary relief is conferred it is inconceivable that where the fnal relief cannot be granted in the terms sought for because the statute bars granting such a relief ipso facto the temporary relief of the same nature cannot be granted. To illustrate this point let us take the relief which the Bank Page 9th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCseeks in its suit. The prayer is that the Corporation be restrained by an injunction of the Court from presenting a winding up petition under the Companies Act 1956 or under the Banking Regulation Act 1949. In other words the Bank seeks to restrain the Corporation by an injunction of the court from instituting a proceeding for winding up of the Bank. There is a clear bar in Section 41against granting this relief. The court has no jurisdiction to grant a perpetual injunction restraining a person from instituting a proceeding in a court not subordinate to it as a relief ipso facto temporary relief cannot be granted in the same terms. The interim relief can obviously be not granted also because the object behind granting interim relief is to maintain status quo ante so that the fnal relief can be appropriately moulded without the party’s position being altered during the pendency of the proceedings.”(Emphasis added)16.Sections 241 and 242 of the Companies Act 1956 read thus:“241. Application to Tribunal for relief in cases of oppression etc.—(1) Any member of a company who complains that—(a) the afairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company or(b)the material change not being a change brought about by or in the interests of any creditors including debenture holders or any class of shareholders of the company has taken place in the management or control of the company whether by Page 19th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCan alteration in the Board of Directors or manager or in the ownership of the company’s shares or if it has no share capital in its change it is likely that the afairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members may apply to the Tribunal provided such member has a right to apply under section 244 for an order under this Chapter.(2)The Central Government if it is of the opinion that the afairs of the company are being conducted in a manner prejudicial to public interest it may itself apply to the Tribunal for an order under this Chapter:Provided that the applications under this sub section in respect of such company or class of companies as may be prescribed shall be made before the Principal Bench of the Tribunal which shall be dealt with by such Bench.(3)Where in the opinion of the Central Government there exist circumstances suggesting that —(a)any person concerned in the conduct and management of the afairs of a company is or has been in connection therewith guilty of fraud misfeasance persistent negligence or default in carrying out his obligations and functions under the law or of breach of trusta company is or has been conducted and managed by such person in a manner which is likely to cause or has caused serious injury or damage to Page 19th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCthe interest of the trade industry or business to which such company pertains or(d)the business of a company is or has been conducted and managed by such person with intent to defraud its creditors members or any other person or otherwise for a fraudulent or unlawful purpose or in a manner prejudicial to public interest the Central Government may initiate a case against such person and refer the same to the Tribunal with a request that the Tribunal may inquire into the case and record a decision as to whether or not such person is a ft and proper person to hold the ofce of director or any other ofce connected with the conduct and management of any company.(4)The person against whom a case is referred to the Tribunal under sub sectionshall be joined as a respondent to the application.(5)Every application under sub section(a)shall contain a concise statement of such circumstances and materials as the Central Government may consider necessary for the purposes of the inquiry and(b) shall be signed and verifed in the manner laid down in the Code of Civil Procedure 1908for the signature and verifcation of a plaint in a suit by the Central Government.242.Powers of Tribunal.—if on any application made under section 241 the Tribunal is of the opinion—(a)that the company’s afairs have been or are being conducted in a manner prejudicial or oppressive to any member or members or prejudicial to public interest or in a manner prejudicial to the interests of the company andPage 19th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOC(b)that to wind up the company would unfairly prejudice such member or members but that otherwise the facts would justify the making a winding up order on the ground that it was just and equitable that the company should be wound up the Tribunal may with a view to bringing to an end the matters complained of make such order as it thinks ft.(2)Without prejudice to the generality of the powers under sub sectionan order under that sub section may provide for—(a)the regulation of conduct of afairs of the company in futurethe purchase of shares or interests of any members of the company by other members thereof or by the companyin the case of a purchase of its shares by the company as aforesaid the consequent reduction of its share capitalrestrictions on the transfer or allotment of the shares of the companythe termination setting aside or modifcation of any agreement howsoever arrived at between the company and the managing director any other director or manager upon such terms and conditions as may in the opinion of the Tribunal be just and equitable in the circumstances of the casethe termination setting aside or modifcation of any agreement between the company and any person other than those referred to in clausethe setting aside of any transfer delivery of goods payment execution or other act relating to property made or done by or against the company within three months before the date of the application under this section which would if made or done by or against an individual be deemed in his insolvency to be a fraudulent preferenceremoval of the managing director manager or any of the directors of the companyrecovery of undue gains made by any managing director manager or director during the period of his appointment as such and the manner of utilisation of the recovery including transfer to Investor Education and Protection Fund or repayment to identifable victimsthe manner in which the managing director or manager of the company may be appointed subsequent to an order removing the existing managing director or manager of the company made under clause(k) appointment of such number of persons as directors who may be required by the Tribunal to report to the Tribunal on such matters as the Tribunal may directany other matter for which in the opinion of the Tribunal it is just and equitable that provision should be made.Page 19th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOC(3)A certifed copy of the order of the Tribunal under sub sectionshall be fled by the company with the Registrar within thirty days of the order of the Tribunal.(4)The Tribunal may on the application of any party to the proceeding make any interim order which it thinks ft for regulating the conduct of the company’s affairs upon such terms and conditions as appear to it to be just and equitable.(4 A)At the conclusion of the hearing of the case in respect of sub sectionof section 241 the Tribunal shall record its decision stating therein specifcally as to whether or not the respondent is a ft and proper person to hold the ofce of director or any other ofce connected with the conduct and management of any company.(5)Where an order of the Tribunal under sub sectionmakes any alteration in the memorandum or articles of a company then notwithstanding any other provision of this Act the company shall not have power except to the extent if any permitted in the order to make without the leave of the Tribunal any alteration whatsoever which is inconsistent with the order either in the memorandum or in the articles.(6)Subject to the provisions of sub sectionthe alterations made by the order in the memorandum or articles of a company shall in all respects have the same efect as if they had been duly made by the company in accordance with the provisions of this Act and the said provisions shall apply accordingly to the memorandum or articles so altered.(7)A certifed copy of every order altering or giving leave to alter a company’s memorandum or articles shall within thirty days after the making thereof be fled by the company with the Registrar who shall register the same.Page 19th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOC(8)If a company contravenes the provisions of sub sectionthe company shall be punishable with fne which shall not be less than one lakh rupees but which may extend to twenty fve lakh rupees and every ofcer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fne which shall not be less than twenty fve thousand rupees but which may extend to one lakh rupees or with both.”(Emphasis added)17.It is true that these sections especially the portions emphasized above in Sections 242(2)(m) and 242(4) confer a wide discretion on the NCLT and NCLAT but can that discretion extend in this manner to passing an order that is ex facie in the teeth of the statutory prohibition contained in Section 41 of the Specifc Relief Act as interpreted and explained by Cotton Corporation That is the question Mr Sakhardande poses.18.Mr Sakhardande would have me hold that the order of the NCLAT is per incuriam. The law on this is well settled. He invites attention to my recent decisionin Sanjay Soya Pvt Ltd v Narayani Trading Company 2 for its review of the decisions on the jurisprudence regarding decisions rendered per incuriam and also for the propositionthat there is no law that a declaration that a previous decision is per incuriam can only be done by a hierarchically superior court.2 Interim ApplicationNo 50120 in Commercial IP Suit No. 21 decided on 9th March 2021. Page 19th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOC19.Incidentally on the second propositionreference can proftably be made to the incisive discussion by Kathawalla J in Gautam Landscapes v Shailesh S Shah.3 The learned single Judge was told that the decision of a Division Bench in Universals Enterprises v Deluxe Laboratories Pvt Ltd.4 was bindingin Gautam Landscapes the learned single Judge held the Division Bench decision in Universals Enterprises to be per incuriam. For our purposes it makes little diference that the Division Bench’s view is now apparently the correct position in law the point is that a declaration that a particular decision is rendered per incuriam is not the sole province of a superior court. 20.While I do not think I need to go quite that far with the NCLAT order it seems to me plain that when the NCLAT passed such an order it did something it could not possibly have done. When it used the words ‘any court of law’ this could conceivably mean the High Court as well. The NCLAT has absolutely no jurisdiction over this Court even on its Original Side given that this is a Chartered High Court. The High Court is in no way subject to 3 2018 SCC OnLine Bom 14613. This is the decision that requested the Hon’ble the Chief Justice to constitute a larger bench to decide the question of stamping of documents in arbitration matters.4 2016Mh LJ 623.5 2021 SCC OnLine SC 13.Page 19th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCthe NCLAT’s jurisdiction or superintendence. I do not see how the words ‘court of law’ can be ‘read down’ because other than the NCLT there is no other judicial authority over which the NCLAT exercises such superintending power. But if we leave that aside and focus on the words ‘arbitration panel and arbitration authority’ and even assuming for a moment that the NCLAT has the power to stay arbitrations it certainly does not have the authority to stay the hands of this Court in hearing a petition under Section 9 or any other petition that properly comes before this Court under the Arbitration and Conciliation Act 1996. Indeed I do not even see how the NCLAT has such control over arbitral tribunals. The NCLAT can make no order under Section 9 Section 11 Section 34 Section 37 or any of the other provisions of the Arbitration and Conciliation Act 1996. Notably Section 9 of the Arbitration Act — and indeed no provision of that Act — is made subject to the provisions of the Companies Act 2013. This in itself is a telling circumstance.21.For the present purposes I need not go further into this question. It is enough for the present order to hold that the NCLAT order cannot and does not come in the way of this Court making an appropriate order under Section 9 of the Arbitration and Conciliation Act 1996. When and how that arbitration is to be commenced is another matter one with which I am not presently concerned. 22.The objection therefore at the threshold by Dr Saraf that the arbitration being stayed and the NCLAT having stayed all Page 19th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCproceedings in all Courts the Petition is not maintainable is rejected.23.The only question therefore is this: Is there a justifcation made out by Mr Sakhardande for the grant of interim relief The total claim today is about Rs. 47.46 crores under the EoD notice. Delayed interest is about Rs. 3 crores AND future interest is Rs. 1 crore. The pledge of shares by Mehta has not been created and as I noted there is now a dispute regarding THE Rs. 10 crores deposit. According to Mr Sakhardande the default in interest was only for two quarters i.e. Q19 and Q20. He also claims that the provision for penal interest invoked by IFIN is in the nature of liquidated damages. This provision is in Annexure 1 of the ofer letter dated 31st January 2017. That contains a tabulation of various clauses and item 12 is the provision for penal interest which is pegged at 1% over and above the prevailing interest rate on overdue amounts. This penal interest begins to operate if Bay Capital defaults in payment of interest or redemption of the OCDs according to their terms. The submission that this is in the nature of liquidated damages seems to me to be prima facie extremely doubtful. 24.At page 357 in the Rejoinder is a copy of letter of 1st November 2019 from IFIN. This gives the details of the outstanding amounts as of 30th September 2019. The outstanding are computed under two steams so to speak. One is under the facility of Rs. 30 crores and the second outstanding is under the OCD facility of Rs. 44 crores. This yields IFIN’s total claim of Rs. 47 53 78 882 and there is a stipulation of further interest of Rs. 16 63 562 . Page 19th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOC25.What Mr Sakhardande in essence seeks and I do not think there is any other way to look at it is virtually a re writing of the terms of the commercial contract between the parties at the time of Section 9 Petition. I am asked to waive or ignore a breach of the obligation to pay interest on schedule. I am asked to turn a blind eye to the failure to create a hypothecation and the pledge of shares. All these breaches and defaults are to count for nothing and in the meantime IL&FS is to be restrained from enforcing its contractual obligations against Bay Capital. I do not see why Bay Capital should not be held to the bargain that it struck. This agreement has never been avoided. Nobody has ever said that any of its terms are fraudulent or barred by any of the provisions of the Contract Act. 26.In a commercial Court these pleas are of very little persuasive value. They will only carry heft if it is shown that there is no breach on the part of the Petitioner and the invocation by the Respondent is totally unlawful. Merely claiming it to be undesirable is useless. Section 9 is not meant to aid parties clearly in breach of their contracts. Everything in the Arbitration Act is founded on a contract and this necessarily means that to claim an equitable and discretionary relief a Section 9 petition is not to be handled like a regular civil suit invoking a non contractual civil remedy. The Respondent must be shown to be in wrongful conduct. Its actions must be shown to ones in violation of the contract. A respondent seeking to enforce its contractual rights will sufer no injunction unless it is shown that the Respondent itself is in breach or has acted contrary to the contract. Once a breach by the Petitioner is not only demonstrated but is accepted equity will not operate in its favour. Conversely where there is a demonstration of a breach by the Page 29th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCRespondent the Petitioner may be entitled to seek an equitable relief in the court’s discretion.27.In this context one must have regard even while deciding a Petition under Section 9 to what is likely to happen and what is permissible and what is not in an ensuing arbitration. It is true that Section 9 is both equitable and discretionary. I do not mean to suggest that a Section 9 Court is constrained by the other limitations that may be placed on an arbitral tribunal itself. The remit of an arbitral tribunal is certainly more confned than that of a Section 9 court. But a look at Section 28(2) of the Arbitration and Conciliation Act 1996 is instructive while assessing a commercial contract. This says that an arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorized it to do so. Absent any such express conferring of power in the contract on an arbitral tribunal could the arbitral tribunal possibly have made the kind of order that Mr Sakhardande wants me to make today The reason I believe this question is important is that even I was to make some sort of order today whether on terms or otherwise it would clearly operate only until the disposal of a Section 17 Application for interim relief by the arbitral tribunal. But if the entire argument before the arbitral tribunal in Section 17 was to be founded only on a question of equity and seeking a decision ex aequo et bono and that is impermissible for the arbitral tribunal to do absent a specifc provision in the agreement itself then it is clearly not possible for that arbitral tribunal to confrm the kind of order that is being sought from me today. As I said earlier I do not see Section 28(2) as constraining or limiting the power of a Section 9 Court. But it must certainly inform the nature of the relief that the Page 29th April 2021 on 12 04 2021 on 12 04 4 ARBPL10089 2020.DOCSection 9 Court moulds. The relief must be one that the arbitral tribunal can legitimately confrm if and when called upon to do so. 28.I do not see any merit in the case presented by Bay Capital. Its ofer made today to deposit certain amounts and for Mehta to pledge his shareholding in Bay Capital is I think far too little too late.29.There is no merit in the Petition. It is dismissed.30.In view of the provisions of Section 35 of the Code of Civil Procedure 1908 as amended by the Commercial Courts Act 2015 there will have be an order of costs. The mandate is that costs follow the event unless the Court decides otherwise for the reasons to be recorded. Dr Saraf submits that the costs payable to the 1st Respondent are in the amount of Rs. 7.5 lakhs. I fnd the fgure reasonable. There will be an order of costs against the Petitioner in the amount of Rs. 7.5 lakhs. The amount is payable within two weeks from today. If not paid it will carry interest at the rate of 9% per annumPage 29th April 2021 

Summary: The NCLAT has absolutely no jurisdiction over this Court, even on its Original Side, given that this is a Chartered High Court. The High Court is in no way subject to the NCLAT’s jurisdiction or superintendence. But if we leave that aside and focus on the words ‘arbitration panel and arbitration authority’, and even assuming for a moment that the NCLAT has the power to stay arbitrations, it certainly does not have the authority to stay in the hands of this Court. The judgment was passed by The High Court of Bombay in the case of Bay Capital v. IL&amp;FS Financial Services Ltd. &amp; Ors. By single bench consisting of JUSTICE G.S. PATEL. The Petition was filed under Section 9 of the Arbitration and Conciliation Act 1996, seeks interim protection pending arbitration to restrain the Respondent, (IL&amp;FS Ltd) from acting on its Event of the Default notice, and seeks for a temporary injunction restraining IFIN from acting in furtherance of a pledge invocation notice, The counsel arguing for Bay Capital argued that NCLAT is neither a tribunal, a judicial authority nor a constitutional court empowered to issue high prerogative remedy. Relying upon Section 242 of the Companies Act (powers of the tribunal), he argued that the Act does not give NCLAT a power of superintendence over other courts, specifically over courts that are neither subordinate to the NCLAT nor subject to its superintendence. The counsel on the corollary submitted that an order of this kind may be made by the Supreme Court, or by the High Court in regard to Courts over which the High Court has judicial superintendence, but certainly not the NCLAT. The Court Observed that NCLAT has no jurisdiction over the Bombay High Court even on its original side (as it was a chartered High Court) Justice Patel concluded that the High Court does not fall within the NCLAT’s jurisdiction or superintendence. “I do not see how the words ‘court of law’ can be ‘read down’, because other than the NCLT, there is no other judicial authority over which the NCLAT exercises such superintending power.”