FUTURE COUPONS PRIVATE LIMITED vs. AMAZON.COM NV INVESTMENT HOLDINGS LLC

EPORTABLE R   I N   THE  S UPREME  C OURT   OF  I NDIA   IVIL PPELLATE URISDICTION   C  A  J     C IVIL  A PPEAL  N OS . 859­860  OF  2022   ( ARISING   OUT   OF  SLP (C) N OS . 13547­13548  OF  2021) UTURE OUPONS RIVATE IMITED RS PPELLANT S F  C  P  L  & O .         …A  ( ) ERSUS V A MAZON . COM  NV I NVESTMENT  H OLDINGS  LLC          …R ESPONDENT ( S ) & O RS .  ITH      W IVIL PPEAL OS OF   C  A  N . 861­862   2022   (A RISING   OUT   OF  SLP (C) N OS .13556­13557  OF  2021) UTURE ETAILS IMITED PPELLANT S F  R  L                   …A ( ) ERSUS V A MAZON . COM  NV I NVESTMENT  H OLDINGS  LLC         …R ESPONDENT ( S ) & O RS .  ITH W   C IVIL  A PPEAL  N O . 864  OF  2022   (A RISING   OUT   OF  SLP (C) N O . 18089  OF  2021) UTURE OUPONS RIVATE IMITED RS PPELLANT S F  C  P  L  & O .          …A ( ) V ERSUS Signature Not Verified Digitally signed by SATISH KUMAR YADAV Date: 2022.02.01 18:39:32 IST Reason: A MAZON . COM  NV I NVESTMENT  H OLDINGS  LLC         …R ESPONDENT ( S ) & O RS .  1 ITH W   IVIL PPEAL O OF   C  A  N . 863   2022   (A RISING   OUT   OF  SLP (C) N O . 18080  OF  2021) UTURE ETAIL TD PPELLANT S F  R  L .               …A ( ) V ERSUS A MAZON . COM  NV I NVESTMENT  H OLDINGS  LLC          …R ESPONDENT ( S ) & O RS .  U D G M E N T   J                  N.V. R AMANA , CJI.   1. Leave granted in all matters. 2. These appeals are against various orders of Delhi High Court connected to the Amazon­Future dispute. Civil Appeals arising out of SLP (C) No. 13547­48 of 2021 and SLP (C) No. 13556­57 of   2021,   impugns   order   dated   02.02.2021   and   18.03.2021 passed in OMP (ENF) (Comm) 17 of 2021 and Civil Appeals arising out of SLP (C) Nos. 18089 and 18080 of 2021, are against impugned orders dated 29.10.2021 passed in Arb. A (Comm.) No. 63 of 2021 and I.A. No. 14285 of 2021 in Arb. A (Comm.) No. 64 of 2021 respectively.  2 3. At the outset, it is necessary for this Court to have a brief background before indulging in analyzing the issue at hand. On 22.08.2019, Amazon entered into Shareholder and Share­ Subscription Agreements with Future Coupon Private Limited (FCPL).   Through   these   instruments,   Amazon   intended   to acquire   49%   stake   in   FCPL.   The   aforesaid   agreements contained an arbitration agreement, wherein parties resolved to   settle   their   disputes   in   accordance   with   the   Arbitration Rules of the Singapore International Arbitration Center (SIAC). The parties had further resolved to have the seats at New Delhi. 4. On   12.08.2019,   FCPL   and   its   promoters   entered   into   a Shareholder   Agreement   with   Future   Retail   Limited   (FRL). Through this Agreement, FCPL was granted certain protective rights. One such right is produced as under: Clause 10 of SHA: 10 .    TRANSFER OF RETAIL ASSETS 10.1 As of the Execution Date, the Company has set up an aggregate of at least 1,534 (one thousand five hundred and thirty four) retail outlets/formats including without limitation the   Small   Store   formats   across   India   and such retail outlets/stores are an integral part 3 of the business conducted by the Company representing   a   significant   and   substantial part   of   the   business   conducted   by   the Company.     The   Existing   Shareholders   and the   Company   further   agree,   covenant   and undertake to FCL that the Company shall be the   sole   vehicle   for   the   conduct   of   such current business comprising of a widespread network   of   the   retail   outlets/formats including without limitation the Small Store formats that the Company has established and   is   operating   across   India   and consequently   such  business   shall  continue to   be   an   integral   part   of   the   Company’s business. 10.2 Accordingly, any sale, divestment, transfer, disposal, etc., of such retail outlets/ formats including without limitation the Small Store Formats   shall   be   in   accordance   with   this Agreement,   and   the   company   and   the Existing   shareholders   covenant   and undertake that during the subsistence of this Agreement, the company shall not transfer, or   dispose   off   the   Retail   Assets   except   as otherwise   mutually   agreed   between   the Company,   the   Existing   Shareholders   and FCL in writing. 10.3 Notwithstanding anything contained herein, the Company and the Existing Shareholders agree   that   the   Retail   Assets   shall   not   be transferred,   Encumbered   divested,   or disposed of, directly or indirectly, in favour of a Restricted Person. There is no dispute that one of the restricted persons included the Reliance Group. 4 5. As in March 2020, FRL submitted that there was business downturn   due   to   Covid­19   lockdowns   as   there   were restrictions on retail sale through brick­and­mortar shops. In light  of   the   same,   the   Board   of   FRL  decided   to   sell,   retail businesses   and   assets   to   Reliance,   for   a   consideration   in excess of Rs. 25,000 crores. Further, it is contended by FRL that there were outstanding loans of about Rs.20,000 crores with a serious and tangible risk of becoming insolvent. It is submitted   that   it   was   in   this   context   that   the   subsequent transaction was entered into to alleviate its financial position and protect employment of around 25,000 employees of the Future Group. 6. Aggrieved by the aforesaid sale transaction, Amazon initiated arbitration   proceedings   before   the   SIAC.   Amazon   filed   an application for emergency relief with the Registrar of the SIAC Court of Arbitration seeking interim prohibitory injunction to prevent   FRL   and   FCPL   from   taking   further   steps   in   the aforesaid transaction with the Reliance Group. Parallelly, FRL filed   a   suit   before   the   Delhi   High   Court   registered   as CS(COMM)   No.   493   of   2020,   against   Amazon   for   tortious interference in the Scheme for the sale of assets. 5 7. On 25.10.2020, the Emergency Arbitrator passed an Interim Award   in   favor   of   Amazon.   It   may   be   noticed   that   the Emergency   Arbitrator   and   the   Single   Bench   came   to diametrically   opposite   conclusions   which   are   juxtaposed herein below:­

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8 8. In   the   meanwhile,   CCI   and   SEBI   approved   the   composite Scheme proposed by FRL­Reliance. Thereafter, FRL filed for sanction of the composite Scheme of arrangement under the provisions of Sections 230 to 232 of the Companies Act, 2013 before National Company Law Tribunal (NCLT).   9. Amazon   filed   a   Petition   for   enforcement   of   the   Emergency Arbitrator Award, under Section 17(2) of the Arbitration and Conciliation   Act,   1996,   before   the   Delhi   High   Court   on 25.01.2021   and   the   same   was   heard   for   the   first   time  on 28.01.2021. As the appellants herein challenge the impugned order on the ground of failure to adhere to the principles of natural justice, it is apt to reproduce certain procedural orders passed by the learned Single Judge, Justice Midha, in OMP (ENF) (COMM) No.17 of 2021. On 28.01.2021, the following order was passed: “1. The   hearing   has   been   conducted through video conference. 2. Arguments partly heard.  3.  List for continuation of the arguments on 29th January, 2021 at the end of the Board.  4. The order be uploaded on the website of this Court forthwith.” On 29.01.2021, the following order was passed: 9 “1.  The hearing has been conducted through video conference. 2. Issue   notice.   Learned   counsels   for respondents accept notice. 3.  Further arguments heard from 02:45 PM to 04:30 PM. 4. List for continuation of the arguments on 01st February, 2021.  5. Both the parties have submitted brief note of submissions.  6. Learned senior counsel for the respondent No.2 submits that he shall file additional note of submissions on the factual aspect by tomorrow afternoon with advance copy to   the   counsel   for   the   petitioner   by tomorrow evening. Respondent  No.2  shall also   respond   to   the   brief   note   of submissions of the petitioner relating to the facts.  7.  The order be uploaded on the website of this Court forthwith.” On 01.02.2021, the following order was passed: “1. Respondent   No.2   has   filed   additional submissions   to   which   the   petitioner   has filed the response.  2. Learned   senior   counsels   for   the respondents   have   concluded   the   oral arguments.  3. List   for   rejoinder   submissions   of   the petitioner on 02nd February, 2021.  4. It   is   clarified   that   no   further   written submissions   shall   be   filed   by   any   of   the parties.” st 10. On   02.02.2021,   the   first   substantive   order   [ 1   impugned Order ] was passed in the following manner: 10 “8.  This Court is of the prima facie view that the   Emergency   Arbitrator   is   an   Arbitrator;   the Emergency   Arbitrator   has   rightly   proceeded against   the   respondent   No.2;   the   order   dated 25th  October,   2020  is   not  a nullity;  the   order dated   25th   October,   2020   is   an   order   under Section 17(1) of the Arbitration and Conciliation Act. This Court is of the view that the order dated 25th October, 2020 is appealable under Section 37 of the Arbitration and Conciliation Act. This Court is of the clear view that the order dated 25th October, 2020 is enforceable as an order of this Court under Section 17(2) of the Arbitration and Conciliation Act. The detailed reasons shall be given in the reserved order.  9.  This   Court   is   satisfied   that   immediate orders are necessary to protect the rights of the petitioner till the pronouncement of the reserved order. In that view of the matter, the respondents are directed to maintain status quo as on today at   04.50   P.M.   till   the   pronouncement   of   the reserved order. The respondents are directed to file   an   affidavit  to   place   on  record   the   actions taken by them after 25th October, 2020 and the present   status   of   all   those   actions,   within   10 days. All the concerned authorities are directed to maintain status quo with respect to all matters in violation of the order dated 25th October, 2020 and shall file the status report with respect to the present status within 10 days of the receipt of this   order.   The   other   prayers   of   the   petitioner shall be considered in the reserved order.  10.  Copy   of   this   order   be   given   dasti   under signatures of the Court Master to counsels for the parties.   Copy   of   this   order   be   also  given  dasti under   signatures   of   the   Court   Master   to   Mr. Kirtiman   Singh,   learned   Central   Government Standing Counsel who shall send the same to all the   concerned   authorities   dealing   with   the actions initiated by the respondents in violation of   the   order   dated   25th   October,   2020.   The 11 petitioner shall send the list of all the authorities to   Mr.   Kirtiman   Singh,   learned   Central Government   Standing   Counsel   within   three days.” 11. Aggrieved   by   the   stay   order   granted   by   the   learned   Single Judge, while reserving the matter, FRL filed an intra­court appeal before the Division Bench in FAO OS (Comm.) No. 21 of 2021.   The   Division   Bench   vide   Order   dated   08.02.2021, passed the following order: “12. It is made clear that the observations made in this order are only a prima facie view for the purpose of grant of interim relief and shall not come in the way of the learned Single Judge in passing   the   final   order   in   OMP(ENF)(Comm) No.17/2021 and needless to state that the order shall   be   passed   uninfluenced   by   any observations made hereinabove.” 12. Amazon appealed against this Order before the Supreme Court in SLP (C) No. 2856­57 of 2021.  Vide  order dated 22.02.2021, this Court  inter­alia  held as under: “ In the meantime, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of scheme.” (Emphasis supplied) 12 13. Again on 18.03.2021, the learned Single Judge in OMP (ENF) nd (COMM) No.17 of 2021, passed the  2      impugned order  with aforesaid directions: “188.  The Emergency Arbitrator is an Arbitrator for   all   intents   and   purposes;   order   of   the Emergency Arbitrator is an order under Section 17(1) and enforceable as an order of this Court under   Section   17(2)   of   the   Arbitration   and Conciliation Act. ………… 190.   The respondents have raised a vague plea of   Nullity   without substantiating the same.   The interim order of the Emergency Arbitrator is not a Nullity  as alleged by respondent No.2. 191.  Combining/treating all the agreements as a single integrated transaction does not amount to control of the petitioner over FRL and therefore, the petitioner ’ s investment does not violate any law.  192. All the objections raised by the respondents are hereby rejected with cost of Rs.20,00,000/­ to be deposited by the respondents with the Prime Minister Relief Fund for being used for providing COVID   vaccination   to   the   Below   Poverty   Line (BPL) category ­ senior citizens of Delhi. The cost be deposited within a period of two weeks and the receipt be placed on record within one week of the deposit.  193.   The   respondents   have   deliberately   and wilfully   violated   the   interim   order   dated   25th October,   2020   and   are   liable   for   the consequences enumerated in Order XXXIX Rule 2A of the Code of Civil Procedure. 194.   In   exercise   of   power   under   Order   XXXIX Rule   2A(1)  of   the   Code   of   Civil  Procedure,   the assets   of   respondents   No.1   to   13   are   hereby attached. Respondents No.1 to 13 are directed to file   an   affidavit   of   their   assets   as   on   today   in 13 Form   16A,   Appendix   E   under   Order   XXI   Rule 41(2) of the Code of  Civil Procedure within 30 days. Respondent No.1, 2, 12 and 13 are directed to   file   an   additional   affidavit   in   the   format   of Annexure B­1 and respondents No.3 to 11 are directed   to   file   an   additional   affidavit   in   the format of   Annexure A­1   to the judgment of   M/s Bhandari Engineers & Builders Pvt. Ltd. v. , (supra) along M/s Maharia Raj Joint Venture with the documents mentioned therein within 30 days.” 14. In the  , the FCPL and FRL approached the Division interregnum Bench of the Delhi High Court in FAO (OS) (COM) No.50 and nd 51   of   2021   respectively   against   the   2   impugned   order passed by the learned Single Judge which was stayed   vide Order dated 22.03.2021.  15. Subsequently, Amazon filed SLP (C) Nos. 6113­6114 of 2021 before this Court against the order dated 22.03.2021 passed by the Division Bench of the High Court. 16. This Court consolidated all the appeals filed by Amazon before this   Court,   heard   the   matters   together   and   passed   a   final judgment dated 06.08.2021, answering only the following two legal questions: 14 i.   Whether an Emergency Arbitrator’s Award can be said to be within the contemplation of the Arbitration Act? ii.   Whether an order passed under Section 17(2) of the Arbitration Act, in enforcement proceedings, is appealable under Section 37 of the Arbitration Act? 17. This   Court   answered   the   first   question   in   the   following manner: “41.   We, therefore, answer the first question by declaring that full party autonomy is given by the Arbitration   Act   to   have   a   dispute   decided   in accordance   with   institutional   rules   which   can include Emergency Arbitrators delivering interim orders, described as “awards”. Such orders are an important step in aid of decongesting the civil courts and affording expeditious interim relief to the parties. Such orders are referable to and are made under Section 17(1) of the Arbitration Act.” The second question was answered thus: “76.  The second question posed is thus answered declaring that no appeal lies under Section 37 of the   Arbitration   Act   against   an   order   of enforcement of an Emergency Arbitrator’s order made under Section 17(2) of the Act. As a result, all interim orders of this Court stand vacated. The impugned judgments of the Division Bench, dated 8th February, 2021 and 22nd March, 2021, are set   aside.   The   appeals   are   disposed   of accordingly.” 18. It may be noted that this Court, in the aforesaid judgment of 06.08.2021, did not adjudicate upon the merits of the case 15 and limited its reasoning only to answer the legal questions which   arose   therein.   On   a   reading   of   this   judgment,   the contention   of   the   learned   Senior   Advocate   Mr.   Gopal Subramanium,   that   this   Court   has   upheld   the   Emergency Arbitrator Award and did not interfere with the enforcement orders in OMP (ENF)(Comm.) No. 17 of 2021, on merits, is not correct. Although, the judgment narrates the facts leading up to   the   appeal,   the   Court   neither   returned   any   findings   on facts,   nor   adjudicated   on   merits   of   the   Order   passed   by Justice Midha in the enforcement proceedings. It is this gap which has led to the current round of litigation on merits of the case for the second time before this Court. 19. In the meanwhile, FRL filed an application under Para 10 of Schedule 1 of the SIAC Rules for vacating the Award of the Emergency Arbitrator before the Arbitral Tribunal. The oral th submissions on the vacate petitions were heard between 12 ­ th 16  of July 2021 and orders were reserved. 20. Contemporaneously, aggrieved by the merits of the orders of the Single Judge dated 02.02.2021 and 18.03.2021, FCPL and FRL preferred appeals directly before this Court in SLP (C) No. 13547­48   of   2021   and   SLP   (C)   No.   13556­57   of   2021, 16 respectively. On 09.09.2021 the following interim order was passed by this Court:­ “Heard   learned   senior   counsel   for   the parties   at   length   and   carefully   perused   the material placed on record.  Issue notice.  Taking   into   consideration   the submissions advanced by the learned senior counsel   for   the   parties   and   particularly   the fact   that   the   parties   have   approached   the Singapore International Arbitration Centre for vacating the Emergency Award passed by the Emergency   Arbitrator   and   the   arguments   in the   said   matter   have   been   ssconcluded   and the order is going to be pronounced shortly, we think it fit to balance the interest of both the parties by staying all further proceedings before the Delhi High Court for the time being. Ordered accordingly.   We   further   direct   to   all   the authorities   i.e.   NCLT,   CCI   and   SEBI   not   to pass any final order for a period of four weeks from today. This order has been passed with the consent of both the parties.  List these matters after four weeks.” ( ) Emphasis supplied 21. Thereafter, the applications filed by FRL and FCPL for vacating the award of the Emergency Arbitrator was dismissed by the Arbitral Tribunal by Order dated 21.10.2021.  22. The   aforesaid   order   of   the   Arbitral   Tribunal,   rejecting   the vacate petition, was challenged by FCPL and FRL before the Delhi High Court in Arb. Pet. No. 63 of 2021 and Arb. Pet. No. 17 64 of 2021. In Arb. Pet. No. 64 of 2021, FRL had filed IA No. 14285/2021, seeking the following prayers: a. Stay   the   operation   of   the   impugned   Order   dated 21.10.2021 passed by the Hon’ble Arbitral Tribunal. b. Alternatively, pass an order allowing the Appellant to take steps pursuing the scheme, subject to the condition that it shall not invite the passing of any final orders of approval of the scheme by the NCLT. 23. While   issuing   notice   in   both   matters,   by   orders   dated rd 29.10.2021   ( 3   impugned   Order ),   the   Delhi   High   Court (Justice Suresh Kumar Kait) refused any immediate relief to FRL in the following words: “15. During the course of hearing, this Court time and again referred that when the subject matter   of   this   appeal   is   pending   sub­judice before   the   Hon’ble   Supreme   Court   in   Special Leave Petition (Civil) No. 13547­ 48/2021 and infact,   by   virtue   of   order   dated   09.09.2021 proceedings before this Court have been stayed and also directions have been passed to NCLT, CCI, SEBI to not pass any final order, then how interim relief, that too without there­being any hearing   or   any   reply   from   side   opposite   on record, application for interim stay can be heard and orders be passed. Upon this, Mr. Harish Salve, learned senior counsel submitted in such eventuality,   this   Court   may   dismiss   the application. 16. In view of the above, the application seeking interim stay being IA No. 14285/2021 (u/S 151 CPC) is accordingly dismissed.”  18 24. Aggrieved   by   the   aforesaid   order,   FCPL   and   FRL   have approached this Court in SLP (C) Nos.  18089 and 18080 of 2021 respectively. 25. Mr. Harish Salve, learned Senior Counsel appearing for FRL submitted that the orders in the enforcement proceedings have been rendered while completely disregarding the order dated 21.12.2020 passed by the learned Single Judge of the Delhi High Court in CS(Comm) No. 493 of 2020, particularly, the finding that FRL does not have any arbitration agreement with the respondent. He further submitted that although an appeal has been filed against the aforesaid order of the learned Single Judge, there is no stay operating against the said order.  26. The learned Senior counsel also submitted that the impugned orders passed in the enforcement proceedings merit setting aside as the said proceedings have been conducted contrary to the   principles   of   natural   justice.   He   submitted   that   the procedure   adopted   has   caused   serious   prejudice   to   the appellants as, after denying them an opportunity to file a reply affidavit, the impugned orders in the Enforcement proceedings 19 recorded that FRL had not made any plea on the issue as to why were the orders of the Emergency Arbitrator a nullity.  27. Thirdly,   the   learned   Senior   counsel   contended   that   the impugned   orders   passed   in   the   Enforcement   proceedings extended   beyond   the   scope   of   the   Emergency   Arbitrator’s interim Award, by directing recall of the approvals granted by the Statutory Authorities.  28. Lastly,   while   relying   upon  the   Singapore   Arbitration  Rules, learned Senior counsel submitted that the Tribunal’s interim order dated 21.10.2021, overrides the Emergency Arbitrator’s interim Award which are the subject matter of the impugned enforcement   proceedings.   As   a   result,   the   enforcement proceedings and the impugned order have lost their relevance due to the subsequent events. 29. Mr.   Mukul   Rohatgi,   learned   Senior   Counsel   appearing   for FCPL   and   their   promoters,   while   supplementing   the submissions   of   Mr.   Salve,   specifically   contended   that   the impugned  order merits  setting  aside  due  to  grave  injustice caused   to   the   appellants   due   to   the   principles   of   natural justice being given a go­by. No opportunity was granted for 20 filing of any response which has resulted in various factual and legal errors creeping in the impugned order. He further submitted that considering the procedure followed by it, the penal orders passed by the High Court in the impugned order, merit a reconsideration.  30. Learned Senior counsel further submitted that no prejudice would be caused to Amazon by setting aside the impugned order passed in the enforcement proceedings or by the passing of   an   interim   measure   allowing   continuation   of   the proceedings before the NCLT. In fact, this Court,   vide   order dated 22.02.2021, has already created an interim arrangement by allowing the NCLT proceedings to continue with a direction to the NCLT not to pass any final order. On the other hand, the impugned order dated 18.03.2021, directed recall of the approvals granted by the statutory authorities. 31. Mr. Gopal Subramanium, learned Senior Counsel appearing for Amazon, submitted that the appellants, by their conduct have demonstrated willful and intentional disobedience of the Emergency Arbitrator’s interim Award, after agreeing for the Emergency Arbitrator. While he fairly stated that Amazon is 21 not interested in pursuing the punitive directions imposed on FCPL   and   others,   he   submitted   that   the   Emergency Arbitrator’s interim Award stands confirmed by the Arbitral Tribunal, which must be abided by the appellants. Learned Counsel argued that when no stay has been granted against the   interim   protection   afforded   to   them   by   the   Arbitral Tribunal, the appellants cannot operate in contravention of the same and proceed to effectuate the scheme before the NCLT. He lastly submitted that pending any challenge, the interim orders passed by the Tribunal needs to be maintained and given effect to, so as to uphold the effectiveness and sanctity of the arbitration process. 32. Mr.   Aspi   Chinoy,   learned   Senior   Counsel   appearing   for Amazon contended that the appellants’ reliance on the order dated 21.12.20, passed by the learned Single Judge of the Delhi   High   Court   in   the   suit   proceeding   is   misplaced.   He submitted that, in the first instance, the suit instituted by FRL before the Delhi High Court was of the nature of an anti­ arbitration suit and a collateral challenge to the arbitration proceedings   which   is   in   contravention   to   Section   5   of   the 22 Arbitration Act. He further submitted that the observations being relied upon by the appellants were made in an order declining   the   relief   sought   by   them   before   the   Delhi   High Court. Finally, the learned Senior counsel submitted that no relief should be granted to the appellants by this Court as they have not approached this Court with clean hands having failed to comply with any judicial order that has been passed. 33. Having   heard   learned   counsel   for   both   the   parties   and  on perusing voluminous documents submitted before the Court, the following questions arise for our consideration : I. Whether the orders dated 02.02.2021 and 18.03.2021, passed by the learned Single Judge in OMP (ENF) (COM) No.17 of 2021, are valid in law? II. Whether   the   orders   dated   29.10.2021,   passed   by  the learned Single Judge in Arb. A (Comm.) No. 64 and 63 of 2021, is valid in law? Question No. I 34. The orders of the learned Single Judge [Justice Midha] in OMP (ENF) (COMM) No.17 of 2021, is impugned on the grounds of lack   of   an   opportunity   granted   to   FCPL  and   FRL   to   file  a 23 counter to establish their defense. Mr. Rohatgi, learned Senior Advocate appearing on behalf of FCPL and its promoters has submitted  that  no time  was   granted   by   the  learned  Single Judge to respond. He added that a 200­page order has been passed without any reply being filed on record and holding everyone guilty of contempt of court. He has further submitted that   punitive directions could not have been passed even in contempt   jurisdiction   without   affording   the   party   a   proper opportunity of filing a reply . 35. In this context, our attention has been drawn to a catena of procedural orders passed by the High Court in OMP (ENF) (COMM) No.17 of 2021. From the record, we observe that FRL and FCPL were not provided sufficient time or opportunity to file their counter or raise their defense. On 29.01.2021, they were allowed to file a brief note of submission within twenty­ four hours, before orders were passed on 02.02.2021. 36. On a perusal of the orders, we find that serious procedural errors were committed by the learned Single Judge. Natural justice is an important facet of a judicial review. Providing effective natural justice to affected parties, before a decision is taken, is necessary to maintain the Rule of law. Natural justice 24 is usually discussed in the context of administrative actions, wherein procedural requirement of a fair hearing is read in to ensure that no injustice is caused. When it comes to judicial review, the natural justice principle is built into the rules and procedures of the Court, which are expected to be followed meticulously to ensure that highest standards of fairness are afforded to the parties. 37. It is well known that natural justice is the sworn enemy of unfairness. It is expected of the Courts to be cautious and afford   a   reasonable   opportunity   to   parties,   especially   in commercial matters having a serious impact on the economy and employment of thousands of people. Coming to the facts herein, the opportunity provided to the appellants herein was insufficient, and cannot be upheld in the eyes of law. 38. Whenever an order is struck down as invalid being in violation of the principles of natural justice, there is no final decision of the case and fresh proceedings are left open. All that is done is to vacate the order assailed by virtue of its inherent defect. Such proceedings are not terminated and are usually remitted back. [ See   Canara Bank v. Debasis Das , (2003) 4 SCC 557] However, in this case, much water has flown under the bridge, 25 since the passing of the order by the learned Single Judge, which has now been rendered redundant, for the following reasons :  Initially,   this   Court   by   order   dated   22.02.2021,   had allowed proceedings to continue before the NCLT without finalization of the scheme. nd  Thereafter,   learned   Single   Judge   passed   the   2 impugned order on 18.03.2021, without considering the order of this Court dated 22.02.2021.  Subsequently, the Division Bench in FAO (OS)(COM) No. 50 and 51 of 2021, had stayed the aforesaid order of the Single Judge, which was taken in appeal again before this Court.   This Court finally disposed of the case, answering only two legal questions, without adjudicating on the merits of the matter.   In the meanwhile, FRL and FCPL had moved the Arbitral Tribunal, for vacating the interim injunction granted by the Emergency Arbitrator.   In   view   of   the   pendency   of   the   aforesaid   application before the Arbitral Tribunal, this Court again through 26 interim order dated 09.09.2021, allowed continuation of proceedings before the NCLT, without final authorization on the scheme. 39. One aspect which may be highlighted is the punitive directions ordered   by   the   learned   Single   Judge   in   the   order   dated 18.03.2021, which are extracted below: “192.   All   the   objections   raised   by   the respondents are hereby rejected with cost of Rs.20,00,000/­   to   be   deposited   by   the respondents   with   the   Prime   Minister   Relief Fund   for   being   used   for   providing   COVID vaccination to the   Below Poverty Line   (BPL) category ­ senior citizens of Delhi. The cost be deposited within a period of two weeks and the receipt be placed on record within one week of the deposit.  193. The respondents have deliberately and wilfully violated the interim order dated 25th October,   2020   and   are   liable   for   the consequences   enumerated   in   Order   XXXIX Rule 2A of the Code of Civil Procedure. 194. In exercise of power under Order XXXIX Rule   2A(1)   of   the   Code,   the   assets   of   the respondents No.1 to 13 are hereby attached. Respondents No. 1 to 13 are directed to file an   affidavit   of   their   assets   as   on   today   in Form 16A, Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure within 30 days. Respondent No. 1, 2, 12 and 13   are directed to file an additional affidavit in the format of Annexure B­1 and respondents no. 3   to   11   are   directed   to   file   an   additional affidavit in the format of Annexure A­1 to the judgment   of   M/s.   Bhandari   Engineers   & .   Builders   Pvt.   Ltd v.   M/s.   Maharia   Raj 27 Joint   Venture ,   (supra)   along   with   the documents   mentioned   therein   within   30 days.” 40. Our  attention is  drawn to  the  fact  that the   learned  Single Judge had relied on   M/s. Bhandari Engineers & Builders Pvt.   Ltd.   v.   M/s.   Maharia   Raj   Joint   Venture ,   2019   SCC Online Del. 11879, which has been overruled by a Division Bench order in  Delhi Chemical and Pharmaceutical Works Pvt. Ltd. & Anr. v. Himgiri Realtors Pvt. Ltd. & Anr.,  EFA (OS) (Comm.) No. 4 of 2021.

under Order XXXIX Rule 2­A CPC not when there has been mere   “disobedience”,  but  only  when  there   has   been   “wilful disobedience”. The allegation of wilful disobedience being in the nature of criminal liability, the same has to be proved to the satisfaction of the court that the disobedience was not

204,   considering   the   implication   of   exercise   of   contempt jurisdiction,   held   that   the   power   must   be   exercised   with caution rather than on mere probabilities. While delineating 28 the conduct which can be held to be “wilful disobedience”, this Court held that: “12.  Thus, in order to punish a contemnor, it has to be established that disobedience of the order is “wilful”. The word “wilful” introduces a mental   element   and   hence,   requires   looking into   the   mind   of   a   person/contemnor   by gauging his actions, which is an indication of one's state of mind. “Wilful” means knowingly intentional,   conscious,   calculated   and deliberate with full knowledge of consequences flowing   therefrom.   It   excludes   casual, accidental, bona fide or unintentional acts or genuine   inability.   Wilful   acts   does   not encompass involuntarily or negligent actions. The act has to be done with a “bad purpose or without   justifiable   excuse   or   stubbornly, obstinately or perversely”. Wilful act is to be distinguished   from   an   act   done   carelessly, thoughtlessly,   heedlessly   or   inadvertently.   It does not include any act done negligently or involuntarily.  The   deliberate   conduct   of   a person means that he knows what he is doing and intends to do the same.  Therefore, there has   to   be   a   calculated   action   with   evil motive   on   his   part.   Even   if   there   is   a disobedience   of   an   order,   but   such disobedience   is   the   result   of   some compelling   circumstances   under   which   it was   not   possible   for   the   contemnor   to comply   with   the   order,   the   contemnor cannot   be   punished .   “Committal   or sequestration   will   not   be   ordered   unless contempt   involves   a   degree   of   default   or misconduct.”  (Emphasis supplied) 29 42. Considering   the fact that in the suit instituted by FRL, the learned Single Judge had earlier allowed FRL and Amazon to continue their pursuit before various regulatory authorities, and   in   view   of   the   interim   orders   of   this   Court   dated 22.02.2021 and 09.09.2021, and the Courts below, we are inclined to set­aside aforesaid directions as the pre­condition of  ‘sufficient   mental   element   for   wilful   disobedience’   is   not satisfied. Moreover, Mr. Gopal Subramanium, learned Senior Advocate appearing for Amazon, has fairly stated that Amazon is not interested in proceeding with the punitive directions. Taking   note   of   the   aforesaid   submission,   we   set   aside   the punitive directions issued in the impugned orders of learned Single Judge dated 02.02.2021 and 18.03.2021. 43. Coming to the merits of the case, we would like to mention a disconcerting aspect wherein the interim order enforcing the Emergency Award has adopted a standard beyond ‘ prima facie view ’, as required under law. It is expected of Courts to be cautious while making observations on the merits of the case, which   would   inevitably   influence   the   Arbitral   Tribunals hearing the matters on merit.  30 44. Therefore, we set aside the order of the learned Single Judge dated   02.02.2021   and   18.03.2021   passed   in   OMP   (ENF) (COMM.) No.17 of 2021. Question No. II 45. At the outset, it is agreed by learned advocates appearing on both side that the impugned order dated 29.10.2021 in IA No. 14285/2021 moved in Arb. A (Comm.) No. 64 of 2021, needs to   be   set   aside   for   non­consideration   of   the   orders   of  this Court in the proper perspective. Our order dated 09.09.2021, imposed no bar on the High Court to adjudicate the issue concerning     legality   of   the   vacate   application   order   by   the Arbitral   Tribunal.   In   our   opinion,   adjudication   of   the applications under Section 37(2), Arbitration Act filed by the appellants before the Delhi High Court are distinct from the earlier appeals filed before this Court.  46. Further,  certain important questions  of  law concerning  the effect   of   the   award   of   an   Emergency   Arbitrator   and   the jurisdiction of an Arbitral Tribunal  qua  such awards arise in the   present   matter.   Therefore,   these   matters   need   to   be remitted back for adjudication on its own merits. 47. In view of the above, we order: 31 st I. Setting aside of impugned orders dated 02.02.2021 (1 nd impugned Order) and 18.03.2021 (2  impugned order) in OMP (ENF)(Comm.) No. 17 of 2021. rd II. Setting aside of 3  impugned order dated 29.10.2021 in Arb.   A.   (Comm.)   No.   64   and   63   of   2021.The   learned Single   Judge   shall   reconsider   the   issues   and   pass appropriate orders on its own merits, uninfluenced by any observation made herein.    ...........................................CJI.                                                                     (N.V. RAMANA)                                    ..............................................J.              (A.S. BOPANNA) ..............................................J.              (HIMA KOHLI) NEW DELHI; FEBRUARY 01, 2022 32