M/S Ramprastha Promoters Developers Pvt Ltd vs M/S Rhine Power Pvt Ltd

$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 20.04.2026
+ LPA 118/2026 & CM APPL. 14984-86/2026
M/S RAMPRASTHA PROMOTERS DEVELOPERS
PVT LTD .....Appellant
Through: Mr. Virender Ganda, Senior Advocate
with Mr. Sougat Sinha, Ms. R.
Gayathri Manasa, Mr. Ayandeb
Mitra, Ms. Ishika Sharma, Ms. Gargi
Patel, Ms. Sonali Kumar, Mr. Vishal
Majumdar and Ms. Maitrayee
Shrivastva, Advs.
Versus
M/S RHINE POWER PVT LTD .....Respondent
Through: Mr. Viksit Arora, Advocate.
CORAM:
HON’BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE TEJAS KARIA
TEJAS KARIA, J. ( Oral )
1. The present intra-court Appeal has been filed challenging the
Judgment and order dated 02.02.2026 (“ Impugned Judgment ”) passed in
W.P.(C) No.2182/2025 (“ Writ Petition ”), whereby the Writ Petition filed
by the Respondent was disposed of with a liberty to the Respondent to seek
adjournment in the ongoing Arbitration Proceedings between the
Respondent and the Appellant pending the disposal of the Contempt
Petition, being Cont. Cas.(C) No.1744/2024 (“ Contempt Petition ”), filed
by the Respondent before this Court and directing that the Arbitration
Proceedings shall await the outcome of the Contempt Petition.
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Signed By:NEELAM
SHARMA
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2. The present Appeal raises the issue whether the Arbitration
Proceedings initiated by the Respondent, seeking specific performance of
the Agreement to Sell concerning the flats mentioned therein (“ Property ”)
being the subject-matter of the Arbitration Proceedings, ought to be stayed
during the pendency of the Contempt Petition.
3. Prior to the invocation of Arbitration Proceedings by the Respondent,
the Respondent had filed an application under Section 9 of the Arbitration
and Conciliation Act, 1996 (“ Act ”) before this Court being
OMP(I)(COMM) No. 192/2023 (“ Section 9 Petition ”) and vide order dated
02.06.2023 (“ Section 9 Order ”), the Appellant was restrained from creating
any third-party interest in, or parting with possession of, the Property until
further orders. After the commencement of the Arbitration Proceedings by
the Respondent, vide orders dated 19.10.2023 and 07.11.2023, Section 9
Petition was disposed of while continuing the interim measure granted vide
Section 9 Order until the Arbitration Tribunal considered the interim
measures sought in Section 9 Petition under Section 17 of the Act. The
learned Arbitration Tribunal, thereafter, has extended the interim measure
granted vide Section 9 Order from time to time.
4. During the subsistence of Section 9 Order continued by the learned
Arbitration Tribunal, the Appellant sold and transferred the possession of 15
flats forming part of the Property. Accordingly, the Respondent filed the
Contempt Petition before this Court alleging wilful disobedience of Section
9 Order by the Appellant. By order dated 07.11.2024 passed in the Contempt
Petition, this Court found the Appellant prima facie guilty of wilful
disobedience of Section 9 Order.
5. The Respondent, thereafter, filed an Application dated 20.11.2024
before the learned Arbitration Tribunal seeking a direction that the
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SHARMA
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Appellant be denied an opportunity of hearing on merits until it had purged
the contempt. However, by order dated 04.12.2024, the learned Arbitration
Tribunal rejected the said Application and declined to adjourn the
Arbitration Proceedings pending the decision in the Contempt Petition, in
the absence of any statutory provision for granting such a stay or order of a
competent court staying the Arbitration Proceedings.
6. Aggrieved by the order dated 04.12.2024 passed by the learned
Arbitration Tribunal refusing to adjourn the Arbitration Proceedings during
the pendency of the Contempt Petition, the Respondent filed the Writ
Petition seeking, inter alia , setting aside of the said order to the extent that it
rejected the Respondent’s Application dated 20.11.2024 for denial of a
hearing on merits to the Appellant until it had purged the contempt and for
adjournment of the Arbitration Proceedings pending the outcome of the
Contempt Petition.
7. By the Impugned Judgment, the learned Single Judge disposed of the
Writ Petition with liberty to the Respondent to seek an adjournment in the
Arbitration Proceedings pending disposal of the Contempt Petition and
directed that the Arbitration Proceedings shall await the outcome of the
Contempt Petition.
8. The reasoning assigned by the learned Single Judge for issuing the
aforesaid directions in the Impugned Judgment is that, if the Respondent
were compelled to proceed with the Arbitration Proceedings before the
Contempt Petition was decided, such compulsion would have a direct
bearing on the relief sought by the Respondent in the Arbitration
Proceedings. It was further observed that the nature of the evidence required
to be adduced in the Arbitration Proceedings would also substantially
change, if the Respondent were compelled to seek the alternative relief of
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SHARMA
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damages, since the relief of specific performance claimed by the Respondent
was stated to have become unavailable in view of the contempt allegedly
committed by the Appellant by selling 15 flats out of the Property, unless
and until the nullification of the third-party rights created therein, as sought
in the Contempt Petition, was adjudicated.
9. Since the Respondent had specifically prayed for a declaration that all
agreements and conveyance deeds executed by the Appellant in favour of
third parties in respect of the sale of 15 flats in the Property were null and
void, and for restoration of the status quo ante by reversion of possession
handed over to such third parties, the Impugned Judgment observed that it
would be expedient for the Contempt Petition to be decided prior to any
further progress in the Arbitration Proceedings. The learned Single Judge
took the view that deferring the Arbitration Proceedings during the
pendency of the Contempt Petition would not amount to interference with
the Arbitration Process, but would instead constitute a limited and
proportionate intervention intended to preserve the efficacy of arbitration by
ensuring that the proceedings were not conducted while the issue concerning
the allegation of contempt, involving the very subject matter of the
arbitration, remained pending.
10. The Impugned Judgment further records that it would be unfair to
compel the Respondent to continue with the arbitration while being confined
to a claim for damages, as such a course would be manifestly unjust, would
place a premium on the alleged disobedience of the Court’s order, and
would allow a party to present the opposing side with a fait accompli of its
own making. It was further observed that the Court could not countenance a
situation in which violation of an injunction granted by this Court became a
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SHARMA
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means of altering the procedural balance or reshaping the substantive
remedies available in arbitration.
11. The learned Senior Counsel for the Appellant submitted that the
Arbitration Proceedings pertains to specific performance of the Agreement
to Sell concerning the Property forms part of a series of agreements
executed between the Parties in relation to a loan transaction availed of by
the Appellant from the Respondent and, consequently, that the remedy of
specific performance is not maintainable. It was further submitted by the
Appellant that the Arbitration Proceedings ought to continue, as Section 9
Order had been obtained by the Respondent through misrepresentation. It
was contended that Section 9 Order, in respect of which contempt
proceedings had been initiated, had been procured by fraud and that, in any
event, there had been no wilful disobedience thereof. It was further
submitted that continuation of the Arbitration Proceedings was necessary to
establish that Section 9 Order had been obtained by misrepresentation. On
behalf of the Appellant, it was also submitted that proceedings under Section
340 of the Code of Criminal Procedure, 1973 (“ Cr.P.C. ”) had already been
initiated against the Respondent, though the same were withdrawn with
liberty to file afresh at a later stage. According to the Appellant, such
withdrawal was on the premise that the truth must first emerge in the
Arbitration Proceedings, which is the sole fact-finding mechanism,
whereafter an application under Section 340 Cr.P.C. would be preferred.
12. It was also submitted by the learned Senior Counsel for the Appellant
that the Court considering the Contempt Petition ought to be apprised that
Section 9 Order had been obtained by fraud, which, according to the
Appellant, would not be possible unless the Arbitration Proceedings were
permitted to proceed.
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SHARMA
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13. The learned Senior Counsel for the Appellant submitted that
continuation of the Arbitration Proceedings could not prejudice the
protection of the assets that form the subject matter of the Contempt
Petition. It was contended that the filing of a Rejoinder to the Statement of
Defence, the leading of evidence, and the recording of oral evidence before
the learned Arbitration Tribunal could not be regarded as prejudicial either
to the interests of the Respondent or to the Property that is the subject matter
of the contempt proceedings. It was accordingly submitted that the
Respondent was not left remediless, contrary to what has been held in the
Impugned Judgment.
14. It was further submitted by the learned Senior Counsel for the
Appellant that the interests of the Respondent stood fully secured in the
Arbitration Proceedings, inasmuch as a sum of Rs. 6,00,00,000/- had already
been secured pursuant to the directions of the learned Arbitration Tribunal,
of which Rs. 3,00,00,000/- had been secured by way of the Bank Guarantee
placed on the record of the learned Arbitration Tribunal and a further sum of
Rs. 3,00,00,000/- lying in the Appellant’s escrow account, has been
specifically earmarked and blocked.
15. Learned Senior Counsel for the Appellant further submitted that, in
view of Section 5 of the Act, judicial interference in ongoing arbitration
proceedings is limited and impermissible except in circumstances
recognised by law. In support of this submission, reliance was placed on the
following decisions of the Supreme Court:
(a) SBP & Com. v. Patel Engineering Ltd. , (2005) 8 SCC 618,
[Paragraph Nos.45 and 46]
(b) Deep Industries Ltd. v. ONGC, (2020) 15 SCC 706, [Paragraph
Nos. 16 and 17]
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SHARMA
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(c) Bhaven Construction v. Sardar Sarovar Narmada Nigam Ltd. ,
(2022) 1 SCC 75, [Paragraph No.18]
16. The learned Senior Counsel for the Appellant submitted that the
maintainability of the Writ Petition ought to have been decided as a
preliminary issue; however, the Impugned Judgment records no finding
whatsoever on that aspect, despite a specific objection having been raised by
the Appellant in that regard.
17. The learned Senior Counsel for the Appellant further submitted that
stalling the Arbitration Proceedings forecloses adjudication of the truth on
merits, converts interim observations into irreversible consequences, and
permits the contempt jurisdiction, which is collateral and penal in nature, to
dictate the course of adjudication of civil and contractual rights, which is
impermissible in law.
18. The learned Senior Counsel for the Appellant also submitted that the
learned Single Judge failed to appreciate that the Arbitration is the only
forum in which disputed questions of fact, contractual interpretation, and the
conduct of the parties can be tested through pleadings, evidence, and cross-
examination. It was further submitted that any order that halts or delays the
Arbitration Proceedings causes permanent prejudice to the Appellant by
foreclosing its defence and converting interim observations into irreversible
findings.
19. The learned Senior Counsel for the Appellant further submitted that
the Impugned Judgment does not specifically safeguard against the risk of
foreclosing the Appellant’s defence before the Arbitration Tribunal and,
therefore, fails to protect the Appellant’s substantive right to a fair
adjudication.
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SHARMA
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20. The learned Counsel for the Respondent submitted that, although the
scope of interference under Articles 226 and 227 of the Constitution of India
with respect to ongoing Arbitration Proceedings is undoubtedly narrow,
such power may nevertheless be exercised in cases of exceptional rarity
where a party is left remediless under the statute or where clear bad faith on
the part of one of the parties is demonstrated, as held in Bhaven
Construction (supra). It was further submitted that, having itself placed
reliance on Bhaven Construction (supra), the Appellant cannot contend that
there is an absolute bar on the jurisdiction of this Court to interfere in
Arbitration Proceedings.
21. The learned Counsel for the Respondent submitted that the question
of maintainability of the Writ Petition or the jurisdiction of this Court has
not been raised in the present Appeal and was sought to be urged for the first
time during oral submissions. It was further submitted that the circumstances
in which the Writ Petition was allowed by the learned Single Judge
constitute a case of “exceptional rarity”, inasmuch as the Respondent had
been left remediless on account of the admitted violation of the Section 9
Order, which, according to the Respondent, constitutes clear bad faith on the
part of the Appellant. It was accordingly submitted that the present Appeal is
liable to be dismissed.
22. The learned Counsel for the Respondent submitted that the
Respondent’s claim before the Arbitration Tribunal for specific performance
of the Agreement to Sell dated 27.09.2018 is premised on the Tribunal’s
jurisdiction being available to grant such a relief. It was submitted, however,
that since the Property protected by the Section 9 Order had been dealt with
in violation thereof, the Appellant had acted in clear bad faith and
engineered a situation in which the Respondent’s primary claim for specific
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SHARMA
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performance of the Agreement to Sell dated 27.09.2018 could not, at
present, be effectively granted by the learned Arbitration Tribunal and that,
as a result, the Respondent had been left remediless.
23. The learned Counsel for the Respondent submitted that unless the
contempt committed by wilful disobedience of Section 9 Order is purged by
the Respondent by restoring the status quo once the sale in favour of third
parties is declared as null and void by the Court in the Contempt Petition, it
would not be possible for the Arbitration Proceedings to proceed. The
learned Counsel for the Respondent relied upon the decision of the Supreme
Court in Balwantbhai Somabhai Bhandari v. Hiralal Somabhai
Contractor (Deceased) Represented by LRs and Others , (2023) 17 SCC
545, wherein it is held that any interference in the course of justice is an
affront to the majesty of law and the conduct of interference is punishable as
contempt of Court. It was further held that although the transfer of the suit
property pendente lite may not be termed as void ab initio yet when the
Court is looking into such transfers in contempt proceedings, the Court can
definitely declare such transactions to be void in order to maintain the
majesty of law. Apart from punishing the contemnors for his contemptuous
acts, the majesty of law may demand that appropriate directions be issued by
the Court so that any advantage secured as a result of such contemptuous
conduct is completely nullified. This may include issue of directions either
for reversal of transactions by declaring such transactions to be void or
passing appropriate directions to the authorities concerned to ensure that the
contemptuous conduct on part of the contemnor does not continue to inure
to the advantage of the contemnor or anyone claiming under him. It was
further held that the beneficiaries of any contemptuous transactions have no
locus to be heard in the contempt proceedings on the ground that they are
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SHARMA
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bona fide purchaser of the property without notice and, therefore, are
necessary parties. Contempt is between the Court and the contemnor and no
third party can involve itself into the same.
24. The learned Counsel for the Respondent submitted that the
Respondent has specifically prayed in the Contempt Petition for declaring
the sale of 15 flats out of the Property by the Appellant in violation of
Section 9 Order as void and sought reversal of the said transactions.
Accordingly, unless the outcome of the Contempt Petition is known, the
Arbitration Proceedings cannot continue as if this Court in Contempt
Petition declares the transaction of sale as void, the relief of specific
performance of sale of the Property by the Appellant shall become available
and the Respondent would not be compelled to seek and prove damages in
lieu thereof.
25. The learned Counsel for the Respondent further submitted that the
learned Arbitration Tribunal had expressed its inability to stay the
Arbitration Proceedings on the ground that the Act contains no provision
authorising such stay and that, therefore, the Respondent had been left
remediless under the statutory framework. It was accordingly submitted that
the intervention made by the Impugned Judgment in the Arbitration
Proceedings was justified and clearly warranted.
26. The learned Counsel for the Respondent submitted that the
Arbitration Proceedings, in which the Respondent’s principal claim is for
specific performance of the Agreement to Sell, ought to proceed further only
upon final adjudication of the Contempt Petition pending before this Court.
It was submitted that, in the absence of a stay of the Arbitration Proceedings,
the Arbitration Tribunal could at best render a contingent award, and that
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SHARMA
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such a course would prejudice the Respondent, as recognised in the
Impugned Judgment.
27. We have duly considered the rival submissions advanced on behalf of
the Parties. It is well settled that the writ jurisdiction is sparingly exercised
to interdict ongoing arbitration proceedings. Interference in the exercise of
supervisory writ jurisdiction is warranted only in exceptionally rare
circumstances, since proceedings under the Act are governed by a self-
contained statutory code, as recognised by the Supreme Court in Kandala
Export v. OCI Corporation , (2018) 14 SCC 715.
28. Accordingly, the sole question that arises for consideration in the
present Appeal is whether the facts of the case disclose such exceptional
circumstances as would justify the exercise of writ jurisdiction by the
learned Single Judge to stay the further conduct of the arbitration
proceedings between the Parties.
29. It is an admitted position between the Parties that Section 9 Order
passed by this Court continues to remain in force by virtue of its extension
by the learned Arbitration Tribunal. During the subsistence of Section 9
Order, the Appellant alienated 15 flats forming part of the Property in
respect whereof the relief of specific performance has been claimed in the
Arbitration Proceedings. The Respondent has sought only the relief of
specific performance before the learned Arbitration Tribunal and has not
claimed the damages as an alternative relief. The case set up by the
Respondent in the Writ Petition was that, by acting in breach of the Section
9 Order, the Appellant rendered the relief of specific performance sought
before the learned Arbitration Tribunal largely illusory, unless the contempt
was purged and the flats transferred in violation of the Section 9 Order were
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SHARMA
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restored, as per the decision of the Supreme Court in Balwantbhai
Somabhai Bhandari (supra), wherein it was held as follows:
“ 117. We may summarise our final conclusion as under:
117.1. We hold that an assurance in the form of an undertaking
given by a counsel/advocate on behalf of his client to the court; the
wilful breach or disobedience of the same would amount to "civil
contempt" as defined under Section 2(b) of the 1971 Act.
117.2. There exists a distinction between an undertaking given to a
party to the lis and the undertaking given to a court. The
undertaking given to a court attracts the provisions of the 1971 Act
whereas an undertaking given to a party to the lis by way of an
agreement of settlement or otherwise would not attract the
provisions of the 1971 Act. In the facts of the present case, we hold
that the undertaking was given to the High Court and the breach or
disobedience would definitely attract the provisions of the 1971 Act.
117.3. Although the transfer of the suit property pendente lite may
not be termed as void ab initio yet when the court is looking into
such transfers in contempt proceedings the court can definitely
declare such transactions to be void in order to maintain the majesty
of law. Apart from punishing the contemnor, for his contumacious
conduct, the majesty of law may demand that appropriate directions
be issued by the court so that any advantage secured as a result of
such contumacious conduct is completely nullified. This may include
issue of directions either for reversal of the transactions by
declaring such transactions to be void or passing appropriate
directions to the authorities concerned to ensure that the
contumacious conduct on the part of the contemnor does not
continue to enure to the advantage of the contemnor or any one
claiming under him.
117.4. The beneficiaries of any contumacious transaction have no
right or locus to be heard in the contempt proceedings on the
ground that they are bona fide purchasers of the property for value
without notice and therefore, are necessary parties. Contempt is
between the court and the contemnor and no third party can involve
itself into the same.
117.5. The apology tendered should not be accepted as a matter of
course and the court is not bound to accept the same. The apology
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SHARMA
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may be unconditional, unqualified and bona fide, still if the conduct
is serious, which has caused damage to the dignity of the institution,
the same should not be accepted. There ought not to be a tendency
by courts, to show compassion when disobedience of an undertaking
or an order is with impunity and with total consciousness. ”
30. In view of the above, the Court while adjudicating the Contempt
Petition, would be competent to determine whether the sale transactions
undertaken by the Appellant during the subsistence of the Section 9 Order
constituted wilful disobedience thereof and, upon so finding, to declare such
transactions void and to issue appropriate directions to nullify the
consequences of the contempt committed by the Appellant. It is, therefore,
necessary that the Contempt Petition be decided prior to the Arbitration
Proceedings proceed on merits.
31. The contention advanced on behalf of the Appellant that the Section 9
Order had been obtained by misrepresentation or fraud is of no relevance for
the purposes of the present Appeal, particularly since the Appellant never
challenged Section 9 Order. Consequently, while deciding the Contempt
Petition, this Court cannot go behind the Section 9 Order or reopen the basis
on which it came to be passed. The limited scope of the Contempt Petition is
to determine whether the Appellant has committed wilful disobedience of
the Section 9 Order and, if so, the consequences that must follow therefrom.
32. The submission that the learned Arbitration Tribunal must first
determine whether the Section 9 Order had been procured by
misrepresentation before the Contempt Petition can be adjudicated is
misconceived, particularly when it is not in dispute that the said order was
subsisting at the time when the flats forming part of the Property were sold.
It is well settled that, even where an order alleged to have been breached in
contempt proceedings is subsequently modified or set aside, a person who
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has violated such order during the period of its operation remains liable for
the disobedience committed during its subsistence. In that view of the
matter, the circumstances in which the Section 9 Order came to be passed,
including the allegation that the Respondent had obtained the injunction by
misrepresentation, are wholly irrelevant for the purposes of adjudicating the
Contempt Petition.
33. The law regarding this Court’s power to exercise the writ jurisdiction
to stay the ongoing Arbitration Proceedings is settled by the Supreme Court
in Deep Industries (supra) which holds that:
“ 16. Most significant of all is the non obstante clause contained in
Section 5 which states that notwithstanding anything contained in
any other law, in matters that arise under Part I of the Arbitration
Act, no judicial authority shall intervene except where so provided
in this Part. Section 37 grants a constricted right of first appeal
against certain judgments and orders and no others. Further, the
statutory mandate also provides for one bite at the cherry, and
interdicts a second appeal being filed [see Section 37(2) of the Act].
17. This being the case, there is no doubt whatsoever that if
petitions were to be filed under Articles 226/227 of the Constitution
against orders passed in appeals under Section 37, the entire
arbitral process would be derailed and would not come to fruition
for many years. At the same time, we cannot forget that Article 227
is a constitutional provision which remains untouched by the non
obstante clause of Section 5 of the Act. In these circumstances, what
is important to note is that though petitions can be filed under
Article 227 against judgments allowing or dismissing first appeals
under Section 37 of the Act, yet the High Court would be extremely
circumspect in interfering with the same, taking into account the
statutory policy as adumbrated by us hereinabove so that
interference is restricted to orders that are passed which are
patently lacking in inherent jurisdiction. ”
34. Further, in Bhaven Construction (supra) it is held that:
“ 18. In any case, the hierarchy in our legal framework, mandates
that a legislative enactment cannot curtail a constitutional right. In
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Nivedita Sharma v. COAI [Nivedita Sharma v. COAI, (2011) 14
SCC 337 : (2012) 4 SCC (Civ) 947] , this Court referred to several
judgments and held :
“11. We have considered the respective
arguments/submissions. There cannot be any dispute that
the power of the High Courts to issue directions, orders
or writs including writs in the nature of habeas corpus,
certiorari, mandamus, quo warranto and prohibition
under Article 226 of the Constitution is a basic feature of
the Constitution and cannot be curtailed by
parliamentary legislation — L. Chandra Kumar v. Union
of India [L. Chandra Kumar v. Union of India, (1997) 3
SCC 261 : 1997 SCC (L&S) 577] . However, it is one
thing to say that in exercise of the power vested in it
under Article 226 of the Constitution, the High Court can
entertain a writ petition against any order passed by or
action taken by the State and/or its
agency/instrumentality or any public authority or order
passed by a quasi-judicial body/authority, and it is an
altogether different thing to say that each and every
petition filed under Article 226 of the Constitution must
be entertained by the High Court as a matter of course
ignoring the fact that the aggrieved person has an
effective alternative remedy. Rather, it is settled law that
when a statutory forum is created by law for redressal of
grievances, a writ petition should not be entertained
ignoring the statutory dispensation.”
(emphasis supplied)
It is therefore, prudent for a Judge to not exercise discretion to
allow judicial interference beyond the procedure established under
the enactment. This power needs to be exercised in exceptional
rarity, wherein one party is left remediless under the statute or a
clear “bad faith” shown by one of the parties. This high standard
set by this Court is in terms of the legislative intention to make the
arbitration fair and efficient. ”
35. Accordingly, the scope of interference by this Court with ongoing
arbitration proceedings is extremely limited and may be invoked only in
exceptional circumstances, namely where a party is left remediless under the
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statutory framework or where clear bad faith on the part of a party is
demonstrated. In the present case, the Respondent has specifically sought, in
the Contempt Petition, a declaration that the transfers of the 15 flats out of
the Property are null and void, together with restoration of the status quo
ante by reversion of possession handed over to third parties or to persons
claiming through them. Unless the said relief is first adjudicated, which this
Court in the exercise of its contempt jurisdiction is competent to grant in
terms of Balwantbhai Somabhai Bhandari (supra), the Respondent would
be effectively left remediless in pursuing its claim for specific performance
before the learned Arbitration Tribunal. Further, the facts of the present case
disclose clear bad faith on the part of the Appellant, inasmuch as, while
disputing the Respondent’s entitlement to seek specific performance of the
Agreement to Sell, the Appellant has at the same time admitted to having
sold 15 flats forming part of the Property, thereby rendering the relief of
specific performance liable to be frustrated. In these circumstances, the
exceptional conditions contemplated in Bhaven Construction (supra) stand
satisfied. The learned Single Judge was, therefore, justified in exercising
writ jurisdiction and in directing that the further arbitration proceedings
between the Parties shall await the outcome of the Contempt Petition.
36. As regards the contention advanced on behalf of the Appellant that
the Respondent is not entitled to seek the relief of specific performance
before the learned Arbitration Tribunal, the same pertains to the merits of
the dispute pending before the learned Arbitration Tribunal and would fall
for consideration only after the Contempt Petition has been finally
adjudicated by this Court. Consequently, no prejudice can be said to be
occasioned to the Appellant merely because the Impugned Judgment is not
interfered with in the present Appeal, since the Appellant shall remain at
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liberty to urge all contentions available to it before the learned Arbitration
Tribunal upon adjudication of the Contempt Petition.
37. The learned Single Judge has acknowledged that writ jurisdiction to
interdict the ongoing arbitration proceedings is to be exercised only in
exceptionally rare situations. However, the Impugned Judgement provides
cogent and persuasive reasons for invoking writ jurisdiction in the peculiar
facts and circumstances of the present case,. The Impugned Judgment
correctly proceeds on the basis that compelling the Respondent to continue
with the Arbitration Proceedings, while requiring it to alter its position by
pursuing damages in lieu of specific performance, would be manifestly
unjust so long as the Contempt Petition remains pending. Equally, if this
Court, while deciding the Contempt Petition, were ultimately to hold that
there was no wilful disobedience of the Section 9 Order, such determination
would also have a direct bearing on the nature of the relief that may be
pursued in the Arbitration Proceedings. It is, therefore, both appropriate and
expedient that the outcome of the Contempt Petition be awaited since the
issues arising therein are inextricably connected with the Arbitration
Proceedings.
38. The submission advanced on behalf of the Appellant that no prejudice
would be caused to the Respondent if the Arbitration Proceedings were
permitted to continue, on the ground that the Respondent is not left
remediless in view of the security allegedly available in its favour, cannot be
accepted. The Respondent has not sought damages in the Arbitration
Proceedings. The question of compensating the Respondent for any loss
suffered by reason of an alleged breach of the Agreement to Sell would arise
only if the relief of specific performance were ultimately held to be
unavailable by the learned Arbitration Tribunal. Such a consequence,
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:11.05.2026
19:22:21
LPA 118/2026 Page 17 of 18

however, cannot be permitted to be precipitated by the Appellant’s alleged
contemptuous conduct in rendering the relief of specific performance
incapable of being granted. This situation can be appropriately addressed
only by ensuring that the Arbitration Proceedings do not continue in parallel
with the Contempt Petition and that the Contempt Petition is decided before
the Arbitration Proceedings continue further.
39. In view of the foregoing, we concur with the approach adopted by the
learned Single Judge in the Impugned Judgment, whereby liberty was
granted to the Respondent to seek adjournment before the learned
Arbitration Tribunal and it was directed that the further Arbitration
Proceedings shall await the outcome of the Contempt Petition.
40. In our considered view, the directions in the Impugned Judgement do
not trench upon or impermissibly interfere with the Arbitration Process;
rather, it preserves the rights of the Parties by deferring the Arbitration
Proceedings until clarity emerges as to what remedies may properly be
pursued before the learned Arbitration Tribunal.
41. In that background, the insistence of the Appellant that the Arbitration
Proceedings must continue notwithstanding the pendency of the Contempt
Petition cannot be accepted, particularly when the Appellant, as respondent
in the arbitration, has not itself sought any substantive relief by way of
counterclaim. We, therefore, find no infirmity in the Impugned Judgment.
42. Accordingly, the Impugned Judgment is upheld and the present
Appeal, along with the pending Applications, stands dismissed. There shall
be no order as to costs.
TEJAS KARIA, J
DEVENDRA KUMAR UPADHYAYA, CJ
APRIL 20, 2026/ ap
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:11.05.2026
19:22:21
LPA 118/2026 Page 18 of 18