Section 9 cannot compel interim restoration or continuation of a determinable contract absent a strong prima facie case.

The petitions were filed under Section 9 of the Arbitration and Conciliation Act, 1996, by transporters whose contracts with BPCL/IOCL for transportation of bulk LPG had been terminated.

The lead petitioner had participated in a tender permitting trucks purchased under an Agreement to Sell (“ATS”) arrangement, subject to transfer of the Registration Certificate and PESO licence within four months of the Letter of Intent (“LOI”).

The LOI for Tank Truck No. TN 88 C 6993 was issued on 19 October 2025, making 19 February 2026 the deadline for completing the requisite transfers.

The Registration Certificate was transferred within time on 18 February 2026, but the application for transfer of the PESO licence was made only on 23 February 2026, and the licence was transferred on 26 February 2026.

Although LPG loads continued to be allotted after the deadline, the respondent issued a show-cause notice on 8 April 2026 and subsequently terminated the truck’s contract on 15 June 2026, forfeiting the caution money of ₹1,00,000.

The petitioners sought an order staying the termination, protection against forfeiture, and a mandatory direction requiring the respondents to resume and continuously allot LPG loads pending arbitration.

Whether the petitioners were entitled to an interim mandatory injunction directing the respondents to restore the terminated contractual arrangement and resume continuous allotment of LPG loads pending arbitration?

Whether the contracts were determinable in nature, such that an order effectively compelling their continuation would be barred by Section 14(d) of the Specific Relief Act, 1963?

Whether the respondents could appropriate or finally deal with the ₹1,00,000 caution money pending adjudication of the contractual dispute by the arbitral tribunal?

The Court exercised its interim jurisdiction under Section 9 of the Arbitration and Conciliation Act, 1996, while applying the principles governing interlocutory mandatory injunctions under Dorab Cawasji Warden v. Coomi Sorab Warden , (1990) 2 SCC 117, and Samir Narain Bhojwani v. Aurora Properties & Investments , (2018) 17 SCC 203.

Such relief requires a strong case of a higher standard than an ordinary prima facie case, the necessity of preventing irreparable or serious injury that is ordinarily not compensable in damages, and a balance of convenience in favour of the applicant.

Section 14(d) of the Specific Relief Act bars enforcement of a contract that is determinable by its nature; the Court relied on the principle in Indian Oil Corporation Ltd. that restoration of a distributorship or similar contractual relationship cannot ordinarily be granted where the contract is revocable in accordance with its terms.

The Court also applied the contractual provisions permitting termination: Clause 33 allowed termination or foreclosure before expiry on thirty days’ notice without assigning reasons, while Clause 34 permitted immediate termination upon specified breaches.

The Corrigendum further provided that failure to submit the changed ownership documents within four months could attract suitable penal action, which “may include” forfeiture, termination and blacklisting.

The Court held that the petitioners had raised arguable issues concerning the short delay in transferring the PESO licence, the respondent’s continued allotment of loads after the contractual deadline, and the availability of several penal consequences under the Corrigendum.

However, the petitioners had not established the higher degree of prima facie strength required for an interim mandatory injunction: the PESO-transfer process itself had commenced only after expiry of the four-month period, rather than being completed in time and delayed solely by the statutory authority.

Further, Clause 33 independently authorised termination without assigning reasons, making the contract prima facie determinable; directing resumption of LPG allotments would therefore substantially restore and specifically enforce a terminated commercial contract, notwithstanding the form in which the relief was pleaded.

The claimed difficulty in quantifying lost profits, limited operational life of the truck and reputational harm did not, without more, satisfy the requirements of irreparable injury or justify compulsory continuation of the contract.

As to the caution money, the Court found that the issue of forfeiture required determination by the arbitral tribunal, and preservation rather than immediate refund was appropriate.

It did not stay or set aside the termination order dated 15 June 2026.

However, the respondent was directed to maintain the ₹1,00,000 caution money in a separate account and not appropriate, utilise or finally deal with it until commencement of arbitration and an appropriate application before the arbitral tribunal.

The arbitral tribunal was directed to decide the disputes independently and without being influenced by the prima facie observations in the Section 9 proceedings; the petitions were disposed of without costs.