Adhunik Steels Ltd. v. Orissa Manganese and Minerals Pvt. Ltd.

Facts

A dispute arose under an agreement relating to raising and processing of manganese ore. A party sought interim relief in connection with the arbitration. The question was whether the court, exercising power under Section 9, was bound by the ordinary principles governing interim injunctions or could grant relief untrammelled by those principles.

Issues

• Whether the power of a court under Section 9 to grant interim measures is governed by the established principles for grant of interim injunctions (prima facie case, balance of convenience, irreparable injury).
• Whether Section 9 confers a wider, unfettered discretion independent of the CPC principles.

Arguments

It was argued that Section 9 confers a special, wide power enabling the court to grant interim relief without strict adherence to the ordinary rules. The opposing view was that the concluding words of Section 9(1), giving the court 'the same power for making orders as it has' in proceedings before it, import the normal rules governing interim relief.

Held

The Supreme Court held that the exercise of power under Section 9 must be based on the well-recognised principles governing grant of interim injunctions and other orders of interim protection. The words at the end of Section 9(1), that the Court shall have the same power for making orders as it has for the purpose of, and in relation to, proceedings before it, indicate that the normal rules were not intended to be dispensed with. Where a party is given a right to approach an ordinary Indian court without a special procedure or special set of rules, the ordinary rules followed by that court govern the exercise of the power. The court must therefore consider prima facie case, balance of convenience and irreparable injury.

Ratio decidendi

Section 9 does not confer an arbitrary or unfettered discretion; interim measures must be granted in accordance with the established principles governing interim injunctions and protective orders.

Significance

Leading authority anchoring Section 9 discretion to settled equitable principles, repeatedly applied and distinguished by High Courts. It was relied on in Nimbus Communications v. BCCI to require the underlying basis of Order XXXVIII Rule 5 to inform Section 9(1)(ii)(b) applications, while some High Courts treat the CPC principles only as guiding rather than strictly binding.

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