FUTURE COUPONS PRIVATE LIMITED vs AMAZON.COM

    IN THE SUPREME COURT OF INDIA
    CIVIL APPELLATE JURISDICTION
    CIVIL APPEAL NOS. 859­860 OF 2022
(ARISING OUT OF SLP (C) NOS. 13547­13548 OF 2021)
FUTURE COUPONS PRIVATE LIMITED & ORS.         …APPELLANT (S)
VERSUS
AMAZON.COM NV INVESTMENT HOLDINGS LLC          …RESPONDENT(S)
& ORS. 
     WITH
    CIVIL APPEAL NOS. 861­862 OF 2022
(ARISING OUT OF SLP (C) NOS.13556­13557 OF 2021)
FUTURE RETAILS LIMITED                   …APPELLANT(S)
VERSUS
AMAZON.COM NV INVESTMENT HOLDINGS LLC         …RESPONDENT(S)
& ORS. 
WITH
    CIVIL APPEAL NO. 864 OF 2022
(ARISING OUT OF SLP (C) NO. 18089 OF 2021)
FUTURE COUPONS PRIVATE LIMITED & ORS.          …APPELLANT(S)
VERSUS
AMAZON.COM NV INVESTMENT HOLDINGS LLC         …RESPONDENT(S)
& ORS. 
1
REPORTABLE
WITH
    CIVIL APPEAL NO. 863 OF 2022
(ARISING OUT OF SLP (C) NO. 18080 OF 2021)
FUTURE RETAIL LTD.               …APPELLANT(S)
VERSUS
AMAZON.COM NV INVESTMENT HOLDINGS LLC          …RESPONDENT(S)
& ORS. 
    J U D G M E N T
    N.V. RAMANA, 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 ShareSubscription 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
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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.
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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:­
Order   of   Emergency   Arbitrator
dated 25.10.2020
Order of Single Judge Bench
in I.A. No. 10376 of 2020 in
CS(COMM)   No.   493   of   2020
dated 21.12.2020
285. In the result, I award, direct,
and order as follows:
(a) the   Respondents   are
injuncted   from   taking
any steps in furtherance
or   in   aid   of   the   Board
Resolution made by the
Board   of   Directors   or
FRL on 29 August 2019
in   relation   to   the
Disputed   Transaction,
including but not limited
to filing or pursuing any
application   before   any
person,   including
regulatory   bodies   or
agencies   in   India,   or
requesting   for   approval
at any company meeting;
(b) the   Respondents   are
injuncted   from   taking
any   steps   to   complete
the   Disputed
Transaction with entities
that are part of the MDA
12.3   Thus the trinity of the
principles for grant of interim
injunction i.e. prima facie case,
irreparable loss and balance of
convenience are required to be
tested in terms of principles as
noted above.  Since this Court
has held that prima facie the
representation   of   Amazon
based   on   the   pea   that   the
resolution   dated   29th  August,
2020 of FRL is void and that
on conflation of the FCPL SHA
and FRL SHA, the ‘control’ that
is   sought   to   be   asserted   by
Amazon   on   FRL   is   not
permitted under the FEMA FDI
Rules,   without   the
governmental   approvals,   this
Court finds that FRL has made
out a prima facie case in its
favour   for   grant   of   interim
injunction.  However, the main
tests in the present case are in
respect   of   “balance   of
6
Group;
(c) without prejudice to the
rights   of   any   current
Promoter   Lenders,   the
Respondents   are
injuncted   from   directly
or indirectly taking any
steps   to
transfer/dispose/alienat
e/encumber FRL’s Retail
Assets   or   the   shares
held   in   FRL   by   the
Promoters   in   any
manner   without   the
prior written consent of
the Claimant;
(d) the   Respondents   are
injuncted   from   issuing
securities   of   FRL   or
obtaining/securing   any
financing,   directly   or
indirectly,   from   any
Restricted   Person   that
will   be   in   any   manner
contrary   to   Section
13.3.1 of the FCPL SHA;
(e) the   orders   in   (a)   to   (d)
above are to take effect
immediately   and   will
remain   in   place   until
further   order   from   the
Tribunal,   when
constituted; and
(f) the   Claimant   is   to
provide   within   7   days
from   the   date   hereof   a
cross­undertaking   in
damages   to   the
Respondents.     If   the
Parties   are   unable   to
agree on its terms, they
convenience”   and   “irreparable
loss”.   Even   if  a  prima   facie
case is made out by FRL, the
balance   of   convenience   lies
both   in   favour   of   FRL   and
Amazon.  If the case of FRL is
that   the   representation   by
Amazon   to   the   statutory
authorities/regulators is based
on illegal premise, Amazon has
also   based   its   representation
on alleged breach of FCPL SHA
and   FRL   SHA,   as   also   the
directions   in   the   EA   order.
Hence it cannot be said that
the balance of convenience lies
in   favour   of   FRL   and   not   in
favour of Amazon.  It would be
a matter of trial after parties
have   led   their   evidence   or   if
decided   by   any   other
competent forum to determine
whether the representation of
Amazon   that   the   transaction
between   FRL   and   Reliance
being   in   breach   of   the   FCPL
SHA   and   FRL   SHA   would
outweigh the plea of FRL in the
present suit.   Further in case
Amazon   is   not   permitted   to
represent   its   case   before   the
statutory
authorities/Regulators,   it   will
suffer   an   irreparable   loss   as
Amazon   also   claims   to   have
created preemptive rights in its
favour in case the Indian law
permitted  in  future.   Further
there   may   not   be   irreparable
loss to FRL for the reason even
if   Amazon   makes   a
7
are   to   refer   their
differences to me qua EA
for resolution; and
(g) the   costs   of   this
Application   be   part   of
the   costs   of   this
Arbitration.
representation   based   on
incorrect   facts   thereby   using
unlawful means, it will be for
the   statutory
authorities/Regulators   to
apply their mind to the facts
and   legal   issues   therein   and
come to the right conclusion.
There   is   yet   another   aspect
as   to   why   no   interim
injunction can be granted in
the   present   application   for
the   reason   both   FRL   and
Amazon   have   already   made
their   representations   and
counter   representations   to
the   statutory
authorities/regulators   and
now   it   is   for   the   Statutory
Authorities/Regulators   to
take   a   decision   thereon.
Therefore,   this   Court   finds
that   no   case   for   grant   of
interim   injunction   is   made
out in favour of the FRL and
against Amazon.
13. Consequently,   the
present application is disposed
of,   declining   the   grant   of
interim   injunction   as   prayed
for   by   FRL,   however,   the
Statutory
Authorities/Regulators   are
directed to take the decision on
the   applications/objections   in
accordance with law.
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.”
10. On   02.02.2021,   the   first   substantive   order   [1
st  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)
(COMM) No.17 of 2021, passed the   2
nd
    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.
M/s  Maharia  Raj  Joint  Venture, (supra) along
with the documents mentioned therein within 30
days.”
14. In the interregnum, the FCPL and FRL approached the Division
Bench of the Delhi High Court in FAO (OS) (COM) No.50 and
51   of   2021   respectively   against   the  2
nd  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:
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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
submissions on the vacate petitions were heard between 12th
­
16th 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
29.10.2021   (3
rd  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 antiarbitration 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 twentyfour 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.
 Thereafter,   learned   Single   Judge   passed   the   2nd
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.
41. Viewed differently, contempt of a civil nature can be made out
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
mere “disobedience” but “wilful” and “conscious”. This Court
in the case of  Ram Kishan v. Tarun Bajaj,  (2014) 16 SCC
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
I. Setting aside of impugned orders dated 02.02.2021 (1st
impugned Order) and 18.03.2021 (2nd impugned order) in
OMP (ENF)(Comm.) No. 17 of 2021.
II. Setting aside of 3rd 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

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

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