Losing Claimant Can Get Post-Award Section 9 Relief in Rare Case, Deposit of Encashed Bank Guarantee Amount Upheld: Supreme Court in NPCC v. Ishvakoo [2026 INSC 828]

In National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. (2026 INSC 828), the Supreme Court held that a post-award Section 9 application by the award debtor is maintainable, following Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, and that the respondent met even the higher threshold for such relief (paras 18–19, 26). With no counter-claim by the appellant, no finding that the mobilisation advance was unutilised, and an earlier 2005 order allowing encashment only if the appellant had to recover money under the award, letting the appellant hold the money pending Section 34 would unjustly enrich it (para 26). A Bench of Justice K.V. Viswanathan and Justice Alok Aradhe dismissed the appeal (para 27).

Status: Division Bench order dated 21.05.2019 in FAO(OS)(COMM) No. 113/2019, affirming the Single Judge's order dated 05.04.2019 in OMP(I)(COMM.) No. 57/2019, upheld; appellant given four weeks to deposit Rs. 3.5 crore; appeal dismissed (paras 1, 27).

Headnote: Post-Award Section 9 Relief to an Unsuccessful Party

Arbitration and Conciliation Act, 1996 – Sections 9, 9(1)(ii)(e), 34 and 36 – Post-award interim measures – Application by award debtor or unsuccessful claimant – Higher threshold – Rare and compelling cases – Encashment of bank guarantees against mobilisation advance – No counter-claim – Unjust enrichment – Deposit in Court pending Section 34 – Prima facie case, balance of convenience, irreparable prejudice.

Held: (i) The maintainability of a post-award Section 9 application by the award debtor is no longer res integra; following Home Care Retail Marts, such an application is maintainable, but the threshold is higher and relief may be granted only in rare and compelling cases to prevent irreparable prejudice and preserve the efficacy of the Section 34 challenge (paras 18–19).

(ii) Section 9 relief continues to be governed by prima facie case, balance of convenience, irreparable injury and reasonable expedition; under the "just and convenient" clause the discretion must be exercised judiciously and must promote the efficacy of arbitration (paras 20–24).

(iii) Under the order of 15.12.2005, the appellant could encash the bank guarantees only if, after adjudication, it was found entitled to recover money from the respondent; the appellant filed no counter-claim, and Issue Nos. 3 and 4 were dealt with only as to bank charges (para 26(i)–(iii)).

(iv) The order of 01.11.2017 did not bar relief, since the present proceedings arose from a post-award Section 9 application and the real question was whether retention of the money would unjustly enrich the appellant in light of the award (para 26(v)).

(v) Prima facie, permitting the appellant to hold the money pending Section 34 would unjustly enrich it and run against the 2005 order; this was a rare and compelling case, the High Court acted judiciously, and the respondent moved with reasonable expedition (para 26(vi)–(ix)).

(vi) The observations are only for the Section 9 petition; the Section 34 application, including whether the arbitrator recorded any finding on the use of the mobilisation advance, will be decided on its own merits (paras 26(iv), 27).

(paras 18–27)

Case Details: NPCC v. Ishvakoo (India) Pvt. Ltd. (2026 INSC 828)

Final Outcome: Civil Appeal dismissed; appellant to deposit Rs. 3.5 crore with the Registry of the High Court of Delhi within four weeks, to be kept in an auto-renewing fixed deposit in a nationalised bank until disposal of the Section 34 application; no order as to costs.

Case: National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd.

Neutral Citation: 2026 INSC 828

Case No.: Civil Appeal No. 5819 of 2025

Court: Supreme Court of India (Civil Appellate Jurisdiction) – Reportable

Date of Decision: 11 August 2026

Bench: Justice K.V. Viswanathan (author) and Justice Alok Aradhe

Relevant Acts & Sections: Arbitration and Conciliation Act, 1996 – Sections 9, 34 and 36; Code of Civil Procedure, 1908 – Order XXXVIII Rule 5 and Order XXXIX Rules 1 and 2 (principles referred to)

Impugned Order: Order dated 21.05.2019 of a Division Bench of the High Court of Delhi in FAO(OS)(COMM) No. 113/2019, confirming the Single Judge's order dated 05.04.2019 in OMP(I)(COMM.) No. 57/2019 (para 1)

Counsel: Mr. Rajat Arora for the appellant; Mr. Ajay Bansal for the respondent (para 14)

Source: Supreme Court of India

Key Holdings of the Supreme Court

• A post-award Section 9 application by the award debtor is maintainable, as held in Home Care Retail Marts (para 18).
• A higher threshold applies to an unsuccessful party, and relief is confined to rare and compelling cases (para 19).
• The usual tests of prima facie case, balance of convenience, irreparable harm and reasonable expedition govern Section 9 relief (paras 20, 23–24).
• Where the opponent filed no counter-claim and the award records no finding entitling it to the money, retention of encashed bank guarantee amounts pending Section 34 may amount to unjust enrichment (para 26(ii), (vi)).
• Directing deposit of the money in Court pending Section 34 furthers the efficacy of arbitration (para 26(ix)).

Brief Facts of the Case

On 16.08.2002 the parties entered into an MoU for work on bus termini and development of the Taj Trapezium Zone Heritage Corridor at Agra. In December 2002 the respondent received Rs. 3.5 crore as mobilisation advance against bank guarantees. Disputes arose and an arbitrator was appointed (paras 3–4).

The respondent's Section 9 petition (OMP No. 363/2003) was disposed of on 15.12.2005 recording that the bank guarantees would be kept alive and that the appellant could encash them only if, after adjudication, it was found entitled to recover an amount from the respondent (paras 5–6). As the respondent could not keep the guarantees alive, the appellant invoked them around September 2017; a Section 9 petition by the respondent was disposed of on 01.11.2017 finding no fault with the appellant (paras 7–8).

The award dated 05.12.2017 dismissed the respondent's claims. The appellant had filed no counter-claim. On Issue Nos. 3 and 4 (discharge of bank guarantees and bank charges), the arbitrator noted the respondent's undertaking and its "fraudulent and collusive conduct" and declined relief (paras 7, 9–10). In the respondent's Section 34 proceedings, orders of 20.09.2018 and 30.10.2018 directing refund were set aside by consent on 29.11.2018, with liberty to file a fresh Section 9 petition (paras 11–12). On 05.04.2019, in OMP(I)(COMM.) No. 57/2019, the Single Judge directed the appellant to deposit Rs. 3.5 crore in the Registry for investment in a fixed deposit, and the Division Bench upheld this on 21.05.2019 (paras 1, 13).

Issues Before the Supreme Court

1. Whether the courts below were justified in directing the appellant to deposit Rs. 3.5 crore in the High Court Registry pending the respondent's Section 34 challenge to the award (para 17).
2. Whether a post-award Section 9 application by a party whose claims were dismissed is maintainable, and what threshold applies (paras 15, 18–19).
3. Whether the respondent satisfied the tests for Section 9 relief on the facts (paras 25–26).

Court's Findings and Reasoning

Rival contentions (paras 15–16): The appellant argued that a claimant whose claim was dismissed in toto holds no award and has no fruits to protect, that encashment was concluded by the order of 01.11.2017, and that the High Court had reviewed the award on merits at an interlocutory stage. The respondent relied on the absence of a counter-claim and of any finding on non-utilisation of the mobilisation advance, and on unjust enrichment.

Maintainability and threshold (paras 18–19): Following Home Care Retail Marts, the Court held the issue of maintainability no longer res integra, while noting the caution that the threshold is higher for an award debtor and that relief is for rare and compelling cases to prevent irreparable prejudice and preserve the Section 34 challenge.

Governing principles (paras 20–24): Relying on Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited and Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd., the Court reiterated that prima facie case, balance of convenience, irreparable injury and reasonable expedition apply, and that the "just and convenient" discretion must be exercised judiciously and promote the efficacy of arbitration.

Application to the facts (para 26): The Court gave nine reasons: the 2005 order permitted encashment only on an adjudicated entitlement; no counter-claim was filed; Issue Nos. 3 and 4 concerned only bank charges and the arbitrator appeared oblivious of the encashment; whether any finding on the mobilisation advance exists will be finally decided under Section 34; the order of 01.11.2017 did not bar relief; retention would prima facie unjustly enrich the appellant; the case was rare and compelling even on the higher threshold; the discretion was exercised judiciously with reasonable expedition by the respondent; and the relief furthers the efficacy of arbitration.

Final Outcome and Directions

• Appeal dismissed for want of merit (para 27).
• Appellant granted four weeks to deposit Rs. 3.5 crore with the Registry of the High Court of Delhi (para 27).
• On deposit, the Registry to keep the amount in a fixed deposit in any nationalised bank on auto-renewal until disposal of the Section 34 application (para 27).
• Observations confined to the Section 9 petition; the Section 34 application to be decided on its own merits; no order as to costs (para 27).

Legal Principle Laid Down

A party that has lost in arbitration may invoke Section 9 after the award, but must meet a higher threshold and show a rare and compelling case in which interim relief is needed to prevent irreparable prejudice and preserve the efficacy of its Section 34 challenge, besides the usual tests of prima facie case, balance of convenience and reasonable expedition. Where the opposing party has encashed security without a counter-claim or any adjudicated entitlement under the award, the court may direct the amount to be deposited pending the Section 34 challenge to prevent unjust enrichment (paras 18–19, 23–24, 26).

Precedents Relied Upon

• Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 SCC OnLine SC 670 – Followed – post-award Section 9 application by an unsuccessful party maintainable, subject to a higher threshold. Discussed at paras 18–19, 26(vii).
• Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited, (2022) 20 SCC 178 – Relied upon – scope of Section 9 and the "just and convenient" clause. Discussed at paras 20–23, 26(vii).
• Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd., (2007) 7 SCC 125 – Relied upon – principles of interim injunction apply to Section 9. Discussed at para 24.

Important Paragraphs of the Judgment

Verbatim extracts from the judgment. For the full text, refer to the judgment PDF below.

Para 18: "Insofar as the maintainability of a Section 9 application by the Award Debtor is concerned, the issue is no longer res integra."

Para 19: "This Court, while holding the application to be maintainable, has sounded a note of caution that the threshold for grant of interim relief will be higher in case the application is moved by an Award Debtor and that a court may, in rare and compelling cases, permit the unsuccessful party to invoke Section 9 to prevent irreparable prejudice and to preserve the efficacy of the challenge under Section 34."

Para 22: "This Court held that while couching a relief under the “just and convenient” clause, the discretion has to be exercised judiciously and not arbitrarily and that such an exercise of power must promote the efficacy of arbitration as a form of dispute resolution."

Para 26: "Sixthly, since prima facie it is found that there was no counter claim by the appellant and no finding that the mobilisation advance against which the bank guarantees were given was not utilized, the High Court was justified in observing that permitting the appellant to hold on the money pending Section 34 application, would be unjustly enriching the appellant and would also be in teeth of the order of 15.12.2005 passed by the High Court in OMP No. 363/2003;"

Para 26: "Finally, a relief, as the one fashioned by the courts below, furthers the efficacy of arbitration as a form of dispute resolution and is in keeping with the purpose and object of interim measures contemplated under Section 9."

Para 27: "Needless to state that the observations made in these proceedings are only for the purpose of deciding the Section 9 petition and the Section 34 application will be decided on its own merits without being influenced by the observations in the orders of the courts below or in the present judgment."

Practical Impact of the Ruling

• For unsuccessful claimants: Losing in arbitration does not shut the door on Section 9; interim protection can be sought pending Section 34, but only in rare and compelling cases (paras 18–19).
• For employers and award holders: Security encashed without a counter-claim or an adjudicated entitlement under the award may have to be deposited in Court pending the challenge (para 26).
• For drafting undertakings: Court-recorded conditions on when bank guarantees may be encashed remain relevant when the court later weighs interim relief (para 26(i), (vi)).
• For courts: Deposit of the disputed sum in an interest-bearing account is a balanced interim measure that protects whichever party ultimately succeeds (paras 13, 27).

FAQs on Post-Award Section 9 Relief to an Unsuccessful Party

1. What did the Supreme Court decide in NPCC v. Ishvakoo?

It upheld the direction to NPCC to deposit Rs. 3.5 crore, realised from the respondent's bank guarantees, in the Delhi High Court Registry until the Section 34 challenge is decided (paras 26–27).

2. Can a party that lost in arbitration apply under Section 9 after the award?

Yes. Following Home Care Retail Marts, such an application is maintainable, but a higher threshold applies (paras 18–19).

3. What must the unsuccessful party show?

A rare and compelling case in which relief is needed to prevent irreparable prejudice and preserve the efficacy of the Section 34 challenge, along with prima facie case, balance of convenience and reasonable expedition (paras 19–20).

4. Why was the appellant not allowed to keep the bank guarantee money?

It filed no counter-claim, the award had no finding entitling it to the money, and the 2005 order allowed encashment only on such an entitlement; retention would prima facie be unjust enrichment (para 26).

5. Does this decide the Section 34 challenge?

No. The observations are only for the Section 9 petition, and the Section 34 application will be decided on its own merits (para 27).

Keywords: 2026 INSC 828, NPCC v. Ishvakoo, National Projects Construction Corporation, Section 9 Arbitration Act, post-award interim relief, unsuccessful party, award debtor, Section 34, bank guarantee encashment, mobilisation advance, unjust enrichment, Home Care Retail Marts, Essar House, Adhunik Steels, Justice K.V. Viswanathan, Justice Alok Aradhe, Supreme Court judgment

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Download Judgment PDF – NPCC v. Ishvakoo (India) Pvt. Ltd.

Judgment PDF: 2026 INSC 828 – National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. (Civil Appeal No. 5819 of 2025) – Download Judgment PDF

Source: Supreme Court of India (official website).