Authority: High Court at Calcutta, Commercial Division

Order Date: 28 July 2026 (judgment delivered)

Case Overview

  • Parties: Appellants – M/s Harsha Constructions and Ors.; Respondents – VKM Projects Private Limited, Marketing Point (partnership) and others.
  • Background: Rapiscan Systems Private Ltd awarded a sub‑contract on 16‑09‑2021 for installing an X‑ray Drive‑Through Container Scanner at Syama Prasad Mookherjee Port Trust, Kolkata. A Joint Venture Agreement (JVA) and Supplementary Agreement dated 06‑09‑2021 were executed among the parties, allocating 5% marketing/consultancy fees to each respondent on every bill raised.
  • Dispute: Respondents filed an application under Section 17 of the Arbitration and Conciliation Act, 1996 before a Sole Arbitrator, seeking disclosure of running‑account (RA) bills, books of accounts, profit‑and‑loss statements, balance sheets, and revenue records related to the sub‑contract.
  • Arbitrator’s Order (10‑06‑2025): Held the reliefs fell within Section 17(1)(ii)(a) & (c) and directed the appellants to disclose the aforementioned documents by 23‑06‑2025.
  • Appellants’ Grounds: Argued the JVA was never operational, the Supplementary Agreement was void for lack of Rapiscan’s consent, and Section 17 does not empower an arbitral tribunal to compel document production – such power resides in Section 19. Cited precedents (Union of India v. Reliance Industries, Pennar Aluminium, Augmont Gold, etc.).
  • Respondents’ Grounds: Asserted the documents formed the subject‑matter of the arbitration, that Clause 5.2 of the JVA created a contractual right to inspect records, and that Section 17 expressly allows detention, preservation, or inspection of any “property or thing” related to the dispute.

Legal Analysis

  • The Court examined Section 17(1) and noted its interim, protective nature, limited to preservation of the subject‑matter, not compulsory evidence production.
  • Citing Reliance Industries Ltd. (Delhi HC) and other authorities, the Court distinguished preservation orders from discovery orders, the latter falling under Section 19.
  • The Court found the Sole Arbitrator’s reasoning portion limited to “preservation and inspection,” but the operative directions (paragraph 22) extended to affirmative disclosure, validation, and forwarding of financial records – a clear overreach.
  • The Court agreed with the appellants that such directions exceed the jurisdiction of Section 17 and must be made, if required, under Section 19, which provides procedural safeguards.
  • The Court also rejected the contention that the documents constitute “property or thing” within the meaning of Section 17, emphasizing that they are evidentiary material for quantifying a money claim.

Final Outcome

  • The appeal under Section 37(2)(b) is allowed.
  • The operative directions in paragraph 22 of the arbitrator’s order directing disclosure of RA bill particulars, books of accounts, profit‑and‑loss statements, balance sheets, and revenue records are set aside as beyond the scope of Section 17.
  • The preservation aspect of the order (preventing destruction of RA bills) remains valid.
  • Respondents may seek production of the disputed documents by invoking Section 19 of the Arbitration Act.
  • All pending applications are disposed of.

Topics: Arbitration, Interim Measures, Document Disclosure