Ingram Micro India Private Limited vs Vcare Infotech Limited

By the present Petition filed under Section 9 of the Arbitration and Conciliation Act, 1996, the Petitioner seeks interim protection against the Respondent because the Respondent has failed to pay the outstanding amounts due for the products supplied by the Petitioner. One of the cheques issued by the Respondent towards payment of the said dues has been dishonoured. The Petitioner seeks a direction to the Respondent to disclose details of its movable and immovable assets. The Petitioner seeks appointment of a Court Receiver over such assets or, in the alternative, an injunction restraining the Respondent from selling, transferring, creating any charge upon or otherwise dealing with its assets. According to the Petitioner, such protection is necessary to secure its claim of Rs.8,07,28,945/- (Rupees Eight Crores Seven Lakhs Twenty-Eight Thousand Nine Hundred and Forty-Five Only), including interest, until the Arbitral Tribunal is constituted and the arbitration proceedings are decided.

The Petitioner has approached this Court because it apprehends that the Respondent, being in financial difficulty, may sell, transfer or otherwise deal with its assets, which may make it difficult for the Petitioner to recover its dues. According to the Petitioner, the products supplied by it from time to time were received by the Respondent and were used for its own benefit. However, the Respondent did not make payment for those supplies. The Petitioner states that the Respondent repeatedly assured it that the outstanding amounts would be paid. Despite these assurances, the Respondent failed and neglected to clear the outstanding dues. The Petitioner submits that the disputes between the parties are covered, among other things, by the Arbitration Clause contained in the invoices issued to the Respondent. According to the Petitioner, the Respondent accepted these invoices and acted upon them. This was the position when the Respondent was carrying on business under its earlier name, NewGen IT Technologies Limited. The Petitioner submits that the Respondent is bound by the Arbitration Clause printed on the invoices. The said Arbitration Clause provides that, if any dispute arises out of or in connection with the transaction, the dispute shall be referred to a Sole Arbitrator appointed by Ingram Micro India Limited. It provides that the decision of the Sole Arbitrator shall be final and binding upon both parties. The Petitioner submits that the invoices contain a specific condition regarding acceptance of their terms. According to this condition, acceptance of the goods or services, making part or full payment, or acknowledging the invoice would amount to acceptance of the terms and conditions printed on the invoice as well as the Sales Terms and Conditions of Ingram Micro available on its online platform. The said Sales Terms and Conditions contain provisions for settlement of disputes through arbitration. The Petitioner relies upon these terms and conditions and submits that they form part of the agreement between the parties.

The Petitioner submits that the Respondent is bound by the terms and conditions applicable to its registration on the Petitioner's online platform, namely the Ingram X4C platform. Clause 16 of those terms and conditions provides for settlement of disputes through arbitration. It states that the terms and conditions are governed by the laws of India and that the Courts at Mumbai shall have exclusive jurisdiction. It provides that any dispute arising out of or in connection with the agreement, which cannot be settled amicably, shall be referred to a Sole Arbitrator appointed by mutual consent of the parties. The arbitration is to be conducted in accordance with the Arbitration and Conciliation Act, 1996. The seat and venue of the arbitration are stated to be Mumbai, India. The Petitioner submits that it is only a distributor of products supplied by various original equipment manufacturers, referred to as "OEMs". It is not the manufacturer of those products and, according to the Petitioner, it is not responsible for the warranties relating to such products and services. The Sales Terms and Conditions state that Ingram Micro is not the manufacturer of the products and that warranties relating to the products are given by the concerned manufacturer or publisher. The Petitioner submits that the Respondent had previously done business with it and was aware of these terms and conditions and of the limits on the Petitioner's liability.

According to the Petitioner, the parties had been following a regular business practice. The Respondent would place purchase orders upon the Petitioner. The Petitioner would then arrange for the products and services supplied by the concerned OEMs in accordance with those purchase orders and would raise invoices upon the Respondent. The Sales Terms and Conditions applicable to these transactions contained provisions relating to orders, shipment and delivery, credit and payment terms, taxes and duties, interest on delayed payments and settlement of disputes through arbitration.

The present dispute arises out of Purchase Order No. VCARE/PO/DEL/1005 dated 22 March 2024 and the invoices raised pursuant to that Purchase Order, which according to the Petitioner have remained unpaid. The Petitioner states that, since it was acting as a distributor, it placed the necessary orders with the concerned OEM and supplied the products and licences to the Respondent. The Petitioner states that the soft copy of the Vendor's Licence was sent to the Respondent by email dated 7 November 2024. At the same time, the Petitioner raised an invoice dated 6 November 2024 for Rs.3,17,20,641.19 (Rupees Three Crores Seventeen Lakhs Twenty Thousand Six Hundred and Forty-One and Paise Nineteen Only). For the next period under the same Purchase Order, the Petitioner states that it again provided the soft copy of the Vendor's Licence to the Respondent by email dated 22 January 2025. The Petitioner raised an invoice dated 21 January 2025 for Rs.3,17,20,641.19 (Rupees Three Crores Seventeen Lakhs Twenty Thousand Six Hundred and Forty-One and Paise Nineteen Only). According to the Petitioner, the amounts covered by both these invoices remained unpaid by the Respondent. The Petitioner states that, despite repeated follow-ups for payment, the Respondent addressed a letter dated 20 January 2026 acknowledging that amounts were due and payable to the Petitioner. In the said letter, the Respondent stated that it was not running away from the outstanding dues and had no such intention. The Respondent explained that the delay had occurred because of certain unforeseen circumstances during the year 2025. The Respondent requested the Petitioner to have patience and stated that it was taking steps to stabilise its cash flow. The Respondent assured the Petitioner that it would work out a structured plan for payment of the outstanding dues.

The Petitioner states that it has a practice of sending statements of account to its customers from time to time. According to the Petitioner, this is done so that there is no dispute regarding the invoices raised or the balance amount payable. Similar statements of account were sent to the Respondent. A statement for the period from 16 March 2026 to 31 March 2026 was sent to the Respondent by email dated 2 April 2026. The statement showed an outstanding amount of Rs.6,14,61,111.47 (Rupees Six Crores Fourteen Lakhs Sixty-One Thousand One Hundred and Eleven and Paise Forty-Seven Only). The Respondent was requested to confirm the balance within ten days from receipt of the statement. The statement stated that, if no discrepancy was reported within ten days, the contents of the statement would be treated as correct. It stated that interest at the rate of 2% per month would be payable on payments made after the due date. A similar statement of account was sent to the Respondent by email dated 17 April 2026 for the period from 1 April 2026 to 15 April 2026. The Petitioner states that the Respondent did not reply to this statement and did not dispute either the correctness of the statement or the outstanding balance shown therein.

The Petitioner states that, after the cheque was dishonoured, the Respondent sent an email dated 1 May 2026 requesting return of the cheques which had been issued to the Petitioner in connection with the business transactions and agreements entered into between the parties from time to time. The Respondent stated that those cheques were no longer required and had no relevance to the existing business arrangements. However, according to the Petitioner, the said email did not refer to the dishonoured cheque for Rs.6,14,61,111/- (Rupees Six Crores Fourteen Lakhs Sixty-One Thousand One Hundred and Eleven Only). The Petitioner states that it has learnt that the Respondent is facing serious financial difficulties. According to the Petitioner, regulatory action has been taken against the Respondent. The Petitioner states that the Respondent is facing shortage of funds and has defaulted in making payments to its suppliers, including the Petitioner. The Petitioner states that, upon searching the records of the Registrar of Companies, it was found that the Respondent had not filed its financial statements after the financial year ending in 2024. The Petitioner states that the Respondent has claimed GST credit of Rs.96,77,482/- (Rupees Ninety-Six Lakhs Seventy-Seven Thousand Four Hundred and Eighty-Two Only) in respect of the two outstanding invoices, even though the Petitioner has not received payment against those invoices. According to the Petitioner, the Respondent has neither reversed the GST credit nor issued any credit note showing such reversal. The Petitioner submits that the Respondent's act of claiming GST credit in respect of these invoices shows that the Respondent has accepted the amounts as due and payable to the Petitioner. The Petitioner submits that, by withholding payment despite claiming the GST credit, the Respondent has obtained an unfair financial benefit.

The Petitioner apprehends that the Respondent may, with the intention of defeating the Petitioner's claim, sell, transfer or otherwise deal with its movable and immovable assets during the pendency of the arbitration. The Petitioner states that it has learnt that the Respondent is heavily indebted and may attempt to dispose of its assets or create charges over them. The Petitioner submits that the licences supplied by it were duly received and used by the Respondent for its own benefit. According to the Petitioner, the Respondent may have received payments from its customers in respect of those licences. In these circumstances, the Petitioner submits that there is a real and immediate apprehension that, unless interim protection is granted, the Respondent may deal with or dispose of its assets. This, according to the Petitioner, may make it difficult for the Petitioner to recover the amount which it proposes to claim in the arbitration. The Petitioner has approached this Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures until the Arbitral Tribunal is constituted and the disputes between the parties are decided.

Mr. Wagle, learned Advocate for the Petitioner, submits that the Respondent's main contention that this Court has no jurisdiction because there is no clear intention between the parties to enter into an arbitration agreement is legally incorrect and misleading. According to him, when the Respondent wanted to register as a Vendor and prospective customer, it was required to provide its details on the Petitioner's online portal. The Respondent could complete the registration only after accepting the Sales Terms and Conditions ("STC"). After such acceptance, an email was sent to the Respondent thanking it for signing up and informing it that the registration request had been successfully processed. A copy of the STC and the product catalogue were sent to the Respondent by email. The said documents are annexed at Exhibit-A to the Petition. Mr. Wagle submits that, where parties accept contractual terms through an online platform, such acceptance is binding upon them. He submits that the email dated 14 March 2019 was generated only after the Respondent accepted the terms and conditions, and there was no contemporaneous denial by the Respondent of such acceptance. Without prejudice to this submission, Mr. Wagle submits that the STC published on www.imonline.co.in contained an arbitration clause in Clause 10. A copy of the terms and conditions applicable at the relevant time is annexed as Exhibit-A. It is denied that there was no express agreement to arbitrate. It is denied that the agreed terms and conditions were subsequently replaced or that the terms and conditions contained in Annexure-1 became applicable. The contention that the terms and conditions of the Purchase Order would govern the parties is denied. Mr. Wagle submits that, apart from the fact that those terms do not confer exclusive jurisdiction upon any particular Court, they cannot prevail over the STC and the terms and conditions printed on the invoices. The invoices themselves contain an arbitration clause and refer to www.imonline.co.in, where Clause 10 provided for dispute resolution by arbitration during the relevant period when the transactions between the parties took place. He submits that the relationship and transactions between the parties are governed by the Petitioner's Electronic Commerce Terms and Conditions. Clause 10 provides: "In case of disputes if any, company and the customer shall try to resolve the dispute(s) amicably. If the parties are unable to reach any resolution, the matter shall be referred to a sole Arbitrator to be appointed by the company."

Mr. Wagle submits that Clause 10 provides that the arbitration proceedings shall be held at Mumbai. Clause 11 provides that the Courts at Mumbai shall have exclusive jurisdiction over disputes arising under the agreement. According to him, the Respondent placed its orders electronically and carried on transactions with the Petitioner for several years. It was fully aware of and bound by the said terms and conditions. Mr. Wagle submits that the Respondent cannot now rely upon its own territorial objections and avoid the seat of arbitration which, according to the Petitioner, was agreed to be Mumbai. Mr. Wagle then deals with what he describes as the Respondent's admission of its liability. He submits that the Respondent has made clear admissions regarding the outstanding dues in its Affidavit-in-Reply. According to him, these admissions substantially weaken the defence raised by the Respondent. In Paragraphs 6(a) and 6(b), the Respondent admits that the Purchase Order dated 22 March 2024 was for a total value of Rs.12,68,82,422.26. In Paragraph 6(b) and Paragraph 9(c), the Respondent admits that it has paid only Rs.6,54,21,310.54.

Mr. Wagle submits that the Respondent has not explained when and in what manner it made even the part payment against the total outstanding amount arising from the transaction. He submits that the Respondent has failed to explain the circumstances in which the substantial balance amount remained unpaid. According to Mr. Wagle, even on the Respondent's own calculations made on oath, a principal amount of more than Rs.6.14 Crores remains outstanding. He submits that the Respondent is mainly disputing the rate of interest and the manner in which the transactions were structured. However, according to the Petitioner, the basic principal liability remains admitted. Mr. Wagle submits that the Respondent cannot avoid the consequences of its admitted outstanding liability merely by raising disputes regarding interest or the structure of the transactions.

Mr. Wagle next submits that the Respondent has not placed the complete and current financial position before the Court. According to him, the Respondent is trying to show that it is financially sound and is an "active going concern" by relying upon a Turnover Certificate dated 3 February 2026, annexed as Annexure "2". The Petitioner submits that this certificate does not give a complete picture of the Respondent's present financial position. According to the Petitioner, the certificate only contains financial figures relating to earlier periods and refers to the financial position up to December 2024 or the financial year 2024-

Mr. Wagle submits that the Respondent has not produced any certified financial statements, audited books of account or turnover figures for the period, covering the subsequent period of approximately 20 months during 2025 and 2026. According to the Petitioner, this omission supports its apprehension that the Respondent is facing serious financial difficulties, regulatory problems and shortage of funds. Mr. Wagle submits that the Respondent cannot rely only upon old financial figures relating to 2024 to demonstrate its present financial condition. According to him, the immediate concern before the Court is whether the Petitioner's claim may become difficult to recover if the Respondent's assets are dealt with or disposed of during the pendency of the arbitration. The Petitioner relies upon the correspondence annexed to the Petition to contend that the Respondent had disclosed difficulties relating to its financial position. The Petitioner denies the Respondent's contention that it is financially sound.

Mr. Wagle deals with the cheque for Rs.6,14,61,111/-. He submits that the Respondent's case that the cheque was a "blank security instrument" handed over before the year 2023 is inconsistent with the Respondent's own admissions regarding the transactions between the parties. According to the Petitioner, the amount mentioned in the cheque corresponds with the balance amount which remained unpaid under the March 2024 transaction. The Petitioner submits that the cheque was issued towards an identified and existing business liability and was not merely a blank security cheque. The subsequent dishonour of the cheque, according to the Petitioner, shows the Respondent's failure to discharge its admitted financial obligation. Mr. Wagle points out that, after dishonour of the cheque, the Respondent did not give any reply to the demand notice.

Mr. Wagle submits that, in view of the Respondent's clear admissions regarding the principal outstanding amount and the terms providing for arbitration and jurisdiction at Mumbai, the Petitioner has made out a sufficient case for grant of urgent interim protection under Section 9 of the Arbitration and Conciliation Act, 1996. According to him, such protection is necessary to safeguard the Petitioner's monetary claim during the period before the dispute is decided in arbitration. On these grounds, the Petitioner submits that the reliefs sought in the Petition ought to be granted.

Mr. Tamboli, learned Advocate for the Respondents, submits that, in any event, the Sales Terms and Conditions ("STC") relied upon by the Petitioner and annexed to the Petition appear to have been replaced by the modified Terms and Conditions available on the Petitioner's website. According to him, the modified Terms and Conditions apply to all purchases and supply of products and services. He submits that these Terms and Conditions state that they contain the complete rights and obligations of the parties concerning the matters covered by them. They state that they replace all earlier understandings, agreements, negotiations and proposals between the parties. It is submitted that these Terms and Conditions contain provisions relating to orders, shipment, credit and payment. However, they do not contain any arbitration clause. Learned Advocate for the Respondents submits that the Petitioner accepted the terms and conditions contained in the Purchase Order when it supplied the products in accordance with that Purchase Order. According to him, the arbitration clause subsequently printed in small letters on the invoices was different from the arbitration clause contained in the STC. At the most, such a clause could be treated as a proposal made by the Petitioner to the Respondent. Unless the Respondent accepted that clause, it could not become a binding agreement between the parties.

It is submitted that the terms and conditions printed in small and unclear letters on the invoices unilaterally issued by the Petitioner cannot bind the Respondent. Learned Advocate points out that the invoices themselves contain a space for the Respondent's signature, but that space has not been signed by the Respondent. According to him, this shows that the Respondent never accepted the alleged arbitration clause. He submits that the Purchase Order makes it clear that the Respondent had not agreed to refer any dispute arising from the transaction to arbitration. Learned Advocate for the Respondents submits that the two arbitration clauses relied upon by the Petitioner are different from each other. According to the Respondents, this difference shows that there was no clear agreement or common understanding between the parties to refer their disputes to arbitration. It is submitted that even the documents relied upon by the Petitioner are not consistent with each other and do not establish with certainty what arbitration agreement, if any, was accepted by the Respondent. Learned Advocate for the Respondents submits that there is no arbitration agreement between the parties. According to him, when there is no arbitration agreement, a Petition under Section 9 of the Arbitration and Conciliation Act, 1996 cannot be maintained. He submits that if the present Petition is entertained, it would cause serious prejudice to the Respondent. It would, according to him, permit the Petitioner to avoid the requirement of pre-institution mediation contemplated under Section 12-A of the Courts Act, 2015.

Learned Advocate for the Respondents submits that the total purchase price under the transactions was Rs.12,68,82,422.26/-, out of which the Respondent has paid Rs.6,54,21,310.54/-. The Respondents deny that the Petitioner is entitled to claim any interest. According to them, neither the STC, nor the present Terms and Conditions, nor the invoices contain any provision for payment of interest. It is submitted that the Petitioner cannot claim interest at the rate of 18% per annum. It is submitted that the parties have had a relationship for several years, beginning from March 2019. During this period, they entered into several transactions and the total value of those transactions was more than Rs.60 crores. The Respondents rely upon this long-standing business relationship to explain the manner in which the transactions and payment arrangements between the parties were carried out.

As regards the alleged dishonour of the cheque dated 21 April 2026 for Rs.6,14,61,111.47/-, learned Advocate for the Respondents submits that the said cheque had been issued several years earlier as a blank cheque. According to him, at the time when it was issued, neither the date nor the amount had been filled in. He submits that the cheque was issued before the Respondent's bank account was closed at the end of 2023. According to the Respondents, the cheque was given only as part of the general and credit arrangement between the parties. It was not issued against any particular debt or liability. In particular, it was not issued towards the Purchase Order dated 22 March 2024 or the invoices relied upon by the Petitioner in the present proceedings. It is submitted that the cheque now bears the exact amount of Rs.6,14,61,111.47/-, which according to the Petitioner is the balance amount remaining after part payments. According to the Respondents, this shows that the amount was filled in by the Petitioner at a later stage. The Respondents submit that they had never authorised the Petitioner to fill in the amount, date or any other particulars in the cheque or to present the cheque for payment. It is submitted that filling in the cheque particulars and presenting the cheque for encashment without such authority amounts to misuse of a cheque given as security. According to the Respondents, it amounts to misuse of the legal process. The Respondents submit that the Petitioner's threat to initiate proceedings under Section 138 of the Negotiable Instruments Act, 1881, is without any proper basis. Learned Advocate for the Respondents admits that the Respondent had issued Purchase Orders to the Petitioner and that the Petitioner supplied the products in accordance with those Purchase Orders. However, he submits that each Purchase Order issued by the Respondent governed the particular transaction and supply. According to the Respondents, these Purchase Orders were the operative documents between the parties for each transaction and not the earlier STC relied upon by the Petitioner.

I have considered the averments made in the Petition, the Affidavit in Reply filed by the Respondent, the rejoinder filed by the Petitioner, the documents placed on record and the submissions made by the learned Advocates for both sides. On considering the pleadings, documents and submissions, two main questions arise for consideration. The first is whether there is an arbitration agreement between the parties. The second is, if such an agreement is found, whether the material before the Court shows that interim protection is required to secure the amount claimed by the Petitioner.

The first objection raised by the Respondent is that there is no arbitration agreement between the parties. Learned Advocate Mr. Tamboli submitted that the Purchase Order does not contain any arbitration clause. He submitted that the Sales Terms and Conditions at Exhibit B, relied upon by the Petitioner, are not signed by the Respondent. According to him, the absence of an arbitration clause in the Purchase Order is an important circumstance. He submitted that merely because an arbitration clause is printed on the invoices, it cannot create an arbitration agreement between the parties. This objection requires consideration. The Court cannot presume that a party agreed to arbitration only because an arbitration clause appears on an invoice. The entire transaction, the documents exchanged between the parties and their conduct have to be considered to find out whether there is sufficient material showing that both parties agreed to resolve their disputes through arbitration.

In this regard, the decision relied upon by the Respondent in Taipack Ltd. v. Ram Kishore Nagar Mal, 2007 SCC OnLine Del 804 is relevant. In paragraph 16, the Court observed:

The above principle makes it clear that merely mentioning “arbitration” in a document is not enough. There must be some material to show that both parties agreed to resolve their disputes through arbitration. At the same time, the law does not require such agreement to be found only in a document signed by both parties. Depending upon the facts of the case, an agreement can be gathered from documents exchanged between the parties or from their conduct, provided such material shows acceptance of the relevant terms. The Petitioner has placed a different factual case before the Court. According to the Petitioner, the Respondent initially registered on the Petitioner's electronic platform, furnished the required details and accepted the Sales Terms and Conditions. The Petitioner relies upon the email dated 14 March 2019 by which the Respondent's registration was acknowledged and the Respondent was informed that the registration process was being completed. The Petitioner states that the relevant Sales Terms and Conditions were sent to the Respondent and that Clause 10 contained the arbitration provision. Thus, the Petitioner's case is not merely that an arbitration clause was printed on the disputed invoices at a later stage. Its case is that arbitration was one of the terms governing the relationship from the time that relationship commenced. The fact that the Sales Terms and Conditions do not bear a physical signature of the Respondent cannot conclude the issue against the Petitioner. Commercial transactions can be entered into electronically. If a party registers on an electronic platform, accepts the terms made available to it and continues business with the other party, the Court has to examine whether such conduct shows acceptance of those terms. The Petitioner has relied upon the decision in Ingram Micro India (P) Ltd. v. Mohit Raghuram Hegde, 2022 SCC OnLine Bom 1777. In paragraph 23, the Court observed:

The above decision does not mean that every online transaction contains an arbitration clause. What is necessary is material showing that the customer accepted the relevant terms and continued the relationship on that basis. In the present case, the Petitioner relies upon the online registration process of 2019, the acceptance of the Sales Terms and Conditions, the email acknowledging the registration and the continued business relationship between the parties. The Respondent does not dispute that it had business dealings with the Petitioner from 2019 onwards. On the contrary, the Respondent states that there were numerous transactions between the parties over several years and that the total value of those transactions exceeded Rs.60 Crores., this is not a case where the arbitration clause appeared for the first time in one invoice after the dispute had arisen. The Respondent relies upon the Purchase Order dated 22 March 2024. It points out that the Purchase Order does not contain an arbitration clause and states “SUBJECT TO DELHI JURISDICTION”. This is an important circumstance. The Respondent is justified in submitting that this term in the Purchase Order has to be considered while deciding whether there was a common understanding between the parties regarding arbitration.

The question which arises is whether the words “SUBJECT TO DELHI JURISDICTION” in the Purchase Order brought an end to the earlier arbitration arrangement relied upon by the Petitioner. In my view, merely because these words appear in the Purchase Order, it cannot be concluded that arbitration was excluded. These words refer to the jurisdiction of Courts. They do not state that the parties shall not refer their disputes to arbitration. The Court has to consider whether the Purchase Order was intended to replace the earlier contractual terms between the parties or whether it was only a purchase document issued during an continuing relationship.

The Respondent has relied upon the modified Terms and Conditions available on the Petitioner's website and submitted that those terms supersede the earlier terms. The dates of the documents are important in considering this submission. The modified terms relied upon by the Respondent were updated in July 2026, whereas the transactions in question took place in 2024 and 2025. A term introduced after the transactions cannot govern those earlier transactions unless there is material showing that the parties agreed to apply the modified terms to the earlier transactions. No such material has been pointed out to the Court., the July 2026 version of the website terms cannot decide whether an arbitration agreement existed when the disputed transactions took place.

The Respondent has relied upon the decisions in Taipack Ltd. and Alupro Building Systems Pvt. Ltd. v. Ozone Overseas Pvt. Ltd., reported in 2017 SCC OnLine Del 7228 and submitted that an arbitration clause printed on an invoice cannot be unilaterally imposed upon the other party. In Taipack, in paragraph 18, the Court held:

The facts of the present case are not the same as those in Taipack. In that case, the arbitration clause was sought to be introduced only through the invoice and the Purchase Order indicated that the party placing the order did not intend to refer the dispute to arbitration. In the present case, the Petitioner has placed material to show that, according to its case, arbitration was part of the online contract from 2019 and that the same arbitration provision was again mentioned in the subsequent invoices. Therefore, the invoice clause cannot be considered separately. It has to be considered together with the alleged online acceptance, the earlier Sales Terms and Conditions and the subsequent conduct of the parties.

The decision in Alupro is relevant. In paragraph 18, the Court framed the question in the following terms:

The above decision makes it clear that mere receipt of goods or an endorsement regarding the quantity received does not mean that the purchaser accepted an arbitration clause printed on the invoice. This principle is applicable in the present case. However, the Petitioner's case is not based only upon receipt of goods. It relies upon the original online registration, acceptance of the Sales Terms and Conditions, the long-standing business relationship and the repeated invoices containing the arbitration provision., the material relied upon by the Petitioner is wider than the material which was found insufficient in Alupro.

The Petitioner has relied upon paragraph 24 of Ingram Micro India (P) Ltd. v. Mohit Raghuram Hegde, where the Court observed:

The above observation shows that the Court has to look at the foundation of the relationship and not only at the last document issued for a particular transaction. In the present case, it is not disputed that the Respondent had a continuing business relationship with the Petitioner from 2019. The Petitioner has placed material showing that the relationship started through an electronic registration process and that the Sales Terms and Conditions formed part of that process. The Respondent has not placed material to show that the online registration was cancelled, that the original Sales Terms and Conditions were rejected, or that the parties entered into any clear agreement excluding arbitration from the transactions in question. At the same time, the Petitioner's reliance only upon the arbitration clause printed on the invoices cannot be accepted. To this extent, the Respondent's submission is correct. An invoice is issued by the party claiming payment and the terms printed on it cannot become binding merely because that party has printed them. However, in the present case, the invoices are not being treated as the only source of the arbitration agreement. Their relevance is that they contain an arbitration provision which was part of the underlying relationship. Therefore, the invoices may be considered as supporting material when read together with the earlier documents and the conduct of the parties.

On considering the material available, I am unable to accept the Respondent's submission that there is no arbitration agreement whatsoever between the parties. The Petitioner has placed sufficient prima facie material consisting of the online registration and acceptance relied upon by it, the Sales Terms and Conditions, the long course of business dealings and the repeated arbitration clause contained in the invoices. When these circumstances are considered together, they are sufficient at this stage to establish a prima facie arbitration agreement for the purpose of the present proceedings. Whether the Purchase Order dated 22 March 2024 or any subsequent document superseded the earlier arrangement is a matter which may require examination in the arbitral proceedings. For deciding the present Section 9 Petition the material placed before the Court is sufficient.

I now turn to the Petitioner's prayer for securing its monetary claim. The Petitioner states that the principal amount outstanding is Rs.6,14,61,111.47 and that, together with the interest claimed, the total amount is Rs.8,07,28,945/-. The Respondent admits that the total purchase price under the Purchase Order was Rs.12,68,82,422.26 and that it paid Rs.6,54,21,310.54. Thus, it is not disputed that substantial transactions took place between the parties and that substantial payments were made. It is clear that a substantial amount remains to be accounted for. The exact amount payable, the entitlement to interest and the contractual basis of the amount claimed are matters which have to be decided by the arbitral tribunal. At this stage, the Court has to consider whether the Petitioner has a substantial claim and whether protection is required for its realization.

The Petitioner has relied upon the Respondent's letter dated 20 January 2026. In that letter, the Respondent acknowledged the dues and stated that it was not running away from its liability. The Respondent referred to unforeseen circumstances and stated that it was trying to stabilize its cash flow and structure repayment. This correspondence is relevant. It may not amount to an unconditional admission of the exact amount claimed by the Petitioner, particularly the amount claimed towards interest. However, it does show that the Respondent was seeking time for payment and had referred to difficulties in its cash flow. The Petitioner has relied upon the statements of account sent in April 2026 and the absence of any detailed objection at that time to the figures mentioned in those statements. This circumstance,, cannot prove the entire claim, particularly when the Respondent disputes interest and other parts of the account. However, it is relevant to the limited question whether the Petitioner's claim is wholly uncertain or without supporting material. On the material before the Court, it cannot be said that the claim is without substance.

The Petitioner has relied upon the dishonoured cheque for Rs.6,14,61,111.47. The Respondent's case is that this was a blank security cheque issued several years earlier and that the Petitioner subsequently filled in the amount and date. This is a disputed question of fact and cannot be decided in the present Section 9 proceedings. However, the fact that a cheque for an amount corresponding to the principal amount claimed by the Petitioner was presented and dishonoured is a relevant circumstance. It shows that there is a serious dispute regarding payment between the parties. At the same time, the dishonour of the cheque does not establish the entire claim of the Petitioner or its entitlement to interest.

The next important question is whether the Petitioner has shown sufficient material to apprehend that the Respondent's assets may not remain available for satisfying a future arbitral award. The Petitioner relies upon the Affidavit of Disclosure filed by the Respondent and points out that the free and liquid movable assets disclosed by the Respondent are small when compared with the amount claimed. According to the Petitioner, the Respondent's operational bank account had a balance of only about Rs.1.22 Lakhs as on 31 August 2026. The fixed deposits of about Rs.3.05 Crores are stated to be pledged as security for performance bank guarantees. The remaining assets include furniture, fixtures, computers and appliances. The Petitioner has submitted that the Respondent does not own the office premises at Kalkaji and Noida and has only leasehold interests in those properties. The leases are stated to expire in 2027 and 2028 respectively. This submission has to be considered carefully. A leasehold interest is different from ownership of the property. However, it cannot be said in every case that a leasehold interest has no value or cannot be dealt with. Its value and legal position would depend upon the terms of the particular lease., the Petitioner's statement that these leasehold interests “cannot be attached, sold, or used as security” cannot be accepted as an absolute proposition without examining the relevant lease documents.

Even after keeping the above aspect aside, the overall position shown by the asset disclosure is relevant. The Respondent has not disclosed substantial unencumbered ownership of immovable property. The operational bank balance is very small. The fixed deposits of substantial value are stated to be pledged. The remaining movable assets are ordinary business assets which are subject to depreciation and are situated in leased premises., the Petitioner's submission that there is very little immediately available unencumbered security against a claim running into several crores cannot be said to be without basis.

The Respondent relies upon the Turnover Certificate dated 3 February 2026 and submits that it shows that the Respondent is financially sound. The certificate is relevant for considering the financial position of the Respondent. However, historical turnover, profit or net worth cannot answer the present question of how much unencumbered property or liquid funds are available for satisfying a possible arbitral award. A company may have substantial turnover or net worth in an earlier period and yet have limited free cash or uncharged assets at a later point of time., the Turnover Certificate does not remove the concern arising from the present asset disclosure.

The Petitioner has relied upon the absence of subsequent audited or certified financial information and upon material concerning non-filing of financial statements and other difficulties. These matters have to be considered carefully. Non-filing of financial statements or difficulties do not establish insolvency or an intention to defeat the claim of a creditor. The Court cannot reach such a conclusion only on the basis of suspicion. However, these circumstances have to be considered along with the Respondent's own statement regarding cash-flow difficulties, its request for time to structure repayment, the small bank balance and the substantial amount outstanding. When all these circumstances are considered together, they create a reasonable concern as to whether sufficient assets will remain available for realization of a future arbitral award.

I am unable to accept the Petitioner's submission in its widest form that merely because the assets disclosed by the Respondent are insufficient compared with the claim, the Respondent must be directed to deposit the entire claim amount. Section 9 is intended to provide interim protection. It is not intended to give the Petitioner the benefit of a final decree before the dispute is decided by the arbitral tribunal. The interim relief must have a proper connection with the need to protect the subject matter of the arbitration or the benefit which may ultimately arise from the arbitral award. A direction to deposit the entire claim amount or to furnish a bank guarantee for the entire amount would place a substantial financial burden on the Respondent before the disputed claim is decided. Such an order cannot be passed merely because the Petitioner has made a substantial monetary claim or because a substantial amount is alleged to be due. There must be sufficient material showing that such protection is necessary to prevent the possible frustration of the arbitral award.

In the present case, the Respondent has not explained why, despite the substantial outstanding amount, the principal liability was not discharged after the invoices became due. The correspondence relied upon by the Petitioner shows that the Respondent was seeking time and referring to cash-flow difficulties. At the same time, the Respondent cannot be said to have no assets at all. It has disclosed fixed deposits, leasehold interests and movable business assets. Therefore, it would not be proper to proceed on the basis that the Respondent has no means whatsoever to satisfy a future arbitral award.

The Court has to balance the interests of both sides. The Petitioner has established a prima facie arbitration agreement and a substantial monetary claim. It has placed material showing that the disclosed unencumbered assets are substantially lower than the amount claimed and that some of the major assets are encumbered. On the other hand, the Respondent has raised disputes regarding the applicable contractual terms, the rate of interest, the nature of the cheque and the effect of the Purchase Order. These issues involve disputed questions and should not be decided in the present Section 9 proceedings.

The finding at this stage is limited. The Petitioner has made out a prima facie case that it has a substantial claim and that there is a genuine concern regarding the availability of sufficient unencumbered assets for satisfying a arbitral award. The Respondent's submission that the entire case is based only on a unilateral arbitration clause printed on the invoices cannot be accepted, because the Petitioner relies upon additional material relating to the earlier contract. However, the Petitioner's submission that the entire claim amount should be secured merely because the disclosed assets appear insufficient cannot be accepted in such a broad manner.

On an overall consideration of the material, the present case cannot be treated either as a case of a unsupported monetary claim or as a case where the Respondent's financial position is shown to be sufficient to satisfy the Petitioner's claim. The Petitioner has shown a substantial unpaid amount, correspondence referring to cash-flow difficulties, a dishonoured cheque corresponding to the principal amount claimed and an asset disclosure showing comparatively limited unencumbered security. These circumstances justify some interim protection. At the same time, the protection granted must be proportionate and should not amount to giving the Petitioner the final relief before the dispute is adjudicated.

In view of the foregoing discussion and for the reasons recorded hereinabove, the following order is passed:

ii) Pending constitution of the arbitral tribunal and until the arbitral proceedings are concluded, the respondent shall not sell, transfer, alienate, dispose of or create any third-party rights or charge or encumbrance over its unencumbered movable and immovable assets, except in the ordinary course of business and subject to maintaining sufficient assets for securing the petitioner's claim;

iii) The respondent shall, within a period of four weeks from the date of this order, disclose on affidavit the complete particulars of all its assets, movable as well as immovable, together with the particulars of the existing loans, charges, liens, pledges, encumbrances and third-party rights, if any, in respect of such assets;

iv) The respondent shall disclose the present balance in all its bank accounts and the particulars of all fixed deposits, including the amount, date of creation, maturity date and details of any pledge, lien or charge thereon;

vi) Until such security is furnished, the respondent shall not create any charge, lien or encumbrance over its unencumbered assets or otherwise deal with such assets in a manner which may defeat or obstruct realization of any arbitral award that may ultimately be passed in favour of the petitioner;

vii) The relief sought by the petitioner for securing the additional amount claimed towards interest, quantified at rs.1,92,67,834.38, is kept open to be considered by the learned arbitral tribunal in accordance with law. no finding is recorded in this order on the petitioner's entitlement to such interest;

viii) The respondent shall preserve all books of account, financial statements, bank statements, invoices, purchase orders, correspondence and other records relating to the transactions forming the subject matter of the present proceedings and shall produce the same before the learned arbitral tribunal as and when directed;

ix) All observations and findings recorded in the present order are prima facie and confined to the adjudication of the present application under section 9 of the arbitration and conciliation act, 1996. The same shall not prejudice the rights and contentions of either party before the learned arbitral tribunal;

xi) The petition is accordingly disposed of in the aforesaid terms.

Xii) There shall be no order as to costs.