Delhi HC Clears Employer Of Generating Classified Documents

The Delhi High Court, on September 24, rejected a direction of Arbitral Tribunal to produce documents classified under the Official Secrets Act 1923.

Bench comprising Justice Manoj Jain heard and decided a plea filed under Article 227 of the Constitution of India.

Brief facts

A contract was executed between M/S Navayuga-Van Oord JV (claimant/respondent herein) and the Director General, Project VARSHA (employer/petitioner herein) on 19.12.2017. It was for construction of „outer harbour for project VARSHA‟.

Several disputes and differences arose between the parties in relation to the above said contract which resulted in issuance of "notice of termination‟ by the employer on 06.07.2022.

Arbitration was invoked by the Petitioner. During the pendency of such arbitration proceedings, an application was filed by the claimant seeking inspection and discovery/production of documents. It was contended therein that such documents were germane to the issues raised before the learned Arbitral Tribunal and were under possession, control and custody of the employer.

The objection raised by the petitioner was concerning National Security and the applicability of Official Secrets Act, 1923 to the documents sought for. It was also averred that these documents, prior in time, were irrelevant as even otherwise the timeline, stipulated in the contract, had been willingly accepted by the claimant.

In context of applicability of Official Secrets Act, 1923, the apprehension was dispelled by directing the employer to submit such documents in a "sealed cover‟ to the learned Tribunal and if at any subsequent stage, the claimant was to make any request for disclosure, thereof, it would take appropriate call on such a request, after hearing the parties.

The Court agreed with the petitioner and dispensed with the production of the documents.

The Court observed that, “Needless to say, there are certain aspects which are better left to the wisdom of Union of India. If any information is stated to be protected and classified as ”Top Secret‟ by Government of India and directly relates to defence of India, the due importance to such crucial fact ought to be given. Therefore, learned Arbitral Tribunal, in my humble opinion, should not have insisted for production of any such document in a sealed cover either, as at any subsequent stage also, it is, virtually, beyond its purview to open such sealed cover and to ponder over whether these were rightly labelled as „classified‟ or not. Even if these were to be opened and evaluated, it could not have been "declassified‟ in the proceedings of this kind. To venture into any such exercise and to scrutinize and evaluate any such thing does not seem permissible."

The Court relieved the employer to produce the said documents.

Advocates for petitioner: Mr. K.K. Venugopal, Sr. Advocate with Ms. Aishwarya Bhati, ASG, Mr. Kapil Arora, Ms. Palak Nagar, Mr. Pravar Veer Mishra and Mr. Walid Nazir Latoo, Mr. Aryaman Vaccher  and Mr. Siddharth Kohli, Advocates.  

For respondent: Mr. Rajiv Nayar and Mr. B  B Gupta, Sr. Advocates with Mr. Saurav Agarwal, Ms. Astha Mehta, Mr. Saurabh Seth, Mr. Shantanu Agarawal, Ms. Chandreyee Maitra, Ms. Allaka M., Mr. Manas Arora and Mr. Manan Mehra, Advocates.