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2010 DIGILAW 556 (CAL)

Bengal Freemasons Trust v. Sumita Dutta

2010-05-19

MD.ABDUL GHANI, SUBHRO KAMAL MUKHERJEE

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JUDGMENT:- Subhro Kamal Mukherjee, J: This is an appeal against order no. 24 dated November 16, 2009 passed by the learned Chief Judge, City Civil Court at Calcutta in Miscellaneous Case No. 9840 of 2008. The learned Chief Judge by the order impugned allowed an application filed under Section 9 of the Arbitration and Conciliation Act, 1996 (the said Act in short) dated December 17, 2008 filed by the Ms. Sumita Dutta, the proprietees of S. Enterprise (hereinafter referred to as the operating agency), the respondent no. 1 in this appeal. The learned judge restrained the Bengal Freemasons Trust Association (hereinafter referred to as BFTA) and its office bearers, the opposite parties in the said application, from disturbing the peaceful possession of the operating agency and enjoyment and acting as the operating agent and/or user of the premises till the disposal of the arbitration proceeding. The relevant facts for disposal of this appeal are as under: On July 1, 2005 a memorandum of understanding was entered between BFTA and the operating agency. BFTA appointed the operating agency for carrying out the entire operations of collecting donations and supervising and managing the private functions of the various donors. The arrangement was to continue for a period of 3 years and 9 months commencing on July 1, 2005 and ending on March 31, 2005. There was an arbitration clause in the said memorandum in the event of any dispute and difference between the parties. BFTA by a letter dated December 28, 2007 informed the operating agency that there would be no extension of the arrangement entered into by and between the parties after March 31, 2009. The operating agency, however, requested for further extension of the said arrangement for a period of 8 years. The operating agency by its letter dated October 27, 2008 requested BFTA to extend the arrangement for a further period by executing a new memorandum of understanding. In the said letter the operating agency clearly stated that it had no intention nor would ever claim any legal right over the place it was using save and except as the operating agency. BFTA again informed the operating agency that BFTA was sticking to their stand as indicated in the letter dated December 28, 2007. In the said letter the operating agency clearly stated that it had no intention nor would ever claim any legal right over the place it was using save and except as the operating agency. BFTA again informed the operating agency that BFTA was sticking to their stand as indicated in the letter dated December 28, 2007. On December 17, 2008 the operating agency filed an application under Section 9 of the said Act against BFTA and all its office bearers, inter alia, seeking an order of injunction restraining them from disturbing and/or interfering with the peaceful possession, enjoyment and acting as the operating agent and/or user of the premises by the operating agency and/or causing any damage to the same and/or appointing any person or agent in respect of the property without due process of law. The learned Judge, Seventh Bench, City Civil Court at Calcutta, on the said application under Section 9 of the said Act, directed BFTA and its office bearers to maintain status quo in respect of the suit premises till January 17, 2009. On January 17, 2009 the interim order was extended till February 16, 2009. On February 16, 2009 the interim order was further extended till April 17, 2009. The life span of the agreement was to expire on March 31, 2009. Therefore, BFTA preferred an appeal before this Court challenging the extension granted by the learned trial judge beyond March 31, 2009. The appeal, as aforesaid, was tendered under FMAT No. 628 of 2009. A division bench of this Court, however, by judgment and order dated May 12, 2009 allowed the appeal and the order granting extension of the interim order was set aside. However, the division bench treated the said miscellaneous case, filed under Section 9 of the said Act, on the day’s list and, also, dismissed the said miscellaneous case. The operating agency challenged the decision of the division bench dated May 12, 2009 before the Supreme Court of India. The Supreme Court of India by order dated August 21, 2009 set aside the portion of the order of the division bench disposing of the application under Section 9 of the said Act and directed that the said application be finally heard and disposed of by the learned trial judge within two months from the date of communication of the said order. As we have noted herein above, the learned Chief Judge, City Civil Court, Calcutta, allowed the application under Section 9 of the said Act and passed an order of injunction, as aforesaid, in favour of the operating agency. Being aggrieved this appeal is filed by BFTA and its office bearers. The operating agency, inter alia, alleged in the application under Section 9 of the said Act, that although the said memorandum of understanding did not contain any express provision for extension/renewal, it was, however, orally agreed upon by the parties that the said agreement would be extended till such time the petitioner would be able to recover the invested amount. It was alleged that the operating agency invested about Rs.60,00,000/- (Rupees sixty lakh) only and numerous staff and labourers, who have been engaged and connected with the said business, would be rendered unemployed. Therefore, grievance of the operating agency was that it had invested a huge sum and if the possession of the property be taken from it with the expiry of the term of the agreement, it would suffer irreparable loss and injury. Mr. Sardar Amzad Ali, learned senior advocate, appearing for the operating agency, strenuously argues that the dispute has to be decided by the arbitral tribunal and till such dispute is decided by arbitral tribunal, which has, since, been constituted, the operating agency is entitled to get interim protection. The dispute as to whether the agreement has been extended orally or not can only be decided by the arbitral tribunal and it is not open to the court, while considering the application under Section 9 of the said Act, to decide such dispute. Mr. Ali submits that his client has made out a strong prima facie case. He submits that the learned judge was right in passing the order of injunction in favour of the operating agency. It is settled law that grant or refusal of temporary injunction is covered by well-established principles, that is, whether the petitioner has made out a prima facie case, whether the balance of convenience is in favour of the petitioner and whether the petitioner would suffer irreparable injury. While the first condition is sine qua non, the petitioner is, also, to establish two other conditions conjunctively. Mere proof of any one of the said three conditions does not entitle a petitioner to get an order of temporary injunction. While the first condition is sine qua non, the petitioner is, also, to establish two other conditions conjunctively. Mere proof of any one of the said three conditions does not entitle a petitioner to get an order of temporary injunction. When none of the three conditions is fulfilled, the application for temporary injunction is liable to be rejected. There is a written agreement between the parties. The agreement expires on March 31, 2009. The operating agency contends that there was an oral agreement. There is no material on record to establish, even prima facie, that there was any intention by BFTA to extend the agency agreement. On the contrary, repeatedly BFTA in its letters informed the operating agency that BFTA was not interested to extend the tenure. The case of oral agreement is pleaded for the first time before the learned trial judge. In the correspondences between BFTA and the operating agency, the operating agency never asserted that there had been any oral agreement for extension of the tenure by BFTA. The operating agency in its letters to BFTA requesting for extension, in effect, accepted the tenure of the operating agency. We feel that the remedy, if any, of the operating agency for the breach alleged in the application filed under Section 9 of the said Act is merely damages. Therefore, the loss, if any, that may be sustained by the operating agency could be calculated in terms of money and in view of that, in the light of the Section 14(3) (c) of the Specific Releif Act, 1963, an injunction, as prayed for by the operating agency could not be granted. Therefore, the order impugned is set aside. The application filed by the operating agency under Section 9 of the said Act is rejected. By way of abundant caution we make it clear that we have not gone into the merits of the claim and the counter claim of the parties involved before the arbitral tribunal and the arbitral tribunal shall be free to decide the issues on merits and in accordance with law. In view of the disposal of the appeal, the pending applications become infractuous and they are, also, disposed of. We direct the parties to bear their respective costs in this appeal. Urgent xerox certified copy of this order, if applied for, is to be supplied on urgent basis. I agree.