B. N Hotels (P) Ltd. v. Shri Ram Multicom. Pvt. Ltd.
2011-11-25
PRAKASH TATIA
body2011
DigiLaw.ai
ORDER By the Court.-Heard learned counsel for the parties. 2. The appellants have challenged the order dated 22.07.2011 by which the following interim order has been passed by the Sub-ordinate Judge-I. Dhanbad (as addressed at the relevant time). The interim order is as under : "That interim injunction is granted and affected till the Award. O.P. is directed not to perform such act which is contrary to the rights of the applicants in respect of Development Agreement dated 8.8.2007".. 3. According the learned counsel for, the appellants, the work contract was given to the respondent for which agreement was entered into between the parties on 8th August, 2007. However. according to the respondent. who was applicant before the Court below, a. dispute arose because of non-giving of the title deeds of the proper, ties of the Appellants to the respondent for obtaining the loan in terms of the agreement which provided that the respondent will be free to take loan and for that the appellant will give the title deeds to the respondent. Because of raising this dispute, the respondent gave a notice to the appellants on 08.05.2009 seeking appointment of Arbitrator. However, learned• counsel for the appellants submits that the appellants did not receive such notice. Then on 16.06.2009. the respondent submitted application under Section 9 of the Arbitration" and Conciliation Act, 1996 and prayed for the interim relief. No ad-interim relief was granted by the trial Court and according to respondent-applicant himself. he gave another notice on 25th October, 2010 seeking appointment of Arbitrator and then on 22.07.2011 the trial Court passed the interim order, after hearing the parties. According to learned counsel for the appellants, the interim order is non speaking order as no reason has been given so as to constitute any case for grant of interim relief as well as the relief which has been granted, could not have been granted. Learned counsel for the appellants submitted that in view of the interim order. the appellants have been restrained from taking any action . which is contrary to• rights of the appellants in respect of the development agreement dated 08.08.2007. Because of this interim order, learned counsel for the appellants submitted. that after 22.07.2011 the appellants could not even proceed to cancel the contract between the parties even for the. lawful reasons.
the appellants have been restrained from taking any action . which is contrary to• rights of the appellants in respect of the development agreement dated 08.08.2007. Because of this interim order, learned counsel for the appellants submitted. that after 22.07.2011 the appellants could not even proceed to cancel the contract between the parties even for the. lawful reasons. Learned counsel for the appellants also submitted that in the application under Section 9 of the Act of 1996. the respondent submitted that there is arbitration agreement and he has already served notice for appointment of Arbitrator and will be filing the petition before the High Court for appointment of a designated Judge as an Arbitrator under Section 11 of the Act of 1996 but no such petition has been filed for about two years i.e.. till the year 2011. therefore. in this fact situation also. the trial Court should not have passed the interim order. 4. Learned counsel for the respondent submitted that there was a minor Issue between the parties and admittedly the appellants did not comply with the term of the agreement which requires handing over of the title deeds by the appellants to the respondent which alone could have facilitated the completion of the work expeditiously and. therefore. there is a clear violation of the term of the agreement by the appellant and in that situation the trial Court was fully justified in passing the order and today also the position is the same that the appellants have not given the title deeds to the respondent, therefore. in that situation the actual relief which could have been granted to the appellants at the moment was to protect their right under the agreement and that have been protected by the order of the trial Court. 5. I have considered the submissions of the learned counsel for the parties and perused the facts of the case. It is true that before initiation of the arbitration proceeding under Section 11 of the Act of 1996. an application under Section 9' of the Act of• 1996. can be filed for obtaining the interim relief. So far as principles for grant of interim relief. are concerned.
It is true that before initiation of the arbitration proceeding under Section 11 of the Act of 1996. an application under Section 9' of the Act of• 1996. can be filed for obtaining the interim relief. So far as principles for grant of interim relief. are concerned. they are well established principles and have been recognized in other proceedings like grant of injunction by the civil Court and those principles are normally followed in almost all proceedings by keeping in mind the question of prima facie case. balance of convenience and irreparable injury as well as the conduct of the parties and the equity etc. are taken into account for granting relief. Not only this. the Court should be very careful while granting interim relief because grant of injunction is a serious matter. In this case. the interim order which has been passed and quoted above. clearly shows that the interim order is absolutely. vague and directing the appellant not to perform such act which is contrary . to the rights of the applicant in respect of development agreement dated 8th August. 2007. The Court should have passed specific order and should not have passed such vague order and left it to the parties to decide what are the acts and actions which are prohibited by this order. 6. Be that as it may be. from the impugned order it appears that the Court was influenced by one fact that in the. agreement there is provision for handing 'over the title deeds to the respondent by the appellants for obtaining loan and financial assistance and that has not been complied with by the appellants but at the same time. the fact situation and the reason for non-compliance has not been taken into account in the reasons given by the 4ial Court and not only this but in that fact situation. whether and what should have been the interim order. has also not been considered. It appears that the trial Court proceeded on assumption that when there is a condition in the agreement. the interim order is mandatorily required to be passed irrespective of the fact whether that will be appropriate to the facts of the case and whether it will be necessary to preserve the property or to protect the rights of the parties or not. 7.
the interim order is mandatorily required to be passed irrespective of the fact whether that will be appropriate to the facts of the case and whether it will be necessary to preserve the property or to protect the rights of the parties or not. 7. Looking to the totality of the facts that it was a case of work contract wherein work contract was given as back in the year 2007, specifically on 8th August. 2007. A dispute was raised for the first time by sending a notice on 8th May. 2009 and thereafter. application under Section 9 of the Act of 1996 was submitted on 16th June. 2009. In any case. if any interim order was not passed by the trial Court for two years. that itself may not be a ground to hold the respondent alone guilty and there may be reasons for not passing the order by the Court and that may be because of the workload in the Court. but fact remains that for agreement of 8th August. 2007 the interim relief was sought in the year 2009 and has been granted on 22nd July. 2011 i.e., after more than one year from the date of filing of the Application and in that situation, this, has not been taken note of that the applicant-respondent did not submit any application for appointment of Arbitrator and that was within the control and hands of the respondent himself and was not dependent upon the order which could have been passed by the trial Court in the application under Section 9 of the Act of 1996, 8. In this case. I do not find any reason for holding that there would have been any irreparable injury to the respondent and also I do not find balance of convenience in favour of the respondent even if it is held ,that there was prima facie case in favour of the respondent because of non-handing over the title deeds by the appellants but that prima facie case itself cannot be a ground for grant of injunction without proof of two components which are•• required for interim relief. 9. In view of the above reasons, the appeal is allowed. The order dated 22.07.2011 is set aside. The application under Section 9 of the Act of 1996 is dis- , missed. Appeal allowed.