Star Track Agency Pvt. Ltd. v. Efcalon Tie Up Pvt. Ltd.
2016-05-20
INDIRA BANERJEE, SAHIDULLAH MUNSHI
body2016
DigiLaw.ai
JUDGMENT : Indira Banerjee, J. Both these appeals under Section 37(1) of the Arbitration and Conciliation Act, 1996, hereinafter referred to as the 1996 Act, are against an order dated 8th June, 2015, passed by the 6th Additional District Judge, Alipore, District - South 24-Parganas, in an application for interim relief under Section 9 of the 1996 Act being Title Suit No. 3 of 2015 filed by Efcalon Tie Up Pvt. Ltd., the appellant in the appeal being FMAT 744 of 2015, and hereinafter referred to as Efcalon. The respondent impleaded in the said application, Star Track Agency Pvt. Ltd., hereinafter referred to as ‘Star Track’ has also filed an appeal being FMAT No. 650 of 2015 against the said order. 2. Kolkata Port Trust is the owner of the said premises. By an indenture of lease executed by and between Kolkata Port Trust and one Das Reprographics Limited, a company within the meaning of the Companies Act, 1956, which has since been wound up, Kolkata Port Trust had leased out the said premises to the said company for a period of 29 years, 1 month and 25 days with effect from December, 1963. 3. The said indenture of lease provided option of renewal of the lease for a further term of 30 years, subject to the conditions as contained in the said indenture of lease. It appears that the company had applied for renewal of the lease some time in August, 1991 about five months before the date of its expiry. The lease was not renewed, but the company continued in possession of the said premises, without interference. 4. By an order dated 21st December, 1994, of this Court in Company Petition No.151 of 1996, the company was directed to be wound up and the Official Liquidator was directed to take possession of the assets of the company in liquidation. 5. Pursuant to an order dated 27th August, 1997, passed in the winding up proceedings, advertisements were issued for sale of the assets of the company in liquidation. 6. By an order dated 16th January, 1998, this Court accepted the offer of Efcalon, of Rs.50 lakhs for purchase of the assets of the company in liquidation, having regard to an agreement made by Efcalon with the workmen of the company in liquidation, to re employ the workmen. 7.
6. By an order dated 16th January, 1998, this Court accepted the offer of Efcalon, of Rs.50 lakhs for purchase of the assets of the company in liquidation, having regard to an agreement made by Efcalon with the workmen of the company in liquidation, to re employ the workmen. 7. United Bank of India filed an appeal against the said Order dated 16th January, 1998, contending that the sale of the assets had been conducted with undue haste, without trying to ensure the best price for the assets of the company in liquidation. 8. By a judgment and order dated 9th April, 2003, a Division Bench of this Court, comprising Their Lordships, the Hon’ble Justice Altamas Kabir and Hon’ble Justice Aloke Kumar Basu (as Their Lordships then were) confirmed the sale of the assets in favour of Efcalon. 9. On consideration of the fact that Efcalon was going to run the factory and re-employ its workers, the Division Bench observed that it was desirable that Kolkata Port Trust, should grant a fresh lease of the said premises in favour of Efcalon, since the earlier lease had expired in the meanwhile. 10. Efcalon filed an application for modification of the order dated 9th April, 2003, and sought a direction on Kolkata Port Trust to renew the lease in favour of Efcalon or its nominee, on the same terms. 11. By an order dated 1st December, 2004, the Court modified its earlier order dated 9th April, 2003, observing that even though the initial lease had expired on 22nd January, 1992, the lease contained a clause giving the parties option of renewal. 12. Some of the relevant parts of the order dated 1st December, 2004 are extracted herein below: "....While considering the matter we cannot lose sight of the fact that the applicant herein purchased the assets of the company (in liquidation) with the intention of running the company as a going concern as to provide employment to the workmen of the said company. It is with such objective in mind that we had requested the Kolkata Port Trust to grant a fresh lease on mutually agreed terms of the applicant despite the fact that the said property had been kept out of the purview of the auction sale.
It is with such objective in mind that we had requested the Kolkata Port Trust to grant a fresh lease on mutually agreed terms of the applicant despite the fact that the said property had been kept out of the purview of the auction sale. The only question we are really concerned with now is whether a fresh lease should be granted on the basis of the rates as subsisting according to the Schedule to the Major Port Trust or whether a fresh lease should be allowed to be executed on the terms and conditions as were existing in the earlier lease. "......In our view, this substantially changes the situation as existing in 9.4.2003 then in our order we had recorded the fact that the lease had expired. We are, therefore, inclined in the larger interest of the industry as also the workmen to modify clause (h) of our order dated 9.4.2003 and to direct the Kolkata Port Trust to grant a fresh lease to the applicant on the basis of the option clause contained in the original lease dated 10.01.1994 subject to the applicant complying with the terms relating to payment of the arrears dues together with interest as suggested by the Kolkata Port Trust itself in its letters dated 7.9.92 and 13.4.95 within fifteen days from date. In other words, the Kolkata Port Trust shall inform the applicant herein of the rental arrears from the date of expiry of the earlier lease till the date of execution of fresh lease together with interest at the rate of 15% per annum within one week from date and upon such intimation the said dues are to be cleared by the applicant within seven days thereafter, and upon such dues being cleared the Kolkata Port Trust grant a fresh lease in the manner indicated herein above to the applicant within a fresh thereafter. Accordingly the application is disposed of without any order as to costs." 13. Kolkata Port Trust filed a Special Leave Petition, being SLP Civil No.571 of 2005 in the Supreme Court for Special Leave to appeal against the said order dated 1st December, 2004 of the Division Bench of this Court. 14.
Accordingly the application is disposed of without any order as to costs." 13. Kolkata Port Trust filed a Special Leave Petition, being SLP Civil No.571 of 2005 in the Supreme Court for Special Leave to appeal against the said order dated 1st December, 2004 of the Division Bench of this Court. 14. The Special Leave Petition was disposed of by an order dated 8th May, 2006, relevant parts whereof are extracted herein below:- ".....Social justice demands that the lease in respect of the factory premises be renewed by the Port Trust in favour of respondent No.1 so that the operation of the factory thereof can be commenced. However, the lease can be renewed only subject to the payment of all the arrears and dues together with interest. ".....In conclusion, we order a fresh lease indenture to be drawn from the date the company came into possession of the land (i.e. 04.08.2003) between the Port Trust and the Respondent No.1 (Efelon) with regard to the premises situated at P-10, Taratola Road, Kolkata at the rental rates contained in the present Schedule of the Kolkata Port Trust Act as soon as the dues of the liquidated company are discharged with by the respondents." ".....We are inclined to grant the lease in favour of the respondent No.1 who sought renewal of the lease with the sole object of reviving and rehabilitating its units and to re-employ its workmen thereof." 15. It appears that immediately after obtaining the order dated 1st December, 2004 from the Division Bench of this Court, on the pious assurance of running the undertakings of the company in liquidation as a going concern and rehabilitating its workers, Efcalon purported to execute an agreement dated 26th December, 2004, purporting to license the said premises out to Star Track Agency Private Ltd., (Star Track) the respondent in the appeal being FMAT 744 of 2015, and the appellant in FMAT 650 of 2015, for a term of 6 years commencing from 1st November, 2005 and expiring on 31st October, 2011, extendable by a further period of 3 years, by mutual agreement between Efcalon and Star Track, but at the sole discretion of Efcalon. 16.
16. The said agreement executed by and between Efcalon and Star Track also provided that if the lease of the said premises was formally renewed by Kolkata Port Trust in favour of Efcalon, Efcalon would negotiate the grant of sub-lease of the said premises to Star Track on the same terms and conditions, whereupon the licence would automatically come to an end. The attention of the Hon’ble Supreme Court does not appear to have been drawn to the said licence agreement between Efcalon and Star Track. 17. The said agreement provided that in case of any dispute or difference arising out of, or in connection with, or regarding the interpretation of the said agreement, which could not be settled by mutual discussion, the same would be referred to the arbitration of Mr. Prabir Kr. Roychoudhury, Bar at law, for adjudication in accordance with the provisions of the 1996 Act. 18. According to Star Track, in or about September, 2010 the Kolkata Port Trust authorities started threatening to evict Star Track, on the ground of non-payment of rent payable by Efcalon to Kolkata Port Trust. 19. Thereafter, by a letter dated 17th September, 2010, Star Track called upon Efcalon to furnish Star Track with details of the rent paid by Efcalon to Kolkata Port Trust and also the taxes payable to Kolkata Municipal Corporation. It is alleged that there was no reply to the said letter dated 17th September, 2010. 20. According to Star Track, Star Track, thereafter, made enquiries and came to know that arrears of rent exceeding Rs.2.45 Crores had not been paid by Efcalon to Kolkata Port Trust. Efcalon had not made any payment to Kolkata Port Trust, since it had taken possession of the said premises with effect from 4th August, 2003. 21. Star Track contends that Efcalon had made a false representation to Star Track, of having cleared all arrears of rent, and had induced Star Track to enter into the said agreement dated 26th December, 2004 with Efcalon and thereby incur huge expenses. The claim of Efcalon of having paid the entire arrears to Kolkata Port Trust as stated in the recital of the agreement executed on 26th December, 2004 was found to be false. 22. According to Star Track, it thereafter made enquiries, and came to know that arrears of rent exceeding Rs.2.45 crores had not been paid by Efcalon to Kolkata Port Trust.
22. According to Star Track, it thereafter made enquiries, and came to know that arrears of rent exceeding Rs.2.45 crores had not been paid by Efcalon to Kolkata Port Trust. Efcalon’s claim of payment of the entire arrear amount to Kolkata Port Trust, as stated in the recital to the agreement, was false. 23. Star Track contended that Efcalon had induced Star Track to enter into the purported licence agreement on the basis of a false representation that the entire arrear rent had been paid to Kolkata Port Trust. Furthermore, since Efcalon had committed a breach of its fundamental obligation under the contract to pay the rent and taxes payable, past or future, in respect of the said premises, disputes arose between Star Track and Efcalon. 24. By a letter dated 18th September, 2010, Star Track referred the disputes arising out of the said purported License Agreement, to the arbitration of Shri Prabir Kr. Roychowdhury, Bar-at-Law, the arbitrator named in Clause 28 of the Licence Agreement. 25. Later, Efcalon issued a notice dated 28th January, 2011, to Star Track under Section 106 of the Transfer of Property Act, 1882 and demanded vacant possession of the said premises. 26. Star Track filed a Statement of Claim before the learned Arbitrator inter alia seeking cancellation of the notice issued by Efcalon under Section 106 of the Transfer of Property Act and also claiming a money award of Rs.1,88,94,208/- along with interest, towards refund of licence fees paid by Star Track to Efcalon and an award of damages of Rs.50,000/-. 27. Efcalon filed a counter statement and a counter claim praying for a money award for the amount of outstanding occupation charges, inclusive of interest as well as an award for recovery of vacant possession of the said premises by eviction of Star Track. 28. Upon consideration of the pleadings and the documents on record, as well as the evidence adduced before the learned Arbitrator by the respective parties, the learned Arbitrator passed his award dated 22nd April, 2012 holding that the licence agreement dated 26th December, 2004 having been induced by misrepresentation of Efcalon that arrears of rent had been paid, the said agreement was void and liable to be delivered up and cancelled. 29.
29. There was also an award in favour of Star Track for refund by Efcalon to Star Track, of licence fees amounting to Rs.1,51,44,208/- paid by Star Track to Efcalon with interest at 15% per annum. 30. Efcalon filed an application being Misc. Case No.298 of 2012, under Section 34 of the 1996 Act, in the Court of the learned District Judge at Alipore, District South 24 Parganas, for setting aside of the award. 31. By a judgment and order dated 6th December, 2014, the learned 10th Additional District Judge at Alipore set aside the award. Star Track filed an appeal being FMA 919 of 2015, in this Court, against the said judgment and order dated 6th December, 2014 of the 10th Additional District Judge at Alipore, setting aside the award. The said appeal has been dismissed by a judgment and order passed by this Court, earlier today. 32. In the meanwhile Efcalon filed an application under Section 9 of the 1996 Act being Title Suit No.3 of 2015 in the Court below praying for the following orders:- "(a) An order of injunction be made restraining the respondent from receiving any rent from any person inducted by it in the said premises till the disposal of the suit; (b) An order appointing a Special Officer with a direction to prepare an inventory of all persons occupying the said premises, the agreements on the basis whereof they have been allowed to occupy and possess their respective portions of the same, the rent payable by them under such agreements, the mode of payment of such rent and since then they have made payment of the same to the respondent and outstanding rent, if any, due by them under such agreements as on the date of such inventory and also be further directed to take possession of the said premises to collect all rents payable by the occupants of the same and to ensure that no new occupant is inducted by the respondent into the same." 33. Prayer (a) was, however, not pressed by Efcalon. The learned Court below, accordingly recorded "Learned Advocate for petitioner stated at bar that he does not press prayer no. a. In that respect, the prayer is refused as not pressed." 34. It appears that Star Track, being the respondent could not file its Written Objection to the application for interim relief filed by Efcalon within time.
The learned Court below, accordingly recorded "Learned Advocate for petitioner stated at bar that he does not press prayer no. a. In that respect, the prayer is refused as not pressed." 34. It appears that Star Track, being the respondent could not file its Written Objection to the application for interim relief filed by Efcalon within time. The Court had however, directed that the Written Objection filed out of time be accepted, subject to the condition of payment of costs of Rs.3,000/-. 35. The order sheet reveals that the learned Court below proceeded on the basis that Star Track had not paid costs of Rs.3,000/- as earlier directed. In the circumstances, the Written Objection of Star Track was not taken on record. The order of the learned Court in this regard is extracted herein below:- "Notices were issued. Respondent appeared but could not file objection till 11.2.14. Predecessor of this Court accepted the same subject to payment of cost of Rs.3000/-. Respondent challenged order dated 11.2.14 before Honourable High Court and Honourable High Court was pleased to uphold the same. Record does not speak that cost has been paid and as such the affidavit in opposition/W.O. is not taken on record." 36. By the judgment and order under appeal, the application of Efcalon under Section 9 of the 1996 Act being Title Suit No. 3 of 2015 has been allowed in part, on contest, but without costs, by appointment of Mr. Pratik Gorai, Advocate as Special Officer, Receiver, to carry out an inventory of the occupants at the said premises, and to maintain accounts of occupational charges paid by the occupants of the said premises to Star Track. 37. Efcalon was directed to pay the learned Special Officer, Receiver Rs.10,000/- for preparation of the inventory and separately Rs.3,000/- per month for maintaining accounts of occupational charges paid by the occupants to Star Track. 38. On 23rd June, 2015, that is, about two weeks after the order under appeal was passed, a Deed of Lease was executed by Kolkata Port Trust in favour of Efcalon, whereby Kolkata Port Trust leased out the said premises to Efcalon for a period of 30 years with retrospective effect from 4th August, 2003, in terms of the Order dated 8th May, 2006 passed by the Hon’ble Supreme Court, upon payment of outstanding arrears of rent. 39.
39. The Deed of Lease dated 23rd June 2015, has been registered in the Office of the Additional Registrar of Assurances - I, Kolkata, the Registration No. being 190105126 for the year 2015 and the registration recorded in Book No. I, Vol. No. 1901-2015, Pages 22109- 22142. 40. In Efcalon’s application being CAN 7982 filed in the appeal being FMAT 744 of 2015, there is a specific averment on oath, supported by documentary evidence, that pursuant to the Deed of Lease dated 23rd June, 2015 Efcalon paid Rs.2,47,678/- towards lease rental and taxes for the period from May, 2015 to June, 2015 and Rs.1,54,509/- towards subletting fees from May, 2015 to June, 2015 on 21st July, 2015. 41. Mr. S.K. Kapur appearing on behalf of Star Track submitted that the finding of the learned Court below that costs as ordered by the Court had not been paid, was completely incorrect. The costs had duly been paid to Efcalon. Our attention was drawn to the receipt for such payment of costs which is annexed to the application being CAN 6114 of 2015 filed by Star Track in its appeal being FMAT 650 of 2015. 42. Mr. Kapur argued that the written objection of Star Track should, therefore, have been taken on record and considered by the learned Court below, before disposing of the application under Section 9 of the 1996 Act. 43. Mr. Kapur argued that the factual error of the Court below and consequential rejection of the written objection of Star Track was in itself ground enough to set aside the order under appeal. 44. Mr. Kapur submitted that the records of the Court below palpably show that there was complete violation of principles of natural justice in the adjudication of the application, which was, for all purposes, ex parte since the learned Court below did not consider the written objection of Star Track. 45. Mr. Kapur submitted that in effect and substance the learned Court below only heard Efcalon, but did not hear Star Track. The order under appeal is, therefore, vitiated. 46. Mr. Kapur next argued that Efcalon had not pressed prayer ‘a’ of the application for interim relief, which was the prayer for an order restraining Star Track from collecting rent from any of the sub-tenants inducted by Star Track. 47. Mr.
The order under appeal is, therefore, vitiated. 46. Mr. Kapur next argued that Efcalon had not pressed prayer ‘a’ of the application for interim relief, which was the prayer for an order restraining Star Track from collecting rent from any of the sub-tenants inducted by Star Track. 47. Mr. Kapur argued that prayer ‘a’ for an order restraining Star Track from realising rent from persons inducted by Star Track at the said premises having been abandoned, prayer ‘b’ for appointment of a special officer to make an inventory of all persons occupying the said premises, and to collect rent from the occupants could also not have been pressed. Mr. Kapur submitted that the said prayer should also have been rejected. 48. Mr. Kapur argued that it was immaterial that the award made and published by the learned arbitrator had been set aside in proceedings under Section 34 of the 1996 Act. There could be no dispute that Efcalon had voluntarily delivered possession of the said premises to Star Track. Star Track having lawfully been inducted to the said premises by Efcalon, Star Track could not be evicted from the said premises except by recourse to the due process of law. Mere setting aside of the award does not confer any right to Efcalon to claim eviction of Star Track, or recovery of possession from Star Track. 49. Mr. Kapur argued that the story of the subsequent lease, procured by Efcalon from Kolkata Port Trust, was completely off the record, and in any way, not relevant. Even assuming that any such lease existed, the lease document would have to be brought on record and be proved, before Efcalon could enforce any right to the said premises. 50. Mr. Kapur emphatically argued that, since Efcalon, at present, had no right to possession of or entry into the said premises, there could be no appointment of any receiver over the said premises, at the instance of Efcalon. 51. Mr. Kapur argued that an order under Section 9 of the 1996 Act was by way of an interim measure granted by Court. It was axiomatic that an interim order could only be made in aid of the final relief that might be claimed in any proceedings. 52. Mr. Kapur argued that, on Efcalon’s own showing, there was no proceeding pending presently. The award may have been set aside.
It was axiomatic that an interim order could only be made in aid of the final relief that might be claimed in any proceedings. 52. Mr. Kapur argued that, on Efcalon’s own showing, there was no proceeding pending presently. The award may have been set aside. There is still no order of Court which entitles Efcalon to possession of the said premises. Therefore, since there is no arbitral lis pending, or likely to follow any further, in which any final relief or order could at all be passed, there could be no question of appointment of Receiver, as an interim measure under Section 9. 53. Mr. Kapur submitted that arguments advanced to the effect that the said premises belonged to Kolkata Port Trust, could not be taken into consideration in these proceedings since the Kolkata Port Trust is not a party to the arbitration agreement or to this proceeding. It is not for Efcalon to take up the cause of Kolkata Port Trust. 54. Mr. Kapur cited the judgment of the Supreme Court in Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd. reported in (2007) 7 SCC 125 where the Supreme Court quoted with approval the principles for grant of relief enunciated by Lord Diplock in Siskina Distos Compania Naviera reported in [1977] 3 All ER 803 (House of Lords), in the following words: "A right to obtain an interlocutory injunction is not a cause of action. It cannot stand on its own. It is dependent upon there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened by him, of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the court. The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action.
The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action. It is granted to preserve the status quo pending the ascertainment by the court of the rights of the parties and the grant to the plaintiff of the relief to which his cause of action entitles him, which may or may not include a final injunction." He concluded : "To come within the sub-rule the injunction sought in the action must be part of the substantive relief to which the plaintiff’s cause of action entitles him; and the thing that it is sought to restrain ........................must amount to an invasion of some legal or equitable right belonging to the plaintiff and enforceable here by a final judgment for an injunction." 55. Mr. Kapur also cited In Metro Marins and Anr. v. Bonus Watch Co. (P) Ltd. and Ors. reported in [2004] 7 SCC 478, where the Supreme Court quoted with approval paragraph 16 of its earlier judgment in Dorab Cawasji Warden v. Coomi Sorab Warden reported in 1990 (2) SCC 117 , set out herein below:- "The Relief of interlocutory mandatory injunctions are granted generally to preserve or restore the status-quo of the last non-contested status which preceded the pending controversy until the final hearing then full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm,..." 56. Citing the judgment of a Division Bench of this Court in Poonam Kejriwal v. Bhagwandas Auto Finance Limited & Ors. reported in 2009 (3) CHN 195 , Mr. Kapur argued that until and unless a final order and/or decree is passed for eviction, a landlord cannot encroach upon the rights of the tenant to enjoy the premises under his occupation in any manner that the tenant might choose. Furthermore, in proceedings for eviction, there can be no mandatory order on the occupant, even though the occupant might be a trespasser, to pay occupation charges.
Furthermore, in proceedings for eviction, there can be no mandatory order on the occupant, even though the occupant might be a trespasser, to pay occupation charges. 57. Mr. Kapur argued that Efcalon had put Star Track into exclusive possession of the said premises. Star Track was thus all along in lawful possession and its possession had not been affected by the order of the District Judge, setting aside the award. Mr. Kapur argued that it was a recognised principle that settled possession or effective possession of a person, even without title, entitled him to protect his possession and all his rights of enjoyment until any claim of any paramount owner was established in Court by due process of law. 58. Mr. Kapur argued that there was no order or decree of any Court for restoration of possession of the said premises to Efcalon. Star Track was entitled to possessory rights, which could not be interfered with at the instance of Efcalon or otherwise, until such time as a final order or decree was passed by a Court of law for eviction of Star Track. 59. Mr. S. N. Mookherjee appearing on behalf of Efcalon submitted that Star Track had admittedly been inducted into the said premises by Efcalon, upon execution of a licence agreement. 60. Mr. Mookherjee referred to Section 116 of the Indian Evidence Act, 1872 which is set out hereinbelwo:- "116. Estoppel of tenant; and of licensee of person in possession. - No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property; and no person who came upon any immovable property by the licence of the person in possession thereof, shall be permitted to deny that such person had a title to such possession at the time when such licence was given." 61. Mr. Mookherjee submitted that Star Track is not entitled to question the title of Efcalon in respect of the said premises since Star Track had been inducted into the said premises by Efcalon, and was in possession of the said premises under Efcalon. 62.
Mr. Mookherjee submitted that Star Track is not entitled to question the title of Efcalon in respect of the said premises since Star Track had been inducted into the said premises by Efcalon, and was in possession of the said premises under Efcalon. 62. In any case, no objection could now be taken to the title of Efcalon since a deed of lease has been executed by and between Kolkata Port Trust and Efcalon on 23rd June, 2015 whereby Kolkata Port Trust has leased out the said premises to Efcalon for a period of thirty years, with retrospective effect from 4th August, 2003. The lease has duly been registered. Mr. Mookherjee argued that having been inducted into the said premises by Efcalon, Star Track had no independent right to the said premises. 63. Mr. Mookherjee pointed out that Star Track had stopped payment of licence fees and/or occupation charges in September/October, 2010, invoked the arbitration agreement and inter alia claimed a declaration that the licence agreement was void, contending that Efcalon had induced Star Track to enter into the said agreement by mis-representation that arrears of rent had been paid to Kolkata Port Trust, when in actual fact no such payment had been made. 64. Mr. Mookherjee submitted that there was in fact no misrepresentation. Efcalon had tendered payment of arrear rent to Kolkata Port Trust by pay order before the date of execution of the licence agreement. Efcalon could not have known and did not know that the pay order had not been encashed by Kolkata Port Trust. 65. In any event, the award made and published by Mr. Prabir Kr. Roychoudhury, Bar at Law, had been set aside by the learned 10th Additional District Judge by an order dated 6th December, 2014. The appeal filed by Star Track against the aforesaid judgment and order was yet to be decided. There was thus, no award in favour of Star Track. 66. Mr. Mookherjee submitted that the licence agreement between which was for a period of six years from 1st November, 2005 expired by efflux of time on 31st October, 2011. Star Track was, therefore, obliged to deliver possession of the said premises to Efcalon. Star Track had no right whatsoever to realise occupation charges in respect of the said premises after termination of the licence agreement. 67.
Star Track was, therefore, obliged to deliver possession of the said premises to Efcalon. Star Track had no right whatsoever to realise occupation charges in respect of the said premises after termination of the licence agreement. 67. In any case, under no circumstances, would Star Track realise rent and/or occupation charges after 31st October, 2011 when the lease was due to expire by efflux of time. Mr. Mookherjee submitted that a Division Bench of this Court passed an order dated 11th October, 2012 in an appeal being FMAT 1305 of 2012 arising out of an earlier application under Section 9 of the 1996 Act, whereby the Division Bench appointed Mr. Pratik Gorai, as Special Officer to find out who were the persons in occupation of the said premises and what were the charges being paid by them to Star Track. 68. Mr. Mookherjee submitted that this order dated 11th October, 2012 was not interfered with by any higher forum. Yet the order was not complied with by Star Track. Star Track tried to render orders of Court infructuous. Mr. Mookherjee submitted that the learned Court below erred in allowing the application of Efcalon under Section 9 of the 1996 Act in part only. While the Court below rightly appointed a Special Officer Receiver to make an inventory of the occupants and keep accounts of the occupation charges paid by such occupants to Star Track, the learned Court below erred in not allowing the prayer of Efcalon for orders on the learned Receiver to collect the occupation charges in respect of the said premises. 69. Mr. Mookherjee submitted that even if Efcalon were to be treated as trespasser in respect of the said premises, which Efcalon is not, its possession was prior to that of Star Track and Star Track having obtained possession from Efcalon, could not have a superior right to Efcalon. In support of his submission Mr. Mookherjee cited Nair Service Society Ltd v. Rev. Father K. C. Alexander & Ors. reported in AIR 1968 SC 1165 . 70. Mr. Mookherjee submitted that it is not open to Star Track to contend that the employees of the Company in liquidation had not been engaged by Efcalon. Even assuming that Efcalon had acted in breach of any agreement with Kolkata Port Trust, that would not render the licence agreement between Efcalon and Star Track void.
70. Mr. Mookherjee submitted that it is not open to Star Track to contend that the employees of the Company in liquidation had not been engaged by Efcalon. Even assuming that Efcalon had acted in breach of any agreement with Kolkata Port Trust, that would not render the licence agreement between Efcalon and Star Track void. In support of his submission, Mr. Mookherjee cited Nutan Kumar and Ors. v IInd Additional District Judge & Ors. reported in (2002) 8 SCC 31 . 71. Mr. Mookherjee argued that in any case Star Track could not question the breach of any obligation of Efcalon towards Kolkata Port Trust in proceedings under the 1996 Act, which only pertain to issues between the parties to the Arbitration agreement. In support of his contention, Mr. Mookherjee cited Deutsche Post Bank Home Finance Ltd. v. Taduri Sridhar reported in (2011) 11 SCC 375 . Mr. Mookherjee argued that the judgments cited by Mr. Kapur were distinguishable on facts and not applicable. 72. It is perhaps true as argued by Mr. Kapur that the learned Court below made an error in not accepting the Written Objection of Star Track on the ground that costs of Rs.3,000/- imposed earlier, had not been paid. It, however, appears that Mr. Kapur’s client did not also draw the attention of the learned Court to the receipts which would establish the fact that it had duly paid costs to Efcalon. 73. The question before us is, whether non-consideration of the Written Objection has rendered the order under appeal erroneous. To frame the question differently, would the order under appeal necessarily have been different if the Written Objection of Star Track had been considered? The answer to the aforesaid question is in the negative, for the reasons discussed hereinafter. 74. Certain facts are undisputed. There can be no doubt that, it was Efcalon who had inducted Star Track into the said premises, whether wrongfully or rightly. As observed above, Star Track, stopped paying licence fee, sometime in September/October 2010, inter alia contending that Efcalon had induced Star Track to enter into the licence agreement by misrepresentation. 75. The entire allegation against Efcalon of mis-representation was based on an assertion in recital "H" of the licence agreement, to the effect that Efcalon had paid the entire arrears of rent to Kolkata Port Trust, which was, according to Star Track, false. 76.
75. The entire allegation against Efcalon of mis-representation was based on an assertion in recital "H" of the licence agreement, to the effect that Efcalon had paid the entire arrears of rent to Kolkata Port Trust, which was, according to Star Track, false. 76. It was the case of Star Track that Kolkata Port Trust, the owner of the said premises, threatened to dispossess Star Track. When the possession of Star Track was being disturbed, Star Track made enquires under the Right to Information Act, and came to know that arrear lease rent had not been paid by Efcalon. Star Track was, however, never dispossessed from the said premises. 77. On the contention that Efcalon had induced Star Track to execute the licence agreement by mis-representation, Star Track invoked the arbitration agreement and claimed delivery up and cancellation of the licence agreement, refund of licence fees, damages and other consequential reliefs. 78. The learned Arbitrator, as observed above, passed an Award for delivery up and cancellation of the licence agreement, and also a money award directing Efcalon to refund to Star Track, the licence fee that had actually been paid by Star Track to Efcalon less Rs.37 lakhs odd spent by Star Track on addition, alternation, repair and renovation of the suit premises for its own enjoyment, with interest thereon. The said award has been set aside in proceedings under Section 34 of the 1996 Act. An appeal from the judgment and order of the Court below setting aside the award has earlier been dismissed by this Court. 79. Star Track had, in effect, claimed that Star Track had exercised its right to repudiate the licence agreement which was voidable at the option of Star Track and even stopped paying licence fee and/or occupation charges to Efcalon. 80. It is doubtful whether a contract could have been avoided on the ground of mis-representation if the veracity of the factual representation could have been ascertained with due diligence. Moreover, as observed above, it was the case of Star Track that Star Track had allegedly been threatened with eviction. Star Track was not actually evicted. Star Track was never dispossessed from the said premises. 81.
Moreover, as observed above, it was the case of Star Track that Star Track had allegedly been threatened with eviction. Star Track was not actually evicted. Star Track was never dispossessed from the said premises. 81. In any case, it is a fundamental principle of law, as enunciated in Section 64 and 65 of the Indian Contract Act, that a party rescinding a voidable contract is obliged to restore the benefits derived from the contract. Even if a contract is ab initio void, all benefits received thereunder would have to be restored. There can be no dispute that even if it is assumed that Star Track’s agreement with Efcalon was voidable at the option of Star Track, Star Track was still obliged to restore all benefits which Star Track derived from the licence agreement. 82. Having been inducted by Efcalon, Star Track cannot and does not have any independent right to occupy the said premises, far less, any right to let out the said premises and earn occupation charges from the said premises. If it is assumed that the licence agreement was void, as contended by Star Track in the arbitration proceeding, Star Track would not be entitled to retain the benefits it derived from the licence agreement. In other words, Star Track would have to refund occupation charges earned by Star Track by further sub-letting the said premises to occupants. 83. In any case, the award having been set aside and an appeal filed in this Court from the judgment and order setting aside the award, having been dismissed, Star Track cannot claim the benefit of the award. 84. Prima facie, it appears that Star Track was not entitled to remain at the said premises, or utilise the said premises, or earn occupation charges and/or rent by further sub-letting the said premises, after termination of the licence agreement on the ground of default in payment of licence fees from September, 2010 onwards. 85. Even assuming that the licence agreement had wrongfully been terminated, the licence was for a period of six years commencing from 1st November, 2005 and expiring on 31st October, 2011, extendable by a further period of three years by mutual agreement between Efcalon and Star Track. Star Track has been in possession of the said premises for over ten years. The licence agreement expired on 31st October, 2011. The licence agreement was not extended.
Star Track has been in possession of the said premises for over ten years. The licence agreement expired on 31st October, 2011. The licence agreement was not extended. Even if the licence agreement were renewed, the licence agreement would still have expired on 31st October, 2014. 86. The Licence Agreement having expired, Star Track is obliged to restore possession of the said premises to Efcalon. We cannot but take judicial notice of the subsequent development of 23rd June, 2015, when Kolkata Port Trust executed a Deed of Lease in favour of Efcalon, whereby Kolkata Port Trust leased out the said premises to Efcalon for a period of 30 years from 4th August, 2003. 87. Assuming, as argued by Mr. Kapur, that the deed of lease would have to be brought on record and proved, that would be at the stage of final adjudication. At this interlocutory stage, the Court might proceed on the prima facie basis that there is a valid lease in favour of Efcalon, more so since the deed of lease has been registered. 88. Mr. Kapur’s client has not been able to demonstrate that the Court below has proceeded on the basis of any erroneous factual premises, by not accepting its written objection. Our attention has not been drawn to any specific factual assertion in the written objection, which if noticed would necessarily have persuaded the Court below to pass a different order. 89. In view of execution and registration of the Deed of Lease dated 23rd June, 2015 between Kolkata Port Trust and Efcalon, whereby the said premises has been leased out to Efcalon for a period of 30 years with retrospective effect from 4th August, 2013, this Court has no option but to proceed on the basis that Efcalon was at all material times in lawful possession of the said premises. 90. In any case, Star Track having been inducted by Efcalon, in terms of a licence agreement, Efcalon is estopped under Section 116 of the Indian Evidence Act, 1872 from questioning the right of Efcalon to possession of the said premises. 91. As observed above, Efcalon obtained orders of this Court as also the Hon’ble Supreme Court directing Kolkata Port Trust to lease out the said premises to Efcalon, on the assurance that Efcalon would run the undertakings of the company in liquidation as a going concern and would rehabilitate its workmen. 92.
91. As observed above, Efcalon obtained orders of this Court as also the Hon’ble Supreme Court directing Kolkata Port Trust to lease out the said premises to Efcalon, on the assurance that Efcalon would run the undertakings of the company in liquidation as a going concern and would rehabilitate its workmen. 92. This Court as also the Supreme Court appear to have been given the impression that the said premises would be utilised for the main business activities of the undertakings of the company in liquidation and accordingly proceeded to pass orders directing Kolkata Port Trust to grant lease in favour of Efcalon. The Courts apparently had no inkling that the said premises would be used for the purpose of letting out. 93. In fact, from the Order dated 8th May, 2006 passed by the Supreme Court, it is patently clear that the notice of the Supreme Court was not drawn to the licence agreement between Efcalon and Star Track. 94. Be that as it may, this appeal being a continuation of the proceedings under Section 9 of the 1996 Act, it is not for this Court to go into the deviousness of Efcalon in obtaining orders of Court. 95. As argued by Mr. Mookherjee, in proceedings under Section 9 of the 1996 Act, this Court cannot embark upon adjudication of issues which do not pertain to the arbitration agreement between the parties. Reference may be made to the dictum of the Supreme Court in Deutsche Post Bank Home Finance Ltd. v. Taduri Sridhar (supra). 96. As observed above, there is now a lease of the said premises in favour of Efcalon. The licence agreement has prima facie, been terminated. Even assuming there was no termination, the licence agreement between Efcalon and Star Track has expired by efflux of time, Efcalon is not only obliged to vacate the said premises but is also liable to pay arrears of licence fees and/or mesne profits for the period during which Star Track remained/ remains in occupation. 97. In our view, the learned Court below rightly appointed a Special Officer/Receiver to make an inventory of the occupants and to keep accounts of occupation charges collected by Star Track from the occupants inducted by Star Track. 98.
97. In our view, the learned Court below rightly appointed a Special Officer/Receiver to make an inventory of the occupants and to keep accounts of occupation charges collected by Star Track from the occupants inducted by Star Track. 98. In this context, it would perhaps not be out of context to note that a Division Bench of this Court had passed an Order dated 11th October, 2012 in FMAT 1305 of 2012 appointing Mr. Pratik Gorai, Advocate as Special Officer to ascertain who were the occupants in possession of the said premises and what was the amount of rent collected from such occupants. The said order does not appear to have been questioned before any higher forum. In any case, the said order dated 11th October, 2012 has not been interfered with, set aside, varied or modified. 99. May be, as argued by Mr. Kapur, it is well settled that until a decree of eviction is passed, any tenant or other occupant, whether he be a licensee or trespasser, is entitled to enjoy the property howsoever he may choose to do, and there can be no impediment or hiatus put in the way of his enjoyment until the right of possession by decree of a court vests in any other claimant. 100. In Rame Gowda (D) By Lrs v. M. Varadappa Naidu (D) By Lrs. & Anr. reported in (2004) 1 SCC 769 , the Supreme Court quoted with approval the law as stated by a Full Bench of the Allahabad High Court in Yar Muhammad And Anr. v. Lakshmi Das And Ors. reported in AIR 1959 All 1 in the following words : "Law respects possession even if there is no title to support it. It will not permit any person to take the law in his own hand and dispossess the person in actual possession without having recourse to court. No person can be allowed to become a Judge of his own cause." 101. The proposition of law reiterated in Rame Gowda (D) By Lrs v. M. Varadappa Naidu (D) By Lrs. & Anr. (supra), that even if a trespasser were in settled possession of property belonging to a rightful owner, the rightful owner would have to take recourse to law, is well-established. Even the owner cannot take the law into his own hands and evict or interfere with the possession of a trespasser. 102.
& Anr. (supra), that even if a trespasser were in settled possession of property belonging to a rightful owner, the rightful owner would have to take recourse to law, is well-established. Even the owner cannot take the law into his own hands and evict or interfere with the possession of a trespasser. 102. However the judgment in Rame Gowda (D) By Lrs v. M. Varadappa Naidu (D) By Lrs. & Anr. (supra) has no application in the facts of this case. By the order under appeal, the Court below has only appointed a Special Officer/Receiver to make a list of the occupants at the said premises and to keep accounts of the occupation charges paid by those occupants to Star Track. Star Track’s possession has not been interfered with. 103. The judgment of Poonam Kejriwal v. Bhagwandas Auto Finance Limited & Ors. (supra) cited by Mr. Kapur is clearly distinguishable on facts. In the aforesaid case, the question which fell for determination was, whether in a suit for eviction of a trespasser, the Court could, at the instance of the plaintiff, compel the defendant to pay or deposit a reasonable amount by way of occupation charges, by making an interim order of mandatory injunction. The question was answered in the negative inter alia since mesne profits had not been determined. In this case, the learned Receiver is only to make a list of the occupants and keep accounts of the occupation charges paid by such occupants. We see no reason why the prayer for orders on the learned Special Officer /Receiver to collect the rents should not also have been allowed 104. As held by the Supreme Court in Nair Service Society Ltd v. Rev. Father K. C. Alexander & Ors. (supra) cited by Mr. Mookherjee, it cannot be denied that possession may prima facie raise a presumption of title, but this presumption would arise when the facts are unknown. When the facts disclose no title in either party, possession alone decides. In the case before the Supreme Court, neither party had title. However, in this case, it cannot be said that Efcalon had no title, at least not after execution of the Deed of Lease dated 23rd June, 2015. 105. Mr. Kapur’s submission that no interim order could have been passed as there was no arbitral lis pending between the parties, is also difficult to sustain.
However, in this case, it cannot be said that Efcalon had no title, at least not after execution of the Deed of Lease dated 23rd June, 2015. 105. Mr. Kapur’s submission that no interim order could have been passed as there was no arbitral lis pending between the parties, is also difficult to sustain. On a perusal of Section 9 of the 1996 Act, it is patently clear that interim relief might be obtained before commencement of arbitral proceedings, during the arbitral proceedings and even after termination of the arbitral proceedings, before the award is enforced under Section 36 of the 1996 Act. 106. In Firm Ashok Traders and anr. Etc v. Gurumukh Das Saluja and Ors. reported in AIR 2004 SC 1433 , the Supreme Court observed : "....The party invoking Section 9 may not have actually commenced the arbitral proceedings but must be able to satisfy the court that the arbitral proceedings are actually contemplated or manifestly intended and are positively going to commence within a reasonable time. What is reasonable will depend on the facts and circumstances of each case and the nature of the interim relief sought." 107. It is rather interesting that Star Track should contend that Star Track has lawfully been inducted into the said premises by Efcalon and thus entitled to protect its possession, after getting the licence agreement adjudged void in arbitration by contending that the same had been induced by misrepresentation. 108. The argument of Mr. Kapur that prayer ‘b’ of the application under Section 9 of the 1996 Act filed in the Court below was not sustainable since prayer ‘a’ had not been pressed by Efcalon is difficult to uphold. Prayer ‘a’ was for an order restraining the respondent from realising any occupation charges from the occupants inducted by it at the said premises. An order in terms of prayer ‘a’ would in effect and substance mean that the occupiers would remain in possession without paying any occupation charges. The decision of Efcalon not to press ‘a’ does not in our view affect the right of Efcalon to claim an order in terms of prayer ‘h’. 109. The principles for grant of interim relief as enunciated in the judgments cited by Mr. Kapur are well-established.
The decision of Efcalon not to press ‘a’ does not in our view affect the right of Efcalon to claim an order in terms of prayer ‘h’. 109. The principles for grant of interim relief as enunciated in the judgments cited by Mr. Kapur are well-established. It is also well-established that principles for grant of interim order applied by Courts would also apply to proceedings under Section 9 of the 1996 Act for interim relief. 110. In Debabrata Mukherjee v. Kalyan Kumar Roy reported in 85 CWN 594 a Division Bench of this Court held that it was settled principle governing the grant of interlocutory injunction that the Court ought to see that there is a bona fide contention between the parties and then to see on which side, in the event of success, would lie the balance of convenience. In the aforesaid case the Division Bench found that the plaintiff appellant had admitted that he had neither paid nor deposited rent in respect of the tenancy claimed by him. The Division Bench held that before it was decided whether the plaintiff appellant was a tenant he ought to deposit some equivalent to rent/damages for the entire period for which rent/damages remained due. At the rate asserted by the plaintiff appellant the Court found that a sum of Rs.15,000/- would be due. The Court directed the plaintiff appellant to deposit the said amount in the Court below as a condition for granting an order of temporary injunction in his favour. 111. As argued by Mr. Kapur an interim order and/or interim relief is granted in aid of the final relief. In an application for interim relief the Court cannot pass an order which it could not have passed while disposing the suit finally. The principles for grant of interim relief are also well-settled. The applicant for interim relief is required to make out a good prima facie case or at least an arguable prima facie case to justify the grant of interim relief. 112. Before passing an interim order the Court is required to examine the balance of convenience, whether the balance of convenience is in favour of or against the passing of orders, as prayed for by the applicant for interim relief. 113.
112. Before passing an interim order the Court is required to examine the balance of convenience, whether the balance of convenience is in favour of or against the passing of orders, as prayed for by the applicant for interim relief. 113. In other words, the Court would have to examine which party would suffer greater prejudice - the applicant by refusal to grant of interim relief, if he ultimately succeeds or the opposite party by grant of interim relief if the applicant ultimately fails. A receiver may be appointed when the Court deems it just and convenient to do so. 114. Star Track’s possession, as observed above, has not been interfered with by the order under appeal. Star Track continues in possession until such time as appropriate orders are passed in appropriate proceedings. However, the licence agreement having been terminated and/or in any event the licence agreement having expired Star Track has no right to remain in the said premises and/or earn profits by utilising the said premises. Star Track is obliged to pay licence fee/occupation charges/mesne profits. 115. No prejudice can be suffered by Star Track by appointment of Special Officer/Receiver to make a list of the occupants in the said premises and keep accounts of the occupation charges paid by said occupants. In our view, it is just and proper that the Special Officer/Receiver should also realise the occupation charges and hold the same until the disposal of the arbitration proceedings or further orders in arbitration whichever is earlier. The occupation charges realised by the Receiver may be kept in deposit in short-term automatically renewable interest bearing Fixed Deposits in a nationalised bank. Particulars of the deposits would have to be furnished to the respective parties and also to the Registrar General of this Court. The Fixed Deposits should not be encashed without leave of this Court. 116. In our view, a special Officer has rightly been appointed to make an inventory of the occupants of the said premises and maintain accounts of the occupation charges paid by the occupants of the said premises. 117.
The Fixed Deposits should not be encashed without leave of this Court. 116. In our view, a special Officer has rightly been appointed to make an inventory of the occupants of the said premises and maintain accounts of the occupation charges paid by the occupants of the said premises. 117. Since Star Track apparently has no right whatsoever to the said premises, we deem it appropriate to direct the special Officer to collect the occupation charges and invest the same in a nationalised bank in automatically renewable interest bearing fixed deposits, particulars whereof shall be furnished to the respective parties, as also the learned Registrar General of this Court. The Fixed Deposits shall not be encashed without leave of Court. 118. The appeals are thus disposed of. Later Mr. Aniruddha Mitra, learned Counsel for the appellant prays for stay of operation of this judgment. Such prayer for stay is considered and refused. Appeals disposed of.