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2023 DIGILAW 682 (RAJ)

Madanlal Jain S/o Late Shri Jeevraj Jain v. Vinay Fabric Pvt. Ltd.

2023-03-17

MANINDRA MOHAN SHRIVASTAVA, REKHA BORANA

body2023
ORDER : 1. The counsel for the respondent has not appeared apparently because he is abstaining from work pursuant to the call given by the office bearers of the Bar Association. Such non-appearance is clearly illegal and in breach of the order passed by Hon’ble Supreme Court in the case of Ex. Capt. Harish Uppal vs. Union of India and Another, 2003 (2) SCC 45 . 2. Heard. 3. This appeal is directed against the order dated 26.04.2022 passed by the Commercial Court No. 1 Jodhpur by which the interim order dated 13.04.2022 pending decision of application under Section 9 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) filed by the appellants, has been discontinued. 4. The appellants moved an application under Section 9 of the Act before the Commercial Court seeking interim measures on the pleadings inter-alia that an award for specific performance of agreement between the parties has been passed by the sole Arbitrator on 31.07.2021. In the application, it was also stated that because of the pendency of PIL and in view of the conditions imposed in the award, the award could not be executed but in the meantime, the respondent is proceeding to dispose off/transfer the right, title or interest in respect of the property involved in the dispute between the parties. 5. The Commercial Court initially vide order dated 13.04.2022 passed the interim order restraining the respondent from selling or transferring any right, title or interest in respect of the property in dispute. 6. Later on, vide impugned order dated 26.04.2022, the interim order has not been continued though the application under Section 9 of the Act has remained pending for consideration. It is against this order that this appeal has been filed. 7. Learned counsel appearing for the appellants would argue that once there was an award passed in favour of the appellants, in terms of the agreement for sale of a floor, the appellants are entitled to appropriate interim relief so that the award is not frustrated. He would further submit that the order passed in the pending PIL in the High Court registered as D.B. Civil Writ Petition No. 19102/2018 does not allow the respondent to raise constructions beyond the 8th floor. He would further submit that the order passed in the pending PIL in the High Court registered as D.B. Civil Writ Petition No. 19102/2018 does not allow the respondent to raise constructions beyond the 8th floor. Taking undue advantage of the order which was passed by the High Court on 23.02.2022, the respondent may proceed to dispose off by sale or otherwise constructed floors without there being any opportunity to the appellants to enforce the award. 8. On the other hand, the respondent in person would argue that the agreement for sale between the parties and the award are not in respect of other properties/floors than the one in respect of which the agreement was entered into and which the appellants may be entitled under the law by way of sale in execution of award for specific performance of contract. If an order is passed restraining the respondent, it will have adverse effect on the rights of other intending buyers, with whom the respondent has entered into agreement for sale upto 8th floor. 9. We have heard the parties and perused the records. 10. Undisputedly, the parties had entered into agreement for sale on 19th July, 2016. Amongst other conditions, the agreement stipulated under the Note that with consent of both parties floor number can be changed, but sale area will be same as per the agreement, remaining amount will be given at the time of execution of sale-deed. 11. On a PIL filed challenging the legality and validity of constructions raised by the respondent, initially a Division Bench of this Court passed an interim order dated 7th January, 2019 restraining the respondents from creating third party interest in any portion of the subject property. Thereafter, vide order dated 23.02.2022, the interim order dated 07.01.2019 was modified. 12. A dispute having arisen between the parties, arbitration proceedings were drawn, which eventually culminated in passing of award in favour of the appellants on 31.7.2021. As on that date the interim order dated 07.01.2019 passed in D.B. Civil Writ Petition No. 19102/2018 was operating, the Arbitrator while passing the award directed the respondent to specifically perform the agreement dated 19.07.2016 by executing the sale deed in favour of the appellants for floor area measuring 33480 sq. ft. in the project “Umed Heights” Wing ‘A’ and ‘B’ situated at plot no. ft. in the project “Umed Heights” Wing ‘A’ and ‘B’ situated at plot no. 7 and 7A, Light Industrial Area, CAZRI Road, Jodhpur, after passing the judgment of the Rajasthan High Court in the said writ petition or by the Apex Court in favour of the respondent company. The award stated that in case the judgment comes against the respondent, the respondent shall execute the sale deed in favour of the appellants/claimants for the floor area measuring 33480 sq. ft. in any other floor after receiving the remaining amount in accordance with the agreement dated 19.07.2016. 13. The appellants having apprehension that after modification of order dated 07.01.2019 vide order dated 23.02.2022, the respondent may proceed to sell or create third party interest in respect of the properties which form part of the subject matter of the award, moved an application under section 9 of the Act before the Commercial Court. Apparently, there exists an award in favour of the appellants. Even though respondent submits that award has been challenged under section 34 of the Act before the Commercial Court, there is no interim order in favour of the respondent. If the respondent is allowed to dispose off the property which is the subject matter of award, the appellants may find it difficult to seek implementation of award in future. Keeping that in view, the Commercial Court had passed interim order in favour of the appellants on 13.4.2022. 14. In our opinion, the said order ought to have been continued as the application under Section 9 filed before the Commercial Court is still pending consideration. The reasons assigned by the Commercial Court to vacate the interim order are not correct. Pendency of proceedings in the writ petition are essentially in public domain. Merely because the Court had modified the interim order dated 07.01.2019 vide order dated 23.2.2022, that would not mean that the rights of the appellants as flowing from the award are in any manner diluted or diminished. 15. Therefore, we are of the view that the learned Commercial Court was not justified in vacating the interim order passed in favour of the appellants till decision of the application under Section 9 of the Act. 16. In view of the above consideration, the order passed by the Commercial Court dated 26.04.2022 cannot be sustained in law and the same is therefore set aside. 16. In view of the above consideration, the order passed by the Commercial Court dated 26.04.2022 cannot be sustained in law and the same is therefore set aside. The interim protection granted earlier on 13.04.2022 shall continue till the decision of the application under Section 9 of the Act. 17. Taking into consideration the nature of the dispute between the parties, we also direct the Commercial Court to decide the application under Section 9 of the Act as early as possible preferably within a period of three months from the date of receipt of the copy of this order. 18. The appeal is allowed accordingly.