JUDGMENT : C.M. POONACHA, J. 1. The present petition is filed under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 [Hereinafter referred to as ‘Act of 1996’] calling in question the order dated 22.11.2022 passed in AA No.42/2022 by the CCH 70 LXIX Additional City Civil and Sessions Judge, Bengaluru , [Hereinafter referred to as ‘Trial Court’] 2. The relevant factual matrix in a nutshell, leading to the present appeal is that the appellant is an institution, which has been allotted a property, by the Government of Karnataka vide registered Lease Deed dated 08.07.2004, wherein it had constructed a building. The appellants being desirous of starting an educational institution and having obtained affiliation from the requisite statutory authorities, entered into a Memorandum of Fee Sharing Agreement , [Hereinafter referred to as ‘MOU’] dated 06.03.2017 with the respondents, whereunder the respondent had paid a sum of `1.00 crore and was required to make further periodic payments. The respondent was permitted to use the property of the appellants for the purpose of running an educational institution. 3. Various disputes arose between the parties culminating in the appellants instituting AA No.103/2020 before the Trial Court under Section 9 of the Act of 1996. Thereafter, the appellants also instituted CMP No.180/2021 before this Court under Section 11 (5) of the Act of 1996 for appointment of an Arbitrator. This Court vide order dated 21.06.2021 allowed the said CMP and appointed an Arbitrator. Thereafter, the appellants filed IA.No.1/2024 in CMP No.180/2021 for appointment of a Substitute Arbitrator. This Court noticing that in the communication dated 22.08.2023 made by the Arbitration and Conciliation Centre, Bengaluru , [Hereinafter referred to as ‘Centre’] , the file was treated as closed because the appellants did not file statement of claim and that the Arbitrator appointed was omitted from the panel of Arbitrators, vide order dated 22.07.2024 refused to appoint a Substitute Arbitrator and disposed of the said application. Thereafter, the respondent instituted AA No.42/2022 before the Trial Court under Section 9 of the Act of 1996. The Trial Court by its order dated 22.11.2022, has disposed of the application and passed the following order: “ORDER The respondents are hereby directed not to interfere in the suit schedules premises unless the order in AA No.103/2020 is passed concerning the relief of injunction sought in this case on merits. Case disposed accordingly. The Trial Court by its order dated 22.11.2022, has disposed of the application and passed the following order: “ORDER The respondents are hereby directed not to interfere in the suit schedules premises unless the order in AA No.103/2020 is passed concerning the relief of injunction sought in this case on merits. Case disposed accordingly. Further the respondents are directed to act in accordance with the Arbitration Tribunal orders if any instituted as per the agreement between the parties in an arbitration proceedings.” 4. Being aggrieved, the present appeal is filed. 5. The respondent in the present appeal was served through paper publication and IA.No.1/2023 for condonation of delay was allowed vide order dated 15.04.2025. Thereafter, this Court vide order dated 16.04.2025 allowed IA No.2/2023 and granted stay of the order dated 22.11.2022 passed in AA No.42/2022. The respondent has filed IA No.2/2025 seeking for vacating of the said order of stay. 6. At this stage, the arguments of both the learned counsel were heard on the merits of the appeal. 7. Learned Senior counsel, Sri Udaya Holla, appearing along learned counsel Sri Sunil S.Rao, for the appellants would contend that pursuant to the order dated 22.11.2022 which is impugned in the present appeal, the respondent not having instituted any arbitration proceedings or given any notice of arbitration, the said order does not in any manner subsist after 3 months of its passing. That as per Section 9 (2) of the Act of 1996 and Rule 9(4) of the High Court of Karnataka Arbitration (Proceedings before the Courts) Rules, 2001 , [Hereinafter referred to as ‘Rules of 2001’] the respondent was required to initiate arbitral proceedings within 3 months, which admittedly not having been done, the impugned order is required to be set aside. It is further contended that the MOU entered into between the parties is null and void since as required under Section 107 (1) and (4) of the Karnataka Education Act, 1983 [Hereinafter referred to as ‘Education Act’] , the same was required to be intimated to the requisite statutory authorities. Hence, he seeks for allowing of the above appeal and granting of the reliefs sought for. 8. Hence, he seeks for allowing of the above appeal and granting of the reliefs sought for. 8. Per contra, learned Senior counsel Sri Sadashiva Reddy appearing along with learned counsel Sri Murali D for the respondent would contend that in the present appeal, the appellants have deliberately given the address of the old Trustee of the respondent and hence the respondent was not served with the notice of the present appeal. That consequent to the interim order dated 16.04.2025 granted by this Court, when the appellants interfered with the functioning of the educational institution of the respondent, the respondent became aware of the present proceedings and the interim order granted by this Court and hence, the application for vacating of the interim order was filed. It is further contend that admittedly, pursuant to the execution of the MOU, the respondent has been running the educational institution in the property belonging to the appellants and the appellants have not averred the date from which the possession of the institution has been resumed by the appellants and hence by misusing the interim order of this Court, the smooth functioning of the educational institution by the respondent is being disturbed by the appellants. That although the appellants had filed CMP No.180/2021, the appellants had not filed a claim petition in the said proceedings, the arbitration proceedings were closed. That the arbitration proceedings having been initiated prior to the filing of CMP No.180/2021, the question of initiating arbitration proceedings once again would not arise. Hence, he seeks for dismissal of the above appeal. 9. After the submissions of both the learned counsels had concluded, upon a query by this Court as to whether both the parties would be agreeable for the appointment of an Arbitrator, the appellants and respondent have filed memos dated 20.6.2025 in that regard. 10. The submissions of both the learned counsels have been considered and the material on record has been perused. The question that arises for consideration is, whether the order dated 22.11.2022 passed by the Trial Court is liable to be set aside? 11. Having regard to the primary contention put forth on behalf of the appellants that the respondent has not complied with Section 9 (2) of the Act of 1996 and Rule 9(4) of the Rules of 2001, it is pertinent to notice the said relevant provisions. 12. 11. Having regard to the primary contention put forth on behalf of the appellants that the respondent has not complied with Section 9 (2) of the Act of 1996 and Rule 9(4) of the Rules of 2001, it is pertinent to notice the said relevant provisions. 12. Section 9 (2) of the Act of 1996 states as follows: “9. Interim measures, etc. by Court.— (2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine.” (Emphasis supplied) 12.1 Rule 9(4) of the Rules states as follows: “Rule 9: Application for interim measure, etc.: (4) In the case of an Application for interim measure made before initiating arbitral proceedings, if the arbitral proceedings are not initiated within three months from the date of the presentation of the Application under section 9, any interim order granted shall stand vacated without any specific order being passed by the Court to that effect.” (Emphasis supplied) 13. It is clear from a plain reading of Section 9 (2) that the arbitral proceedings is to be commenced within a period of 90 days from the date of an order passed under Section 9 or within such time as the Court may determine. It is forthcoming from a reading of Rule 9(4) that if the arbitral proceedings are not initiated within 3 months from the date of presentation of the application under Section 9 , any interim order granted shall stand vacated without any specific order being passed by the Court to that effect. 14. In the case of Sundaram Finance Ltd. v. NEPC India Ltd. (1999) 2 SCC 479 relied upon by the appellants, the Hon’ble Supreme Court, considering Section 9 of the Act of 1996 held as follows: “19.……………..Once it is so satisfied, the court will have the jurisdiction to pass orders under Section 9 giving such interim protection as the facts and circumstances warrant. While passing such an order and in order to ensure that effective steps are taken to commence the arbitral proceedings, the court while exercising jurisdiction under Section 9 can pass a conditional order to put the applicant to such terms as it may deem fit with a view to see that effective steps are taken by the applicant for commencing the arbitral proceedings. What is apparent, however, is that the court is not debarred from dealing with an application under Section 9 merely because no notice has been issued under Section 21 of the 1996 Act.” (Emphasis supplied) 15. A Division Bench of this Court in the case M/s Paton Constructions Pvt. Ltd. v. M/s. Lorven Projects Ltd. & Anr. ILR 2017 KAR 3016 , while considering Rule 9(4) of the Rules of 2001 and Section 9 (2) of the Act of 1996 held as follows: “3. In this case, the application under Section 9 of the Act was presented on 13.11.2013. It is stated by Learned Counsel for the appellant that the arbitral proceedings in respect of the dispute were not initiated within three months from 13.11.2013, the date of presentation of the application. Hence, in our opinion, the Order dated 21.12.2013 granting the interim measure, which is impugned in this appeal, stood automatically vacated on the expiry of three months from the date of presentation of the application. Therefore, no further order to set it aside is necessary. 4 .……….. As per the above sub-Section, where a Court passes an order for any interim measure under Section 9 (1) of the Act before commencement of the arbitral proceedings, the arbitral proceedings shall be commenced within the period stated in the sub-Section. Commencement of the arbitral proceedings within the period stated in Section 9 (2) of the Act is made mandatory by Parliament. The intention of Parliament in making commencement of the arbitral proceedings within the period stated in sub-Section (2) mandatory is to see that an order for any interim measure passed under Section 9 (1) shall not continue to be in force indefinitely in the absence of the arbitral proceedings. Therefore, commencement of the arbitral proceedings within the period stated in sub-Section (2) is a requirement for the legal effectiveness of the order passed for any interim measure under Section 9 (1) of the Act. Therefore, commencement of the arbitral proceedings within the period stated in sub-Section (2) is a requirement for the legal effectiveness of the order passed for any interim measure under Section 9 (1) of the Act. Hence, if the arbitral proceedings in respect of the dispute are not commenced within the period stated in Section 9 (2) of the Act, the order granting any interim measure under Section 9 (1) of the Act shall automatically stand vacated on the expiry of the said period. Though this is not expressly stated in the sub- Section, it is clearly implied in the purpose of the mandate of the sub-Section. Any other interpretation of sub-section (2) will defeat the intention of Parliament in making commencement of the arbitral proceedings within the period stated in the sub-Section mandatory. 5. As stated above, the order which is impugned herein, stood automatically vacated on the expiry of three months from 13.11.2013, the date of presentation of the application under Section 9 of the Act in view of Rule 9(4) of the Rules. Hence, no further order to set it aside is necessary. Appeal disposed of.” (Emphasis supplied) 16. The judgment of the Division Bench of this Court in the case of M/s Paton Constructions Pvt. Ltd. (supra) has also been followed by another Division Bench of this Court in the case of M. Rajesh v. M/s Metro Cash and Carry , [dated 14.7.2021 passed in MFA No. 7207/2017] 17. It is clear from the dicta as laid down by the Hon’ble Supreme Court and the Division Bench of this Court as noticed above that the applicant in the proceedings under Section 9 of the Act of 1996 is required to initiate arbitration proceedings within the time as stipulated under Section 9 (2) of the Act of 1996 and Rule 9(4) of the Rules of 2001 and if such arbitration proceedings are not initiated, the order passed in the proceedings under Section 9 of the Act of 1996 would automatically stand vacated on the expiry of 3 months. 18. In the present case, admittedly, CMP No.180/2021 has been instituted by the appellants. However, despite the arbitral tribunal having been constituted, no arbitration proceedings have taken place. 18. In the present case, admittedly, CMP No.180/2021 has been instituted by the appellants. However, despite the arbitral tribunal having been constituted, no arbitration proceedings have taken place. It is forthcoming from the records that pursuant to the respondent having filed AA No.42/2022, neither has notice been issued by the respondent nor has effective steps been taken in order to commence the arbitral proceedings. 19. At this juncture, it is relevant to note that the MOU between the parties is admitted. Various disputes have arisen between the parties pertaining to the terms of the MOU. The appellants having instituted AA No.103/2020 and CMP No.180/2021 and the respondent having instituted AA No.42/2022, it is clear that both the parties would admit the arbitration clause stipulated in the MOA. Further, vide the memos dated 20.6.2025 filed by the appellants and the respondent, both the parties have no objection for the commencement of the arbitral proceedings. 20. It is pertinent to note here that in the memo dated 20.6.2025 the appellants have placed on record that they should be allowed to continue the management of the educational institution as it has been doing so. Learned counsel for the respondent opposes the same on the ground that consent is given by the respondent only for the commencement of arbitral proceedings. 21. It is pertinent to place on record the unfortunate situation wherein various civil and criminal proceedings have been initiated between the parties with respect to the functioning of an educational institution. In this context, it is deemed necessary for this Court to also pass orders with regard to the commencement of the arbitration proceedings since despite institution of CMP No.180/2021 and orders being passed in that regard, the arbitral proceedings have not commenced. 22. In view of the aforementioned, following the dicta as laid down by the Division Bench of this Court in the case of M/s Paton Constructions Pvt. Ltd. (supra) it is held that the interim order dated 22.11.2022 passed in AA No.42/2022 automatically stood vacated on the expiry of 3 months from 22.11.2022. Accordingly, the question is answered partly in the affirmative. 23. Having regard to the fact that both the parties have consented for commencement of arbitration proceedings, both the parties shall appear before the Director, Arbitration and Conciliation Centre, Bangalore on 26.06.2025 at 3.00 pm. 24. Accordingly, the question is answered partly in the affirmative. 23. Having regard to the fact that both the parties have consented for commencement of arbitration proceedings, both the parties shall appear before the Director, Arbitration and Conciliation Centre, Bangalore on 26.06.2025 at 3.00 pm. 24. Pursuant to the appearance of the parties, the Director of the Centre, shall initiate proceedings for appointment of an Arbitrator as contemplated under the Arbitration and Conciliation Centre Rules, 2012. 25. It is open to both the parties to arrive at a consensus as to an Arbitrator to be appointed and intimate the same to the Director of the Centre on the date of their appearance. 26. Both the parties shall be at liberty to file appropriate interim applications in the arbitral proceedings. This order shall not debar the parties from making an application seeking appropriate interim orders, if the need arises. 27. Having regard to the fact that the above appeal has been disposed of holding that the order dated 22.11.2022 passed in AA No.42/2022 has automatically stood vacated having regard to the mandate as contemplated under Section 9 (2) of the Act of 1996 and Rule 9(4) of the Rules of 2001, the contentions of the parties on merits have not been considered and no finding with regard to the same has been recorded. 28. Accordingly, the above appeal is disposed of. All contentions of the parties on the merits of the matter are kept open.