IN THE HIGH COURT OF KARNATAKA
Ritu Raj Awasthi, S.R. Krishna Kumar, JJ.
Godolphine India Private Limited - Appellant
Versus
UM Projects LLP - Respondent
Commercial Appeal No. 140 of 2022
Decided On : 01-04-2022
Arbitration - Lease Dispute - Arbitration and Conciliation Act, 1996 - Section 9
Fact of the Case:
The appellant filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 seeking an interim order restraining the respondent from interfering with the appellant's possession of the leased premises. The respondent filed a counter application seeking direction for the appellant to deposit outstanding rent and maintenance charges. The trial court partly allowed the respondent's application and dismissed the appellant's application.
Finding of the Court:
The trial court directed the appellant to pay the sums towards occupation of the leased premises, including maintenance charges and applicable GST, from December 2021 till the conclusion of arbitration proceedings or till the passing of any interim order by the Arbitral Tribunal. The trial court also dismissed the appellant's application under Section 9 of the Arbitration and Conciliation Act, 1996.
Issues: The main issues were the liability of the appellant to pay the outstanding rent and maintenance charges, and the maintainability of the appellant's application under Section 9 of the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The trial court held that the liability of the appellant to pay the outstanding rent and maintenance charges was not restricted by the permission granted to deposit only 40% of the rent in a previous order. The court also found that the appellant's application under Section 9 was not maintainable due to the pendency of a similar application filed by the respondent.
Final Decision: The appeal was dismissed, confirming the trial court's order. The appellant was reserved the liberty to file appropriate applications before the Arbitral Tribunal without being influenced by the trial court's findings.
JUDGMENT
S.R. Krishna Kumar, J. - This appeal by the respondent in Com. A.A. No. 247/2021 is directed against the impugned order dated 04.03.2022 passed by LXXXIII Additional City Civil and Sessions Judge, Bengaluru (Commercial Court) whereby, the Commercial Court partly allowed the application filed by the respondent herein under Section 9 of the Arbitration and Conciliation Act, 1996 (for short A the said Act of 1996') and dismissed the interlocutory application-I.A. No. III filed by the appellant under Section 9 of the said Act of 1996.
2. The material on record discloses that the respondent entered into a lease deed dated 10.06.2020 with the appellant in relation to the schedule premises. The appellant had filed A.A. No. 127/2021 under Section 9 of the said Act of 1996 for an interim order/direction restraining the respondent from interfering with the appellant's possession of the schedule property pending disposal of the Arbitration proceedings, which are said to have been initiated by the appellant. In the said A.A. No. 127/2021, the appellant filed an application, I.A. No. 1 for ad-interim order of temporary injunction restraining the respondent from interfering with the appellant's possession and enjoyment of the schedule property during the pendency of the arbitration application. In the said A.A. No. 127/2021, the appellant also filed a memo stating that the appellant was ready to deposit the agreed rent on a monthly basis to the tune of 40% of the rent before the trial court.
3. The said A.A. No. 127/2021 and the application, memo etc., filed by the appellant, having been opposed by the respondent, the trial court passed an order dated 22.12.2021 restraining the respondent from interfering with the appellant's possession of the schedule property till the next date of hearing i.e.,. 18.01.2022. In this context, it is relevant to state that the said interim order was not extended. Subsequently, under the said order dated 22.12.2021 passed in A.A. No. 127/2021, the trial court permitted the appellant to deposit the rent as prayed for in the memo dated 21.12.2021.
4. Meanwhile, the respondent herein filed the instant COM. A.A. 247/2021 before the trial court under Section 9 of the said Act of 1996 for a direction to the appellant herein to deposit outstanding rent and maintenance charges and for other reliefs. In the said proceedings, in addition to opposing the application filed by the respondent, the appellant also filed an application I.A. No. III under Section 9 of the said Act of 1996 to restrain the respondent from interfering with the appellant's possession of the schedule property till disposal of the arbitration proceedings. The said I.A. No. III having been opposed by the respondent, the trial court proceeded to pass the impugned common order allowing COM. A.A. No. 247/2021 filed by the respondent and dismissing I.A. No. III filed by the appellant. Aggrieved by the impugned common order, the appellant is before this Court by way of the present appeal.
5. A perusal of the impugned order passed by the trial court will indicate that the trial court has directed the appellant to pay the sums towards occupation of the leased premises, including the amount towards maintenance along with applicable GST at the rate mentioned in the lease deed dated 10.06.2020, from December 2021 till conclusion of arbitration proceedings or till passing of any interim order by the Arbitral Tribunal to be constituted, so long as the appellant herein continued to be in occupation of the schedule premises; under the impugned order, the Commercial Court also directed the appellant herein to adjust any amount, if already deposited in A.A. No. 127/2021, in payment of the sums as per this order and the payment to be made by the appellant herein as per the impugned order, would be subject to final order to be passed in the arbitration proceedings; so also, I.A. No. III filed by the appellant was dismissed by the trial court. While doing so, the tr
The liability of the appellant to pay outstanding rent and maintenance charges was not restricted by a previous order, and the application under Section 9 of the Arbitration and Conciliation Act, 199....
Final relief cannot be given by way of interim measure.
The Court emphasized the limited circumstances under which the Court should intervene under Section 9(3) of the Act, 1996 after the constitution of the Arbitral Tribunal, and the alternative remedy u....
The main legal point established in the judgment is the importance of securing the interest of the appellants and the need for proper adjudication of claims and counter-claims before the arbitrator.
The essential preconditions for maintainability of an application under Section 7(2) of the West Bengal Premises Tenancy Act, 1997, are: (i) raising a dispute with regard to the rate of rent; (ii) de....
The grant of interim directions resembling the main relief is not permissible in law, and the revival of the lease agreement could not be granted as an interim measure.
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