IMPORTANT POINT
The court ruled that failure to initiate arbitration proceedings within 90 days of an interim order vacates such order, impacting the validity of injunction applications.

JUDGMENT :

(H.P. Sandesh, J.)

Heard the learned counsel for the appellant and the learned counsel for the caveator/respondent No.2.

2. This miscellaneous first appeal is filed challenging the order of the Trial Court dated 01.10.2024 dismissing I.A.Nos.5 to 7 in AA No.4/2024 which have been filed under Order 39 Rules 1 and 2 read with Section 151 of CPC and Section 9 of the Arbitration Act read with Rule 9 of the Arbitration (Proceedings Before the Courts) Rules, 2001. I.A.No.5 was filed praying to grant an order of temporary injunction restraining respondent No.2, his representatives, successors in interest and anyone claiming under through him from obstructing or impeding the smooth functioning and operations of the hotel premises/schedule property in any manner, pending disposals of the suit.

3. I.A.No.6 was also filed under the very same provision of law seeking the relief of temporary injunction restraining respondent No.2, his representatives, successors in interest and anyone claiming under through him from interfering, obstructing and/or in any manner impeding, either directly or indirectly with the management and operations of the hotel premises/schedule property in any manner, pending disposal of the suit.

4. I.A.No.7 was also filed under the very same provision of law seeking the relief of temporary injunction restraining respondent No.2, his representatives, successors in interest and anyone claiming under through him from interfering, obstructing and/or in any manner impeding, either directly or indirectly with the staff member and/or guests/customers of the petitioner in the hotel premises/ schedule property in any manner, pending disposal of the suit.

5. In support of the applications, an affidavit is sworn to contending that on 23.03.2019, a franchise agreement was entered between the parties for operating the hotel premises on the schedule property. It is contended that the petitioner being one of the India’s finest and fastest growing hotel chain and being one of the most sought-after hospitality brands in the industry, enters into hotel operation agreement with the owner of the properties and lending them goodwill associated with the internationally renowned “Royal Orchid” “Regenta” and “Regenta Central” brand name amongst others. The respondent No.1 is a partnership firm registered under the Partnership Act, 1932. The respondent Nos.2 to 5 are partners of respondent No.1. The respondent No.1 is the owner of a hotel premises located near Hatrick Restaurant, Raj, Bagh, Srinagar, Jammu and Kashmir “Premises” or “Schedule Property”. The parties entered into a franchisee agreement dated 23.03.2019, wherein the petitioner would aid and facilitate the business of respondent No.1 by contributing through its brand reputation, technical know-how, training and expertise in running premium quality hotel businesses. Subsequent to execution of the agreement, the management and operations of respondent No.1 were smoothly being carried out. However, respondent No.2 started unnecessarily interfering in the functioning of the hotel premises. The respondent No.2 has been shouting at staff in the reception and threatening to cancel bookings, take away records if he is not paid exorbitant sums separately over and above what is agreed under the agreement. Therefore, the operations of the hotel under the petitioner’s name and guests, is under serious jeopardy.

6. It is further contended that the interference and disturbances being caused by respondent No.2 are in blatant violation of the agreement. Clause 5.1 of the agreement clearly stipulates that respondent No.1 Firm will maintain a high moral and ethical standard and atmosphere at the hotel premises. The maintenance of atmosphere at the hotel premises is an essential and indispensable part of providing the best quality hospitality services to the customers of the petitioner. The disturbances being caused by respondent No.2 has a direct bearing on the customer experience and im