High Court of Delhi
DEEPA SHARMA, J.
Planet M Retail Ltd.
Versus
Select Infrastructure Pvt Ltd.
OMP No. 488 of 2013
Decided on : 19-09-2014
Arbitration and Conciliation Act, 1996 -Section 9 - Specific Relief Act, 1963 - Sections 14, 37, 41, 42 - Termination of Licence - Agreement - Violation Licence Agreement - Injunction - Petitioner is a licensee of the respondent - Licence was granted to run a shop in a mall - Petitioner was permitted to carry out the trade of permitted category of articles - Under the agreement of licence, the respondent retains the right to terminate the agreement in case of petitioner making any change in the permitted business - Respondent issued show-cause notice to the respondent - In the absence of any satisfactory reply, the respondent terminated the licence - Petitioner was a licensee under the licence agreement - Licence stands terminated - Possession of the shop in question all along remained with the respondents who are the owners of the shop - Petitioner only had the permission to run a particular trade from the shop - Held, even by way of grant of interim injunction, Court cannot restore an agreement which already stands terminated - Balance of convenience does not lie in favour of plaintiff - Petition under Section 9 stands dismissed.
Licence -A license does not create any interest in the property, it merely permits another person to make use of the property, there is no parting with possession as the legal possession continues with the owner - Under the licence, the licensee is only given the permission to use the property in a particular way and that after the termination of the licence, the licensee has no right to continue in the said premises and that the possession of the said premises all along remain with the licensor.
1. The present petition has been filed under Section 9 with the prayer that respondent be restrained from terminating the Licence Agreement dated 12.12.2006 on the ground of violation of clause 2(a) of the said Licence Agreement and restrain the respondent, its servants, employees, agents, third party contractors or anybody claiming through respondent, from creating any obstruction, hindrance in possession, use of licensed premises by petitioner and also from disconnecting, discontinuing of any of amenities to the licensed premises or committing any act/omission directly or indirectly causing obstruction to business of petitioner from the licensed premises and attempting to illegally evict the petitioner from the licensed premises, without following due process of law.
2. It is contended by the petitioner that the petitioner is a company incorporated under the provisions of Companies Act, 1956 and is engaged in the business of retail of sale of CDs, DVDs, CD ROMs etc. of music, movies, games, memorabilia, promotional merchandise and general merchandise. The respondent is also a company incorporated under the Companies Act and is owner of mixed use commercial complex, consisting of shopping centre, multiplex complex, offices and hotels, etc. named ‘Select City Walk’ at District Centre, Saket (in short ‘Select City Walk’).
3. Pursuant to the agreement dated 12.12.2006 between Bennett, Coleman & Co., predecessor-in-interest of the petitioner, and the respondent, in respect of Shop F-18, measuring 2,263 square feet (Licensed Premises) in Select City Walk, a licence for a term of nine (9) years from the year 2006 was granted to the petitioner, with effect from 01.11.2007. The petitioner had acquired the retail division of Bennett, Coleman & Co. Ltd. and all rights, liabilities and possession of licensed premises under the Licence Agreement was legally assigned to the petitioner and vide letter dated 08.04.2008, the respondent was informed of these facts and the respondent had acknowledged the said assignment of licence agreement to the petitioner. From time to time, the Licence Agreement was amended. First Addendum is dated 31.03.2007 and second Addendum is dated 01.04.2011. According to the petitioner, the Clause 2(a) of the Licence Agreement is relevant, which is reproduced as under:-
“The Licensee hereby undertakes to conduct only the following Permitted business in the Licensed Space, on a regular basis, and exclusively in the manner as specified hereinafter:
In view of the above clause, the petitioner submits that he was permitted to sell the permitted brand under the brand name ‘Planet M’ and also permitted to sell, besides other articles, General Merchandise, including Promotional Merchandise. It is contended that under the term ‘General Merchandise’, the petitioner is entitled to sell any variety of goods except the sale of those goods which are barred under the law. It is further contended that under the aforesaid addendums, the parties had agreed to various forms of payment on the same. 4. 8% was to be paid to the licensor on the net sales turnover of music CDs and 2% on the game instrument, equipment and other accessories and 1.50% on the net sales turnover of mobiles, form the licensed space. Monthly Minimum Guarantee (MMG), licence fee was calculated @ Rs145/- per square feet of the licences space per month which amounted to Rs.3,40,895/- All these payments were subjected to the escalation as agreed between the parties. It is submitted that in order to promote the sale of kids music and gaming product and to draw more footfall, the petitioner had started selling toys, apparels and related accessories from the licensed premises with effect from April, 2012 and decided to add toys as a separate category in its current business plan for the Financial Year 2013-2014. It is further contended that the petitioner and its predecessor-in-interest had with the knowledge of respondent been permitted to sell certain othe
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