Karnataka High Court
M/S Cowrks Coworking Spaces Private ... vs M/S Regus Bangalore Suburb Center ... on 3 March, 2017
Author: Jayant Patel
Bench: Jayant Patel
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 3RD DAY OF MARCH 2017
PRESENT
THE HON'BLE MR.JUSTICE JAYANT PATEL
AND
THE HON'BLE MR.JUSTICE N K SUDHINDRARAO
MFA NO.89/2017 (AA)
C/W
MFA NO.258/2017 (AA)
IN MFA NO.89/2017
BETWEEN:
M/S COWRKS COWORKING
SPACES PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE PROVISIONS
OF THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT LEVEL 12-14,
TOWER "B", THE MILLENIA, NO.1 & 2,
MURPHY ROAD, ULSOOR,
BENGALURU-560001
AND REPRESENTED BY ITS AUTHORISED SIGNATORY
MR. RABINDRA DUGAR
... APPELLANT
(BY SRI UDAYA HOLLA, SR. COUNSEL
FOR SRI PRASHANTH G, ADVOCATE)
2
AND:
1.M/S REGUS BANGALORE SUBURB
CENTRE PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE PROVISIONS
OF THE COMPANIES ACT, 1956
HAVING ITS OFFICE AT LEVEL 1, TOWER-B,
REGUS MILLENIA, NO.1 & 2,
MURPHY ROAD, ULSOOR,
BENGALURU-560008 AND
REPRESENTED BY ITS MANAGING DIRECTOR
2.M/S RMZ INFOTECK PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE PROVISIONS
OF THE COMPANIES ACT HAVING ITS OFFICE AT LEVEL
12-14, TOWER-B, THE MILLENIA NO.1 & 2,
MURPHY ROAD, ULSOOR,
BENGALURU 560008
3.M/S MILLENNIA REALTORS PRIVATE LTD.
A COMPANY INCORPORATED UNDER THE PROVISIONS
OF THE COMPANIES ACT, 1956
HAVING ITS OFFICE AT "THE MILLENIA NO.12 & 14TH
FLOOR, TOWER B, 1 & 2 MURPHY ROAD
ULSOOR, BENGALURU-8
... RESPONDENTS
(BY SRI ADITYA SONDHI, SR. COUNSEL FOR
SRI SEETHARAM FOR KOCHHAR & CO., ADVOCATE FOR
C/R1)
THIS MFA IS FILED U/S 37(1)(a) OF THE
ARBITRATION AND CONCILIATION ACT, AGAINST THE
ORDER DATED:16.12.2016 PASSED IN AA.NO.462/2016
ON THE FILE OF THE 40TH ADDITIONAL CITY CIVIL &
3
SESSIONS JUDGE, BENGALURU, ALLOWING THE
PETITION FILED U/SEC 9 OF THE ARBITRATION AND
CONCILIATION ACT, 1996.
IN MFA NO.258/2017
BETWEEN:
M/S RMZ INFOTECK PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE PROVISIONS
OF THE COMPANIES ACT HAVING
ITS OFFICE AT LEVEL 12-14, TOWER B,
THE MILLENIA NO.1 & 2, MURPHY ROAD,
ULSOOR, BENGALURU-560 008.
REPRESENTED BY ITS AUTHORISED SIGNATORY
CHETRU MENDA
... APPELLANT
(BY SRI B.N.PRAKASH, FOR LAWYERS INC., ADVOCATE)
AND:
1.M/S REGUS BANGALORE SUBURB
CENTRE PRIVATE LIMITED,
A COMPANY INCORPORATED UNDER THE PROVISIONS
OF THE COMPANIES ACT, 1956 HAVING ITS OFFICE AT
LEVEL 1, TOWER-B, REGUS MILLENIA, NO.1 & 2,
MURPHY ROAD, ULSOOR, BENGALURU-560 008 AND
REPRESENTED BY ITS MANAGING DIRECTOR
2.M/S. COWRKS COWORKING
SPACES PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE PROVISIONS
OF THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT LEVEL 12-14,
TOWER "B", THE MILLENIA, NO.1 & 2,
4
MURPHY ROAD, ULSOOR, BENGALURU-560 001.
REPRESENTED BY ITS AUTHORISED SIGNATORY
MR.RABINDRA DUGAR
3.M/S. MILLENNIA REALTORS PRIVATE LTD
A COMPANY INCORPORATED UNDER THE PROVISIONS
OF THE COMPANIES ACT, 1956 HAVING ITS OFFICE AT
"THE MILLENIA NO.12 & 14TH FLOOR,
TOWER B, 1 & 2 MURPHY ROAD,
ULSOOR, BENGALURU-8.
REPRESENTED BY ITS AUTHORISED SIGNATORY
MR.CHETRU MANDA
...RESPONDENTS
(BY SRI ADITYA SONDHI, SR. COUNSEL FOR
SRI.SEETHARAM FOR KOCHHAR & CO., ADVOCATE FOR
C/R1)
THIS MFA IS FILED U/S 37(1)(b) OF THE
ARBITRATION AND CONCILIATION ACT, AGAINST THE
ORDER DATED:16.12.2016 PASSED IN A.A.NO.462/2016
ON THE FILE OF THE XL ADDITIONAL CITY CIVIL &
SESSIONS JUDGE, BENGALURU, ALLOWING THE
PETITION FILED U/S 9 OF THE ARBITRATION AND
CONCILIATION ACT.
THESE APPEALS COMING ON FOR ADMISSION
THIS DAY, JAYANT PATEL J., DELIVERED THE
FOLLOWING:
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ORDER
The present appeals are directed against the order dated 16.12.2016 passed by the City Civil Court in Arbitration Application No.462/2016, whereby the lower Court for the reasons recorded in the order has granted interim injunction.
2. We have heard Mr.Udaya Holla, learned Senior Counsel appearing for the appellant in MFA No.89/2017 and Mr.B.N.Prakash, learned Counsel appearing for the appellant in MFA No.258/2017 and Mr.Aditya Sondhi, learned Senior Counsel appearing for respondent No.1- original applicant before the lower Court in both the appeals.
3. The respective Advocates for the appellants and respondent No.1 have appeared for the respective parties in these appeals.
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4. After the matter was argued for sometime, the learned Advocates appearing for both the sides are at agreement on the following aspects:
A. Respondent No.1 has invoked arbitration by issuing notice and they have nominated Hon'ble Mr. Justice N.Kumar (Former Judge of this Court) as the sole arbitrator.
B. Both the appellants have no objection for referring the matter to the sole Arbitrator Hon'ble Mr. Justice N.Kumar (Former Judge of this Court).
C. If the matter is referred to the arbitration of Hon'ble Mr. Justice N.Kumar as sole Arbitrator, the interim application may be made by respondent No.1 for interim injunction until the arbitration is finalized by appropriate award. D. They also pray that appropriate request may be made to the sole Arbitrator to take appropriate decision below the interim application. 7
5. Apart from the aforesaid agreement, it appears that the learned Counsel appearing for respondent No.1 contended that the interim injunction already granted by the lower Court on 16.12.2016 be continued until the Arbitrator takes appropriate decision below the interim application.
6. Whereas the learned Counsel appearing for both the appellants contend that after the injunction was granted by the lower Court on 16.12.2016, the operation of the interim injunction was suspended by the lower Court so as to enable the appellants to approach before the higher forum. When the appeal was heard on 05.01.2017, the order was passed that respondent No.1 would not precipitate the matter any further against the appellant till next date and the said order is continued until further orders, as per 8 the order dated 13.01.2017 passed in MFA No.89/2017. Therefore it was submitted that such an arrangement be continued until the Arbitrator passes appropriate order below the interim application.
7. Since there was no agreement on the part of the appellants as well as for respondent No.1 for interim arrangement until the learned Arbitrator decides the application for interim application, we had called upon the details about the tentative loss being suffered by respondent No.1 as per their calculation and it was submitted by the learned Senior Counsel appearing for respondent No.1 that for last 4-5 months, the respondent No.1 has suffered business loss of about more than a crore of rupees and the said brief note is also tendered on record. 9
8. In our view, if the said brief note is considered, approximately the loss can be assessed at Rs.20,00,000/- per month subject to the final decision, if any, may be taken by the learned Arbitrator. In our view, when the injunction has not come into effect inasmuch as the direction was issued by this Court not to precipitate the issue even if it is considered that the injunction technically came into effect, such injunction is not enforced. Further the suffering of the business loss can be considered for the purpose of quantification by way of an interim arrangement. Hence we find that if some reasonable amount is ordered to be deposited until the learned Arbitrator passes the appropriate order below interim application, the same should meet with ends of justice. Thereafter, it will be for the learned Arbitrator to pass appropriate order considering the 10 facts and circumstances including the appropriation of the amount or refund of the amount as the case may be. Even the question of arbitrability of the dispute against the appellant in MFA No.89/2017 may also be decided by the learned Arbitrator prima facie at the stage when the application for interim application is to be decided.
9. In view of the aforesaid, we find that the following order shall meet with the ends of justice:
1. The Arbitration in question shall stand referred to the sole Arbitrator Hon'ble Mr. Justice N.Kumar (Former Judge of this Court).
2. The parties shall submit their respective claim within ten days including the interim application.
3. The appellants shall submit their response by way of a counter within ten days from the date of receipt of the claim.11
4. The learned Arbitrator is requested to pass appropriate order below the interim application preferably within a period of four weeks after submission of claim and the statement of objections/counter reply.
All rights and contentions of both the sides shall remain open.
10. Until the arbitration order is passed by the learned Arbitrator below the interim application as indicated hereinabove, the operation and implementation of the order dated 16.12.2016 passed by the lower Court (impugned order) shall remain in abeyance/stayed on condition that the appellants deposit the amount of `50,00,000/- (Rupees Fifty Lakhs Only) within two weeks from today with this Court, with the further direction that no new contract shall be entered into by the appellants with any third party. 12
11. So far as the investment and the appropriation of the amount of `50,00,000/- or for the continuation of the injunction or otherwise is concerned, the same shall be finalized by the learned Arbitrator while passing the order below the interim application.
12. The appeals are disposed of accordingly. In view of the above, I.A.No.1/2017 filed in both the appeals would not survive for consideration and shall stand disposed of.
Sd/-
JUDGE Sd/-
JUDGE JT/-