Delhi District Court
Cygnus Medicare Pvt. Ltd vs B R Dhawan Memorial Charitable Trus & ... on 7 August, 2014
CS No. 207/2014
Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others
IN THE COURT OF SHRI RAJ KUMAR TRIPATHI,
ADDITIONAL DISTRICT JUDGE04, SOUTHWEST,
DWARKA COURTS, NEW DELHI.
CS No. 207/2014
Computerized ID No. 02405C0193442012
Cygnus Medicare Private Limited,
Through Sh. Sunil Bhayana,
Director,
Office at 1211, Netaji Subhash Place,
Delhi.
..... Petitioner
Versus
1. B R Dhawan Memorial Charitable Trust,
Through President,
A44, Vishal Enclave, New Delhi.
2. Ms Nirmal Dhawan,
Trustee & President
C/o Doctor's Residence, Bensups Hospital,
Sector12, Dwarka, Delhi110075
3. Sh. Shekhar Dhawan
Trustee B R Dhawan Memorial Charitable Trust,
A44, Vishal Encalve, Delhi110027
4. Branch Manager,
Bank of Maharashtra,
Sector12, Dwarka, New Delhi
..... Respondents
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CS No. 207/2014
Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others
O R D E R
This order will decide an application under Section 9 of The Arbitration and Conciliation Act, 1996 (in short 'the Act') filed by petitioner against the respondents. Along with the application, petitioner also filed an application for appointment of receiver to look after the management and administration of the hospital. In the application, the petitioner has prayed the following reliefs:
i) Restrain the respondent no.2 and 3 from trespassing into the Bensups Hospital till the pendency of the present petition as well as arbitration proceedings till award.
ii) Respondent no. 1, 2 and 3 may further be restrained from interfering into the day to day functioning at Bensups Hospital in any manner, till the pendency of the present petition as well as arbitration proceedings till award.
iii) Petitioner may kindly be permitted to deposit the monthly 2 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others performance guarantee with the court.
iv) Respondent no. 4 may be directed to allow the petitioner to operate the current account no. 00000020014500588 of Bensups Hospital maintained at the Dwarka Branch exclusively.
v) Direct the respondent no.1 to deposit the rent received from Airtel Mobile Tower in the current account no. 00000020014500588 of Bensups Hospital till the disposal of present petition and till arbitration proceeding.
vi) Pass any other order or further orders which this Hon'ble Court may deem fit and proper in favour of the petitioner company and against the respondents, in the interest of justice.
2. Brief facts of petitioner's case is that petitioner M/s Cygnus Medicare Private Limited is a company engaged in the specialized business of management of medical services. Respondent no. 1 i.e. B R Dhawan Memorial Charitable Trust is a charitable trust being run by respondent no. 2 Smt. Nirmal Dhawan and respondent no.3 Sh. Shekhar 3 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others Dhawan. Respondent no. 1 is running a hospital in the name of Bensups Hospital at Sector12, Dwarka, New Delhi, which was lying sick for a considerable period of time. Respondent no. 2 and 3 on behalf of respondent no. 1 approached and requested the petitioner company to provide management services to their hospital. The petitioner company and the respondent entered into a Medical Services Agreement (in short 'the Agreement') on 22.09.2011 for running the hospital. In terms of the Agreement, the petitioner deposited an amount of Rs.60,00,000/ with the respondent, out of which Rs.30,00,000/ is a refundable security amount. The terms of Agreement is 15 years which is having a lock in period of 3 years. An account bearing number 00000020014500588 exists in the name of the hospital with Bank of Maharastra which is required to be operated by the petitioner through its authorized signatory. As per the terms of the Agreement, the respondents no. 1 to 3 have to divest themselves from all the rights and interest except receipt of monthly payment of Rs.20,00,000/ or 8% of the total profit made by petitioner by running the hospital whichever is 4 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others more.
3. Allegation of petitioner is that respondents no. 2 and 3 are not permitting the petitioner company to run the hospital and they have been creating hindrances one after the other in the smooth functioning of the services and administration of the hospital. It is averred that petitioner has already incurred huge expenses in terms of infrastructure, manpower and appointment of consultants to the tune of Rs.10,00,00,000/. According to petitioner, due to disturbances caused by respondents no. 2 and 3, petitioner is not able to smoothly proceed with the business activities like Coronary Unit, Radiology and IVF etc. It is averred that respondent no.2 has not left the Doctors' Residence where she along with respondent no. 3 and her other associates frequently visit and create nuisance. Petitioner alleges that their behaviour towards the staff employed by the petitioner is also not proper and they are playing all sorts of tricks to harass the staff. It is further alleged that respondent no. 2 and 3 are constantly interfering into the administration and management of services, appointment, terms of services of the employees, 5 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others accounting, placement of the staff, storage of data and even the movement of the staff and material within the hospital premises. The respondents are stated to have stolen all accounting data and illegally restrained the petitioner's employees from maintaining the account. It is stated that on 01.08.2012, respondent no. 3 came to I T Room on 4th floor along with his associate and stolen account server, CPU and UPS installed by the petitioner which are worth Rs.60,000/. He further threatened the staff with dire consequences. A number of complaints are stated to have been made against the respondents. Further impediments are being created in the way of employees of hospital who carry cash from the hospital to the bank. On 04.08.2012, when Sh. Praveen Chutani, an employee of the petitioner company, was taking cash from hospital to the bank for depositing the same, respondent no. 2 tried to snatch away money from the Manager and only after the intervention of the police the amount could be secured and deposited. Respondent no. 2 and 3 in collusion with each other are stated to have conspired to cause wrongful loss to petitioner company and withdrew Rs.20,00,000/ from the account by 6 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others forging the cheque issued to Bensups Hospital without any authority. They are also stated to have removed the almirah on 07.08.2012 which was having cash of Rs.10,00,000/ belonging to company.
4. It is averred that petitioner company has already made heavy investment in the project and incurred expenses to the tune of Rs. 10,00,00,000/. Respondent no. 2 has refused to accept monthly amount of Rs.20,00,000/ payable to trust w.e.f. the month of August2012, so as to create a ground for termination of the Agreement. The petitioner apprehends that the respondent may transfer, dispose of or terminate the services of the company in violation of the legal contract. Petitioner in terms of clause 14 of the Medical Services Agreement is taking steps to initiate arbitration proceedings to claim its rights as per the provisions of MSA. Petitioner prays to allow the application and grant the reliefs as prayed.
5. Respondents no. 1 to 3 have filed written reply to the application of petitioner and denied the allegations as made in the application. They have contended that the petitioner in the guise of the instant application 7 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others is seeking to take over the entire hospital. The petitioner has ill motive to usurp the hospital and throw away the respondents as seen from the fact that they are requesting this court to appoint its Director Doctor Naveen Nischal as receiver. It is submitted that vide order dated 31.08.2012, the court was pleased to pass ex parte interim relief in favour of the petitioner company and also appointed Doctor Naveen Nischal as receiver and as a result of the same respondents have lost their right to keep a check upon the illegal activity of the petitioner company. Petitioner company was never given any right to operate the operating account exclusively. Respondents have denied that they are under an obligation to divest themselves from all the rights and interest of the hospital except receipt of Rs.20,00,000/ per month.
6. It is stated that respondents never entered into a Lease Agreement with the petitioner company but entered into Medical Services Agreement to only provide medical services and that too under strict control and supervision of the respondents. Petitioner company has to act for and on behalf of the respondents and not independently. Respondents have stated that 8 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others it is the petitioner company who is actually violating various terms of the Agreement. It is submitted that the Agreement was actually signed on 13.10.2011 but it was ante dated to 22.09.2011 at the instance of Doctor Dinesh Batra who was instrumental from the very beginning in persuading the respondent no.2 for entering into the Agreement. Respondents have contended that petitioner in order to usurp the management of the hospital and to throw them out went to the extent of lodging of an FIR on false and baseless premises. Respondents state that the amount of Rs.20,00,000/ per month received from petitioner company is not in the personal capacity of respondent no. 2 and 3 but is received by the respondent no.1 trust. They have denied to have committed any illegal act or any act which is inconsistent with the Agreement till date. They have also denied to have illegally accepted any money from the petitioner. It is contended that respondent no.2 and 3 are entitled for residence and the food in the hospital. The mobile tower was set up prior to the Agreement and, therefore, the same does not fall within the purview of the Agreement. Respondents have denied to have taken the server 9 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others or any part or otherwise the computer from its relevant place. They have also denied to have ever interfered with the running and management of the hospital in any way either by way of threatening or otherwise till date. Respondents state that they have never given up entire hospital premises to petitioner company and as such they are well within their rights and liberty to occupy the premises. It is contended that ever since the Agreement was executed, the petitioner company through its Directors, its employees and henchmen have been relentlessly trying their level best in interfering and provoking the respondents and the trust people one way or the other and thereby creating and manufacturing illegal means to oust them from the hospital in all respect.
7. Respondents have stated that a huge amount running into lacs have been transferred to the personal accounts of the different Directors of the petitioner company from the operating account of the hospital by taking benefit of the trust reposed by respondent no.2 in Doctor Batra. It is submitted that as on June2012, Rs.87.62 lacs was taken away by Directors of 10 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others petitioner company in their personal names. Respondents allege that petitioner is employing all possible illegal means even to the extent of false allegation of sale, disposal, transfer, concealment etc. of the service of the hospital without any basis. It is submitted that allegations levelled by petitioner company are baseless and unfounded. They further allege that they are being wrongfully denied the revenue by the petitioner who is in breach of the terms of the Agreement and are liable to be removed therefrom. Rest of the averments as made in the application are vehemently denied by the respondents.
8. I have heard the arguments advanced by learned counsel for both the parties. Learned counsel for petitioner submitted that due to acts, omissions and commissions of respondents, vide order dated 31.08.2012, learned predecessor of the court granted relief in favour of petitioner and against the respondents, thereby appointing a receiver namely Doctor Naveen Nischal to manage the administration of the hospital as an interim arrangement. The trust challenged the order dated 31.08.2012 in appeal FAO 11 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others bearing no. 407/2012 in Hon'ble High Court of Delhi, which was dismissed as withdrawn on 14.09.2012 and thus, the order dated 31.08.2012 has become absolute. It is submitted that it is already mentioned in the order itself that any further order shall be passed by the Arbitral Tribunal. Petitioner is stated to have filed petition under Section 11 (6) of The Arbitration and Conciliation Act, 1996 for appointment of arbitrator by Hon'ble High Court, which is pending disposal. It is submitted that the MSA Agreement dated 22.09.2011 is still subsisting and same is not revoked and therefore, all the terms of the Agreement are to be adhered by the petitioner as well as the receiver appointed by the court. It is submitted that interim orders were passed for preserving the property in respect of the Agreement till the disputes between the parties are adjudicated upon. It is the respondent who had been choosing forums one after the other to avoid arbitration and final adjudication of the matter. It is submitted that the disputes between the parties are well within the scope of an arbitrator. It is submitted that petitioner has come to the court seeking the injunctive and equitable relief as provided under the Arbitration 12 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others clause and as per Clause 14 of the Medical Services Agreement. This court has power to entertain the present application. Counsel for petitioner has relied upon the judgment titled as Adhunik Steel v Orissa Manganese AIR (2007) 7 SCC 125 and Amit Sinha v Sumit Mittal & others 2011 (3) R.A.J. 306 (DEL) in support of his submissions. Learned counsel for petitioner submitted that petitioner has prime facie case in its favour, balance of convenience also lies in its favour and if the equitable relief is not granted, petitioner shall suffer irreparable loss and injury which cannot be compensated in terms of money. Therefore, it is prayed, to allow the application and grant the relief as prayed.
9. Per contra, it was submitted by learned counsel for respondents that the impugned Medical Services Agreement has already been terminated by a notice on 05.09.2012 as respondents had no knowledge about the passing of interim order dated 31.08.2012. He further submitted that on 14.09.2012 respondents withdrew the FAO 407/2012 before Hon'ble Delhi High Court to agitate the matter before the trial court. He argued that 13 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others petitioner company served a final notice for seeking consent for appointment of arbitrator (the names suggested were friends and relatives of the Directors of the petitioner company) from the respondents on 08.12.2012. The respondents sent reply declining the request since the Agreement in question already stood terminated and there was no arbitration agreement as such in existence. It is submitted that respondents have already filed Civil Suit no. 292/2013 for declaration, mandatory injunction, mesne profits/damages against the petitioner company and three others before Hon'ble High Court of Delhi. The main relief in the suit is to declare the impugned Medical Services Agreement as sham, illegal, null and void, holding the same as obtained by fraud, misrepresentation, undue influence and coercion by the defendants. The petitioner company and others filed an application under Section 8 of the Act for stay of the suit. The said application has already been dismissed by Hon'ble Delhi High Court on 09.12.2013 by passing a detailed judgment holding that the issues involved need to be tried by the court and not by the arbitrator. Learned counsel submitted that after rejection of application 14 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others under Section 8 of the Act in civil suit, no ground for further extension of ex parte order is made out and, therefore, application under Section 9 of The Act preferred by the petitioner company be dismissed. He further submitted that the petitioners have already assailed the order of Hon'ble Delhi High Court dated 09.12.2013 before Hon'ble Supreme Court but no stay has been granted in favour of the petitioner. It is argued that order under Section 11 of the Act will be an administrative order restricted to the appointment of Arbitrator. It is submitted that in the present case, in view of dismissal of application under Section 8 of the Act by Hon'ble Delhi High Court, question of appointment of Arbitrator under Section 11 does not arise. It is submitted that petitioners have initiated certain criminal proceedings by filing FIR no. 193/2012 alleging theft by the Chairperson of the respondent trust and her son to justify their move for the interim order and the appointment of Arbitrator. It is argued that upon completion of investigation of the case, the allegations were found to be false and a cancellation report under Section 173 CrPC has already been filed before the court of competent jurisdiction. He further submitted that receiver 15 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others cannot interfere in the residence and even the court through receiver cannot dispossess a person of his property. It is submitted that respondent no.2 who is having residence in hospital is not a party to the Medical Services Agreement obtained by coercion, fraud and misrepresentation by the petitioner company. He submitted that ex parte interim measures were passed on 31.08.2012 and the same cannot be made permanent. Learned counsel for respondent prayed to dismiss the application of the petitioner and vacate the interim orders passed in favour of petitioner forthwith. In support of his contentions, counsel for respondents relied upon the judgments i.e. Vijay Vishwanath Talwar v Mashreq Bank 2004 (1) ARB LR 399, Anthony C Leo v Nand Lal Bal Krishnan (1996) 11 SCC 376 and Yog Raj Infrastructure v SSANGYOG Engineering & Construction Company Limited(2012) 3 SCC 425.
10. I have thoughtfully considered the submissions advanced by learned counsel for both the parties and perused the record of the case.
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11. Section 9 of The Arbitration and Conciliation Act, 1996 enables a party to seek for interim orders. This section vests power upon a Court to pass necessary orders and/or interim injunction for preservation, interim custody or sale of any goods which are the subjectmatter of a reference, and/or securing the amount in dispute in the Arbitration. In the case of Olex Focas Ptv Ltd v Skodaexport Co. Ltd., AIR 2000 Del 161, it was held that:
" The Court is vested with the powers to grant interim relief, but the court's discretion must be exercised sparingly and only in appropriate cases. The courts should be extremely cautious in granting interim relief. The power to pass orders with regard to interim measures should always be exercised by court for the purpose of safeguarding the interest of the parties to the arbitration proceeding so that the award is not frustrated. The court's discretion ought to be exercised in those exceptional cases when there is adequate material on record, leading to a definite conclusion that the respondent is likely to render the entire 17 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others arbitration proceedings infructuous, by frittering away the properties or funds either before or during the pendency of arbitration proceedings or even during the interregnum period from the date of award and its execution. In those cases, the courts would be justified in granting interim relief".
12. While deciding application under Section 9 of The Arbitration and Conciliation Act, the court has to satisfy itself that there was an arbitration clause between the parties, a dispute has been raised in terms of the arbitration clause and there was sufficient ground to grant interim relief. It is not necessary for the court to frame as to what was the exact nature of dispute which could be referred to Arbitrator. (Reference may be had to Escorts Limited v Knorr BremseAG, 2008 (2) RAJ 113 (L). The contention of respondents is that respondent no. 2 is not a party to the Medical Services Agreement which was obtained by coercion, fraud and mis representation by the petitioner company. The respondent no.1 trust has already filed a civil suit bearing CS (OS) no. 292 of 2013 titled as B R 18 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others Dhawan Memorial Charitable Trust v Cygnus Medicare (P) Limited and others before Hon'ble High Court of Delhi seeking the relief of declaration, mandatory injunction, permanent injunction and mesne profits/damages against the petitioner company and others. The respondent trust has prayed to declare the impugned Medical Services Agreement as sham, illegal, null and void, holding that the same has been obtained by fraud, misrepresentation, undue influence and coercion by defendants. In the said suit, petitioner company filed an application under Section 8 of the Act seeking the relief that jurisdiction of civil court was barred and the suit be dismissed. Hon'ble High Court of Delhi vide order dated 09.12.2013 was pleased to dismiss the application of petitioner company and found no merit in the application. It was observed by Hon'ble High Court that keeping in view the serious allegations of fraud etc levelled against defendants in the suit, the matter was not found fit to be referred to arbitration. Thus, the prayer of petitioner company for referring the matter to the arbitration has already been declined by Judicial Order passed under Section 8 of the Act by Hon'ble High Court of 19 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others Delhi. The dispute between the parties, is now to be decided by the civil court i.e. Hon'ble High Court of Delhi and not by the Arbitrator. Petitioner company is reported to have challenged the order of Hon'ble High Court dated 09.12.2013 but no relief has been granted to him till date.
13. As per the Medical Services Agreement entered into between the parties, the role of petitioner company is limited only to the extent of providing medical services to the hospital. The ownership of the hospital rests with the respondent trust. Thus, the respondent has a right to look into the services being provided by the petitioner company. The hospital has its own reputation in the area which it gained after providing services to the patients for a long period of time. The respondent trust has right to check the quality of services being provided by the petitioner company as per the Agreement and if the services provided are not up to the mark, it is the reputation of the trust which is at stake and not of the petitioner company. Nothing material relating to goodwill and reputation of petitioner company is at stake. The public at large knows the hospital to be run by a trust. Petitioner 20 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others is only providing medical services for smooth running of the hospital. Because of the aforesaid reasons, the respondent trust has every right to see the quality of services being provided by the petitioner company. For ensuring the quality of services of petitioner company being provided in the hospital, access to hospital is necessary. As per clause 9.1 of the Agreement the ownership of the hospital and lease holding of the land underlying Bensups Hospital land of the trust, shall continue to vest absolutely in the trust and petitioner company shall have no right, title or interest therein by virtue of any provisions of this Agreement. The respondent trust being the owner of the hospital has every right to enter into the hospital. If they enter in the premises of the hospital, they cannot be termed as trespassers.
14. As per the Agreement, the bank account in the name of Bensups Hospital has been designated as the operating account. The Gross Operating Expenses is to be met out of the operating account. The Gross Revenue is also to be paid only into the operating account. It is the duty of the trust to ensure that all such amounts are payable by third parties only into the 21 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others operating account. Respondent no.3 is one of the signatory of the account. The respondent is to receive Rs.20,00,000/ per months or 8% of the total profit made by petitioner by running the hospital whichever is more. Unless and until the respondent trust has access to the hospital, how can they ensure what is the revenue being generated in the hospital. If any bungling or mismanagement in respect of the fund/revenue is done by the petitioner company, the respondent trust will never be in a position to check the same, unless it has a right to supervise or control it. The respondent trust has right of complete supervision over the accounting/revenue generated in the hospital by virtue of being authorized signatory of the operating account and entitlement of 8% of revenue if it is more than Rs.20,00,000/. If no control is given to the trust, it will never be in a position to detect the fraud, if committed by the petitioner company.
15. Petitioner cannot be permitted to exclusively operate the operating account maintained in the name of Bensups Hospital. A counter sign by the signatory i.e. respondent no.2 has the effect of check and balances 22 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others of the account and that is necessary to ensure the fair and bonafide transaction from the account.
16. The Medical Services Agreement specifically provides that all movable properties pertaining to the hospital as currently present and existing shall remain the property of the trust and the petitioner company shall have no right, title or interest in the same except in relation to equipment installed by petitioner company in the hospital. Airtel Mobile Tower was admittedly in existence prior to entering into the Agreement by the parties. The petitioner company has no right in respect of the rent received by the respondent trust from the Airtel Mobile Tower. There is nothing in the Agreement to suggest that after the Agreement the rent received from the Airtel Company shall be deposited in the operating account.
17. The petitioner company has only invested the money in terms of infrastructure etc as per Agreement for running the hospital. The role of company is confined only to providing of the medical services. The complete control over the hospital continues with the respondent trust.
23 of 24 CS No. 207/2014 Cygnus Medicare Pvt. Ltd Vs B R Dhawan Memorial Charitable Trus & others Respondent being the owner of the hospital has every right to enter in the hospital to check the quality of services being provided by the petitioner company, to supervise the revenue generated in the hospital and to receive the profit as agreed i.e. Rs.20,00,000/ per month or 8 % of the total profit whichever is more.
18. In view of discussion made above, this court is of the considered view that petitioner has failed to make out a case for grant of interim relief as prayed in the application. Hence, the application under Section 9 of the Act is dismissed. The interim order passed on 31.08.2012 stands vacated. File be consigned to record room.
Announced in the open Court (RAJ KUMAR TRIPATHI)
on 07th August, 2014 ADDL. DISTRICT JUDGE
DWARKA COURTS: NEW DELHI
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