Madras High Court
Manoharamma Hotels And Investments ... vs Aruna Hotels Ltd. And Ors. on 20 February, 2004
Equivalent citations: AIR2004MAD344, 2004(2)ARBLR583(MADRAS), AIR 2004 MADRAS 344, (2004) 2 ARBILR 583
Author: V. Kanagaraj
Bench: V. Kanagaraj
ORDER V. Kanagaraj, J.
1. The above original application has been tiled by the applicant herein, praying to grant an order of temporary injunction restraining the respondents, their men, servants, agents, officers or any one claiming under them or through them from in any way interfering with the applicant's peaceful possession and enjoyment of the schedule 'C' property including the enjoyment of access, parking, lift, remodelling, power, additional bar license and public resort license till the suit claim is discharged.
2. The properties concerned with the application are the first and second floor along with all fixtures and equipments at No. 145, Sterling Road, Nungambakkam, Chennai-600 034, viz., "Aruna Centre".
3. The application would be filed by the applicant on grounds such as that the applicant is one of the group companies managed by the representative of the applicant and another having diversified activities in the film field : that way back in 1992, the second respondent herein borrowed a sum of Rs. 20,00,000/- (Rupees Twenty Lakhs only) on 18-4-1992 and another sum of Rs. 10,00,000/- (Rupees Ten Lakhs only) on 25-7-1992; that the second respondent paid Rs. 5,00,000/- (Rupees Five Lakhs only) on 10-6-1994, a further sum of Rs. 15,00,000/-(Rupees Fifteen Lakhs only) on 26-8-1994 and Rs. 10,000/- (Rupees Ten Thousand only) on 21-9-1997 all towards interest; that the second respondent had not settled the loan account till June 2000, but was attempting to sell a portion of the suit schedule property; that one of the applicant's group companies, M/s. Asian Capital Consolidated Fund, filed a case In O.S. No. 3659 of 2000 for a decree of permanent injunction, restraining the second respondent from selling the property.
4. The applicant would further submit that in a settlement, it was finally decided that the respondents would sell their discotheque business for a consideration of Rs. 1,50,00,000/- (Rupees One crore and Fifty Lakhs only) and the applicant could make good all the dues payable to the group companies by running the discotheque business; that an agreement was entered into between the applicant and the respondents on 28-3-2003 on the representations made on the part of the third respondent to the effect that the first respondent is running a Four Star Business Class Hotel situate In a land measuring about 13 grounds at No. 144. Sterling Road, Nungambakkam, Chennai-600 034; that in the "Aruna Centre", the first respondent owns the 1st, 3rd, 4th and 5th floors and the second respondent owns the second floor with proportionate undivided shares of land; that they both have entered into an agreement for the first respondent to acquire the second floor besides having a lease of the same from the second respondent and hence the second respondent also Joined the agreement dated 28-3-2003 as a confirming party; that in the said agreement, it was further represented that M/s. DMS Enterprises Private Limited had set up and was running a Bar and Discotheque in the second floor of "Aruna Centre" under the name and style of "Hell Freezes Over" (HPO); that the first respondent had acquired the rights to use the name of "HFO" for operating Discotheque within the Chennai city and that the first respondent would obtain necessary clearance from the authorities including the licence for running a Discotheque in the second floor of "Aruna Centre".
5. The applicant would further submit that on the basis of that representation of the respondent, he agreed to purchase the assets of the said Discotheque for a consideration of Rs. 1,40,00,000/- (Rupees One Crore Forty Lakhs) and the rights of "HFO" for Rs. 10,00,000/- (Rupees Ten lakhs only), totalling a sum of Rs. 1,50,00,000/- (Rupees One Crore Fifty Lakhs only) and it was a pre-conditional obligation on the respondents that they would obtain license for running the Discotheque in the second floor of the "Aruna Centre".
6. The further averments of the application are that towards the agreed consideration, sums of Rs. 5,00,000/- (Rupees Five Lakhs only), Rs. 15,00.000/- (Rupees Fifteen Lakhs only) and Rs. 10,00,000/- (Rupees Ten Lakhs only) were paid respectively on 10-3-2003 and 25-3-2003 by cheques drawn on ICICI Bank, T. Nagar, Chennai in favour of the first and second respondents at the time of signing the agreement; that further sums of Rs. 10,00,000/- (Rupees Ten Lakhs only), Rs. 13,00,000/- (Rupees Thirteen Lakhs only), Rs. 2,00,000/- (Rupees Two Lakhs only) and Rs. 5,00,000/- (Rupees Five Lakhs only) were paid by cheques respectively dated 7-4-2003, 12-4-2003 and 22-4-2003 in favour of the third respondent, all totalling a sum of Rs. 65,00,000/-(Rupees Sixty Five Lakhs only); that on 28-3-2003 itself, the applicant was put in possession of the second floor of the "Aruna Centre" and promised that within thirty days, the first respondent would obtain the license for running the Discotheque, based on which, the applicant recruited a Chief Executive for running a show in consultation of whom, he also invested a sum of Rs. 20,00,000/- (Rupees Twenty Lakhs only) for acquiring equipments, payment of rents etc; that apart from constituting a 35 men strong team for running Discotheque business in the first and second floors of "Aruna Centre" and to run the Bar in the second floor, he also paid a sum of Rs. 3.13.318/- (Rupees Three Lakhs Thirteen Thousand Three Hundred and Eighteen only) as the lease rent and a sum of Rs. 1,51,050/- (Rupees One Lakh Fifty One Thousand and Fifty only) for acquiring the Additional Bar licence and Rs. 30,000/- (Rupees Thirty Thousand only) for Draught Beer License Fee.
7. It would further be submitted that the first respondent was not able to obtain the Discotheque license, but only an Additional Bar license was obtained so as to run the business in the second floor; that on account of the absence of the dance shows, the applicant could not achieve the projected business; that in the third week of July 2003, the applicant insisted the first respondent to get the license within ten days failing which the said agreement would have to work its way; that even at that point, a sum of Rs. 1,00,000/- (Rupees One Lakh only) was paid by cheque in favour of "M/s. Aruna Hotels Limited", but the license was not forthcoming; that in the last week of July 2003, the first respondent informed the applicant that the discotheque license was granted and the applicant could right earnestly start the business; that the third respondent demanded a sum of Rs. 1,50,000/- (Rupees One Lakhs and Fifty Thousand only), which was also paid by cheque in favour of "M/s. Aruna Hotels Limited"; that even on 1-8-2003, the first respondent did not hand over the license; that ultimately the first respondent handed over a Public Resort License Issued by the Commissioner of Police, Chennai for conducting Indian Cultural Dances at Door Nos. 144 and 145, Sterling Road, Nungambakkam, Chennai in the year 2003 with a condition that Discotheque program should not be conducted; that with fond hopes that the Discotheque licence would be obtained by the first respondent huge investments were made by the applicant, besides shelling out a sum of Rs. 2,00,000/- (Rupees Two Lakhs only) every month to keep the crew in place; that having lost hopes, on 12-8-2003 the applicant Informed the third respondent that he was not Interested in any more promises and insisted on settlement of the entire loan amount between both the group companies; that since the third respondent suggested the applicant to occupy the first floor and continue the Banquet Halls Hiring Business as a compensatory measure, the applicant agreed and took possession of the first floor of "Aruna Centre" making a payment of Rs. 3,70,000/- (Rupees Three Lakhs Seventy-Thousand only) and a further payment of Rs. 1,75,000/- (Rupees One Lakh Seventy Five Thousand only) on 13-8-2003 by B.P.O.
8. While so, on 18-8-2003, the first respondent had unauthorisedly switched off the power supply to the entire second floor finding fault with the applicant for not having paid the agreed amount for using the first floor; that a further sum of Rs. 1,75,000/- (Rupees One Lakh and Seventy Five Thousand only) was paid and thereafter, many attempts made on the part of the applicant to meet the third respondent became futile, since he evaded responsibility; that from 28-8-2003 the first respondent refused to supply liquor items for running the Bar in spite of the fact that the first respondent was duty bound to ensure continuous supply as per the indent; that he was also Informed on the same day not to run any business activity In both the floors of the "Aruna Centre" from 1-9-2003; that he was at liberty to remove all the fixtures and equipments by the end of August 2003, failing which, the first respondent would remove everything and use it for themselves; that the conduct of the respondents is so alarming and not in consonance with the business practice; that on 4-9-2003 and on 12-9-2003, the second and third respondents' men respectively forced their entry in to the applicant's business premises with a view to Illegally throw the applicant's men out of the premises but their Illegal attempts were thwarted; that on 13-9-2003, the respondents' men interacted with the applicant's guests and informed them that "HFO" was closed and they could go to the first respondent's restaurant; that even the vehicles were not allowed to be parked and the respondents were firm on the applicant leaving the premises at once; that ultimately on 14-9-2003, the third respondent had switched off the power to the entire first and second floors of "Aruna Centre" and refused to restore the same and thereafter he was not available for any communication. Using a mobile generator, the applicant restored the power supply and continued the business.
9. The last phase of the petition would reveal that the applicant has the right to be in the property during the subsistence of the agreement; that as the first respondent failed to obtain a Discotheque license, which is a prerequisite to invoke any default clause against the applicant, the first respondent is not entitled to invoke any of the default clauses; that having Invested huge moneys, the applicant has to recover the same along with the old dues only by conducting a profitable business; that as per the terms of agreement, though the applicant is entitled to a notice contemplated under Clause 33, it has not been served; that as per Clause 8 of the said agreement, in the event of the respondent falling to make refund of the money, the applicant is entitled to be in possession of the first and second floors of the "Aruna Centre" without payment of any license fee for running other lawful activities, besides being entitled to a charge over the first and second floor of the "Aruna Centre" till the refund of the suit claim; that the applicant was further given to understand that as early as on 16-9-2002 Itself, the second floor of "Aruna Centre" stood attached to the Income Tax department for the dues of Rs. 1,46,53,501/- (Rupees One Crore Forty Six Lakhs Fifty Three Thousand Five Hundred and one only) payable by the second respondent to the said Department; that the respondents are guilty of suppression of these vital facts at the time of entering into the said agreement; that a sum of Rs. 85,00,000/- (Rupees Eighty Five Lakhs only) is due and payable by the first respondent in favour of the applicant; that yet another sum of Rs. 1,32,23,087/- (Rupees One Crore Thirty Two Lakhs Twenty Three Thousand and Eighty Seven only) is due and payable by the second respondent to the applicant as per the statement of accounts filed herewith : that he is lawfully entitled to be in possession of the first and second floor of "Aruna centre" and the respondent cannot interfere with such possession and enjoyment of the applicant; that a suit in C.S. No. 667 of 2003 has been filed by him against the respondents for the recovery of the money and for injunction. On such pleadings, the applicant would ultimately pray to the reliefs extracted supra.
10. In the counter-affidavit filed by the third respondent, besides generally denying all the allegations made in the application, he would specifically state that he is only a Director of M/s. Soundararajan & Company Private Limited and he had no other connection or control over the said Company, who is the second respondent. Denying knowledge regarding most of the allegations of paragraph 3 of the application, this respondent would state that the second respondent is a separate company registered under the Companies Act, 1956 and it has got its own business; that there is no commonality between respondents 1 and 2 except the second respondent so selling the basement, ground, 1st, 3rd, 4th and 5th floors of the "Aruna Centre", besides selling out 13 grounds adjacent to the site of "Aruna Centre"; that the first respondent constructed a Four Star Hotel in the said 13 grounds without having any right either over the land or the superstructure; that both the hotel and Aruna Centre are in one and the same compound; that for impleading the second respondent there is no nexus and the application becomes liable to be dismissed on the ground of mis-Joinder of parties and cause of action.
11. Also denying the averments of paragraph 4 of the application, this respondent would specifically deny that the first respondent agreed to sell the Discotheque business with a view to make good all the dues payable to the company of the applicant, but it was only A. Manohar Prasad, approached the first respondent for purchasing the equipments of the discotheque; that based on detailed discussions, the Leave and License Agreement dated 28-3-2003 was entered into between the applicant and the first respondent; that the second respondent signed only as a confirming party, since it continued its ownership over the second floor of "Aruna Centre" and the agreement with regard to the second floor; that the first respondent also entered into another agreement for sale on 10-4-2002 with the second respondent in respect of the second floor of "Aruna Centre", which was subsisting on the date of leave and Licence and excepting as a confirming party, the second respondent is in no way involved in the transaction between the applicant and the first respondent, which facts are incorporated in the preamble and the operative portion of the said agreement dated 28-3-2003.
12. Denying the settlement that is alleged to have been reached between the applicant and this respondent, as absolutely false, this respondent would attribute that the averments made in paragraphs 5 and 6 are matter of records and he would also specifically state that no reference is made under the Leave and License Agreement dated 28-3-2003 as to the earlier dues.
13. Dealing with paragraph 7 of the application, this respondent would state that as per the Leave and License Agreement the application for Discotheque license should be made within thirty days from the date of the agreement as contemplated under Clause 11 of the said agreement with provision for extension of the time by mutual consent; that while agreeing to permit the agreement to run the Discotheque business in the second floor as a reciprocal agreement, the first respondent is also entitled to have other branches of business such as Food and beverages; that the applicant had to purchase the assets and equipments at a cost of Rs. 1.40 crores, besides the good will of "HFO" at a cost of Rs. 10,00,000/- (Rupees Ten Lakhs only), which till date, the applicant has not made; that though the applicant has given two cheques for the said amount of Rs. 1.50 crores, instructions were imparted by the applicant not to present the cheque; that yet another sum of Rs. 3,70,000/- (Rupees Three Lakhs Seventy Thousand only) per month should also be paid as lump sum fee for the sale of beverages with another deposit of a sum of Rs. 50.00.000/- (Rupees Fifty Lakhs only) as caution deposit for using the first and second floors of "Aruna Centre", the first instalment of which has to be paid in three months and the second in ten months from the agreement as contemplated under Clause 25; that the applicant has not deposited this amount at all; that further a sum of Rs. 3,50,000/- (Rupees Three Lakhs and Fifty Thousand only) and a sum of Rs. 1,80,000/- (Rupees One Lakh and Eighty Thousand only) were to be paid to use the second floor and first floor respectively as per Clause 26, which the applicant is yet to pay and the like sum has to be paid for the use of the first and second floor of "Aruna Centre" per month. Since the permission to use the building was not given, the respondent is entitled to only Rs. 3,50,000/- (Rupees Three Lakhs and Fifty Thousand only),
14. The counter-affidavit would specifically deny the payment of a sum of Rs. 10,00,000/- (Rupees Ten Lakhs only) on 7-4-2003 and the further allegation that the total payment of Rs. 65,00,000/- (Rupees Sixth Five Lakhs only) was paid being not true and the said sums were paid only as personal loans and a balance of Rs. 15,00,000/- (Rupees Fifteen Lakhs only) was only paid to the first respondent towards payment contemplated under Clause 1 and 2 of the agreement; that the applicant is mixing up the payments with the private loans obtained by the respondent; that the applicant is attempting to connect different unconnected transactions between different parties with ulterior motive that he has taken a loan of Rs. 50,00,000/- (Rupees Fifty Lakhs only) from M/s. Asian Capital Consolidated Funds and Gemini Industries and Imaging Limited; that deducting this loan from Rs. 65,00,000/- (Rupees Sixty Five Lakhs only), the balance of Rs. 15,00,000/-(Rupees Fifteen Lakhs only) alone was paid to R-1 in furtherance of the agreement dated 28-3-2003 and the first respondent is not aware of the alleged payment made to the third respondent.
15. Pertaining to the allegations of paragraph 9 of the affidavit in the application, this respondent would say that the applicant was permitted to use the second floor of "Aruna Centre", but would deny the expenditure incurred by the applicant in the second floor of "Aruna Centre", except Rs. 3 to 4 lakhs towards purchase of equipments and lights etc. Regarding the bills, putting the applicant to strict proof, this respondent would attribute that the bills are created for the purpose of application and would wonder as to how such investments could be made prior to obtaining the Discotheque license. Admitting the payment of Rs. 3,13,318/- (Rupees Three Lakhs Thirteen Thousand Three Hundred and Thirteen only) towards lease rent of the second floor of "Aruna Centre", he would deny the responsibility for recruiting the staff and employees for the proposed Discotheque business to be run in the first and second floors of "Aruna Centre" but the understanding was to conduct Discotheque program in the second floor and the other activities like conducting PUB in the first floor. Regarding the allegations of paragraph 11, the counter affidavit would deny that those payments were made towards the reasons contemplated in the agreement.
16. Regarding paragraph 12 of the affidavit, this respondent would deny the cheques alleged to have been issued for Rs. 1,00,000/- (Rupees One Lakh only) and Rs. 1,50,000/- (Rupees One lakh and Fifty Thousand only) and would state that the applicant has to pay Leave and License fee of Rs. 3,50,000/- (Rupees Three Lakhs Fifty Thousand only) every month for the second floor and yet another fixed amount of Rs. 3,70,000/- (Rupees Three Lakhs and Seventy Thousand only) towards fee from April 2003; that he paid only during the months of June and July and a lump sum fee of Rs. 3,70,000/- (Rupees Three Lakhs and Seventy Thousand only) in the month of July by issuing two cheques, one for Rs. 3,13,318/- (Rupees Three Lakhs Thirteen Thousand Three Hundred and Eighteen only) and another dated 19-7-2003 for Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand only); that the first cheque was honoured, but the second cheque was dishonoured for want of funds and hence, he issued two more cheques in lieu of the dishonoured cheques. The first respondent tried its level best to obtain the Discotheque license since it is also beneficial to it and would state that there is no reason for it to delay the license being processed.
17. Attributing that the averments at paragraph 13 are matters of records, the respondent would generally state that the copy of the license obtained by the first respondent was given to the applicant on the very same day; that they had detailed discussions on the conditions stipulated in the licenses; that Mr. A. Manohar Prasad agreed to comply with all the conditions and this respondent advised the applicant to conduct the program in the second floor within the purview of the license issued by the Commissioner of Police.
18. Regarding the payments alleged to have been made In paragraphs 15 and 16 on 5-8-2003 and 18-8-2003, that is, a sum of Rs. 3,70,000/- (Rupees Three Lakhs Seventy Thousand only) and sums of Rs. 1,75,000/- (Rupees One Lakh Seventy Five Thousand only), the respondent would state that they are lump sum fee payable for July 2003 and the Leave and License Fee payable for the second floor for the same month and for no other purpose as alleged therein. Denying that on 18-8-2003 the first respondent unauthorisedly switched off the power supply, he would further state that no injunction would lie against their legal owner, particularly when the amount of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand only) has not been paid as per the agreement.
19. Denying the allegations of para 17 of the affidavit, the first respondent would offer his own explanation for having Interacted with the officers and the employees of the applicant with the Import that only in compliance of the conditions imposed in the discotheque licence particularly regarding the timings consequently advising the first respondent to wind up the activities by 30-9-2003. The counter-affidavit would also allege that the default committed by the applicant regarding the payment of the value of the assets and HFO aggregating to Rs. 1.50 crores and in the payment of monthly lump sum fees of Rs. 3,70,000/-, the leave and licence fee of Rs. 3,50,000/- per month, further failing to make 50% of the caution deposit i.e. Rs. 50 lakhs within three months, a settlement was reached with the applicant to vacate the premises and to settle the dues if any for him.
20. The allegations made in paragraphs 18 to 20 would be dismissed by the first respondent as imaginary and false, and only to mislead the Court; that when the first respondent was contemplating legal action to evict the applicant from the second floor of Aruna Centre, the applicant rushed to this Court to file a suit in C.S. No. 667 of 2003, which is nothing but abuse of process of law, that excepting to make some payments as detailed in settlement-1 attached to the counter and another payment of Rs. 15 lakhs as per the details of the statement of accounts, the applicant is still to pay Rs. 17,50,000/- as on 30-9-2003, besides committing the default in making the other payments as stated earlier, that the applicant has misquoted the provisions of leave and licence agreement; that Clause-33 of the agreement is not invokable in the facts and circumstances of the case; that there is no written notice from the applicant demanding refund of the amount paid by the applicant.
21. Denying the allegations made in paragraph 23 of the counter-affidavit as not known to the first respondent, he would state that he is given to understand by the second respondent about the ex parte injunction granted in favour of Asian Capital Consolidated Fund had been vacated on 1 -3-2001 and this fact had been suppressed; that the applicant is trying to mislead this Court alleging that payments are to be made by the second respondent, which has no nexus with the payment, if any, to be made by the first respondent. The respondent would reveal that he had taken a loan of Rs. 50 lakhs from Asian Capital Consolidated Fund and Gemini Industries & Imaging Limited, which has nothing to do with the transaction contemplated under the Leave and Licence Agreement; that the loan is a personal loan unconnected to the first respondent.
22. Regarding the allegations of paragraphs 24 and 25 of the affidavit, this respondent would submit that the default was committed only by the applicant, who neither claims to continue to enjoy the second floor of "Aruna Centre" nor has he established a prima facie case nor the balance of convenience with him and would plead to reject the application for Injunction. The respondent would also dismiss the allegations of paragraph 26 of the affidavit and regarding the allegations of paragraphs 27 and 28, the respondent would attribute that they are matters of record and the prayer sought for therein are not grantable since the application has never been in possession of either the first floor or the second floor and that the alleged contract is only a contract to licence with no interest in the immovable properties. He would further allege that the arbitral proceedings could be initiated only in respect of matters covered by the agreement and such proceedings cannot be invoked for any extraneous claim outside the scope of the agreement; that since the applicant was never ready and willing for arbitration and having filed the suit has not come forward to file this application under Section 9 of the Arbitration Act during the pendency of the suit, which would only go to show that the applicant has not approached this Court with clean hands. On such averments, the first respondent would ultimately pray to dismiss the above application.
23. In the supplementary counter-affidavit filed by the third respondent to that of the counter filed on behalf of the first respondent, the respondent would only reiterate what has been pleaded in the main counter without any specific new facts and circumstances being brought forth and therefore, the tracing the said counter, since being a time consuming affair under repetition of the same facts already pleaded in the counter-affidavit filed on behalf of the first respondent, but only a stress being laid on those items brought forth and hence, this Court is not of the view to trace the points covered in this counter-affidavit.
24. During arguments, the learned Senior Counsel appearing on behalf of the applicant would submit that in an application under Section 9 of the Arbitration and Conciliation Act seeking temporary injunction restraining the respondents from interfering with the applicant's possession and enjoyment of the "C" schedule properties tracing the facts and events as pleaded in the affidavit, which has been extracted supra, the learned Senior Counsel would point out that all the "payments made by way of cheques, which the other side cannot dispute, but what the other side says is that under Clause 7 of the agreement, the applicant has to pay a sum of Rs. 1 crore and odd, which cannot be paid; that it is specifically agreed that obtaining the licence is a prerequisite to invoke any default clause; that Clauses 7 and 8 are very important; that not only the possession but also the applicant has charge over the properties, that he can remain in possession, besides holding that charge now against their own undertaking the other side is trying to dispossess the applicant.
25. Continuing his argument, the learned Senior Counsel would point out that other side's argument is that the company has taken a policy decision not to grant any licence to discotheque till date and no legislation, no notification or no Government Order has been passed between the period of his entering into the agreement till date and hence, it is utter falsehood to say that the company has taken a policy decision; that the other side has to perform their part of the contract, lest the applicant is entitled to get the reliefs mentioned in the contract; that the judgment relied on by the other side in M. N. Clubwala v. Fida Hussain Saheb, is on a different footing; that it is hot just a bar that the applicant spending enormous amount towards remodelling the premises; that in the area allotted he has spent lakhs and lakhs of rupees and remodelled the entire area to international standards; that he cannot take permanent structure and that Section 60 of the Easements Act cannot come to the rescue of the other side.
26. The further arguments of the learned Senior Counsel is that when the respondents received the money, they say that the applicant is a third party and when it comes to any licence, they say that it is the responsibility of the applicant, thus playing diabolic standards, that they are in possession of the property is indisputable. On such arguments, the learned Senior Counsel would cite the following judgments respectively reported in (1) (Alamelu Achi v. Ponniah) (2) (M. N. Clubwala v. Fida Hussain Saheb) (3) 1996 (1) Mad LW 13 (C. Sekar v. Perilovanpatti Hindu Nadars etc. High School) (4) 1996 (1) Mad LW 19 (K. S. Thiruganasambandam Chettiar (died) etc. etc. v. The Settlement Thasildar, Coimbatore) (5) (Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya)
27. So far as the first Judgment cited above is concerned, the learned single Judge of this Court, while dealing with the second appeal has remarked :
"a person in wrongful possession of property is not entitled to be protected against the lawful owner by an order of injunction. When once a Court finds that a plaintiffs possession of property is wrongful such possession cannot be protected by assistance of Court."
28. In the second judgment cited above, the Honourable Supreme Court has held :
"In the case before us, however, while it is true that each stall-holder is entitled to the exclusive use of his stall from day to day it is clear that he has no right to use it as and when he chooses to do so or to sleep in the stall during the night after closure of the market or enter the pleasure. He can use it only during a stated period every day and subject to several conditions. These circumstances, coupled with the fact that the responsibility for cleaning the stalls, disinfecting them and of closing the market in which the stalls are situate is placed by the Act, the regulations made thereunder and the licence issued to the landlords is on the landlords would indicate that the legal possession of the stalls must also be deemed to have been with the landlords and not with the stall-holders. The right which the stallholders had was to the exclusive use of the stalls during stated hours and nothing more. Looking at the matter in a slightly different way it would seem that it could never have been the intention of the parties to grant anything more than a licence to the stall holders. The duties cast on the landlord by the Act are onerous and for performing those duties they were entitled to free and easy access to the stalls. They are also required to see to it that the market functioned only within the stated hours and not beyond them and also that the premises were used for no purpose other than of vending comestibles. A further duty which lay upon the landlords was to guard the entrance to the market. These duties could not be effectively carried out by the landlord by parting with possession in favour of the stall-holders by reason of which the performance by the landlords of their duties and obligations could easily be rendered Impossible if the stall-holders adopted an unreasonable attitude. If the landlords failed to perform their obligations they would be exposed to penalties under the Act and also stood in danger of having their licences revoked. Could in such circumstances the landlords have ever intended to part with possession in favour of the stall-holders and thus place themselves at the mercy of these people? We are, therefore, of the opinion that the intention of the parties was to bring into existence merely a licence and not a lease and the word 'rent' was used loosely for 'fee'."
29. In the third judgment cited above, a Division Bench of this Court, while dealing with an Original Side Appeal, held :
"The only question which is relevant at this interlocutory stage in an application for injunction restraining the defendants from interfering with the possession of the plain-tiffs is whether the plaintiffs are in possession as alleged by them. Unless the plaintiffs prove prima facie that they are in possession, no order of injunction can be granted in their favour. Even if the possession of the defendants is illegal and unlawful, there cannot be an order of injunction by the Court in favour of a person who is not in possession, even if that person is the true owner."
30. In the fourth judgment cited above, a Full Bench of the Honourable Apex Court, while dealing with Section 13 of the Tamil Nadu Minor Inams (Abolition and Conversion into Ryotwari) Act, 1963, wherein in a case of dual estate i.e. that the building belonging to one and the site to another, has held:
"It is not necessary that both the site and the building should belong to one and the same person so as to derive the benefit of Section 13 with effect from the appointed, day."
31. In the last judgment cited above, a Division Bench of the Honourable Apex Court has :
"For interpretation of Section 8, Section 5 would have no bearing. Except Section 8, there is no other provision in the Act that in a pending suit, the dispute is required to be referred to the arbitrator. Further, the matter is not required to be referred to the Arbitral Tribunal, if : (1) the parties to the arbitration agreement have not filed any such application for referring the dispute to the arbitrator; (2) in a pending suit, such application is not filed before submitting first statement on the substance of the dispute; or (3) such application is not accompanied by the original arbitration agreement or duly certified copy thereof. This would, therefore, mean that the Arbitration Act does not oust the jurisdiction of the civil Court to decide the dispute in a case where parties to the arbitration agreement do not take appropriate steps as contemplated under Sub-sections (1) and (2) of Section 8 of the Act.
Secondly, there is no provision in the Act that when the subject-matter of the suit includes subject-matter of the arbitration agreement as well as other disputes, the matter is required to be referred to arbitration. There is also no provision for splitting the cause or parties and referring the subject-matter of the suit to the arbitrators.
Thirdly, there is no provision as to what is required to be done in a case where some parties to the suit are not parties to the arbitration agreement."
On such arguments, the learned senior counsel for the applicant would pray to grant the reliefs sought for in the above application.
32. In reply, the learned senior counsel appearing on behalf of the first and third respondents would submit that the first application filed under Section 9 of the Arbitration and Conciliation Act was not entertained since the suit in C.S. No. 667 of 2003 was pending and without withdrawing the said suit, the applicant has filed similar injunction applications in O.A. Nos. 747 and 748 of 2003 and only withdrawing the original applications praying to restrain the respondents from encumbering and from interfering with his possession; that he has withdrawn only the applications when the suit is still pending; that the applicant cannot have two remedies, he should have withdrawn the suit itself; that the act of the applicant is beyond the agreement and beyond the arbitration clause that Section 9 is discretionary and at this score itself, the suit becomes liable to be dismissed.
33. Continuing to argue, the learned senior counsel would point out that the applicant cannot have two courses under two different forums of law splitting the cause of action. At this juncture, the learned senior counsel would cite a judgment of the Honourable Apex Court delivered in Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya, wherein it is held (at page 2255-2256 of AIR) :
"The relevant language used in Section 8 (of the Arbitration and Conciliation Act, 1996) is : "in a matter which is the subject of an arbitration agreement", the Court is required to refer the parties to arbitration. Therefore, the suit should be in respect of "a matter" which the parties have agreed to refer and which comes within the ambit of arbitration agreement. Where, however, a suit is commenced "as to a matter" which lies outside the arbitration agreement and is also between some of the parties who are not parties to the arbitration agreement, there is no question of application of Section 8. The words "a matter" indicate that the entire subject-matter of the suit should be subject to arbitration agreement".
"It would be difficult to give an Interpretation to Section 8 under which bifurcation of the cause of action, that is to say, the subject-matter of the suit or in some cases bifurcation of the suit between parties who are parties to the arbitration agreement and others is possible. This would be laying down a totally new procedure not contemplated under the Act".
"Secondly, such bifurcation of suit in two parts, one to be decided by the Arbitral Tribunal and the other to be decided by the civil Court would inevitably delay the proceedings. The whole purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by such procedure. It would also increase the cost of litigation and harassment to the parties and on occasions there is possibility of conflicting judgments and orders by two different forums".
34. The learned senior counsel would then submit that though the interim application is only pending the suit, the applicant keeps the main relief pending, without withdrawing the suit itself; that on merits, the main agreement entered into on 28-3-2003 by the applicant and the respondents 1 and 2, the third respondent has been shown as an individual who represents a Public Limited Company in his capacity as the Vice Chairman and Managing Director and not in his individual capacity; that it is an independent legal entity wherein everything is limited and nothing could be done in his personal capacity; that when the third respondent is not a party and impleading him, under Section 9 of the Act, is not permissible in law; that no relief can be sought for against the therefore this application is not maintainable for mis-joinder of parties.
35. In clarification, the learned senior counsel for the applicant would submit that the suit claim is Rs. 2,27,00,000/- that it has been specifically agreed and the respondents against their own undertaking are now trying to manipulate the whole affair in order to obtain wrongful gains putting him on wrongful loss, he would claim that he is entitled to the injunction prayed for.
36. In consideration of the facts pleaded, having regard to the materials placed on record and upon hearing the learned counsel for all the parties, at the outset it is relevant to focus attention on the prayer of the petition in order to ward-off many confusions and confrontations. The prayer is to the extent of grant of an order of temporary injunction restraining the respondents and their men from in any manner interfering with the applicant's peaceful possession and enjoyment of the schedule 'C' property with all such facilities annexed to the same till the suit claim is discharged. It is pertinent to point out that primarily this is an interim protection that is sought for on the part of the petitioner pending disposal of the suit and it has absolutely no clash with the suit claim at all and therefore the question of maintainability of such an application before this Court in view of the suit alleged to have been instituted by the petitioner in C.S. No. 667 of 2003 is ruled out.
37. It could further be understood that the application has enormous bearing on the suit claim and therefore it cannot also be so easily discarded that the above application, which is mainly based on the agreement dated 28-3-2003 admittedly entered into in between the applicant and the respondents have culminated based on the representations made on the part of the third respondent to the effect of the crux of the agreement regarding the subject-matter as extracted in para 4 supra. Therefore, the mere allegation in an application of this sort is sufficient to prima facie arrive at the conclusion that the third respondent is an integral part of the agreement dated 28-3-2003 and therefore the application cannot become bad for mis-joinder of the third respondent. It could further be remembered that in law, mis-joinder of parties, even in the event of coming to be proved, would not lead the situation for the very claim to be rejected or the application to be dismissed as not maintainable and it could not be declared that the suit or application is bad for mis-joinder of parties becoming invalid pertaining to the other reliefs sought for regarding the other parties relevant to the suit or application. If at all it is only a remedial defect which even has not occurred in this application regarding the third respondent.
38. Secondly, the basic case of the applicant Is that they had dealings in money wherein enormous amounts are alleged to have been parted with by the applicant in favour of the respondents particularly, the second respondent well before entering into the agreement dated 28-3-2003 as it has been extracted from the pleadings of the application from paragraphs 3 to 6 supra. However, on the part of respondents, they would hotly contest stating that the applicant is attempting to connect different unconnected transactions between different parties with ulterior motives and citing a loan of Rs. 50 lakhs taken from M/s. Asian Capital Consolidated Funds and Gemini Industries and Image Limited, they would argue that deducting this loan from Rs. 65 lakhs, only the balance of Rs. 15 lakhs was paid to the first respondent in furtherance of the agreement dated 28-3-2003 and that the first respondent is not aware of the alleged payments made towards the third respondent and that even the agreed sums have been paid only as personal loans to the first respondent towards the payment contemplated under Clauses 1 and 2 of the agreement and there is no point in mixing up the payments with the private loans obtained by the second respondent thus attempting to commit different unconnected transactions between different parties. But, there is no denying of the fact that prior transactions were in existence in between the applicant and respondents and moneys have been shelved out by the applicant either direct to the respondents or settling their dues with the third parties or otherwise and therefore, there is enough materials prima facie to support the case of the applicant so far as Clauses 1 and 2 of the agreement are concerned, which are sufficient for a decision to be arrived at in a matter of this sort seeking for a temporary relief pending disposal of the main suit instituted by the applicant and hence this point could also be decided only in favour of the applicant and against the respondents and the same is decided accordingly.
39. The third point raised on the part of the respondents is regarding the arbitration clause and the argument goes that while an arbitration clause is inserted in the agreement, by mutual consent, the chances for instituting the suit are either remote or nil. But, on the part of the applicant having not only already instituted the suit, he has also come forward to file the application of this sort and the respondents would argue that without withdrawing the very suit, the applicant has only withdrawn the IAS, filed in that suit and hence this application, during the pendency of the suit, is not maintainable thus seeking to dismiss the application at this score also.
40. The controversy regarding whether it is the suit or application of this sort that could be maintained or both side by side or to what extent each of these could be maintained, no straight line could be drawn and the judgments cited on the part of the respondents to this effect are only suggestive in nature in the given circumstances of each and every case and the possibility of filing of an application is not at all ruled out which greatly depends on the Intention of parties entering into the agreement and it could be remembered that the Arbitration and Conciliation Act, which is a special Act, does not oust the jurisdiction of the civil Court to decide the dispute in a case where parties to the arbitration agreement do not take appropriate steps as contemplated under subsections 1 and 2 of the Section 8; that there is also no provision in the Act that the subject-matter of the suit Includes the subject-matter of the arbitration agreement as well as other disputes; that the matter Is required to be referred to arbitration and there is also no provision for splitting the causes of action or parties and referring the subject-matter of the suit to the Arbitrator and that there is also no provision as to what is required to be done in a case where some parties to the suit are not parties to the arbitration agreement, as it has been ruled by the Honourable Apex Court In its latest decision cited by the applicant reported In (extracted supra).
41. In these circumstances, this Court is unable to arrive at the conclusion that either the jurisdiction of this Court is ousted in entertaining the above application or filing of the regular suit in the civil forum of law, or on account of the applicant coming forward to withdraw the LAS, prior to filing of this application and hence he would not have the locus standi to file such an application before this Court. The simple answer for all the above legal questions raised is that it is perfectly right on the part of this Court to have the jurisdiction to entertain an application of this sort and there is no impediment to pass an order positively in favour of the applicant and that the applicant is also fully entitled to maintain an application of this sort before this Court in spite of a suit filed by him is kept pending before the civil forum and further, since no interim application is kept pending in the suit for any relief, the only conclusion that could be arrived at is that this application could be very well maintained before this Court in the circumstances of the case.
42. On facts, on a overall consideration of the facts and circumstances of the case, there is no denying of the fact that the respondents have inducted the applicant into possession of the "C" schedule properties on the basis of the agreement dated 28-3-2003 on certain terms and conditions besides promising to get the discotheque licence within a particular point of time and having failed to perform their part of agreement, many inter-meddling arrangements have been, made and while so, it is totally unreasonable on the part of the respondents to attempt to eject the petitioner from out of possession without resolving the main issues in a reasonable and legal manner and therefore this Court is of the firm view that pending disposal of the suit, the applicant is entitled to such protection and the grant of the order of temporary injunction by this Court in favour of the applicant is a necessity in the circumstances of the case and the same is ordered accordingly.
43. In result, the above application's allowed as prayed for.
44. No costs.