Calcutta High Court
Eastern Railway vs Lafarge India Pvt. Ltd on 4 January, 2017
Author: Sanjib Banerjee
Bench: Sanjib Banerjee, Siddhartha Chattopadhyay
O-62
APOT No. 109 of 2016
GA No. 1010 of 2016
GA No. 1121 of 2016
AP No. 481 of 2015
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
EASTERN RAILWAY
Versus
LAFARGE INDIA PVT. LTD.
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE
AND
The Hon'ble JUSTICE SIDDHARTHA CHATTOPADHYAY
Date : 4th January, 2017.
Appearance
Mr. Sanjit Kr. Ghosh, Adv.
Mr. Malay Ghosh, Sr. Adv.
Mr. Prantik Garai, Adv.
The Court : In view of the good grounds shown, the delay in
preferring the appeal is condoned.
The appeal is directed against an order dated July 27, 2015 passed
on a petition under Section 9 of the Arbitration and Conciliation Act, 1996.
The respondent is a tenant under the railways; or, at any rate, a lessee.
The respondent entered into possession of the railway premises pursuant to an agreement of May 24, 1999.
2
There is no dispute that clause 4 of the relevant agreement empowers the railways to enhance the rent without notice to the petitioner. The railways enhanced such rent and claimed a sum in excess of Rs.1.21 crore from the respondent. By the order impugned, it was observed, inter alia, as follows:-
"According to the petitioner, this rent hike has been made wrongfully by the railways. This dispute between the parties is to be resolved thorough arbitration, since arbitral proceedings have already been started under Section 21 of the Arbitration and Conciliation Act, 1996. But in the meantime, according to the petitioner, the railways are trying to dispossess them of the said property.
I think this course of action is not permitted once arbitration proceeding has started. The railways should make an effort to expedite the same and get an award in their favour before evicting the petitioner. This section 9 application is for protection against eviction."
The order impugned directed the respondent to furnish a bank guarantee in favour of the General Manager of Eastern Railway for a sum of Rs.25 lakh. The bank guarantee is to be kept renewed till the disposal of the arbitration. An omnibus injunction has been granted restraining the railways from disturbing the respondent's possession of the premises in question till the publication of the award.
For the grant of an order of injunction, even under Section 9 of the said Act of 1996, a prima facie ground should be noticed and the question of convenience needs also to be addressed. The order impugned merely records an allegation made by the respondent herein that the increase in the rent had been 3 made wrongfully by the railways, without even recognising how it was asserted to be wrongful. Merely because a lessee claims that the increased rent is disproportionate or wrongful, no injunction can issue without a prima facie assessment of the reason proffered to challenge the increase. Indeed, the order impugned does not indicate the reason why the respondent asserted the increase to be wrongful.
On the issue of balance of convenience, the order is equally silent. If money was paid at the enhanced rate by the respondent to the railways and the payment was directed to be subject to the outcome of the arbitral reference, no prejudice would have been suffered by the respondent herein. It could not have been the respondent's case that Eastern Railway would evaporate or vanish upon receiving the rent and without the reference being concluded.
True to the games that litigants like the respondent play and, unfortunately, encouraged sometimes by orders of Court, the railways complain that the reference has been scuttled by repeated attempts being made by the respondent to question the composition of the arbitral tribunal and insist on an independent panel of arbitrators to take up the reference, which is contrary to the arbitration clause contained in the relevant agreement.
For the reasons aforesaid, the order impugned cannot be sustained and the same is set aside. The entire enhanced payment on account of rent should be deposited by the respondent with the appropriate authority of the railways within a period of four weeks from date. In other words, there will be an unconditional injunction restraining the railways from removing the respondent from the premises in question for a period of four weeks. The railways will be at liberty to take appropriate steps in accordance with law, including for the immediate 4 forcible eviction of the respondent, after four weeks from date if the entire dues on account of rent as demanded are not tendered by then.
It is needless to say that the respondent will be obliged to pay the current rent at the enhanced rate demanded by the railways and all payments made at the increased rate of rent will abide by the result of the arbitral reference.
Upon the payment being tendered in terms of this order within four weeks from date, the bank guarantee will stand discharged.
In the light of the above, no costs are awarded against the respondent. Urgent certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(SANJIB BANERJEE, J.) (SIDDHARTHA CHATTOPADHYAY, J.) sg.