Bangalore District Court
Sri. Kunduru Ramana Reddy vs Sri.R.V.Shiva Reddy on 2 September, 2022
IN THE COURT OF THE LXXXVI ADDL. CITY CIVIL JUDGE
AT BANGALORE [CCH.No.87]
Present:
Sri.SUNIL ANDANEPPA SHETTAR, B.Sc., LLB., (SPL)
LXXXVI ADDL. CITY CIVIL JUDGE
Dated this the 2nd day of September, 2022
Com.A.A.No.238/2022
Petitioner: Sri. Kunduru Ramana Reddy
S/o Sri. Venkata Reddy
Partner
M/s. Abhi Developers,
Aged about 51 years,
Presently resident of
# 7030 Ang Mo Kio Avenue 5
#08-60 Northstar@AMK
Singapore-569880
And permanent resident:
Flat No.301,
Mahalakshmi Nivas,
Sagar Society,
Road No.2, Banjara hills,
Hyderabad-500034
(By S.A, Advocate)
- Vs -
Respondents: 1. Sri.R.V.Shiva Reddy
S/o.Sri.Rama Reddy
Aged about 49 years.
2. Smt.Lalitha Reddy
W/o.Sri.Shiva Reddy,
Aged about 46 years,
2 Com.A.A.No.238/2022
Both respondents No.1 and 2
Are residents of No.116,
1st J Main, G cross,
Kasturinagar, Green view layout,
Bangalore-560043.
3. Sri.Kaka Haribabu
S/o.Sri.Kaka Venkateswarlu,
Aged about 48 years,
Resident of House No.13/1/55/E/50,
Avanthinagar East, Erragada,
Hyderabad-500018.
(R1 & 2 by K.N.M., Advocate)
Date of institution
of the suit : 21.04.2022
Nature of the petition : U/s 9 of the Arbitration and
Conciliation Act, 1996
Date on which the
Judgment was pronounced : 02.09.2022
Year/s Month/s Day/s
Total Duration 00 04 12
(SUNIL.A.SHETTAR)
LXXXVI Addl. City Civil Judge
Bangalore.
JUDGMENT
This is the petition filed by the petitioner against the respondents No. 1 to 3 under Sec.9(ii) (e) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as "the Act") 3 Com.A.A.No.238/2022 seeking an interim measure of protection of injunction restraining the respondents, their legal heirs, representatives, agents or anybody claiming through them from alienating, selling or creating any kind of third party rights/interest over the petition schedule property until constitution of the arbitral tribunal and for costs.
2. The brief facts of the case of the petitioner as narrated in the petition are as under:-
That the petitioner and the respondent No.3 had constituted registered partnership firm by name M/s Abhi Developers by virtue of registered partnership deed dated 30.10.2017 having its registered office at Hyderabad and the firm was involved in real estate, land developers, township developers, satellite town promoters and other related activities.
3. The petitioner is the managing director of K.S.R properties private limited and the respondent No.1 who was associated with the K.S.R properties private limited prior to the year 2015 had approached the land owners of the petition schedule property in order to procure the land to the petitioner and had requested the petitioner to enter into a contract for 4 Com.A.A.No.238/2022 development of the petition schedule property to earn good profits to KSR properties private limited. Accordingly, a memorandum of understanding dated 08.01.2016 came to be entered between the petitioner with land owners i.e. Hanumanthappa, B.H.Krishnamurthy, Vani.R and others under which an advance refundable advance amount of Rs.85,00,000/- was paid by the petitioner to the aforesaid land owners and also agreed to formulate a scheme for development of the properties.
4. It is further contended that the petitioner is residing in Singapore and has been traveling to and from India and during his absence, he had asked the respondent No.1 to look-after his business as the respondent No.1 is the resident of Bangalore. In the meanwhile when the preparations for the project and the process of joint development agreement were in progress, the respondent No.1 during the month of April 2018 approached the petitioner and said that one of the party under the memorandum of agreement by name R.Vani W/o V.H.Venkatesh Kumar had filed a suit for partition and separate possession in Sy.No.7 of Bychapura village in O.S.No.771/2016 on the file of Senior Civil Judge, Devanahalli and obtained an order of 5 Com.A.A.No.238/2022 injunction. The respondent No.1 further advised the petitioner not to proceed with the said property and only to proceed with the land owners of Sy.No.9 of Baichapura village.
5. It is also the case of the petitioner that he was ignorant of the transactions that has taken place at Bangalore as the entire project was taken care by respondent No.1 and he was blindly made to believe the words of respondent No.1 and agreed to terminate the contract entered between the land owners and KSR properties and in turn to nominate "Abhi Developers" in the place of KSR properties.
6. It is further contended that in terms of the MOU dated 08.01.2016, the JDA dated 11.07.2018 came to be entered for the development of the land bearing Sy.No.9 of Baichapura Village for construction of residential apartments. It is alleged that the respondent No.1 who was incharge of the project in active collusion with respondent No.2 and the land owners by taking advantage of the absence of the petitioner and his busy schedule on behalf of the firm started acting detrimental to the interest of the petitioner and also hatched a plan to knock of the partnership firm and also the project by name "Abhi Homes".
6 Com.A.A.No.238/2022
7. During the course of the business, the partnership firm has availed the loan of Rs.9,80,00,000/- from state bank of India as working capital as per the letter of the bank dated 15.06.2019 on the project by name "Abhi Homes" by offering the petition schedule property as a security. After obtaining the loan the petitioner has commenced the work of construction of residential apartments and when the work was in full swing, the petitioner has to stop the construction from 24.03.2020 due to covid-19 pandemic. Thereafter, during the month of November 2020, the applicant had began preparation for commencement of the work and at that time the land owner by name krishnamurthy turned hostile and expressed his anger for stopping the work due to covid-19 and also threatened the employees of petitioner with dire consequences and also that he would file a case for cancellation for joint development agreement and lodged a police complaint.
8. It is further alleged that the land owners in collusion with respondent No.1 had closed the main gates of the project site and thereby the petitioner was put to mental stress and financial burden. The respondent No.1 also avoided the petitioner when he was approached through telephone calls, 7 Com.A.A.No.238/2022 but whenever the respondent No.1 has answered, he threatened that the land owners were powerful person and also advocate and it is very risky to face them before court of law. It is further alleged that the respondent No.1 with a malafide intention to take over the project of 'Abhi Homes' has created an unpleasant atmosphere and also started blackmailing the petitioner. It is further contended that the respondent No.1 being incharge of the project and also the marketing agent instead of resolving the things has misled the petitioner.
9. It is further contended that the respondent No.1 insisted that if he is made one of the partners of firm, he would pursue the land owners from doing illegal acts and dropping of the legal proceedings and also he can effectively involve in marketing to gain more funds to the firm. Thereafter, the petitioner consulted the respondent No.3 who is the partner of Abhi Developers and accountant of KSR properties also endorsed the representation of respondent No.1 for reconstitution of the firm. Accordingly, in the month of January 2021 the respondents No.1 and 3 came to Hyderabad with certain typed deed of reconstitution dated 18.01.2021 and also blank stamp papers and white papers and proposed that he has 8 Com.A.A.No.238/2022 prepared the deed of reconstitution dated 18.01.2021 in consultation with his advocate, under which the respondent No.1 and his wife would become incoming partners with a share of 1% each and the share of the petitioner as 95%. At that time while tendering the acceptance of reconstitution deed dated 18.01.2021, the respondent No.3 has obtained signatures and thumb impression on nearly twelve stamp papers and some blank white papers under the guise that they are required to complete the procedures for implementation of the project as pandemic was prevalent restricting the moments.
10. It is further contended that the respondents No.1 and 2 were brought into the partnership firm as nominal partners though they have not contributed any amount or goodwill in the firm. Since the 'Abhi Developers' Firm was a new firm and it was difficult to fund the project immediately, it was agreed between the owners of the land and the partners of the firm that the amounts already paid by KSR properties are to be treated as advances and 'Abihi Developers' shall continue with the project. The KSR properties has paid an amount of rupees two crores as refundable advance to land owners and spent a sum of Rs.1,00,00,000/- for implementation of the project. 9 Com.A.A.No.238/2022 Therefore, it was understood that KSR properties are also stakeholders.
11. It is further contended that since the petitioner did not receive any intimation of the project for more than eight months, he made a call to the new partners of the firm, but there was no response and thereafter, the petitioner sent his person to know about the progress of work. At that time the employees and agents of the respondent No.2 threatened the said person stating that the petitioner has nothing to do with the project. On enquiry the petitioner came to know that a document styled as deed of reconstitution dated 25.01.2021 has been registered in the office of Registrar of Firms, Hyderabad (south) in which the petitioner is shown as outgoing partner and the share of the respondents No.1 and 2 who are the signatories to the said documents is shown as 95% and 5% respectively. It is alleged that the respondents No.1 and 2 in collusion with respondents No.3 have misused the blank singed stamp papers and white signed stamp papers and created the reconstitution deed dated 25.01.2001. The said deed is an outcome of concoction and fraud. The document referred as MOU dated 21.01.2021 in the reconstitution deed dated 10 Com.A.A.No.238/2022 25.01.2021 is also a fraudulent document.
12. It is further alleged that the respondent with an evil and criminal intention to defraud the KSR Properties Private Limited as well as the petitioner induced the petitioner to believe that MOU dated 08.01.2016 has run into litigation and hence, the properties needs to be transferred to a new firm. The respondents have played undue influence upon the petitioner and there is no free consent of the petitioner. The reconstitution deed is unconscionable one and hence, the same cannot be enforced.
13. It is further contended that the respondents with an intention to create third party interest over the petition schedule property are trying to alienate the same and in that aspect the petitioner has lodged the police complaint against the respondents No.1 and 2, but no action has been taken. Hence, the petition schedule property is to be preserved till the matter is referred to an arbitrator to declare the deed of reconstitution dated 25.01.2021 as null and void.
14. It is further contended that the firm at present owns 70% divided or undivided share, right, interest and ownership over the petition schedule property. The total number of flats 11 Com.A.A.No.238/2022 constructed on the petition schedule property by the firm is 292 flats and out of which 204 flats are owned by the firm as per the JDA entered with the land owners and at present the firm is selling one flat at Rs.35,00,00/- and hence, the present value of the assets owned by the firm in the project is around rupees seventy crores. The petitioner having invested so much of money into the firm for the development of the project is placed in an unfair footing by the illegal acts of the respondent.
15. As per clause 22 of the partnership deed dated 30.10.2017 in the event of any dispute that may arise between parties to the agreement shall be resolved through the process of arbitration. Clause 28 of the reconstitution deed dated 25.01.2021 deals with resolving the dispute through arbitration if any dispute arises between parties touching upon the partnership affairs. The act of the respondents is completely illegal, which seriously impacts the reputation of the petition and also monetary loss. The petitioner has also requested for commencement of an arbitration proceedings and in the meanwhile if the respondents alienates the petition schedule property, the petitioner will be put to greater hardship. The petitioner has made out prima-facie case and the balance of 12 Com.A.A.No.238/2022 convenience lies in his favour. Hence, on these grounds the petitioner has prayed for grant an interim measure of protection by way of injunction by allowing the petition.
16. The respondents No.1 and 2 have resisted the petition by filing their common objections and denied the allegations made against them. The respondents have raised an objection with respect to the jurisdiction of the court as the dispute raised by the petitioner is not commercial dispute as per the Commercial Courts Act, 2015. They have also raised an objection with respect to the maintainability of the petition on the ground of non-joinder of necessary parties as the firm is not made as a party. The respondent has also raised an objection that the petition is bad for mis-joinder of respondent No.3 as he is no more the partner of the firm. The respondents have also raised an objection with respect to the territorial jurisdiction of the court. It is their contention that as per the original partnership deed dated 30.10.2017, the jurisdiction agreed upon was at Hyderabad. The reconstitution deed dated 25.01.2021 confers the jurisdiction on this court, but the execution of the said document is disputed by the petitioner. When the petitioner has submitted to the jurisdiction of this 13 Com.A.A.No.238/2022 court, then he cannot dispute the execution of the reconstitution deed dated 25.01.2021. The petitioner is approbating and repprobating the facts and as such the petition is not maintainable. The allegations that the petitioner has signed on blank stamp papers and white papers and the same have been misused by the respondent is denied and disputed.
17. The petitioner is to enter into a JDA and obtain huge loans from the financial institutions by mortgaging the properties and withdraw the amounts without developing the properties or complying the terms and conditions of the agreement causing heavy loss to the land owners and the customers. Some of the projects undertaken and launched by the petitioner have never been completed and the said projects have been mentioned in the objections.
18. It is also the case of the respondents that the project land under the JDA was to an extent of 2.08 acres and as soon as the JDA was entered with the land owners, the petitioner mortgaged his rights and raised a loan of Rs.9,80,00,000/- and out of which a sum of Rs.6,09,00,000/- was withdrawn by the petitioner and the same has not been used towards the development of the project. The petitioner has diverted the said 14 Com.A.A.No.238/2022 funds to various other projects which are not related to the project under the lis. The outstanding amount to be paid by the suppliers and contractors who have rendered services to the project is around Rs.1,23,00,000/-.
19. The respondents were approached by the petitioner for marketing the project and accordingly an agreement was entered with one of the company, in which the respondent no.1 was the director. Based on the said agreement the respondent No.1 had facilitated the sale of 78 flats at the project through his sources and the project never took of and hence some of the transactions were canceled and around 67 flats were sold. This being the situation all of sudden the petitioner abandoned the project leaving the land owners and customers in dark and the liabilities was running into crores of rupees. This being the situation the petitioner in order to save himself from his liabilities persuaded the respondent No.1 to take over the project. It is alleged that the petitioner was always incognito and not reachable. Hence, the respondents on humanitarian grounds accepted to take over the project. As the project was making losses the respondent has approached the planning authorities and got modified the plan with an intention to 15 Com.A.A.No.238/2022 achieve cost to cost basis. By taking over the project the respondents are not making any profits and infact they are undergoing loss in crores of rupees. The expenditure is more than the revenue generated from the project.
20. The re-constitution of partnership deed came to be executed after negotiations as per the instructions of the petitioner along with a chartered accountants. Based on the KYC documents provided by the respondents, the reconstitution of the partnership deed was drafted mentioning the retirement of petitioner and respondent No.3 and incoming of respondents No.1 and 2 as partners. Based on the advice, the documents were drafted by chartered accountant of petitioner and printed on a stamp paper obtained at Hyderbad and sent for signatures of the respondent. Thereafter, the respondents have signed the deeds and then the petitioner has signed. In the meanwhile when the document was submitted to the registrar of firms, the same was not entertained on the ground that retirement and incoming of the partners cannot happen in a single document and the authorities advised the petitioner to execute two documents. Hence, the respondents No.1 and 2 were brought into partnership and later on the petitioner and respondent No3 16 Com.A.A.No.238/2022 have retired by executing another deed. Apart from the signatures of the parties, thumb impressions were also obtained. With all these formalities the re-constitution deed was executed on 18.01.2021, but the date was mentioned as 25.01.2020 due to typographical error and the same was identified by the officials of the registration and hence the document was sent back to the parties for corrections and counter signature. Thereafter the date was corrected as 25.01.2021 and the same was counter signed by all the parties. The allegation that the petitioner has no knowledge about the documents and he had signed on blank papers is denied. The rest of the averments of the petition and the allegations made against the respondents are denied. On these grounds the respondents have prayed to dismiss the petition.
21. Based on the contentions of the respective parties, and the materials available on record, the following point arises for my consideration:-
(1) Whether the petitioner has made out sufficient grounds for grant of an interim measure of protection by way of an injunction as claimed in the petition?
22. The advocate for the respondents No.1 and 2 has filed written arguments on the main petition. Having heard the 17 Com.A.A.No.238/2022 arguments of the counsel for the petitioner and considering the entire materials available on record, I answer the above point in the 'Affirmative' for the following;
REASONS
23. Before going through the actual dispute between the parties as raised in their pleadings, it is necessary to mention the admitted facts. The constitution of the partnership firm by name 'Abhi Developers' by virtue of the registered partnership deed dated 30.10.2017 of which the petitioner and the respondent No.3 were the partners and the business of the said firm is not at all disputed.
24. According to the petitioner he is the managing director of the firm by name KSR properties private limited and the respondent No.1 who was associated with the said firm had brought the owners of the petition schedule property with whom a MOU dated 08.01.2016 was entered for the development of the property under which an advance refundable amount of Rs.85,00,000/- was paid to the land owners by the petitioner. It is also the case of the petitioner that he is residing at Singapore and the respondent No.1 was looking after the entire business and at his instance the 18 Com.A.A.No.238/2022 contract entered between the land owners and the KSR properties was agreed to be terminated and to nominate 'Abhi Developers' in place of KSR properties. It is the allegation of the petitioner that the respondent No.1 in collusion with the land owners and respondent No.2 hatched a plan to knock off the partnership firm and also the project by name 'Abhi Homes'. The partnership firm has availed the loan of Rs.9,80,00,000/- from state bank of India as working capital and commenced his work, but due to covid 19 pandemic, the work was stopped and in that aspect the land owner by name Krishnamurthy turned hostile and caused hurdles for the work. It is also alleged that the respondent No.1 insisted to admit him as a partner of the firm so that all the disputes with the owners will be resolved and in that aspect the respondents No.1 and 2 came to Hyderabad and obtained the signatures of the petitioner on the deed typed as deed of reconstitution dated 18.01.2021 and also obtained signatures on blank stamp papers and white papers.
25. It is also the case of the petitioner that the respondents No.1 and 2 were brought into the partnership firm as nominal partners though they have not contributed any money or goodwill to the firm. The KSR properties has paid an 19 Com.A.A.No.238/2022 amount of rupees two crores towards refundable advance to the land owners and spent an amount of rupees one crore towards implementation of project and hence it was understood that KSR properties are also the stake holders. It is the allegation of the petitioner that the respondents have misused the blank signed stamp papers and created the re-constitution deed dated 25.01.2001 ousting the petitioner as a partner and inducting the respondent No.1 and 2 as partners with a share of 95% and 5% respectively. The petitioner by making various allegations of fraud and creation of documents against the respondents has contended that the respondents are trying to create third party interest over the suit schedule property and are also trying to alienate the same.
26. On the other hand it is the contention of the respondents the re-constitution deed dated 25.01.2021 came to be voluntarily executed by the petitioner based on the advise of his chartered account. The respondents have also made counter allegations against the petitioner that he is in the habit of entering into a JDA and then obtaining hefty loans from the bank by mortgaging his rights in the property. It is further alleged that the petitioner has abandoned the project under the 20 Com.A.A.No.238/2022 JDA and hence the respondents on humanitarian grounds accepted the project.
27. The petitioner in support of his contentions has furnished copy of partnership deed dated 30.10.2017, certificate of registration, copy of MOU dated 08.01.2016, copy of plaint in O.S.No.771/2016, copy of JDA dated 11.07.2018, copy of re-constitution deed dated 18.01.2021, copy of re- constitution deed dated 25.01.2021, copy of sanction letter, copy of bank statement and other documents before the court.
28. The first and the foremost objection raised by the respondents No.1 and 2 is that the nature of the dispute raised in the petition is not commercial dispute and this court has no jurisdiction to entertain the suit. The avernments of the petition and the materials available on record disclose that the dispute has arisen between the parties out of the partnership deed dated 30.10.2017 and hence the nature of dispute between the parties is a commercial dispute as defined U/s 2 (1) (c) of the commercial courts act, 2015 and the specified value of the subject matter of the dispute between the parties is more than Rs.3,00,000/- as prescribed U/s 2 (1) (i) of the said act and hence, this court has jurisdiction to entertain the suit. 21 Com.A.A.No.238/2022
29. In order to appreciate the rival contentions of the respective parties it is necessary to go through the provisions of the Sec.9 of the Arbitration and Conciliation Act 1996.
9. Interim measures, etc. by Court.--A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court--
(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters, namely:--
(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.22 Com.A.A.No.238/2022
30. As per Sec.9 of the Arbitration and Conciliation Act, 1996, the parties are permitted to seek interim measure in order to safeguard their interest if the other party violates the terms and conditions of the agreements. Any contracting party is at liberty to file an application U/s 9 of the said act for interim measure during or before the arbitration proceedings. Merely because there is an arbitration agreement between the parties to the suit is not sufficient to grant an interim relief. The party who has no intention to ultimately refer the dispute to arbitration and seek final relief cannot be permitted to seek interim relief.
31. The relief of interim measure of protection is sought by the petitioner on the basis of the partnership deed dated 30.10.2017 entered between the petitioner and the respondent No.3 which is an undisputed fact. On going through the said document, the partnership firm is formed under the name and style of 'Abhi Developers' with an object of carrying on real estate and construction business. The said partnership deed contains various clauses and as per clause No.7 of the deed, the share of the petitioner and the respondent No.3 in the profit and loss of the partnership is 95% and 5% respectively. 23 Com.A.A.No.238/2022
32. clause No.22 of the partnership deed deals with resolution of dispute between the partners through the process of arbitration. As per the said clause any dispute or difference which may arise between the partners or their legal representatives with regard to the business, meaning or effect of partnership or any part thereof or in respect of accounts, profit and loss of the business or the rights and liabilities of the partnership or of dissolution or winding up is to be referred to arbitrator or arbitrators appointed by the parties and provided of arbitration act, 1996 shall apply.
33. On going through the contentions of the respective parties and the materials placed on record a serious dispute has arisen between the petitioner and the respondents in respect of the partnership firm i.e., 'Abhi Developers' as per the partnership deed dated 30.10.2017. All the allegations made by the petitioner and the counter allegations made by the respondents with respect to the conduct of the business of the firm is a matter to be agitated before the arbitral tribunal. Whether the petitioner has given blank signed stamp papers and white papers to the respondents or not and the respondents have misused the same and created a deed of 24 Com.A.A.No.238/2022 constitution dated 25.01.2022 or not are the aspects to be agitated before the arbitral tribunal to be constituted. Likewise all the contentions raised by the respondents are also to be considered by the arbitral tribunal. The geninueness of the re- constitution deed dated 25.01.2021 is a matter to be decided by the arbitral tribunal.
34. The respondents have also raised a contention that as per the original partnership deed dated 30.10.2017 the jurisdiction agreed upon was at Hyderabad and hence the petition cannot be entertained by this court. On perusal of the partnership deed dated 30.10.2017 no doubt the partnership deed came to be registered at Hyderabad south, but the arbitration clause i.e., clause no.22 does not say that the jurisdiction of the courts agreed upon by the parties is at Hyderabad if any dispute or difference arising out of the partnership. Since the petition schedule property is situated at Devanahalli taluk of Bangalore, this court has jurisdiction to entertain the petition.
35. At this stage based on the contentions raised by the respective parties and the materials placed before the court a dispute has arisen between the parties to the partnership deed 25 Com.A.A.No.238/2022 dated 30.10.2017 and the partnership deed itself provides for resolution of disputes through the process of arbitration. Under such circumstances until the rights of the parties are determined the suit schedule property to the extent of the share of the partnership firm as per the partnership deed dated 30.10.2017 has to remain intact. The petitioner is entitled for an interim measure of protection of injunction as prayed in the application only with respect to the share of the partnership firm in the petition schedule property. The advocate for the petitioner has relied upon the decisions of the Hon'ble Supreme court reported in 1990 (supp) SCC 727, (1992) 1 SCC 719 and (2012) SCC page 93 wherein the principles and the requirements of law for grant of an interlocutary injunction under order 39 rules 1 and 2 of CPC and the requirements of Sec.9 of the arbitration and conciliation act has been discussed. In the aforesaid first judgment, the Hon'ble supreme court has said that:
"The prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at trial 26 Com.A.A.No.238/2022 on evidence and the interlocutory remedy is intended to preserve in status-quo, the rights of parties which may appear on a primafacie case".
36. Hence, in the case on hand the materials available on record disclose that the plaintiff has a primafacie case and the balance of convenience leans in his favour.
37. The respondents have also raised a contention that the petition is not maintainable for not impleading the firm as a party to the proceedings. It is an admitted fact that the petitioner and the respondent No.3 are the only partners of the parthership firm by name Abhi Developers constituted under the partnership deed dated 30.10.2017 and hence there is no necessity of arrying the firm as a party to the proceedings. Apart from that the petition is filed under section 9 of the arbitration and conciliation act 1996, which is an interim measure of protection and hence the question of impleading the firm as a party in the present proceedings is not the essential requirement.
38. At this stage it is necessary to go through the judgment of the Hon'ble High Court of Orissa reported in 2006 SCC online Orissa 68, wherein the Hon'ble High Court has 27 Com.A.A.No.238/2022 discussed the requirement of Sec.9 of the Arbitration and Conciliation Act, 1996. In the said judgment the Hon'ble High Court at para No.29 has discussed that :
" The order U/s.9 can be passed by way of an interim measure of protection before or during the arbitral proceeding or at any time after making of arbitral award but before it is enforced in accordance with Sec.36 of the Act. So, it is an interim measure of protection. The act is implicit that the dispute must have arisen, it is referable to arbitration tribunal and when an application U/s.9 is filed before commencement of the arbitral proceeding, there has to be manifest intention on the part of the applicant to take recourse to the arbitral proceeding, if at the time when application U/s.9 is filed, the proceeding has not commenced U/s.21 of the Act. While exercising the jurisdiction U/s.9, the court should satisfy itself that effective steps have been taken to commence the arbitral proceeding. The court could also pass a conditional order to put the applicant to such term as it may deem fit with a view to see that steps". 28 Com.A.A.No.238/2022
"The party having succeeded in securing an interim measure of protection before arbitral proceedings cannot afford to sit and sleep over the relief, conveniently forgetting the 'proximately contemplated' or 'manifestly intended' arbitral proceedings itself. If arbitral proceedings are not commenced within a reasonable time of an order U/s.9, the relationship between the order U/s.9 and the arbitral proceedings would stand snapped and the relief allowed to the party shall cease to be an order made 'before' i.e., in contemplation or arbitral proceedings. The court, approached by a party with an application U/s.9, is justified in asking the party and being told how and when the party approaching the court proposes to commence the arbitral proceedings. Rather, the scheme in which Sec.9 is placed obligates the court to do so. The court may also while passing an order U/s.9 put the party on".
39. It is an established principle of law that in order to get the relief of injunction the petitioner has to make out prima- facie case and the balance of convenience should lean in favour 29 Com.A.A.No.238/2022 of petitioner. The prima-facie case means that there are issues to be tried and points and pleas to be decided and determined by the court. On going through the averments of the petition and the entire materials available on record the petitioner has made out sufficient grounds for grant of an injunction as prayed in the petition. The petitioner having invested money in the firm has a right to claim interim measure of protection until his rights are decided throguh the process of arbitration as agreed under the partnership deed dated 30.10.2017. In otherwords the petitioner has made out a prima-facie case. The balance of convenience also leans in favour of the petitioner. If the injunction as prayed in the petition is not granted it is the petitioner who will be put to irreparable injury. Hence, under the facts and circumstances of the case the petitioner is entitled for injunction as prayed in the petition. Hence, I answer the above point in the 'Affirmative' and proceed to pass the following;
ORDER
The petition filed by the
applicant/petitioner U/s 9(ii)(e) of the
Arbitration and Conciliation Act, 1996 is hereby allowed.
30 Com.A.A.No.238/2022
It is hereby ordered that the respondents, their legal heirs, representatives, agents or anybody claiming through them are hereby restrained by an order of an injunction from selling or alienating the share of the partnership firm by name 'Abhi Developers' as per the partnership deed dated 30.10.2017 and the 'Joint Development Agreement' dated 11.07.2018 in the petition schedule property or creating any third party rights over the said property till constitution of the arbitral tribunal.
It is hereby made clear that if the
petitioner does not initiate the abitral
proceedings within a period of ninety days from this date, the order of injunction shall remain inforce for the period of ninety days only from this date.
[Dictated to the stenographer online, transcribed & computerized by her, corrected on computer and signed by me then pronounced in the Open Court, dated this the 2 nd day of September, 2022] (SUNIL.A.SHETTAR) LXXXVI Addl. City Civil Judge Bangalore.