VISHAL GUPTA Vs. UDAI K LAURIA

JUDGEMENT

(1.) The petitioner in this case contended that he entered into an agreement with the respondent on 9th Oct., 2007 and in consideration of his dissociating with the business, he agreed to pay to the respondent a compensation of Rs. 60 lakhs in the manner provided in the agreement. He paid a sum of Rs. 25 lakhs (out of Rs. 60 lakhs) at the time of signing the agreement and issued a post dated cheque of Rs. 35 lakhs. The respondent however did not fulfill his part of the obligation and breached the terms of the memorandum and therefore the petitioner was no longer liable to pay a sum of Rs. 35 lakhs for which post dated cheque was issued. He therefore made a prayer that the respondent be restrained from presenting the cheque of Rs. 35 lakhs to his banker till the time dispute between the parties was not settled and the respondent be restrained from carrying out any business similar to that of the business carried out by the petitioner or engaging or employing or otherwise associating with the present or future employees/customers/consultants of the petitioner.

(2.) Sec. 9 of the Arbitration and Conciliation Act reads as under:-

(3.) It is apparent that the purpose of Sec. 9 is to preserve the subject matter of dispute and the purpose of Sec. 9 is not to preserve the interest of one of the parties at the cost of the other party. Neither it is to re-write a contract between the parties. The petitioner had given a post dated cheque to the respondent on the basis of an agreement. The petitioner after securing the agreement from the respondent in respect of the business cannot come to the Court to get a restrain order against the respondent from presenting the cheque thereby making the Court a tool to curtail the right of the respondent of presenting the cheque to the banker, initiating proceedings against the petitioner in case of dishonour of cheque under Sec. 138 of the Negotiable Instruments Act and taking action for recovery of the amount. The purpose of Sec. 9 is not to jeopardise the interest of one of the parties by issuing an injunction in the nature of frustrating the contract itself. But the purpose of Sec. 9 is to preserve the subject matter of the dispute so that the opposite party may not frustrate the subject matter itself. Where the subject matter of the dispute is recovery, the prayer at the most can be in the nature of Order 38 Rule 5 Civil P.C. for providing security and if the Court is satisfied that it was a fit case for pre-decretal attachment, the Court can issue an order in the nature of Order 38 Rule 5 CPC, but the Court cannot restrain a party from presenting the cheque. Cheque is a negotiable instrument on the basis of which an independent action can be taken by a party and by restraining a party from presenting the cheque, the Court is, in fact, restraining a person from exercising his legal rights.