VISHAL RETAIL LTD Vs. KATARIA AUTOMOBILES LTD

JUDGEMENT

(1.) This matter was heard by this Court on 20th January 2010 and the matter was reserved for judgment.

(2.) Heard learned Advocate Mr. Shalin Mehta appearing on behalf of appellant and learned Advocate Mr. Nitin Mehta appearing for on behalf of respondent. 2.1 The appellant has challenged interim order, below exh. 1 filed by respondent herein before the City Civil Court, Ahmedabad in Civil Misc. Application No. 990 of 2009 dated 16th October 2009. The City Civil Court, Ahmedabad has passed following order:

(3.) Learned Advocate Mr. Shalin Mehta raised contention before this Court challenging aforesaid interim order, which has been passed by the trial Court under Sec. 9 of the Arbitration and Conciliation Act, 1996 (for short "the Arbitration Act"). Learned Advocate Mr. Shalin Mehta submitted that on 6th March 2007, Business Conducting Agreement signed by both parties. The premises in question, is belonging to respondent, where retails and departmental stores conducted by appellant in the name of 'Vishal Mega Mart'. On 4th April 2007 possession of property handed over to appellant by respondent. On 17th June 2007 rent period started, which is to be paid by appellant. About 15,000/- sq. ft. area for parking place was not provided by respondent and therefore, dispute has been arisen, which required renegotiation between both the parties. Therefore, on 20th October 2007, two separate agreements, after renegotiation, arrived at between both the parties viz. Business Conducting Agreement and Service and Amenities Agreement. The date of renegotiation commenced on is 13th October 2007. The minimum monthly rent for a period of three years decided, wherein one month rent is Rs.18,63,812/-. On 31st July 2008 alleged default of not paying rent by appellant committed meaning thereby that, the appellant stopped paying rent to the respondent. On 7th November 2008, the appellant wrote termination letter to terminate mutually both agreements. This aspect has been denied by respondent vide letter dated 10th November 2008. On 27th February 2009, Rs.12,69,923/- monthly rent towards November/December 2008 paid by appellant to respondent. Similarly, on 15th May 2009, Rs.12,69,923/- monthly rent for January/February 2009 paid by the appellant to respondent. 3.1 On 5th September 2009, an application under Sec. 9 of the Arbitration Act has been filed by respondent. The trial Court passed order on 16th October 2009 and certain directions have been issued by the trial Court, which are on page 13 to the appeal. The arbitration proceedings have commenced from November 2009 and no dispute is raised for commencing arbitration proceedings. However, respondent is not agree to this submission made by learned Advocate Mr. Shalin Mehta. In respect to security amount of Rs.62,80,000/-, according to learned Advocate Mr. Shalin Mehta, it has been wrongly forfeited by respondent. Learned Advocate Mr. Shalin Mehta emphasized that direction in respect to solvent security of 2.5 crores shall have to be executed by appellant is an unwarranted because there is no base established by respondent before the trial Court. He relied upon Para 8 of the impugned order and also relied upon a decision of the Honourable Apex Court, reported in 2009 AIR SCW 7551 in respect to fact that in absence of prima facie case, if not established by respondent before trial Court, then question of balance of convenience and irreparable loss caused to respondent have no meaning to grant to interim relief in favour of the respondent by trial Court. He also referred to Para 10 of the order and submitted that trial Court has secured the amount for respondent, which amounts to giving final direction by way of interim order. Therefore, impugned order is bad. He is also harping upon these facts that apparently the order passed by the trial Court, which amounts to a final or in permanent measure in favour of respondent, such order cannot be passed. For that, he relied upon a decision of the Honourable Apex Court, in the case of Firm Ashok Traders and Anr. Vs. Gurumukhdas Saluja and Ors., reported in (2004) 3 SCC 155, more particularly Para 17, which is quoted as under: