IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR -------------------------------------------------------- CIVIL MISC. APPEAL No. 450 of 2009 M/S YASH AMUSEMENT V/S R.T.D.C.LTD.& ANR. Mr. SL MANDAWAT, Mr. VINEET SANADHYA, for the appellant / petitioner Mr. ARUN BHANSALI, for the respondent Date of Order : 13.4.2009 HON'BLE SHRI N P GUPTA,J. ORDER ----- This appeal has been filed against the order of the learned trial Court dated 6.3.2009, passed on the appellant's application, filed under Section 9 of the Arbitration and Reconciliation Act, for grant of temporary injunction. The learned trial Court had dismissed the application. The necessary facts are, that on 25.2.2009 the appellant filed an application before the learned trial Court against the two non-petitioners, being Rajasthan Tourism Development Corporation Limited (RTDC for short) and Senior Manger, Hotel Kazari, Rajasthan Tourism Development Corporation Limited, alleging inter-alia that there was an agreement between the parties entered into on 18.1.2006, according to para 21 thereof, there was an arbitration clause. This agreement was valid from 1.1.2006 to 31.12.2008, and could be further extended for a period of two years by mutual consent. According to the terms of the agreement, 35% of the revenue was to be given by the appellant to the non-petitioners, and accordingly, the appellant had been paying the revenue. It was then alleged that during all this period of three years, he had worked peacefully and comfortably; he had commissioned echo- friendly boat also. Then in para 7 it is alleged, that as per directions of the non-petitioner, the appellant deposited Rs.1,20,000/- in the UIT and Member, Jheel Samvardhan Avam Jheel Vikas Society on 10.10.2008, which constituted licence fee for the period ending upto 5.10.2009 and this was deposited because there is a clause in the agreement for extension of contract for a period of two years. It is then alleged that on 8.11.2008 a letter was addressed by the appellant, to the General Manger, Transportation Unit, Udaipur, requesting for extension of the contract for a period of further 5 years, and had enclosed therewith the recommendatory letter of non- petitioner No.1. Then it is alleged that creating a dispute under the agreement on 25.12.2008, the non-petitioners invited fresh tenders, which was opposed by the appellant. Thereupon the tenders were withdrawn. However, on 9.2.2009 fresh advertisement was issued inviting tenders. Thus a dispute has arisen between the parties. Accordingly, the 2 appellant had sent a notice to the non-petitioners for appointing Arbitrator. With this, it is alleged that the non-petitioners did not stop the working of the appellant on 31.12.2008 and allowed him to continue, and has received the money for the future years also, and had issued No Objection Certificate. All this was done with a view to extend the contract for another period of two years, and now since obstructions are being created therein, while by the conduct, the period of two years automatically stands extended. With these averments, powers of the learned trial Court under Section 9 were invoked for grant of temporary injunction. It was prayed that temporary injunction be issued, restraining the respondents from preventing the appellant from operating the boats in Fatehsagar lake, the tenders invited vide advertisement dated 9.2.2009 should not be proceeded further, and the appellant's contract be extended for a period of two years, and till the matter is decided by the Arbitrator, no action be taken against the appellants by the non-petitioners. The non-petitioners opposed the application on variety of grounds. Preliminary objections were raised, to the effect, that contract was for the period 1.1.2006 to 31.12.2008, and could be extended for two years by mutual consent of the parties, which contract came to an end by efflux of time. Thereafter vide order, dated 9.1.2009 the appellant was allowed to work till the tender process is 3 completed by the Board or till 31.3.2009, whichever is earlier. It was submitted, that vide letter, dated 8.11.2008, the appellant had prayed for extension of the contract and it is with reference to that only, that the communication, dated 9.1.2009 was issued. Thus by mutual consent of the parties the agreement survives only upto 31.3.2009, and the appellant is not entitled to claim any benefits thereafter. Likewise the appellant is not entitled to obstruct the fresh tender process. Another objection taken was, that the agreement was of a determinable nature and was extended only upto 31.3.2009, and therefore, the appellant is not entitled to claim any relief under Section 9 of the Arbitration Act. Agreement already comes to an end on 31.3.2009. It was also contended that this is a purely private transaction, which agreement cannot be specifically enforced, it does not confer any unqualified rights on the appellant to enforce renewal. Likewise it was also pleaded that in the event of any alleged breach of the contract, the appellant is entitled to claim compensation in monetary terms, and as such, is not entitled to any injunction. Then an objection was also raised, that there is no concluded contract between the parties, entitling the appellant to get the enforcement of the extension of the contract for two years, and that there was no implied or tacit consent, which may tantamount to extension of contract. It was also pleaded that the appellant had filed Civil Writ Petition No.420/09 at Jaipur Bench of this Court. 4 Then giving parawise reply it was pleaded, that whatever rights are available to the appellant, they flow in his favour, only under the agreement, and not independently. Then regarding the revenue earned, it was pleaded that the non-petitioner corporation earned only Rs.14,15,000/- and the figure given by the appellant is highly exaggerated. Regarding echo-friendly boats, it was pleaded that it was at the directions of the Hon'ble Chief Minister, that the Collector Udaipur had issued necessary directions, which were necessary for the appellant to comply with, at the pain of disentitling him from operating the boats, and no extra benefit can be claimed by the appellant on that count. Then regarding deposit of Rs.1,20,000/-, it was pleaded that the amount was deposited with the Jheel Samvardhan Avam Jheel Vikas Society, which was necessary to be deposited, being the licence fee, and this amount was only for the period upto 5.10.2009. It was pleaded that in this regard no assurance was given by the non-petitioner corporation, that the agreement between the parties shall be extended for another period of two years, rather the amount was required to be deposited even for enjoying the contract, which was to subsist upto 31.12.2008. Then it is pleaded that the appellant did write a letter dated 8.11.2008, seeking extension of agreement for a period of 5 years, but that was not acceded to, and extension was given only upto the period mentioned in the 5 communication dated 9.1.2009. It was pleaded that the non- petitioners are entitled to float the tenders. It was also pleaded that it was made clear vide communication dated 9.1.2009, as to upto what time the period has been extended, and the appellant cannot compel the non- petitioners to extend the contract for another period of two years. Inter-alia with this it was prayed that the application be dismissed. Learned trial Court has found, that the appellant was well aware of the fact, that the contract can be extended for a period of two years, only with mutual consent, and simply on account of implied consent if the amount has been deposited by the appellant he cannot be said to be entitled to extension of contract. Likewise, when the tenders are being floated, the appellant is also very much entitled to participate therein, as he has never been prohibited from participating therein. Thus, the learned trial Court did not find any ground to grant the injunction prayed for. Arguing the appeal, the learned counsel for the appellant referred to the communications dated 6.10.2008, 7.10.2008, 6.11.2008, and the appellant's communication dated 10.12.2008, to contend, that thereby there was an implied extension of the agreement, as the appellant has deposited a huge amount of Rs.1,20,000/-. Regarding 6 communication, dated 9.1.2009, reading clause 13 of the agreement, it was pleaded, that the contract can be extended for a period of two years; and cannot be extended for any period less than two years, and therefore, it was not open to the non-petitioners to extend it for a period upto 31st March 2009, or till completion of tender process. According to learned counsel since amount of Rs.1,20,000/- has been deposited, which constituted licence fee upto 3.10.2009, the contract stands extended, or in any case should be held to stand extended for a period of two years, and that being the position, the appellant was entitled to be granted the interim injunction. It was also submitted that the non-petitioners had initially floated tenders on 25.12.2008, and abruptly had withdrawn it on 9.1.2009, and then floated fresh tenders on 9.2.2009, while if the contract was not to be extended, the appellant's work should have been stopped right from 31.12.2008 itself, and since he was allowed to work even upto issuance of the communication dated 9.1.2009, it clearly shows, that there was a implied extension of contract, and since it could not be for any part of period of two years, it stands extended for two years. It was also submitted, that if the injunction is granted in favour of the appellant, the other party can very well be compensated in monitory terms, as though the highest bid received is of 71% sharing of revenue, but then the non-petitioners are inclined to grant the contract to a person offering 45% sharing of the 7 revenue only. It is a different story, that another litigation in that regard is already pending in this Court, particulars whereof have not been disclosed before me. On the other hand, if the working of the appellant is stopped, his entire establishment of boats, in purchase whereof he has invested huge amounts, and has invested huge amounts in repair of the boats would all go waste. Thus, the appellant would suffer irreparable loss. It was also pointed out that the appellant had also sent notice for appointment of Arbitrator on 23.2.2009, which was received by the Corporation on 27.2.2009, in accordance with para 21 of the agreement, but since the respondents have not appointed any Arbitrtor so far, the appellant is moving this Court under Section 11 of the Arbitration Act, for appointment of the Arbitrator. With this it was prayed that the impugned order be set aside and the injunction as prayed in the application under section 9 submitted before the learned trial court be granted. Learned counsel for the non-petitioners on the other hand, supported the impugned order, and submitted, that the conduct of the appellant is not above board, inasmuch as, firstly, there is no pleading regarding serving of notice regarding appointment of Arbitrator, in the petition under Section 9, and the only averment made in this regard is in the memo of appeal, wherein also, it is alleged that the notice was sent on 29.2.2009 while in the 8 year 2009 there was no 29th of February. Then it was submitted, that the appellant himself had filed a writ petition before the Jaipur Bench on 9.1.2009 itself, challenging the action of the respondents on the same grounds, but then that petition was withdrawn on 25.2.2009. In that writ petition also the order dated 9.1.2009 was not challenged. Then it was also contended, that immediately before withdrawing that writ petition, on 24.2.2009 itself a suit was got filed through one Bhanwar Singh, praying for a direction to the present respondents to proceed with the tender process, and the plaintiff Bhanwar Singh in that case, and the present appellant, both were represented in the trial Court by the same learned counsel. With this, after passing of the present impugned order on 6.3.2009, on 27.3.2009 the suit of Bhanwar Singh was dismissed, and that very day the review petition that was filed by the appellant against the impugned order dated 6.3.2009, was got dismissed as withdrawn, and that very day the present appeal was filed. The whole thrust of the argument, by giving these facts is, that the appellant has been moving helter-skelter, resorting to various remedies and various subterfuge, to somehow continue his operation of boats in the lake, and having ultimately failed, has filed the present appeal. It was then argued that when the appellant himself submits, that in the event of his being allowed to operate the boats, the prospective tenderer can very well be compensated in monitory terms, the same argument applies 9 to the appellant also, inasmuch as, if the Arbitrator decides the matter in favour of the appellant, Arbitrator can very well settle equities in favour of the appellant also. It was reiterated that under clause 13, the contract can be extended for a period of two years by “mutual consent” only, which does not mean that the appellant can seek to compel the non-petitioners to extend the contract, and obviously, implied or tacit consent cannot be tantamount to “mutual consent”. I have considered the submissions and have gone through the record, which was requisitioned. Since the matter was of urgent nature; and vide order dated 30.3.2009 notices were issued for final disposal, at the request of the learned counsel the matter was head finally at this stage itself. At the outset it may be observed, that the powers to be exercised under Section 9 have a definite purpose, and are not to be invoked as a routine affair. Primarily the object was that the relief that may ultimately be granted by the Arbitrator may not get frustrated by lapse of time, and therefore, by way of providing some protective measures, Section was enacted and in that process, power was conferred on the Court to grant interim injunction or to appoint Receiver. In the present case, admittedly the agreement originally entered into was to expire on 10 31.12.2008. From what has been submitted by both the learned counsel, and from the record it does not transpire, that there is an express mutual consent between the parties for extending the contract for a period of two years. On the other hand, the communication dated 9.1.2009 extends the contract upto 31.3.2009, or till the tender process is completed, whichever is earlier. Thus, the express extension of contract is only upto period mentioned in the communication dated 9.1.2009. So far the argument of learned counsel for the appellant, that extension can be only for a period of two years, and not a part thereof, so as to entitle the appellant to construe the sequence of things, comprising of the communication dated 6.10.2008, 7.10.2008, 6.11.2008 and 9.1.2009, to be tentamounting to extension of the contract for a period of two years, is concerned, in my view, the argument cannot be sustained, for the simple reason, firstly, that vide communication dated 8.11.2008, the appellant had prayed for extension of contract for a period of 5 years, obviously this was a no right, or possibility contemplated, under the agreement, either it could be extended for two years, or could not be extended. Then by communication dated 6.10.2008 and 6.11.2008 also the amount that was deposited was Rs.1,20,000/-, being licence fee for a period of two years, and that period purports to be from 4.10.2008 to 3.10.2009. 11 Obviously half of the amount did represent the period anterior thereto, being 4.10.2007 to 3.10.2008. Meaning thereby, firstly, that the amount did not represent any consideration for extension of contract for a period of two years, and secondly, even according to the communication dated 6.11.2008, if the contract were to be extended only upto 3.10.2009, that was not for a period of two years from 1.1.2009. Thus, these communications cannot be said to be in line with any implied extension of contract for a period of two years. It was submitted by learned counsel for the respondent that this amount of Rs.1,20,000/- was a licence fee for a period of two years, which was required to be deposited by the present respondents, and since that liability, according to clause 5 of the agreement, was to be borne by the appellant, the appellant was directed to deposit that amount, but then that had nothing to do with the extension of the contract in any manner whatsoever. It was submitted by learned counsel for the appellant, that the respondent corporation was getting licence from year to year, by depositing the licence fee. It would suffice to say, that obviously if it was getting licence on annual basis, this deposit of the amount of the said license fee upto 3.10.2009 could possibly not tantamount to any extension of contract by the non-petitioners for a period of two years, as was sought to be argued by learned counsel for the appellant. Thus, in my view, it cannot be said that the learned trial Court was in error in refusing the 12 injunction as prayed for. There is yet another aspect of the matter, that admittedly the appellant has enjoyed the benefit of the communication dated 9.1.2009, and in any case the same has not been challenged by the appellant, in that view of the matter the appellant cannot be allowed to approbate and reprobate at same time. If the appellant felt that the contract could be extended only for not less then two years, appropriate remedy should have been sought on that basis. Having not done that, now the appellant cannot be allowed to claim the injunction as prayed for, on that basis. The appeal thus, has no force and is dismissed. Parties shall bear their own costs. ( N P GUPTA ),J. /tarun/ 13