1 IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL ORIGINAL ORIGINAL CIVIL JURISDICTION CIVIL JURISDICTION CIVIL JURISDICTION ARBITRATION ARBITRATION ARBITRATION PETITION (L) NO.192 OF 2007 PETITION (L) NO.192 OF 2007 PETITION (L) NO.192 OF 2007 Vama Vama Vama Apparels (India) Pvt.Ltd Apparels (India) Pvt.Ltd Apparels (India) Pvt.Ltd ..Petitioners ..Petitioners ..Petitioners vs vs vs Juniper Juniper Juniper Hotels Pvt Ltd .. Hotels Pvt Ltd .. Hotels Pvt Ltd .. Respondents espondents espondents Mr.J.P.Sen Mr.J.P.Sen Mr.J.P.Sen a/w a/w a/w Mr.H.N.Thakore and Ms.Agnes Mr.H.N.Thakore and Ms.Agnes Mr.H.N.Thakore and Ms.Agnes Baredia Baredia Baredia i/b i/b i/b Thakore Jariwala & Asso.for Petitioner Thakore Jariwala & Asso.for Petitioner Thakore Jariwala & Asso.for Petitioner Mr.Chirag Mr.Chirag Mr.Chirag Balsara Balsara Balsara i/b M/s.Khaitan & Co for i/b M/s.Khaitan & Co for i/b M/s.Khaitan & Co for Respondents Respondents Respondents CORAM CORAM CORAM : ANOOP V.MOHTA, J : ANOOP V.MOHTA, J : ANOOP V.MOHTA, J RESERVED RESERVED RESERVED ON: ON: ON: 30th April, 2007 30th April, 2007 30th April, 2007 PRONOUNCED PRONOUNCED PRONOUNCED ON: ON: ON: 4th May, 2007 4th May, 2007 4th May, 2007 P.C. P.C. P.C. 1.1.1. The petitioner has invoked section 9 of the The petitioner has invoked section 9 of the The petitioner has invoked section 9 of the Arbitration Arbitration Arbitration and Conciliation Act, 1996 (for short and Conciliation Act, 1996 (for short and Conciliation Act, 1996 (for short Arbitration Arbitration Arbitration Act, 1996) as there arose disputes Act, 1996) as there arose disputes Act, 1996) as there arose disputes between between between the parties arising out of agreement dated the parties arising out of agreement dated the parties arising out of agreement dated 24th 24th 24th August, 2005. August, 2005. August, 2005. 2.2.2. In Arbitration Petition (Lodging) No.556 of In Arbitration Petition (Lodging) No.556 of In Arbitration Petition (Lodging) No.556 of 2006, 2006, 2006, between the parties this Court by an order between the parties this Court by an order between the parties this Court by an order dated dated dated 10th October, 2006 refused to grant ad 10th October, 2006 refused to grant ad 10th October, 2006 refused to grant ad interim interim interim order/injunction and in the result the order/injunction and in the result the order/injunction and in the result the respondents respondents respondents took took took possession of the premises wherein possession of the premises wherein possession of the premises wherein the the the petitioner was conducting the business based on petitioner was conducting the business based on petitioner was conducting the business based on the the the agreement. agreement. agreement. 3.3.3. Admittedly, various articles/goods have been Admittedly, various articles/goods have been Admittedly, various articles/goods have been lying lying lying inside the premises. The respondents inside the premises. The respondents inside the premises. The respondents 2 therefore therefore therefore are in possession of those goods. The are in possession of those goods. The are in possession of those goods. The petitioners petitioners petitioners therefore, averred in the present therefore, averred in the present therefore, averred in the present petition petition petition that third party goods have also that third party goods have also that third party goods have also been taken taken taken possession of as per the inventory of stocks possession of as per the inventory of stocks possession of as per the inventory of stocks Exhibit Exhibit Exhibit E of the respondents. The action of the E of the respondents. The action of the E of the respondents. The action of the respondents respondents respondents therefore, to retain the goods of the therefore, to retain the goods of the therefore, to retain the goods of the petitioner petitioner petitioner and as also the third parties is and as also the third parties is and as also the third parties is illegal. illegal. illegal. The petitioner therefore prayed for The petitioner therefore prayed for The petitioner therefore prayed for mandatory mandatory mandatory order directing the respondents to hand order directing the respondents to hand order directing the respondents to hand over over over the entire stocks retained by the respondents the entire stocks retained by the respondents the entire stocks retained by the respondents as as as per Exhibit E, F1 and F2. per Exhibit E, F1 and F2. per Exhibit E, F1 and F2. 4.4.4. In view of the averments made in the petition In view of the averments made in the petition In view of the averments made in the petition and and and specifically the submissions as the respondents specifically the submissions as the respondents specifically the submissions as the respondents though though though served was not appeared following order served was not appeared following order served was not appeared following order cam cam came to be passed. 5. " " " In view of the urgency as referred in the In view of the urgency as referred in the In view of the urgency as referred in the petition petition petition in paragraphs 16 to 22, I am inclined to in paragraphs 16 to 22, I am inclined to in paragraphs 16 to 22, I am inclined to grant grant grant ad-interim relief in terms of prayer clause ad-interim relief in terms of prayer clause ad-interim relief in terms of prayer clause (e) (e) (e) which reads thus: which reads thus: which reads thus: (e) (e) (e) that pending the hearing and final that pending the hearing and final that pending the hearing and final disposal disposal disposal of the petition and until such time of the petition and until such time of the petition and until such time that that that Arbitration proceedings are commenced Arbitration proceedings are commenced Arbitration proceedings are commenced and and and until such time that an Award is passed until such time that an Award is passed until such time that an Award is passed and and and the Award becomes enforceable as a the Award becomes enforceable as a the Award becomes enforceable as a Decree Decree Decree of this Hon’ble Court, this Hon’ble of this Hon’ble Court, this Hon’ble of this Hon’ble Court, this Hon’ble Court Court Court be pleased to pass an order of be pleased to pass an order of be pleased to pass an order of injunction injunction injunction restraining the respondents by restraining the respondents by restraining the respondents by themselves, themselves, themselves, their agents, servants, their agents, servants, their agents, servants, representative representative representative (s) or person (s) claiming (s) or person (s) claiming (s) or person (s) claiming through through through or under them from in any manner or under them from in any manner or under them from in any manner dealing dealing dealing with, seling, disposing of, with, seling, disposing of, with, seling, disposing of, alienating, alienating, alienating, encumbering,creating any third encumbering,creating any third encumbering,creating any third party party party rights on the stocks as illegally rights on the stocks as illegally rights on the stocks as illegally detained detained detained by the respondents as per inventory by the respondents as per inventory by the respondents as per inventory of of of stock Exhibit E hereto. stock Exhibit E hereto. stock Exhibit E hereto. 3 . Notice Notice Notice returnable within two weeks. returnable within two weeks. returnable within two weeks. 6. Learned counsel appearing for the respondents ounsel appearing for the respondents ounsel appearing for the respondents though though though that there was no proper service before that there was no proper service before that there was no proper service before moving moving moving this petition yet, considering the disputed this petition yet, considering the disputed this petition yet, considering the disputed questions questions questions of facts about sending and receipt of fax of facts about sending and receipt of fax of facts about sending and receipt of fax of of of intimation of the matter, submitted that the intimation of the matter, submitted that the intimation of the matter, submitted that the matter matter matter may please be heard on merits instead of may please be heard on merits instead of may please be heard on merits instead of those those those objections. objections. objections. 7.7.7. The Memorandum of Understanding (MOU) signed The Memorandum of Understanding (MOU) signed The Memorandum of Understanding (MOU) signed between between between the petitioner and the respondents on 15th the petitioner and the respondents on 15th the petitioner and the respondents on 15th October, October, October, 2003 permitted the petitioner to carry on 2003 permitted the petitioner to carry on 2003 permitted the petitioner to carry on the the the business from the respondent’s premises. business from the respondent’s premises. business from the respondent’s premises. Disputes Disputes Disputes arose between the parties. Various arose between the parties. Various arose between the parties. Various correspondences correspondences correspondences exchanged from 24th August, 2005 exchanged from 24th August, 2005 exchanged from 24th August, 2005 onwards. onwards. onwards. The respondents terminated the agreement The respondents terminated the agreement The respondents terminated the agreement on on on 25th September, 2006.As respondents threatened 25th September, 2006.As respondents threatened 25th September, 2006.As respondents threatened toto to remove the petitioner out of the premises, an remove the petitioner out of the premises, an remove the petitioner out of the premises, an Arbitration Arbitration Arbitration Petition Petition Petition was filed on 13th August, 2000 was filed on 13th August, 2000 was filed on 13th August, 2000 which which which was dismissed. The goods of the petitioner was dismissed. The goods of the petitioner was dismissed. The goods of the petitioner including including including of the third party have been detained by of the third party have been detained by of the third party have been detained by the the the petitioners. petitioners. petitioners. 8. Admittedly, based on the agreement between the Admittedly, based on the agreement between the Admittedly, based on the agreement between the parties parties parties the respondents have already taken the respondents have already taken the respondents have already taken possession possession possession of of of the property. The security amounting the property. The security amounting the property. The security amounting toto to the tune of Rs. 50 lacs are still lying with the tune of Rs. 50 lacs are still lying with the tune of Rs. 50 lacs are still lying with the the the respondents. The Arbitral Tribunal will respondents. The Arbitral Tribunal will respondents. The Arbitral Tribunal will adjudicate adjudicate adjudicate the monetary claim between the parties. the monetary claim between the parties. the monetary claim between the parties. 4 The The The goods are still in possession of the goods are still in possession of the goods are still in possession of the respondents. respondents. respondents. Therefore, at this stage, pending Therefore, at this stage, pending Therefore, at this stage, pending adjudication adjudication adjudication by the Arbitral Tribunal, I am of the by the Arbitral Tribunal, I am of the by the Arbitral Tribunal, I am of the view view view that the petitioners are entitled for ad that the petitioners are entitled for ad that the petitioners are entitled for ad interim interim interim relief as prayed in terms of prayer clause relief as prayed in terms of prayer clause relief as prayed in terms of prayer clause (e). (e). (e). The respondents are at the most entitled to The respondents are at the most entitled to The respondents are at the most entitled to retain retain retain possession possession possession of the goods in view of clause of of the goods in view of clause of of the goods in view of clause of " lien over the property". But, they are not at lien over the property". But, they are not at lien over the property". But, they are not at this this this stage entitled to dispose of the said stage entitled to dispose of the said stage entitled to dispose of the said property. property. property. The respondents are also subject to The respondents are also subject to The respondents are also subject to interpretation interpretation interpretation of of of the clauses and/or even otherwise the clauses and/or even otherwise the clauses and/or even otherwise entitled entitled entitled for monetary consideration in view of the for monetary consideration in view of the for monetary consideration in view of the breaches breaches breaches committed by the petitionerd. At this committed by the petitionerd. At this committed by the petitionerd. At this stage, stage, stage, without going further into the merits of the without going further into the merits of the without going further into the merits of the matter, matter, matter, even even even the submissions of the learned counsel the submissions of the learned counsel the submissions of the learned counsel appearing appearing appearing for the respondents that they are for the respondents that they are for the respondents that they are entitled entitled entitled to sell those properties as per the to sell those properties as per the to sell those properties as per the agreement agreement agreement cannot be accepted. The Arbitral cannot be accepted. The Arbitral cannot be accepted. The Arbitral Tribunal Tribunal Tribunal will will will consider all the issues raised by the consider all the issues raised by the consider all the issues raised by the parties parties parties including proper interpretation and rights including proper interpretation and rights including proper interpretation and rights of of of the parties. The effect of termination as per the parties. The effect of termination as per the parties. The effect of termination as per agreement agreement agreement need to be interpreted and considered by need to be interpreted and considered by need to be interpreted and considered by the the the tribunal tribunal tribunal which includes the respondents’s right which includes the respondents’s right which includes the respondents’s right toto to have have have first charge and/or lien on products and/or first charge and/or lien on products and/or first charge and/or lien on products and/or toto to sell all those properties for recovering the sell all those properties for recovering the sell all those properties for recovering the damages damages damages so claimed. In these background and in so claimed. In these background and in so claimed. In these background and in view view view of the rival contentions as raised, I am not of the rival contentions as raised, I am not of the rival contentions as raised, I am not inclined inclined inclined to pass ad interim order of mandatory to pass ad interim order of mandatory to pass ad interim order of mandatory injunction injunction injunction as prayed by the petitioners. There is as prayed by the petitioners. There is as prayed by the petitioners. There is no no no case out made out by the petitioners for such case out made out by the petitioners for such case out made out by the petitioners for such 5 mandatory mandatory mandatory injunction for releasing the goods as injunction for releasing the goods as injunction for releasing the goods as claimed. claimed. claimed. Whether the goods belongs to third party Whether the goods belongs to third party Whether the goods belongs to third party or or or not cannot be adjudicated at this stage of the not cannot be adjudicated at this stage of the not cannot be adjudicated at this stage of the proceeding proceeding proceeding though there are inventories made to though there are inventories made to though there are inventories made to reflect reflect reflect the same. The respondents are not the same. The respondents are not the same. The respondents are not admitting admitting admitting the the the same. The respondents even otherwise same. The respondents even otherwise same. The respondents even otherwise submitted submitted submitted that they have right/charge/lien on the that they have right/charge/lien on the that they have right/charge/lien on the stocks stocks stocks lying in the premises as per the agreement lying in the premises as per the agreement lying in the premises as per the agreement itself. itself. itself. Therefore, unless the parties agree to Therefore, unless the parties agree to Therefore, unless the parties agree to furnish furnish furnish respective respective respective securities or able to secure the securities or able to secure the securities or able to secure the amount amount amount of damages at this stage, I am not inclined of damages at this stage, I am not inclined of damages at this stage, I am not inclined toto to grant any mandatory order to release the said grant any mandatory order to release the said grant any mandatory order to release the said property. property. property. However, the respondents are also as However, the respondents are also as However, the respondents are also as observed observed observed above, not entitled to sell or dispose of above, not entitled to sell or dispose of above, not entitled to sell or dispose of the the the said property till adjudication of the rival said property till adjudication of the rival said property till adjudication of the rival claims claims claims by the Arbitral Tribunal. by the Arbitral Tribunal. by the Arbitral Tribunal. 9. Considering the fact that goods are perishable Considering the fact that goods are perishable Considering the fact that goods are perishable inin in nature as contended it is in the interest of nature as contended it is in the interest of nature as contended it is in the interest of parties parties parties that they should agree to commence that they should agree to commence that they should agree to commence arbitration arbitration arbitration proceedings as settled as early as proceedings as settled as early as proceedings as settled as early as possible. possible. possible. Liberty is granted to the parties to Liberty is granted to the parties to Liberty is granted to the parties to take take take out appropriate proceedings before the out appropriate proceedings before the out appropriate proceedings before the tribunal. tribunal. tribunal. 10. Taking all these into account, the petition is Taking all these into account, the petition is Taking all these into account, the petition is partly partly partly allowed in terms of prayer clause (e). allowed in terms of prayer clause (e). allowed in terms of prayer clause (e). Other Other Other prayers are rejected. This order will be prayers are rejected. This order will be prayers are rejected. This order will be continued continued continued for fourweeks even after constitution of for fourweeks even after constitution of for fourweeks even after constitution of the the the tribunal. The petitioners and/or parties are tribunal. The petitioners and/or parties are tribunal. The petitioners and/or parties are 6 atatat liberty to take out appropriate proceedings liberty to take out appropriate proceedings liberty to take out appropriate proceedings before before before the constituted tribunal if any. the constituted tribunal if any. the constituted tribunal if any. 11. Petition is therefore, accordingly disposed Petition is therefore, accordingly disposed Petition is therefore, accordingly disposed of. of. of. No order as to costs. No order as to costs. No order as to costs. (Anoop (Anoop (Anoop V.Mohta, J) V.Mohta, J) V.Mohta, J)