FAO No.2280 of 2009 -1- IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH FAO No.2280 of 2009 Date of Decision : 25.5.2009 M/s K.G.Telecom Private Limited ..Appellant. Vs. HUDA Gurgaon and another ..Respondents. CORAM : HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present: Mr.R.N.Lohan, Advocate for the appellant. RAKESH KUMAR JAIN, J. This appeal is directed against the order dated 10.4.2009 passed by the Additional District Judge, Fast Track Court, Gurgaon, whereby an application filed by the appellant under Section 9 of the Arbitration and Conciliation Act, 1996 (for short `the Act') has been dismissed. Briefly stated the facts of the case of the appellant are that respondents No.1 and 2 had invited tenders for allotting several sites for installing unipoles for the purpose of advertisement at various sites at Gurgaon. The appellant submitted its tender dated 27.2.2007 for obtaining the said sites on lease on BOT (build, own and transfer) basis. The appellant was the successful bidder. Vide memo No.3808 dated 1.3.2007, respondent No.2 informed the appellant that 23 sites had been allotted to it and was called upon to execute an agreement on non judicial stamp paper within 15 days. The agreement was executed on 30.3.2007 in respect of 23 sites for FAO No.2280 of 2009 -2- providing unipoles and maintenance of adjacent sites. The said agreement was valid for a period of five years. The appellant paid security amount and lease amount dated 2.4.2007 against a sum of Rs.5 lacs. According to the appellant, respondents No.1 and 2 were not in a position to hand over the aforesaid 23 sites for which the agreement was executed as some of the sites were within the municipal limits of Gurgaon which were already given to some other persons for installing unipoles. Due to start of Metro Project on Mehrauli Gurgaon road, many sites were not available at the spot, whereas several persons had installed hoardings, illegally on some of the sites allotted to the appellant. According to the appellant, this fact was brought to the notice of respondents No.1 and 2, who had stated that appellant can instal its unipoles at alternate sites and for that purpose, the appellant was to submit alternate sites in lieu of such disputed sites. The appellant submitted a letter dated 1.5.2007, indicating alternative sites and requested the respondents for delivery of clear possession. It is further the case of the appellant that respondents No.1 and 2 did not take steps to hand over the sites or even alternative sites and as such, vide its letter dated 1.5.2007, the appellant informed them that in case sites under Municipal Committee, Gurgaon, were not cleared upto 15.9.2007, the appellant would instal unipoles on 23 sites indicated in his letter dated 1.5.2007. Since respondents No.1 and 2 were unable to get seven out of the originally allotted sites cleared as it was promised by them, the appellant installed unipoles indicated in its letter dated 1.5.2007 shown in red colour in the attached site plan Annexures A to E as U1 to U23. According to the appellant, they have spent a huge amount on the installment of the unipoles with an expectation that they would be entitled to use and utilise the same upto the year 2012 as FAO No.2280 of 2009 -3- agreed upon. The appellant had further alleged that according to the terms and conditions of the said agreement dated 13.3.2007, respondents No.1 and 2 could charge rent only after a period of three months from the date of handing over the said sites but respondents No.1 and 2 had sent Memo No.A-BOT-07/2515 dated 6.12.2007, for recovery of monthly rent regarding the said unipoles. The calculation in the aforesaid memo was challenged as baseless. In the reply dated 14.12.2007 to the said memo the errors in calculation on the part of respondents No.1 and 2 were highlighted and on the same day, a sum of Rs.5 lacs was deposited with them (respondents No.1 and 2) and also undertook to pay the balance amount immediately after receipt of proper calculations. However, in December 2007, respondents started threatening the appellant that they would impose damage upon him, therefore, the appellant had to file a Civil Suit in which status quo was granted. Respondents No.1 and 2 then filed an application under Section 8 of the Act and the matter was referred to the Arbitrator, but the Arbitrator has not started any proceeding. On these premises, the present application under Section 9 of the Act, was filed on 6.4.2009, seeking an interim injunction for restraining the respondents, their officials, agents, functionaries and persons claiming through or under them from causing any sort of damages or loss to and from removing the unipoles and also from interfering in the peaceful operation of the said unipoles and also from allotting the same to any other agency creating any third party rights. The case set up by the respondents in the reply is that appellant has not come to the Court with clean hands. The appellant entered into an agreement dated 30.3.2007 and it was alleged that it provides arbitration clause that in case of any dispute, the matter would be referred to the FAO No.2280 of 2009 -4- Arbitrator and decision of the Arbitrator would be binding on the parties. Appellant filed the Civil Suit having title M/s K.G.Telecom Pvt.Limited versus HUDA etc. and got an injunction order and as such, the appellant had misused the process of law. It was further alleged that on the one hand, the appellant had pleaded that respondents had not delivered the possession of the sites whereas on the other hand, it is alleged that they had spent huge amount on unipoles for the purpose of advertisement, therefore, the appellant had taken contradictory stand. It was further pleaded that the appellant himself has admitted that he received a letter dated 30.3.2009 about cancellation of the allotment, therefore, the application under section 9 of the Act had become infructuous. It was further alleged that the appellant is guilty of violation of various conditions No.8, 9, 10 and 15 for non-depositing of the amount of Rs.2,79,81,800/- besides service tax. The contract agreement has been cancelled after providing opportunity of hearing to the appellant and security amount had been forfeited. It was also alleged that possession of 23 numbers of sites providing unipoles have been taken back on 5.4.2009 and advertisement slides have been removed. It was denied that several sites fell within municipal limit and some sites have been given to other persons or could not be given to the appellant due to the start of Metro Project. After taking into consideration the entire facts and circumstances, the learned Court below vide the impugned order dated 10.4.2009 dismissed the application, inter alia, on the ground that conduct of the appellant itself disentitled it to the relief of interim injunction because in spite of having knowledge that there is an arbitration clause in the agreement, the appellant had filed a Civil Suit for injunction and obtained FAO No.2280 of 2009 -5- order of status quo from the Civil Judge (Sr.Divn.) and when the respondents filed application under Section 8 of the Act, suit of the plaintiff was disposed of and the matter was referred to the Arbitrator, whereas the prayer made in the suit was similar to the prayer made in the application under Section 9 of the Act. The suit has been disposed of vide order dated 21.3.2009 and the case has been sent for arbitration. Learned Court below had observed that after obtaining stay order from the Civil Court the appellant had dragged the Civil Suit for over a period of 1-1/4 years. From the various letters, it transpired that Estate Officer-II had been dealing with the system but the appellant intentionally did not implead Estate Officer II as a party and had rather impleaded the Estate Officer to create some confusion to prolong the proceedings because there are two Estate Officers. It was also observed that from the perusal of order dated 21.3.2009 which is marked as Ex.R1, the appellant had failed to make payment of the security and amount of rent as stipulated, in accordance with the terms of the condition of the agreement Ex.AX, which was cancelled after affording opportunity of hearing. It was also observed that contract itself was determinable or terminable, therefore, no injunction could have been granted. Ultimately, the learned Court below found that it is clear from document mark Ex.R4 that possession of 23 sites had already been taken on 5.4.2009 and advertisement slides were also removed on 5.4.2009, whereas application under Section 9 of the Act was instituted on 6.4.2009, therefore, no prohibitory injunction could be granted. It was also found that it has been revealed from the letter dated 1.5.2007 (Mark R2) that the appellant had itself chosen the site convenient to it without the consent of the respondents. Letter mark Ex.R3 written by the appellant to the Estate Officer also FAO No.2280 of 2009 -6- revealed that the appellant raised the objections of MC, whereas vide letter mark A4, Estate Officer-II Gurgaon had asked the appellant to explain its position. Reply filed (Mark A5) does not make out bonafide conduct of the appellant. Thus, it was found that the appellant has not been serious in making the payment of the amount in question, rather he has been avoiding the payment on one pretext or the other and now when the contract has been cancelled, the appellant has shown readiness and willingness to make payment of the amount in question. After taking into consideration the entire facts and circumstances, the learned Court below found that neither there is prima -face case nor balance of convenience and irreparable loss in favour of the appellant and as such, application for injunction was dismissed. During the course of hearing of the appeal, this Court had asked Sh.R.N.Lohan, learned counsel appearing on behalf of the appellant as to whether finding recorded in para 13 of the order is correct or wrong to which learned counsel for the appellant replied that findings are correct. It was then asked that if the poles have already been removed and the possession has already been taken by the respondents, whether any prohibitory injunction can be granted as prayed for restraining the respondents, their officials, agents, functionaries and persons from removing the unipoles in question or interfering in its peaceful possession. The learned counsel for the appellant could not reply in affirmative. It is well settled that injunctions are granted by the Court only on the existence of the prima facie case, balance of convenience and irreparable loss in favour of the applicant/plaintiff but where the apprehended wrong has already been done, the remedy is not by way of FAO No.2280 of 2009 -7- application for injunction but the remedy lies by way of seeking damages of the alleged wrong. In the present case, all the issues with regard to damages of loss, if any, which have been suffered on account of the action of the respondents shall have to be gone into by the Arbitrator at the time of arbitration proceedings. Thus, in the present case, at this stage, no injunction can be granted to the appellant and as such, the present appeal is dismissed in limine without any order as to costs. (Rakesh Kumar Jain) 25.5.2009 Judge Meenu