2002 (3) TMI 872 - HC - Companies Law

Summary

Issues:
Interim protection under section 9 of the Arbitration and Conciliation Act, 1996 regarding an agreement to sell, readiness and willingness of parties to perform the contract, validity of the agreement, breach of terms, extension of time, role of the Supreme Court orders, remedy through arbitration, balance of convenience, element of irreparable loss, and significance of time in the agreement.

Interim Protection under Section 9:
The petitioners sought interim protection through section 9 of the Arbitration and Conciliation Act, 1996, to restrain the respondents from dealing with the suit land pending arbitration. The dispute arose from an agreement to sell, and the petitioners aimed to prevent any actions affecting the land's status.

Validity of the Agreement and Breach of Terms:
The agreement to sell involved parties who were employees of a company and purchased land under specific conditions. The agreement had a clause regarding the execution and registration of sale deeds within a specified period. The respondents contended that the agreement became non-existent due to subsequent events, including Supreme Court orders, and they were relieved from their obligations.

Extension of Time and Role of Supreme Court Orders:
The agreement's time period was extended once, but not further. Supreme Court orders directed changes in land use, reducing the area originally covered by the agreement. The respondents argued that the agreement's terms were affected by these legal developments.

Remedy through Arbitration and Balance of Convenience:
The judgment emphasized that the dispute's resolution lay within the realm of arbitration, as per the agreement's clause. The readiness and willingness of both parties to perform the contract were crucial, with the balance of convenience considered for granting interim protection.

Significance of Time in the Agreement:
While time is generally not considered essential in property sale transactions, parties can make it so by agreement. The judgment highlighted the importance of the extended time period agreed upon in subsequent documents and the implications of not further extending it in writing.

Conclusion:
After analyzing the arguments and circumstances, the court found that the petitioners failed to establish a prima facie case for the injunction sought. The petition was dismissed, emphasizing the readiness and willingness of the parties, the impact of time in the agreement, and the need for resolution through arbitration.