2024 (8) TMI 157 - HC - Insolvency and Bankruptcy

Seeking stay of an award - Seeking an order of restraint restraining the petitioner from interring with its peaceful possession of the schedule property - Termination of lease and possession of the property - Non-payment of rent - Section 34 Arbitration and Conciliation Act, 1996 - HELD THAT - The dispute having arisen between the two is also not in dispute. The dispute is with regard to non-payment of rent. In terms of the agreement, the matter reaches the table of the Arbitrator in A.C. No. 207 of 2022. Arbitration proceedings go on and the learned Arbitrator by his order dated 09-10-2023 allows the claim of the petitioner/land lord and directs recovery of a sum of qwertyuip 2.60 crores along with the amount of GST, interest and other expenses as detailed in the award. The claim of the petitioner is that, it has secured keys from the security guards and defence of the respondent is that, there was no such security guard with it. Since the crime had been registered before the jurisdictional police, an application is moved on 17-10-2023. The concerned Court was on vacation and the vacation Court was holding the proceedings. On the same day, the matter is taken up in the afternoon. By then, the petitioner files its objections to I.A. Nos. 1 and 2. The matter is heard at length by the concerned Court and an order is passed on 18-10-2023 after considering the objections so filed. Therefore, it is not a case where the matter was not heard. Taking of possession by the petitioner in the manner in which it is projected requires further evidence before the concerned Court. The award of the Arbitrator is stayed subject to the condition that the respondent herein shall furnish security deposit covering 5% of the entire amount of award and temporary injunction restraining the petitioner from disturbing peaceful possession of the respondent. Submissions are made by the petitioner that the concerned Court in a mortal hurry took up the matter and passed the aforesaid order and, therefore, this Court should declare the said order to be inspiring no confidence of this Court - petition dismissed.

Issues Involved:
1. Termination of lease and possession of the property.
2. Arbitration award and its enforcement.
3. Interim orders and urgency in the matter.
4. Allegations of forcible entry and criminal proceedings.
5. Validity of the Commercial Court's order dated 18-10-2023.

Issue-wise Detailed Analysis:

1. Termination of Lease and Possession of the Property:
The petitioner entered into a lease with the respondent on 19-10-2019. The respondent delayed in payment of rent, leading to a notice regarding termination of the lease. The lease was deemed terminated after the respondent failed to cure the breach within the notice period, resulting in arbitration proceedings. The Arbitrator's award directed the respondent to hand over vacant possession of the property to the petitioner. The petitioner claimed to have received the keys and possession on 11-10-2023, which the respondent disputed, stating they never delivered possession and that a sub-lessee was still occupying the property.

2. Arbitration Award and Its Enforcement:
The Arbitrator in A.C. No. 207 of 2022 passed an award on 09-10-2023, rejecting the respondent's claims and allowing the petitioner's counterclaims for arrears of rent, damages, and return of vacant possession. The award included financial recovery directives, such as a sum of Rs. 2.60 crores with corresponding GST and interest at 18% per annum from 04-11-2021. The respondent filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside the arbitral award and filed applications for stay of the award and a restraining order against the petitioner.

3. Interim Orders and Urgency in the Matter:
The Commercial Court, on 13-10-2023, found no urgency for an interim order and adjourned the matter to 04-11-2023. However, after an alleged forcible entry by the respondent on 14-10-2023 and subsequent criminal proceedings, the respondent sought an advancement of the case. The vacation Court heard the matter on 17-10-2023 and passed an order on 18-10-2023, staying the arbitral award subject to the respondent furnishing a security deposit covering 5% of the award amount and restraining the petitioner from disturbing the respondent's possession.

4. Allegations of Forcible Entry and Criminal Proceedings:
On 14-10-2023, the respondent and its sub-lessee allegedly forcibly entered the property, leading to the petitioner registering a crime on 16-10-2023 under Sections 149, 323, and 448 of the IPC. This incident prompted the respondent to file an advancement application, leading to the expedited hearing on 17-10-2023.

5. Validity of the Commercial Court's Order Dated 18-10-2023:
The petitioner contended that the Commercial Court acted in haste without providing adequate opportunity to present their case. However, the Court noted that the petitioner was heard, and objections were filed. The Court's order, which stayed the arbitral award and granted a temporary injunction, was deemed to have considered all pleadings and was not found to be faulty. The High Court declined to interfere with the interim order, emphasizing that the petitioner was heard, and the matter was appropriately considered by the Commercial Court.

Conclusion:
The High Court dismissed the writ petition, leaving all contentions open to be urged before the concerned Court. The interim order subsisting was dissolved. The High Court found no fault with the Commercial Court's order, which was interim in nature and had considered the submissions of both parties.

← Previous Next →