Second Section 9 Application, Relief Can't Be Granted As It Would Amount To Main Relief In Arbitration :Gujarat High Court

The Bench, consisting of Justices N.V. Anjaria and Samir J. Dave, held that principal relief cannot be granted at the interim stage, and granting interim directions which are in the nature of main relief is not permissible in law.

The appellant Time Cinemas and Entertainment Pvt Ltd entered into a lease agreement with the respondent Venus Infrastructure and Developers Pvt Ltd. The leased premises were to be used by the appellant for the purpose of exhibiting films.

The respondent, later, issued a notice to the appellant for vacating the leased premises on the ground of non-payment of lease rent by the appellant. After a dispute arose between the parties, the appellant invoked the arbitration agreement and the respondent filed an application under Section 11 of the A&C Act before the Gujarat High Court for appointment of an Arbitrator.

Thereafter, the appellant filed an application under Section 9 of the A&C Act for interim measures before the Commercial Court to restrain the respondent from dispossessing the appellant from the leased premises. The Court allowed the application by directing the respondent to not initiate any coercive action against the appellant.

The appellant, thereafter, filed another application under Section 9 of the A&C Act for interim measures before the Commercial Court, seeking directions to the respondent to provide essential services to the appellant in the common area of the leased premises as per the lease agreement. The Commercial Court rejected the application filed by the appellant and held that the appellant had failed to pay the rent and maintenance charges under the lease agreement. Against this order passed by the Commercial Court, the appellant filed an appeal before the Gujarat High Court under Section 37 of the A&C Act read with Section 13 of the Commercial Courts Act, 2015.

The respondent Venus Infrastructure and Developers submitted before the High Court that after the disposal of the first application for interim measures filed by the appellant, a second application for interim measures on the same lines was not maintainable. The respondent contended that it was not under any obligation to provide services to the appellant after the lease deed was terminated.

The High Court noted that in the first application for interim measures filed under Section 9 before the Commercial Court, the appellant sought directions to restrain the respondent from dispossessing the appellant from the leased premises and to not obstruct the appellant in the peaceful enjoyment of the leased premises. The Commercial Court had directed the respondent to not take any coercive steps against the appellant, but had not passed any order granting relief from obstruction in the peaceful enjoyment of the leased premises.

The High Court observed that another application for interim measures was filed by the appellant, wherein the appellant sought directions to the respondent to provide essential services like lifts, escalators, inter alia in the common area of the leased premises, which was rejected by the Commercial Court. The appellant had contended in its second application for interim relief that without the provision of such services, the appellant would not be able to enjoy the fruits of the earlier order passed by the Commercial Court whereby the appellant was granted protection from any coercive steps taken by the respondent.

The High Court held that the second application for interim measures filed by the appellant was repetitive in nature. The High Court ruled that once an application under Section 9 seeking interim measures has been disposed of by granting the relief sought, either fully or in part, a subsequent similar application seeking similar reliefs, which were already dealt with in the earlier proceedings, is not maintainable.

The High Court thus ruled that the second application for interim measures filed by the appellant seeking similar relief was not maintainable.

"Once the application under section 9 of the Arbitration and Conciliation Act seeking interim measures was filed with similar prayers and the same has been disposed of by granting the prayers either fully or in part, subsequent similar application making prayers on the same lines which were dealt with in the earlier proceedings, could hardly be said to be maintainable. The second application with similar prayers was not maintainable."

The High Court ruled that the appellant, by seeking directions against the respondent to provide certain facilities and amenities as specified under the said lease agreement, was trying to revive the lease agreement which was already terminated. The High Court ruled that whether the appellant was entitled to exercise rights under the lease agreement or not is an arbitral dispute which must be decided by the Arbitrator himself. The High Court added that revival of the lease agreement could not be granted by way of interim measures as it would amount to interjecting the realm of arbitration and the dispute to be tried before the Arbitrator.

The High Court ruled that granting any direction in favour of the appellant, beyond the interim protection of peaceful possession, would tantamount to granting principal relief to the appellant. The High Court held that principal relief cannot be granted at the interim stage, and granting interim directions which are in the nature of main relief is not permissible in law.

"Granting any direction beyond the said interim protection of enjoying the peaceful possession would tantamount to granting principal relief to the applicant, which is to be decided by the Tribunal. The relief which could be granted by the Arbitrator only at the end of the arbitral proceedings, would ordinarily and in normal circumstances not be granted as an interim measure on the footing of the principle that principal relief cannot be granted at the interim stage and that grant of interim directions of the nature granting main relief is not permissible in law."

The Court thus dismissed the appeal filed by the appellant.

Case Title: Time Cinemas and Entertainment Pvt Ltd versus Venus Infrastructure and Developers Pvt Ltd

Dated: 21/04/2022 (Gujarat High Court)

Counsel for the Appellant: Mr. Kishan Y Dave, Mr. Rasesh H Parikh and Mr. Hemang H Parikh

Counsel for the Respondent: Mr. Jigar M Patel

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