[Arbitration & Conciliation Act] Proceedings U/S 9 Interim In Nature, Not Meant For Enforcement Of Conditions Of Contract: JKL High Court

The pronouncement was made by Justice Wasim Sadiq Nargal in a plea filed by M/s Doon Caterers Dehradun seeking directions on the respondents to maintain status quo with respect to the refreshment room at Shri Mata Vaishno Devi Katra Railway Station with a further direction of restraining the respondents from levying/imposing and recovering undue license fee from the petitioner during the pendency of arbitral proceedings etc.

The main plank of argument put-forth by the petitioner was that since the other similarly situated persons had been given due consideration and their licenses had been extended suitably for sufficient period and charged 20% of the license fee, however, the petitioner has been arbitrarily singled out and meted out discrimination by the respondents.

Adjudicating upon the Justice Nargal observed, "the petitioner through the medium of the present petition filed under Section 9 of the Arbitration and Conciliation Act, 1996, is seeking final relief with regard to the extension of the contract in spite of the fact that the petitioner has failed to pay the license fee which was agreed by the petitioner while seeking the extension of the license agreement which was extended initially for a period of 176 days with effect from 08.06.2022 in addition to 68 days— total of 244 days, which expired on 30.11.2022".

Taking recourse to the available record the bench noted that it is apparent that while extending the period of the contract, the petitioner was time and again reminded to deposit the license fee along with GST amount for the extended period well in time as per the executed contract agreement but the petitioner failed to deposit the license fee and instead has approached this court through the medium of the present petition.

Explaining the law applicable to the instant subject Justice Nargal observed,

"The proceedings of Section 9 of the Act is by way of an interim measure and are not meant for enforcement of the conditions of the contract as it would be done only when the rights of the parties are finally adjudged or crystallized by the arbitrator. Section 9 proceedings which are for interim measures cannot be converted into the proceedings where a party may seek indirectly a final relief but nature of the conditions incorporated in the terms and conditions of the agreement, its scope and merit in-law and its applicability, are all questions to be examined by the arbitrator in accordance with law".

Pointing out to the colourable measures adopted by the petitioner the bench observed that the petitioner has come to the court by invoking the powers under Section 9 of the Act for seeking final relief and this court while exercising the powers under Section 9 of the Act cannot pass an interim order by directing specific performance of the contract, the breach of which is alleged by the respondents, as the petitioner has failed to pay the license fee in spite of various reminders from time to time.

"The interim relief under Section 9 of the Act can in no way be granted for specific purpose of the contract. Thus, it is amply clear that even by way of grant of interim injunction, the court cannot restore an agreement which already stands terminated due to failure on the part of the petitioner to pay the license fee as agreed mutually while seeking extension", the bench underscored, adding "it goes without saying that a person who seeks equity must do equity. He must also come to the court with clean hands.

Explaining the doctrine of "approbate and reprobate", squarely applicable to the instant case Justice Nargal observed that no party can be allowed to accept and reject the same thing and the petitioner has admittedly accepted the extension of the agreement which was subject to the payment of license fee and after having accepted the agreement the petitioner he by no stretch of imagination can accept one part of the agreement which is favourable to him while rejecting the other.

"Once an agreement has been accepted by the other party who has derived the benefit out of the same, subsequently, cannot challenge it on any ground whatsoever. Law does not permit a person to both approbate and reprobate", said the court.

In view of the aforesaid discussion the bench dismissed the petition.

Case Title : M/S Doon Caterers Dehradun Uttrakhand Vs Union of India

Citation : 2022 LiveLaw (JKL) 235

Coram : Justice Wasim Sadiq Nargal

Counsel For Petitioner : Mr Sunil Sethi Sr Adv

Counsel For Respondent : Mr Vishal Sharma DSGI

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