Case Note & Summary
The appellant, Royal Orchid Associated Hotels Private Limited, filed a Miscellaneous First Appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996, challenging an order dated 01.10.2024 passed by the IX Additional City Civil and Sessions Judge, Bengaluru, in AA.No.4/2024. The trial court had dismissed IA Nos.5 to 7 filed by the appellant under Order 39 Rules 1 and 2 read with Section 151 CPC and Section 9 of the Arbitration Rules (Proceedings before the Court) 2001. The appellant had entered into a Hotel Management Agreement with the respondents, who are partners of M/s. Hotel Grand Centre Point, Srinagar. Disputes arose, and the appellant invoked arbitration. Pending arbitration, the appellant sought interim injunction to restrain the respondents from interfering with its management of the hotel. The trial court dismissed the applications. The High Court, after hearing the learned senior counsel for the appellant and the learned counsel for the caveator/respondent No.2, allowed the appeal. The court held that the appellant had made out a prima facie case and the balance of convenience was in its favour. The court set aside the trial court's order and granted interim injunction in favour of the appellant, restraining the respondents from interfering with the appellant's management of the hotel pending disposal of the arbitration proceedings.
Headnote
A) Arbitration - Interim Injunction - Prima Facie Case - The appellant sought interim injunction to restrain respondents from interfering with its management of the hotel under a Hotel Management Agreement - The trial court dismissed the applications - Held that the appellant had made out a prima facie case and balance of convenience was in its favour, warranting interim protection (Paras 1-5).
Issue of Consideration
Whether the trial court erred in dismissing the appellant's applications for interim injunction under Order 39 Rules 1 and 2 CPC and Section 9 of the Arbitration and Conciliation Act, 1996, pending arbitration proceedings.
Final Decision
Appeal allowed. The order dated 01.10.2024 passed by the IX Additional City Civil and Sessions Judge, Bengaluru, in AA.No.4/2024 is set aside. The respondents are restrained from interfering with the appellant's management of the hotel pending disposal of the arbitration proceedings.
Law Points
- Section 37(1)(b) of the Arbitration and Conciliation Act
- 1996
- Order 39 Rules 1 and 2 CPC
- Section 9 of the Arbitration and Conciliation Act
- Prima facie case
- Balance of convenience
- Irreparable injury
- Interim injunction
- Arbitration Rules
Case Details
MFA No. 7168 of 2024 (AA)
Sri. Arun Kumar (Senior Counsel for Sri Pradhyuman Singh, Advocate for M/s. Crestlaw Partners) for appellant; Smt. Sheethal Soni (Advocate C/R2) for respondent No.2
Royal Orchid Associated Hotels Private Limited
M/s. Hotel Grand Centre Point, Mohammad Rafeeq Karnai, Mansoor Ahmed Karnai, Nazir Ahmed Karnai, Bashir Ahmed Karnai
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Nature of Litigation
Appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 against dismissal of interim injunction applications.
Remedy Sought
Appellant sought interim injunction restraining respondents from interfering with its management of the hotel pending arbitration.
Filing Reason
Trial court dismissed IA Nos.5 to 7 filed by appellant under Order 39 Rules 1 and 2 CPC and Section 9 of the Arbitration Act.
Previous Decisions
Trial court order dated 01.10.2024 dismissing IA Nos.5 to 7 in AA.No.4/2024.
Issues
Whether the trial court erred in dismissing the appellant's applications for interim injunction.
Whether the appellant had made out a prima facie case and balance of convenience in its favour.
Submissions/Arguments
Appellant argued that it had a prima facie case and balance of convenience was in its favour.
Respondent No.2 opposed the appeal.
Ratio Decidendi
The appellant had made out a prima facie case and the balance of convenience was in its favour, warranting interim injunction pending arbitration.
Judgment Excerpts
Heard the learned counsel for the appellant and the learned counsel for the caveator/respondent No.2.
This miscellaneous first appeal is filed under Section 37(1)(b) of the Arbitration and Conciliation Act 1996, against the order dated 01.10.2024 passed on IA.Nos.5 to 7 in AA.No.4/2024 on the file of the IX Additional City Civil and Sessions Judge, Bengaluru, dismissing the IA.No.V to VII filed under Order 39 Rule 1 and 2 r/w Section 151 of CPC and Section 9 of the Arbitration Rules (Proceedings before the Court) 2001.
Procedural History
The appellant filed AA.No.4/2024 before the IX Additional City Civil and Sessions Judge, Bengaluru, seeking interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. The trial court dismissed IA Nos.5 to 7 on 01.10.2024. The appellant then filed the present appeal under Section 37(1)(b) of the Act on 14.11.2024.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 37(1)(b), Section 9
- Code of Civil Procedure, 1908: Order 39 Rules 1 and 2, Section 151
- Arbitration Rules (Proceedings before the Court) 2001: Section 9
