M/S. Sagar Ratna Restaurants ... vs Tarseem Kumar & Ors
2013 Latest Caselaw 1729 Del

*         THE HIGH COURT OF DELHI AT NEW DELHI

+                        OMP 1064/2012

                                         Date of Decision: 17.04.2013

M/S. SAGAR RATNA RESTAURANTS PRIVATE LIMITED.
                                   ...... Petitioner

                         Through:     Mr. Jagjeet Singh, Advocate.

                                Versus

TARSEEM KUMAR & ORS.                               ...... Respondent

                         Through:     Mr. Yogendra Nath Bhardwaj,
                                      Advocate with Mr. Daksh
                                      S.Bhardwaj     &     Mr.Rakesh
                                      Tripathi, Advocates.

CORAM:
HON'BLE MR. JUSTICE M.L. MEHTA

M.L. MEHTA, J. (Oral)

1. This is a petition filed under Section 9 of the Arbitration and

Conciliation Act, 1996. The admitted facts of the case are that vide an

agreement dated 01.05.2005 executed between the respondents and

M/s. Sagar Ratna Hotels P. Ltd. (M/s. SRHP), the commercial

premises being premises No. 33, 35 & 36, Pocket C-9, Sector 7,

Rohini, Delhi situated on the ground & first floors, was agreed to be

provided by the respondents to M/s. SRHP for running its outlet of

restaurant on the terms and conditions as stipulated therein. One of the

terms being that the duration of the agreement was for a period of ten

years from the date of opening the restaurant, which could be increased

further for such a period on the terms and conditions, as may be

mutually agreed between the parties. Another important term as

stipulated in Clause 19 of the said agreement is that both the parties

could terminate this agreement by serving three months notice in

writing in the event of there being violation of any of the terms and

conditions thereof. In the case of termination, M/s. SRHP was to hand

over the possession of the premises along with the fixtures etc. to the

respondents. Further, one of the important term as stipulated in Clause

20 is that in the event of expiry of the agreement, the respondents

could not use the name "SAGAR RATNA" or any other name

identical to it, and could not continue the restaurant business for a

further period of seven years.

2. After the agreement dated 01.05.2005, another supplementary

agreement dated 17.06.2011 was executed between the respondents,

the petitioner herein and SRHP. By virtue of this agreement, the

present petitioner acquired all the rights of SRHP in respect of the

restaurant business that was being carried by SRHP in the suit

premises. All the terms and conditions as stipulated in agreement of

01.05.2005 executed between the respondents and SRHP were to be

applicable to the petitioner herein. In other words, the petitioner

stepped into the shoes of SRHP qua the suit premises and the

restaurant business being carried therein on all the terms and

conditions of the agreement dated 01.05.2005.

3. The business was being carried by the petitioner for quite some

time. The grievance of the petitioner is that the respondents have

unauthorizedly dispossessed it in connivance with some of its staff

officials on 24.09.2012. It is alleged that this is in gross violation of

the terms of the agreement of 01.05.2005 as also of the supplementary

agreement of 17.06.2011. It is pointed out by the learned counsel for

the plaintiff that a notice of termination of the agreement was sent by

the respondents on 23.09.2012 by speed post. A look at that notice

would show that certain differences and disputes were sought to be

raised by the respondents. The petitioner was also called upon for

rendition and settlement of account, and was asked to give the

possession of the premises and fixtures immediately. The said notice is

seen to have been sent by the speed post on 23.09.2012 at about 10

p.m. It is submitted by the learned counsel that this notice was

received only on 25.09.2012, but, in the meanwhile, the petitioner was

dispossessed from the premises, and for which, the police complaints

were made on 24.09.2012 itself. It is submitted by the counsel for the

plaintiff that as per Clause 19 of the agreement dated 01.05.2005, the

termination of the same can only be done by either party by serving

three months notice in writing in the event of any violation of the

term/condition thereof, and that there was no such notice ever given by

the respondents. The said notice of 23.09.2012 is alleged to be not in

consonance with the Clause 19 of the agreement. Further, it is

submitted that in any case, the respondents could not carry on the

business of restaurant for seven years as per Clause 20.

4. On the other hand, learned counsel appearing for the respondents

submits that the persons who were named in the petition were either

the employees or the outsiders and they being not the party to the

agreement, the arbitration could not be invoked in the present form. It

is also submitted that the possession of the suit premises was given by

the petitioner to the respondents of its own as mutually agreed on

24.09.2012 through Mr. K.S. Manjunath, the then employee of the

petitioner company. This is all vehemently denied by the learned

counsel for the petitioner.

5. With regard to the plea that is sought to be taken by the

respondent that arbitration could not be invoked as some of the persons

named in the petition being either the employees of the petitioner or

outsiders, were not signatory to the agreement, is apparently untenable.

The petitioner is not seeking arbitration proceedings against those

persons. The grievance of the petitioner is to the violation of the terms

and conditions of the agreement dated 01.05.2005 and its dispossession

from the suit premises. From the averments as set out in the petition

and the reply of the respondents thereto, apparently, there are certain

differences and disputes which have arisen between the parties. It is

admitted by the learned counsel for the respondents that if it was so,

then, as per Clause 21 thereof, the matter was to be referred to the

arbitration. Since the respondents are admittedly carrying on the

business of restaurant in the same premises under the name of "Shree

Rathnam" since from the time of taking the possession on 24.09.2012,

it is a fit case for passing of interim order under Section 9 of the

Arbitration and Conciliation Act.

6. With the consent of the both the parties, the Receiver is to be

appointed till such time, the disputes and differences between the

parties are settled by the Arbitrator. Accordingly, Sh. J.P.Sharma,

Addl. District & Sessions Judge (Retd.) is appointed as Receiver as

regard to the affairs and conduct of the restaurant business by the

respondents themselves or through M/s. Shree Rathnam in the

premises i.e. 33, 35 & 36, Pocket C-9, Sector 7, Rohini, Delhi. Sh.

J.P.Sharma would device his own means and methods for maintaining

the details of the accounts of the business including the expenses and

sales etc. He would be at liberty to control and regulate the business in

a computerized manner, if not already done, and is also authorized to

employ some suitable Manager of his own choice to look after the day

to day business & affairs of the restaurant business. He will also be at

liberty to open an account and operate the same for the purpose of

conduct of the business. His remuneration is fixed at Rs. 50,000/- per

month exclusive of other out of pocket expenses including conveyance

etc. The learned counsel representing both the parties have requested

for the appointment of Arbitrator in the present proceedings itself to

avoid another litigation in this regard. With their consent, Sh. Dinesh

Dayal, Addl. District & Sessions Judge (Retd.) is appointed as an

Arbitrator. His remuneration would be Rs. 50,000/- per sitting. On

being informed about the arbitration proceedings nearing conclusion,

the Receiver shall submit his report with accounts to Arbitrator. The

learned Arbitrator shall take into consideration the detailed report of

Receiver while making an award. All these expenses of the Receiver

and Arbitrator shall be borne by the parties equally.

7. Copy of the order be sent to Sh. J.P.Sharma and Sh. Dinesh

Dayal, AD&SJ (Retd.) and also be given dasti to both the parties. The

parties are advised to appear before Sh. J.P.Sharma (Receiver) on

22.04.2012 at 3.00 p.m. and before Sh. Dinesh Dayal on 23.04.2012 at

3.00 p.m.

8. Petition stands disposed of accordingly.

M.L. MEHTA, J.

APRIL 17, 2013 akb