Karnataka High Court
M/S Kdpr Communications vs M/S Mobitech Creations Private Limited on 28 May, 2024
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NC: 2024:KHC:17833-DB
COMAP No. 146 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF MAY, 2024
PRESENT
THE HON'BLE MRS. JUSTICE ANU SIVARAMAN
AND
THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
COMMERCIAL APPEAL NO. 146 OF 2024
BETWEEN:
M/S KDPR COMMUNICATIONS,
OFFICE AT D NO. 39-17-5, FIRST FLOOR,
OPP KALANJALISIVANANDAM STREET,
M G ROAD, LABBIPET, VIJAYAWADA-520010,
REP. BY ITS MANAGING PARTNER,
SRI V L SATHYANARANA, AGED ABOUT 48 YEARS,
FLAT NO. 13-343/VL/53,
SPRING VILLEY, NIZAMPET, JOURNALIST COLONY,
MEDCHAL MALKAJGIRI, TELANGANA.
...APPELLANT
(BY SRI D R RAVISHANKAR, SR. COUNSEL A/W
SRI SIDDHARTH SUMAN, ADVOCATE)
AND:
Digitally signed 1. M/S MOBITECH CREATIONS PRIVATE LIMITED,
by BELUR
RANGADHAMA DTJ 308, 3RD FLOOR, DLF JASOLA TOWER B,
NANDINI PLOT NO.11, DDA DIST, CENTRE,
Location: HIGH JASOLA, NEW DELHI-110025,
COURT OF
KARNATAKA REP. BY ITS MANAGING DIRECTOR.
2. M/S ONE PLUS INDIA TECHNOLOGY PVT LTD.,
UB CITY CONCORD TOWERS, 6TH FLOOR,
24, VITTAL MALLYA ROAD, K G HALLI,
D SOUZA LAYOUT, ASHOK NAGAR,
BENGALURU, KARNATAKA-560001,
REP BY ITS DIRECTOR.
...RESPONDENTS
(BY SRI C K NANDA KUMAR, SR. COUNSEL A/W
SRI SAITH C V, FOR C/R2
SRI DASHARATH T M, ADVOCATE FOR R1)
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COMAP No. 146 of 2024
THIS COMMERCIAL APPEAL IS FILED UNDER SECTION
13(1A) OF THE COMMERCIAL COURTS ACT 2015 READ WITH
SECTION 37(1)(b) OF THE ARBITRATION AND CONCILIATION
ACT, 1996 PRAYING TO:
(i) TO CALL FOR THE RECORDS AND SET ASIDE THE
ORDER DATED 16.04.2024 IN COM.AA.NO.38/2024 PASSED BY
HON'BLE LXXXV ADDITIONAL CITY CIVIL JUDGE, COMMERCIAL
COURT BANGALORE CITY (CCH-86) AT BENGALURU ON THE
APPLICATION UNDER SECTION 9 OF THE ARBITRATION AND
CONCILIATION ACT, 1996 AND ETC.
THIS APPEAL COMING ON FOR ADMISSION THIS DAY
ANANT RAMANATH HEGDE J., DELIVERED THE FOLLOWING:
JUDGMENT
1. This appeal is arising from the order dated
16.04.2024 passed in Commercial Arbitration Application
No.38/2024 rejecting application filed under Section 9 of
the Arbitration and Conciliation Act, 1996 (for short Act of
1996).
2. The applicant before the Commercial Court is
the appellant in this appeal.
3. The application is filed seeking restraint order
against respondents from terminating Master Service
Agreement dated 01.12.2022, till the expiry of the tenure
of the agreement. Relief is also sought to restrain the
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respondents from appointing any other person to South
India Region as service provider to ONEPLUS handsets,
parts and accessories. A prayer is also sought to direct
the respondents to supply handsets, accessories to the
applicant till completion of the contract period.
4. Admitted factual position is that on 01.12.2022,
an agreement termed as Master Service Agreement was
entered into between the appellant and respondents. The
tenure of the agreement was upto 30.11.2025.
Admittedly, the agreement also provided for termination
from either side on issuance of notice in writing.
5. The application is filed invoking Section 9 of the
Act of 1996, apprehending that the respondents are likely
to appoint another person as the service provider in place
of the applicant. During the pendency of the said
application, the first respondent vide e-mail dated
05.02.2024 terminated a Master Service Agreement dated
01.12.2022 by giving 30 days notice. Later, on
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14.03.2024, the first respondent sent one more e-mail
clarifying that the termination of agreement contemplated
in the notice dated 15.03.2024 will be effective after
expiry of 60 days from the date of the earlier notice dated
05.02.2024.
6. The Commercial Court after hearing both
parties dismissed the application. Aggrieved by the said
order, the applicant is in appeal.
7. Sri D.R. Ravi Shankar, the learned senior
counsel appearing for the appellant would contend that the
Commercial Court has not addressed the issue as to
whether the termination of contract is valid or not, as the
notice issued earlier was only a 30 days notice and not
60/90 days notice contemplated under the agreement. It
is further submitted that the agreement enabled to the
applicant to appoint sub-agents and the applicant has
appointed 129 sub-agents and the rights have been
created in favour of said sub-agents. Learned senior
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counsel referred to Section 192 to 194 of Indian Contract
Act to urge that the sub-agents appointed by the applicant
will also be affected by the act of the respondents in
appointing some other person as the service provider. It
is also his further submission that the Commercial Court
erred in holding that the contract is determinable by its
nature. He would submit that contract is determined only
by efflux of time and the tenure of the agreement is not
yet completed. He would further submit that the contract
can be terminated only in the manner provided under the
agreement. Thus, there is no determination of contract
and there is no valid termination as 60/90 days clear
notice is not given by the respondent No.1 who is claiming
that the contract is terminated.
8. It is also urged that in view of the rights
created in favour of 129 sub-agents, the Commercial Court
ought to have granted the interim prayer for supply of the
handsets and accessories.
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9. Sri C.K. Nandakumar, the learned senior
counsel appearing for the respondents would contend that
the applicant before the Commercial Court had admitted
that the contract is terminated and accordingly, he has
given up the prayer relating to restraint order on
termination of contract. He would further submit that
once the said prayer is given up, the remaining prayers do
not survive for consideration. It is also urged that since
the contract is terminable in nature, the applicant is not
entitled to the interim relief which in substance is in the
nature of relief for specific performance. It is also his
submission that there is a bar under Sections 14 and 41 of
the Specific Relief Act to grant the relief sought in the
application. He would also submit that more than 90 days
have elapsed since the issuance of notice terminating the
contract and the agreement provides for termination of
contract, the appellant is not entitled to the relief of
interim injunction claimed in the application.
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10. This Court has considered the contentions
raised at the Bar.
11. Execution of the agreement dated 01.12.2022
is not in dispute. It is further not in dispute that the
contract provides for termination of the contract by either
side. Though there is some controversy relating to the
duration of the notice of termination, the said controversy
is not material at this juncture for adjudication of this
appeal for the simple reason that the relief if granted to
the appellant restraining the respondents from terminating
the contract, same amounts to restraining the respondents
from exercising their rights under the agreement. It is
simply impermissible.
12. As already noticed that the agreement is
terminable in nature. In such an event under Section 14
of the Specific Relief Act, there is a bar to grant the relief
which is in the nature of specific performance of contract.
It is also required to be noticed that the
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appellant/applicant before the Commercial Court has
admitted that the contract is terminated during the
pendency of the application and before consideration of
the interim prayer. Accordingly, the appellant has not
pressed the prayer to restrain the termination of the
contract. When the contract is terminated, the appellant
cannot seek performance of the contract. However, the
appellant may be entitled to some other relief like
damages on account of termination of the contract, if the
said termination is illegal.
13. The Commercial Court has taken note of the
nature of the contract. The Commercial Court has held
that there is a clause in the contract which provides for
termination of the contract by either of the parties to the
contract. It is also relevant to note that the applicant is
seeking an interim order which is in the nature of a
mandatory injunction to direct the respondents to supply
handset and accessories to the applicant. Such an order
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cannot be granted in view of the bar under Sections 14
and 41 of the Specific Relief Act.
14. The Commercial Court has also taken note of
the fact that the applicant has not pressed the prayer (a)
on the premise that the contract is already terminated and
accordingly, the application seeking injunction is rejected.
This being the position, this Court does not find any
reason to interfere with the order which is in tune with the
settled principles of law.
15. It is made clear that the observations made in
this order are only confined to the merits of the application
seeking interim measure.
16. Accordingly, the appeal is dismissed.
Sd/-
JUDGE
Sd/-
JUDGE
CHS/List No.: 1 Sl No.: 30.
