Madanlal Jain vs M/S Vinay Fabric Pvt. Ltd. ...
2023 Latest Caselaw 2263 Raj

[2023/RJJD/006909]

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Misc. Appeal No. 642/2022

1. Madanlal Jain S/o Late Shri Jeevraj Jain, Aged About 66

Years, B/c Jain, R/o A-52, Shastri Nagar, Jodhpur.

2. Mukesh Jain S/o Shri Madanlal Jain, Aged About 41 Years,

B/c Jain, R/o A-52, Shastri Nagar, Jodhpur.

----Appellants Versus

M/s Vinay Fabric Pvt. Ltd., A Company Registered Under The

Indian Company Act, 1956 Having Its Registered Office At First

Floor, Malhar Rao Wadi, Kalba Debi Road, Mumbai (Maharashtra)

And Plot No. 7 And 7/a, Light Industrial Area, Jodhpur Through

Its Authorized Representative Shri Vinod Jain S/o Shri Ummedraj

Sand, Dirctor, M/s Vinay Fabric Pvt. Ltd. Mumbai.

----Respondent

For Appellant(s) : Mr. Puneet Jain through V.C. For Respondent(s) : Mr. Vinod Jain, authorized representative-respondent company

HON'BLE ACTING CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA

HON'BLE MS. JUSTICE REKHA BORANA

Order

17/03/2023

Mr. Puneet Jain, learned counsel for the appellants through

V.C.

Mr. Vinod Jain, authorized representative of the respondent

company is present in person.

[2023/RJJD/006909] (2 of 6) [CMA-642/2022]

The counsel for the respondent has not appeared apparently

because he is abstaining from work pursuant to the call given by

the office bearers of the Bar Association. Such non-appearance is

clearly illegal and in breach of the order passed by Hon'ble

Supreme Court in the case of Ex. Capt. Harish Uppal Vs. Union

of India & Anr. [2003 920 SCC 45].

Heard.

This appeal is directed against the order dated 26.04.2022

passed by the Commercial Court No. 1 Jodhpur by which the

interim order dated 13.04.2022 pending decision of application

under Section 9 of the Arbitration and Conciliation Act, 1996 (for

short 'the Act') filed by the appellants, has been discontinued.

The appellants moved an application under Section 9 of the

Act before the Commercial Court seeking interim measures on the

pleadings inter alia that an award for specific performance of

agreement between the parties has been passed by the sole

Arbitrator on 31.07.2021. In the application, it was also stated

that because of the pendency of PIL and in view of the conditions

imposed in the award, the award could not be executed but in the

meantime, the respondent is proceeding to dispose off/transfer

the right, title or interest in respect of the property involved in the

dispute between the parties.

The Commercial Court initially vide order dated 13.04.2022

passed the interim order restraining the respondent from selling or

transferring any right, title or interest in respect of the property in

dispute.

Later on, vide impugned order dated 26.04.2022, the interim

order has not been continued though the application under Section

[2023/RJJD/006909] (3 of 6) [CMA-642/2022]

9 of the Act has remained pending for consideration. It is against

this order that this appeal has been filed.

Learned counsel appearing for the appellants would argue

that once there was an award passed in favour of the appellants,

in terms of the agreement for sale of a floor, the appellants are

entitled to appropriate interim relief so that the award is not

frustrated. He would further submit that the order passed in the

pending PIL in the High Court registered as D.B. Civil Writ Petition

No. 19102/2018 does not allow the respondent to raise

constructions beyond the 8th floor. Taking undue advantage of the

order which was passed by the High Court on 23.02.2022, the

respondent may proceed to dispose off by sale or otherwise

constructed floors without there being any opportunity to the

appellants to enforce the award.

On the other hand, the respondent in person would argue

that the agreement for sale between the parties and the award

are not in respect of other properties/floors than the one in

respect of which the agreement was entered into and which the

appellants may be entitled under the law by way of sale in

execution of award for specific performance of contract. If an

order is passed restraining the respondent, it will have adverse

effect on the rights of other intending buyers, with whom the

respondent has entered into agreement for sale upto 8th floor.

We have heard the parties and perused the records.

Undisputedly, the parties had entered into agreement for

sale on 19th July, 2016. Amongst other conditions, the agreement

stipulated under the Note that with consent of both parties floor

number can be changed, but sale area will be same as per the

[2023/RJJD/006909] (4 of 6) [CMA-642/2022]

agreement, remaining amount will be given at the time of

execution of sale deed.

On a PIL filed challenging the legality and validity of

constructions raised by the respondent, initially a Division Bench

of this Court passed an interim order dated 7 th January, 2019

restraining the respondents from creating third party interest in

any portion of the subject property. Thereafter, vide order dated

23.02.2022, the interim order dated 07.01.2019 was modified.

A dispute having arisen between the parties, arbitration

proceedings were drawn, which eventually culminated in passing

of award in favour of the appellants on 31.7.2021. As on that date

the interim order dated 07.01.2019 passed in D.B. Civil Writ

Petition No.19102/2018 was operating, the Arbitrator while

passing the award directed the respondent to specifically perform

the agreement dated 19.07.2016 by executing the sale deed in

favour of the appellants for floor area measuring 33480 sq. ft. in

the project "Umed Heights" Wing 'A' & B situated at plot no. 7 &

7A, Light Industrial Area, CAZRI Road, Jodhpur, after passing the

judgment of the Rajasthan High Court in the said writ petition or

by the Apex Court in favour of the respondent company. The

award stated that in case the judgment comes against the

respondent, the respondent shall execute the sale deed in favour

of the appellants/claimants for the floor area measuring 33480 sq.

ft. in any other floor after receiving the remaining amount in

accordance with the agreement dated 19.07.2016.

The appellants having apprehension that after modification of

order dated 07.01.2019 vide order dated 23.02.2022, the

respondent may proceed to sell or create third party interest in

[2023/RJJD/006909] (5 of 6) [CMA-642/2022]

respect of the properties which form part of the subject matter of

the award, moved an application under section 9 of the Act before

the Commercial Court. Apparently, there exists an award in favour

of the appellants. Even though respondent submits that award has

been challenged under section 34 of the Act before the

Commercial Court, there is no interim order in favour of the

respondent. If the respondent is allowed to dispose off the

property which is the subject matter of award, the appellants may

find it difficult to seek implementation of award in future. Keeping

that in view, the Commercial Court had passed interim order in

favour of the appellants on 13.4.2022.

In our opinion, the said order ought to have been continued

as the application under Section 9 filed before the Commercial

Court is still pending consideration. The reasons assigned by the

Commercial Court to vacate the interim order are not correct.

Pendency of proceedings in the writ petition are essentially in

public domain. Merely because the Court had modified the interim

order dated 07.01.2019 vide order dated 23.2.2022, that would

not mean that the rights of the appellants as flowing from the

award are in any manner diluted or diminished.

Therefore, we are of the view that the learned Commercial

Court was not justified in vacating the interim order passed in

favour of the appellants till decision of the application under

Section 9 of the Act.

In view of the above consideration, the order passed by the

Commercial Court dated 26.04.2022 cannot be sustained in law

and the same is therefore set aside. The interim protection

[2023/RJJD/006909] (6 of 6) [CMA-642/2022]

granted earlier on 13.04.2022 shall continue till the decision of the

application under Section 9 of the Act.

Taking into consideration the nature of the dispute between

the parties, we also direct the Commercial Court to decide the

application under Section 9 of the Act as early as possible

preferably within a period of three months from the date of receipt

of the copy of this order.

The appeal is allowed accordingly.

(REKHA BORANA),J (MANINDRA MOHAN SHRIVASTAVA),ACJ

6-Jayesh/-

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