Classic Tent And Decorators vs India Travel Guide

Sanjeev Narula, J

CM APPL. 4226/2021 (for exemption).

Allowed, subject to just exceptions and as per extant rules.

The application is disposed of.

FAO (COMM) 24/2021 & CM APPL. 4225/2021 (for interim relief)

This appeal under Section 13 of the Commercial Courts Act, 2015 read with Order XLIII Rule 1(r) of the Code of Civil Procedure, 1908

(‘CPC’) is directed against the order dated 18th January, 2021 [hereinafter referred to as the ‘impugned order’] passed by the learned

District Judge (Commercial) North-West District, Rohini in CS(COMM.) No. 22/2021 whereby the application of the Plaintiff (i.e. Appellant herein),

under Order XXXIX Rules 1 & 2 of the CPC, has been decided, giving only partial relief to the Appellant.

The case of the Appellant is that a business agreement dated 9th November, 2020 [hereinafter referred to as ‘the Agreement’] was

executed between the parties, whereunder it was agreed that in relation to two properties [hereinafter referred to as ‘suit properties’], all the

rights of booking an event, providing catering and decoration services etc., were to vest with the Appellant for a period of three years. Pursuant to the

Agreement and in accordance with the terms and conditions stipulated therein, several events were organized and held at the venues, for which the

Appellant provided the services of decoration, catering etc. After a while, disputes arose between the parties, which resulted in filing of criminal

complaints with the police, exchange of legal notices through counsels, all leading finally to the filing of the suit for specific performance of the

Agreement, recovery of money and damages etc. Initially, without going into the merits of the contentions, on a concession given by the Respondent

herein, the learned trial court allowed the Appellant to hold an event of marriage party on 15th January, 2021 at one of the venues. Subsequently, after

hearing the parties, the trial court vide the impugned order, decided the application under Order XXXIX Rules 1 & 2 CPC and partly allowed the same

in favour of the Appellant by granting them permission to execute all already booked events/marriage at the suit properties, as per terms and

conditions of the Agreement. At the same time, the learned trial court declined to pass an order restraining the Respondent from taking independent

bookings and creating hindrance in the operation of the Appellant during the tenure of the Agreement. Further, the learned trial court restrained the

Appellant from taking any further bookings except on the dates for which the permission to perform the services was specifically granted.

The grievance of the Appellant is that the learned Trial Court has granted only partial relief. It is contended that by restraining the Appellant from

taking any further bookings at the suit properties, and declining to restrain the Respondent from taking further independent bookings, the learned trial

court has practically decreed the suit against the Appellant and in favour of Respondent, that too, at the stage of deciding the interim application under

Order XXXIX Rule 1 & 2 CPC. It is further contended that the right for making bookings for events/marriages, catering and decorations, etc. vests

with the Appellant by virtue of the terms and conditions of the Agreement. The Appellant has already installed/placed many items pertaining to

catering, decoration, lights etc. of substantial worth, and the refusal of the court to grant an injunction order, as sought for, would cause huge business

loss. Counsel for the Appellant submits that since huge investment has been made, and in case the impugned order is restricted only with respect to

bookings events for certain/particular dates, the Appellant would suffer grave prejudice. He submits that under the Agreement, the Appellant is

entitled to take the bookings for the entire tenure of the Agreement and therefore the learned Trial Court should have granted complete injunction and

not restrained the Appellant. He further argues that the Agreement in question is not a sublease but only a ‘business agreement’ for three

years, by virtue whereof, the Appellant is entitled to take bookings, perform catering and decoration services etc. on the suit properties at basement

and ground floor. Therefore the observations made by the learned Trial Court relating to Sections 17 and 49 of the Registration Act, 1908 are uncalled

for, as the provisions are inapplicable.

The learned counsel for the Respondent who appears on advance notice, at the outset submits that the Agreement is forged and fabricated and

does not bear the signatures of the Respondent. He further argues that the said document does not confer any right, title or interest on the Appellant

and is not legally enforceable. Without prejudice to the aforesaid submissions, he states that the Appellant was introduced as a decorator for the

events to be held at the premises in question, which were to be booked by the Respondent. Under the garb of the Agreement, the Appellant has now

independently started taking bookings for the suit premises, which was never intended or agreed between the parties. He further submits that even the

bookings for which injunction has been granted, were made without the consent of the Respondent. He further submits that for the event fixed on 15th

January, 2021, the Respondent, without prejudice to his legal rights and contentions, as recorded in the order dated 14th January, 2021, purely on

humanitarian grounds and with the intent not to disturb the marriage event scheduled, agreed to allow the Appellant to provide catering, decoration and

other services, for that event only.

The learned counsel for the Respondent further submits that the Respondent is paying a huge amount of rent for the premises in question and in

case this arrangement is allowed to continue, and injunctions as sought for are granted, it will cause irreparable injury to the Respondent.

During the course of the arguments we have enquired from the counsel for the Appellant about the possibility of an amicable resolution of the

dispute. However, Respondent’s counsel submits, now that there is complete mistrust between the parties, his client would not like to have any

association or business relationship with the Appellant, irrespective of the terms they may offer.

We have considered the submissions of the learned counsels for the parties.

In the instant case, the Agreement sought to be specifically enforced is in serious dispute. At the stage of grant of interim injunctions the Court is

only required to take into consideration the well-entrenched principles relating to the same viz- (i) prima facie case, (ii) balance of convenience, and

(iii) likelihood of irreparable injury or loss. These aspects have been considered in a proper perspective, having regard to the facts and circumstances

of the case, as is evident from the following extract of the impugned order:

“7. At present this court is to see a prima facie case, balance of convenience and question of irreparable loss. Prima facie case is disclosed by

plaintiff showing that he had already organized many functions in the suit properties and that he has taken further bookings for five days. It is to be

noted that these are marriage functions, which are fixed by the customers much in advance. This will cause huge inconvenience to plaintiff as well as

to those customers of the plaintiff, whose bookings have been accepted by the plaintiff. It will therefore cause irreparable loss to the plaintiff if he

cancels these bookings. Therefore, interim injunction is passed in favour of plaintiff restraining the defendant from interfering with the smooth

execution of bookings already done in two properties mentioned in para no. 2 of this order on the dates 16.02.2021, 25.04.2021, 26.04.2021,

27.04.2021, 24.05.2021 in respect of these functions, the parties will be governed by the terms and conditions of the agreement dated 09.11.2020.

However, it is made clear that nothing in this order shall tantamount to give effect to the clause of sublease mentioned in the agreement it being the

unregistered document.

The plaintiff has prayed in the application that defendant may be restrained from taking independent booking and creating hindrance in daily

operation of the plaintiff during the tenure of the agreement. Since agreement to sublease is hit by section 17 and 49 of the registration act, this relied

cannot be granted.

Ld. Counsel for defendant argued that plaintiff should not take further bookings. I agree with submissions and in order to avoid multiplicity of

litigation, I restrain the plaintiff also from taking any further bookings except on the dates already mentioned above in the two properties in question. I

hold that if the plaintiff takes further bookings, he himself will be responsible for any loss of business or reputation. Application is disposed of

accordingly. However, it is made clear that nothing stated herein shall tantamount to expression of my opinion on the merits of the case.â€​

The learned Trial Court has taken into consideration the factual disputes and having regard to the balance of convenience, allowed the Appellant to

hold the events for the dates for which the bookings had been made. We find no reason to interfere with the view taken by the learned Trial Court in

exercise of discretionary and equitable jurisdiction. The Agreement if construed as purely a ‘business agreement’, as contended by the

Appellant, and not a sub-lease, would have to be looked at as a commercial contract which is determinable in nature. The implication would be that if

the Respondent has avoided the contract, the Appellant’s right for the breach of the terms and conditions, if any, would entitle them to claim

damages from the Respondent. In fact, damages are one of the reliefs sought for in the pending suit. The balance of convenience thus tilts in favour of

the Respondent. Therefore, the restraint put on the Appellant under the impugned order and the corresponding ensuing right with the Respondent to

make bookings for the two venues, cannot be construed as grant of final relief. Further, it can also be argued that if the injunction, as the Appellant

desires, is granted, it would amount to grant of final relief of specific performance. The learned trial court has balanced the scales, having regard to

the nature of rights and obligations flowing from the Agreement in dispute.

We may also note that in so far as the Appellant’s investments, installations etc. made at the premises are concerned, the Respondent’s

counsel on instructions has confirmed that he has no objection in case the same are removed by the Appellant. However, the Appellant is not

agreeable and continues to insist that the interim injunction should be granted, as prayed for.

We find no merit in the present appeal and accordingly the same is dismissed. No costs. We may only add that parties, if they so desire, may

approach the Mediation Centre of this Court or the learned trial court, to explore the possibility of amicable settlement of the disputes arising from the

suit. The observations made hereinabove are only tentative and not a final expression of our views on the merits of the case and would not come in

the way of the learned trial court while deciding the suit finally.