# L.I.C v. U.P. Metro Rail Corp. Ltd

- **Citation:** (2022) 3 ILRA 24
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-02-22
- **Bench:** Mrs. Sangeeta Chandra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/l-i-c-v-u-p-metro-rail-corp-ltd-48187
- **Pages:** 5

## Headnote

Civil Law- The Arbitration and Conciliation
Act, 1996- Section 9- Grant of interim
stay- the learned Additional District Judge
has far exceeded its jurisdiction and given
findings on the merits of the case. He
ought to have given only prima facie
consideration to the question whether
there
was
any
prior
correspondence
between the parties before granting of
such license to a third party- He could
have only seen the lease agreement for
this purpose and not for the purpose of
determining whether the "activity" which
was being permitted by the Respondent
Corporation on the demised land came
within the ambit of the Metro Act of 2002.

At the stage of considering an application u/s 9
of the Act, 1996, the Additional District Judge
has only the jurisdiction to see as to whether a
prima facie case is made out or not and not
beyond that, as a detailed finding on the merits
of the case is likely to prejudice the case of the
applicant/ petitioner during the arbitration
proceedings. (Para 12)

Appeal allowed. (E-3)

## Text

24 INDIAN LAW REPORTS ALLAHABAD SERIES
and promotees on the post of Professor of
Medicine in a medical college. The appellant
therein faced the selection process for direct
appointment along with the respondents who
had been working on the said post on ad hoc
basis. The appellant was duly selected,
however, the private respondents could not
succeed. The respondents filed the writ petition
before the High Court and precluded the
appointment of the appellant pursuant to his
selection, by obtaining an interim order and on
the other hand they got their ad hoc promotion
to the post regularised under the Rules. The
appellant could succeed in obtaining the
appointment only after dismissal of the writ
petition against him after several years of his
selection. This Court held that in addition to the
relief under the statutory provisions the
appellant was entitled in equity to get the
seniority over the respondents as they
succeeded in precluding his appointment to the
post by obtaining an interim order in a case
having no merits whatsoever.

24. In Arya Nagar Inter College v.
Sree Kumar Tiwary [(1997) 4 SCC 388 : 1997
SCC (L&S) 967 : AIR 1997 SC 3071] the
services of the respondent therein were
terminated, however, he continued to be in
service on the basis of an interim order passed
by the High Court in the writ petition filed by
him. During the pendency of the writ petition,
the rules for regularisation of ad hoc appointees
were amended and in pursuance thereof his
services also stood regularised. Ultimately, the
writ petition filed by the respondent was
dismissed. This Court held that his continuity in
service and regularisation had to be understood
as it was subject to the result of the writ petition.
As the writ petition was dismissed the order
regularising his services, passed during the
pendency of the writ petition, became
inoperative."

43. Thus, it is also well settled that the
doctrine of restitution is also applicable to
interim orders and a litigant would not be
allowed to gain by swallowing the benefits
yielding out of the interim order. If the petition
is dismissed, the injury, if any, caused by the act
of the Court is required to be undone and, the
gain, which the party would have earned as a
result of interim order of the Court would be
restored to or conferred on the other party,
otherwise it would lead to unjust consequences.

44. In the present case, since the
petitioners had drawn the salary on the strength
of the interim order dated 21.02.2005 although
same was not extended after the writ petition
was
dismissed
for
non-prosecution
on
25.01.2006, the petitioners are required to
refund the salary drawn by them illegally and,
therefore, the petitioners are directed to refund
the amount of salary with interest @ 6% per
annum within a period of two months from
today.

45.
 The
BSA
is
directed
to
communicate the amount to be recovered
from each of the petitioners for making
payment by them in compliance of this
order. In case of failure to refund the
amount by the petitioners, as directed
above,
the
District
Magistrate,
Ambedkarnagar shall initiate proceedings
for recovery as arrears of land revenue.
----------
(2022)03ILR A24
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 22.02.2022

BEFORE

THE HON'BLE MRS. SANGEETA CHANDRA, J.

Appeal U/S 37 of Arbitration and Conciliation Act
1996 No. 1 of 2022

L.I.C. ...Appellant
Versus
U.P. Metro Rail Corp. Ltd. ...Respondent
3 All. L.I.C. Vs. U.P. Metro Rail Corp. Ltd.
25
Counsel for the Appellant:
Sanjeev Singh

Counsel for the Respondent:
Kumar Ayush, Pritish Kumar

Civil Law- The Arbitration and Conciliation
Act, 1996- Section 9- Grant of interim
stay- the learned Additional District Judge
has far exceeded its jurisdiction and given
findings on the merits of the case. He
ought to have given only prima facie
consideration to the question whether
there
was
any
prior
correspondence
between the parties before granting of
such license to a third party- He could
have only seen the lease agreement for
this purpose and not for the purpose of
determining whether the "activity" which
was being permitted by the Respondent
Corporation on the demised land came
within the ambit of the Metro Act of 2002.

At the stage of considering an application u/s 9
of the Act, 1996, the Additional District Judge
has only the jurisdiction to see as to whether a
prima facie case is made out or not and not
beyond that, as a detailed finding on the merits
of the case is likely to prejudice the case of the
applicant/ petitioner during the arbitration
proceedings. (Para 12)

Appeal allowed. (E-3)

(Delivered by Hon'ble Mrs. Sangeeta
Chandra, J.)

1. Heard Sri Sanjeev Singh, learned
counsel for the appellant and Sri Pritish
Kumar, Advocate assisted by Sri Kumar
Ayush,
Advocate
appearing
for
the
respondent.

2. This appeal has been filed under
Section 37 (1) (b) of the Arbitration and
Conciliation
Act
1996
against
the
judgement and order dated 10.08.2021
passed by the Additional District Judge,
Court No. 17, Lucknow in Arbitration Case
No. 02 of 2020 re: Life Insurance
Corporation of India Versus U. P. Metro
Rail Corporation of India filed by the
appellant under Section 9 of the Arbitration
and Conciliation Act (hereinafter the Act of
1996).

3. It has been submitted by Sri Sanjay
Singh, Advocate that a lease agreement had
been entered into between the appellant and
the respondent, Corporation on 30.11.2018
for 348 square meters of land in front of its
building Jeevan Bhawan-I, Plot No. 43,
Hazrat Ganj, Lucknow, which was earlier
being used by the petitioner, Corporation
for parking of vehicles by its employees.
The lease was for a period of 90 years for
the purpose of laying the metro rail line in
the city of Lucknow at a premium of Rs.
82,000/- per square meter, and as per the
terms of the lease agreement more
specifically Clause 9 and 11 thereof, the
lessee was in no case to assign, relinquish,
sublet, transfer or part with possession of
the demised premises for any activity
without prior written permission of the
lessor, except activity as per the provisions
of the Metro Railways (Operation and
Maintenance) Act, 2002 as amended from
time to time (hereinafter referred to Act of
2002), or any other direction/guidelines/
statutory
regulations
issued
by
the
Government or any Court of Law in this
regard.

4. In Clause 11 of the said lease
agreement the demise premises could not
be
assigned,
relinquished,
mortgaged,
sublet, transferred either as a whole or in
part, for any activity without written
consent of the lessor except the activities as
per the Act of 2002 or any other
directions/guidelines/statutory
regulations
issued by the Government or any court of
law in this regard.
26 INDIAN LAW REPORTS ALLAHABAD SERIES

5. However, the Uttar Pradesh Metro
Rail Corporation (hereinafter referred to as
U.P.M.R.C.L.
entered
into
a
license
agreement with M/s Mr. Brown (a bakery)
for commercial purposes for some gain.
This fact came into the knowledge of the
officers of the appellant on 25.10.2019, and
on 07.11.2019, the then Manager (Estate)
of the appellant wrote a letter to the
respondent Corporation to explain about
the activities done on the lease property for
opening of an outlet of Mr. Brown. In reply
to the said notice/letter the U.P.M.R.C.L.
admitted that it had entered into a license
agreement with Mr. Brown to open its
outlet. On 23.11.2019, the appellant found
that on the demised property construction
was going on in full swing and the
respondent had opened a door towards the
parking of the petitioner and constructed a
platform by encroaching upon the land of
the
petitioner.
On
01.01.2020,
the
petitioner, Corporation again wrote to the
respondent asking them to stop all
construction activity but the respondent
failed to comply. There being a Clause in
the Lease Agreement for referring of the
dispute
to
the Arbitrator
under
the
Arbitration and Conciliation Act, 1996, the
appellant
repeatedly
requested
the
respondent for reference of the dispute to
arbitration. The respondent refused to act
on the same. Later on, it was learned by the
appellant that the agreement for opening of
outlet of M/s Mr. Brown had fallen
through, and one M/s Hazelnut Factory,
also a Bakery, had been licensed the
demised property. After invoking the
arbitration clause the appellant approached
the court of Additional District Judge under
Section 9 of the Act of 1996for grant of
interim stay of all construction activity on
the demised property by the licensee/third
party
till
finalization
of
arbitration
proceedings.

6. The Respondent, Corporation filed
its written statement saying that act of the
Respondent was within the ambit of the
terms of the lease agreement as it had only
granted license to M/s Mr. Brown for
opening its outlet within the area under the
possession of U.P.M.R.C.L. It is a space
within the building of Metro Station and
such license does not create any interest or
right in favour of third party over the lease
property, and in no way compromised the
interest of the LIC. The action of the
U.P.M.R.C.L. was within the ambit of
Section 6 of the Act of 2002.

7. The appellant filled a replication
refuting such claim of the Respondent and
saying that the demised property was not
on the land occupied by the metro railway
line as it was leased to the respondent for a
specific purpose under the terms and
conditions of the lease agreement, which
had been violated. After exchange of
pleadings the Additional District Judge,
who was assigned Arbitration Case No. 02
of 2020 as refused to grant interim
injunction for protection of the rights of the
parties. The Addl. District Judge in his
order impugned in this petition has in detail
gone into language of Section 5 and
Section 6 of the Act of 2002 and into
various clauses/terms and conditions of the
leasedeed and has incorporated the clauses
of the lease agreement and also the clauses
of the Act of 2002 far exceeding its
jurisdiction and holding that "any activity"
that
has
been
carried
out
by
the
U.P.M.R.C.L. by licensing the property in
question to a third party would come within
its ambit of activities permissible under the
Act of 2002. He has interpreted the phrase
"any activity" to say that it cannot be given
a restricted sense of laying the Metro
Railway lines only. It would also include
developing the metro railway land for the
3 All. L.I.C. Vs. U.P. Metro Rail Corp. Ltd.
27
commercial use and to execute lease or
grant any license in respect of property
"held" by U.P.M.R.C.L. Having defined
what is "land' and having defined and
discussed in detail "any activity", the
Additional
District
Judge
has
given
findings in paragraph 21 and 22, which will
go against the appellant when the dispute is
referred to the Arbitrator.

8. Learned counsel for the appellant
has also pointed out the observations made
in paragraph 23 of the order impugned
wherein the Additional District Judge has
ignored paragraph 4 and 5 of the very same
order, where a reference was made to
various correspondence exchanged between
the parties for appointment of Arbitrator.

9. It has been submitted by Sri
Sanjeev Singh, Advocate for the appellant
that
in
the
order
impugned
dated
10.08.2021, learned Additional District
Judge has far exceeded its jurisdiction and
has also recorded findings which are
perverse to the material on record, which
would seriously prejudice its case before
the Arbitrator, when such an Arbitrator is
appointed under Section 11(6) of the Act of
1996 by this Court. It has been pointed out
that after filing the Section 9 application,
the appellant has also filed an application
under Section 11 (6) of the Act of 1996
before this Court.

10. Sri Pritish Kumar, Advocate
alongwith Sri Kumar Ayush, Advocate
has referred to the lease agreement
entered into between the Appellant
Corporation
and
the
Respondent
Corporation and has also referred to the
provisions of the Act of 2002 and
Sections 5 and 6 thereof to argue that the
Additional District Judge has rightly
considered, the said Sections and the
clauses of the lease agreement to find out
whether the prima facie case has been
made out by the Appellant for it to
exercise its jurisdiction under Section 9
of the Act of 1996.

11. According to Sri Pritish Kumar,
Advocate, learned Additional District
Judge could not have given any interim
injunction without considering a prima
facie case and for considering a prima
facie case having been made out by the
applicant it was necessary to refer to
various clauses/phrases of the lease
agreement, between the LIC and the
U.P.M.R.C.L. and the license agreement
between
the
U.P.M.R.C.L.
and
the
licensee/third party i.e. M/s Hazelnut
Factory Limited.

12. This Court having heard the
learned counsel for the parties finds on a
careful perusal of the order impugned that
indeed the learned Additional District
Judge has far exceeded its jurisdiction and
given findings on the merits of the case. He
ought to have given only prima facie
consideration to the question whether there
was any prior correspondence between the
parties before granting of such license to a
third party. He could have only seen the
lease agreement for this purpose and not for
the purpose of determining whether the
"activity" which was being permitted by the
Respondent Corporation on the demised
land came within the ambit of the Metro
Act of 2002. There were letters on record
had also been referred to in paragraph 4, 5
and 6 of the impugned order, which clearly
indicated the attempt made by the Life
Insurance Corporation for invocation of the
Arbitration Clause and the steadfast refusal
of
U.P.M.R.C.L.
for
appointment
of
Arbitrator saying that there was no dispute,
although It did admit that it had entered
28 INDIAN LAW REPORTS ALLAHABAD SERIES
into the license agreement and it had
handed over the part of the demised
property to the licensee.

13. Accordingly, the appeal is
allowed,
the
impugned
order
dated
10.08.2021 is set aside and the matter is
remanded to the Additional District Judge,
Lucknow to consider afresh the application
of the petitioner under Section 9 of the
Arbitration and Conciliation Act, 1996
within a period of three weeks from the
date of a copy of this order produced before
him.

14. In the meantime, status quo as it
exists on today shall be maintained by the
parties.
----------
(2022)03ILR A28
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.03.2022

BEFORE

THE HON'BLE ROHIT RANJAN AGARWAL, J.

Arbitration and Conciliation Application U/S
11(4) No. 5 of 2022

IFFCO Ltd., Phulpur Unit, Allahabad
 ...Applicant
Versus
M/S
Manish
Engineering
Enterprises,
Prayagraj ...Opposite Party

Counsel for the Applicant:
Ms.
Sushmita
Mukherjee,
Sri
Sanjay
Grover, Sri Manish Goyal

Counsel for the Opposite Party:
Sri Dharmendra Shukla, Sri Anil Tiwari

A. Civil Law-Arbitration and Conciliation
Act, 1996. - Section 29-A -- An application
filed for extending the mandate of substitute
sole Arbitrator on the expiry of time limit for
publication
of
arbitral
award.-
Whether
maintainable before High Court of principal Civil
Court defined u/S 2(1)(e) of the Act?

Once the appointment of Arbitrator or Arbitral
Tribunal has been made by the High Court or
the Supreme Court exercising powers u/Ss
(4)(5) and (6) of Section 11 then the power
to substitute the arbitrator or arbitral tribunal
only vest with the said appointing authority
i.e. High Court or Supreme Court as the case
may be.(Para 35)

B. Section 42 of the Act will get attracted only
when the courts are dealing matters other
than that of appointment or removal of
arbitrators.

Application allowed. (E-12)

List of Cases cited:-
1. Amit Kumar Gupta Vs Deepak Prasad 2021
SCC Online Cal 2174

2. DDA Vs M/s Tarachand Sumit Construction
Company OMP(Misc.) (Comm) No. 236 of
19(Delhi High Court)

3. Nilesh Ramanbhai Patel Vs Bhanubhai
Ramanbhai Patel 2019(2) GLR 1537

4. Cabra Instalaciones Y. Services S.A. Vs
Maharashtra St. Electricity Distribution Co. Ltd.
2019 SCC Online Bom 1437

5. M/s Lots Shipping Comp. Ltd.Vs Cochin Port
Trust Board of Trustees 2020 AIR Kerala 169

6. Garhwal Mandal Vikas Nigam Ltd.Vs Krishna
Travel Agency (2008)6 SCC 741

7. Nimet Resources Inc. & anr. Vs Essar Steels
Ltd. (2009)17 SCC 313

8. Bharat Coking Coal Ltd. Vs Annapurna
Construction (2008)6 SCC 732

9. St. of Mah. Vs Atlanta Ltd. (2014)11 SCC 619

10. St. of W.B. & ors. Vs Associated Contractors
(2015)1 SCC 32