R.C. Chopra, J.

1. This petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the" only) has been filed with a prayer to restrain the respondent from giving or parting with the possession of the ground floor portion at A-3, Green Park, New Delhi, in which the restaurant "Red Snapper" had been running to anyone else and further restraining the respondent from entering into any agreement/arrangement with anyone regarding the management of the said restaurant/outlet.

2. The petitioner and the respondent herein had entered into the agreements dated 1.10.2001 and 26.11.2001 under which the respondents restaurant/bar called "red Snapper" at respondents "Sartaj Hotel" at Green Park, New Delhi was handed over to the petitioner for its management and administration for a total rental of Rs. 2,25,000/- per month. The respondent which owns the aforesaid Hotel was already running the said restaurant/bar but vide the two agreements mentioned above, the restaurant/bar along with its furniture, fixtures and fittings, kitchen equipments, manpower, airconditioners etc. was entrusted to the petitioner for a period of three years w.e.f. 1.10.2001. The contract could be extended by three months notice in advance and with mutual agreement failing which it was to be treated as expired automatically on the expiry of its period. The agreement also provided that it could be determined in case of defaults upon giving 10 days notice to take remedial measures. It contained an Arbitration Clause also.

3. According to the petitioner, the respondent was not at all caring for the airconditioning in the restaurant and since March, 2002, disputes arose between them on account of improper functioning of the airconditioners. According to the petitioner, by June, 2002, the sales of the restaurant/bar dipped on account of poor airconditioning and the customers stopped coming. The petitioner approached the respondent to do the needful but the respondent started creating all sorts of troubles and interfering with the running of the restaurant by the petitioner. According to the petitioner, it suffered major losses but still was hopeful that it could carry on the business and earn profits, if it was given free hand. The petitioner stated that under the pressure of the respondent it had been signing various documents which gave the respondent an upper hand in the matter of disputes. Around 10th July, 2002 the respondent assured it that the airconditioning system would be repaired and thereafter the petitioner could commence its work. The respondent suggested that in view of massive repairs and installation of airconditioners, the petitioner should suspend its business for three weeks and accordingly, the petitioner suspended its business. However, after taking possession of the restaurant/bar under the pretext of repairing the airconditioning system the respondent entered into a business relationship with "Barista Chain of Restaurants" and started carrying out renovation of the restaurant as per the requirements of the said Chain. The respondent also started creating false evidence and raising arbitrary demands against the petitioner. On 3.8.2002 when some of the petitioners employees were inside the restaurant, the respondent and its workers along with some others came and threatened them to leave immediately.On 5.8.2002, a complaint was filed at the Police Station. The petitioner alleged that the respondent had illegally ousted he petitioner from the restaurant/bar and as such, disputes had arisen between them which were to be referred to the Arbitrator. In these premises, the aforesaid interim reliefs were prayed under Section 9 of the.

4. The case of the respondent on the other hand, is that the agreement with the petitioner stood terminated as the petitioner was not managing the restaurant properly and was not clearing its liabilities according to the schedule. The details of the petitioners liabilities were given in para 7 of the reply and it was stated that if petitioners liabilities to third parties were taken note of, the security deposit of the petitioner was not sufficient to discharge all the liabilities. It was also stated that the cheques being issued by the petitioner were getting bounced and the petitioner was unable to run the restaurant. According to the respondent it had taken over the management and the control of the restaurant with the concurrence of the petitioner and started issuing its own bills in respect of the sales at the restaurant. In July, 2002, it entered into an agreement with "Barista Chain of Restaurants" and handed over the premises to them for running a restaurant. The details of the hostilities between the parties and of Police reports were given and it was pleaded that the petitioner was not entitled to insist that he had a right to run the restaurant. It was denied that there was any dispute in regard to the airconditioning or that the petitioner had handed over the possession of the restaurant to carry out the repairs in the airconditioners as alleged. it was stated that the respondent was always in actual and physical possession of the restaurant/bar and now even third party interest had been created as possession had already been given to "Barista Chain of Restaurants" and large scale changes had been made. It was stated that the petitioner had filed these proceedings only to pressurise and harass the respondent and there were no good grounds for grant of relief of specific performance of the agreement and injunction as prayed. It was added that the petitioner could be compensated in terms of money if it was established that the agreement was wrongfully terminated.

5. I have heard Mr. Rakesh Tikku, learned counsel for the petitioner and Mr. H.L. Tikku, learned Senior counsel for the respondent. I have gone through the records.

The first and foremost question to be considered in the present case is as to whether there was a relationship of landlord and tenant between the parties as asserted by the petitioner. Learned counsel for the petitioner has referred to the agreement dated 1.10.2001 and 26.11.2001 in which the word "Rent" was repeatedly used. He has submitted that in view of the fixed amount of rent payable by the petitioner to the respondent a relationship of landlord and tenant had come into existence between the parties and as such, the respondent had no right to disposes the petitioner or induct a third party in the premises during the subsistence of the Lease which is to expire in the year 2004. It is submitted that whatever may be the terms and conditions in the agreement between the parties, the ground reality was that the possession of the restaurant/bar was handed over to the petitioner by the respondent and as such, the petitioner had become a tenant therein and could not be dispossessed as had been done in the present case.

6. On the other hand, learned counsel for the respondent submits that a plan perusal of the agreement reveals hat no relationship of landlord and tenant had come into existence and no lease was created by the respondent in favor of the petitioner. It is stated that the agreement were only for the administration and management of the respondents restaurant, which was already functional, through which the petitioner was given a license only for managing the same. it is submitted that the exclusive possession and control of the restaurant as well as bar premises always remained with the respondent. He refers to Clauses 5, 6, 7, 8 & 9 of the Agreement dated 1.10.2001 and corresponding Clauses in the Agreement dated 26.11.2001 to submit that only the management and administration of the restaurant, room service and kitchen was given tot he petitioner and not only the staff of the respondent continued to work there, the respondent kept full control over the quality of the food prepared at the restaurant by incorporating a Clause that the raw material and liquor was to be supplied by the respondent to the petitioner. According to the agreement, in case the petitioner wanted to bring in any raw material, he could do so subject to approval and confirmation of its quality by the respondent. The amount of sales in the restaurant, room service and food supplied in the bar was to be credited to the account of the petitioner to be settled periodically and even electricity charges for the kitchen as well as restaurant were to be charged by the respondent from the petitioner. He points out Clause 15 also of the agreement according to which the petitioner could not make even decorations and alterations in the restaurant and kitchen without the permission of the respondent. According to Clause 9 of the Agreement dated 26.11.2001, the keys of the premises were to remain with the respondent and it was specifically mentioned that the actual possession of the premises will remain with the respondents only. According to learned counsel for the respondent all these Clauses clearly show that the possession of the restaurant/bar always remained with the respondent and the petitioner was there as a licensee only to run, supervise and control the restaurant without acquiring any lease hold interest in the premises.

7. There is a plethora of judgments underlining the distinction between a lease and license. It has been repeatedly held by the Courts that the words used in the Agreements are not to be taken on their face value for holding as to whether a particular agreement creates a lease or a license. The Court has to see the intention of the parties and for ascertaining this intention, the terms and conditions contained in the Agreement, the surrounding circumstance sand the conduct of the parties has to be considered. However, exclusive possession of the premises in the hands of a party is always crucial for ascertaining as to whether a lease has been created or not. The possession and control retained over the premises by a party giving license to the other for the use of the premises indicates that it is not a case of lease and merely an Agreement of leave and license only. Even in the case of exclusive possession, sometimes, the Court may upon consideration of the terms and conditions of a documents and conduct of the parties, may hold that the parties never intended to create a lease and only leave and license was granted. The Apex Court in "Delta International Ltd. v. Shyam Sundar Ganeriwalla & Anr." : [1999]2SCR541 has highlighted the principles to distinguish between a lease and a license. In "Rajbir Kaur and Anr. v. M/s. S.Chokesiri & Company" : AIR1988SC1845 also, it was held by the Apex Court that lease involves grant of exclusive possession by transfer of interest in the property for a rent and mere grant of right to use the premises without being entitle to the exclusive possession thereof operates merely as a license. In "Capt. B.V.Dsouza v. Antonio Fausto Fernandes" : [1989]3SCR626 , the Apex Court held in no uncertain terms that the intention of the parties has to be ascertained by looking to the substance of the document and the test of exclusive possession is applicable. In "Associated Hotels of India Ltd. v. R.N. Kapoor" : [1960]1SCR368 , it was held that the following propositions are well established for consideration as to whether a lease or a license had been created:

(1) To ascertain whether a document creates a license or lease, the substance of the documents must be preferred to the form;

(2) the real test is the intention of the parties whether they intended to create a lease or a license;

(3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a license.

(4) if under the document is party gets exclusive possession of the property, prima facie, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease.

8. A perusal of the agreements, conduct of the parties and the facts and circumstances brought on record clearly show that in the present case, the respondent never intended to create a lease in respect of the premises in question in favor of the petitioner and only a license was granted to him for the management and administration of the respondents restaurant "Red Snapper". The actual and physical possession of the premises always remained with the respondent and overall control and supervision of the restaurant was with the respondent. The keys of the premises were always with the respondent the staff earlier employed by the respondent continued to work in the restaurant although salaries were being paid by the petitioner, the raw material for use in the restaurant was being supplied by the respondent and the petitioner could bring in raw material only with the approval of the respondent. The electricity matters and air conditioner remained under the control of the respondent the licenses were in the name of the respondent and even the sales being made in the restaurant were not directly going to the pocket of the petitioner but were being credited to its account. Therefore, the arrangement between the parties was in regard to the management and administration of the respondents restaurant by the petitioner and it does not appear that the parties ever intended that the premises should be handed over to the petitioner and it should be allowed to deal with those in whatever manner it wanted. Therefore, it was an agreement to run the restaurant only and not at all a lease agreement. The mere use of word "rent" in the agreement between the parties is meaningless and does not establish that a lease had been created in favor of the petitioner.

9. It is also to be noticed that Clause (xiii) on page 8 of the agreement dated 26.11.2001 provided that in case of breach of any terms and conditions of the management agreement the respondent could cancel the agreement or impose any penalty upon the petitioner if within 10 days of the service of the notice remedial measures were not taken by the petitioner. Such a condition could never be a part of a lease agreement and could be only in a leave and license agreement. This Court, Therefore, has no hesitation in holding that there was no lease in respect of the premises in question in favor of the petitioner and the petitioner had not become a tenant in respect of the premises in question. The agreement between them created only a leave and license in favor of the petitioner for the management and administration of the respondents restaurant "Red Shapper" and even this agreement was terminable in terms of the clauses contained therein if the petitioner was found in violation of the terms thereof. The respondent always remained in physical possession of the premises in question and had full control not only over the premises but upon the staff and stuff also as catering was to not only the restaurant and the bar but to the respondents rooms also in the Hotel. The plea of the petitioner that a tenancy had been created in favor of the petitioner cannot be upheld.

10. Even otherwise, this Court is of the considered view that the prayer of the petitioner to restrain the respondent from entering into any agreement for running a restaurant with anyone else cannot be sustained for the reason that prima facie, it appears that before filing of this petition the respondent had already entered into an agreement to run this restaurant with Barista Chain of Restaurants", vide a business conducting agreement dated 9.7.2001, a copy of which has been placed on record. It appears that large scale renovations and changes to suit the "Barista Chain of Restaurants" have already taken place and the respondent has already reached an advanced stage in the matter of running the restaurant through "Barista Chain of Restaurants" in its premises. As already observed earlier, it does not appeal to reason that the petitioner left the management and control of the respondents restaurant so that the respondent may carry out repairs in the airconditioning plant, without obtaining something in writing from the respondent when there were so many misgivings and misunderstandings between the petitioner and the respondent. It prima facie appears that in view of losses and its inability to run the restaurant smoothly the petitioner opted out of the business and thereafter respondent started running the restaurant and then entered into the aforesaid agreement with "Barista Chain of Restaurants". There are various documents on record to show that the petitioner was in default of payments and its contractual obligations and the respondent was issuing letters and notices even to fit for taking remedial measures. Such notices are dated 17.4.2002, 8.5.2002, 21.5.2002 and 20.6.2002. In view of Clause (Xiii) of part "B" of the Agreement dated 26.11.2001, it can be safely held that the contract between the petitioner and the respondent was terminable in case the terms thereof were not being complied with. After the notice dated 8.5.2002 wherein the respondent had pointed out to the petitioner that it was in default of payment of advance rent in terms of the agreement and was also in settling its accounts by 5th of every month the respondent became entitled to determine the contract with the petitioner. The question as to whether the contract between the parties was validly determined or not would be determined by the Arbitrator only to be appointed in terms of the agreement between the parties but this Court on prima facie basis, holds that the contract stood determined and as such, the petitioner is not entitled to interim relief as prayed.

11. In a judgment of this High Court in "Rajasthan Breweries Ltd. v. Stroh Brewery Company" : AIR2000Delhi450 a Division Bench of this Court relying upon "Indian Oil Corporation Limited v. Amritsar Gas Service" : (1991)1SCC533 held in no uncertain terms that in case of terminable agreements Section 14(1) of the Specific Relief Act comes into play and it has to be held that such contracts cannot be specifically enforced. It was also held that even in the absence of a specific clause enabling either party to terminate an agreement a private commercial transaction could be determined by serving a reasonable notice. It was held that at the most, in case it is ultimately found that the termination was bad in law or contrary to the terms of the agreement or of any understanding between the parties or for any other reason, the remedy of the aggrieved party would be to seek compensation for wrongful termination but no claim could be made for specific performance of the Agreement.

12. In M/s. Classic Motors Limited v. "M/s. Maruti Udyog Limited" reported in 1997 (65) DLT 166 also, a learned Single Judge of this Court and observed that in private commercial transactions, the parties could terminate a contract even without assigning any reason with a reasonable period of notice in terms of such a clause in the agreement. The submission that there could be no termination of agreement even in the realm of private law was held to be fallacious.

13. The plea of the petitioner, Therefore, that by invoking its powers under Section 9 of thethis Court should restrain the respondent from giving possession of the premises to anyone else and respondent should be restrained from entering into any agreement or arrangement with any other party in regard to the running of the restaurant cannot be sustained firstly for the reason that the contract between the parties was terminable in nature and appears to have been terminated and secondly the contract between the parties is of such a nature which can not be specifically enforced for the reason that the Court would never be in a position to supervise and enforce the obedience of its orders. Moreover, the petitioner can be adequately compensated in terms of money in case it is held that the agreement in its favor was not terminated or was illegally determined. Clauses (a), (b), (c) and (d) of Section 14(1) of Specific Relief Act stand in the way of petitioner and disentitle him to interim injunctions as prayed.

14. The question as to whether a valid Arbitration agreement between the parties is subsisting or not and as to whether the petitioner had forfeited his right to invoke Arbitration Clause 21 contained in the Agreement on account of not referring the disputes to Arbitrator within 45 days would be a subject matter of adjudication by the Arbitrator only. This Court prima facie finds that an Arbitration Agreement was there and as such, it cannot be said that the petition under Section 9 of theis not maintainable. It is clarified that all the observations made herein are tentative and on prima facie basis only with a view to decide the petitioners application under Section 9 of theand the Arbitrator shall be free to adjudicate the controversies between the parties without referring to this order.

15. In view of the forgoing discussions, this Court is of the considered view that the petitioner has failed to make out a prima facie case for grant of ad interim injunction as prayed. It is also held that the balance of convenience is more in favor of the respondent and the petitioner would not suffer any irreparable loss/injury if the interim relief is not issued in its favor in terms of its prayers. The petitioner can always be compensated in terms of money if the breach of contract between the parties is established.

16. Accordingly, the petition stands dismissed. The ex-parte ad interim injunction dated 14.8.2002 stands revoked.