Arbitration Act | Karnataka High Court Upholds Refusal Of Interim Measures In Coorg Cineplex Lease Dispute With Landlord

The Karnataka High Court has recently upheld a Commercial Court order rejecting a plea for interim measures filed by Coorg Cineplex and its partners, holding that after the expiry of the lease, the landlord cannot be restrained from raising objections before the licensing authority regarding the renewal of a theatre licence.

A Division Bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Poonacha dismissed the appeal filed by the Cineplex, which had sought directions to the licensing authority to consider renewal of the theatre licence without insisting on the landlord's no-objection certificate.

The court noted that the licensing authority was not a party to the arbitration proceedings and is required to act in accordance with law.

It observed, “Clearly, the respondents are entitled to raise their objections before the licensing authority. We find no reason that would compel the respondents to refrain from raising objections. Conversely, we do not accept that the appellants have any right to insist that the respondents desist from raising their objections.”

The dispute arose from a lease deed dated February 15, 2014, under which premises in Kushalnagar in Kodagu district were leased to Coorg Cineplex for exhibiting cinema and allied activities for a period of ten years commencing from June 1, 2014. The lease has since expired, giving rise to disputes between the parties in relation to the use of the premises.

K.J. Nagendra Gupta, the landlord, approached the Commercial Court under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim measures in relation to the disputes, alleging that the partners of the Cineplex were attempting to change the nature of the premises and introduce third parties, all contrary to the terms of the lease.

By order dated December 16, 2025, the Commercial Court restrained the Cineplex from altering or modifying the property, inducting third parties, or creating any third-party rights and directed that the status quo be maintained regarding the nature, condition, structure, and use of the premises.

The interim protection was to remain in force for three months or until constitution of the arbitral tribunal, whichever was earlier.

The Commercial Court, however, rejected the application filed by the Cineplex seeking to restrain the landlord from interfering with their possession and from raising objections before the licensing authority and also declined to direct the authority to consider renewal of the theatre licence without insisting on the landlord's no-objection certificate.

Aggrieved by the rejection of their application, the Cineplex and its partners filed an appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996.

The High Court noted that although the appellants' possession of the premises was recognised, the lease itself had expired, and therefore the respondents could not be prevented from taking lawful steps to recover possession or from raising objections before the statutory authority.

Refusing to issue directions to the licensing authority, the court held:

“Insofar as the prayers for directing the licensing authority to consider and conclude the appellants' application for renewal of the licence without a NOC from the land lord is concerned, no such directions can be issued to the licensing authority as it was not a party to the arbitration proceedings or the disputes. The licensing authority is required to act in accordance with the law, and there is no ground to issue any directions to it to act contrary to the relevant rules or procedure.”

Finding no error in the Commercial Court's reasoning, the bench dismissed the appeal, observing:

“In our view, the learned Commercial Court rightly rejected the appellants' application for interim measures. The appeal is accordingly dismissed.”

The court clarified that the arbitral tribunal shall adjudicate the disputes independently and would not be influenced by the observations made in the interim orders.

For Appellants (M/s Coorg Cineplex & Ors): Advocate Raghunatha K.

For Respondent (K.J. Nagendra Gupta): Advocate Syed Ahmed.