Section 9 protection includes preserving the commercial worth and rental income potential of the subject property.

The Appellant (licensee) challenged an order dated 04.08.2025 passed by a learned Single Judge under Section 9 of the Arbitration and Conciliation Act, 1996.

The impugned order appointed a Local Commissioner to inventory goods and directed that possession of a commercial shop be handed over to the Respondent (licensor), further allowing the Respondent to let out the shop to a third party.

The Appellant moved the Division Bench asserting they were never served notice of the Section 9 petition.

Records indicated that notice was served multiple times via the email ID provided in the Leave and License Agreement, served on the Appellant’s Director, and served on the Appellant’s counsel who had previously issued legal notices.

The underlying dispute involved the Appellant’s failure to pay license fees since 2022, resulting in outstanding dues of approximately Rs. 94 Lakhs.

Whether the Appellant was served with the notice of the Section 9 petition in accordance with the law.

Whether an interim order permitting the re-letting of a commercial property to a third party falls within the scope of "protection or preservation" of the subject matter under Section 9 of the Act of 1996.

The Court primarily applied Section 9 of the Arbitration and Conciliation Act, 1996, which empowers courts to grant interim measures for the "preservation, interim custody or sale" of the subject matter of the dispute.

The Court interpreted the principle of "preservation" to extend beyond mere physical custody, holding that for commercial assets, it includes the preservation of "commercial worth or propensity to derive income".

On the issue of service, the Court found the Appellant’s claim of non-receipt of notice to be a "blatant lie" and "factually incorrect," as the Respondent proved service via email, registered post, and through the Appellant's advocate on multiple occasions.

Regarding the merits of the Section 9 order, the Court reasoned that a licensee who fails to pay fees for years cannot claim a right to retain possession of a locked commercial shop.

The Court held that "securing" property under Section 9 must be interpreted broadly; if a commercial property meant for rental income is kept locked during multi-year litigation, its commercial value diminishes, and the resulting loss of rentals may be impossible to recoup.

Therefore, allowing the Respondent to re-let the shop was a valid exercise of power to maintain the property's commercial utility.

The Court upheld the Single Judge's order, ruling that re-letting a commercial property during the pendency of a dispute is a valid measure to secure the property's commercial value under Section 9.

A cost of Rs. 1 Lakh was imposed on the Appellant for making false assertions before the Court.

The Arbitrator remains free to decide the final rights of the parties independently.