A Mohali court has issued a notice to VR Malwa Private Ltd in a case concerning the closure and transfer of property leased to H&M Hennes and Mauritz Retail Private Ltd. The court has directed both parties to maintain the status quo until July 2, 2026.
Background of the Dispute
The sudden closure of VR Mall, located in Sector 118 on Mohali-Kharar Road, has raised concerns among showroom owners, employees, retailers, suppliers, and other stakeholders. The mall, one of the largest shopping centers in the region, shut down unexpectedly, leading to uncertainty about the future of businesses operating within it.
Legal Action by H&M
Hennes and Mauritz Retail Private Ltd (H&M) filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996. The company sought an urgent interim order to restrain VR Malwa Private Ltd from alienating, transferring, or creating third-party rights in respect of the leased property. Counsel Manish Jain, representing H&M, referred to a clause in the lease agreement that prohibits the lessee (VR Malwa) from early termination except in case of default by the lessee. He highlighted that the lease was for 35 years from the handover date and that only the lessee can terminate the agreement by giving 60 days' prior notice.
Court's Observations
The court noted that a valid lease agreement exists between the parties. However, on April 18, 2026, VR Malwa issued a notice to shut down the mall, citing public interest due to damage caused by an earthquake on April 3, 2026. The court observed that since H&M is operating a business within the premises, material rights are involved. Therefore, VR Malwa cannot proceed with closure, transfer, or alienation of the property without settling the matter with H&M.
Impact on Stakeholders
The closure of VR Mall has put a question mark on the future of numerous stakeholders, including showroom owners, employees, retailers, and suppliers. The court's order aims to maintain the status quo until further hearing, providing temporary relief to those affected.
The next hearing is scheduled after July 2, 2026, when the court will review the matter further.
