Trans World Finance & Real Estate ... vs Union Of India (Uoi)
2002 Latest Caselaw 572 Del

JUDGMENT

R.C. Jain, J.

1. This civil revision is directed against the order of the learned Additional District Judge, Delhi, dated 12.1.99, thereby returning a finding that the plaint is not maintainable before the court and the matter in dispute be referred to the arbitration as per clause 9 of the lease deed.

2. The relevant facts to be noted for the disposal of the present revision petition are that the petitioner herein had filed a suit for recovery of possession of the tenanted premises after terminating the tenancy of the respondent and for mesne profits for use and occupation. The suit was contested by the respondent-defendant inter-alia on the ground that there exited an arbitration agreement between the parties in terms of Clause 9 of the lease deed dated 1st April, 1992 and, therefore, the suit of the plaintiff before the civil court/judicial authority was not maintainable. Other averments and allegations made in the plaint were also appropriately replied. The petitioner-plaintiff did not chose to file any replication to the written statement of the defendant and rather sought a judgment in terms of the suit prayer based on certain admissions of facts made by the defendant in their written statement. It was at this stage that the learned trial court considered the objections of the defendant about the maintainability of the civil suit and held that there exist an arbitration agreement between the parties as contained in the lease agreement dated 1.4.1992 and ordered as above.

3. I have head the learned counsel for the parties and have given my thoughtful consideration to their respective submissions. Mr. S.K. Luthra, counsel for the petitioner has challenged the impugned order on a variety of grounds. The first and foremost being that the defendant had not invoked the provisions of Section 8 of the Arbitration and Conciliation Act 1996 (in short "Act") for making a reference to the arbitrator by making an application or a specific prayer to that effect in the written statement. The other related submission is that the respondent-defendant by filing the written statement will be deemed to have taken step in the proceedings in the civil suit and was debarred from invoking the jurisdiction of the court under Section 8 of the Act. A bare reading of Section 8 of the act would show that the judicial authority before which an action is brought in a matter which is the subject matter of arbitration agreement shall, if a party so applied not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. The question is whether this mandate of law could have been ignored by the court mainly on the ground that no specific application or prayer for reference or dispute to arbitration was made or it did not preceed the filing of the written statement. In the opinion of this court the these circumstances were not such as should have precluded the court from exercising its jurisdiction under Section 8 keeping in view the object of the Act as fully detailed in Section 5 of the said Act and as interpretted by the courts in recent times. The defendant clearly brought it to the notice of the trial court about the existence of the arbitration agreement at first ever opportunity which he had and, therefore, it was the bound duty of the court to have consider this aspect, lest the very object of the Act is frustrated.

4. Learned counsel for the petitioner has then urged that the learned trial court has erred in acting upon the lease deed dated 1.4.1992 which is an unstamped and unregistered document and since it tended to create the lease for a period of over one year it was not a valid lease agreement and consequently the arbitration agreement contained therein did not constitute a valid arbitration agreement. Yet another submission is that as the lese was for a period of three years, the arbitration agreement, if any, contained in the said lease agreement also automatically lapsed on the expiry of three years. This contention appears to be fallacious on the face of its because it is well established proposition of law that even if the said agreement entered into between the parties, could not be treated as a valid lease agreement for lack of registration, it could certainly be looked into for the collateral purpose. Existence of arbitration agreement or otherwise is one such purpose for which such an agreement can be looked into and relied upon.

5. In the case in hand admittedly the respondent has already handed over the vacant possession of the suit premises to the petitioner and the only dispute remains about the determination of the quantum of mesne profits for use and occupation of the premises after determination of the lease. Clause 9 contained in lease deed dated 1.4.1992 reads as under:

"Provided always and it is hereby expressly agree that if at any time there shall arise any dispute, doubt, difference or question with regard to the interpretation or meaning of any of the terms and conditions of this demise or in respect of the rights, duties and liabilities of he parties hereto or in anyway touching or arising out of these presents or otherwise in relation to the premises, then every such dispute, difference, doubt or question (expect the decision whereof is herein expressly provided for shall be referred to the sole arbitration of the Member (Services), Department of Telecommunication, New Delhi, or if he is unable or unwilling to act, then of an officer appointed by him in this behalf and the decision of the arbitrator shall be final and binding on the parties of this deal. The provisions of India Arbitration Act, 1940, or nay statutory modifications or re-enactments thereof and the rules made there under for the time being in force shall apply to such arbitration and this deed shall be deemed to be submission to arbitration within the meaning of the said Act."

6. The above arbitration agreement between the parties leave absolutely no doubt that the parties have clearly intended that any dispute arising in relation to the said lease shall be referred to and got adjudicated upon through alternate dispute resolution mechanism through the sole arbitration of the Members (Service), Department of Communication, New Delhi. Therefore it does not lie in the mouth of the petitioner to urge that the petitioner does not want to invoke the said arbitration agreement and the matter must be decided through judicial authority. Such a course is not permissible in law.

7. Having considered the matter in its entirety, this court is of the opinion that the impugned order so far as it held that there is an arbitration agreement between the parties and the matter is required to be settled through the named arbitrator in the agreement is correct and deserves to be upheld. However, the finding so far as it holds that the suit was not maintainable leaving the mater at that without making reference to the sole arbitrator cannot be upheld.

8. In the result this revision petition is partly allowed and the impugned order is modified to the extent that the reference shall now be made for the remaining/subsisting dispute to the sole arbitrator of Member (Service), Department of Communication, New Delhi, who shall enter the reference forthwith and shall make his award within four months from the date of receipt of this order. Copy of the order shall be sent to the named sole arbitrator viz Members (Service), Department of Communication, New Delhi forthwith.

9. With these observations CR 411/99 stands disposed of. CMs also stand disposed.