Harjit Singh vs Delhi Development Authority
2009 Latest Caselaw 1784 Del

*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 WRIT PETITION (CIVIL) 8982/2008

                            Reserved on :       24th April, 2009
                         Date of Decision :     1st May, 2009

     HARJIT SINGH
     SON OF LATE SHRI HARBANS SINGH
     RESIDENT OF D-3/169, RAJOURI GARDEN
     NEW DELHI-110027                       .... Petitioner
                        Through: Mr. B.L. Chawla, Adv.


                                  Versus


     DELHI DEVELOPMENT AUTHORITY
     VIKAS SADAN, I.N.A. MARKET
     NEW DELHI
     THROUGH ITS VICE-CHAIRMAN.                     .... Respondent

                            Through:    Mr. Deepak Khadaria, Adv.
                                        With Ms. Sangeeta Chandra,
                                        Adv.

%    CORAM:
     HON'BLE MR. JUSTICE MADAN B. LOKUR
     HON'BLE MR. JUSTICE SIDDHARTH MRIDUL

     1.    Whether reporters of local papers may be allowed to see
           the judgment?                                            YES.
     2.    To be referred to the Reporter or not?                   YES.
     3.    Whether the judgment should be reported in
           the Digest?                                              YES.
                           JUDGMENT

SIDDHARTH MRIDUL, J.

1. The present writ petition has been filed by the Petitioner against

the impugned order dated 18th July, 2008 in Arbitration Petition

No.242/2007, whereby the petition of the Petitioner under Section 11

of the Arbitration and Conciliation Act, 1996 has been dismissed, and

seeking the appointment of an Arbitrator to adjudicate upon the

dispute and controversy between the parties.

2. The facts as are necessary for the adjudication of the present

petition are that the Petitioner's father was granted a piece of

industrial plot bearing No.213/5, Rewari Line, Industrial Area, Phase-

II, Mayapuri measuring 145.33 square yards by the Respondent-Delhi

Development Authority (DDA) vide a Perpetual Lease Deed dated

22nd June, 1982.

3. The Petitioner is the Legal Representative of late Sh. Harbans

Singh in whose favour the Perpetual Lease Deed was executed. The

Petitioner's father applied for sanction of building plans which were

accordingly sanctioned on 6th May, 1988 and thereafter, building was

constructed on the said plot.

4. The said plot was leased out to the Petitioner's father by the

DDA for manufacturing process or running the industry of service-

repair of motor cars.

5. The Petitioner's father had changed business activities being

unsuccessful in their business and, therefore, had made certain

deviations in the structure of buildings and was desirous of making

the compounding fees as per the policy of the DDA.

6. The Petitioner states that instead of acceding to the request of

the Petitioner, the Respondent gave notice to the father of the

Petitioner, highlighting the breaches of the terms of the Perpetual

Lease regarding deviations in the structure of the building and for

change of user.

7. The Petitioner's father gave a reply to the said notice requesting

for condoning the said breaches in consideration of the compounding

fees but the DDA did not accede to such request and instead

determined the Lease Deed of the Petitioner's father and referred the

matter to the Estate Officer under the Public Premises (Eviction of

Unauthorized Occupants) Act, 1971 for eviction.

8. It is the case of the Petitioner that, Clause VI of the Perpetual

Lease Deed relates to Arbitration clause, and that such dispute which

would arise between the parties was required to be referred to

arbitration, and that the Petitioner had written to the Respondent to

appoint the Arbitrator, but the Respondent refused by letter dated

25th May, 2006 stating therein that no dispute about cancellation of

Lease Deed for violation of its terms and conditions existed and as

such there was no need for appointment of an arbitrator to resolve the

dispute.

9. The Petitioner, therefore, filed a petition under Section 11 of the

Arbitration and Conciliation Act, 1996 for appointment of an

Arbitrator.

10. The learned Single Judge while rendering the impugned

judgment and order dated 18th July, 2008 held that the dispute

between the parties is not covered by the Arbitration clause in

Perpetual Lease Deed dated 22nd June, 1982 and it is excepted matter

and cannot be referred to the Arbitral Tribunal. Learned Single

Judge, therefore, dismissed the petition being devoid of substance.

11. The Petitioner is aggrieved by the said order dated 18th July,

2008.

12. Mr. B.L. Chawla, learned counsel appearing on behalf of the

Petitioner urged that the learned Single Judge fell into error and

failed to appreciate the provisions of Section 16 of the Arbitration and

Conciliation Act, 1996 which empowers the Arbitral Tribunal to rule

on its own jurisdiction, including ruling of any objection with respect

to the existence or validity of the Arbitration Agreement, and further

provides that for the purpose an arbitration clause, which forms part

of the contract, shall be treated as an agreement independent of the

other terms of the contract.

13. Per contra Mr. Deepak Khadaria, learned counsel appearing on

behalf of the DDA supported the impugned judgment and submitted

that in terms of Clause VI of the Lease Deed dated 22nd June, 1982

matters such as the present one the decision of which is specifically

provided by the said Lease Deed could not be referred to arbitration.

In this behalf learned counsel relied on the provisions of Clause III of

the said Lease Deed.

14. Before dealing with the respective submissions made on behalf

of the counsel it would be relevant to extract the provisions of Clause

II sub-clauses 12 and 13, Clauses III and VI of the said Lease Deed

dated 22nd June, 1982:

"II. (1) to (11) xxxxxxxxx

(12) The Lessee shall not without sanction or permission in writing of the proper municipal or other authority erect any building or make any alteration or addition to such building on the Industrial plot.

(13) The Lessee shall not without the written consent of the Lessor use, or permit to be used, the industrial plot or in any building thereon for residence or for carried on any trade or business whatsoever or use the some or permit the same to be used for any purpose other than that of carrying on the manufacturing process or running the industry of service/repair of motor car or such other manufacturing processor industry as any approved from time to time by the Lt. Governor or do or suffer to be done therein any act or thing whatsoever

which in the Lessor may be a nuisance, annoyance or disturbance to the Lessor of and person living in the neighbourhood.

PROVIDED that, if the Lessee is desirous of using the said Industrial lot or the building thereon for a purpose other than that of the manufacturing process or industry as may be approved from time to time, the Lessor may allow such charge of user on such terms and conditions, including payment of additional premium and additional rent, as the Lessor may in his absolute discretion determine."

"III. If the sum or sums payable towards the premium of the yearly rent hereby reserved or any part thereof shall at any time be in arrears and unpaid for one calendar month next after any of the days whereon the same shall have become due, whether the same shall have been demanded or not, or if it is discovered that this Lease has been obtained by suppression of any fact or any mis- statement, mis-representation or fraud or if there shall have been in the opinion of the Lessor, whose decision shall be final any breach by the Lessee or by any person claiming through or under him of any of the covenants or conditions contained herein and on his part to be observed, or performed, then and in any such case, it shall be lawful for the Lessor, notwithstanding the waiver of any previous cause or right of re-entry upon and take possession of the industrial plot and the buildings and fixtures and there-upon this Lease and every thing herein contained shall cease and determine and the Lessee shall not be entitled to any compensation whatsoever not to the return of any premium paid him.

Provided that, not withstanding anything contained herein to the contrary, the Lessor may without prejudice to his right of re-entry as aforesaid; and in his absolute discretion, waive or condone breaches, temporarily or otherwise, on receipt of such amount and on such terms and conditions as may be determined by him and may also accept the payment of the said sum or sums of the rent which shall be in arrear as aforesaid together with interest at the rate of ten per cent per annum.

IV and V xxxxxxxx

VI. In the event of any question, dispute or difference, arising under these presents, or in connection therewith [except as to any matters the decision of which is specially provided by these

presents], the same shall be referred to be sole arbitration of the Lieutenant Governor or any other person appointed by him. It will be no objection that the arbitration is a Government servant and that he has to deal with the matters to which the Lease relates or that in the course of his duties as a Government servant he has expressed views on all or any of the matters in dispute or differences. The award of the arbitrator shall be final and binding on the parties.

The arbitrator may, with the consent of the parties, enlarge the time, from time to time, for making any publishing the award.

Subject as aforesaid, the Arbitration Act, 1940 and the Rules there under and any modifications thereof for the time being in force shall be deemed to apply to the arbitration proceedings under this Clause."

15. A reading of the provisions extracted above makes it clear that,

the re-entry and taking over of possession of an industrial plot and the

buildings and fixtures thereupon can be resorted to by the DDA, if

there shall have been in the opinion of the DDA, whose decision shall

be final, a breach by the lessee or by any person claiming through or

under him of any of the covenant or conditions contained therein.

16. It is further clear from the reading of the above provisions that,

re-entry upon the premises is a decision which is specifically provided

for in the Lease Deed, in the event the lessee makes any alteration or

addition to such building on the industrial plot without the written

sanction or permission in writing of the proper authority or uses or

permits to be used the industrial plot or any building thereon for

residence or for carrying on any trade or business other than that of

carrying on the manufacturing process or running the industry of

service-repair of motor cars as was approved by the DDA in the

present case.

17. A plain reading of Section 16 of Arbitration and Conciliation Act,

1996 makes it evident that the said statute enable the Arbitral

Tribunal to rule on its own jurisdiction. The Act, however, does not

exclude the Court from returning a finding on this issue. The decision

of the Supreme Court in S.B.P. and Co. v. Patel Engineering Ltd.

and Anr.; AIR 2006 SC 450 provided that the function of the Court

in an application under Section 11 is adjudicatory and not merely

ministerial, and as such the Court can determine whether a particular

dispute is an excepted matter or not.

18. Coming to the rival submissions made on behalf of the counsel it

is seen that Clause VI of the said Lease Deed dated 22nd June, 1982

clearly indicated that all disputes excepting as to any matter, the

decision of which is specifically provided by the said Lease Deed was

to be referred to the sole arbitration of the Lieutenant Governor or

any person appointed by him. Emphasis is made on the words "except

as to any matters the decision of which is specifically provided by

these presents".

19. When Clause III of the said Lease Deed is read in conjunction

with Clause II(13), it clearly and unequivocally demonstrates that the

lessee was not to use the industrial plot for residence or for any trade

or business whatsoever or permit the same to be used by any person

other than that of carrying on the running of service-repair of motor

cars or such other manufacturing process industries as may be

approved from time to time. It is, therefore, unambiguous that if any

such violation were made by the lessee the matter was required to be

referred to the Lieutenant Governor whose decision was to be final as

stipulated in Clause III of the Lease Deed. This provides that the

matters regarding such decisions was specifically provided in the

Lease Deed and these kind of breaches of violations were especially

excluded from the arbitration clause.

20. We, therefore, agree that the learned Single Judge who

observed that Clause VI which relates to arbitration clause was not

absolute in nature but restrictive as only particular kind of disputes

were required to be referred to the Arbitrator and not the one violated

by the Petitioner, as for that kind of dispute the sole authority vested

with the Lieutenant Governor which he had exercised whereby he

found that there were breaches and thereafter determined the Lease

Deed consequently moving the Estate Officer for the eviction of the

lessee under the Public Premises (Eviction of Unauthorised

Occupants) Act, 1971.

21. In view of the foregoing discussion and for the reasons given

therein, we find no infirmity in the impugned order dated 18th July,

2008.

22. The petition is, therefore, devoid of any substance and is

accordingly dismissed, however without any order as to costs.

SIDDHARTH MRIDUL, J.

MADAN B. LOKUR, J.

May 01, 2009 dn