Delhi High Court
R.P.S.Educational Society ... vs Delhi Development Authority on 2 September, 2009
Author: Shiv Narayan Dhingra
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Reserve: August 27, 2009
Date of Order: September 02, 2009
+ OMP 538/08
% 02.09.2009
R.P.S. EDUCATIONAL SOCIETY(REGD.) ..... Petitioner
Through: Mr. T.K.Ganju, Sr. Adv. with
Mr. B.L.Wali, Adv.
versus
DELHI DEVELOPMENT AUTHORITY ..... Respondent
Through: Mr. Bhupesh Narula, Adv.
JUSTICE SHIV NARAYAN DHINGRA
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 judgment should be reported in Digest? Yes.
ORDER
1. Petitioner claiming to be an educational society had taken
on license a Community hall from DDA vide license deed dated
15.11.2007 for the purpose of developing, managing and operating the
community hall for a period of 3 years at monthly license fee of
Rs.501/-. The activities which the licensee could run included reading
room/library, gymnasium, indoor games such as table tennis, billiards,
badminton, cafeteria, internet kiosk, temporary hobby courses,
conference room(office space for use of RWA or other bodies working
for the upliftment of neighbourhood). The activities permitted in
community hall also included yoga, music concerts, performing arts,
film festivals, etc. The activities not permitted in the community hall
or open spaces were exhibition-cum-sale, diwali mela, restaurant
serving alcoholic drinks etc. It was specifically provided in Clause 54
that community hall shall not be used for banqueting, tehbazari, retail
shopping and licensee shall not be permitted to utilize the community
hall to carry any other trade.
2. A show-cause notice was served by DDA after receiving
complaints from the respondent for violation of different clauses of the
licensee deed namely clauses no. 4, 6, 12, 19, 20, 23, 28, 29 & 39.
After this show-cause notice was served, the petitioner approached the
Court under Section 9 of the Arbitration and Conciliation Act, 1996
since the license deed provided for arbitration as a dispute resolution
mechanism. Prayer has been made in the petition that the Court
should stay the operation of show-cause notice and restrain
respondent from taking any coercive action for dispossessing the
petitioner from the community hall and pass an interim order in this
case.
3. In reply, DDA has stated that complaints were received
against the petitioner regarding misuse of community hall and its use
contrary to the terms and conditions. It is submitted that under the
license deed, the license of the petitioner could be terminated by
giving one month notice even without assigning any reason. After
termination of license, the petitioner had no title, right or interest in
the community hall and respondent, DDA was entitled to possess the
community hall forthwith after expiry of one month notice period. It is
also submitted that the breach of license deed was enquired into and
the reply to show-cause notice was not found satisfactory. The
petitioner was supposed to open a separate account in respect of the
community hall as provided in Clause 23 and was to include two
members of DDA in the executive committee but the petitioner flouted
both the conditions and minutes of meeting signed by the petitioner on
20.2.2009 show that the petitioner started operating community hall
in December, 2007 and wrote a letter to the respondent after 8 months
asking the respondent to associate in the executive committee and in
the accounts. It is submitted that the respondent could not have
approved the past accounts. The respondent had cancelled the license
of the petitioner on 25th September, 2008.
4. Clause 46 of the license agreement reads as under:
"That the licensor shall have the right to terminate
the license after giving one month's notice without
assigning any reasons thereof."
5. It is apparent that in terms of license deed, the respondent
had authority to cancel the license. Under Section 9 of the Arbitration
and Conciliation Act, the Court can pass an interim order to preserve
such subject matter of dispute which it considered was necessary to be
preserved for adjudication of the dispute. However, an order under
Section 9 of the Arbitration and Conciliation act cannot be passed by
the Court directing specific performance of the contract, the breach of
which is alleged by the petitioner. This Court in Excel Generators
Pvt. Ltd. Vs. IJM Corporation Berhad OMP No. 241/09(decided on
13th May, 2009) had observed that where a contract is terminable
contract and it can be foreclosed, the interim relief under Section 9 of
the Arbitration and Conciliation Act cannot be granted for specific
performance of the contract. In all those cases where monetary
damages can compensate the breach of contract, the Court cannot
insist upon the parties that the contract should be specifically
performed.
6. Termination of the contract is one of the facets of the
commercial law and if a party is aggrieved that the contract was
wrongly terminated, the remedy lies in claiming damages. The party
cannot insist that the contract should be specifically performed and it
should be restored to the position prior to the breach of the contract.
Even otherwise it is settled law that show-cause notice cannot be
stayed by a Court. Giving show-cause notice amounts to giving an
opportunity to the party to explain the breaches. Serving show-cause
notice is a right of the party and the Court cannot interfere in serving
show-cause notice and cannot say that the department should not ask
the contracting party to explain its action. It is also settled law that
the Court cannot write a new contract or revalidate a contract for the
parties, if the contract is already terminated. The Court cannot thrust
a contract upon the party under Section 9 of the Arbitration and
Conciliation Act and ask that the contract should be restored. I find no
force in the petition. The petition is hereby dismissed.
September 02, 2009 SHIV NARAYAN DHINGRA J.
ak
