Mr Rakesh Khanna vs M/S Surya Vinayak Industries Pvt ...
2009 Latest Caselaw 3683 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                ARB.P.No.220/2009

%                     Date of decision: 10th September, 2009

MR RAKESH KHANNA                                     ....Petitioner
                       Through: Mr. Vikas Dhawan and Mr Siba Prasad
                                Das, Advocates

                               Versus

M/S SURYA VINAYAK INDUSTRIES PVT LTD                ... Respondent
                       Through: Mr. N.K. Vohra, Advocate.


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?                NO

2.    To be referred to the reporter or not?         NO

3.    Whether the judgment should be reported        NO
      in the Digest?


RAJIV SAHAI ENDLAW, J.

1. This petition has been preferred under Section 11 of the

Arbitration Act, 1996 for appointment of an arbitrator pursuant to an

arbitration clause contained in the Registered Lease Agreement

dated 11th June, 2007 between the parties. The counsel for the

respondent has appeared and states that since this is his first

appearance he should be given time to file reply. The respondent

having been served with the notice of the petition issued on 29th

May, 2009, if needed to file reply ought to have filed before today

and cannot seek time for filing reply as a matter of right. The

counsels have been heard.

2. The counsel for the respondent has raised two contentions.

Firstly, it is contended that Registered Lease Agreement containing

arbitration clause has been novated and secondly, it is contended

that there is no live issue between the parties for adjudication by

arbitration.

3. As far as the plea of novation is concerned, the petitioner

himself has in the petition stated that disputes and differences had

arisen with the respondent earlier also resulting in the petitioner

then also terminating the tenancy of the respondent; that the said

disputes and differences were subsequently settled and a settlement

deed dated 21st March, 2008 executed. The contention of the counsel

for the respondent is that the novation of the lease agreement is by

the said settlement deed; that the said settlement deed does not

contain any provision for arbitration. It is also contended that the

petitioner itself does not accept the said settlement deed.

4. As far as the last of the aforesaid submissions is concerned, the

petitioner has not pleaded having not accepted the settlement deed.

The contention of the petitioner is that the respondent had

unilaterally sent an addendum dated 6 th April, 2009 to agreement to

lease and which was not accepted by the petitioner.

5. A perusal of the settlement deed shows that in the recitals

thereof reference is made to the disputes which had earlier arisen

between the parties and resulting in the petitioner then terminating

the lease of the respondent. The settlement deed is executed to

record the settlement arrived at of the disputes which had so arisen.

A reading of the said settlement deed does not show that same is in

supersession of the lease agreement between the parties. In fact in

clause 6 of the said settlement deed reference is expressly made to

the stipulations in the lease agreement which were to continue. The

settlement deed also does not record any fresh agreement between

the parties. The counsel for the petitioner has also pointed out that

the respondent itself has in the reply to the notice of termination of

tenancy now issued, referred to the said lease agreement and the

plea taken today of novation is an afterthought. I thus, do not find

that the lease agreement containing the arbitration clause has been

novated or that the arbitration agreement between the parties has

been novated.

6. As far as the plea of there being no live issue between the

parties, the same is falsified from the contention of the counsel for

the respondent that the petitioner has till now not taken possession

of the premises from the respondent in spite of the respondent

offering the same. Once it is found that the respondent is admittedly

in possession of the premises, it cannot be said that there is no live

issue between the parties.

7. The counsel for the respondent has further urged that the

petitioner has encashed the cheque for Rs.64,41,972/- sent along

with the addendum dated 6th April, 2009 to the agreement to lease

and by encashment of the said cheque has impliedly accepted the

terms of the said addendum. In this regard, the plea of the petitioner

in the petition that neither the addendum nor the payment by cheque

aforesaid is acceptable to the petitioner as the same is admittedly in

variance of the agreement between the parties may be noticed. Even

if the petitioner has encashed the said cheque, encashment of the

cheque cannot be said to be in full and final settlement of all the

claims of the petitioner against the respondent. The counsel for the

petitioner further informs that, in fact, the cheque was encashed

pursuant to the orders obtained in another petition preferred under

Section 9 of the Act.

8. At this stage, it may also be noticed that the addendum dated

6th April, 2009 relied upon by the respondent itself shows the lease

agreement dated 11th June, 2007 to be subsisting and the conduct of

the respondent shows that the respondent has been indulging in

taking convenient pleas whatever suits it at whatever time.

9. Else, it is found that the parties had in the Registered Lease

Agreement (Supra) provided for settlement of all disputes by

arbitration. The petitioner has also issued a notice dated 21st March,

2009 to the respondent proposing the name of arbitrator. Thus, the

petitioner had occasion to prefer this petition.

The petition is accordingly, allowed.

10. Ms Justice Sharda Aggarwal (Retd) is appointed as the

arbitrator to adjudicate the disputes between the parties. The

counsel for the petitioner states that the claims of the petitioner

against the respondent are for a sum of over Rs.2 crores and the

respondent is also liable to be ejected from the premises. On this

premise, the consolidated fee of the arbitrator is fixed at

Rs.1,50,000/- (besides out of pockets expenses). The fee to be shared

equally by the parties subject to award as to costs. The parties to

appear before the arbitrator with prior appointment on 22nd

September, 2009.

RAJIV SAHAI ENDLAW,J th September 10 , 2009 pp