Ajit Mittal vs Heat Exchange (P) Ltd.
2009 Latest Caselaw 3762 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI


                                                   Date of Reserve: August 06, 2009
                                                   Date of Order: September 15, 2009

+OMP 303/2009
%                                                                       15.09.2009
    Ajit Mittal                                                  ...Petitioner
    Through: Mr. Shiv Khorana, Advocate

       Versus

       Heat Exchange (P) Ltd.                        ...Respondent
       Through: Mr. Jasmeet Singh with Mr. Saurabh Tiwari & Ms. Divya
       Chaturvedi, Advocates


       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.


       JUDGMENT

1. This objection petition under Section 34 of the Arbitration & Conciliation

Act, 1996 has been preferred by the petitioner assailing an award dated 23rd

January,2009 passed by the learned Sole Arbitrator allowing the claim of

possession of the tenanted premises owned by the claimant and also allowing

monetary claim of Rs.50,86,485/- after giving adjustment of counterclaim of

the petitioner and further holding that the petitioner would be liable to pay

Rs.6000/- per day with effect from 12th January, 2009 as damages till he

vacates the premises. The arbitrator awarded interest @ 12% per annum on

the awarded amount.

2. Brief facts relevant for the purpose of deciding this petition are that the

petitioner was a tenant in the premises bearing number 349, Functional

OMP 303 of 2009 Ajit Mittal vs. Heat Exchange (P) Ltd. Page 1 Of 7 Industrial Estate, Patparganj, Delhi-110 092 having an area of 450 sq. meters

comprising of basement, first floor and a second floor. The tenancy was

created by a written lease agreement dated 7th July 2003 between the

parties. The tenancy started from 4th July 2003 when the possession of the

premises was handed over to the tenant (petitioner herein). The rent payable

by the petitioner was Rs.90,000/- per month for the first and second year and

Rs.99,000/- per month during third year of the tenancy. The Lessee

(petitioner herein) was provided with 70 KW of electric load connection and

the meters were installed in the premises on 17th July 2003.

3. During continuation of the tenancy period, disputes arose between the

parties regarding non-payment of electricity bills by the tenant to BSES and

regarding forging of certain documents by the petitioner/ tenant concerning

electricity meters. However, the Lessee/petitioner did not vacate the

premises even after expiry of three years, despite service of a notice by the

respondent. The petitioner also stopped paying rent as reserved under the

lease agreement. The lease agreement between the parties had an

arbitration clause. A petition was moved before this Court for appointment of

an arbitrator and Justice Anil Dev Singh (retd.) was appointed as the sole

arbitrator, who during arbitral proceedings resigned and Justice V.S. Aggarwal

(retd.) was subsequently appointed as an arbitrator in his place.

4. The learned arbitrator after considering the claims and counterclaims

of the parties and material placed before him passed the impugned award

giving reliefs as narrated above to the claimant (respondent herein).

5. The petitioner has assailed the award on the ground that the learned

OMP 303 of 2009 Ajit Mittal vs. Heat Exchange (P) Ltd. Page 2 Of 7 arbitrator had no jurisdiction to entertain the claim of the petitioner since the

lease agreement was for a period of three years and no dispute arose

between the parties within the period of three years i.e. tenure of the

agreement and after expiry of the agreement, the matter pertaining to

tenancy and eviction could not be referred to by the arbitrator.

6. Similar objection was raised before the learned arbitrator as well and

the learned arbitrator rejected this plea on the ground that the plea could not

be considered since the arbitrator was appointed by the order of High Court

and this plea should have been taken before the High Court. I consider that

the learned arbitrator rightly rejected the plea taken by petitioner. It is settled

law that before appointing an arbitrator, the High Court has to consider about

the existence of arbitration agreement and a live dispute between the

parties. The petitioner was at liberty to challenge the order of this Court of

appointing the arbitrator. Since the petitioner did not challenge the order of

this Court appointing an arbitrator for adjudicating the disputes between the

parties, the order has become final and the issue regarding jurisdiction

cannot be raised by the petitioner either before the arbitrator or now before

this Court by way of present petition.

7. The other ground for challenging the award is that the lessor

(respondent) in this case had taken the premises from Commissioner of

Industries on lease and one of the conditions of the lease was that the

premises could not be further sublet. This plea was considered by the

learned arbitrator and was rightly rejected. The lease between the lessor and

the superior lessor was not the subject matter of dispute before the arbitrator

nor could the petitioner raise this issue. The superior lessor is free to take

OMP 303 of 2009 Ajit Mittal vs. Heat Exchange (P) Ltd. Page 3 Of 7 action against the lessor (respondent herein) for violation of the terms of the

lease. It is none of the business of the petitioner, that too after enjoying the

lease premises, to raise this issue. If the petitioner was aggrieved on this

count, he could have vacated the premises as and when the petitioner came

to know about it. The petitioner could not have continued to occupy the

premises and simultaneously take a ground that he was wrongly inducted as

a sub-tenant.

8. The other ground taken by the petitioner is that the learned arbitrator

had no jurisdiction to order eviction as the lease agreement entered into

between the parties provided for damages @ Rs.6,000/- per day in case of

overstaying by the petitioner after expiry of the lease period. This argument

of the petitioner must fail because the arbitration clause envisages

adjudication of all disputes arising out of the lease agreement, which includes

termination of the lease and consequential handing over of possession of the

leased premises by the lessee to the lessor. There is no bar under law or

otherwise on an arbitrator on ordering handing over of the possession of the

premises by the lessee, whose stay in the premises is held unlawful,

unauthorized or illegal. The petitioner has also assailed the decision of the

arbitrator of awarding damages @ Rs.6,000/- per day for unauthorized

occupation of the premises by the petitioner till date of passing of the award

and thereafter. The contention of the petitioner is that the compensation

awarded by the arbitrator was unreasonable and contrary to the provisions of

Section 74 of the Indian Contract Act. The arbitrator should have awarded a

reasonable compensation taking into account the evidence of lose suffered by

claimant. It is submitted that there was no evidence to come to this

conclusion.

OMP 303 of 2009 Ajit Mittal vs. Heat Exchange (P) Ltd. Page 4 Of 7

9. Where the parties have entered into a contract specifying the quantum

of user charges for use and occupation of the premises after a particular date,

the parties are bound by that contract. Even otherwise, in my view, non-

vacation of the premises by the petitioner despite the clause that he will have

to pay Rs.6,000/- per day as damages, is sufficient proof that the quantum of

damages agreed between the parties represented market rent of the

premises. If the petitioner considered that damages @ Rs.6,000/- per day was

an unreasonable amount to be paid for the premises being used by him, he

would have searched for another premises in the same vicinity on lesser rent

and shifted to that premises. The very fact that the petitioner despite the fact

that his tenancy had been terminated and despite passing of award against

him by the arbitrator did not shift to another premises would show that the

premises of same area was not available at an amount of less than Rs.6000/-

per day to the petitioner and agreed amount of Rs.6000/- per day was just

and reasonable amount for use of the premises. No further evidence was

required by the arbitrator to award damages at agreed rate. In any event, it is

settled law that where parties had entered into a contract for liquidated

damages, irrespective of the quantum of loss suffered by one party, the other

party is bound to pay damages at the rate agreed between them. The

quantum of loss in that eventuality may be more than the damages or may

be less than the damages agreed by the parties. It is not that if the quantum

of loss suffered by the lessor would have been Rs.9,000/- per day, the

arbitrator could award damages @ Rs.9,000/- per day instead of Rs.6,000/-

per day. The arbitrator was bound by the contract entered into between the

parties and could not have awarded damages at a rate more or less than

Rs.6000/- per day.

OMP 303 of 2009 Ajit Mittal vs. Heat Exchange (P) Ltd. Page 5 Of 7

10. The next objection taken by the petitioner is that the respondent had

not filed the site plan of the leased property and, therefore, respondent was

not entitled to claim of possession. This plea of the petitioner has to be

rejected outrightly. The property in this case is an identifiable property. The

lease agreement between the parties is regarding an identifiable property

and there was no necessity of filing the site plan.

11. The next objection taken by the petitioner is that the person who filed

the claim petition before the learned arbitrator was not duly authorized on

behalf of respondent company and the arbitrator failed to appreciate the

evidence in this regard. It is settled law that this Court does not sit in appeal

against an order of the learned arbitrator. This Court cannot re-appreciate the

evidence and come to a different conclusion than one arrived at by the

arbitrator. Even otherwise, I consider that the arbitrator has rightly come to a

conclusion that the provisions of Civil Procedure Code and Evidence Act were

not applicable to the arbitral proceedings and he was not bound by the strict

provisions of the Evidence Act neither was bound by the provision of Civil

Procedure Code. I find no infirmity in the award on this count also.

12. The Supreme Court in catena of judgments has observed that the claim

of the party should not be allowed to be defeated on account of trivial and

technical grounds. In Union Bank of India v Naresh Kumar and others (1996) 6

SCC 660, the Supreme Court observed that in case where pleadings have

been signed by one of the officers of the Corporation, the Corporation can

ratify the said action of its officer in signing the pleadings. Such ratification

may be expressed or implied and the Court on the basis of record could come

OMP 303 of 2009 Ajit Mittal vs. Heat Exchange (P) Ltd. Page 6 Of 7 to a conclusion that the Corporation had ratified the signing of the pleadings

by the officer. The learned arbitrator in this case has rightly held that the

person who signed the claim petition was duly authorized by respondent.

13. I find that the petition of the petitioner under Section 34 of the Act has

no substance and merits dismissal. The petition is hereby dismissed. No

orders as to costs.

September15, 2009                                       SHIV NARAYAN DHINGRA J.
rd




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