Namgyal Institute For Research On ... vs Turner Morrison Ltd.
2010 Latest Caselaw 197 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI


%                                                  Date of decision : 15.01.2010


+                          FAO (OS) No.26/2010


NAMGYAL INSTITUTE FOR RESEARCH ON LADAKHI ART AND CULTURE
AND ANR.

                                                                 ...APPELLANTS

                               Through:         Dr.Shyamlha Pappu, Sr.Adv. with
                                                Mr.R.Krishnaamorthi, Mr.K.K.Singh
                                                and Mr.V.K.Dawar, Advocates


                                          Versus


TURNER MORRISON LTD.                                            ...RESPONDENT

                               Through:         Mr.Sandeep Sethi, Sr.Adv.with
                                                Mr.Lalit Gupta, Advocate


+                          FAO (OS) No.27/2010


NAMGYAL INSTITUTE FOR RESEARCH ON LADAKHI ART AND CULTURE
AND ANR.

                                                                 ...APPELLANTS

                               Through:         Dr.Shyamlha Pappu, Sr.Adv. with
                                                Mr.R.Krishnaamorthi, Mr.K.K.Singh
                                                and Mr.V.K.Dawar, Advocates


                                          Versus


TURNER MORRISON LAND LTD.                                       ...RESPONDENT

                               Through:         Mr.Sandeep Sethi, Sr.Adv.with
                                                Mr.Lalit Gupta, Advocate


+                          FAO (OS) No.45/2010


NAMGYAL INSTITUTE FOR RESEARCH ON LADAKHI ART AND CULTURE
AND ANR.

                                                                 ...APPELLANTS



FAO(OS) 26/2010, 27/2010, 45/2010 and 46/2010                       Page 1 of 14
                                Through:         Dr.Shyamlha Pappu, Sr.Adv. with
                                                Mr.R.Krishnaamorthi, Mr.K.K.Singh
                                                and Mr.V.K.Dawar, Advocates


                                          Versus


TURNER MORRISON LTD.                                            ...RESPONDENT

                               Through:         Mr.Sandeep Sethi, Sr.Adv.with
                                                Mr.Lalit Gupta, Advocate

+                          FAO (OS) No.46/2010


NAMGYAL INSTITUTE FOR RESEARCH ON LADAKHI ART AND CULTURE
AND ANR.

                                                                 ...APPELLANTS

                               Through:         Dr.Shyamlha Pappu, Sr.Adv. with
                                                Mr.R.Krishnaamorthi, Mr.K.K.Singh
                                                and Mr.V.K.Dawar, Advocates


                                          Versus


TURNER MORRISON LAND LTD.                                       ...RESPONDENT

                               Through:         Mr.Sandeep Sethi, Sr.Adv.with
                                                Mr.Lalit Gupta, Advocate

CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MS. JUSTICE VEENA BIRBAL

1.     Whether the Reporters of local papers
       may be allowed to see the judgment?                 No

2.     To be referred to Reporter or not?                  No

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

SANJAY KISHAN KAUL, J. (ORAL)

1. The Namgayal Institute for Research on Ladakhi Art and

Culture (appellant) acquired perpetual leasehold rights in

respect of a plot of land measuring 5324.40 square metres

situated in South of IIT Institutional Area bearing no.B-25,

Qutab Institutional Area, New Delhi - 110016 from the DDA.

The perpetual lease deed was executed on 22.11.1995. In

order to facilitate the construction on the plot, the appellant

entered into a construction agreement with M/s Turner

Morrison Limited (respondent) on 11.12.1995. The

construction agreement stated that the appellant did not

have the finances and expertise for construction of building.

In terms of the said agreement, inter alia, the obligation of

the appellant was to pay M/s Turner Morrison Limited („TML‟

for short) a sum at the rate of Rs.1,200/- per square foot in

accordance with the schedule of payment and in the event of

delay, interest was payable. It was also provided that till the

entire construction cost was paid, TML would have a lien over

the land along with the construction thereon with a full

authority and power to recover such amounts payable to TML

by transfer of lease of such constructed area so as to meet

the outstanding liabilities of the appellant. The original title

deeds were to be deposited with TML to secure the

payments. The possession of the property was handed over

on the same day to TML for construction and powers of

attorney were also executed on behalf of the appellant.

2. TML formed a subsidiary in the name and style of Turner

Morrison Land Limited („TMLL‟ for short) which is also

respondent in the present proceedings. TML decided to

carry out construction work through TMLL and made a

request to the appellant on 04.03.1996 which was granted by

the appellant on 28.03.1996 and a deed of assignment dated

02.08.1996 was accordingly executed with the appellant,

TML and TMLL being parties to the same.

3. The appellant is also stated to have issued their NOC for

creation of equitable mortgage in favour of third parties for

raising funds and the permission to create equitable

mortgage was granted by the DDA in the name of the

appellant on 30.12.1996. Some further communication also

took place about the increase in costs of construction which

was proposed by TMLL at Rs.2250/- per square foot, but the

appellant was agreed to only an increase to Rs.2,000/- per

square foot. Since additional construction was also

permitted, an arrangement was entered into between the

parties even in that behalf. On 08.01.1999, a letter was

addressed by the appellant in pursuance to certain meetings

setting out the agreement between the two parties that the

appellant would like to occupy and take possession of the

total area of its share of 13,500 square feet on the ground

floor and would forego the balance amount of security

deposit in lieu of the additional area of 4,000 square feet

made available on the ground floor. TML and TMLL agreed to

take up the balance space in the building of approximately

13,500 square feet on the ground floor and 2,188 square feet

in the basement. The undisputed position is that the

appellant never paid a penny to either TML or TMLL. Thus,

the respondents let out various portions to recover their

costs. This fact is acknowledged even in a letter dated

10.05.2006 addressed on behalf of the appellant to the

Lieutenant Governor when the lease was cancelled due to

commercial user.

4. The dispute arose between the parties and in view of the

construction agreement dated 11.12.1995 containing an

arbitration clause with a named arbitrator, orders were

passed on an application filed by respondents under Section

8 of the Arbitration and Conciliation Act, 1996 („the said Act‟

for short) in a suit of the appellant and in another application

which came to be filed under Section 11 of the said Act by

the respondents. In terms of the order dated 06.03.2009,

learned Single Judge of this Court on the Original Side

referred all the disputes between the parties to the sole

arbitration of Justice A.B.Saharya (Retd.), former Chief Justice

of Punjab and Haryana High Court. A review application by

the respondents in respect of certain facts set out in the

Order dated 06.03.2009 was allowed on 01.07.2009. The

arbitration proceedings have, however, not proceeded as the

appellant has not participated though the respondents have

filed their written statement of claim. The appellant

preferred an appeal against the order dated 06.03.2009

before the Division Bench in December, 2009. The appeal is

stated to be still pending though there is no stay of the

operation of the order of the learned Single Judge referring

the disputes to arbitration.

5. It is in the aforesaid background that two OMPs came to be

filed on the Original Side of this Court by TML and TMLL

respectively against the appellant. The arrangement

between the parties was set out by the respondents and it

was pleaded that they were in possession of the entire built

up property except the area on the ground floor and the

basement parking of the appellant. The building was lying

sealed on account of misuser. These OMPs were filed under

Section 9 of the said Act seeking a restraint order against the

appellant from occupying or using any portion of the property

except the area of 13,500 square feet on the ground floor

and 2,188 square feet on the basement for parking and from

the appellant transferring, leasing, licensing, mortgaging and

encumbering portions of the property which were under the

possession and control of the respondents. It may be noticed

that in the assignment deed, TMLL was claiming certain

rights while TML was claiming to be carrying on the

maintenance service in the entire property. These petitions

was contested by the appellant once again seeking to raise

the issue of there being no valid assignment and there being

no arbitration agreement apart from the plea that no

injunction could be issued in favour of a trespasser against

the true owner and that the claims were barred by time. The

learned Single Judge noticed that there was no stay of the

reference of disputes to arbitration and the adjudication in

respect of the reference of disputes to arbitration had been

concluded by a judgment of the learned Single Judge of the

Court and the mere pendency of the appeal or any other

application for review could not come in the way of the Court

exercising the power under Section 9 of the said Act. This

became all the more necessary as the arbitration

proceedings were also not proceeding in view of the stand of

the appellant and thus as an interim measure of protection,

the arbitrator could really not be moved. The learned Single

Judge allowed these applications in terms of the impugned

order dated 23.09.2009 recording in para 7 as under:

"As far as the merits of granting the interim measures are concerned, the senior counsel for the respondents does not dispute that since the completion of the construction of the building and till sealing, the portions of the property with respect whereto interim measures are claimed were in the control and possession of the petitioners. It is also admitted that the maintenance services were being carried out by the petitioner and the petitioner had installed their plant & equipment for the said purposes. The plea in this regard is that pursuant to sealing, the petitioner had vacated the premises. It is contended that the petitioners having vacated are now not entitled to any interim relief."

6. The learned Single Judge recorded the conclusion in para 9 to

11 as under:

9. In my view, once it is admitted that the petitioners were in control and possession of the portions with respect whereto interim measures are claimed, till sealing, the factum of sealing by the Government Agency cannot interfere with the rights, if any, of the petitioner. Such action of a third party cannot vest any advantage in the respondent. At this stage, it is not deemed appropriate to go into the merits of the respective case. All that can be said is that the courts have taken notice of such transactions in Delhi and at least in Ansal Property & Industries Private Limited Vs. Anand Nath MANU/DE/0824/1991 the true nature of such transactions was also gone into. I thus find the petitioners to have made out a prima-facie case. The rights sought to be protected being with respect to immovable property, cannot be compensated in money. The balance of convenience is also found to be in granting the interim relief claimed.

10. The petitions are accordingly allowed. The respondents are restrained from occupying or using and/or from alienating, encumbering or parting with possession of property No.B-25, Qutab Institutional Area, New Delhi save the portion of 13,500 sq. ft. on the ground floor of the said property and 2,188 sq. ft. in the basement of the said property. The respondents are also restrained from using or removing the equipment, plaint & machinery of the petitioner for the purposes of carrying out maintenance services in

the said property and from carrying out the said services themselves.

11. It is sad that such valuable commercial property is being wasted for the last so many years.

Though no claims in that respect have been made but I clarify that upon an application in this regard being made, the Arbitral Tribunal stated to have been already constituted shall attempt to make provision for allowing use/commercial exploitation of the said property so that pending the resolution of disputes between the parties the property can be put to optimum use.

7. The appellant filed a review application which has also been

dismissed by the impugned order dated 27.11.2009. The

review was sought of the observations made in para 7 of the

Order 23.09.2009 contending that no such concession was

made by the learned counsel for the appellant. Learned

Single Judge noticed that fortunately the notes taken by the

learned Single Judge at the time of hearing still existed on

the file and on a perusal of the same, it has been verified

that the concession made by the senior counsel for the

appellant in para 7 was on the basis of what had been urged

in the Court. In any case, the contention of the counsel for

the appellant was that it was the TMLL who had let out the

portions of the building though in the name of the appellant,

but the rent for the said portions was being realized by TMLL,

which was now pleaded to have been misappropriated.

8. The present four appeals are filed against the order dated

23.09.2009 in respect of the two respondents and of the

review order dated 27.11.2009 against the same two

respondents.

9. Learned counsel for the appellant once again sought to urge

that the concession recorded in para 7 was not correct and

even if said concession had been made it was of no avail to

the respondents since any concession contrary to pleadings

cannot be accepted. Learned counsel relied upon the

observations of the Supreme Court in Swami Krishnanand

Govindanand v. M.D.Oswal Hosiery (Regd.); (2002) 3 SCC 39.

10. On a perusal of the said judgment, we find the same

does not apply to the facts of the present case. In the facts

of that case, where the petition for bona fide requirement

was filed by the landlord and admission was made by the

tenant that the landlord is an institution covered under

Section 22 of the Delhi Rent Control Act, 1958, contrary to

the pleadings of the tenant. It was held that the admission

cannot be considered relevant material on record on the

basis of which satisfaction of the Rent Controller could be

recorded. The judgment is really an order and in para 3

itself it states that "on the facts of this case".

11. The Supreme Court has repeatedly emphasized that

judgments and orders are not to be read as statutes and

when an order is passed in the given facts of the case, it can

hardly be treated as precedent, which is binding.

12. The factual matrix of the present case is completely

different where the admitted position is that the appellant

never paid a penny for the construction and in terms of the

arrangement between the parties, even as envisaged under

the original construction agreement, there was entitlement

vested in the respondents to let out the premises other than

the share of the appellant to recover their dues. This is

exactly what has been done though letting out of the premies

would have been in the name of the appellant. The rent was

also being realized by TMLL. We may further notice that in

the appeal filed against the order of review dated

23.09.2009, only two grounds have been set out, which are

as under:

"A. Because the learned Single Judge could not have given a finding contrary to the pleadings of the parties.

B. Because the learned Single Judge ought to have noticed that no injunction can be granted against the true owner specially when the person praying for injunction is admittedly not in possession."

13. In fact, a preliminary hurdle in the way of the appellant

in the appeals against the orders of review as submitted by

the learned senior counsel for the respondents is the

provisions of Order 47 Rule 7 of the Code of Civil Procedure,

1908 itself, which read as under:

"7. Order of rejection not appealable. Objections to order granting application

(1) An order of the Court rejecting the application shall not be appealable;

but an order granting an application may be objected to at once by an appeal from the order granting the application or in an appeal from the decree or order finally passed or made in the suit.

(2) Where the application has been rejected in consequence of the failure of the applicant to appear, he my apply for an order to have the rejected application restored to the file, and, where it is proved to the satisfaction of the Court that he was prevented by any sufficient cause from appearing when such application was called on for hearing, the Court shall order it to be restored to the file upon such terms as to costs or otherwise as it thinks fit, and shall

appoint a day for hearing the same.

(3) No order shall be made under sub-

rule (2) unless notice of the application has been served on the opposite party."

14. In the present case, the application for review has been

rejected on merit and thus no appeal lies. Thus, the appeals

filed against the review order are not even maintainable

apart from the fact that the learned Single Judge has again

verified that the submissions were recorded correctly

including concessions as the notes of the learned Single

Judge were still preserved in the file. It is clearly an

afterthought of the learned senior counsel for the appellant

who was seeking to wriggle out of the position of admitted

facts only to create grounds of appeal. If this aspect is read

even with the pleadings, it is apparent that though the letting

out of the premises may be in the name of the appellant,

same was done by TMLL as per the authority conferred on

TMLL by the appellant and the rents were being appropriated

by TMLL towards construction costs since undisputedly the

appellant had not paid a penny for the construction.

15. The second aspect sought to be urged by learned

counsel for appellants is that there cannot be an injunction

order against the true owner. In this behalf, learned counsel

referred to the judgment of the Supreme Court in Percept

D‟Mark (India) P. Ltd. v. Zaheer Khan and Anr.; (2006) 4 SCC

227. Once again, in the facts of that case, the factual matrix

is completely different since an interim injunction had been

granted on an application under Section 9 of the said Act

compelling specific performance of a contract for personal,

confidential and fiduciary service, which was held to be

barred under the relevant provisions of The Specific Relief

Act, 1963 and was thus impermissible. Learned counsel also

referred to the observations in Premji Ratansey Shah & Ors.

v. Union of India & Ors; JT 1994 (6) SC 585 where it has been

observed that injunction cannot be issued in favour of a

trespasser or a person who gained unlawful possession as

against the owner.

16. We have already observed that in the present case, the

possession of the property for construction was given to the

respondents who after construction handed over possession

of the portion of the appellant to them and the remaining

portion under due authorization was let out by them to

recover the dues of construction for which not a penny had

been paid by the appellant.

17. In the present case, the subject matter of dispute is an

immovable property and the rights conferred on the

respondent to let out portions of the same in the name of the

appellant to make recovery of their dues. The property has

been sealed by the MCD and the object of an interim

measure of protection is to ensure that on de-sealing the

appellant does not take advantage of the sealing by the MCD

and the previous position is restored in respect of right of

possession.

18. Learned senior counsel for the respondents also

emphasized that what order can be passed is only an interim

measure of protection as observed in Firm Ashok Traders and

Anr.etc. v. Gurumukh Das Saluja and Ors.; AIR 2004 SC 1433.

Once again there can be no dispute about the proposition. It

is obvious from the impugned order that the rights have been

protected pending the arbitration proceedings and in fact the

learned Single Judge in the last paragraph of the Order has

observed that the arbitral tribunal constituted could look into

the matter so that the property is not wasted for years

together pending resolution of disputes.

19. Learned counsel for the appellant sought to take

advantage of the application moved by the various tenants

for de-sealing to contend that it is their own case that the

lease was in the name of the appellant. Once again, the

answer to this has already been discussed above setting out

the true arrangement inter se the parties.

20. We may notice that in the writ proceedings filed by the

appellant challenging cancellation of lease, the respondents

sought to be impleaded as a party, which was permitted.

The appellant sought to challenge the signatures of its

authorized representative on documents which resulted in

the documents being sent to CFSL, the report of which found

against the appellant after comparing the signatures with the

undisputed signatures.

21. We have put to learned counsel for the parties that

there is no dispute that if the appeals of the appellant

succeed and the matter is held not referable to arbitration,

then the impugned orders would not subsist and the parties

would be free to take other appropriate legal remedies since

the impugned order has been passed on the premise of

existence of a valid arbitration clause in view of the reference

already made. Even if the arbitration were to be proceeded,

the impugned order takes care of the interest of the parties

by observing that the arbitrator would look into the aspect of

best utilization of the property pending resolution of disputes

between the parties so that the property is not wasted.

22. We also make it clear that any observations made in

the impugned order and the present order are naturally by

way of prima facie observations as they are in the nature of

interim measure of protection and would not in any way

influence the final adjudication in the arbitration proceedings

or otherwise.

23. We find the appeals completely devoid of merit and

having heard learned senior counsel for the appellant for a

better part of an hour and fifteen minutes, dismiss the

appeals with costs quantified at Rs.25,000/- per appeal to be

paid to the respective respondents in appeals within a period

of fifteen days.

SANJAY KISHAN KAUL, J.

JANUARY 15, 2010                                     VEENA BIRBAL, J.
dm