D.S.I.D.C. Ltd. vs Baleswer Verma & Anr.
2010 Latest Caselaw 5117 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

               Date of hearing & decision 10.11.2010

+      FAO(OS) No.646/2010

       D.S.I.D.C. LTD.                       .....APPELLANT

                          .....Through         Mr. Amiet Andlay

                   Versus

       BALESWER VERMA & ANR.                 .....Respondent

                         ......Through           Nemo
       CORAM:
*      HON'BLE MR. JUSTICE VIKRAMAJIT SEN
       HON'BLE MR. JUSTICE G.P.MITTAL

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

G.P.MITTAL, J (ORAL)

We have heard Mr. Amiet Andley, learned counsel

appearing for the Appellant.

2. The appellant takes exception to the order dated

31.08.2010 passed by the learned Single Judge in OMP No.

519/2010 whereby the petition under Section 34 of the

Arbitration and Conciliation Act, 1996(the „Act‟) was dismissed.

3. An agreement dated 07.08.1998 was entered into between

the parties whereby appellant was permitted to use the

premises measuring about four hundred square feet bearing No.

12, Block-J, Saket, New Delhi - 110017 on payment of

commission by way of license fee/rent compensation @ 12½ per

cent on the gross profit out of difference between the wholesale

price and retail sale price minus excise duty and taxes fixed per

bottle by the Commissioner of Excise, Delhi. Under another

agreement, an additional space of 80 sqr. ft. was also provided

to the appellant on a monthly rent of Rs.8000/- w.e.f.

01.04.2003(the said space is not the subject-matter of dispute in

the instant appeal as there was no arbitration agreement in

respect thereof).

4. It is admitted case of the parties that letters dated

26.09.2005 and 23.12.2006 were written by the respondent to

the appellant seeking enhancement of rent for use and

occupation of the premises. There was no response from the

appellant though the appellant in para 7 of the appeal says that

while the matter was under consideration, a legal notice dated

17.09.2007 issued on behalf of the respondent was served upon

the appellant terminating the agreement between the parties.

5. The disputes having arisen between the parties, the same

were referred for arbitration with the intervention of this Court

vide order dated 15.02.2008. The Arbitral Tribunal passed an

award dated 13.05.2010 whereby the respondent was held to be

entitled to recover a sum of Rs. 1,25,000/- per month towards

damages for unauthorized use and occupation of the premises

by the appellant w.e.f. 19.12.2007 till the date of passing of the

award and further damages at the aforesaid rate from the date

of the award till the date of actual handing over possession of

the shop to the respondent. The learned Arbitral Tribunal

further awarded interest @ 9 per cent per annum from the date

of the award till the delivery of possession.

6. An Objection Petition under Section 34 of the Act was filed

challenging the award by the Arbitral Tribunal. The contention

raised on behalf of the appellant that the agreement in question

was a commission agreement and not a rent agreement did not

find favour with the learned Single Judge. The learned Single

Judge drew support from various clauses of the agreement to

reach the conclusion that it was a rent agreement. The

contention raised on behalf of the appellant that the learned

Arbitral Tribunal had travelled beyond the scope of the

agreement was also rejected on the ground that the primary

issue pertains to the claim for eviction consequent upon the

issuance of the termination notice by the respondent.

7. It has been urged by the learned counsel for the appellant

that the learned Arbitral Tribunal ignored the terms and

conditions of the agreement and travelled beyond the

agreement dated 07.08.1998 and adjudicated the dispute not

contemplated in the agreement. This is not so. In this

connection, a reference can be made to Clause 13 of the

Arbitration Agreement according to which "if any dispute or

difference arises between the parties hereto or their

representatives or in regard to any matter relating to touching

these presents, save as to any manner the decision whereof is

herein before expressly provided of the same shall be referred

to the sole arbitration of the Managing Director of the

licensee......". The terms of agreement were very wide and any

dispute or difference with regard to the agreement dated

07.08.1998 was liable to be referred for arbitration. An award

given by Arbitral Tribunal could be challenged under Section 34

of the Act only on limited grounds. It is now well-settled that an

award can be set aside if it is " (i) contrary to (a) fundamental

policy of Indian law; or (b) the interest of India; or (c) justice or

morality; or (ii) is patently illegal or (iii) is so unfair and

unreasonable that it shocks the conscience of the court. No

ground has been made out. Even if it is assumed that the

agreement dated 07.08.1998 was not a rent agreement; but was

an agreement for payment of commission, still the premises i.e.

Shop No. 12, Block-J, Saket, New Delhi - 110017 was part of the

agreement and thus it was within the domain of the Arbitrator

to allow eviction of the premises and compensation/damages in

respect thereof after the said agreement had been terminated

by the respondent. There is no error or infirmity in the

impugned order passed by the learned Single Judge.

8. The appeal is accordingly dismissed in limini. All pending

applications also stands disposed of.

(G.P. MITTAL) JUDGE

(VIKRAMAJIT SEN) JUDGE November 10th, 2010