Shri Goverdhan Singh vs M/S Alisha Enterprises Pvt. Ltd.
2014 Latest Caselaw 2890 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                            Date of decision: 2nd July, 2014.
+                                 FAO(OS) 260/2014

       SHRI GOVERDHAN SINGH                   ..... Appellant
                   Through: Mr. Anand Yadav with Ms. Anita
                            Tomar, Advocates.
                                    Versus

       M/S ALISHA ENTERPRISES PVT. LTD.          ..... Respondent
                    Through: Mr. Rajiv Nayar, Sr. Adv. with Ms.
                             Shyel Trehan and Ms. Manjira
                             Dasgupta, Advocates.

                                       AND

+                                 FAO(OS) 263/2014

       SHRI GOVERDHAN SINGH                   ..... Appellant
                   Through: Mr. Anand Yadav with Ms. Anita
                            Tomar, Advocates.
                                    Versus
    M/S ALISHA ENTERPRISES PVT. LTD.           ..... Respondent
                 Through: Mr. Rajiv Nayar, Sr. Adv. with Ms.
                           Shyel Trehan and Ms. Manjira
                           Dasgupta, Advocates.
CORAM :-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J.

1. These appeals under Section 37 of the Arbitration and Conciliation Act,

1996 (Arbitration Act) impugn the common order dated 25th April, 2014 of the

learned Single Judge of this Court in OMPs No.15/2013 & 136/2013 filed by

the respondent and the appellant respectively, both under Section 9 of the

Arbitration Act.

2. The respondent filed OMP No.15/2013, pleading:

(i) that the respondent was a tenant under the appellant vide two

separate Lease Deeds, both dated 1st December, 2009, with respect to the

ground, first and covered area on the third floor and the open and

covered area above the third floor of property No.T-12/A situated at

Khasra No.624/278, Hauz Khas Village, New Delhi;

(ii) that both the Lease Deeds contained an arbitration clause;

(iii) that the respondent had taken the said premises for running a

restaurant;

(iv) that the respondent had been regularly paying lease rental of

Rs.1,80,000/- and Rs.95,000/- per month under the two Lease Deeds;

(v) that the respondent in fact is in possession of the said premises

since the year 1990, on the basis of earlier lease agreement;

(vi) that the respondent entered into a Business Collaboration

Agreement with M/s Impresario Entertainment & Hospitality Private

Limited and M/s Epiphany Hospitality Private Limited, to start a

restaurant in collaboration, in the said tenanted premises;

(vii) that the appellant herein executed affidavits dated 20th August,

2011 and 18th November, 2011 supporting the respondent's applications

to the concerned authorities for necessary permissions for so starting the

restaurant;

(viii) that the appellant however sent to the respondent legal notice dated

23rd August, 2012 alleging subletting to the aforesaid M/s Impresario

Entertainment & Hospitality Private Limited and M/s Epiphany

Hospitality Private Limited;

(ix) that the respondent replied to the said legal notice informing that

the respondent had not sublet but had merely entered into a business

Collaboration Agreement and which was not in violation of the terms and

conditions of the Lease Deeds with the appellant;

(x) that the appellant however wrote letters to the Local Authorities

including the Municipal Corporation of Delhi (MCD), objecting to the

grant of license to the proposed restaurant being so started by the

respondent;

(xi) that the respondent began renovating and fitting out the tenancy

premises for the purposes of the proposed restaurant in October, 2012;

(xii) that however the appellant obstructed and prevented the

respondent from carrying out renovation; instances of such obstructions

were pleaded;

(xiii) that owing to the aforesaid, arbitral disputes had accrued.

Accordingly, the petition under Section 9 was filed seeking the interim

measures of restraining the appellant from obstructing the respondent from

enjoying peaceful possession of the premises and from obstructing the

renovation and fitting out of the said premises and conduct of the business

therein and to desist from calling upon the Local Authorities to not grant the

requisite permissions or revoke the permissions already granted for the

proposed restaurant.

3. The appellant filed OMP No.136/2013, not denying the tenancy of the

respondent since the year 1990 and the renewal of the lease vide Deeds dated

1st December, 2009 and further contending:

(a) that the complete second floor and areas of the property not

covered by the two Lease Deeds dated 1st December, 2009 were in the

sole possession of the appellant;

(b) that as per the Lease Deeds, any renovation to be carried out by the

respondent in the tenancy premises, could be carried out only after

obtaining written consent of the appellant and only after bringing the

nature and extent of changes to the knowledge of the appellant;

(c) that the respondent has taken some of the adjoining properties also

on lease, either itself or with his associates, from the owners thereof and

had been intending to merge the premises in tenancy of the respondent

under the appellant with the adjoining premises by making structural

changes and by removal of load bearing walls dividing/demarcating the

property of the appellant from the other adjoining properties;

(d) that the structural changes being carried out by the respondent had

even caused cracks on the second floor where the appellant resides;

(e) that the nature of the structural changes being made by the

respondent were hazardous to the building, habitat of the building as well

as adjoining buildings;

(f) that the intent of the respondent was to amalgamate the property of

the appellant with the adjacent property;

(g) that the appellant had filed a complaint with the MCD in this

regard;

(h) that the respondent had been intending to sublet the property.

Accordingly, the interim protection of restraining the respondent, from

making any alterations, renovations, structural changes, removing the load

bearing walls dividing the premises of the appellant in the tenancy of the

respondent from other properties and from amalgamating the property No.T-

12A Hauz Khas of the appellant with other properties bearing No.9A, 12, 12B,

13B and a direction for restoration of the premises to the original position was

claimed. Interim protection, in the form of relief of restraining the respondent

from subletting, assigning or parting with possession of the tenancy premises

and from obtaining license and permission in the name of third parties with

respect to the said premises, was also claimed.

4. Needless to state that both the petitions were contested.

5. The learned Single Judge, vide the impugned common order dated 25th

April, 2014 has disposed of both the petitions, finding/observing/holding:

(I) that vide order dated 9th January, 2013 in OMP No.15/2013 filed

by the respondent/tenant, the appellant/landlord had been restrained from

obstructing the respondent/tenant from enjoying peaceful possession of

the tenancy premises and from carrying out the renovation and fitting out

works; the said order was continued from time to time;

(II) that vide order dated 11th December, 2013 in OMP No.136/2013

filed by the appellant/landlord, the respondent/tenant had been directed

to maintain status quo regards the work at the site in issue; the said ad-

interim order had also continued;

(III) that the factual position was that as on 11th December, 2013, when

order directing status quo was passed, the renovation of the ground floor

had already been completed and the renovation work on the first, third

and the space above the third floor and terrace was in progress;

(IV) that the main grievance of the appellant/landlord was that the

respondent/tenant had amalgamated the premises of the

appellant/landlord with the adjoining properties by breaking open the

walls demarcating the two properties;

(V) that while it was the case of the appellant/landlord that the walls

demarcating the premises of the appellant/landlord from the adjoining

properties had been demolished in the year 2013, the case of the

respondent/tenant was that the amalgamation had taken place much

earlier, in or around the year 1990;

(VI) that the aforesaid controversy, i.e. the date when the

respondent/tenant had removed/demolished the walls separating the

premises of the appellant/landlord from adjoining properties, was a

disputed question of fact which could not be adjudicated in a proceeding

under Section 9 of the Act and which has to be adjudicated by the

Arbitral Tribunal;

(VII) that it was the submission of the counsel for the respondent/tenant

that the amalgamation was in existence since the year 2005 i.e. even

prior to the date of execution of the Lease Deeds dated 1st December,

2009;

(VIII) that the report of the Court Commissioner appointed also was that

the premises had been amalgamated with the adjoining properties but on

the basis of the said report it could not be said, whether the said

amalgamation was done in the year 1990/2005 or had been done

recently;

(IX) that the apprehension expressed by the appellant/landlord that the

said amalgamation may jeopardize his interests vis-à-vis his neighbours

can be addressed by requiring the parties to clearly demarcate the

premises of the appellant/landlord vis-à-vis the adjoining properties and

directions wherefor were issued;

(X) that if the appellant/landlord succeeds in the arbitration

proceeding, the respondent/tenant shall not claim any equity or special

rights on account of the fact that he, in the meantime, invested monies to

complete the renovation process in the property and any such renovation

work shall be carried out by the respondent/tenant entirely at his own risk

and peril;

(XI) that the Archaeological Survey of India and the South Delhi

Municipal Corporation of Delhi had already issued 'No Objection

Certificate' (NOC) in favour of the respondent/tenant;

(XII) that it was not in dispute that the respondent/tenant had been

paying rent month by month and was not in default;

(XIII) that in these circumstances, the balance of convenience lies in

permitting the respondent/tenant to put the entire premises to use till

further orders are passed by the Arbitral Tribunal;

(XIV) that the respondent/tenant shall be bound to comply with all the

legal requirements and shall not resort to any illegality while using the

tenancy premises.

Accordingly, the order dated 11th December, 2013, in OMP No.136/2013

of status quo, was vacated and an Arbitrator appointed to adjudicate the

disputes which had arisen.

6. The counsel for the appellant/landlord,

(A) has invited our attention to the report of the visit by the Court

Commissioner on 15th December, 2013 to contend that therefrom it is

apparent that the openings/merging in the premises of the

appellant/landlord with the adjoining properties had been made recently

only;

(B) has invited our attention to Clause 2 of the Lease Deeds dated 1st

December, 2009 and the relevant portion whereof is as under:

"TO HAVE AND TO HOLD the same to the Lessee for a term appearing hereunder and in order to facilitate the Lessee to carry out the necessary renovations to suit the business requirement of the lessee and furnishings with the consent of Lessor for the purpose of running the business of restaurant or any other activities in the leased premises. The Lessor has put the Lessee in possession of the leased premises."

to show that the respondent/tenant could not have carried out any

renovations without the consent of the appellant/landlord and has argued

that no such consent has been taken;

(C) has invited our attention to the photographs of the property to

contend that the work of amalgamation of the premises of the appellant

with the adjoining properties is still underway;

(D) has invited our attention to the site plan filed by the

respondent/tenant for the purposes of grant of Health Trade License and

has contended that the site plan filed is wrong and the position is entirely

different; our attention is also invited to the correct site plan;

(E) has argued that the respondent/tenant for the purpose of obtaining

the licenses/permission has also altered the copy of the Lease Deeds and

made other false representations to the authorities concerned;

(F) has argued that the premises of the appellant/landlord cannot be

permitted to be merged with the adjoining properties.

7. Per contra, the senior counsel for the respondent/tenant has contended:

(i) that the appellant had concealed the NOCs handed over by the

appellant/landlord to the respondent/tenant for the purposes of obtaining

the various permissions and that the same show the consent of the

appellant/landlord to the renovation work commenced by the

respondent/tenant;

(ii) that the respondent/tenant, after the ex-parte ad-interim order

dated 9th January, 2013 in OMP No.15/2013 restraining the

appellant/landlord from obstructing in the work of repairs, has gone

ahead with the work of repair/renovation in the property;

(iii) that the appellant/landlord subsequently as an afterthought lodged

complaints with the various authorities, to scuttle the launch of the

proposed restaurant of the respondent/tenant in the premises;

(iv) that the only dispute between the parties is of 'amalgamation' and

which is also an afterthought, the amalgamation having been done in the

year 1990/2005.

8. We, sitting in appellate jurisdiction over an order in a proceeding under

Section 9 of the Arbitration Act, are not required to decide whether the

respondent/tenant under the terms of the Lease Deeds with the

appellant/landlord was or was not entitled to, break the walls separating the

premises in its tenancy under the appellant/landlord from the adjoining

properties. That decision will fall in the domain of the Arbitral Tribunal. Of

course, even in a proceeding under Section 9, we would have been required to

take a prima facie view thereon, if the walls had not been demolished as yet.

However, today the position is that the separating walls already stand

demolished. The amalgamation complained of, has thus already taken place.

9. When we put the same, as is also evident from the photographs on

record, to the counsel for the appellant/landlord, all that he could say was that

the furnishing of the entire premises as one is still to take place and we should

direct the openings already made, amalgamating the tenancy premises with

adjoining properties, to be closed. Though the photographs show rough edges

at the place from where the separating walls have been removed, and which is

indicative of the same having taken place recently but the possibility, of the

same having been done earlier or in the year 1990/2005, as claimed by the

respondent/tenant, also cannot be ruled out, as often while repairing/renovating

the premises, the existing plaster/plaster of paris is removed to re-plaster the

walls and which can lead to such rough edges; similarly, if in such renovations,

the door frames/leaves are changed, the same can also give an impression of the

opening having been made recently only. We therefore concur with the learned

Single Judge that no definite fact finding in this regard can be given without

recording of evidence; though we may record that generally when the same is

permitted, a specific clause therefor exists and which is not found in the Lease

Deeds dated 1st December, 2009.

10. What persuades us from not interfering with the order of the learned

Single Judge is the fact that separating walls have already been demolished and

amalgamation of tenancy premises with adjoining properties, at the level of the

ground, first and third floor, has already been done. The owners of the

adjoining properties are not parties to the Lease Deeds containing the

arbitration clause and are not parties before us. They perhaps have no objection

to such works/amalgamation. As far as the apprehension of the

appellant/landlord of, owing thereto the boundaries of the property of the

appellant/landlord having disappeared, has to be addressed at the final stage

and not at this interim stage, when only the work of completing the works

already commenced and done, remains.

11. On a perusal of the photographs and the site plans on record, we are also

of the prima facie view that it will not be difficult to identify the separating

lines between the premises of the appellant/landlord and the adjoining

properties at a subsequent point of time.

12. As far as the grievance of the appellant/landlord of the renovation

illegally carried out by the respondent/tenant having jeopardized the structural

safety of the premises and having damaged the premises is concerned, the

remedy therefor also is at the final stage only, either by claiming damages or a

direction to the respondent/tenant to restore the premises and at this stage, when

there are no specifics also of the damages, no interim order with respect thereto

can be made.

13. Yet another factor which also cannot be lost sight of is that the locality

where the premises is situated has a large number of eateries and restaurants

and the appellant/landlord let out his property for the purposes of operating the

restaurant therefrom. The said locality was originally a part of village abadi

and which was subsequently urbanized and considering the sizes of the

property therein, the practice of such amalgamation of several properties to

create larger spaces is not unknown.

14. For the aforesaid reasons, no interference is called.

15. Dismissed.

RAJIV SAHAI ENDLAW, J.

CHIEF JUSTICE JULY 02, 2014 bs..