Delhi High Court
Mahanagar Telephone Nigam Ltd & ... vs M/S Anant Raj Agencies Pvt Ltd on 31 July, 2017
$~19
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) 220/2017 & CM Nos. 26916-26918/2017
% Date of decision : 31st July, 2017
MAHANAGAR TELEPHONE NIGAM LTD & ANR
..... Appellants
Through : Mr. Kirti Uppal, Sr. Adv.
with Ms. Sangeeta Bharti,
Mr. S.K. Singh, Mr. Ashish
Kumar, Ms. Surabhi Diwan,
Mr. Harsh Tayal and
Mr. Rameezuddin Raja,
Advs.
versus
M/S ANANT RAJ AGENCIES PVT LTD ..... Respondent
Through : Ms. Biji Rajesh, Adv.
CORAM:
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE C.HARI SHANKAR
JUDGMENT (ORAL)
GITA MITTAL, ACTING CHIEF JUSTICE
CM No. 26917/2017(condonation of delay)
1. Notice.
2. Ms. Biji Rajesh accepts notice.
3. Having regard to the nature of the application, counsels are
orally heard. Delay of 52 days in filing the appeal is hereby
condoned.
4. This application is allowed.
CM No.26918/2017 (exemption)
5. Allowed, subject to just exceptions.
6. The application is disposed of.
FAO(OS) 220/2017
7. By way of the instant appeal, the appellant assails the order
dated 2nd March, 2017 whereby its petition under Section 34 of the
Arbitration Act being OMP No. 637/2008 raising objections
against the Arbitral Award dated 9th August, 2008 passed by the
sole arbitrator in the arbitration between these parties was rejected.
8. We have been carefully taken through the impugned award
dated 9th August, 2008 as well as the impugned order dated 2 nd
March, 2017 by Mr. Kirti Uppal, learned Senior Counsel for the
appellant.
9. The facts giving rise to the instant appeal are within a narrow
compass and to the extent necessary are briefly noted hereafter.
10. Vide an agreement dated 1st June, 1992, the respondent
rented out two floors in the premises known as ARA Centre, E-2,
Jhandewalan Extension, Delhi to the appellant at the monthly rental
of `15 per sq. ft. for a period of five years. The agreement clauses
2 and 17 of this lease deed permitted the appellant, at the end of
five years, to request for extension of the lease deed whereupon the
appellant was required to grant such lease for a further period of
five years at the same rent.
11. The appellant has claimed that on 28th April, 1997, it wrote
to the respondent requesting for renewal of the lease for the period
of five more years on the same terms and conditions. On 8 th May,
1997, the respondent replied to the appellant stating that it would
consider renewing the lease for the period of five years only if the
rent was increased to `66 per sq. ft. This demand was premised on
the fact that the Income Tax Department, which had rented floors
in the other floors in the same building, had increased rent for its
tenanted premises and was paying rent at the rate of `39 per sq. ft.
12. The appellant refused this offer. As a result, the respondent
responded by a letter dated 11th December, 1997 terminating the
tenancy of the appellant pointing out as follows :
(i) As the lease deed was unregistered, the tenancy was required
to be considered as a month to month tenancy liable to be
determined in accordance with the provisions of Section 106 of the
Transfer of Property Act requiring only 15 days notice;
(ii) By the said notice, the tenancy of the appellant was
terminated with effect from 31st January, 1998;
(iii) The further notice demand was made that in case vacant
possession was not handed over by the appellant on 1st February,
1998 with arrears of rent, the respondent would be entitled to
arrears of damages at the rate of `3,33,000/- per month till such
time the appellant delivered possession.
13. The appellant obviously did not agree to the notice demand
resulting in the respondent initiating Civil Suit No.287/1998 before
this court for arrears and future mesne profits.
14. In this suit, the appellant filed an application being IA No.
7269/1998 pointing out that there was an arbitration agreement
between the parties.
15. During the pendency of the suit, one important event
intervened. We are informed that as on 31 st March, 2003, the
appellant returned the possession of the property to the respondent.
16. By an order dated 24th February, 2004, the learned Single
Judge referred the dispute regarding mesne profits and damages to
the arbitrator noting that the possession had been handed back to
the landlord on 31st March, 2003.
17. It appears that after consideration of the entire matter of the
Award dated 9th August, 2008, the arbitrator returned the following
findings :
(i) that the lease deed was an unregistered document and,
therefore, by application of the principles laid down by the
Supreme Court in AIR 1988 SC 1470 Burmah Shell
Distributing now known as Bharat Petroleum Corporation
Ltd. v. Khaja Midhat Noor & Ors. the lease between the
parties was deemed to be a month to month tenancy in view
of Section 107 of the Transfer of Property Act.
(ii) The notice dated 11th December, 1997 was a valid
notice of termination of tenancy and as such the tenancy
came to an end on 31st March, 1998.
(iii) The respondent was entitled to damages/mesne profits
from the appellant with effect from 1st February, 1998 to 31st
March, 2003 when the appellant actually vacated the
property.
(iv) That in view of the respondent's letter dated 10th June,
1997, rent of the tenanted premises was assessed at `29 per
sq. ft. per month.
18. The Arbitral Tribunal noted the order dated 16th August,
2000 passed by the learned Single Judge on IA No.1362/1998 in
Suit No.287/1998 filed by the respondent wherein the court had
directed as follows :
"without prejudice to rights and contentions of the
parties, the defendant shall pay the entire arrears of
rent due from 1st June, 1997 @ Rs.77,085/- per month
within four weeks and will continue to pay the future
rent/damages for use and occupation of the premises by
the 7th day of each subsequent month". The Court also
directed the adjustment of amounts so paid against the
claim for arrears of rent/damages. Therefore, the
acceptance of amount of rent/damages by the
Respondent from MTNL after 31st May, 1997 was
pursuant to the aforementioned order of the High Court
dated 16th August, 2000."
19. The Arbitral Tribunal also held that the respondent would be
entitled to simple interest at the rate of 8% per annum from the
period of Mrch, 1998 to 31st March, 2003 and imposed costs of
`1.50 lakhs upon the appellant. It was further directed that in case
the awarded sum was not paid within two months of the award, the
respondent would be entitled to simple interest at the rate of 12%
per annum from the date of the award till date of payment.
20. These findings of the Arbitral Tribunal have been considered
at length by the learned Single Judge while considering the
appellant's objection under Section 34 of the Arbitration &
Conciliation Act, 1996 being OMP No. 37/2008 culminating in the
impugned order dated 2nd March, 2017.
21. Placing reliance on the pronouncement of the Supreme Court
in (2015) 14 SCC 21 NHAI v. ITD Cementation India Ltd., the
learned Single Judge laid down the principles of law regarding
scope of interference by the court in objections to the Arbitral
Award under Section 34 of the Arbitration & Conciliation Act.
The Supreme Court of India has laid down the applicable principles
thus :
"25. It is thus well settled that construction of the
terms of a contract is primarily for an arbitrator to
decide. He is entitled to take the view which he holds to
be the correct one after considering the material before
him and after interpreting the provisions of the contract.
The Court while considering challenge to an arbitral
award does not sit in appeal over the findings and
decisions unless the arbitrator construes the contract in
such a way that no fair-minded or reasonable person
could do."
Our consideration has to abide by these very principles.
22. It is, therefore, well settled that in proceedings under
Section 34 of the Arbitration Act, the court cannot re-appreciate the
evidence and arrive at a different conclusion merely because it was
possible to do so. The learned Single Judge has also noted the
important procedural principle that neither the Code of Civil
Procedure nor the Indian Evidence Act, 1972 strictly applies.
After a detailed consideration, the learned Single Judge
arrived at a conclusion that no ground was made out for
interference by the court under Section 34 of the Arbitration Act.
23. Before us, Mr. Kirti Uppal, learned Senior Counsel would
contend that the Arbitral Tribunal had gravely erred in awarding
mesne profits at the rate of `39 per sq. ft. and that there was no
basis or justification for the same.
24. We find that the Arbitral Tribunal has carefully noted the
evidence on record and arrived at a conclusion that the established
facts disclosed that the Income Tax Department had actually rented
out a different portion of the same building at the monthly rental of
`39 per sq. ft. per month for the same period.
25. It is also noteworthy that the landlord had claimed
damages/mesne profits at the rate of `66 per sq. ft. per month. This
prayer was rejected and after a careful evaluation, the learned
Arbitrator has awarded damages/msene profits only at the rate of
`39 per sq. ft. per month.
26. The findings of the Arbitral Tribunal were based on
documentary evidence in the nature of the lease deed executed by
the Income Tax Department.
27. These findings and award of the Arbitral Tribunal could not
be challenged on any legally tenable grounds before the learned
Single Judge.
28. Nothing has been placed before us which would enable us to
take a view different from the learned Single Judge as well. The
challenge by the appellant to the Award and to the order of the
learned Single Judge upholding the same in our view is completely
misconceived.
This appeal is, therefore, without any legal merit and is
hereby dismissed.
CM No. 26916/2017 (stay)
29. In view of the orders passed in the appeal, no further orders
are called for in this application and the same is disposed of.
ACTING CHIEF JUSTICE
C.HARI SHANKAR, J
JULY 31, 2017/kr
