C.J. International Hotels Ltd. & ... vs N.D.M.C. & Ors.
2017 Latest Caselaw 4875 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI


                              RESERVED ON : 29th AUGUST, 2017
                              DECIDED ON : 8th SEPTEMBER, 2017

+                              CS(OS) 610/2000

        C.J. INTERNATIONAL HOTELS LTD. & ORS. ..... Plaintiffs
                   Through : Mr.Amarjit Singh Chandhiok,
                   Sr.Advocate with Mr.Neeraj Kishan Kaul,
                   Sr.Advocate with Mr.M.S.Chandhiok, Mr.Shiv
                   Sapra, Ms.Neha Mehta, Ms.S.Seth, Ms.Shruti
                   Sharma & Mr.A.Gupta, Advocates.
                         versus
        N.D.M.C. & ORS.                          ..... Defendants
                   Through : Mr.Sanjay Jain, ASG with
                   Mr.Yoginder Handoo, Mr.Akshay Makhija,
                   Ms.Rhea Varma, Mr.Nikhil Bhat & Mr.Vidur
                   Mohan, Advocates for NDMC.
        CORAM:
        HON'BLE MR. JUSTICE S.P.GARG

S.P.GARG, J.

IA 8454/2017 (u/S 141 and 151 CPC)

1. The instant application has been filed by the plaintiffs to stay operation of the letters dated 17.02.2016, 07.11.2016, 09.11.2016, 02.03.2017 and 12.07.2017 issued by the defendant No.1 to restrain the defendants from taking coercive steps or to interfere with the possession of the plaintiffs over the land and building in question in any manner whatsoever. The application is contested by the defendant No.1.

2. Briefly stated, the facts of the case are that the plaintiffs have filed the instant suit inter alia seeking specific performance and injunctions against the defendants. By an order dated 18.05.2001, this Court restrained defendant No.1 from interfering with the possession of the plaintiffs in any manner and from disconnecting, withholding any amenities including water and / or electricity on the plaintiffs paying the licence fee in terms of the said order. Order reveals that FAO (OS) 310/2001 to challenge order dated 18.05.2001 resulted in its dismissal by an order dated 12.03.2003. The operation of the said order was suspended for four weeks to enable the plaintiffs to approach the Hon'ble Supreme Court. It is unclear if the said order was challenged before the Supreme Court and if so, what was its outcome. Various IAs were filed on several occasions. Finally, on 24.08.2004, the issues were settled. It took around two years to carry on admission and denial of documents. Again, CM 3436/2006 under Order VI Rule 17 CPC was filed by the plaintiffs; it was allowed on 24.08.2006. After the amendment, again, it took substantial time to admit or deny the documents and it could be done on 17.05.2008. Again, application under Order XIV Rule 5 was filed to recast issues; it was allowed and vide order dated 19.08.2009 issues were recast. The matter was listed before Joint Registrar to record evidence. Pursuant to the filing of IA No.3085/2010, issues earlier framed were corrected and modified. Court Commissioner was appointed to record evidence. Record reveals that again various IAs were filed from time to time and not a single witness could be examined before the Court Commissioner. The plaintiff filed IA 7432/2011 under Order XII

Rule 6 CPC on 06.05.2011. Before it could be disposed of IA 7172/2015 was filed on 10.04.2015. This was an application under Order XXIII Rule 3 CPC filed by the plaintiffs informing that on payment of arrears of licence fee of `150,92,43,676/- in satisfaction of the full licence dues and interest payable up to the year 2013-2014, the matter stood settled with the defendant in view of the correspondence including letters dated 02.03.2015 and 26.03.2015 received from the defendants and communication dated 26.03.2015 written by the plaintiffs to the defendants. In view of the satisfaction, by an order dated 21.04.2015 this Court passed a decree in terms of the correspondence between the parties.

3. Subsequently, IA 15580/2015 was filed on behalf of the defendant No.1 for setting aside the compromise decree allegedly procured by playing fraud in connivance with certain officials of the NDMC. Initially, it was opposed by the plaintiffs. On 15.07.2016 arguments were heard on the application and the matter was reserved for orders. The matter was taken up on 09.08.2016 upon 'mention' having being made by the learned counsel for the plaintiffs. Learned Senior Counsel for the plaintiffs, on instructions, stated that without prejudice to the rights and contentions of the plaintiffs and without admitting any of the averments made in IA 15580/2015 of the NDMC the plaintiffs had no objection to the order dated 21.04.2015 decreeing the suit being set aside / recalled and the suit being proceeded with in accordance with law with liberty to the plaintiffs in support of their suit claims also plead the settlement on the basis of which the suit was earlier decreed. Accordingly, order dated 21.04.2015 was recalled /

set aside. The matter was listed before the Joint Registrar for fixing date of trial. Till date, the plaintiffs have examined only one witness.

4. Again, various IAs were filed including IA 14072/2016 (under Order VI Rule 17 CPC) by the plaintiff. The defendant No.1 filed IA 2917/2016 (under Order XXXIX Rule 4 CPC). IA 14072/2016 was withdrawn with liberty to apply again to incorporate subsequent events by an order dated 24.04.2017. The plaintiff filed IA 5346/2017 for amendment of the plaint under Order VI Rule 17 CPC; it is pending disposal.

5. In the meantime, the Defendant No.1 sent a letter dated 02.03.2017 claiming termination of the licence agreement dated 14.07.1982 (Annexure 'A6'). It is urged that the said letter is ex-facie void ab initio in the teeth of order dated 18.05.2001. The defendant No.1 again issued demand notice dated 12.07.2017 and a letter dated 18.07.2017 claiming that proceedings were pending before the Estate Officer. It is urged that the issuance of the letters was without application of mind. It is contended that licence fees has been regularly and duly paid by the plaintiffs without fail. As per the calculation based on order dated 18.05.2001, the plaintiffs as on 31.03.2016 have paid a sum of `164,04,75,583/- in excess; there is no question of non-compliance of the orders passed by this Court and these payments have been accepted and appropriated by the defendant No.1 without demur. The proceedings under the Public Premises Act cannot be sustained; the said Act is not applicable to the premises in question.

6. In response, NDMC urged that the present application is not maintainable as it is seeking stay of operation of letters in question referred above which primarily pertain to the recovery of outstanding dues in terms of the order dated 18.05.2001. Order dated 18.05.2001 is a conditional order and the plaintiffs are in gross violation of it. Proceedings under Public Premises Act have been initiated, however, it has been clearly stated therein that the final orders in the said eviction petition would be implemented with the leave of the Court and subject to compliance of the order dated 18.05.2001. The proceedings under the Public Premises Act are wholly independent proceedings and the plaintiffs have remedy under the Act to challenge. It is informed that a sum of `605,60,66,631/- is due and payable by the plaintiffs; they have also to pay service tax liability of `94 crores (approximately) (Annexure 'R2'). The NDMC has already filed IA 8455/2017 (under Order XXXIX Rule 2A CPC) to initiate contempt proceedings against the plaintiffs for violation of order dated 18.05.2001.

7. Learned Senior Counsel for the plaintiffs urged that by issuance of the letters in question, the NDMC has brazenly flouted the order dated 18.05.2001 of this Court whereby they were specifically restrained from interfering with the plaintiffs' possession in the suit premises in any manner whatsoever. The NDMC has already filed two applications one for contempt and other for vacation of the order dated 18.05.2001 under Order XXXIX Rule 4 CPC (IA 2917/2017). Both these applications are pending disposal by this Court. Before these applications could be disposed of on merits, the NDMC initiated

coercive proceedings against the plaintiffs. Learned Senior Counsel for the plaintiffs would urge that the plaintiffs have regularly paid the licence fee in terms of the order dated 18.05.2001 without fail. Pursuant to the figure arrived at by the officials of the NDMC, a settlement was arrived at and the plaintiffs paid `150 crores which was duly accepted by the NDMC without any objection. Till date, the plaintiffs have paid in excess and are entitled for refund of `164,04,75,583/-. NDMC has issued letters to various agencies / customers including Fifa authorities informing of their intention to terminate the licence as a result of which the plaintiffs have been deprived of a huge contract resulting in loss of substantial amount. It is further urged that vide order dated 21.04.2015 the plaintiffs were given liberty to agitate the settlement arrived at with the NDMC. False calculations have been made by the NDMC to inflate the dues. As per the calculation arrived at by the plaintiffs (Annexure 'A8'), no 'dues' remain to be paid to the NDMC. During these long 20 years, no demand has ever been raised by the NDMC.

8. Learned Addl. Solicitor General for NDMC urged that the demand of arrears have been made after due calculation in terms of the order dated 18.05.2001 (Annexure 'Part-A'). This huge amount has remained unpaid by the plaintiffs who are regular defaulter. Proceedings have been initiated under the Public Premises Act on plaintiffs' failure to abide by the terms and conditions of the licence deed and the order dated 18.05.2001 of this Court. Plaintiffs' possession, however, would not be interfered without seeking leave of

the Court for which an application under Order XXXIX Rule 4 CPC for clarification has already been filed and is pending disposal.

9. Before proceeding to hear the arguments on merits, it was enquired from the plaintiffs if they were willing to pay any amount without prejudice and subject to adjustment. The offer to pay `20 crores in two instalments was with some reluctance; it was not acceptable to NDMC.

10. By a letter dated 02.03.2017 (Annexure 'A6') for detail reasons stated therein, licence deed dated 14.07.1982 was determined with immediate effect. It records that a demand notice dated 07.11.2016 calling on the plaintiffs to deposit a sum of `518.80 crores based on the balance-sheet submitted till 2013-2014 to pay the arrears within thirty days was issued and it remained unpaid. Seemingly, the said termination was not challenged in any proceedings by the plaintiffs. The proceedings under Sections 5 & 7 of the Public Premises Act were initiated and are pending before Estate Officer vide case No. 02/17/EO for which the plaintiffs have been informed and asked to appear.

11. NDMC's claim is that as per statement of account (Annexure 'part A') till 2015-2016, the plaintiffs were in arrears of licence fee amounting to `523,65,28,211/-. This chart has been prepared in terms of the order dated 18.05.2001; all the prescribed deductions have been accounted for. No inaccuracies in the chart so prepared were highlighted by the plaintiffs. The plaintiffs have shown their own calculations (Annexure 'A8') where excess payment of `164,04,75,583/- was reflected. Seemingly, the plaintiffs have

unilaterally accounted for certain 'deductions' which were not permissible in order dated 18.05.2001. At no stage, the plaintiffs moved NDMC for refund or adjustment of the alleged excess payment made by it. Contrary to that `150,92,43,676/- were paid as arrears of licence fee along with interest payable up to the year 2013 - 2014 in satisfaction of the claim at the time of filing IA 7172/2015 under Order XXIII Rule 3 CPC on 21.04.2015. It has not been explained as to how `164,04,75,583/- were paid in excess when `150,92,43,676/- were paid as arrears of licence fee till 2013 - 2014 on 21.04.2015.

12. Plaintiffs' conduct in not paying the licence fee in terms of the order dated 18.05.2001 is unreasonable and unacceptable. As back as on 16.10.1990, this Court in Suit No.113/1990 under Section 20 of the Arbitration Act, 1940 observed :

".....Further I am of the view that the disputes raised by the petitioner are not bonafide. Its only purpose appears to be in raising the disputes to delay the payment of lawful dues to NDMC under the agreement. Petitioner is using prime land where hotel building has constructed without paying anything of it. It has suppressed its accounts and has raised claims which are not tenable. Conduct of the petitioner does not commend to me and this conduct entitles the petitioner to any discretionary relief...

...It appears the petitioner never honestly intended to pay. This application is, therefore, dismissed with costs, counsel fee Rs. 2,000/-...."

13. Nothing is on record to infer if after the order dated 18.05.2001 regular licence fee was paid by the plaintiffs. Payment of

`150,92,43,676/- in 2015 reflects that due to non-compliance of the order dated 18.05.2001, huge amount had accumulated to be payable by the plaintiffs towards licence fee. Apparently, the terms and conditions of the order dated 18.05.2001 were not adhered to by the plaintiffs.

14. Issuance of the demand notices by the NDMC to claim its legal dues cannot be faulted. On plaintiffs' failure to pay the licence fee and its arrears in terms of the order dated 18.05.2001, recourse to legal proceedings under the Public Premises Act by NDMC cannot be considered illegal or unlawful. Precaution has already been taken by the NDMC seeking clarification by moving IA 2917/2017 and NDMC has categorically declared that plaintiffs' possession will not be interfered without prior leave of this Court. It is to be noted that order dated 18.05.2001 was a conditional order and restraint order against NDMC was subject to the plaintiffs' paying the licence fee regularly. The NDMC cannot be deprived to avail legal remedies in case there is default in the compliance of the order. On the strength of interim orders, the plaintiff cannot be permitted to enjoy the possession of the suit land without paying licence fee in terms of the order dated 18.05.2001.

15. The plaintiffs have remedies under the Public Premises Act to challenge the order of the Estate Officer before the competent authorities prescribed therein. The said proceedings have not been challenged in writ petition or by filing a separate suit. All these complicated questions as to how much exact licence fee remains due cannot be gone through just by filing an IA in question, the

proceedings in the main suit would never be completed. The proceedings under the Public Premises Act are distinct and there was no restraint order not to avail the legal remedies.

16. In the light of above discussion, the application is unmerited and is dismissed.

17. Observations in the order shall have no impact on merits of the case.

18. Order 'dasti' to the parties.

IA 2917/2017 (u/O XXXIX R 4 CPC)

1. Response has already been filed by the plaintiffs.

2. Rejoinder, if any, shall be filed within two weeks with advance copy to the other side.

3. For disposal, list on 3rd November, 2017 at 12.30 p.m. IA 5346/2017 (u/O VI R 17 CPC)

1. Response is stated to have already been filed by the defendants.

2. Rejoinder, if any, shall be filed within two weeks with advance copy to the other side.

3. For disposal, list on 3rd November, 2017 at 12.30 p.m. IA 8455/2017 (u/O XXXIX R 2A CPC)

1. Response has been filed.

2. Rejoinder, if any, shall be filed before the next date of hearing with advance copy to the other side.

3. For disposal, list on 3rd November, 2017 at 12.30 p.m.

IA 9825/2017 (u/O XXXIX R 1&2 CPC)

1. Response, if any, shall be filed within two weeks with advance copy to the other side.

2. Rejoinder, if any, shall be within a week thereafter with advance copy to the other side.

3. For disposal, list on 3rd November, 2017 at 12.30 p.m.

(S.P.GARG) JUDGE SEPTEMBER 08, 2017 / tr