Delhi High Court
M/S V2 Retail Ltd vs M/S S.S Enterprises on 26 October, 2018
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on : 5th October, 2018
Date of decision :26th October, 2018
+ O.M.P. (COMM) 64/2017
M/S V2 RETAIL LTD ..... Petitioner
Through: Mr. Vishwendra Verma & Mr. Pranav
Verma (M-91871704611).
versus
M/S S.S ENTERPRISES ..... Respondent
Through: Mr. Sudhir Naagar & Mr. Bhanu
Sanoriay, Advocates (M-
9953227984).
CORAM:
JUSTICE PRATHIBA M. SINGH
JUDGMENT
Prathiba M. Singh, J.
1. The Petitioner, who was the Respondent in the arbitral proceedings
(referred to as 'Respondent' for the sake of consistency) has preferred the
present petition challenging the award dated 27th December, 2012 passed by
Justice J.P. Singh (Retired) - Learned Sole Arbitrator.
2. The Respondent had entered into a Memorandum of Understanding
(hereinafter 'MOU') dated 25th December, 2007 with M/s. S.S.Enterprises-
Claimant in the arbitral proceedings (referred to as `Claimant' for the sake
of consistency), by which the Respondent took on lease suit property i.e. part
of 3/1/22, Site IV, Sahibabad Industrial Area, Ghaziabad (U.P.) constituting
of Basement plus Ground Floor, First Floor, with wall to wall covered area
of 21840 sq. ft. (approximately) (hereinafter 'suit property'). The monthly
lease amount was Rs.3,30,000/- for a period of 9 years with a lock in period
of 15 months. After the expiry of the lock in period, if the lessee wished to
terminate the agreement prior to the period of expiry, three months' notice in
writing could be given by the lessee. However, the lessor did not have the
option of terminating the lease. One of the clauses in the agreement imposed
an obligation on the Claimant lessor, to get the user of the premises property
changed from 'manufacturing corrugated boxes' to 'software development
unit'.
3. The Respondent paid rent till September, 2008. However, in the
month of October, 2008, it did not pay rent which resulted in issuance of
notice dated 22nd October, 2008. Vide this notice, the Claimant called upon
the Respondent to execute the lease deed in terms of the MOU and also pay
the rent amount. Vide letter dated 10th November, 2008, the Claimant
invoked the arbitration clause. In the mean time, the Respondent had filed an
injunction suit before the Civil Judge seeking injunction and declaration.
4. Thus, disputes had arisen between the parties. Vide letter dated 3 rd
July, 2009, Learned Sole Arbitrator was appointed who entered reference.
5. The Learned Sole Arbitrator, vide award dated 27th December, 2012
awarded the following amounts in favour of the Claimant. The operative
portion of the award is set out herein below:
"75. It is evident that the respondent for the reasons
best known to it was not willing to continue its business
in the tenancy premises and started vacating the same
but there was confrontation with the claimant and there
were some objections on behalf of the claimant, which
resulted in disputes. It has been established on record
that the claimant had taken steps for change of the user
and no govt or municipal authorities had prevented the
respondent from continuing its business. The dispute of
removing goods and handing over vacant possession
was resolved amicably during the arbitration
proceedings. Therefore there is no question of the goods
still lying in the premises. The security amount is to be
adjusted from the outstanding amount as ascertained
above. Both the sides do suffer some damage when the
premises are vacated. But the respondent has neither
pleaded nor given break up of the expenses allegedly
incurred on maintenance. The claimant's pleadings and
contentions on damages are on reliable footing.
Considering all the facts and circumstances, I do not
find any merit in the counter-claim and resultantly the
same is dismissed.
SUMMARY OF THE AWARD
CLAIMS OF THE CLAIMANT
Srl. Amount claimed Amount allowed
No.
1. Claims No.1 to 3 and 6 (a)@ Rs.
regarding Rent for the period Rs.3,30,000/- 23,10,000/-
1.10.2008 to 31.5.2010 @ per month from
Rs.3,30,000/- per month 1.10.2008 till
30.4.2009(upto
lock-in period)
(b)@ Rs.
Rs.1,65,000/- 21,45,000/-
from 1.5.2009 to
31.5.2010 (upto
handing over the
possession)
2. Claim No. 7 towards damages Rs. 5,00,000/-
Rs. 40,00,000/-
3. (a) Cost of Arbitration Rs. 2,00,000/-
proceedings/litigation Rs.
2,00,000/-
(b) The share of arbitration
fee and expenses payable by
respondent but as per the paid Rs. 82,500/- Rs. 2,82,500/-
by the claimant Arbitration
Act 1996
Total
Rs.52,37,500/-
4. Interest claimed @12% per Interest allowed
annum @12% per annum
TOTAL AMOUNT ALLOWED IN FAVOUR OF THE Rs.52,37,500/-
CLAIMANT (Plus interest)
COUNTER CLAIMS OF THE RESPONDENT/COUNTER
CLAIMANT
Srl. Amount claimed Amount allowed
No.
1. Cost of goods lying in the Nil
tenancy premises
Rs.50,00,000/-
2. Refund of security deposit Rs.9,90,000/- (adjusted)
Rs.9,90,000/-
3. Damages Rs.20,00,000/- Nil
TOTAL AMOUNT ALLOWED IN Rs.9,90,000/- (adjusted)
FAVOUR OF THE RESPONDENT
AMOUNT DUE AND Rs.42,47,500/- (Plus interest
RECOVERABLE FROM THE @ Rs.12% p.a)
RESPONDENT
76. Consequently the counter-claim of the respondent
is dismissed. The Award is passed in favour of the
claimant and against the respondent in the sum of Rs.
42,47,500/-(Rupees Forty Two Lacs Forty Seven
Thousand and Five Hundred) with interest @12% p.a.
from the date of filing of the claim petition till
realisation of the Award amount. Announced and
declared on this 27th day of December 2012."
6. The submission of Learned counsel for the Respondent is that the
fundamental breach committed by the Claimant is that it had failed to obtain
the change of user from Uttar Pradesh State Industrial Development
Corporation (hereinafter 'UPSIDC') which was a pre-condition for the
MOU. He submits that the Claimant having been in breach, could not have
been compensated with the rental amount for the entire period. Moreover,
the Respondent had clearly expressed its intention as of October, 2008 itself
that it no longer wished to continue in the suit premises. He relies on the
pleadings in the suit filed before the Civil Judge in the suit for injunction. He
further submitted that there was no logic in the Arbitrator awarding full rent
for the period 1st October, 2008 to 30th April, 2009 and 50% of the rent for
the period 1st May, 2009 to 31st May, 2010. Mr. Verma also placed heavy
reliance on the letter of the UPSIDC dated 25th September, 2008 (Mark A).
7. It is his further submission that even as per the Claimant's own notice,
the maximum that was claimed by the Claimant was rent for the 15 month
lock in period and nothing more. This is clear from the perusal of the notice
dated 22nd October, 2008. The Respondent having tendered the property
back to the Claimant, it was not liable to pay any rent. He submitted that as
per the MOU, the approval from the UPSIDC had to be obtained within
three months from the date of the MOU, but the application to the UPSIDC
was made only on 21st April, 2008.
8. On the other hand, counsel for the Claimant submits that the
Respondent though repeatedly claimed to take a position that they no longer
needed the premises, but in fact possession was only handed over under the
supervision of the Arbitrator after he had entered reference. Specific reliance
is placed on the proceeding sheets and orders passed by the Arbitrator dated
12th February, 2010 and 25th March, 2010. It is further submitted by learned
counsel for the Claimant that the Respondent handed over possession after
repeated attempts, only on 31st May, 2010, until which the premises was
being continuously used. He submits that the Respondent had never
terminated the lease as per Section 106 of the Transfer of Property Act, 1882
or in terms of the MOU. No notice of termination was ever given by the
Respondent. Further it was argued that under Section 116 of the Indian
Evidence Act, 1872 the tenant is estopped from questioning the title of the
owner.
9. This Court has heard the submissions of the parties. Firstly, the scope
of challenge under Section 34 of the Arbitration and Conciliation Act, 1996,
is a limited one. The interpretation of the terms of the Contract have to be
done by the Arbitrator and unless the findings of the Arbitrator are perverse,
the Court cannot substitute its opinion, which is the settled position, as per
the judgment of the Supreme Court in Associate Builders v. DDA A.I.R.
2015 SC 620
10. The MOU dated 25th December, 2007 contains the following salient
terms and conditions which are extracted herein below:
Whereas the owners are the lessee of the demised
premises owned by UPSIDC, vide lease deed dated 7th
January 2004. The same falls under industrial zone and
is approved for manufacturing of corrugated boxes.
And where as the lesser hereby undertakes that he shall
get the use of the demised premises changed from
corrugated boxes to software development unit and shall
produce to the lessee a certificate of the same within 3
(Three) months from the date of signing of this MOU.
He further undertakes that he shall take the required
permission from the UPSIDC as per the terms of the
lease deed dated 7th January 2004 to sublet the premises
to the Lessee.
...
1. Rent
1.1 The rent for the demised premises shall be Rs
330000/- (Rupees Three Lacs Thirty Thousand only)
for the entire premises on a lump-sum basis, per month.
The rent shall be payable on or before 10th of each
month. An interest of 12% P A shall be payable in case
of delayed payment.
1.2 The rent in respect to the basement (7280 sq. ft)
shall not be payable for initial 6 (Six) months or our
operation from that said floor which ever is earlier and
shall be proportionately deduced from the rent payable
as per clause 1.1.
2. Increment of Rent
The aforesaid monthly rent shall be increased by 15 %
after every 3 (Three) years from the rent starting date in
respect of the demised premises. The increase on the
rent shall be calculated on the rent paid for the last
month.
...
4. Lease Period
Lease period shall be for 9 (Nine) years and may be
extended on mutual agreement between the parties on
terms contained here in this Memorandum of
understanding. Separate agreement shall be entered into
for the extended period. The lock-in period shall be first
15 (Fifteen) months.
...
7. Refundable Security Deposit
The Lessee shall pay an interest free refundable security
deposit equivalent to the 3 (Three) months rent to the
Lessor in the manner provided in clause 8.
8. Payment schedule of Security Deposit
Sr. No. Description Point of
Payment
1. One month security At the time of
deposit. signing of MOU.
2. Two Months security At the time of
deposit handing over the
renovated demised
premises along
with complete
amenities to the
Lessee.
The Lessee has paid Rs. 330000/- (Rupees Three Lacs
Thirty Thousand Only) towards One month
refundable security deposit, out of which Lessee has
paid Rs.10, 000/- (Rupees Ten thousand only) in cash
as part payment of refundable security deposit to the
Lessor, the receipt of which Lessor hereby
acknowledges. Further, the Lessee has paid balance
amount by cheque No. 279909 &...... dated 26.12.08
drawn on Axis Bank, Rajouri Garden New Delhi
towards balance payment of refundable security
deposit, the receipt of which Lessor hereby
acknowledges.
In addition to the above said refundable security
deposit the lessee shall pay advance rent of 2 (Two)
months at the time of providing Electricity Connection
as per the requirement of lessee, to the lessor. The
lessor hereby declares that the same shall be
adjustable in the rent of 3rd and 4th Month as per
clause 6.
9. Notice Period
9.1 After the Lock in period Only the Lessee, if for any
reason, wishes to terminate the agreement prior to the
expiry of Twelve years, shall serve upon a notice in
writing to the Lessor in their behalf at-least 3 (three)
months in advance. In other words the Lessor cannot
terminate the agreement before the expiry of the
Twelve years.
9.2 However, the Lessor may terminate the agreement
in case of default in payment of monthly rental for
continues period of three months by giving 15 days
notice in advance.
17. Arbitration & Conciliation
In case of any difference or dispute arising between the
parties herein on any of the terms and conditions
contained herein, such difference or dispute shall be
referred to sole arbitrator appointed by both the
parties i.e. Lessee and the Lessor. The provision of the
Arbitration and Conciliation Act, 1996 and any
modification thereof shall be applicable for settlement
of disputes, thus referred. The Venue for holding all
such proceeding shall be at New Delhi. The Courts at
New Delhi shall have the sole and exclusive
jurisdiction to try any such dispute that may arise out
of this instant agreement"
As per the above-mentioned MOU -
The rent payable was Rs.3,30,000/- per month.
The user of the demise premises was to be changed within three
months after applying to the UPSIDC
Rent in respect of the basement was not payable for a period of
six months or was to be paid from the date of operation of the
basement whichever is earlier.
The rent was to be increased 15% after every three years. The
lease period was 9 years, extendable on mutual agreement.
Lock in period was first 15 months.
Security deposit of one month's rent was paid in addition, two
months' rent was paid as advance rent.
If the lessee wishes to terminate the agreement prior to the
expiry of 12 years, three months' notice in writing was to be
served in advance.
If there is default in payment of rent, the lessor could terminate
the agreement.
11. There is no dispute between the parties that until September 2008,
rent was duly paid by the Respondent. When the Respondent defaulted the
payment of rent for the month of October, 2008, notice dated 22nd October,
2008 (Ex.PW1/B) was issued. This notice is important as vide this notice,
the Claimant called upon the Respondent to make the payment of monthly
rent before the 10th of every month and if there is a default, interest of 12%
per annum was liable to be paid. The notice records that despite repeatedly
calling upon the Respondent, the lease deed in terms of the MOU was not
being executed. By this notice, the Claimant also reminded the Respondent
that the first 15 months was to be the lock in period. It thus called upon the
Respondent to adhere to the MOU. On 10th November, 2008, the Claimant
invoked arbitration and the said notice was sent to the Respondent, vide
registered post on the same date. It appears that immediately after the notice
was received, the Respondent filed a suit for declaration and permanent and
mandatory injunction. In this suit for the first time, the Respondent took a
stand that the user change permission was to be obtained from UPSIDC.
However, this fact was not the basis of the suit. The basis of the suit was that
the Claimant was not permitting the Respondent to remove its goods from
the premises on 26th September, 2008. It was claimed in the suit that a
meeting was held between the parties on 21st October, 2008, thereafter
Claimant's representative sent the notice dated 22nd October, 2008. In the
said suit, it was claimed by the Respondent that it had stopped the use of the
premises from 1st October, 2008. The prayer sought in the said plaint filed
on 14th November, 2008 is set out herein below:
"It is, therefore, respectfully prayed that this Hon'ble
Court be pleased to:
(a) Restrain the defendant, its partners, agents,
employees, successors, assignees, workers etc. from
removing the articles from the premises bearing
No.3/1/22, Site IV, Sahibabad Industrial Area,
Ghaziabad (U.P.)
(b) Restrain the defendant not to disturb the
plaintiff, its workers while removing the articles from
the premises bearing No.3/1/22, Site IV, Sahibabad
Industrial Area, Ghaziabad (U.P.) and not to create
any hindrance while removing the articles.
(c) Declare the MOU dated 25.12.2007 as null
and void.
(d) Direct the defendant to accept the vacant
possession of the premises bearing No.3/1/22, Site IV,
Sahibabad Industrial Area, Ghaziabad (U.P.) after
allowing the plaintiff to take out its belongings,
material, equipment etc. or in alternate the plaintiff be
allow to deposit the keys of the above said premises in
the Hon'ble Court.
(e) Any other relief that this Hon'ble Court deem
fit be allowed in favour of the plaintiff as against the
defendant."
12. In the said suit, an application under Section 8 came to be moved and
thereafter in Arbitration Application No.33/2009, the Learned Sole
Arbitrator was appointed. Despite the stand of the Respondent in the suit
that it was willing to hand over peaceful and vacant possession of the
property as of 1st October, 2008, a perusal of the proceedings before the
Arbitrator clearly shows that it was not until May, 2010 that the actual
vacant peaceful possession was handed over. The arbitral record shows that
issues were framed on 3rd December, 2009 as under:
"1. Whether the respondent had taken the premises in
question on a monthly rent of Rs.3,30,000/-? OPC
2. Whether the respondent has validly terminated the
tenancy at any point of time? OPR
3. Whether the respondent has handed over the
possession of the premises to the claimant? OPR
4. Whether the respondent failed to execute the lease
deed in terms of clause 14 of the Memorandum of
Understanding dated 25.12.2007?OPC
5. Whether the respondent is guilty of committing
breach of Memorandum of Understanding dated
25.12.2007?OPC
6. Whether the claimant is entitled to receive rent from
the respondent from October 2008, onwards? OPC
7. Whether the claimant is entitled to receive damages
from the respondent on account of expenses incurred
on the building by the claimant in order to bring it in
shape with the requirement of respondent? OPC
8. Whether the claimant is entitled to receive interest
on the outstanding rate? If yes, at what rate and for
what period? OPC
9. Whether the claimant has failed to perform its part
of the Memorandum of Understanding and failed to
take the requisite permission from UPSIDC to allow
the respondent to run its office from the claimant's
premises? If yes, its effect? OPR
10. Whether the claimant is liable to pay damages to
the respondent on account of not seeking permissions
and allow the respondent to run its office by making
adjustment with the concerned department and also for
not returning the material/goods of the respondent?
OPR
11. Whether the respondent is entitled to the relief in
terms of the counter- claim? OPR"
13. Repeated adjournments were sought by the Claimant prior to framing
of issues and even after framing of issues. Order dated 12th December, 2010
passed by the Arbitrator is important and is set out herein below:
"12.2.2010
Present Mr.Sudhir Naagar with Mr.Tarun Chaudhary
Advocates for the claimant
Mr.Shishupal partner of the claimant
Mr.Rohit Singh, representative of the respondent
Mr.Rohit Singh, representative of the respondent
submits that the respondent has given an application in
Corporate Debt Restructuring Cell (CDR Cell),
therefore, their records practically stand seized and
they can not make any debit transactions. However,
credit transactions can be made. Today, no document
is available in support of this plea. Mr.Rohit submits
that documents in this regard, can be filed on the next
date. Evidence by way of affidavit has not been filed on
behalf of the respondent despite this being the past
opportunity.
Learned counsel for the claimant submits that adverse
order be passed and at least possession of the property
should be handed over to the claimant in accordance
with the memorandum of understanding (by 15 days
notice).
Mr.Rohit has contacted his office on telephone and
has then submitted that learned counsel for the
respondent will contact learned counsel for the
claimant on 15.2.2010, on this aspect and it can be
mutually agreed to hand over the possession.
The arbitration fee, as mentioned in the proceeding
dated 30.1.2010, has not been paid by the respondent.
It is, therefore, directed that fee payable by the
respondent, as mentioned in the proceedings/order
dated 30.1.2010 be paid by the claimant by or before
the next date (section 38 of the Arbitration &
Conciliation Act).
Meanwhile, one final opportunity is granted to the
respondent for filing evidence by way of affidavit by or
before the next date, with advance copy to the learned
counsel for the claimant, failing which adverse order
may be passed.
To come up on 1.3.2010 at 5.00 pm, for further
proceedings."
14. In this order, it is clearly recorded that it was the Claimant which
sought the possession of the property in accordance with the MOU.
15. In response to this order, counsel for the Respondent addressed letter
dated 16th February, 2010, which is on the arbitral record and reads as under:
"REGD.A.D.
To,
Sh. Sudhir Nagar,
Advocate,
Ch. No.106, Western Wing,
Tis Hazari Courts,
Delhi-110054.
Sub: Arbitration case of M/s S.S. Enterprises.
Sir,
With respect to this case, the proceedings are pending
before the Ld. Arbitrator. In terms of the discussions
which took place after moving application before Ld.
Arbitrator for withdrawing the material from the
premises in question which took place on 12.02.2010,
our clients shall start operation to withdraw all its
material/equipments etc. from the premises bearing
No.3/1/22, site No. IV, Sahibabad Industrial Area,
Ghaziabad U.P. w.e.f. 19.02.2010. Please advise your
client to co-operate in this regard, as agreed before the
Ld. Arbitrator.
Thanks
For Vishal Retail Ltd.
(NARENDRA KALRA)
ADVOCATE"
16. Thus in this letter, the Respondent claimed that the removal of
material from the premises would start from 19th February, 2010. In
response to this letter, on 20th February, 2010, the Claimant's counsel
addressed a reply and stated that the notice dated 16 th February, 2010 shall
be construed as a notice of 15 days as per the MOU and that the Respondent
ought to hand over vacant and peaceful possession on 3 rd March, 2010 at
12:00 noon. In fact, an application was then moved by the Respondent
seeking Police help for removal of goods. On this application, the Learned
Arbitrator passed order dated 25th March, 2010 which reads as under:
"25.3.2010
Present Mr.Sudhir Naagar with Mr.Tarun Chaudhary
Advocates for the claimant
Mr.Shishupal partner of the claimant
Mr.Narendra Kalra, Advocate for the respondent
Evidence by way of affidavit has already been filed on
behalf of the respondent. However, the document
(Ex.RW-1/2) mentioned in para 3 of the affidavit, is not
attached with the affidavit. The same be filed and copy
thereof be supplied to the learned counsel for the
claimant.
Another application dated 24.2.2010 filed on behalf of
the respondent, for directions stating that the claimant
is not allowing the respondent to remove belongings
&goods from the tenancy premises.
On this aspect, both the learned counsel have given
statements which are recorded separately to the effect
that respondent will remove all goods from the tenancy
premises and the claimant will not create any
hindrance. After vacating the tenancy premises the
keys will be handed over by the learned counsel for the
respondent to the learned counsel for the claimant on
15.4.2010 before me.
These statements are without prejudice to the rights
and contentions of the parties in the matter pending
before me and will not be read for settling anyother
past, present and/or future disputes between the
parties".
17. Thus, the Arbitrator directed that the keys of the premises should be
handed over on 15th April, 2010. Despite this order, repeated
communications were exchanged between the parties and on 15 th April,
2010, the keys were not handed over before the Arbitrator. Thereafter on
24th April, 2010, the Arbitrator again recorded that the handing over of keys
did not materialize on 15th April, 2010 and thus the same was re-scheduled
for 8th May, 2010. Again on 13th May, 2010, the Arbitrator recorded the
submissions of counsel for the Claimant that the Respondent had only
removed some goods and the remaining goods were to be removed in due
course. Admittedly, all the goods were finally removed only on 31 st May,
2010.
18. The above chronology of events has been recorded as the Arbitrator in
view of these facts came to the conclusion that the tenancy has not been
validly terminated by the Respondent. The findings of the Arbitrator are as
under:
i) that the Claimant had applied to the UPSIDC only on 21st April,
2008. However, the Respondent had never been harassed by any
government authority or agency from running its operations.
Moreover, by the time, the Respondent allegedly started to remove its
goods i.e. on 1st October, 2008, UPSIDC had already recommended
the approval for change of user subject to deposit of requisite charges
from 25th September, 2008;
ii) the keys were all along in the possession of the Respondent which
had its goods stored until May, 2010;
iii) the Respondent never handed over possession in September,
October, 2008 as was alleged;
iv) the tenancy could only have been terminated after the lock-in
period and that too by giving notice of at least three months;
v) further the Respondent had also not paid the rent as agreed ;
The Arbitrator, taking into consideration the suit filed by the Respondent,
thus awarded full rent for the lock in period and half rent thereafter. The
Arbitrator further awarded the damages to the Claimant as the Claimant had
re-done the premises as per the requirements of the Respondent. The
Arbitrator then awarded interest at 12% per annum on the rent due from
October, 2008 till date of realization. Since the Respondent vacated the
premises for its own reasons, it is not entitled to any counter claims or
damages except the refund of security deposit which was adjusted in favour
of the Respondent. The vacant and peaceful possession was handed over just
before 1st June, 2010 during the course of the arbitration proceedings.
19. The Claimant justifies the application to the UPSIDC in April, 2010,
inasmuch as it wanted the Respondent to be in complete occupation of the
premises as the Respondent had moved in to the premises in a staggered
manner. Upon the Respondent fully occupying the premises, the Claimant
applied for change of user which was in any case recommended in
September, 2008.
20. The cross-examination of Mr. Arun Gupta - Ex. Legal Head of the
Respondent is very relevant and is set out herein below:
"RW-1 Statement of Mr.Arun Gupta Legal Head
&Company Secretary
of the respondent on SA
I tender my affidavit Ex.RW-1/1 in evidence Xxxxxxx by
Sh.Sudhir aagar Advocate for the claimant
My knowledge about this case is based on documents
as well as my personal knowledge.
I have not seen the property in question. Mr.Rajesh
Verma who has signed the MOU dated 25.12.2007 is
not in service as of now. I believe that no notice from
any Government Authority was ever received
regarding the use of the property in question. It is
incorrect to suggest that no such notice was received
as the property in question was being used lawfully.
Vol. It was meant for industrial purpose and not for the
purpose for which it was let out. It is correct that no
Government authority came to stop or obstruct our
business physically. Vol. In fact, we could not properly
start our work as the claimant failed to prove the
requisite permission which he was supposed to do
within three months from the date of MOU.
We did not write any letter regarding non supply of the
above said permission by the claimant but had been
verbally requesting to send the requisite permission.
Mr.Rajesh Verma had been requesting Sh.Shivkumar
ji, as I was told by Sh.Rajesh Verma as I had been
asking Mr.Rajesh Verma about the matter. I used to
discuss these issues with Mr.Rajesh Verma. I
personally did not contact the claimant party.
It is wrong to suggest that even Mr.Rajesh Verma did
not speak to the claimant party on this issue".
21. From the above cross-examination, it is clear that no governmental
authority had troubled the Respondent's occupation on the premises and the
Respondent did not write any letter in respect of change of user permission
to the Claimant.
22. The Respondent had claimed that it had served termination letter
dated 6th November, 2008 of the MOU, however, the witness could not
produce the said letter. He also admitted that no letter was written to any
authority by the Respondent that the Claimant was not allowing them to
remove the goods. The witness of the Respondent could also not show any
legal notice issued in the year 2008 for termination of lease. The second
witness of Respondent - Mr. Umesh Sharma who was the Personal Assistant
to CMD of the company also admitted that the Claimant had not
misrepresented to him about the user of the premises. He also admitted that
he had not signed any notice of termination dated 6th November, 2008. From
the evidence on record, it is quite clear that the Respondent never terminated
the lease as alleged in the pleadings. It was not able to show any notice of
termination sent by it. The lease having not been terminated in terms of
MOU, the earliest date that can be considered as notice of termination is
before the Learned Arbitrator when letter dated 16th February, 2010 was
issued. If the three months period is calculated from February, 2010, the
lease would actually come to an end on 15th May, 2010. The actual physical
possession was given on 31st May, 2010.
23. The analysis of the facts, the chronology of the events as also after
considering the submissions of the parties, it is clear that the Respondent
defaulted in the payment of rent. It never terminated the tenancy as per the
MOU by giving proper 15 days' notice and handing over of vacant and
peaceful possession. Though, it pleaded in the suit for injunction filed by it
that it was wanting to move its goods out on 25th September, 2008, as is
evident from the evidence which transpired thereafter, it did not hand over
possession until May, 2010. Even before the Arbitrator, from February,
2010 until May, 2010, repeated disputes were raised in respect of handing
over of possession. This shows that the Respondent was wanting to enjoy
the possession of the property and simultaneously avoid the payment of rent
under the garb of the user having not been changed by the UPSIDC within
the three months period as stipulated in the MOU.
24. There being no termination of lease and it having been admitted on
record that the delay in the change in user having not affected the operations
of the Respondent in any manner, the view of the Arbitrator cannot be
termed to be perverse or a patent illegality. The Arbitrator has in fact given
the benefit of doubt to the Respondent by reducing the rent amount after the
lock in period, to 50% of the actual payment. Thus, the award of the
Arbitrator does not deserve to be interfered with.
25. In the present petition, there was a delay in re-filing of the petition.
The petition had been dismissed on 25th September, 2014. In the appeal, Ld.
Division Bench had directed the Respondent to deposit the sum awarded
together with interest vide order dated 27th May, 2015. However, it was
thereafter recorded that the Respondent has deposited the entire amount of
the award along with interest before the Executing Court.
26. On 14th March, 2016, the Division Bench set aside the order of
dismissal and condoned the delay in refiling the objections. The matter was
to be thereafter heard on merits.
27. The discussion herein above clearly shows that the award does not
warrant any interference. However, the interest payable on the awarded
amount is reduced to 8% keeping in mind the prevalent interest rates. The
Executing Court, may release the amount awarded along with simple interest
at 8% to the Claimant in the manner awarded by the Arbitrator. Remaining
sum be refunded to the Claimant. The award is upheld except with the
modification of rate of interest.
28. OMP is disposed of.
PRATHIBA M. SINGH
JUDGE
OCTOBER 26, 2018
Rahul
