Delhi High Court
Kuljeet Singh vs Anil Kumar Heera on 17 May, 2019
$~56
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: 17th May, 2019
+ FAO 211/2019 & CM APPL. 23616-23618/2019
KULJEET SINGH ..... Appellant
Through: Mr. Manoj Gahlot and
Mr. Bharat Bagga, Advocates.
versus
ANIL KUMAR HEERA ..... Respondent
Through: Mr. Ravi Prakash, Advocate. with
Mr. Ashish Verma, Mr. Viplav
Acharya, Advocates.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
PRATEEK JALAN, J. (ORAL)
%
CAV 536/2019
Learned counsel enters appears on behalf of the caveator, the caveat
stands discharged.
FAO 211/2019 & CM APPL. 23616-23618/2019
1. The present appeal under Section 37 of the Arbitration and
Conciliation Act, 1996 ("The Act") is directed against the judgment of the
Additional District Judge-03, (West) Tis Hazari Court, Delhi dated
26.02.2019, dismissing the appellant's petition under Section 34 of the Act.
The appellant had sought setting aside of an award passed by a sole
arbitrator dated 02.08.2018, awarding possession of the suit property and
rent/occupation charges in favour of the respondent herein.
2. The arbitration proceedings emanated from a lease agreement dated
15.07.2013 whereby the respondent had leased the suit property (second
floor of house no. 50 Avtar Enclave, Paschim Vihar, New Delhi) to the
appellant. The monthly rent was ₹22,000/- per month, and the initial tenure
of the agreement was 11 months, which came to a close on 30.06.2014.
3. The respondent's claim for possession and rent/occupation charges,
was resisted by the appellant, inter alia, on the ground that the parties had
entered into an agreement for sale dated 02.03.2016 by which the appellant
had agreed to purchase the suit property from the respondent.
4. It is undisputed that the appellant has filed a suit for specific
performance of the said agreement for sale, which is pending before the
Additional District Judge, Tis Hazari Court.
5. The Arbitrator awarded the claim for possession on the basis that the
rent agreement was admitted and the relationship of landlord and tenant
stood established. In view of the fact that the suit property had not been
vacated despite the expiry of the said agreement, an award of possession
was passed as well as a consequential award of Rs. 22,000/- per month for
the period of occupation.
6. In the impugned order, the appellant's petition under Section 34 of
the Act has been dismissed, upholding the aforesaid findings of the learned
Arbitrator. With regard to the contentions of the respondent regarding the
agreement for sale dated 02.03.2016, the learned Additional District Judge
held as follows:-
"16. The other contentions of the tenant is that he is no
longer the tenant of the landlord as the landlord has entered
into an agreement to sell dated 02.03.2016, with him to sell the
suit property to him for total sale consideration amount of
Rs.80 lakh, out of which Rs.10 lakh has been paid as earnest
money. He, thus urges that after entering into the agreement to
sell, the status of the tenant in the suit property is of agreement
purchaser and as such, he is not liable to be evicted. The
landlord has urged that the agreement to sell relied upon by
the tenant is a forged and fabricated document.
17. Let us examine the case of the parties by accepting the
averment of the tenant as a gospel truth that the parties
entered into the agreement to sell qua the suit property.
Accepting, this contention of the tenant as it is then also, the
tenant is not entitled for any relief in view of the several
judicial rulings of the Hon‟ble Higher Courts. The law is well
settled that the status of tenant would not alter even if, he
enters into an agreement to sell qua the tenanted premises, so
much so, that he cannot avoid his ejectment even if, decree of
specific performance is passed in his favour.
For this, I would first take note of a judgment reported
as "Sunil Kapoor vs Himmat Singh & ors" 167(2010) DLT
806. MANU/DE/0203/2010. This was a suit with similar facts
as in the present one. The tenant sued the landlord for specific
performance of an unregistered agreement to sell. The
landlord thereafter filed a suit for his ejectment. The tenant‟s
plea that he could not be ejected in view of the agreement to
sell was negatived, in this judgment by observing that "mere
agreement to sell of immovable property does not create any
right in the property save the right to enforce the said
agreement. Thus, even if the landlords/plaintiffs are found to
have agreed to sell the property, the tenant/defendant would
not get any right to occupy that property as purchaser. This
court in "Jiwan Dass Rawal vs Narain Das'',AIR 1981 Delhi
291, has held that in fact no rights enure to the agreement
purchaser, nor even after the passing of a decree for specific
performance and till conveyance in accordance with law and
in pursuance thereof is executed. Thus, in law the tenant has
no right to remain in occupation of the premises or retain
possession of the premises merely because of the agreement to
sell in his favour."
18. This was followed by judgement dated 06th August,
2013, of Hon‟ble Delhi High Court in RFA NO.324/2013 titled
as "Sanjiv Pathak vs Somnath", the facts whereof were
exactly similar to the instant case. The landlord sued the
tenant for his eviction, but the defendant/tenant on the strength
of an agreement to sell pleaded that the landlord had agreed
to sell the tenanted premises to him and his possession was
thus as an agreement purchaser. This contention was
negatived by the Hon‟ble High Court. The only exception in
the cases like the present one has been carved out in view of
Section 53 A of Transfer of Property Act, under which the
tenant can protect his possession as an agreement purchaser,
if the said agreement to sell is registered, which is not so in the
present case, hence, the tenant cannot protect his possession in
the suit property on the premise of the alleged agreement to
sell."
7. In the present appeal, learned counsel for the appellant urges that the
consideration of the issues by the learned Arbitrator has been one sided and
in ignorance of the pleadings of the appellant herein. Learned counsel
further submits that the award is contrary to the provisions of the Code of
Civil Procedure and the Specific Relief Act, 1963.
8. Learned counsel for the respondent, on the other hand supported the
impugned judgment with particular reference to the consideration of the
agreement for sale, as extracted above.
9. Having heard learned counsel for the parties, I am of the view that
interference with the impugned judgment under Section 37 of the Act is not
warranted. In a petition for setting aside of an arbitral award under Section
34 of the Act, the grounds available to the Court are very narrow. In J.G.
Engineers (P) Ltd. vs. Union of India, (2011) 5 SCC 758, the Supreme
Court held as follows:-
"27. Interpreting the said provisions, this Court in
ONGC Ltd. v. Saw Pipes Ltd. [(2003) 5 SCC 705] held
that a court can set aside an award under Section
34(2)(b)(ii) of the Act, as being in conflict with the
public policy of India, if it is (a) contrary to the
fundamental policy of Indian law; or (b) contrary to the
interests of India; or (c) contrary to justice or morality;
or (d) patently illegal. This Court explained that to hold
an award to be opposed to public policy, the patent
illegality should go to the very root of the matter and not
a trivial illegality. It is also observed that an award
could be set aside if it is so unfair and unreasonable that
it shocks the conscience of the court, as then it would be
opposed to public policy."
10. In Associate Builders vs. Delhi Development Authority, (2015) 3
SCC 49, the Supreme Court has held as under-:
"33. It must clearly be understood that when a court is
applying the "public policy" test to an arbitration award, it
does not act as a court of appeal and consequently errors of
fact cannot be corrected. A possible view by the arbitrator on
facts has necessarily to pass muster as the arbitrator is the
ultimate master of the quantity and quality of evidence to be
relied upon when he delivers his arbitral award. Thus an
award based on little evidence or on evidence which does not
measure up in quality to a trained legal mind would not be
held to be invalid on this score [Very often an arbitrator is a
lay person not necessarily trained in law. Lord Mansfield, a
famous English Judge, once advised a high military officer in
Jamaica who needed to act as a Judge as follows:"General,
you have a sound head, and a good heart; take courage and
you will do very well, in your occupation, in a court of equity.
My advice is, to make your decrees as your head and your
heart dictate, to hear both sides patiently, to decide with
firmness in the best manner you can; but be careful not to
assign your reasons, since your determination may be
substantially right, although your reasons may be very bad,
or essentially wrong". It is very important to bear this in
mind when awards of lay arbitrators are challenged.] . Once
it is found that the arbitrators approach is not arbitrary or
capricious, then he is the last word on facts. In P.R. Shah,
Shares & Stock Brokers (P) Ltd. v. B.H.H. Securities (P)
Ltd.[(2012) 1 SCC 594 : (2012) 1 SCC (Civ) 342] , this
Court held: (SCC pp. 601-02, para 21)
"21. A court does not sit in appeal over the award of an
Arbitral Tribunal by reassessing or reappreciating the
evidence. An award can be challenged only under the
grounds mentioned in Section 34(2) of the Act. The
Arbitral Tribunal has examined the facts and held that
both the second respondent and the appellant are liable.
The case as put forward by the first respondent has been
accepted. Even the minority view was that the second
respondent was liable as claimed by the first
respondent, but the appellant was not liable only on the
ground that the arbitrators appointed by the Stock
Exchange under Bye-law 248, in a claim against a non-
member, had no jurisdiction to decide a claim against
another member. The finding of the majority is that the
appellant did the transaction in the name of the second
respondent and is therefore, liable along with the
second respondent. Therefore, in the absence of any
ground under Section 34(2) of the Act, it is not possible
to re-examine the facts to find out whether a different
decision can be arrived at.""
As far as appreciation of evidence is concerned, the factual findings of the
Arbitrator can be disturbed only if they display manifest arbitrariness. The
factual findings, in the present case, based upon the admitted lease
agreement and the fact that the appellant has admittedly neither vacated the
subject property, nor paid rent in terms thereof, do not suffer from any such
illegality.
11. Further the judgments cited by the Learned Additional District Judge
clearly establish that the existence of an agreement for sale does not per se
extinguish the rights of the owner of the property. The Supreme Court, in
Suraj Lamp and Industries Private Limited (2) vs. State of Haryana and
Anr.,(2012) 1 SCC 656 held as follows:-
"19. Any contract of sale (agreement to sell) which is
not a registered deed of conveyance (deed of sale)
would fall short of the requirements of Sections 54 and
55 of the TP Act and will not confer any title nor
transfer any interest in an immovable property (except
to the limited right granted under Section 53-A of the TP
Act). According to the TP Act, an agreement of sale,
whether with possession or without possession, is not a
conveyance. Section 54 of the TP Act enacts that sale of
immovable property can be made only by a registered
instrument and an agreement of sale does not create any
interest or charge on its subject-matter."
It was also held in Sunil Kapoor vs. Himmat Singh & Ors., ILR (2010) II
Delhi 616, by this Court, as follows :-
"11. A mere agreement to sell of immovable property
does not create any right in the property save the right
to enforce the said agreement. Thus, even if the
respondents/plaintiffs are found to have agreed to sell
the property, the petitioner/defendant would not get any
right to occupy that property as an agreement
purchaser. This Court in Jiwan Das v. Narain Das, AIR
1981 Delhi 291 has held that in fact no rights enure to
the agreement purchaser, not even after the passing of a
decree for specific performance and till conveyance in
accordance with law and in pursuance thereto is
executed. Thus in law, the petitioner has no right to
remain in occupation of the premises or retain
possession of the premises merely because of the
agreement to sell in his favour."
12. The appellant has already filed a suit for a specific performance of
the agreement to sell, which is pending and, according to the learned
counsel for the appellant, certain interim orders have been passed therein.
The rights of the appellant in respect of the agreement for sale will
ultimately be decided in that suit, but do not afford to the appellant any
ground for setting aside of the award which is in dispute herein.
13. The appeal is, therefore, dismissed.
PRATEEK JALAN, J
MAY 17, 2019
„j‟
