Judgment:
* IN THE HIGH COURT OF DELHI AT NEW DELHI Order delivered on:
22. d December, 2014 % + CS(OS) No.2634/2014 & I.A. Nos.23469/2014 & 23470/2014 RAJEEV JAIN & ANR Through .....Plaintiffs Mr.Anand Maheshwari, Adv. with Mr.Navin Gupta, Adv. versus AARAV AGROTECH PVT LTD & ANR …..Defendants Through Mr.Puneet Bhalla, Adv. with Ms.Chetna Bhalla, Adv. CORAM: HON'BLE MR. JUSTICE MANMOHAN SINGH MANMOHAN SINGH, J.
1. The plaintiffs have filed a suit for possession, recovery of rent and damages for use and occupation of property bearing Flat No.207, situated on the second floor of Mercantile House, 15, Kasturba Gandhi Marg, New Delhi and parking space No.LB-9, situated at Lower Basement of Mercantile House, 15, Kasturba Gandhi Marg, New Delhi (hereinafter referred to as the ‘suit properties’) against the defendants.
2. Brief facts of the case are that the plaintiffs are the joint owners of the suit properties, having purchased the same from M/s New Delhi Hotels Limited. The defendants approached the plaintiffs to lease out the suit properties on rent for commercial purpose only to which the plaintiffs agreed and in pursuance of the same, a Lease Agreement dated 1st November, 2011 was signed and executed for a period of six years between the parties subject to the condition that either the plaintiffs or the defendants can terminate the lease by giving three months notice in advance after the lock-in period which was fixed to be of two years. Thereafter, the defendants in terms of the Lease Agreement took over the possession of the suit properties for commercial purpose only from the date of inception of the tenancy till date.
3. It is stated that under the terms of the Agreement, the defendants were paying a monthly rent amounting to Rs.1,50,000/inclusive of rent of the official space and also that of the parking area. The defendants had also deposited a sum of Rs.8,10,000/- with the plaintiffs as collateral security without any interest and refundable at the time of vacating and handing over of the suit properties.
4. It is further stated that the defendants gave a notice for termination of the Lease Agreement vide email dated 31st January, 2014 followed by legal notice dated 20th February, 2014 by virtue of which the defendants have shown their interest to terminate the lease deed dated 1st November, 2011. In the said notice, the defendants also informed that they will vacate the tenanted suit properties on or before 1st May, 2014 and asked to adjust the future rent from their security deposit amounting to Rs.8,10,000/-. Thereafter, the plaintiffs also issued a reply notice dated 7th March, 2014 by acknowledging the receipt of the notice of termination of tenancy.
5. It is alleged that the defendants had paid rent of the tenancy premises upto 31st January, 2014. The defendants have not paid the rent of parking area with effect from 1st November, 2013 till date and have also not paid costs of proportionate share of electricity in the common areas, water and elevator charges from 1st November, 2011 till date and hence the plaintiffs claims the following amounts from the defendants:(i) Rent from 1st February, 2014 to 31st August, 2014 @ Rs.1,50,000/- per month Rs.10,50,000/- (ii) Balance rent of the parking area from 1st November, 2013 to 31st January, 2014 @ Rs.5,000/- Rs.15,000/- (iii) Service tax @ Rs.13,442/- per month with effect from 1st February, 2014. Rs.94,094/- (iv) Demurrage charges for use and occupation and after termination of the tenancy i.e. from 1st May, 2014 to 31st August, 2014 @ Rs.5,000/- per day i.e. for 123 days. Rs.6,15,000/- (v) Service tax on the demurrages charges. Rs.76,014/- (vi) Reimbursement of proportionate share of electricity of common areas, elevator and water charges etc. w.e.f. 1st November, 2011. Rs.1,40,893/- Total Rs.19,91,001 The plaintiffs as per the terms of the Agreement after deducting collateral security of the defendants amounting to Rs.8,10,000/claims a sum of Rs.11,81,001/-.
6. It is alleged that the plaintiffs have on various occasions called upon the defendants to settle down all the legal claims of the plaintiffs, however the defendants have failed to do the same and also not vacated the suit properties inspite of the notice.
7. The suit along with said interim application was listed before Court on 1st September, 2014. After hearing, ex-parte ad-interim order was passed against the defendants restraining from subletting, assigning or parting with the possession or creating any third party interest in respect of the suit property.
8. Defendant No.2 has filed two applications one being I.A.No.23470/2014 under Order 1 Rule 10 CPC seeking deletion of defendant No.2 from the array of the parties and another being I.A.No.23469/2014 under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) seeking reference of the matter to arbitration.
9. By way of the application being I.A. No.23470/2014 it is stated that the defendant No.1 had entered into a Lease Agreement dated 1st November, 2011 through its Director with the plaintiffs qua the suit properties which was executed by the assent of both the parties and the said agreement dated 1st November, 2011 was annexed as Annexure A. The defendant No.2 who is the director of defendant No.1 Company has signed the aforesaid Lease Agreement on behalf of the defendant No.1 Company and he cannot be individually held liable in the present proceedings. It is also stated that the plaintiffs have filed the suit against the defendants and it is bad for mis-joinder of defendant No.2 who cannot be held liable in personal capacity for any grievance caused to the plaintiff qua the Lease Agreement as he has signed the Lease Agreement on behalf of the defendant No.1 company and only the company is the necessary party in the present proceedings.
10. By way of the application being I.A. No.23469/2014, it is stated that this Court has no jurisdiction to try and entertain the suit as any/all disputes arising between the parties with respect to the Agreement dated 1st November, 2011, entered into between the parties are to be adjudicated in terms of the Act as specifically agreed by the parties in the Clause 8(II) of the said Lease Agreement. The said Lease Agreement has an arbitration clause which provides that all the disputes, difference and/or claim arising out of the agreement shall be resolved in accordance with the provisions of the Act.
11. Learned counsel for the parties have made their submissions. Learned counsel for the defendants has not denied the facts with respect to the relation between the parties, issuance of termination notice and the rent in question. The rent of the suit properties is more than Rs.3500/- per month. The only submission made by the learned counsel for the defendants is that the defendants intend to contest the matter on merits and the suit of the plaintiffs for possession is not maintainable, as this Court has no jurisdiction to entertain and try the present suit in view of the arbitration clause that exists in the Agreement dated 1st November, 2011 entered into between the plaintiffs and defendant No.1-Company. His submission is that dispute, if any, be adjudicated by the Arbitrator as per Clause 8 of the Lease Agreement.
12. It is settled law that in case a party, who has filed an application under Section 8 of the Act has failed to spell out the details of the claim arisen between the parties, the disputes cannot be referred for arbitration. In the present case, defendant No.1 itself has issued the notice dated 20th February, 2014 also on behalf of its Director Mr.Arvind Singh, admitting that the Lease Agreement dated 1st November, 2011 has been entered into between the parties in respect of the premises being Flat No.207, Mercantile House, 15, Kasturba Gandhi Marg, New Delhi-110001. In para 6 of the said notice, it was specifically mentioned by the defendants that they have in due compliance of the Clause 1(II) of the Lease Agreement, served upon the plaintiffs a three months’ notice expressing their interest to terminate the Lease Agreement vide email dated 1st February, 2014 and in view of the said email, the defendants intended to vacate the suit properties before 1st May, 2014. Thus, there is an admission on the part of the defendants to vacate the suit properties. However, the defendants did not vacate the same nor they have paid the admitted rent to the plaintiffs.
13. Learned counsel for the plaintiffs has fairly stated that in case the defendants will pay the agreed rent from the period 1st December, 2014 till the date of vacation of the suit properties, the plaintiffs would not be pressing the relief of recovery of damages for use and occupation. It appears to the Court that the offer made by the plaintiffs is very fair. Under these circumstances, this Court is of the view that there is no dispute that exists between the parties in view of the facts and circumstances of the present case.
14. This Court in the case of Monporte Impex Pvt. Ltd. vs. Harveen Bali & Ors., reported in 2000 (84) DLT272 in paras 2 & 3 held as under:
“2. The suit is for the recovery of Rs.38,20,184/-. Learned Counsel for the plaintiff has relied on Hindustan Copper Ltd., Jhunjhunu Vs. Assam Bearing Agencies, AIR1980Delhi 238, in which a learned Single Judge of this Court, after duly considering of the previous decisions on the subject, held that if the applicant was neglected to spell out in detail the claims which in its contention, had arisen between the parties recourse could not be had to the Arbitration Clause. The learned Single Judge relied on the decision of the Supreme Court in Union of India Vs. Birla Cotton Spinning and Weaving Ltd., AIR1967SC688 in which it was observed: "With regard to the question whether a dispute of this type i.e. non-payment of price of goods is a referable dispute, the judgment of Shah, J., as he then was in the Supreme Court in the case just cited above, is very plain and states that the non-payment of price is not a dispute under or arising out of contract. As I have said a dispute or difference requires the statement of a proposition and a denial thereof by the other side. As the existence of such a dispute or difference is not alleged or proved or even pointed out from any documentary material or contemporary dealings between the parties, I came to the conclusion that this suit cannot be stayed and I accordingly reject the application for stay with costs."
3. Faced with this precedent learned Counsel for the applicant submits that these decisions had been rendered in the context of the Arbitration Act, 1940, and would not be relevant since the present application has been preferred under Section 8 of the Arbitration and Conciliation Act, 1996. It is no longer res integra that the provisions of Section 8 of the 1996 Act are pari materia to the provisions contained under Section 34 of the 1940 Act. The decision cited before me applies to the present case on all fours. Accordingly, the application is dismissed with costs of Rs.2,000/-.”
15. In view of the aforesaid reasons, the plaintiffs are entitled to a decree for possession of the suit properties as well as for recovery of the arrears of rent for the period 1st February, 2014 up to 31st August, 2014 to the tune of Rs. 11,81,001/- as calculated above as well as the rent from 1st September, 2014 till the possession to be taken by the plaintiffs by filing of an execution petition. The suit of the plaintiffs is accordingly decreed. The plaintiffs are also entitled for the cost of the suit to the tune of Rs.50,000/-. A decree be drawn accordingly. Pending applications also stand disposed of. (MANMOHAN SINGH) JUDGE DECEMBER22 2014