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2010 DIGILAW 2321 (MAD)

Customer Operational Services (Chennai) Pvt. Ltd. v. Shobana Radhakrishnan

2010-06-09

G.M.AKBAR ALI, PRABHA SRIDEVAN

body2010
Judgment :- Prabha Sridevan, J. 1. The appellant is the tenant and the respondents are landlords. They are governed by the terms and conditions of the agreement of lease dated 17-10-2007 which contains an arbitration clause. The agreement was terminated by notice dated 11-05-2009 with effect from 10-06-2009. The appellant indicated by its letter dated 09-06-2009 that they are willing to handover possession and that the security deposit should be handedover to them by the respondents by way of a demand draft. 2. The dispute arose between the parties since according to the respondents, the appellants had not maintained the garden and the landscape areas and they had been completely neglected. The respondents filed an application under Section 9 of the Arbitration and Conciliation Act for appointment of an Advocate Commissioner to handover possession of the property. According to the respondents, the appellants citing that the security deposit was not returned which amounted to a sum of Rs.15,00,000/-, was occupying a very valuable property. This Court appointed an Advocate Commissioner who broke open the lock and handed over possession. When the application was heard, the learned Single Judge after recording the report filed by the Advocate Commissioner rejected the contention of the appellant that they are not obliged to handover possession of the property to the respondents as long as the security deposit was not refunded. The learned Single Judge accepted the contention of the respondents that under the same agreement the refund of security deposit was made subject to adjustment towards the rental arrears or towards any damage done to the property. A statement of account was filed by the respondents and the learned Single Judge prima facie accepted the calculation made by the respondents that the net amount refundable was only a sum of Rs.2,93,438.88p. Therefore, the application was ordered recording the handing over of possession and directing the respondents herein to make payment of the above sum. The appellant prayed that the respondent should be directed to atleast deposit the amount of Rs.15,00,000/-(security deposit) into Court. The learned Single Judge held that such a prayer cannot be made in the application filed by the other party. Aggrieved by the above order, the appeal has been filed. 3. Though the order directed payment of the above sum, the respondents have deposited the sum of Rs.2,93,489/-in Court. 4. The learned Single Judge held that such a prayer cannot be made in the application filed by the other party. Aggrieved by the above order, the appeal has been filed. 3. Though the order directed payment of the above sum, the respondents have deposited the sum of Rs.2,93,489/-in Court. 4. The learned counsel submitted that Section 9 of the Arbitration and Conciliation Act provides for a equitable remedy and therefore, the rights of both the parties must be balanced. When the agreement provides for a security deposit (Clause No.6 of the agreement), the conditions subject to which refund should be made (Clause No.7 of the agreement), liquidated damages payable to both the parties subject to the conditions (clause No.9 of the agreement), and for continuance of possession, if security deposit is not refunded then the terms should be strictly applied. (Clause No.16). The learned counsel also referred to the affidavit filed by the respondents in the application under Section 9 where it is admitted that "the disputed amount is Rs.1,66,129.12." When that is the admitted fact the Court should have directed the respondents to deposit/pay a sum of Rs.15,00,000/- minus the above disputed amount. The learned Single Judge ought not to have directed payment of only the sum of Rs.2,93,439/-, when the categoric admission of the appellant was available. The learned counsel also submitted that though the order directed payment, the respondent had deposited the amount into Court. 5. The learned counsel for the respondents submitted that the arbitration proceedings have commenced and issues are to be framed on 13-06-2010. He submitted that the learned single Judge had taken into account the continued occupation of the property in dispute by the appellant and that is why he passed the above order. There is no justification to interfere. The learned counsel also submitted that all the issues are to be decided by the Arbitrator and at this stage, any finding by this Court will affect the conduct of the arbitration proceedings. However, he admitted that though the order directed payment, the respondent had deposited the amount into Court. 6. We do not see any reason to interfere with the order of the learned Single Judge. The appellants grievance only appears to be that instead of the learned Single Judge directing the respondents to deposit Rs.15,00,000/-minus 1,66,219.12, the respondent was directed to deposit only a sum of Rs.3,00,000/-. 6. We do not see any reason to interfere with the order of the learned Single Judge. The appellants grievance only appears to be that instead of the learned Single Judge directing the respondents to deposit Rs.15,00,000/-minus 1,66,219.12, the respondent was directed to deposit only a sum of Rs.3,00,000/-. The learned Single Judge had given reasons for this and unless it is plainly arbitrary or unreasonable, we do not think we should interfere, sitting in appeal. Further any interim relief or direction can be sought for even before the Arbitrator, who is now seized of the matter. Any findings on the construction of the clauses of the lease agreement would unnecessarily affect the arbitration proceedings. 7. Therefore, we dispose of this appeal permitting the appellant to obtain payment out of the amount deposited to the credit of the application which the Registry shall handover on production of the order copy and a memo for payment out. The respondents also have no objection to the same. If the appellant prays for any directions before the Arbitrator, it will decide in accordance with law.