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2011 DIGILAW 152 (CAL)

Rajiv Bhatt v. UNION OF INDIA

2011-02-02

SANJIB BANERJEE, SOUMITRA PAL

body2011
JUDGMENT 1. The appellant has assailed the final order on an application under section 9 of the Arbitration and Conciliation Act, 1996. 2. Shortly stated, the facts are these: In September, 2004 the Administration through its appropriate officer granted a licence in favour of the appellant in respect of a restaurant at Corbyn's Cove. The duration of the licence was initially for one year with an extension or renewal for a period of two years. The licensor issued a notice some time in the year 2006 requiring the licensee to remove himself from the premises, whereupon the section 9 proceedings were instituted before the District Judge. The appellant says that it would be evident from the facts pleaded in the petition under section 9 of the 1996 Act and the documents relied upon that immediately after the appellant went into possession of the premises in question, the appellant complained of the tardy condition thereof and the immediate need to repair the same. The appellant says that the agreement guaranteed the licensee to have meaningful enjoyment of the property for the entire duration thereof, but it would appear from the tenor of the contemporaneous letters addressed by the licensee that the premises were not in habitable condition when they were made over to the appellant. 3. There was an ad interim order passed on the application which, effectively, restrained the licensor from taking steps to evict the licensee. Such order has been vacated upon the application having been heard out. 4. The learned Court below observed that notwithstanding the petitioner's grievance as to the condition of the premises, the petitioner had enjoyed the property and had run a restaurant by the name 'Waves' thereat. The learned Court below appreciated the facts in great detail and referred to the documents and concluded that no prima facie case had been made out by the appellant warranting the appellant's retention of possession way beyond the period envisaged by the agreement. The appellant asserts that the conduct of the licensor has been blameworthy since the appointing authority named in the arbitration agreement has not appointed any arbitrator for several years despite the appellant's request. The appellant says that the appellant could have proceeded with the arbitral reference and the matter may have been concluded if a timely appointment was made. The appellant asserts that the conduct of the licensor has been blameworthy since the appointing authority named in the arbitration agreement has not appointed any arbitrator for several years despite the appellant's request. The appellant says that the appellant could have proceeded with the arbitral reference and the matter may have been concluded if a timely appointment was made. The appellant suggests that since the appellant had enjoyed an order from or about the year 2006, there was no question of such order being vacated without the appointing authority naming the arbitrator to enter upon the arbitral reference. 5. The appellant has also referred to a subsequent eviction notice issued by the licensor after the order of dismissal of the section 9 petition. It is the appellant's contention that in issuing such notice the licensor is seeking to take the law into its own hands and remove the appellant from the possession of an immovable property other than in accordance with law. 6. In support of the appellant's argument, the judgments reported at 1996(4) SCC 144 and 2009(5) SCC 182 have been placed. In the first case, the matter pertained to a property at Mayfair Road in Calcutta. The purchaser had agreed to buy the property with full knowledge that the property was in the possession of a person other than the vendor. In a subsequent action for specific performance of the agreement where the person in possession was not impleaded, a decree was obtained and in course of execution of such decree the person in possession was sought to be thrown out. It was in such context that the Supreme Court held that even a rank trespasser cannot be dispossessed from any immovable property except in/accordance with law. 7. The second judgment speaks of the operation of an arbitration clause contained in an agreement notwithstanding the expiry of the tenure of the agreement. It goes without saying that an arbitration agreement is severable from the main agreement in the sense that even, if the main agreement is not workable, the arbitration agreement may still apply. 8. The moot point here is that the learned Court below exercised its discretion in a matter where its discretion was at large and the appellant has not been able to demonstrate that the exercise of discretion was perverse. 8. The moot point here is that the learned Court below exercised its discretion in a matter where its discretion was at large and the appellant has not been able to demonstrate that the exercise of discretion was perverse. It is settled law that the Appellate Court will ordinarily not interfere with the discretion exercised by the Trial Court unless the exercise of discretion is shown to be contrary to known legal principles. The Appellate Court would not substitute its discretion for the Trial Court's, even if it appears to the Appellate Court that a different view was possible. On facts, it is evident that the appellant herein has enjoyed the restaurant and the use thereof as a commercial venture for a period of about six years by virtue of the original tenure under the agreement and, thereafter, upon the Court largesse by way of the ad interim order. The appellant suggests that since the appellant has been in continued possession for such period, the possession should not be permitted to be disturbed till the matter is adjudicated upon in the reference. 9. It is precisely for such reason that the appellant's possession does not deserve to be protected. The appellant has overstayed his invitation under the agreement twice over. The appellant enjoyed the benefit under an undeserving ad interim order for nearly four years. In substance, the appellant suggests that till such time the arbitral in reference is over, and subsequently, the challenge to the award that may be made therein is concluded, the appellant should continue in undisturbed possession. There is no law that has been cited in support of such contention that a licensee can overstay his welcome by merely carrying a petition to Court or a statement of claim to an arbitral reference. 10. The order under appeal does not call for any interference on the exercise of the discretion by the learned Court below. The only remedy that may be made available to the appellant is to direct the appointing authority to complete the process of appointment and despatch the relevant notice to the appellant and the appointee within a period of four weeks from date. There will be no embargo on the licensor to take appropriate steps in accordance with law. The only remedy that may be made available to the appellant is to direct the appointing authority to complete the process of appointment and despatch the relevant notice to the appellant and the appointee within a period of four weeks from date. There will be no embargo on the licensor to take appropriate steps in accordance with law. In the event, however, the appellant has not been evicted within a period of four weeks from date, and the appointing authority has not despatched the letter of appointment of the arbitrator to the appellant by such time, the appellant will be entitled to retain possession of the restaurant till such time that the appointment of the arbitrator is made. Fmat No.004 of 2010 is disposed of without any order as to costs. 11. Urgent certified photocopies of this order, if applied for, be furnished to the parties upon compliance with the requisite formalities. S. Banerjee, J.: I agree.