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2011 DIGILAW 704 (UTT)

ALOK MEHROTRA v. GOVERNMENT OF NCT OF DELHI

2011-12-02

B.S.VERMA

body2011
JUDGMENT This revision under Section 25 of the Provincial Small Cause Courts Act is directed against the order dated 24.7.2009 passed by the Judge Small Causes Court/District Judge Dehradun (for short the J.S.C.C.) in S.C.C. Suit No. 14 of 2009, Alok Mehrotra Vs. Govt. of NCT of Delhi and others, whereby the application moved by the defendant nos. 1 and 2 (respondent nos. 1 and 2 herein) under Section 8 of the Arbitration and Conciliation Act, 1996 (for short the Act) read with Section 151 C.P.C. has been allowed and the parties are directed to refer their disputes to the sole arbitrator. 2. Briefly stated, the facts giving rise to the present revision are that the plaintiff- revisionist instituted S.C.C.Suit No. 14 of 2009 against the defendant-respondent nos. 1 and 2, wherein defendant nos. 3 to 9 (respondents no. 3 to 9 herein) have been arrayed as proforma defendants. The plaintiff-revisionist has sought the following relief in the said suit- "(i) That a decree for an amount of Rs. 44,000/- as mesne profits as demanded for use end occupation for the period after determination of tenancy; and the period thereafter till the physical possession is received by the plaintiff be passed in favour of the plaintiff and against the defendants; (ii) That a decree for eviction of the defendant from the suit premises be passed in favour of the plaintiff and against the defendants, and the defendants be directed to handover vacant physical possession of the premises mentioned in the schedule to the plaintiff. (iii) That a decree for the costs of the notice Rs. 2200/-, and expenses of the suit be passed in favour of the plaintiff and against the defendants." 3. Summons were issued to the defendants. After receipt of summons along with copy of the plaint, the defendant nos. 1 and 2 filed an application under Section 8 of the Act with a prayer inter alia to refer the parties for settlement of disputes, as sought to be raised in the present suit, before the sole arbitrator to be appointed as per Clause 12 of the Lease Agreement dated 23rd March, 1988. The application under Section 8 of the Act had been moved in view of the agreement/lease deed dated 23rd March 1988 allegedly executed by Smt. Jiyo Rani in favour of the defendant no.1 and 2. Clause 12 of the said agreement reads as under:- "12. The application under Section 8 of the Act had been moved in view of the agreement/lease deed dated 23rd March 1988 allegedly executed by Smt. Jiyo Rani in favour of the defendant no.1 and 2. Clause 12 of the said agreement reads as under:- "12. All disputes and differences arising out of or in any way touching or concerning this indenture shall be referred to the sole arbitration of any person nominated by the Lt. Governor, Delhi or in case his designation is changed or his office is abolished, to the sole arbitration of any person nominated by the office who for the time entrusted, whether or not in addition to other functions, with the functions of the Lt. Governor by whatever designation such officer may be called. There will be no objection to any such appointment that the arbitrator so appointed is a Government servant, that he had to deal with the matter to which this indenture relates and that in the course of his duties as such Government servant he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator so appointed shall be final and binding on the parties." 4. Clause 2 of the alleged agreement reads as under:- "2. The lease shall commence on 1st day of September, 1982 and shall subject to the terms hereof continue for a term of six years with an option to the Government to renew the lease for a further term as set out in clause 10 hereof." 5. Clause 10 and 11 of the agreement read as under- "10. If the Government shall be desirous of taking a new lease of the said premises after the expiration of the term hereby granted, it shall deliver to the proprietor or send by registered post to his last known place of abode or business a letter to this effect in writing before the expiration of the term hereby granted provided the property remains with the Managing Proprietor. If there shall be no subsisting breach of any of the lessee's obligation new lease of the said premises for a further term of five years shall commence from and after the expiration of the term hereby granted at the same rent or at such rent that may be mutually agreed upon and subject to the same covenants and conditions as in this present agreement reserved and contained including the present covenant for renewal and so on the Government exercising the option and giving the latter as aforesaid provided the property remains with the Managing Proprietor; and he is willing to extend the lease." "11. The Government shall be entitled to terminate the lease at any time during the period of lease by giving to the Proprietor one month's previous notice in writing of its intention to do so." 6. It appears that the plaintiff-revisionist appeared before the learned J.S.C.C. in person but did not file any objection in writing against the application moved under Section 8 of the Act. 7. The learned J.S.C.C. after hearing the plaintiff in person and learned counsel for the defendant nos. 1 and 2 has allowed the application moved under Section 8 of the Act and directed the parties to refer their disputes and differences for decision to the sole arbitrator to nominated in view of Clause 12 of the agreement dated 23.3.1988. The learned J.S.C.C. has given this finding in view of the Apex Court verdict in the case of N. Srinavasa Vs. Kuttukaran Machine Tools Limited [(2009) 5 SCC, 182] allowed the application and dropped the proceedings of the S.C.C. Suit in question by order dated 24.7.2009, which is impugned in the present revision. 8. I have heard learned counsel for the parties and have perused the material placed before this Court including the original record. 9. Learned counsel for the revisionist has vehemently argued that in the agreement dated 23.3.1988, the contesting defendants/respondent nos. 1 and 2 had a right to terminate the lease at any time by giving to the Proprietor one month's notice in writing but the said agreement did not give any such right to the landlady to terminate the lease during the period the lease agreement had been in force. 1 and 2 had a right to terminate the lease at any time by giving to the Proprietor one month's notice in writing but the said agreement did not give any such right to the landlady to terminate the lease during the period the lease agreement had been in force. Learned counsel for the revisionist further contended that the period of lease under the agreement had already come to an end on the expiry of the period of six years, as mentioned in the said agreement and that no renewal or fresh agreement had ever been entered into between the parties. Learned counsel for the revisionist further contended that the matter relating to eviction or tenancy matters are governed by special statutes and eviction decree as sought by the revisionist-plaintiff cannot be granted by the arbitrator, therefore, there is no question of directing the parties to arbitral proceedings. In support of his argument, learned counsel for the revisionist has placed reliance upon paragraph no. 36 of the case of Booz Allen and Hamilton Inc. Vs. SBI Home Finance Limited and others [(2011) 5 Supreme Court Cases, 532]. This case law will be dealt with at appropriate place in the latter part of this judgment. 10. Learned counsel for the revisionist has further relied upon the case of S. B. Civil Writ Petition No. 746 of 2008, Union of India & Another Vs. Rent Tribunal Jodhpur & Another decided by the Rajasthan High Court, Jodhpur on 12.12.2008, wherein it has been held that there is no jurisdiction left with the Arbitrator to pass eviction decree because as per agreement only those matters can be referred to the Arbitrator which are related to the terms and conditions and none else. 11. In reply, the learned counsel for the contesting respondents (defendant nos. 1 and 2) has submitted that even if an agreement ceases to exist, the arbitration clause remains in force and any dispute pertaining to the agreement ought to be resolved as per arbitration clause. In support of his argument, the learned counsel has placed reliance on paragraph 37 of the case of N.Srinivasa Vs. Kuttukaran Machine Tools Limited [(2009) 5, Supreme Court Cases, 182], which reads as under:- "37. In support of his argument, the learned counsel has placed reliance on paragraph 37 of the case of N.Srinivasa Vs. Kuttukaran Machine Tools Limited [(2009) 5, Supreme Court Cases, 182], which reads as under:- "37. It is well settled that even if an agreement ceases to exist, the arbitration clause remains in force and any dispute pertaining to the agreement ought to be resolved according to the conditions mentioned in the arbitration clause. Therefore, in our view, the High Court was not justified in setting aside the order of the trial court directing the parties to maintain status quo in the matter of transferring, alienating or creating any third-party. interest in the same till the award is passed by the sole arbitrator." 12. Learned counsel for the respondent nos. 1 and 2 further relied upon the case of M/s Everest Holding Ltd. Vs. Shyam Kumar Shrivastava & Ors. [2008 (14) SCALE, Page 294]. In this case, the Apex Court has considered the provisions of Section 11 (6), (8) and (9) of the Act pertaining to appointment of arbitrator. But in that case the matter of termination of tenancy and eviction matter have not been considered, which is involved in the present case. 13. In another case Bharat Petroleum Corporation Ltd. Vs. Great Eastern Shipping Co. Ltd. [AIR 2008 Supreme Court, 357], relied upon by the learned counsel for the respondent nos. 1 and 2, the Apex Court has held that in the circumstances of the case, charter party did not get extinguished, inter alia, for purpose of determination of disputes arising thereunder and arbitration clause contained therein could be involved. The facts of the case at hand are quite distinguishable from the case cited by the respondents and the same does not help to them. 14. The last case-law relied upon by the learned counsel for the respondent nos. 1 and 2 is Branch Manager, Magma Leasing and Finance Limited and anotherVs. Potluri Madhavilata and another [(2009) 10 S.C.C., 103]. In this case, the Apex Court has held that merely because the contract has come to an end by its termination due to breach, the arbitration clause does not perish nor is rendered inoperative; rather it survives for resolution of disputes arising "in respect of' or "with regard to" or "under" the contract. In this case, the Apex Court has held that merely because the contract has come to an end by its termination due to breach, the arbitration clause does not perish nor is rendered inoperative; rather it survives for resolution of disputes arising "in respect of' or "with regard to" or "under" the contract. The ratio of the judgment cannot be disputed, but in that case the maintainability of eviction suit has not been considered vis-a-vis arbitration clause. To my mind, this case is of no avail to the respondent nos. 1 and 2. 15. For just decision of the controversy involved in the present case, a reference to paragraph no.3 of the plaint is necessary, which reads as under:- "3. That after late Smt. Jiyo Rani Mehrotra purchased the said property in the year 1985, a lease deed dtd. 23.03.1988 was executed between Late Smt. Jiyo Rani Mehrotra and the Hon'ble President of India, as head of the Government of India, Delhi being a Union Territory under the direct administration of the Hon'ble President of India; for a period of six years retrospectively w.e.f. 01.09.1982. The said lease-deed has expired on 31.08.1988. After some-time Delhi acquired statehood and the Dept. of Labour came under control of the Defendant no.1 through Defendant no.2. But inspite of repeated requests by Late Smt. Jiyo Rani Mehrotra and the plaintiff, who is son of Late Smt. Jiyo Rani Mehratra (and was also her duly constituted attorney during her life-time), no fresh lease deed was ever executed between Late Smt. Jiyo Rani Mehrotra and the defendants; and the defendants continued to occupy the said property without any lease deed and has been paying some amount every year in rent account to Late Smt. Jiyo Rani Mehrotra as there was no such clause in the agreement. The last amount of Rs. 77,596/- was paid by the defendant no.1 through defendant no.2 after deducting income tax on 18.03.2009 vide cheque nos. 984542 & 984542. No amount had been paid by the defendants to Late Smt. Jiyo Rani Mehrotra or the plaintiff after the said date inspite of repeated demands." 16. It is significant to mention that in the application under Section 8 of the Act read with Section 151 CPC moved on behalf of the applicants/defendant nos. 1 and 2, wherein the defendant nos. No amount had been paid by the defendants to Late Smt. Jiyo Rani Mehrotra or the plaintiff after the said date inspite of repeated demands." 16. It is significant to mention that in the application under Section 8 of the Act read with Section 151 CPC moved on behalf of the applicants/defendant nos. 1 and 2, wherein the defendant nos. 1 and 2 had taken recourse to Clause 12 of the alleged agreement to refer the parties to Arbitrator. On the other hand, the plaintiff-revisionist has taken specific plea in paragraph no. 3 of the plaint that the alleged agreement dated 1988 had already expired by efflux of time after expiry of the period of six years and that no renewal of the lease agreement had ever been executed between the parties. As such the lease deed is non-existent. 17. It may be noted that the suit (S.C.C. Suit No. 14 of 2009) was filed before the J.S.C.C. on 23.4.2009. The suit was ordered to be registered on S.C.C. side, date for framing points for determination was fixed for 16.7.2009 and the suit was fixed for final hearing on 23.7.2009. On 7.7.2009, the defendants moved an application under Section 8 of the Act. It was ordered by the J.S.C.C. that the application be put up on the date fixed. On 16.7.2009, the suit was ordered to be put on 23.7.2009. On 23.7.2009 the application of the defendant under Section 8 of the Act was heard and the impugned order was passed by the learned J.S.C.C. on 24.7.2009. It is thus clear that the defendant-respondent nos. 1 and 2 had not yet filed their written statement in the suit. 18. Thus, from the above position, it is crystal clear that denial of the plaint allegations has not so far been filed in the form of written statement. 19. Since the defendant nos. 1 and 2 have not yet filed their written statement before the trial Court in the original suit and as the application under Section 8 of the Act was moved prior to filing of written statement, therefore, the short controversy involved in the present revision is whether the suit of eviction brought by the plaintiff-petitioner against the respondents no. 1 and 2 is the subject matter of arbitration or the same would fall as a dispute covered by the arbitration agreement. 20. 1 and 2 is the subject matter of arbitration or the same would fall as a dispute covered by the arbitration agreement. 20. It is also significant to mention here that the defendant respondent nos. 1 and 2 has taken a stand that the lease in question stood continued upto the date of notice 24.2.2009 sent by the landlady to the defendants. The relevant extract of paragraph no.3 of the said notice reads as under:- "3. That after my clientess purchased the said property in the year 1985, a lease deed executed between the Govt. and my clientess for a period of five years. The said lease deed has expired long back. Inspite of repeated requests by my clientess and her son (who is also her duly constituted attorney), no fresh lease deed has been prepared and executed between my clientess and the Govt.; and the Govt. is continuing to occupy the said property without any lease deed and has been paying some amount every year in rent account to my clientess allegedly at the rate fixed long time back ex-parte by the CPWD, inspite of objections by my clientess as there was no such clause in the agreement. No amount has been paid in the current year." 21. The Apex Court in the case of Booz Allen and Hamilton Inc. (supra), which has been relied upon by the learned counsel for the petitioners, has considered the scope of Section 8, 11, 16, 34(2)(b) and 48(2) of the Act and the Apex Court in paragraph no. 36 has held as under:- "36. The well-recognised examples of non-arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes." 22. The Apex Court has also observed in the very first line of paragraph no. 37 that "It may be noticed that the cases referred to above relate to actions in rem." In paragraph 38, the Apex Court has held as under:- "38. The Apex Court has also observed in the very first line of paragraph no. 37 that "It may be noticed that the cases referred to above relate to actions in rem." In paragraph 38, the Apex Court has held as under:- "38. Generally and traditionally all disputes relating to rights in personam are considered to be amenable to arbitration; and all disputes relating to rights in rem are required to be adjudicated by courts and public tribunals, being unsuited for private arbitration. This is not however a rigid or inflexible rule. Disputes relating to subordinate rights in personam arising from rights in rem have always been considered to be arbitrable." 23. Besides, from a perusal of the lease-agreement, it cannot be said that there is any specific provision/clause in the lease agreement that the matter of eviction of the defendants shall be referred to the arbitrator and that the arbitrator shall have power to pass order of eviction against the lessee/defendant nos. 1 and 2. 24. From the above narration of the facts and circumstances of the case, it comes out that the learned trial Court has lost sight of the fact the defendant-respondent nos. 1 and 2 have not even asserted in the application under Section 8 of the Act that the agreement dated 23.3.1988 whereby the lessees have held lease rights for a period of six years i.e. from 1-9-1982 had ever been renewed or extended at the behest of the defendants for any further period. What they have asserted in the application is that "the said Lease Agreement is continuing even at least as per the version of the Plaintiff upto 24th Feb, 2009, on the day of alleged notice of termination of the Lease by Late Smt. Jiyo Rani. The Defendant/Applicant vehemently deny the said legal notice as Late Smt. Jiyo Rani has no right to terminate the Lease Deed. Therefore the present Suit has been filed as disputes sought to have arisen out of the Agreement/Lease Deed dated 23rd March, 1988." The learned trial Court appears to have entirely lost sight of the averments made by the plaintiff-revisionist in the suit including that of cause of action mentioned in the plaint as also in the notice dated 24-2-2009 that renewal of the lease deed was not made, that the Govt. is continuing to occupy the said property without any lease deed and that fresh lease had not been executed by the defendant nos. 1 and 2 any time after the lease period of six years had been elapsed in the year 1988, as well as the stand taken by the defendant nos. 1 and 2 that late Smt. Jiyo Rani had no right to terminate the Lease Deed and that too without asserting anything that the defendant/lessees had taken any steps to get the lease deed renewed after the initial lease period of six years had elapsed on 31-8-1988. The plaintiff has alleged that his mother Smt. Jiyo Rani Mehrotra had died on 19-3-2009 and the present suit for eviction etc. has been filed before the J.S.C.C. on 23-4-2009. Be that as it may, the fact remains that the plaintiff has filed the suit for a decree of eviction and for recovery of arrears of rent and damages, which is cognizable by the Court of Judge, Small Cause Courts. 25. Having gone through the entire material placed before this Court including the lower Court record and considering the facts as disclosed in the plaint allegations by the plaintiff-revisionist coupled with the fact that the defendant-respondent nos. 1 and 2 have not alleged that the contract of lease had been sought to be extended or renewed by them as per clause no. 10 thereof in the application under Section 8 of the Act, as discussed above, and in view of the Apex Court verdict in the case of Booz Allen and Hamilton Inc. (supra), I am of the considered view that the view taken by the learned trial Court that the matter of eviction is an arbitral dispute is not at all justified since suit for eviction of a tenant is actions in rem and the approach of the learned trial Court is not sustainable in the eye of law thereby directing the parties for arbitration. 26. In the result, the revision petition deserves to be allowed outright and the impugned order dated 24.7.2009 has to be set aside. The application moved by the defendant nos. 1 and 2 under Section 8 of the Act before the learned J.S.C.C. in S.C.C. Suit No. 14 of 2009, Alok Mehrotra Vs. Govt. of NCT of Delhi and others, is liable to be dismissed. 27. The revision is allowed. The application moved by the defendant nos. 1 and 2 under Section 8 of the Act before the learned J.S.C.C. in S.C.C. Suit No. 14 of 2009, Alok Mehrotra Vs. Govt. of NCT of Delhi and others, is liable to be dismissed. 27. The revision is allowed. The impugned order dated 24.7.2009 is set aside. The application of the defendant nos. 1 and 2 (paper no. 22-C) moved under Section 8 of the Act is dismissed. Costs easy. The learned J.S.C.C. shall proceed further with the suit in accordance with law and shall decide the S. C. C. Suit No. 14 of 2009 expeditiously as far as possible.