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2022 DIGILAW 1453 (ALL)

Nagar Nigam v. Sharad Rohtagi

2022-09-12

SARAL SRIVASTAVA

body2022
JUDGMENT : 1. Heard Sri Pankaj Srivastava, learned counsel for the petitioner and Sri P.K. Jain, learned Senior Counsel assisted by Sri Vinayak Mithal, learned counsel for the respondents. 2. The petitioner, by means of the present writ petition under Article 227 of the Constitution of India, has assailed the order dated 21.08.2014 passed by Additional Civil Judge (Senior Division), Meerut in Original Suit No.539 of 2011 (Dr. Jagat Narayan Vs. Nagar Nigam, Meerut) rejecting the application 28Ga of the petitioner for referring the dispute to the Arbitrator under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act, 1996’) and order dated 28.02.2019 passed by the 1st Additional District Judge, Meerut in Civil Revision No.05 of 2015 (Nagar Nigam Meerut Vs.Sharad Rohtagi) dismissing the revision of the petitioner. 3. The facts in brief are that Original Suit No.539 of 2011 has been instituted by respondent Nos. 1 to 7 (hereinafter referred to as ‘plaintiff/respondents) against the petitioner (hereinafter referred to as ‘defendant/petitioner') alleging that by a registered sale deed dated 18.06.2013, predecessor in title of the plaintiffs/respondents, Late Haji Sheikh Alauddin, son of Late Shaikh Gulam Muhiuddin of Lalkurti Bazar, Meerut had let out part of land measuring about 11 Bighas, 16 Biswas pukhta situated at Budhana Gate, Meerut, formally known as ‘Barfkhana’ to the then Municipal Board, Meerut and now occupied under Gymkhana Maidan, Bachcha Park and Ladies Park under the terms and conditions stipulated in the said lease deed on payment of Rs.1/-per annum by the then Municipal Board to the lessor Late Haji Sheikh Alauddin. Besides others stipulation in the lease deed, the lease was for the term of 99 years commencing w.e.f. 01.04.1911. Another relevant clause of the lease deed in the instant case is that the lease shall be renewable at the option of the lessor at the expiration of original term of 99 years on same term for a period of not less than 30 years. If on the determination of the lease, the lessor shall not elect to renew the lease, it shall be the duty of the lessee to make over the land hereby demised, to the lessor in a condition not worse than its condition at present, but it shall not be bound in that case to restore any trees that may have been removed or otherwise have ceased to exist. 4. 4. According to the plaint, the defendant/respondent i.e., Municipal Corporation (Nagar Nigam), Meerut now represents the former Municipal Board, Meerut which is bound by the terms and conditions of the lease deed dated 18.06.2013. It is further stated that Late Haji Sheikh Allauddin, son of Sheikh Gulam Mohiuddin had transferred his rights in the land to Sheikh Manzoor Mohiuddin, son of Sheikh Gaush Mohiuddin of Lal Kurti, Meerut by registered Gift Deed dated 13.06.1939/21.06.1939 registered on 22.06.1941, therefore, Sheikh Manzoor Mohiuddin stepped into the shoes of original lessor. Subsequently the said Sheikh Manzoor Mohiuddin made an Exchange Deed with Gulzari Mal, the successor of plaintiff/respondent in respect of 2/3rd portion of the said leased land vide registered deed dated 11.07.1945 and transferred the remaining 1/3rd share in the said leased land to the said Gulzari Mal vide registered sale deed dated 18.04.1949. 5. In para-8 of the plaint, the plaintiffs/respondents had stated the details as to how the property has devolved on the plaintiffs/respondents. It is further stated that Late Gulzari Mal (predecessors of respondents) in the year1978 informed the then Municipal Board about his right to realize rent from the Municipal Board, Meerut under the said lease deed dated 18.06.1913 (herein-after referred to as the 'lease deed'). In reply to the said letter, the then Municipal Board, Meerut vide letter dated 179/ME/PWD dated 26.07.1978 asked for some clarification regarding his ownership and rights and other particulars. It is further stated that Sri Awadh Bihari Lal, son of Late Gulzari Mal replied the said letter addressing to the application of Civil Abhiyanta, Nagar Palika, Meerut on 15.07.1978, clarifying about his ownership and his rights as one of the lessor after the transfer of property by Haji Sheikh Allauddin. 6. Further case of the plaintiffs/respondents is that the period of lease has expired by efflux of time on 31.03.2010, and thereafter the possession of the defendant/revisionist is unauthorized, illegal and is that of trespasser. It is also stated that the defendant/revisionist in contravention of the terms and conditions of the lease deed had raised unauthorized constructions on the land which is absolutely illegal and liable to be removed. 7. It is also stated that the defendant/revisionist in contravention of the terms and conditions of the lease deed had raised unauthorized constructions on the land which is absolutely illegal and liable to be removed. 7. It is further stated that since the tenancy has been determined by efflux of time under Section 111 (a) of the Transfer of of Property Act, 1982 (herein-after referred to as ‘T.P.Act’), therefore, there is no need to serve notice under Section 106 of the T.P. Act. The plaintiffs/respondents served a notice upon the defendant/revisionist through their counsel Sri Ashutosh Garga, Advocate, Meerut on 14.03.2011 under Section 571 of the U.P. Municipal Corporation Act, 1959 stating therein that after the expiry of period of two months, the suit for the arrears of rent, eviction and mesne profit shall be filed in the competent court having jurisdiction. 8. In the aforesaid backdrop, the plaintiff/respondents prayed for the following reliefs:- “(a) That by a decree of this Hon'ble Court, the plaintiffs be got delivered the actual physical and vacant possession of the demised land and measuring about 11 Bigha, 16 Biswa situated at Budhana Gate Meerut formely known as Barf Khana and Now occupied under Gymkhana Maidan, Bachcha Park and Ladies Park, the boundaries of which are mentioned at the foot of this Plaint, from the defendant or any other person found in occupation thereof, after removing the superstructures/ constructions raised on the said land. (b) That the plaintiffs be got awarded a sum of Rs.3,00,000/-(Rs. Three lacs only) towards mesne profit for 17.05.2011. (c) That the plaintiffs be got awarded mesne profit at the rate of Rs.3,00,000/-(Rs. Three lacs only) per day from the date of filing of the suit till the date of delivery of the possession of the demised property as mentioned in paragraph (A) supra the court fees on the said amount shall be paid at the time of execution. (d) That such other relief as the Hon'ble Court may deem think fit and proper may kindly be awarded to the plaintiffs again the defendant under the facts and circumstances of the present case. (e) That the cost of the suit be awarded to the plaintiffs against the defendant.” 9. (d) That such other relief as the Hon'ble Court may deem think fit and proper may kindly be awarded to the plaintiffs again the defendant under the facts and circumstances of the present case. (e) That the cost of the suit be awarded to the plaintiffs against the defendant.” 9. In the aforesaid suit, defendant/revisionist filed an application 28Ga2 under Section 8 of the Arbitration and Conciliation Act, 1996 (herein-after referred to 'Act 1996') stating therein that under Clause 9 of the lease deed, if any dispute arises between the parties, the matter shall be referred to the State of U.P. and the decision taken thereon by the State of U.P. shall be final and binding upon the parties. 10. Plaintiff/respondents filed an objection against the said application 28Ga 2 of the defendant/revisionist taking a plea that Clause 9 of the lease deed cannot be termed to be an arbitration clause as alleged by the defendant/revisionist. It is further stated that there is no dispute in respect of covenants of the deed or proper fulfillment of the deed. The term mentioned in the lease deed has already expired, thus, the present case does not fall within the ambit of purview and scope of clause 9 of the lease deed as alleged by the defendant/revisionist. 11. It is further stated that it is not mentioned in the clause that the decision shall be binding on the parties to the deed as alleged by the defendant/revisionist. 12. The trial Court by order dated 21.08.2014 by placing reliance of a judgement of this Court in the case reported in 2014 (138) L.I.C. 901, All., Bharat Sanchar Nigam Limited Vs. Ashok Kumar held that the terms and conditions of the lease deed are binding upon the parties during the subsistence of lease deed, and as the term of the lease deed has expired on 31.03.2010, therefore, the dispute is not referable under Section 8 of the Act, 1996. 13. In the revision, preferred by the petitioner/defendant, the revisional Court after considering various clauses of the agreement found that after expiry of the lease deed, the lessor i.e., plaintiffs/respondents are entitled to regain the possession of the leased property. 13. In the revision, preferred by the petitioner/defendant, the revisional Court after considering various clauses of the agreement found that after expiry of the lease deed, the lessor i.e., plaintiffs/respondents are entitled to regain the possession of the leased property. The revisional court further held that the suit is for possession of the property leased out to the defendant/petitioner for a fixed period of 99 years and after expiry of the term of the lease, the lease has not been renewed between the parties. Accordingly, it held that as the dispute between the parties about the rights of the plaintiffs to regain the possession of the property is not one which relates to the rights and liabilities to the parties under the terms of the lease deed and the claim of the plaintiffs/respondents is clearly one that arose only after expiry of the term of the lease, and thus, the dispute is beyond the term of lease deed executed between the parties in the year 1911. Accordingly, it held that the matter is not referable to the Arbitration under Section 8 of the Act, 1996 and accordingly, it dismissed the revision. 14. Challenging the said order, learned counsel for the petitioner has contend that the finding of the trial Court in rejecting the application 28Ga2 of the defendant/petitioner is perverse and illegal as there was no lease agreement between the plaintiffs/respondents and defendant/petitioner. It is further submitted that the Court below has incorrectly narrated the basic facts which clearly indicate that the impugned orders have been passed in a very casual manner. He further contends that the defendant/petitioner cited number of judgements before the Court below but none of the judgements cited by the defendant/ petitioner have been dealt with by the Court below and this reflects that very casual approach had been adopted by the Court below in deciding the application 28Ga2, therefore, the impugned orders are liable to be set aside. 15. 15. Lastly, it is urged that there is an arbitration clause and even after the lease deed is expired, the arbitration clause shall remain in existence and is binding upon the parties, and thus, both the Courts below were obliged to refer the dispute under Section 8 of the Act, 1996 and it is only the domain of the Arbitrator to see whether the dispute falls within the ambit of the arbitration clause or not, and, thus, it is contended that the Court below has committed jurisdictional error in rejecting the revision of the defendant/petitioner. 16. In support of his case, learned counsel for the defendant petitioner has placed reliance upon the judgement of the Apex Court reported in 2000 (4) SCC 539 P. Anand Gajapati Raju Vs. P.V.G Raju, 2003 (6) SCC 503 Hindustan Petrolium Corporation Ltd. Vs. Pinkcity Midway Petroleums, 2004 (1) SCC 372 Mallikarjun vs. Gulbarga University, 2005 (2) CTC 487 Ford Credit Kotak Mahindra Ltd., vs M. Swaminathan , 2007 (5) SCC 692 National Agricultural Corp. Marketing Federation India Ltd. vs Cains Trading Ltd., 2007 (5) SCC 28 Punjab State and Ors. Vs Dina Nath, 2008 (2) Alld. ALJ 663, M/S A.R.C Overseas Private Limited vs M/S Bougainvillea Multiplies and Entertainment Centre Pvt. Ltd.& 2009 (10) SCC 103 , Branch Manager, Magma Leasing And Finance Ltd and Another vs Potluri Madhavilata And Another. 17. Per contra, learned counsel for the plaintiffs/respondents has submitted that the Clause on which reliance is placed by the defendant/petitioner is not an arbitration agreement as it does not conform to Section 7 of the Arbitration Act,1996.It is further contended that the cause of action for filing the suit for eviction had arisen after expiry of the lease deed on 31/03/2010,therefore, there is no claim with regard to the period during which the lease was in subsistence, hence, there is no dispute regarding the terms and conditions of the agreement or breach of any terms and conditions of the agreement when lease deed was in force, therefore, the dispute does not come within the ambit of alleged arbitration clause. 18. It is further contended that the defendant/petitioner did not hand over the actual physical vacant possession of the land after expiry of the lease deed on 31.03.2010. 18. It is further contended that the defendant/petitioner did not hand over the actual physical vacant possession of the land after expiry of the lease deed on 31.03.2010. The plaintiffs/ respondents did not consent to the occupation of the tenant after the expiry of the lease deed, therefore, the status of the defendant/petitioner is that of a tenant at sufferance (unauthorized occupant), hence, is liable to be ejected forthwith without issuance of any prior notice. In support of his case, he has relied upon the upon the judgement of the Apex Court as well as this Court reported in 2014 (2) SCC 201 P. Dasaratharama Reddy Complex vs. Government of Karnataka and Ors., 2014 (5) ADJ 644 , Bharat Sanchar Nigam Limited vs. Ashok Kumar, 2011 (5) SCC 532 Booz Allen and Hamilton Inc. vs. SBI Home Finance Ltd. and Ors., 2021 (2) SCC 1 Vidya Drolia and Ors. vs. Durga Trading Corporation and Ors & 2018 (2) SCC 21 Syed Sughra Zaidi vs. Laeeq Ahmad (Dead) through L.Rs. and Ors. 19. I have heard learned counsel for the parties and perused the record. 20. The fact as to how the plaintiffs/respondents came to be the owner of the property has been delineated in the earlier part of the judgement. They claimed the eviction of the petitioner/defendant from the property on the ground that the term of the lease period has expired and after expiration of the lease period, the possession of the petitioner/defendant is illegal and their status is that of a trespasser. 21. Now, the petitioner/defendant has instituted an application 28Ga2 under Section 8 of the Act, 1996 on the basis of stipulation referred as arbitration clause in the lease deed contending that the dispute in the instant case is covered under the said stipulation and as such, the suit is not maintainable and it is only the Arbitrator who has jurisdiction to decide the dispute. The stipulations on which the petitioner/defendant are harping is reproduced herein-below:- “Provided further that should any dispute arise at any time in future between the parties to the deed as to the proper fulfillment or otherwise covenants or of any matter with reference to this deed, the dispute shall be referred to the Government of the United of Province of Agra and Oudh, and the decision of the Government shall be accepted as final by the parties and their representative and assigns;” 22. According to the defendant/petitioner, the aforesaid clause is an arbitration agreement and conforms to the requirement of Section 7 of the Act, 1996 which defines the arbitration agreement. It is contended that even if the word 'Arbitration' is not used in a clause relating to the settlement of disputes, it does not detract from the clause being an arbitration agreement if it has the attributes or elements of an arbitration agreement. 23. In support of the aforesaid contention, petitioner has relied upon the judgement of the Apex Court reported in 2007 (5) SCC 28 . Paras- 8 & 10 of the said judgement are reproduced herein-below:- “8. A bare perusal of the definition of arbitration agreement would clearly show that an arbitration agreement is not required to be in any particular form. What is required to be ascertained is whether the parties have agreed that if any dispute arises between them in respect of the subject matter of the contract, such dispute shall be referred to arbitration. In that case, such agreement would certainly spell out an arbitration agreement. [See Rukmani Bai Gupta v. Collector of Jabalpur AIR 1981 SC 479 . However, from the definition of the arbitration agreement, it is also clear that the agreement must be in writing and to interpret the agreement as an “arbitration agreement” one has to ascertain the intention of the parties and also treatment of the decision as final. If the parties had desired and intended that a dispute must be referred to arbitration for decision and they would undertake to abide by that decision, there cannot be any difficulty to hold that the intention of the parties was to have an arbitration agreement, that is to say, an arbitration agreement immediately comes into existence. 10. We have already noted clause 4 of the Work Order as discussed hereinabove. 10. We have already noted clause 4 of the Work Order as discussed hereinabove. It is true that in the aforesaid clause 4 of the Work Order, the words "arbitration" and "arbitrator" are not indicated; but in our view, omission to mention the words "arbitration" and "arbitrator" as noted herein earlier cannot be a ground to hold that the said clause was not an arbitration agreement within the meaning of Section 2[a] of the Act. The essential requirements as pointed out herein earlier are that the parties have intended to make a reference to an arbitration and treat the decision of the arbitrator as final. As the conditions to constitute an “arbitration agreement” have been satisfied, we hold that clause 4 of the Work Order must be construed to be an arbitration agreement and dispute raised by the parties must be referred to the arbitrator. In K.K. Modi v. K.N. Modi [1998] 3 SCC5 73 this Court had laid down the test as to when a clause can be construed to be an arbitration agreement when it appears from the same that there was an agreement between the parties that any dispute shall be referred to the arbitrator. This would be clear when we read para 17 of the said judgment and Points 5 and 6 of the same which read as under: 5. that the agreement of the parties to refer their disputes to the decision of the tribunal must be intended to be enforceable in law, and lastly 6. the agreement must contemplate that the tribunal will make a decision upon a dispute which is already formulated at the time when reference is made to tribunal.” 24. On the other hand, learned counsel for the plaintiffs/ respondents has contended that stipulation extracted above, is not an arbitration clause, inasmuch as it does not fulfill the test laid down by the Apex Court for it to be a valid arbitration agreement. It is submitted that the aforesaid clause does not refer to word 'Arbitration' as the mode of settlement of dispute between the parties. The perusal of the said clause does not indicate the intention of the parties that the decision of the Government of United Province of Agra and Awadh is binding on either party, therefore, the aforesaid clause is not an arbitration clause. 25. The perusal of the said clause does not indicate the intention of the parties that the decision of the Government of United Province of Agra and Awadh is binding on either party, therefore, the aforesaid clause is not an arbitration clause. 25. In support of the said argument, learned counsel for the respondent has placed reliance upon the judgment of the Apex Court reported in 2014 (2) SCC 201 P. Dasaratharama Reddy Complex vs. Government of Karnataka and Ors. He has placed reliance upon paras-14 & 27 of the said judgement, which are being reproduced herein-below:- “14. In Mysore Construction Co. v. Karnataka Power Corporation Limited and Ors. (supra), the learned Designated Judge referred to the passage from Russell on Arbitration (19th Edition, page 59), the judgments of this Court in K.K. Modi v. K.N. Modi and Ors. (supra), Chief Conservator of Forests, Rewa v. Ratan Singh Hans MANU/SC/0066/1966 : AIR 1967 SC 166 ; Smt. Rukmanibai Gupta v. the Collector, Jabalpur (supra); State of Uttar Pradesh v. Tipper Chand (1980) 2 SCC 341 ; State of Orissa v. Damodar Das (1996) 2 SCC 216 ; Bharat Bhushan Bansal v. Uttar Pradesh Small Industries Corporation Limited, Kanpur (1999) 2 SCC 166 and observed: The above decisions make it clear that an agreement or a clause in an agreement can be construed as an arbitration agreement, only if, (i) it provides for or contemplates reference of disputes or difference by either party to a private forum (other than a Court or Tribunal) or decision; (ii) it provides either expressly or impliedly, for an enquiry by the private forum giving due opportunity to both parties to put forth their cases; and (iii) it provides that the decision of the forum is final and binding upon the parties, without recourse to any other remedy and both would abide by such decision. Where there is no provision either for reference of disputes to a private forum, or for a fair and judicious enquiry, or for a decision which is final and binding on parties to the dispute, there is no arbitration agreement. 27. Where there is no provision either for reference of disputes to a private forum, or for a fair and judicious enquiry, or for a decision which is final and binding on parties to the dispute, there is no arbitration agreement. 27. To the aforesaid proposition, we may add that in terms of Clause 29(a) and similar other clauses, any dispute or difference irrespective of its nomenclature in matters relating to specifications, designs, drawings, quality of workmanship or material used or any question relating to claim, right in any way arising out of or relating to the contract designs, drawings etc. or failure on the contractor's part to execute the work, whether arising during the progress of the work or after its completion, termination or abandonment has to be first referred to the Chief Engineer or the Designated Officer of the Department. The Chief Engineer or the Designated Officer is not an independent authority or person, who has no connection or control over the work. As a matter of fact, he is having over all supervision and charge of the execution of the work. He is not required to hear the parties or to take evidence, oral or documentary. He is not invested with the power to adjudicate upon the rights of the parties to the dispute or difference and his decision is subject to the right of the aggrieved party to seek relief in a Court of Law. The decision of the Chief Engineer or the Designated Officer is treated as binding on the contractor subject to his right to avail remedy before an appropriate Court. The use of the expression 'in the first place' unmistakably shows that non-adjudicatory decision of the Chief Engineer is subject to the right of the aggrieved party to seek remedy. Therefore, Clause 29 which is subject matter of consideration in most of the appeals and similar clauses cannot be treated as an Arbitration Clause. 26. Para-8 of the judgment in the case of Punjab State and Ors vs. Dina Nath (supra) relied upon by the learned counsel for the petitioner, extracted above, also defines the definition of arbitration agreement and one of the necessary condition to construe an agreement to be an arbitration agreement is that the parties had desired and intended that a dispute must be referred to arbitration for decision and they would undertake to abide by the decision. On the presence of such condition, there cannot be any difficulty to hold that the intention of the parties was to have an arbitration agreement, and thus, the arbitration agreement immediately comes into existence. Though, it is true that the mention of word 'Arbitration' in the clause may not be necessary to construe an agreement to be an arbitration agreement, but the relevant clause which is being termed as 'arbitration agreement' has to conform to the requirement of arbitration as contained in Section 7 of the Arbitration Act and elaborated by the judgement of the Apex Court. 27. The Court now on the principles set out by the Apex Court proceeds to find out whether in the instant case, the stipulation referred as an arbitration agreement, can be termed an arbitration agreement; it is evident from the clause extracted above, which has been relied upon by the petitioner for referring the dispute to the arbitrator in the opinion of the Court lacks necessary ingredients of arbitration agreement that the decision of the arbitrator shall be binding upon the parties. 28. Perusal of the aforesaid clause does not in any way indicate the intention of the parties that the decision of the United Province shall be binding upon the parties, therefore, in absence of such a mandatory condition, the aforesaid clause cannot be termed as arbitration clause. Since, this Court has held that the clause referred above, is not an arbitration clause, therefore, there is no question of referring the matter to the arbitration and application under Section 8Ga2 of the defendant/petitioner was not maintainable. 29. It is also pertinent to note one of the arguments raised by the counsel for the petitioner that the Court below has noted wrong fact in the order that the lease deed was executed between the plaintiffs/respondent and defendant/petitioner and this reflects that the impugned orders were passed in a most casual manner. In this regard, para-39 of the writ petition is being reproduced herein-below :- “39. That the additional Civil Judge (Senior Division) Meerut in its order dated 21.08.2014 has incorrectly mentioned and discussed the facts which were not even the case of the plaintiff. The court below stated that there was a Lease deed dated 1.4.1911 between the plaintiff and defendant. But it was not even the case set up in the plaint. That the additional Civil Judge (Senior Division) Meerut in its order dated 21.08.2014 has incorrectly mentioned and discussed the facts which were not even the case of the plaintiff. The court below stated that there was a Lease deed dated 1.4.1911 between the plaintiff and defendant. But it was not even the case set up in the plaint. A bare perusal of the lease deed also however shows that there was no lease deed executed between the plaintiffs and defendant Rather it was between Haji Sheikh Alauddin and Chairman Municipal Board, Meerut. The court below had incorrectly narrated the basis facts which clearly indicate that the impugned order was passed in a most casual manner.” 30. If that argument of the learned counsel for the petitioner is accepted, which means that if the plaintiff/respondents have not stepped into the shoes of the lessor Haji Sheikh Alauddin and lease deed is not considered to have been executed between the plaintiffs/respondents and Chairman, Municipal Board, Meerut, the terms and conditions of the lease deed was not binding upon the plaintiffs/respondent which means that the above clause which the defendant/petitioner is referring to an arbitration agreement, even otherwise, shall not be binding upon the plaintiffs/respondents. 31. In view of the finding that the stipulation referred as 'arbitration agreement' of the lease deed is not an 'arbitration agreement', therefore, in the opinion of the Court, the application 8Ga2 under Section 8 of the Act, 1996 filed by the defendant/petitioner is misconceived and was not maintainable. In such view of the fact, the Court is not proceeding to deal with the other contentions of the parties to unnecessarily burden the judgement. 32. Thus, for the reasons given above, the writ petition lacks merit. It is, accordingly, dismissed.