Bangalore District Court
/ : 1) Laqshya Digital Media Pvt.Ltd vs M/S.Bhoruka Park Private Limited on 22 November, 2018
IN THE COURT OF THE VI ADDL. CITY CIVIL & SESSIONS JUDGE
AT BENGALURU CITY : (CCCH.11)
Dated this the 22nd day of November, 2018
PRESENT: Sri. Rama Naik, B.Com., LL.B.,
VI Addl.City Civil & Sessions Judge,
Bengaluru City.
A.S.NO:48/2012
PLAINTIFFS / : 1) LAQSHYA DIGITAL MEDIA PVT.LTD.,
APPELLANTS A Company incorporated under the
Provisions of Companies Act, 1956
Having its registered Office at :
Unit No.17, Andheri Industrial Estate,
Off Veera Desai Road,
ANDHERI (West), MUMBAI-400 053.
Reptd.by its Head-Finance & Commercial
Now by Sri.N.Ravi Reddy,
S/o.late Sri.P.Nanjundappa,
Aged about 45 years.
2) LAQSHYA DIGITAL MEDIA PVT.LTD.,
Head Office at 1st Floor, ABB House,
Plot No.22-A, Shah Industrial Estate,
Off Veera Desai Road,
ANDHERI (West), Munbai - 400 053.
3) LAQSHYA DIGITAL MEDIA PVT.LTD.,
No.167, Amar Jyothi Layout,
Domlur Extension,
Koramangala Ring Road,
Bengaluru-560 071.
4) LAQSHYA DIGITAL MEDIA PVT.LTD.,
No.29, 2nd Floor, Mallik's Bldg.
Boring Hospital Road, Shivajinagar,
Bengaluru-560 001.
[By Pleader Sri.V.V.Gunjal]
AS.48/2012
2
/Vs/
DEFENDANT : M/S.BHORUKA PARK PRIVATE LIMITED
A Company incorporated under the
provisions of Companies Act, 1956
Having its registered office at :
No.48, Lavelle Road, Bengaluru-560 001.
Reptd.by its authorised representative-
Mr.VishalJhunjhunwala.
[By Pleader Sri.S.Srinivasa Murthy]
--
JUDGMENT
This suit is filed under Section 34 of the Arbitration and Conciliation Act, 1996, by the Appellants/Plaintiffs praying for setting aside the award passed by the learned Arbitrator Sri.N.S.Sangoli, on 29.02.2012 in CMP.No.60/2010.
2) The Plaintiffs' case in brief are that, the Plaintiff is engaged in the business of outdoor Media Services and out of home advertisement and content deployment and as part of their business, provide service of displaying commercial advertisement at different location (indoor and outdoor) at location in public and private commercial AS.48/2012 3 establishments frequented by public. The Plaintiffs provide services to their clients for dissemination of information of the products and services etc., of their clients by charging rents and services charges for the use of space provided/time provided for display etc. The Defendant/Respondent claiming to have established and developed "Technology Park" which provided infrastructure and support services for businesses, particularly, real estate and office space in the field of software technology, where technology transfer function and linked with educational or research institutions. In addition, it was claimed as highly successful tech park visited by droves of people involved in the field and had cyber park, hi-tech park, industrial park, innovation center, R&D research and technology facilities etc. The Plaintiffs, hence, offered to provide their services and the Defendant gave the right of exclusive permission to install and operate 8 screens in form of LCD/Plasma Screen and the Plaintiffs were to pay a sum of Rs.62,400/- per month, which was inclusive of direct taxes like TDS, IT and AS.48/2012 4 charges for electricity consumed. On these and certain other parameters, the parties had entered into an Agreement on 01.04.2008. However, provision was made only for four screens and only four screens were installed. Thus, the rates will have to be worked on pro-rata basis. The duration of the agreement was for a period of five years.
The Plaintiffs further state that, due to recession and its economic impact on the industry, the Plaintiffs sought for reduction of license fee and offered to pay Rs.21,034/- per month, if the said offer was not acceptable, the Plaintiffs offered to exit from the agreement with effect from 31.01.2009. The Plaintiffs also state that they had paid as agreed rentals at the rate of Rs.70,113/- towards four display panels, without any default till December, 2008. The Defendant, vide response dated 02.03.2009 informed the Plaintiffs that it would give concession of 42% which would amount to Rs.37,440/- with effect from 01.08.2009. The Defendant accepted the fact that there was economic stagnation.
AS.48/2012 5 The Plaintiffs further state that they had also informed on 29.04.2009 that in full and final settlement of payment of Rs.20,000/- they wish to terminate the agreement. The Defendant replied accepting the termination offer at Rs.20,000/-, but requested that it requires the screens for sunning messages and videos for the benefit of its tenant, vide reply dated 14.04.2009. The said agreement was terminated and fresh undertaking as arrived at. Though reduction was accepted, the Defendant issued legal notice dated 31.07.2009 demanding sum of Rs.4,84,361/- and later sought for arbitration. Thereafter, the Hon'ble High Court in CMP.No.60/2010 appointed Arbitrator by its order dated 16.11.2010. In pursuance of that, the matter was referred for arbitration and the Defendant filed claim petition on 02.03.2011. Notices were ordered and the Defendant filed reply during April, 2011. The learned Arbitrator thereafter passed an award holding that the Plaintiffs are liable to pay Rs.6,22,902/- together with interest at 12% from the date of claim AS.48/2012 6 petition and thereby, the Defendant's appeal has been allowed in its entirety. Being aggrieved, the Plaintiffs have challenged the impugned award on the following grounds.
(1) The learned Arbitrator has failed
to apply his mind to the facts and
circumstances of the case and has
ignored or over-looked the vital material documents.
(2) The learned Arbitrator has failed to note Clause-22 of the Arbitration Agreement, therefore, the award passed is contrary to Section 34(2)(a)(i) to (iv). The parties have taken definite stand about the fresh undertaking regarding fee and other aspects, the new agreement has replaced the old agreement or the terms stand modified.
(3) The learned Arbitrator ought to decide the dispute not only within the parameters of terms and conditions of the agreement, but bound to appreciate the evidence on records and his findings to be based on appreciation of records. The learned Arbitrator has not given reason AS.48/2012 7 for rejecting or ignoring the Plaintiffs contentions and documents.
(4) Once having accepted the offer of
termination with settlement of
Rs.20,000/-, the learned Arbitrator ought not to have passed an award awarding entire claim of the Defendant together with interest.
(5) The learned Arbitrator has failed to note that the rate was agreed on the prima facie understanding that eight screens to be set up and the service tax, electricity charges, etc., would have to be worked on prorata usage.
(6) The award is patently illegal and it touches the code of justice and morality as the same is so unfair and unreasonable and it shocks the conscience of the court. For all these reasons, the Plaintiffs pray for setting aside the impugned award.
3) The Defendant, in this case, has entered its appearance through its counsel and filed its statement of AS.48/2012 8 objection. The Defendant in its statement of objection has denied the averments of the plaint. Inter alia it is stated that :
(i) The award which is under challenge is not maintainable having regard to the scope of Section 34 of Arbitration and Conciliation Act, 1996.
(ii) No grounds have been made out to set aside the award.
(iii) There is no new contract as claimed in para-4 of the plaint.
(iv) The Plaintiff cannot urge any grounds which are not taken before the learned Arbitrator, therefore, the suit is liable to be dismissed.
(v) The contentions that have been raised in the suit are contrary to what has been stated by the Plaintiffs witness.
It is also stated that the object of the Arbitration and Conciliation Act, 1996 is to give finality to arbitral awards. The scope of judicial interference with such awards is extremely limited, hence, prays for dismissal of the suit.
4) Heard. Perused the records placed in this case.
AS.48/2012 9
5) The points that arise for my consideration are:-
(1) Whether Plaintiffs have made out any of the grounds mentioned in Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the impugned award?
(2) What Order?
6) My answers to the above points are :-
Point No.1 - In the Affirmative;
Point No.2 - As per final order, for the following :
REASONS
7) POINT NO.1 : The whole crux of the matter in Plaintiffs' case is that, the learned Arbitrator is bound to appreciate the evidence on record and his findings to be based on appreciation of records, but the learned Arbitrator has not given reason for rejecting or ignoring the Plaintiffs' contentions and documents, hence, the award is patently illegal and it touches the code of justice and morality as the same is so unfair and unreasonable and it shocks the conscience of the court.
AS.48/2012 10 On the other hand, the Defendant has urged that the object of the Arbitration and Conciliation Act, 1996 is to give finality to the arbitral awards. The scope of judicial interference with such awards is extremely limited. The grounds urged by the Plaintiffs do not come within the purview of Section 34.
8) The following decisions are brought to the notice of the Court by the Defendant regarding limited scope of judicial interference in the award passed by the learned Arbitrator.
(1) AIR 2008 SC 2928 = MANU/SC/7640/2008 " .... The legal position has been crystalized in a series of judgments of this Court that the Arbitrator has got ample power in giving an award. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself a task of being a judge of the evidence before the arbitrator. The court should approve the award with the desire to support it, if that is reasonably possible rather than to destroy it, by calling it illegal. This court has very limited jurisdiction to interfere with the reasoned award."
AS.48/2012 11 (2) 2012 (1) SCC 594 = MANU/SC/1248/211 "A Court does not sit in appeal over the award of the arbitral tribunal by re-assessing or re- appreciating the evidence. .............Therefore, in the absence of any ground under Section 34(2) of the act, it is not possible to re- examine the facts to find out whether a different decision can be arrived at."
(3) 2010(1) SCC 409 =
MANU/SC/1857/2009
"Courts ought not to re-appreciate the evidence led before the arbitrators which evidence has been duly scrutinised and evaluated by the Arbitrator. Elaborate reasons given by arbitrator regarding claims. In such an event, findings cannot be said to be perverse or based on no evidence.
Arbitrator is the final arbiter for the dispute between the parties and it is not open to challenge the award on ground that arbitrator has drawn his own conclusion or has failed to appreciate facts .......
Conclusions of Arbitrator substituted by High Court set aside."
(4) (1994) 6 SCC 485 = MANU/SC/0865/1994 "The arbitrator is the final arbiter for the dispute between the parties and it is not open to challenge the award on the ground that the arbitrator has drawn his own conclusion or has failed to appreciate the facts. "
9) At the same time, it is relevant to mention the decision reported in 2015(3) SCC 49 in the case of AS.48/2012 12 Associate Builders Vs. Delhi Development Authority, wherein, the Hon'ble Supreme Court was pleased to hold that "none of the grounds contained in Section 34(2)(a) of the Arbitration and Conciliation Act, 1996 deal with merits of the decision rendered by arbitral award. It is only when the award is in conflict with Public policy of India as prescribed in Section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996 that the merits of the arbitral award are to be looked into under specified circumstances."
10) The merits of the arbitral award can be assailed having regard to the grounds urged by the Plaintiffs in this case. The authorized representative of the Defendant/Claimant got examined as C.W.1 before the learned Arbitrator and Ex.C.1 to Ex.C.10 were got marked on behalf of the Defendant. The Senior Manager of the Plaintiffs got examined as R.W.1 and got marked Ex.R.1 to R.10 on behalf of the Plaintiffs.
AS.48/2012 13
11) On perusal of the impugned award makes it clear that, the learned Arbitrator framed three points for his consideration, which are as follows :
" 1. Whether the respondent proves that the claimants voluntarily from 31.01.2009 and to receive Rs.21034=00 pm instead of Rs.62400=00 pm as agreed earlier?
2. Whether the respondent prove that the claimant agreed to receive Rs.20000=00 as full and final settlement towards the dues of the claimant by respondent?
3. Whether the equipments and installations worth Rs.480000=00 belonging to the respondents are in the possession of the claimant and they are liable to return them to the respondent or to pay the said amount after adjusting the agreed Rs.20000=00 as pleaded by the respondents?"
12) It is the contention of the Plaintiffs that the learned Arbitrator has not appreciated the records placed before him and has not given reason for rejecting or ignoring the Plaintiffs' contention and documents while giving findings on points for consideration.
13) On perusal of the claim petition filed before the learned Arbitrator by the Defendant, wherein, the AS.48/2012 14 Defendant claimed a sum of Rs.6,22,902/- from the Plaintiffs. The Defendant claimed a sum of Rs.1,40,226/- towards installation/display fees for the period from 01.01.2009 to 28.02.2009 plus service tax at the rate of Rs.70,113/- per month and claimed a sum of Rs.3,44,135/- towards installation fees for the period from 01.03.2009 to 31.07.2009 at the rate of Rs.68,827/- per month [including service tax]. It also claims interest of Rs.1,38,541/- at the rate of 18% per annum on Rs.4,84,361/- from the date of notice i.e. from 31.07.2009 till 02.03.2011. In all, the Defendant claimed a sum of Rs.6,22,902/-. The learned Arbitrator was pleased to pass the award awarding the said amount claimed by the Defendant with interest at the rate of 12% per annum from the date of petition. It is the Plaintiffs' case that, due to global recession, a meeting was held in the office of the Defendant on 17.02.2009 regarding re-negotiations on display rentals. This fact has been substantiated by Ex.R.1, e-mail dated 19.02.2009 sent by the Plaintiffs to Defendant. In Ex.R.1, Plaintiffs proposed to pay AS.48/2012 15 Rs.21,034/- per month, wherein, it is also mentioned that if the said proposal is not accepted within seven days from the date of receipt of it, the Plaintiffs would have no option but to exit the agreement with effect from 31.01.2009. Ex.R.1 makes it clear that the Plaintiffs proposed to exit the Agreement with effect from 31.01.2009, if the proposal made by the Plaintiffs is not accepted. The Defendant replied to Ex.R.1, vide e-mail dated 19.02.2009, which is marked as Ex.R.2, which reads as follows :
" I would like to point out here that your mail is not in lines with our discussion. It was discussed and agreed that you would pay us the due rentals for January and February and that whatever the new proposal agreed would be from prospective effect only. We have had also clearly told you that since our Director is not in station we would required till the end of next week (end of the month) to revert back. In any case please clear the dues so as to take the matter forward."
14) In Ex.R.2, the Defendant mentioned that the Plaintiffs were in due of rentals for January and February, wherein, it is also mentioned that whatever the new proposal agreed would be from prospective effect only. It AS.48/2012 16 clearly indicates that as per Defendant, the Plaintiffs were due in rentals for January and February. Thereafter, on the same day i.e. 19.02.2009, the Plaintiffs sent an e-mail at Ex.R.3, wherein, the Plaintiff stated that "not agreed"
which is referring to arrears of pending from Plaintiffs' side. The Defendant on 02.03.2009 sent an e-mail at Ex.R.3(a), wherein the Defendant agreed to revise the rentals of Rs.37,440/- with effect from 01.03.2009 to 31.08.2009. In Ex.R.3(a), the Defendant urged the Plaintiffs to pay dues of January and February. Ex.R.3(a) reads as follows :
" We have reviewed your offer and we understand the business and economic scenario prevailing in the country and elsewhere. We would definitely like to continue the relationship with Laqshya for providing the services in our building as a long term partner of our company. We appreciate your concern of falling revenues for your company during these uncertain times and being a partner we would definitely like to share your concerns, commercially, so that we can both profit from the same in the longer term. Generally, as a company policy, we do not review the contracted amount but in view of extra-ordinary scenario, as a special case on your request, we can work on the following terms:
1. As against monthly rentals of Rs.62,400 plus indirect taxes, we will revise the same to AS.48/2012 17 Rs.37,440 which works out to 42% discount on the agreed amount.
2. The discount offered will be effective from March 1, 2009 to August 31, 2009.
We are sure that in the coming months business will turn around for the better and will be to generate business as per plans that were forecast when the original amount was agreed. Looking into the long term business association we have worked out this special discount for the interim period, with all other terms and conditions remaining the same. in the meantime we urge you to kindly pay us the dues for January and February."
15) However, the Plaintiffs on 13.03.2009 sent an e-mail at Ex.R.4, wherein, the Plaintiffs mentioned the termination of agreement on immediate effect as discussed in the office of the Defendant. The Plaintiffs also sent termination notice dated 13.03.2009 along with Ex.R.4. The said termination notice is marked as Ex.R.5, wherein, the Plaintiffs clearly mentioned that "We have taken a decision to terminate hire agreement on immediate effect to avoid further financial losses." It is also mentioned that they are agreeing to clear arrears for the month of January, 2009. The Plaintiffs clearly mentioned in Ex.R.1 that if their proposal is not AS.48/2012 18 acceptable, they would exit the agreement with effect from 31.01.2009. More specifically in Ex.R.5, the Plaintiff terminated the Agreement with immediate effect. Having regard to Ex.R.5, it can be said that the agreement was terminated on 13.03.2009 by the Plaintiffs. After that, on 25.03.2009 the Defendant sent an e-mail (Mail-6) at Ex.R.6 to the Plaintiff. It reads as follows :
" We have received the notice and we appreciate the problems being faced by you in the installations due to market circumstances. In this respect we would like to say that since this matter was first discussed in February 2009, please pay the dues uptil February'09 and then terminate the agreement. Then you can arrange to take your screens subject to repairing the location to its original condition. We hope that you will abide by your request to effect a amicable termination."
16) In Ex.R.6 (Mail-6), the Defendant also mentioned to pay rents uptil February, 2009. On 14-04-2009, the Plaintiffs sent one more e-mail (Mail-7) at Ex.R.6, it reads as follows:
"As discussed we are agreed to terminate hire agreement with full and final settlement as Rs. 20,000=00."
17) Hence, it is clear from Ex.R.6 (Mail-7) that, termination of agreement was agreed with full and final settlement of AS.48/2012 19 Rs.20,000/-. This fact is further substantiated by Ex.R.7 (Mail-8), e-mail sent by Defendant to the Plaintiff on 28.04.2009, which reads as follows :
" We want to go ahead with your offer of termination with Rs.20000/- offer for settlement as we understand the problems faced by laqshya due to the prevailing market conditions and that the laqhya is completely closing its digital screens business.
We will retain the screens as we require them for running messages and videos for our tenants at the Building and we want you to give us the technology used for uploading the content on the screens.
Once again with the above as our final offer we would like to close the entire issue and hope for doing business with laqhsha in future."
18) On perusal of Ex.R.8 makes it clear that the Defendant accepted the termination with settlement of Rs.20,000/- and finally closed the entire issue. When matter stood thus, the Defendant issued a legal notice to the Plaintiff on 31.07.2009 at Ex.C.3, wherein, the Defendant claimed arrears of rentals from 01.01.2009 to 31.07.2009 amounting to Rs.4,84,361/-. The Defendant also claimed interest at the rate of 18% per annum.
AS.48/2012 20 Thereafter, the Defendant also sent a notice to appoint an Arbitrator at Ex.C.9 to the Plaintiffs on 10.12.2009. It is important to note that the Plaintiffs right from the beginning after global recession proposed to exit Agreement with effect from 31.01.2009. Thereafter, on 13.03.2009 the agreement was terminated with immediate effect. Even after the termination of agreement, the matter was settled for Rs.20,000/-. These are the facts established by Exs.R.1 to R.9. When matter being thus, the Defendant sent a legal notice at Ex.C.3 stating arrears of rentals from 01.01.2009 to 31.07.2009. On the basis of the pleadings of the Defendant, the learned Arbitrator held that "the termination date can be 31.07.2009, date of legal notice sent by the Claimant" This finding of the learned Arbitrator is against the documentary evidence placed by the parties before him. The Defendant never terminated the agreement, but he demanded arrears of rentals alleged to be due by the Plaintiff as per Ex.C.3. In fact, the agreement was terminated by the Plaintiffs on 13.03.2009 with immediate effect as per Ex.R.4. Earlier to Ex.R.4, Plaintiffs AS.48/2012 21 proposed to exit the agreement with effect from 31.01.2009 as per Ex.R.1. Under such circumstances, the findings of the learned Arbitrator that "Claim of the Claimant [Defendant] detailed in para 7 of the affidavit of CW1 Rs.6,22,902=00 as calculation of interest at 18% pa is acceptable..." is against the documentary evidence placed before him. Ex.R.2 makes it clear that Plaintiffs were due in rentals of January and February, 2009. Of course, the Plaintiffs did not agree in Ex.R.3 that they were in due of rentals for February, 2009. They agreed that they were due in rentals for January, 2009. The fact of paying rentals for January 2009 by the Plaintiffs has been specifically mentioned in Ex.R.5. Be it as it may.
19) Assuming that arrears of rentals are due from Plaintiffs, it would be only for January and February, 2009. This fact is established by Ex.R.2, Ex.R.2(a) and Ex.R.6, the e-mails sent by Defendant to the Plaintiffs. Moreover, it is important to note that the Defendant prematurely demanded the rentals of February, 2009 at Ex.R.2 on 19.02.2009 before it is being due by the Plaintiffs. Having AS.48/2012 22 regard to Ex.R.5, the termination notice sent through e-mail on 13.03.2009, it can be come to the conclusion that the Plaintiffs were displaying advertisement till the date of termination of notice. At any event, the Plaintiffs would not be due in arrears of rentals after 13.03.2009, the date of termination of agreement. Under such circumstances, the findings arrived at by the learned Arbitrator is not based on documents produced by the parties.
20) Perused the oral testimonies of the parties. R.W.1 [Plaintiff] in his cross-examination has specifically deposed that :
" ....We are not doing now indoor
advertisements since Dec, 2008 or Jan,
2009..."
" ---We have terminated the agreement probably in March 2009. I have also communicated this during February 2009. The Agreement is terminated during Feb, 2009. There was a discussion about session of display charges during the months of Jan, Feb 2009. Display charges are paid upto 31.12.2008........"
".........it is not true to say that the agreement was not cancelled till 13.03.2009 as per Ex.R.4. It is true that correspondences were made as agreement was not terminated. I have not made payments as per the letter AS.48/2012 23 Ex.R.5. After Ex.R.5 we have not made any payments................"
It is further deposed that :
" Except Ex.R.7 mail No.8 there is no other material to show that the Claimant accepted final settlement for Rs.20,000/-. We have not accepted the offer in full made in mail No.8 at Ex.R.7. As per mail 9 at Ex.R.8 we have intimated our acceptance of offer in part to claimant. The claimant did not accept the counter offer made by the Respondent in terms of mail 9 Ex.R.8..........."
21) Now coming to the evidence of C.W.1-Claimant (Defendant), C.W.1 in his cross-examination has deposed that :
"........... The Respondents displayed their advertisement for about one year from the date of the agreement ....."
"............ In December, 2008 the last rent was paid by the Respondents."
" I now see the mail sent to me by the Respondent on 19.2.2009. It is at Ex.R.1. I have replied to Ex.R.1 as per Ex.R.2. I now see mail 19.2.2009. It is addressed to me. It is at Ex.R.3, other mails dated 2.3.2009, 13.3.2009, 25.3.2009, 14.4.2009, 28.04.2009, 29.4.2009 and they are at Ex.R.4 to R.9 (By consent)."
22) On perusal of oral evidence also, it is crystal clear that the Plaintiffs did not display indoor advertisement since AS.48/2012 24 December, 2008 or January, 2009. This fact has also been admitted by Defendant that the Plaintiffs displayed their advertisement for about a year from the date of the agreement. Hence, from the oral evidence of the parties also makes it clear that the Plaintiffs did not display their advertisement after January, 2009.
23) The Plaintiffs in their oral evidence have deposed that they have terminated the agreement in February, 2009 and the same was communicated to the Defendant. The Defendant has put a specific suggestion to the RW-1 that the Agreement was not cancelled till 13.03.2009 as per Ex.R.4. The Defendant thereby admitted the fact that the Agreement was cancelled by the Plaintiffs on 13.03.2009 as per Ex.R.4. Moreover, the Defendant has admitted all the e- mail correspondences at Ex.R.1 to Ex.R.9. Under such circumstances it can be said that, the agreement was duly terminated on 13.03.2009 as per Ex.R.4. When matter stood thus, the learned Arbitrator's finding that the termination date can be 31.07.2009, the date of legal notice sent by the Claimant is nothing but devoid of merits. This finding of the AS.48/2012 25 learned Arbitrator is not supported by any evidence and it is contrary to the oral and documentary evidence adduced by the parties. On perusal of the legal notice at Ex.C.3, wherein, the Defendant has made a demand of alleged arrears of rentals, in fact, Ex.C.3 is not at all termination notice. Termination notice is at Ex.R.5, which was intimated to the Defendant through Ex.R.4. The Defendant has deposed that the last payment was made by the Plaintiffs in December, 2008. The Plaintiffs, right from the beginning said, that they are in due of rentals for January, 2009. However, the Defendant said that the Plaintiffs were in arrears of rentals for January and February, 2009. In view of the termination of the agreement by the Plaintiffs, vide Ex.R.4 and the termination letter dated 13.03.2009 at Ex.R.5, at the most it can be said that the Plaintiffs are liable to pay rentals for January, 2009 or January and February, 2009. When matter stood thus, there is no question of claiming rentals from January, 2009 to 31.07.2009 with interest as claimed in Ex.C.3-legal notice. Clause-22 of AS.48/2012 26 Ex.C.2-Display Agreement dated 01.04.2008 specifically states as follows :
"22. DISPUTES Any and all disputes and claims as aforesaid, which cannot be fully and satisfactorily resolved or settled mutually by the parties, shall at the request of either party, be submitted to, and be settled by arbitration in Bangalore, under and in accordance with the Arbitration and Conciliation Act, 1996 by a sole arbitrator appointed by mutual consent of the Parties. The language of arbitration shall be in English."
When the parties have arrived at full and final settlement and in view of the settlement, the Defendant wanted to go ahead with the offer of termination with Rs.20,000/- and wanted to close the entire issue; again, the Defendant issued legal notice at Ex.C.3 claiming alleged arrears of rentals and notice at Ex.C.2 for arbitrability of the matter is against the natural justice
24) The Plaintiffs mentioned in e-mail-9 at Ex.R.8 that it is advisable not to retain screens, which requires regular uploading contents through software which is too expensive to run for prescribed time and it wont work for more than a week. In spite of this request by the Plaintiffs, the Defendant AS.48/2012 27 stuck to its demand of retaining the screens vide e-mail-10 at Ex.R.9 and thereby invoked arbitration clause.
25) In the case of Associate Builders Vs. Delhi Development Authority reported in 2015(3) SCC 49, wherein it has been held that " whether a finding is based on no evidence or an arbitral tribunal take into account something irrelevant to the decision which it arrives at or ignores vital evidence in arriving at a decision, such decision would necessarily be perverse."
26) For the foregoing reasons and discussions, I am of the opinion that the impugned award was passed ignoring the vital evidence both documentary and oral evidence. If the learned Arbitrator considered the evidence placed before him in a perspective manner, the learned Arbitrator ought not to have passed the impugned award. Hence, the award is patently illegal and the same is required to be set aside. Accordingly, I answer Point No.1 in the affirmative.
AS.48/2012 28
27) POINT NO.2 : For foregoing discussions and answer to Point No.1, I proceed to pass the following :
ORDER The suit filed by the Plaintiff under Section 34 of the Arbitration and Conciliation Act, is hereby allowed.
The impugned award passed by the learned Arbitrator on 29.02.2012 in CMP.No.60/2010 is hereby set aside.
(Dictated to the Judgment Writer, transcribed and computerized by her, transcript thereof corrected and then pronounced by me in open court, dated this the 22nd day of November, 2018.) (RAMA NAIK) VI Addl.City Civil & Sessions Judge, Bengaluru City.