Gujarat High Court
Gandhi Corporation vs Gujarat University & on 19 July, 2017
Equivalent citations: AIR 2017 (NOC) 1006 (GUJ.)
Author: Rajesh H.Shukla
Bench: Rajesh H.Shukla
C/SCA/13390/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 13390 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE RAJESH H.SHUKLA : Sd/
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1 Whether Reporters of Local Papers may be NO
allowed to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the NO
fair copy of the judgment ?
4 Whether this case involves a substantial
question of law as to the interpretation NO
of the Constitution of India or any
order made thereunder ?
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GANDHI CORPORATION....Petitioner(s)
Versus
GUJARAT UNIVERSITY & 1....Respondent(s)
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Appearance:
MR SHALIN MEHTA, Sr. Advocate with MR DIPEN DESAI,
ADVOCATE for the Petitioner(s) No. 1
MR SN SHELAT, Sr. Advocate with MRS VD NANAVATI,
CAVEATOR for the Respondent(s) No. 1
MR PK JANI, Sr. Advocate for Respondent No.2
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CORAM: HONOURABLE MR.JUSTICE RAJESH H.SHUKLA
Date : 19/07/2017
ORAL JUDGMENT
1. The present petition is filed by the petitioner under Articles 14, 19, 226 and 227 of the Constitution of India as well as under the provision of the Gujarat Public Premises (Eviction of Unauthorized Occupants) Act, 1972 (hereinafter Page 1 of 19 HC-NIC Page 1 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT referred to "Public Premises Act, 1972") for the prayers as prayed for in the petition inter alia that appropriate writ, order or direction may be issued quashing and setting aside the impugned order passed the below Exh.5 in Appeal No.1 of 2017 by learned Judge, City Civil Court No.10, Ahmedabad dated 07.07.2017 at AnnexureA on the grounds stated in the memo of petition.
2. The facts of the case briefly summarized are as follows: 2.1 The petitioner is a partnership firm engaged in the business of decoration and event management. The petitioner has been granted property in question by way of lease from 01.06.2012 to 31.05.2017 subject to the terms and conditions as stated in the lease deed. One of the clauses in the lease deed i.e. Clause No.10.3 referred to the renewal clause, which is the bone of contention between the parties.
3. Heard learned Senior Counsel, Shri Shalin Mehta appearing with learned advocate, Shri Dipen Desai for the petitioner, learned Senior Counsel, Shri S.N. Shelat appearing with learned advocate, Page 2 of 19 HC-NIC Page 2 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT Mrs.V.D. Nanavati and learned Additional Advocate General Shri P.K. Jani with learned AGP Shri Bhargav Pandya.
4. Learned Senior Counsel, Shri Shalin Mehta referred to the background of the facts and also the lease deed produced on record with emphasis on Clause 10.3 as well as Clause 11, which provides for Arbitration. He submitted that the petitioner had requested vide communication dated 14.02.2017 for the renewal of the lease as per Clause - 10.3 of the lease deed, however reply has been given dated 26.04.2017 (Page No.55) and, therefore, the petitioner has given notice invoking arbitration clause. He submitted that an application under Section 9 of the Arbitration & Conciliation Act, 1966 (hereinafter referred to as "the Arbitration Act") for interim relief has also been filed before the learned Judge, City Civil Court No.10, Ahmedabad and emphasized that the petitioner has not been called for negotiation for renewal and, therefore, the aforesaid application has been filed for interim relief. He also submitted that the arbitration proceedings consisting of Hon'ble Justices of the Hon'ble Apex Court have been Page 3 of 19 HC-NIC Page 3 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT initiated. The petitioner has also prayed for relief before the Hon'ble Arbitral Tribunal consisting of Hon'ble Mr. Justice M.B. Shah (Presiding Arbitrator Former Judge, Supreme Court of India), the Hon'ble Mr. Justice G.T. Nanavati (CoArbitrator Former Judge, Supreme Court of India) and Hon'ble Mr. Justice J.M. Panchal (CoArbitrator Former Judge, Supreme Court of India) under Section 17 of the Arbitration Act. He submitted that pending such arbitral proceeding, even though the joint pursis has been given in a proceeding before the learned Judge, City Civil Court No.10, Ahmedabad, the eviction proceedings have been initiated. Learned Senior Counsel, Shri Shalin Mehta submitted referring to the application under Section 17 of the Arbitration Act produced at AnnexureK before the Hon'ble Arbitral Tribunal that the hearing has taken place and it is kept for orders on 25th July, 2017 and, therefore, the present petition may be entertained and interim relief may be granted. Learned Senior Counsel, Shri Shalin Mehta again referred to Clause - 10.3 referred to the renewal of the lease and Clause - 11 referred to the Page 4 of 19 HC-NIC Page 4 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT Arbitration. Learned Senior Counsel, Shri Shalin Mehta submitted that as provided in Clause - 11 regarding arbitration, it is specifically stated that any dispute, controversy or claim between the parties arising out of or in connection with the lease deed would be a matter of arbitration and the Hon'ble Atrbitral Tribunal, as stated above, is seized of the matter. Learned Senior Counsel, Shri Shalin Mehta submitted that Clause - 10.3 provides for the renewal as per the terms and conditions mutually agreed between the parties, which would imply that there has to be negotiation and the petitioner ought to have been called for the negotiation. He submitted that the petitioner has not been given opportunity of being heard, which amounts to violation of Rules of natural justice. He submitted that therefore it is very much falling within Clause - 11 of the lease deed providing for the Arbitration. Learned Senior Counsel, Shri Shalin Mehta submitted that the respondent no.1 has refused to negotiate without any reason. He, therefore, submitted that the present petition may be entertained and protection may be given. He submitted that the present Page 5 of 19 HC-NIC Page 5 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT petition may be entertained and the interim relief may be granted, failing which, his remedy under the Public Premises Act, 1972 as well as under
Section 17 of the Arbitration Act would be rendered infuctutious.
5. Learned Senior Counsel, Shri S.N. Shelat appearing for the respondent no.1 referred to the background of the facts and submitted that lease has been granted for a period of 60 months, which has come to an end on 30.05.2017 and, therefore, the lease which has come to an end by efflux of time, cannot be renewed. He submitted that Clause - 10.3 provides an option for the renewal with mutual agreement, however, it does not confer any right on the petitioner to claim renewal as a matter of right. He has pointedly referred to Clause - 10.3.
He has also referred to Clause - 10.1 and submitted that on expiry of period of lease, the lessee is required to handover vacant and peaceful possession of the property to the lessor. Learned Senior Counsel, Shri S.N. Shelat, therefore, submitted that as the petitioner has not handed over the vacant possession on expiry of the lease, the proceedings have been initiated under the Page 6 of 19 HC-NIC Page 6 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT Public Premises Act, 1972 as it is a public premises. Learned Senior Counsel, Shri S.N. Shelat submitted that reference is made to the purshis where it has been clearly stated that the possession of the property in dispute would not be taken forcibly without following due process of law, meaning thereby, as required under the law, the steps have been taken under the Public Premises Act, 1972. Learned Senior Counsel, Shri S.N. Shelat submitted that as per the provision of Section 108(q) of the Transfer of Property Act, the petitioner is an unauthorized occupant, which provides, "on the determination of the lease, the lessee is bound to put the lessor into possession of the property".
6. Similarly he referred to Section 111(a) of the Transfer of Property Act and submitted that as the petitioner is unauthorized occupant or a tenant with suffering, cannot continue with the possession after the lease period is over. He emphasized that it has been observed consistently that any such possession after the period of lease is over, would be unauthorized. In support of his submissions, he has referred to and relied upon Page 7 of 19 HC-NIC Page 7 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT the judgment of the Hon'ble Apex Court in case of Smt. Shanti Devi Vs. Amal Kumar Banerjee, reported in AIR 1981 SC 1550 and emphasized the observation made in Paragraph NO.5. Learned Senior Counsel, Shri S.N. Shelat also referred to and relied upon the judgment in case of B. Valsala Vs. Sundaram Nadar Bhaskarana, reported in AIR 1994 KERALA 164. He also referred to the judgment in case of Bharti Airtel Ltd. & Ors. Vs. Union of India (UOI) & Ors., reported in AIR 2015 SC 2583 and referred to the observations made therein in Paragraph No.58. He also submitted that mutually agreed terms and conditions have also been interpreted and considered by the Hon'ble Apex Court. He submitted that the premises in question is a public premises and when the clause agreement regarding renewal is considered, the application under the contract as well as the application under the Constitution have to be considered. He emphasized the observation, "It is a well settled principle of law that where there is a conflict between obligations flowing from a contract and those flowing from the law, the obligations flowing from the contract must necessarily Page 8 of 19 HC-NIC Page 8 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT yield to obligations flowing from the Constitution and laws. We, therefore, reject the submission of Shri Venugopal."
7. Learned Senior Counsel, Shri S.N. Shelat submitted that it is required to be considered that after the period of lease is over, the respondent no.1 is obliged to invite tenders and has already given advertisement to give by auction. He submitted that the conduct of the petitioner may also be examined that he had challenged the notice inviting tenders by way of filing Special Civil Application No. 9923 of 2017 and no interim relief has been granted. He submitted that in the said tender process, the petitioner had participated along with other tenders and as other tender was found to be lowest, the respondent no.1 has taken decision to give it to the said tender, who is lowest. Learned Senior Counsel, Shri S.N. Shelat therefore submitted that though the petitioner is aware about this, he has initiated proceeding under the Arbitration Act. Learned Senior Counsel, Shri S.N. Shelat submitted that neither in the petition being Special Civil Application No.9923 of 2017 nor in the arbitration proceeding with an application under Section 17 of the Arbitration Page 9 of 19 HC-NIC Page 9 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT Act, interim relief has been granted. He emphasized that had there been a case made out, the Hon'ble Arbitral Tribunal would have passed appropriate order granting interim relief and, therefore, the submissions, which have been made that the proceedings would be rendered infructuous, are without any merits. Learned Senior Counsel, Shri S.N. Shelat also submitted that as now the tender has been invited and lowest party is required to be given the same, the right of third party are required to be considered.
8. Learned Senior Counsel, Shri S.N. Shelat also referred to the judgment in case of Delhi Development Authority Vs. Anant Raj Agencies Pvt. Ltd., reported in AIR 2016 SC 1806. He submitted that there is bar of jurisdiction of the Civil Court as provided under Section 16 of the Public Premises Act, 1972 and, therefore, when the relief has not been given, such petition may not be maintainable and no prima facie case is made out nor any balance of convenience is in favour of the petitioner. He, therefore, referred to the order of the Hon'ble Arbitral Tribunal and submitted that as the Hon'ble Arbitral Tribunal as well as Page 10 of 19 HC-NIC Page 10 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT the High Court in aforesaid writ petition have not granted any relief, the present petition may not be entertained.
9. In rejoinder, learned Senior Counsel, Shri Shalin Mehta referred to the papers as well as the judgment of the Hon'ble Apex Court in case of Delhi Development Authority (supra). He submitted that the judgments which have been referred to, would not apply to the facts of the present case. Learned Senior Counsel, Shri Shalin Mehta again referred to Clause - 10.3 and submitted that the submissions made by Learned Senior Counsel, Shri Shelat for the respondent no.1 that such a clause is vague and cannot be enforced, is misconceived. He submitted that the respondent cannot be permitted to approbate and reprobate and, therefore, cannot be allowed to argue that such a clause cannot be enforced. He also submitted that Clause - 10.3 refers to the obligation to call the petitioner for negotiation. Learned Senior Counsel, Shri Shalin Mehta submitted that he has been making it clear that the petitioner may not claim the renewal but atleast he has to be called for negotiation, however as the respondent no.1 Page 11 of 19 HC-NIC Page 11 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT has refused to negotiate, the petitioner had challenged when the eviction proceedings are initiated and he has also invoked the arbitration as per the agreement, which provides for the arbitration. He, therefore, submitted that the conduct of the petitioner on the contrary suggest that he has taken steps as per the lease agreement. Lastly, learned Senior Counsel, Shri Shalin Mehta submitted that there is no issue of any conflict between the contractual obligation and an application under the Constitution or the Act. He, therefore, submitted that it will not have any application in the facts of the case and the present petition may be allowed and the interim relief may be granted.
10. In view of these rival submissions, it is required to be considered whether the present petition deserves consideration.
11. As could be seen from the background of the facts, the petitioner has challenged the proceeding and refusal of the grant of injunction below Exh.5 in the proceeding of Appeal No.1 of 2017 under the Public Premises Act, 1972. At the same time, it is required to be stated that the petitioner had Page 12 of 19 HC-NIC Page 12 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT filed an application under Section 9 of the Arbitration Act and, thereafter, as per Clause - 11 of the lease deed, Arbitration has been invoked and the Hon'ble Arbitral Tribunal is seized of the matter as stated above, where an application under Section 17 of the Arbitration Act has been made and no interim relief has been granted. It is stated that the order is awaited on 25th July, 2017. Moreover admittedly, fresh tenders have been invited and the notice inviting tenders has been challenged and it is subject matter of challenge in Special Civil Application No.9923 of 2017, which is pending, wherein no interim relief has been granted. The aforesaid petition is also filed challenging the action of invitation of the tender on the same ground of renewal clause of the lease deed i.e. Clause - 10.3. It is required to be stated that the petitioner had participated in that proceeding of fresh tender and as another bidder is found to be lowest, the arbitration proceedings are initiated and pursued and the respondent no.1 has commenced the proceeding under the Public Premises Act, 1972.
12. It is in this background, moot question, which is Page 13 of 19 HC-NIC Page 13 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT required to be focused, is Clause - 10.3 providing for renewal of the lease subject to the fresh terms and conditions mutually agreed upon between the parties. In other words, person like petitioner cannot claim the renewal of lease as a matter of right merely because the clause in the lease deed provides for the renewal of the lease. Admittedly, as per the lease deed, lease has come to an end on expiry of 60 months on 30.05.2017. Thus there is no grievance or complaint or a dispute with regard to the lease deed on any count. The real issue is with regard to the renewal as provided in Clause - 10.3 of the lease deed. However Clause - 10.3 provides for the renewal subject to fresh terms and conditions mutually agreed upon between the parties. Therefore it leaves an option to the parties for renewal subject to mutual agreement and also terms and conditions.
13. Another aspect which has been much emphasized referring to Clause - 11 regarding the arbitration also requires to be considered. Arbitration clause referred to a remedy to the parties for resolving any dispute arising out of or in connection with Page 14 of 19 HC-NIC Page 14 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT the lease deed in the event of any breach or termination of the lease. It would therefore imply that this arbitration has a reference to any dispute arising out of the lease deed regarding the breach of any terms and conditions during the period of lease and the arbitration clause, therefore, cannot be a matter of resolution with regard to the renewal of the lease dehors Clause - 10.3 referring to the renewal of the lease. In other words, when the lease has expired by efflux of time, it cannot be interpreted in the manner that the petitioner can claim a renewal of the lease and/or extension in the guise of pending proceeding.
14. The provision of the Transfer of Property Act, particularly, Section 108(q) referred to by learned Senior Counsel, Shri Shelat clearly provides, "on the determination of the lease, the lessee is bound to put the lessor into possession of the property".
15. Section 111(a) of the Transfer of Property Act clearly provides that "A lease of immoveable property determines - by efflux of the time limited thereby". At the cost of repetition, it is Page 15 of 19 HC-NIC Page 15 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT stated that as the lease was for a fixed period, it has come to an end on expiry of the period and it could not be matter of right for the petitioner to force other side to enter into a fresh lease or renew the same. The Hon'ble Apex Court in a judgment in case of Bharti Airtel Ltd. (supra) has observed, "Therefore, under the contract neither the LICENSOR nor the LICENSEE has a right to insist that other party should continue with the contract even if such other party is not willing to continue except on such terms and conditions on which the other party may desire to continue".
16. The aforesaid observations have been made while interpreting similar language of the contract "mutually agreed terms". Therefore as discussed above, renewal of the lease by mutual agreement is one thing as per Clause - 10.3 of the lease deed and Clause - 11 providing for resolution of the dispute by Arbitration is a separate thing. One provides for renewal subject to mutual agreement and clause for Arbitration provides for resolution of any dispute arising out of the lease deed. Meaning thereby, any dispute arising out of the lease deed regarding the terms and conditions or Page 16 of 19 HC-NIC Page 16 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT the termination of the lease before the expiry, it could be resolved by Arbitration. Therefore both clauses have to be read in a harmonious way. In other words, if one of the parties is not inclined or willing, it could be foisted upon or renewal cannot be claimed as matter of right.
17. The submission made by learned Senior Counsel, Shri Shalin Mehta that the petitioner does not claim the renewal as of right but the petitioner ought to have been called for negotiation, is misconceived as the language of Clause - 10.3 does not provide for any such stipulation and it merely leaves an option to the parties. Therefore one of the parties, which is not inclined to renew, may not consider the option of renewal and other party like the petitioner cannot insist for renewal based on such Clause - 10.3 in the lease deed. Therefore the clause provides for renewal is one thing and the arbitration clause providing for resolution of dispute arising out of the lease deed has a reference to any dispute during the period of lease or the termination of the lease before the expiry of the period by way of arbitration. In the facts of the case, there is no Page 17 of 19 HC-NIC Page 17 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT such dispute and lease has come to an end by efflux of time without any grievance or complaint. Therefore, the renewal which is sought to be claimed, is misconceived.
18. Another facet of submission with regard to the proceeding under the Public Premises Act, 1972, is also well within the right of the respondent when the petitioner - lessee has failed to handover vacant and peaceful possession on expiry of the period of lease as provided in Clause - 10.1. Therefore as discussed above, with reference to the provision of the Transfer of Property Act, more particularly Section 108(q) of the Transfer of Property Act, when the petitioner has failed to handover the possession, the respondent no.1 would be justified in resorting the proceeding under the Public Premises Act, 1972 for eviction, which could be said to be in accordance with law or due process. Therefore, no grievance could be made on that count by the petitioner.
19. Therefore it is in these circumstances, it is required to be considered as to whether the petitioner would be justified in filing such petition asking for the discretionary relief Page 18 of 19 HC-NIC Page 18 of 19 Created On Wed Jul 19 23:57:08 IST 2017 C/SCA/13390/2017 JUDGMENT and/or stay of the operation of the order passed below Exh.5 in Appeal No.1 of 2017 under the Public Premises Act, 1972. The submissions which have been made about the jurisdictional error, has no merits as the petitioner, as discussed above, has no prima facie case and/or balance of convenience. It is required to be stated that the petitioner having pursued the remedy under the Arbitration Act as well as the petition being Special Civil Application No. 9923 of 2017 challenging the notice inviting tenders has failed to get any interim relief and, therefore, when the tender process is over, such petition claiming any relief, cannot be entertained and, therefore, the impugned order passed below Exh.5 in Appeal No.1 of 2017 by the learned Judge, City Civil Court No.10, Ahmedabad dated 07.07.2017 does not call for any interference.
20. The present petition, therefore, deserves to be dismissed in limine and accordingly stands dismissed.
Sd/ (RAJESH H.SHUKLA, J.) Gautam Page 19 of 19 HC-NIC Page 19 of 19 Created On Wed Jul 19 23:57:08 IST 2017