Delhi High Court
Ravinder Nath & Anr. vs Best Entertainment (P) Ltd. on 4 July, 2011
Author: Manmohan Singh
Bench: Manmohan Singh
* THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 4th July, 2011
IA No. 11277/2010 in CS(OS) No. 755/2010
RAVINDER NATH & ANR. ..... Plaintiffs
Through: Mr Ali H. Naqvi, Adv.
versus
BEST ENTERTAINMENT (P) LTD. ..... Defendant
Through: Mr Pradeep Aggarwal, Adv.
CORAM:-
HON'BLE MR JUSTICE MANMOHAN SINGH
1.Whether Reporters of local papers may be allowed to see the judgment ?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be reported in Digest ? MANMOHAN SINGH, J
1. By this order I shall dispose of the present application filed by the defendant/applicant under section 8 of the Arbitration and Conciliation Act, 1996 praying that the parties be referred to arbitration, in terms of clause 16 of the lease deed dated 03.03.2003 executed between the parties.
2. The brief facts of the case, as per the plaint, are that plaintiffs are the owners of the property bearing No.B-88, Niti Bagh, New Delhi, and vide registered lease deed dated 03.03.2003 they had created the IA No.11277/2010 in CS(OS) No. 755/2010 Page No.1 of 6 tenancy in favour of the defendant in respect of the said property. The said lease agreement was for the period of five years w.e.f. 01.07.2003 to 30.06.2008.
3. It is averred in the plaint, that there was an undertaking of the defendant to vacate the suit property on or before 30.06.2008 and before the expiry of the lease, the plaintiff, sent a notice dated 25.06.2008 reminding the defendant of its obligation under law to vacate the said premises by 30.06.2008. But, the defendant failed to vacate the said premises even on the expiry of the lease and agreed to pay rent @ Rs.300,000/- per month for the overstay as per Clause 5 of the lease deed. In the month of January 2010, it came to the notice of the plaintiff that the defendants have altered the suit property causing damage to its structure as well as design. Therefore, as per section 106 of the Transfer of Property Act, 1882, the plaintiff served a legal notice upon the defendant to vacate the suit property within 15 days. But, the defendant continues to be in possession of the suit property.
4. Thus, the present suit for recovery of possession and mesne profit is filed.
5. According to the defendant, the relief sought by the defendant in its application under Section 8 of the Arbitration & Conciliation Act, 1996 is clearly covered in view of Clause 16 of the Lease deed which reads as under:
IA No.11277/2010 in CS(OS) No. 755/2010 Page No.2 of 6 "Any dispute/s or difference/s that may arise between the parties in respect of any matter contained herein including interpretation of any of the terms contained herein and/or the termination of the lease shall be settled by the arbitration under the provisions of Arbitration & Conciliation Act, 1996. The place of arbitration shall be New Delhi and courts in New Delhi shall have exclusive jurisdiction."
6. It is stated by the defendant, that the disputes which are the subject matter of the present case do not fall within the jurisdiction of this court and have to be referred to the arbitrator or an arbitration tribunal constituted in terms of the said lease deed. Therefore, the applicant/defendant has filed the present application which is liable to b e allowed.
7. The plaintiff in its reply to the present application has submitted that the clause referred to by the defendant actually pertains to the lease tenure from 01.07.2003 to 30.06.2008 and therefore, the said clause has no nexus with the present suit. An arbitration clause in a prior lease deed cannot be used to decide the rights of the parties after the expiry of the lease tenure.
8. Admittedly there was neither a fresh lease nor any registered extension of the earlier lease between the parties, and as per the law of the land, an arbitration clause has to be in writing, therefore, the said arbitration clause cannot be relied upon by the defendant in the circumstances of the present suit.
IA No.11277/2010 in CS(OS) No. 755/2010 Page No.3 of 6
9. The learned counsel for the defendant/applicant, in order support his submission, has referred to clause 5 of the lease deed which contains the provision of overstay. It is stipulated in clause 5 of the lease deed that in case the lessee continues to occupy the said premises after the said lease has expired, without the consent of the lessor. The lessor will charge a rent of Rs. 3 lac per month from the lessee as rent towards the overstay at the premises after the expiry of the lease. The learned counsel for the defendant has argued that despite the fact that the lease tenure ended on 31.06.2008, the defendant is already occupying the tenanted premises and is paying the rent of Rs.3 lac per month in view of the clause 5 of the lease deed. The learned counsel for the defendant has submitted that by implication the lease deed in question continues to exist and therefore, as per arbitration clause 16 of the lease deed, the present suit is not maintainable.
10. It is the admitted fact between the parties that the plaintiffs granted the lease to the defendant through a registered lease deed dated 3.3.2003 for a period of five years commencing with effect from 01.07.2003 up to 30.06.2008. The stamp duty was also paid for the said period. The lease deed also contained an undertaking of the defendant to vacate and hand over the vacant and peaceful possession of the property on the expiry of the lease deed which admittedly expired on 30.06.2008. IA No.11277/2010 in CS(OS) No. 755/2010 Page No.4 of 6
11. As far as arbitration clause is concerned, clause 16 of the lease deed clearly states that only disputes or differences which may arise in respect of any matter contained in the lease deed and/or termination of the lease deed shall be settled by arbitration. Clause 1 of the lease deed clearly mentions that the said deed would be terminated on 30.06.2008. It is also an admitted fact that despite of negotiation the lease deed was not extended between the parties. The learned counsel for the defendant has not disputed that the lease deed signed properly registered and the payment of stamp duty was only for five years.
12. In view of the above said facts and circumstances, this Court is of the considered view that the arbitration clause referred to by the defendant in a prior lease deed, which has already expired on 30.06.2008, cannot be used to decide the rights of the parties after expiry of the lease tenure and under these circumstances, the rights being sought to be enforced do not relate to the said lease deed or tenure but to a period later in time.
13. It is not in dispute that the defendant has not vacated the premises in question after the expiry of the period of the lease deed and he is also paying the rent to the tune of Rs.3 lac per month. However, the law of the land mandates that an arbitration clause has to be in writing. Since the lease between the parties has already ceased to exist with effect from 30.06.2008, there is no fresh agreement between the parties and IA No.11277/2010 in CS(OS) No. 755/2010 Page No.5 of 6 therefore, the arbitration clause is inapplicable to the subject mater of the present suit. The application is totally false and frivolous and the same is dismissed with the cost of Rs.10,000/-.
CS(OS) No. 755/2010
List on 18th July, 2011 before Joint Registrar for admission/denial of documents.
MANMOHAN SINGH, J JULY 04, 2011 jk IA No.11277/2010 in CS(OS) No. 755/2010 Page No.6 of 6