Delhi High Court
Fabiroo Gift House vs India Tourism Development Corp. on 30 September, 2002
Equivalent citations: 2003(66)DRJ243
Author: J.D. Kapoor
Bench: J.D. Kapoor
JUDGMENT
Khan, J (ORAL)
1. Petitioner's O.A.No.676/1999 for appointment of Arbitrator under Section 11(6) of Arbitration Act has been dismissed on the premise that disputes raised by it fall under Section 15 of Public Premises (Eviction of Unauthorised Occupants) Act of 1971 and by implication create a bar against appointment of Arbitrator. Whether such bar operates is the sole question falling for determination.
2. Petitioner is a licensee of shop Nos.8 to 25 of Shopping Arcade at Ashoka Hotel run by R-1. The parties executed two license deeds providing for an enhanced license fee and containing an Arbitration clause which read thus:-
"All disputes or differences whatsoever arising between the parties out of or relating to the constitution, meaning Y operation of effect of this license deed or the breach thereof shall be settled by arbitration in accordance with the provision of the Indian Arbitration & Conciliation Act 1996 and the award made in pursuance thereof shall be binding on the parties."
3. Later R-1 raised a demand of Rs.6.83 lacs or so on account of arrears of license fee etc. against petitioner and filed recovery proceedings under Section 7 of the Eviction Act. This amount was, however, paid by it under protest and without prejudice to its rights and contentions. Petitioner thereafter issued a legal notice dated 25.10.1999 to R-1 raising a demand of Rs.16,89,120/- on account of losses suffered by it because of arbitrary increase in rent, electricity and on account of loss of business due to low occupancy caused by renovations conducted in the premises. R-1 disputed all claims and liabilities and petitioner filed O.A.No.676/1999 for appointment of Arbitrator which was rejected. Hence this petition.
4. All that remained to be seen was whether petitioner's claim fell within the parameters of Section 15 of PPE Act and whether it was debarred from seeking appointment of Arbitrator.
5. Petitioner's case is that though dispute raised by its for arbitration was partly co-related to R1's recovery proceedings under Section 7 of Eviction Act, it predominantly represented an independent claim for damages suffered by it on account of business loss due to electricity breakdown and renovations in the premises and, therefore, it could not be treated falling under Section 15(d) of the Eviction Act which barred a suit or proceedings in respect of recovery of arrears of rent payable under Section 7 of the Eviction Act. It is pointed out that once petitioner had paid the demanded amount, though under protest, pursuant to recovery proceedings, its claim for appointment of Arbitrator was not directed at challenging these recovery proceedings but was to vindicate its independent claim for damages on account of the business loss suffered by it. The designated authority had thus fallen in error by concluding that the disputes raised fell within the ambit of Section 15 of Eviction Act.
6. The answer lies in the correct and true interpretations of relevant provisions of Section 7 and 15 of the Eviction Act. The relevant provisions are reproduced and read thus:-
"15. Bar of jurisdiction - No court shall have jurisdiction to entertain any suit or proceeding in respect of-
(d) the arrears of rent payable under sub-section (1) of Section 7 of damages payable under sub-Section (2), or interest payable under sub-section 2(A), of that section."
7. A perusal of the relevant provision shows that the bar operated only in cases involving arrears of rent payable under sub-section (1) of Section 7, of damages payable under sub-section (2) or interest payable under sub-section 2A of that section. What are these arrears and what is their nature and kind is specified in Section 7 of the Eviction Act which lays down thus:-
7. Power to require payment of rent or damages in respect of public premises- (1) Where any person is in arrears of rent payable in respect of any public premises, the estate officer may, by order, require that person to pay the same within such time and in such Installments as may be specified in the order.
(2) Whether any person is, or has at any time been in unauthorised occupation of any public premises, the estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such Installments as may be specified in the order.
(2A) While making an order under sub-section (1) or sub-section (2), the estate officer may direct that the arrears of rent or, as the case may be, damages shall be payable together with simple interest at such rate as may be prescribed, nt being a rate exceeding the current rate of interest within the meaning of the Interest Act, 1978.
8. A plain reading of these provisions leaves no scope for doubt as regards the bar created by Section (F) against the maintainability of the suit or proceedings involving any challenge to the demand of arrears of rent payable under Section 7 of the Act. This provision specifies such arrears which include arrears of rent payable in respect of any public premises, damages on account of unauthorised use and occupation of such premises and the interest, if any, levied by the Estate Officer. Therefore, if any suit or proceedings touches or challenges any demand for recovery of the arrears covered by Section 7, it would not be entertainable and would be barred.
9. In the present case, petitioners' dispute centres around his claim for damages for business loss suffered by him due to renovations and repairs conducted in the premises and the electricity failure etc. Therefore, it does not as such reflects on or impinge on respondents claim for arrears of license fee or any damages for unauthorised occupation etc. which stands satisfied by petitioner though under protest. It is true that petitioner had also disputed the rate of rent while doing so but that was more to highlight its grievance than any claim for reduction of such license fee etc.
10. Viewed thus, it does not appear to us that petitioner's application was liable to be rejected for this or that the dispute raised by it feel squarely within parameters of section 15 of Eviction Act to bar appointment of arbitrator. Petitioner's claim seems to have been mistaken for the damages contemplated by Section 15(f) which talks of damages for unauthorised occupation of the public premises. Here petitioner is seeking to claim damages for business loss and the nature of two claims is poles apart. This obviates the need to examine the ancillary issue-viz, whether arbitration clause contained in license deed would amount to waiver by R-1 and bind it and whether a lease of public premises should or should not contain an arbitration clause and if it does what would be its consequences.
11. We accordingly hold that the dispute sought to be arbitrated by petitioner did not fall within the parameters of Section 15 of Eviction barring proceedings for appointment of Arbitrator.
12. Petition is accordingly allowed and impugned order is set aside. Arbitration application No.676/99 shall revive. It shall, however, be suitably amended by petitioner to delete any claim which may reflect on the recovery proceedings under Section 7 and shall be then reconsidered and disposed of afresh by Designated Authority by appropriate orders. Parties to appear before the Designated Authority on 11th November, 2002.