Bangalore District Court
M/S Nitesh Residency Hotels Pvt. Ltd vs The Archdiocease Of Bangalore on 14 July, 2022
1 Com.A.P.No.4/2021
IN THE COURT OF THE LXXXVIII ADDL. CITY CIVIL &
SESSIONS JUDGE (EXCLUSIVE COMMERCIAL COURT):
BENGALURU CITY. (CCH-89)
Present: Sri. P.J. SOMASHEKARA, B.A.,LL.M,
LXXXVIII Addl. City Civil & Sessions Judge
Bengaluru City.
Dated this the 14th day of July 2022
Com.A.P.No.4/2021
Applicant: M/s Nitesh Residency Hotels Pvt. Ltd.,
Having its registered office at No.25A,
2nd Floor, Imperial Court, Cunningham
Road, Bangalore - 560 052.
Represented by its authorized signatory,
Mr. K.B. Swamy.
(By Sri. V.H., Advocate)
-vs-
Respondent: 1. The Archdiocease of Bangalore
Archbishop's House No.75,
Miller's Road, Benson Town,
Bangalore - 560 046,
Rep. by the Archbishop of
Bangalore.
2. Hon'ble Mr. Justice R. Gururajan (retd.)
No.504, Sri Hari Krupa, 5th Floor,
Chitrapur Apartment, 15h Cross,
Malleshwaram, Bangalore -03.
(By Sri. K.S. Advocate)
2 Com.A.P.No.4/2021
JUDGMENT
This is a suit filed by plaintiff under Sec.34 of the Arbitration and Conciliation Act r/w Sec.10 of Commercial Court Act 2015 and sought for to set aside the Arbitral award dated 07.11.2020 passed by the Sole Arbitrator.
2. Nut shell of the plaint are as under:
The plaintiff being the respondent and the defendant being the claimant before the arbitral tribunal feeling aggrieved by the award has filed the instant suit by alleging that the defendant called the tender during the year 2006 for lease of the property bearing old No.4, New No.99, Residency Road, Bangalore, measuring 1124 sq.ft., for putting up a hotel project thereon. The schedule property had a small building which housed senior citizens and old age home run by the defendant and also a tenant, since the building was an old one, it had to be demolished and a hotel had to be constructed. During the year 2006/2007 the rental value of the vacant land in the said area was around Rs.10/- per sq.ft., who is the head and whole and sole authority of the defendant personally requested its Managing Director to quote an exorbitantly high rent of Rs.35/- per sq.ft., during moratorium period and Rs.115/- per sq.ft., after the moratorium 3 Com.A.P.No.4/2021 period so as to ensure that it becomes a successful bidder and promised that would reduce the rent to market rents prevailing at the time of the bid, after the completion of the hotel minutes of meeting dated 20.05.2006 has been held in between the defendant and its MD and the defendant wanted to its MD to quote exorbitantly high rentals to show the achievements and financial progress during his regime. Later the defendant fail to honor his promise. The lease rent is not the rent specified in the lease deed and the addendum. The defendant has pleaded the facts and has given evidence while no contra evidence has been produced by the either side nor as the defendant been examined, though it is submitted by the witnesses for the defendant that who is hale and healthy and travels all across Karnataka and globe and attends the meeting is the sole authority for taking final decisions in respect of all matters pertaining to the defendants, no evidence whatsoever has been produced by the defendant to rebut its evidence, pursuant to its bidding on 07.08.2006 a memorandum of understanding was entered into in between them. On 11.01.2007 a registered lease deed was entered into in between them.4 Com.A.P.No.4/2021
3. The defendant being the lessor had specifically made the following representations as evidenced in clause (j) of the said lease deed.
(a) That the lessor is the absolute owner and is in possession of the schedule property and that the lessor has absolute, marketable and subsisting title and possession over the schedule property and none else has the right, title, interest or share therein;
(b) That the schedule property is not subject to any litigation, attachments, court or acquisition proceedings of any kind;
(c) That there are no claims, mortgages, charges, lien or encumbrances on the schedule property;
(d) That the lessor has not entered into any agreement of sale, memorandum of understanding, lease or any scheme for development of the schedule property with any other person, company, society or organization;
(e) That there are no easementary rights over the schedule property;
(f) That the lessor has paid property taxes, and utility charges, up to date, in respect of schedule property and
(g) That there are no tenants or occupants on the schedule property.
4. The plaintiff in its plaint has further alleged that on 13.08.2009 the first addendum was entered into and on 28.03.2012 second addendum was entered amending certain terms of the lease deed regarding rent, security deposit, memorandum period and bank guarantee, an additional refundable security deposit of Rs.7.76 Crores was paid at the time of first addendum who has paid in all the security deposit of Rs.47.76 Crores which is over 75% of the then prevailing market value of the property, out of the security deposit major portion was paid as non refundable security amount, out of the net 5 Com.A.P.No.4/2021 security deposit of Rs.3.76 Crores was required by the defendant to the claimant is of Rs.43 Crores. After the memorandum of understanding, the lease deed was taken place in between them and who is aware of the innumerable hurdles to set up a hotel. The entire floor area ratio had been utilized by the Prestige Estates Projects Pvt., Ltd., to whom the defendant had sold the neighbouring property which was earlier part of the schedule property, actually while selling the property in favour of Prestige, Khatha of the property was not bifurcated with the ulterior motive to gobble up the FAR eligible for rest of the unsold land which was subsequently leased in its favour. Without FAR available in respect of the schedule property not even a square feet of the building could be put up. The defendant had sold the property abutting the schedule property to Prestige under a sale deed dated 18.09.2002. The property and the schedule property were on large property and bore single municipal number and Prestige had put up the building in the adjoining property and while so constructing the building they had utilized the FAR of not only the property purchased by them but also the FAR on the schedule property that was possible and permissible only with the consent of defendant. The defendant totally suppressed the facts, as a result of which BBMP refused to sanction its plan in respect of the 6 Com.A.P.No.4/2021 schedule property and the said fact was deliberately suppressed by the defendant, as the result as to do a lot of liasoning work with the authorities and also initiate legal proceeding to get back the schedule property. BBMP in the letter dated 14th August 2007 raised several quires and called upon the defendant for clarifications on FAR issues with regard to Prestige, BBMP also sought clarifications in several issues like general power of attorney being issued in favour Mr.Irfan Razak in the year 2001 although the sale of 60,402 was effected in the year 1995. Filing of several cases by several resident in various courts pendency of litigation against the defendant in various courts suppression on the part of Prestige and obtaining FAR for the land though Prestige owns only 60.217 sq.ft of land.
5. The plaintiff in its plaint has further alleged that as per reply/clarification vide letter dated 22.08.2007, the Khatha could be issued only after submission of clarification by the defendant which resulted in considerable time being consumed in obtaining Khatha of the lease property. The defendant got the Khatha bifurcated including the portion of the land, sold to Prestige earlier and the same was concealed at the time of entering into lease deed which was resulted in delay in obtaining various approvals and also further resulted in delay of sanction plans. 7 Com.A.P.No.4/2021 The lease deed has been signed on 11.01.2007 and could obtain commencement certificate only on 19.11.2009 after lapse of 3 years of execution of the lease deed, it was herculean its task and Senior Government Officials including Lawyers to convenience the authorities to get the plan approvals which was otherwise impossible task as the result of which losses in terms of essential of projects cost including payment of interest and the defendant has suppressed the utilization of FAR by Prestige as a result in over 3 years delay in commencement of the project itself. The inmates of the old age home and the tenants M/s.Sukanda India Pvt., Ltd., did not vacate the building at the time of lease as the result of which who had to pay compensation/alternative premises at its cost. They have spend over 26 Lakhs as payment of compensation, apart from institution, legal proceedings and bear legal expenses. The delay in the project for its no fault and solely because of the negligence and default of the defendant, the defendant has assured its encumbrances free property, the defendant did not take any initiative to clear the same which eventually made the respondent to clear the same by spending huge amounts of money.
6. The plaintiff in its plaint has further alleged there were innumerable suits and PL's which came to be filed regarding the 8 Com.A.P.No.4/2021 schedule property and construction of which had to undertake and a writ petition No.362/07 was came to filed by challenging the legality of the construction and subsequently on 8 th June 2007 writ petition had been withdrawn, the several residents were protesting and one Mr.Peeran and Mr.Veenay Bajaj filed the suit OS No.700/2012 and obtained injunction orders regarding the acts. While started the construction found hard rock in the land which necessitated appointment scientist Geologist of Indian Institute of Science and International results for removing hard rock, since the schedule property is situated in the heart of the city and use to slow and time consuming process of chipping, stone cutting etc., since blasting could not be resorted to being in City Centre and even the specialized methodology of piercing the rock and using the chemicals were not effective. All this consumed enormous amount of time resulted in delay. It was too impossible to remove such hard rock in less than a year. The expert advice from various international consultants had been procured at the additional expenditure on its part, though existence of hard rock was well within the knowledge of the defendant suppressed the same and against delayed the project enormously. As a result of various hurdles like non-availability of 9 Com.A.P.No.4/2021 FAR non vacation of the inmates and tenants from the existing building.
7. The plaintiff in its plaint has further alleged that enormous litigations and hard rock exist of the hard rock etc., entire commencement of the project was delayed by over 3 years, during the year 2006-2007 the cost of the project was Rs.342 crores. The project cost of 2009 got inflated to Rs.625 crores and ultimately incur a total cost of Rs.920.36 crores for completion of the project and the same is evidence by the certificate of the chartered accountant and the same was admitted by the defendants witness in their deposition and it was intention of the parties that the hotel would be completed by 2009 and commence its commercial operations, but it could be completed and commercial operations started only from 31.10.2013 due to the gross misrepresentation of the claimant with regard to the schedule property including contained occupation by tenants/ occupants appropriation of the FAR on the property by Prestige and other causes for the delay.
8. The plaintiff in its plaint has further alleged the increase of 577.96 crores in the hotel project from 342.40 crores to 920.36 cores is solely due to the default, negligence and suppression of 10 Com.A.P.No.4/2021 material facts and misrepresentation on the part of the defendant and contrary to clause (J) of the lease deed, the defendant had represented that the schedule property is free from all encumbrances which was not true. The R.W.1 who is its M.D. and R.W.2 who is its financial controller have categorically spoken to all the facts about the delays, suppression of material facts, hurdles on the negligence of the defendant. The project ought to have been commenced in the year 2007 could be completed only by October 2013 after over 6 years, the defendant liable to pay escalation in cost of the project, losses and damages which suffered as per clause 25 of the lease deed, since the clause 25 of the lease deed reflects about payment of damages, during the year 2011 after 4 years and after the lapse of schedule property the claimant leased a high tech building constructed by the defendant along with the land to Fortis hospital at Rs.25 per square feet and the said fact was admitted by the witness. That itself proves the fact that the rental of schedule property could not have been as indicated in the lease deed and the Arch Bishop had agreed to reduce the lease rent to the market rent prevailing at the time of bid namely Rs.10 per sq.ft. Sec.17 of the Contract Act defines fraud to include a promise made without any intention of performing it or any other acts fitted to deceive as the Arch 11 Com.A.P.No.4/2021 Bishop had made R.W.1 to quote an exorbitantly high rent with a promise to reduce it to the market rent at the time of bid. Once the construction of hotel was completed, had no intention to perform a promise that he had made and therefore, it is clear the case of fraud. As per Clause 4 of the registered lease deed dated 11.01.2007 defines a moratorium period to mean the initial period of the lease during which the lessee makes its own arrangements to obtain the necessary permissions commences and proceeds with preliminary work on the schedule property. The moratorium period shall be up to the date of completion of the entire construction and commencement of the commercial operation. The construction were completed and commercial operations were commenced only on 31.10.2013. So the payment of rent has been enhanced if at all was payable only from November 2013 till then, the rent agreed to be payable during the moratorium period was applicable and who has every right to set up the losses suffered due to the misrepresentation of the defendant against the rents payable and every stage of construction, there has been communication and exchange of correspondence as well as minutes of meeting between them.
9. The plaintiff in its plaint has further alleged the complaint has been made about the falsity of the representation which 12 Com.A.P.No.4/2021 made by the defendant at the time of entering into lease deed and its inability to proceed further with the project on hand and on every stage complaint has been made and the defendant went on assuring that they would take care of all the damages that may be sustained and there have been meetings also as a result of false representation which made by the defendant at the time of lease, who is not liable to pay any amount to the defendant as alleged in the claim statement which is contrary and it is the defendant who owns huge some money in respect of which claiming the said amount in the counter claim, despite paying the rentals for more than the agreed rent. The defendant illegally terminated the lease deed dated 11.12.2014 falsely alleging that there is a default on its part for which has reply to the said purported termination notice and the defendant invoked the arbitration clause in the lease deed and raised an arbitration dispute pursuant thereto arbitral tribunal consisting of arbitrator Justice R. Gururajan was constituted to resolve the disputes between the parties and the defendant filed its claim seeking various monetary claims apart from direction to quit, vacate and deliver vacant possession of the schedule property in terms of the clause 21 of the lease agreement and who filed its detailed statement of defence denying the allegations which made by the 13 Com.A.P.No.4/2021 defendant and also sought for damages by way of counter claim which has been sustained as a result of fraud and misrepresentation committed by the defendant and sought for declaration that the action of termination of lease is illegal apart from seeking to fix the reasonable rentals in respect of the schedule property.
10. The plaintiff in its plaint has further alleged that after completion of the pleadings, the tribunal has framed in all 12 issues, the defendant examined two witnesses namely C.W.1 and C.W.2 and marked the documents as Ex.C.1 to C.87 and two witnesses were examined on its behalf as R.W.1 and R.W.2 and got marked the documents as Ex.R.1 to R.25 despite of serious allegations of fraud which has been proved by leading oral and documentary evidence which has not been contravened by the defendant by any leading evidence, the arbitrator without considering the same has passed the award holding that the rent is as set out in the lease deed directing to pay alleged arrears of rent and quit and vacate the schedule property and its counter claim has been dismissed contrary to over whelming evidence. The arbitral award is wholly erroneous and patent illegal apart from contrary to well established principles of law laid by the Hon'ble Supreme court and Hon'ble High Court of Karnataka and 14 Com.A.P.No.4/2021 who has highly aggrieved by the arbitral award dated 07.11.2020 passed by the arbitrator in allowing the claims of the defendant by rejecting its counter claim has filed the instant suit for the following grounds:
GROUNDS A. The award which passed by the sole arbitrator dated 07.11.2020 is opposed to the public policy in contravention of the fundamental policy of Indian Law, oppose to basic notions of justice and patent illegal apart from being perverse namely patently contrary to the evidence on record.
B. The arbitrator failed to take into account and consideration the unrebutted evidence which unimpeachably establish that the rent set out in the lease deed and addendum is not agreed rent, but erred in not taking into account and consideration of the fact that the Arch Bishop who is the whole and sole of the defendant had requested its M.D. to quit exorbitantly inflated the rental which they were to pay with the promise to reduce the same to market rent at the time of the bid.
C. The arbitrator erred in not taking into account and consideration of the fact of the evidence of C.W.1 and C.W.2 and not considered the lease deed and its clauses which appeared and held in para No.298 of the award that the material on record reveal that the market value was Rs.10 per sq.ft. which is again is a clear indicator of the fraud played by Arch Bishop having regard to the fact that the lease deed and the addendum provide for unconscionably lease rent of Rs.35 per sq.ft. during the moratorium period. The arbitral tribunal failed to notice of the evidence of C.W.1 and failed to take into note the facts which placed on record regarding the rent and the arbitrator despite holding the rentals agreed by the parties is for higher than the rentals of the fully furnished building owned by the defendant leased in favour of Fortis Hospital.
D. The learned Arbitrator failed to consider clear and categorical admissions on the part of the witnesses on behalf of 15 Com.A.P.No.4/2021 the claimant, regarding the delay in the project due to the breaches attributable on the part of the claimant, has erroneously allowed the claims of the claimant, holding that he has agreed for the rentals as per the terms of the lease deed which marked as Ex.C.13.
E. The learned Arbitrator failed to notice that the judgment of the Hon'ble Supreme Court of India reported in 2016 (10) SCC 386 (Para 25), where it has been held that allegation of fraud can be dealt by the Arbitrator and erred in holding in Para No.213 of the Award that the "Plea of Fraud" with necessary details in terms of the document is not forthcoming, ignoring paragraph 33A, 33C and 33D of the Statement of Defence, wherein the respondent has categorically stated that the Archbishop had specifically asked the Managing Director of the respondent (RW1) to quote exorbitantly high rent so as to be the highest bidder with a promise to reduce the rental to the actual market value prevalent as on the date of the bid after the completion of the hotel and has gone back on his promise and thereby played fraud upon the respondent in fixing the rentals in respect of the schedule property.
F. The Arbitrator has ignored Ex.R.25 (Minutes of the Meeting dated 20.05.2006) and the clear and unequivocal statement by the Managing Director of the respondent (RW1) in the pleadings as well as his deposition and erred in holding in Para 219 that high level of pleading on fraud could be proved. The Arbitrator totally ignored the evidence, both oral and documentary, on record regarding the allegation of fraud.
G. The learned Arbitrator ignored the law laid down by the Hon'ble Supreme Court of India reported in 1999 (4) SCC 262 wherein it has been held that pleadings in case of fraud need not be elaborate and ignored the judgments in AIR 1966 SC 735 (Para
10) and 2006 (6) SCC 94 (Para 71) wherein even in absence of plea of fraud, if issues by implication cover it and parties knew about fraud being an issue in the case, court can consider issue of fraud.
H. The learned Arbitrator totally failed to appreciate the judgment of the Hon'ble Supreme Court of India reported in 1987 (2) SCC 555 (Para 6 & 7) which has held that pleading should 16 Com.A.P.No.4/2021 receive liberal construction and failed to notice even in the admission and denial of documents submitted by the respondent dated 26.02.2017, it has been categorically stated that the respondent is not admitting the contents of the MOU, Lease Deed and the two addendums on the ground of fraud and misrepresentation. In these documents the term regarding rental is vitiated by fraud and therefore that portion of the lease deed relating to rent cannot be accepted as the true agreement between the parties.
I. The learned Arbitrator failed to notice that the Archbishop, is the whole and sole of the claimant, which is admitted by the claimant's witness CW1 (Q.No.110 & 127) and CW2 (Q.No.126) had requested the MD of the respondent RW1 to exorbitantly inflate the rental which they were to pay with the promise to reduce the same to market rent at the time of the bid, after the commencement of the hotel and based on the representation and promise of Archbishop, the respondent quoted a rental of 35 per square ft., during the moratorium period and 115 per square ft., thereafter, while the market rent was only Rs.10 per square ft.
J. The learned Arbitrator failed to notice that the respondent in its statement of defence at Para 33(A), (C) & (D) have categorically stated about the representation and promise held out by the Archbishop and about his going back on the same which tantamount to fraud and had categorically stated that the claimant has played fraud on the respondent, despite producing the minutes of the meeting dated 20.05.2006 (Ex.R25) and despite categorical statement in this regard made by RW1, Nitesh Shetty, especially in para 7 of deposition (affidavit evidence), Archbishop chose not to appear before the arbitrator and lead evidence and the adverse inference ought to be drawn against the claimant as held by the Hon'ble Supreme Court of India.
K. The learned Arbitrator failed to notice the agreement between the parties was oral one and it was between Archbishop and RW1 and in this regard, RW1 has spoken about it on oath and has produced documents as well, however the Archbishop chose not to appear and consequently, adverse inference has to be drawn. Having not done so, the learned Arbitrator committed patent illegality and hence the award is liable to be set aside. 17 Com.A.P.No.4/2021
L. The learned Arbitrator failed to notice that CW1 in answer to Q.No.67 & 69 that several meetings have been taken place between Mr.Nitesh Shetty, MD of respondent and the Archbishop before and after the execution of the lease deed and the addendum and that he is not a privy to such meetings and the respondent has proved Ex.R.25.
M. The learned Arbitrator totally acted contrary to facts, pleadings and evidence, which clearly proves that there was a meeting between the MD of the respondent and Archbishop and that the rent agreed between Archbishop and the RW.1 was Rs.10/- per Sq. feet and not Rs.35/- and Rs.115/- as set out in the lease deed and the addendum.
N. The learned Arbitrator, wholly erred in holding in Para 226 of the award that there is no reference to Ex.R.25 and it is only after cross examination, as additional affidavit was filed and Ex.R.25 was filed and hence a combined reading of evidence of RW.1 on question No.97 with Ex.R.25, the said document cannot be considered as proof by the claimant and Arbitrator ignored the pleadings especially statement of objections at para 33A, 33C and 33D, the respondent categorically mentioned about the fraud played by the claimant in inducing the respondent to quote higher rentals at the time of the bid, promising that the same will be reduced later.
O. The learned arbitrator wholly erred in paragraph 188 and 189 in holding that the respondent was award of the FAR issued even before entering into lease and that the same is apparent from the letter Ex.C9, wherein respondent has stated that they became award of the fact that prestige has utilized some part of FAR relating to car parking. Learned Arbitrator failed to notice in reality, it was the whole of the FAR of the property in question which had been appropriated by prestige and not a part of it and this was not known to the respondent and that as a result of the utilization of the entire FAR respondent could not proceed with the construction for nearly three years.
P. The learned Arbitrator wholly erred in holding in paragraph 224 and 225 of the award that paragraph 1 of Ex.R25 states that the ground lease rent would be linked to the actual revenue generation. This again is factually not correct and erred in holding 18 Com.A.P.No.4/2021 in paragraph 226 of the award that after the lease deed and of addendum respondent cannot plead fraud and that 'extremely higher' proof of fraud is needed. The said conclusion of the Arbitrator is totally perverse and contrary to the evidence on record and to law.
Q. The learned Arbitrator in para 227, wholly erred in holding that there is no fraud played in the case on hand by Most Rev. Bernard Moras. did not enter the witness box, despite alleging fraud against him by the respondent, the Arbitrator failed and misconducted himself in not drawing adverse inference against the claimant and the entire Arbitral Award is a nullity and the same is liable to be set aside.
R. The learned Arbitrator wholly erred in holding in Para 237 that oral evidence cannot be accepted in the context of fraud since the same is prevented by Sec.92 of Evidence Act and judgments of Hon'ble Supreme Court and ignored the settled principles evolved by the Hon'ble Supreme Court of India in numerous judgments, wherein it has time and again held that oral evidence can be lead in respect of the written agreement and especially to prove fraud.
S. The learned Arbitrator wholly erred in holding in paragraph 238 that fraud is not proved and the question of considering Sec.91 and 92 of Evidence Act to prove fraud, does not arise. The said finding is contrary to numerous judgments of the Hon'ble Supreme Court of India, various other High Courts including the Hon'ble High Court of Karnataka and the award is contrary to Provisions of Sec.3 to Sec.92 of the Evidence Act which specifically states that the existence of any separate oral agreement constituting any condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved, a separate oral agreement between Archbishop and RW.1 - M.D. of respondent was a condition precedent to attaching the obligation of payment of rent of Rs.35/- and Rs.115/-. In the light of Proviso Sec.3 to Sec.92 of the Evidence Act, oral evidence is permissible and the Arbitrator having acted contrary to the same, has committed patent illegality and the award is liable to be set aside. 19 Com.A.P.No.4/2021
T. The learned Arbitrator failed to appreciate the illustration
(d) to Sec.91 of the Evidence Act, which specifically indicates that when a contract mentions payment having been made for Indigo, oral evidence is admissible to show that no payment was made for Indigo and erred in holding in paragraph 238 of the award that Sec.91 and 92 of the Evidence Act is a bar to plead fraud. The conclusion of the Arbitrator is contrary to the general law of the land.
U. The learned Arbitrator wholly erred in holding in paragraph 239, that since fraud plea was declined, the question of considering oral agreement is bad in law. The said finding is contrary to binding judgments of the Hon'ble Supreme Court of India and erred in holding in paragraph 252, that Sec. 46 and 48 of the Registration Act 1908 violates consideration of oral agreements. The said finding is contrary to various judgments of the Hon'ble Supreme Court of India.
V. The learned Arbitrator wholly erred in holding in paragraph 268 that there is no need of drawing adverse inference in the case on hand, since there are no acceptable pleadings and evidence of RW1 read with Ex.R.25, cannot be accepted for a fraudulent action. The finding of the Arbitrator is contrary to evidence on record and settled principles of law laid down by the Hon'ble Supreme Court of India, wherein the Supreme Court of India has time and again held that persons do not enter witness box, adverse inference has to be drawn against him.
W. The learned Arbitrator totally ignored the principles laid down by the Hon'ble Supreme Court, reported in AIR 1968 SC 1413 (Para 5), 2003(8) SCC 204 (Para 11 to 13) and 2012 (8)Scc 148 (Para 12 to 25), has held that person in possession of best evidence fails to produce it, an adverse inference has to be drawn. Similarly, the Supreme Court in 1999(3) SCC 457 (Para
17), AIR 1957 Allahabad 346 (Para 30) has held that an adverse inference has to be drawn if a party refuses to enter witness box. In 1999 (3) SCC 573 (Para 17), the Supreme Court has held that the party not entering into witness box, an adverse inference has to be drawn holding that the case set up by him is false. Similarly, in 2007 (12) SCC 27 (Para 18 to 20), the Supreme Court has held 20 Com.A.P.No.4/2021 that adverse inference has to be drawn against a party for withholding the evidence. Therefore the award is liable to be set aside.
X. The learned Arbitrator wholly erred in holding that there is no acceptable pleading and evidence to draw adverse inference and failed to notice that adverse inference is drawn when best evidence is not produced and non examination of Archbishop, who is the person who had made the promise and who went back on it was not at all examined and therefore adverse inference ought to have been drawn.
Y. The learned Arbitrator wholly erred in holding that there is no pleading or evidence regarding fraud. This is also contrary to the claim statement and other pleadings of the respondent and the evidence of RW.1 and RW.2 and Tribunal has power to draw adverse inference, however, failed to draw adverse inference against the claimant committed patent illegality thus the award is contrary to public policy and the same is liable to be set aside.
Z. The learned Arbitrator wholly erred in holding in paragraph 275 that material on record and the evidence both oral and documentary to show that the respondent did violate the terms of payment of rent and evidence is not lacking. The said finding is contrary to evidence on record and the same is liable to be set aside.
AA. The learned Arbitrator wholly erred in holding in paragraph 276 that it cannot be said that respondent has not violated the terms relating to the rental payments is contrary to the evidence on record, which clearly proves that the respondent has paid the rentals as agreed between the claimant and the respondent at the rate of Rs.10/- per square feet which was the prevailing market rent on the date of the bid. If a computation is made at the rate of Rs.10 per square feet, the rent up to date aggregates to Rs.17,54,61,000/-. The respondent had paid in all a sum of Rs.104.21 crores. Same has been stated on oath by RW2, the Finance Controller of the respondent in para 10 of his affidavit evidence and submitted a statement of the amounts that have been paid by the respondent to the claimant, which is at Ex.R12 which clearly shows that the amount paid till date of his deposition was Rs.104.21 crores. The statement of RW2 has not 21 Com.A.P.No.4/2021 at all been challenged or questioned nor has the said Ex.R12 been assailed. In fact, CW2 in answer to Q.No.148 has categorically admitted that if rent is reckoned at Rs.35 per square feet, the rent paid till date satisfies. The finding of the Arbitrator that the respondent has violated the terms of lease is unsustainable and contrary to evidence on record.
BB. The learned Arbitrator wholly erred in holding in paragraph 279, that the claimant has rightly exercise its right in terminating the lease under Clause 18 of the Lease Deed. The said finding is contrary to both oral and documentary evidence. As the respondent has paid the rentals in excess and the action of the claimant in terminating the lease is contrary to terms of the lease deed and the award is liable to be set aside.
CC. The learned Arbitrator wholly erred in holding in paragraph 285, that moratorium is only for 24 months + 24 months and not till the completion of the hotel and the parties never understood that the moratorium was till completion of the construction. The Arbitrator has created a new contract contrary to the terms of the lease deed and addendum entered into between the parties, especially Clause 4 of the lease deed and the Addendum, and the understanding between the parties and the Arbitral Award is patently illegal and is liable to be set aside.
DD. The learned Arbitrator failed to understand the real intent of Clause 4 of the lease deed which defines moratorium period. While the first sentence of Clause 4 specifies that the moratorium period will be till the completion of the construction, the second sentence states that the moratorium period shall be 24 months and failed to notice the admitted fact that construction of the hotel was complete only on 31.10.2013 when a soft opening of the hotel was launched and same has been admitted by CW.1 in Q.No.29 and CW.2 in Q.No.121 and the Arbitrator failed to notice that without the completion of the hotel construction it is not possible to start commercial operation of the hotel and in the light of the first sentence of Clause 4 of the lease deed, the necessary understanding between the parties was moratorium exists till the date of commercial operation.
EE. The learned Arbitrator wholly erred in holding in paragraph 298, that plea of fraud and misrepresentation is not 22 Com.A.P.No.4/2021 available to the respondent in terms of the law governing such pleas. The said finding is contrary to evidence on record and the settled principles of law and the Arbitrator despite holding in paragraph 298, that material on record would reveal that market rate was Rs.10 per square feet and a lesser rent as claimed from Fortis Hospitals, erred in holding that parties have acted on the terms of lease and paid higher rents and the Tribunal cannot reduce the rentals and erred in holding that parties by open eyes have signed the agreement and the terms of the agreement cannot be varied and ignored the settled principles of law laid down by the Hon'ble Supreme Court of India wherein in case of fraud, even the solemn action would be vitiated and the fraud played by the claimant, the respondent has agreed for the rentals as stated in the lease deed with an assurance that the same will be reduced later.
FF. The learned Arbitrator wholly erred in holding in paragraph 298, that the claimant has suffered huge amounts while providing 4 long years of moratorium. In fact, it is due to the negligence on the part of the claimant in providing the respondent the encumbrance free land, the entire project got delayed and only in order to compensate the respondent, the claimant provided the moratorium, but subsequently the same was also failed since the entire project took over 6 years to complete and the commercial operations could start only in October 2013 and the respondent has suffered huge losses and the same is admitted by the witnesses on behalf of the claimant.
GG. The learned Arbitrator wholly erred in holding in paragraph 298 that the Tribunal cannot rewrite the contract. In fact, the respondent did not pray the Tribunal to rewrite the contract, but contended the terms of the contract and interpreted as agreed between the parties and the same does not amount to rewriting of the contract and the despite holding in para 314, that the rentals agreed to be paid by the respondent is much higher compared to similarly situated property and committed error in awarding 10% interest on the alleged damages, which the claimant is not entitled to.
HH. The learned Arbitrator wholly erred in para 318, in awarding damages to the claimant, when the respondent itself 23 Com.A.P.No.4/2021 has suffered huge losses due to the fraud and misrepresentation played by the claimant and the award is liable to be set aside and the Arbitrator merely holding that the respondent has not been able to prove the fraud and misrepresentation on the part of the claimant and awarded all the claims sought for by the claimant.
II. The learned Arbitrator wholly erred in paragraph 325 of the award holding that damages payable for continuing possession after the termination would be last paid rent and awarded for payment of rent at the rate of Rs.1.48 crores per month, which is contrary to the last paid rent, which was Rs.64,67,317/- and the award is liable to be set aside and the Arbitrator at para 326 and 328, has erroneously held that since the respondent has not disputed the rentals payable, the claimant is entitled for the revision in the rents at the rate of Rs.1.48 crores per month.
JJ. The learned Arbitrator has wholly committed error in rejecting all the counter claims of the respondent, though the respondent has provided ample evidence both oral and documentary and the Arbitrator has totally ignored Clause 25 of the lease deed, which clearly provides for indemnity in case, the party suffer due to the misrepresentation by the other party and not providing the encumbrance free land to the respondent.
KK. The learned Arbitrator has failed to appreciate the evidence of RW1 and RW2 regarding the losses suffered by the respondent and committed serious misconduct and the Arbitral Award is liable to be set aside and the Arbitrator totally ignored Ex.R.6 which is the Chartered Accountant's Certificate which clearly spells out the expenditure incurred for construction of the hotel project in the schedule property and the said escalation in the price is due to the fraud and misrepresentation played by the claimant and hence the respondent is entitled for the counter claims as sought for.
LL. The learned Arbitrator ignored Ex.R.16 which is the SBI CAP Report, which clearly spells out the cost and expenditure incurred in respect of the project in question and the same clearly indicates the problems and hurdles faced by the respondent in executing the project in question and which got delayed inordinately and the same is attributable to the claimant and 24 Com.A.P.No.4/2021 erred in holding in paragraph 361 and 362 of the award. The finding of the Arbitrator wholly erroneous since the RW2 who is the Finance Controller of the respondent who spoke regarding Ex.R.6 and the said finding is liable to be set aside.
MM. The learned Arbitrator in para 362, erroneously rejected Ex.R.6-CA Certificate, by relying upon the judgment in 1960(2)SCR 906, though the said judgment does not have any application to the facts of the case and despite RW 2 who lead evidence and spoken regarding Ex.R.6l.
NN. The learned Arbitrator wholly erred in holding in paragraph 366, that consideration of commercial hardship in the present case does not arise, and the respondent is entitled for counter claim. In fact, the respondent nowhere pleaded or stated commercial hardship either in the pleading or in his evidence. In fact, the respondent has pleaded due to fraud and misrepresentation, the respondent suffered huge losses and the Arbitrator totally misconstrued the fact of the case and the Award is patently illegal and is liable to be set aside.
OO. The learned Arbitrator wholly erred in holding in paragraph 367, that indemnification is not available to the respondent. The said finding of the Arbitral Tribunal is clear contravention of Clause 25 of the Lease Deed, which entitles the respondent to claim losses and damages due to the misrepresentation played by the claimant and the Arbitrator erred in holding in para 373, that since the respondent has no right of indemnification, it is not entitled for any loss of profit or reputation. The said finding is contrary to evidence on record, both oral and documentary and the Award is liable to be set aside.
PP. The learned Arbitrator wholly erred in holding that the cost of the project increased because of increase in the room size and other constructions which are set out. The conclusion of the arbitrator is also contrary to the evidence on record and erroneously awarded damages to the plaintiff/petitioner as discussed above, was clearly an exercise opposed to public policy. The Arbitral Award in this regard has resulted in gross miscarriage of justice and is opposed to fundamental policies of Indian law.
25 Com.A.P.No.4/2021
QQ. The award passed by the learned Arbitrator suffers from patent illegality, perversity, irrationality of such a nature as no reasonable person would take that view and the award is liable to be set aside and the Arbitral Tribunal failed to understand that the damage and injury suffered by the plaintiff/petitioner in the matter was irreparable, having adverse consequences on the financial well-being of the plaintiff/ petitioner and all associated with it and the failure in understanding that even on grounds of equity, the claims of the applicant could not have been ignored has served a heavy blow to the notions of justice and public policy.
RR. Thus the impugned award is shrouded with perversity, inconsistent findings and unsustainable in law and liable to be set aside as per well-established principles of law and the counter claims of the respondent/applicant should be allowed in its entirety and failed to completely appreciate the documents produced, the evidence lead and gather the import of the documents produced and award suffers from various other legal infirmities and the impugned award was passed by the Arbitration Tribunal, on 07.11.2020 and the same was received by the plaintiff/ petitioner on the very same day. From the date of receipt of the said award, the above suit is well within limitation period and prays for allow the suit and set aside the award which passed by the Sole Arbitrator.
11. In response of the summons the defendant No.1 has been appeared through its counsel and defendant No.2 being sole Arbitrator. The defendant No.1 has filed its objection statement in which he has alleged that the allegations which made by the plaintiff U/Sec.34 of Arbitration and Conciliation act r/w Sec.10 of Commercial Courts Act are false frivolous and untenable and the plaintiff has filed the instant suit by misrepresenting and suppressing the material facts, on this ground alone the suit 26 Com.A.P.No.4/2021 which filed by the plaintiff is deserved for dismissal. The award which passed by the Sole Arbitrator is not erroneous, patently illegal not against the well established principles of the Hon'ble High Court and Hon'ble Supreme Court and there has no violation of public policy, the Arbitral tribunal is the master of quantity and quality of evidence to be relied upon while delivering the Arbitral award and this Court cannot reassess or re-appreciate the evidence which already considered by the Arbitral tribunal and all the contentions which are raised by the plaintiff before this Court has been raised before the Arbitral tribunal and the Arbitral tribunal already recorded its findings, question of reconsider the same does not arise. The plaintiff being the company has entered into registered lease deed dated 11.01.2007 relation to the immovable property and the plaintiff has taken the property on lease to develop a five star hotel in the property involved in the lease deed. The lease of the property was for a period of 40 years, which included a moratorium period of 24 months. As per the terms of the lease deed during moratorium period a monthly rent of Rs.39,36,625/- which payable by the plaintiff, after completion of the moratorium period a monthly rent of Rs.1,29,34,625/- which payable by the plaintiff and the plaintiff was agreed during the term of the lease, monthly rent was to be 27 Com.A.P.No.4/2021 increased by 15% every 3 years on the last paid rent and in case of delayed payment shall be payable together with interest at the rate of 3% and above SBI prime lending rate in force at the time of default from the date of default upto the date complete payment thereof and furnish bank guarantee of Rs.19,40,19,375/-.
12. The defendant No.1 in its objection statement has further alleged in the year 2009 the plaintiff had represented that they were facing certain difficulties due to the hard rock conditions at the site and also pointed out that the certain floor area ratio issues needed to be sorted out with the Bruhat Bengaluru Mahanagara Palike and there was a delay in getting the plan sanction and despite the fact that the issues were pure business risks which were within the plaintiff domain and which did not impact the contractual obligations and first addendum to the lease deed dated 13.08.2009 was taken place moratorium period set out in the lease deed was extended by a further period of 24 months and reduced the bank guarantee from a sum of Rs.18 crores to 1.18 Crores valid for 24 months and at the time of entering into the first addendum lease deed additional refundable security deposit of Rs.7,76,07,750/- which paid by the plaintiff and the plaintiff was paying the rents of Rs.64,67,312/- as per the 28 Com.A.P.No.4/2021 first addendum to the lease deed and period ended on 10.01.2011 and the rent payable from 11.01.2011 was of Rs.1,29,34,625/- and received a cheque for Rs.64,67,312/- for the period from 11.01.2011 to 10.02.2011. The plaintiff was defaulted in payment of rent and service tax and who has approached the Hon'ble High Court in Company Petition No.240/14 seeking its winding up of the Respondent No.1. On the ground of their inability to pay and notice dated 11.12.2014 was also issued to the plaintiff terminating the lease as per clause 18 of the lease deed and clause 20 of the lease deed preclude to initiating the Arbitration proceedings and letter has been issued on 14.03.2015 inviting the plaintiff for amicable settlement and several meeting and correspondences were also exchanged in between them and the plaintiff did not come forward to settle the dispute amicably and raised defamatory baseless allegations, thereby constrained to initiate the arbitration proceedings against the plaintiff before the Arbitral tribunal comprised and during the pendency of the proceedings filed an application U/Sec.31(6) of the Act and sought for interim arbitral award for payment of arrears of rent and Arbitral tribunal passed the interim award.
13. The defendant No.1 in its objection statement has further alleged the Arbitral tribunal passed the interim order and directed 29 Com.A.P.No.4/2021 to pay Rs.5,98,43,926/- and the said amount is only on the admission of the plaintiff. The plaintiff neither paid the outstanding amount of Rs.5,98,43,926/- nor it was regular in paying the monthly rent and the Arbitral tribunal after considering the amount which awarded under interim relief allowed all the claims. The plaintiff is liable to pay a sum of Rs.161,61,57,931/- as arrears of rent and the present suit which filed against the impugned award which outside the ambit of Sec.34 of Arbitration and Conciliation Act and tribunal after considering all the aspects passed the award when such being the case the plaintiff does not fulfill any of the grounds.
14. The defendant No.1 in its objection statement has alleged that the para No.1 to 3 of the plaint are formal in nature do not require traversal and admitted during the year 2006 issued a public advertisement for lease of the property and the plaintiff aware of the fact, the senior citizens were residing in the property prior to entering into the lease deed and it was the obligation on the part of the plaintiff to resolve them and denied the averments made in para No.5 of the plaint are false and no attempt has been made to the MD of the plaintiff to reduce the rents and the plaintiff has not furnished any acknowledgment and he has alleged that the para No.6 to 9 are matter of record do not 30 Com.A.P.No.4/2021 requires traversal and the security deposit which paid by the plaintiff in accordance to the 2 nd addendum to the lease deed, property was bifurcated and khatha certificate was obtained on 08.01.2007 and all the allegations which alleged by the plaintiff are totally false and the plaintiff has to strict prove of the same and it was the sole responsibility of Nitesh Estates Private limited to ensure that alternative premises equivalent to the present premises and he has alleged that the para No.11 of the plaint are irrelevant and Nitesh Developer is the confirming party to the lease deed and denied that he was aware of the existence of the hard rock in the premises and denied the other averments which alleged in the objection statement and prays for reject the suit.
15. Both counsels were filed the written arguments and reply arguments.
16. Heard arguments on both sides.
17. The points that arise for court consideration are as under:
1. Whether the plaintiff has made out the grounds which are enumerated under Sec.34 of the Arbitration and Conciliation Act to set aside the award?
2. What order?
18. My answer to the above points are as under:
Point No.1: In the Negative;31 Com.A.P.No.4/2021
Point No.2: As per final order, for the following;
REASONS
19. POINT NO.1: The plaintiff being the respondent and the defendant being the claimant before the sole arbitrator feeling aggrieved by the award has filed the instant suit on the ground a lease deed was taken place in between them on 11.01.2007 for the construction of a five star hotel in the property which involved in the lease deed and the lease of the schedule property was for a period of 40 years which included a moratorium period of 24 months and the plaintiff has to obtain necessary permissions to commence and to proceed with the preliminary work in relation to the schedule property and to complete the construction and both parties were agreed the terms and conditions which are incorporated under the lease deed dated 11.01.2007. During the moratorium period from the date of commencement of the lease for the next 24 months a monthly rent of Rs.39,36,625/- payable by the plaintiff to the defendant. Accordingly from 11.01.2007 onwards till 10.01.2009 a monthly rent of Rs.39,36,625/- has been fixed which payable by the plaintiff to the defendant and after completion of the moratorium period a monthly rent of Rs.1,29,34,625/- has been fixed which payable by the plaintiff to the defendant and they were also agreed the terms of the lease 32 Com.A.P.No.4/2021 and the monthly rent was to be increased by 15% every 3 years on the last paid rent and the plaintiff has to furnish the bank guarantee and due to some inconvenience, 1 st addendum agreement dated 13.08.2009 was taken place in between them, but the plaintiff failed to comply the terms and conditions of lease deed dated 11.01.2007 thereby the dispute has been arisen in between them and the defendant has issued a notice for amicable settlement and both parties were consented and appointed justice R. Gururajan being the sole arbitrator and both parties were led the evidence and after hearing the arguments by the sole arbitrator passed the award. Feeling aggrieved by the said award, the plaintiff being the respondent before the sole arbitrator has filed the instant suit.
20. The learned counsel for the plaintiff apart from the written arguments has submitted the defendant called the tender during the year 2006 for lease of the schedule property for putting up hotel project therein and the schedule property had a small building which housed a senior citizen and old age home run by the defendant and also a tenant and the building was an old one to be demolished and a hotel had to be constructed, thereby the schedule property was treated as vacant land to be granted on lease to the prospective bidder. During the year 2006-2007 the 33 Com.A.P.No.4/2021 rental of vacant land was around Rs.6/- per sq.ft. The Arch Bishop who is the head and whole and sole of the defendant personally requested managing director to quote an exorbitantly high rent of Rs.35/- per sq.ft. during the moratorium period and Rs.115/- per sq.ft. after the moratorium period so as to ensure that became an successful bidder. On 07.08.2006 MOU was entered between the plaintiff and the defendant. On 11.01.2007 a registered lease deed was entered into between the plaintiff and the defendant and on 13.08.2009 a first addendum was entered into between the plaintiff and the defendant. Again on 28.03.2012 a second addendum was entered into amending certain terms of the lease deed regarding the rent, security, security deposit, moratorium period and bank guarantee. The plaintiff had paid security deposit of Rs.47.76 crores, out of the said amount 3.76 crores was repaid by the defendant to the plaintiff at the time of second addendum. Therefore the net security deposit that was paid by the plaintiff to the defendant is of Rs.43 crores, after the MOU the lease deed was entered into between the plaintiff and the defendant and the entire floor area ratio had been utilized by Prestige Estates Projects with whom the defendant had sold the neighbouring property without FAR available in respect of the schedule property and inmates of the senior citizens and old age home and also the 34 Com.A.P.No.4/2021 tenants Kanada India Pvt. Ltd., continue to occupy the property without vacating them. It was not possible for the plaintiff to put the building and construct the hotel and innumerable litigations came to be initiated in respect of the schedule property and while doing the work found the hard rock in the schedule property which was within the knowledge of the defendant, but it was not disclosed by the defendant at the time of register lease agreement nor addendum to the said agreement and the defendant has suppressed the same and the defendant had sold the property to the Prestige under sale deed dated 18.09.2002 and the schedule property were one large property and a single municipal number and prestige had put up a building in the adjourning property while constructing the building had utilized the FAR of not only the property purchased by them but also the FAR of the schedule property and the defendant totally suppressed the utilization of the FAR by the prestige from the defendant which resulted in over 3 years delay in commencement of the project itself and the defendant knowing fully well that the inmates of the old age home and tenant Kanada India Pvt. Ltd., did not vacate the building as a result of which the plaintiff had to pay them compensation/ alternative premises at its cost who spent over Rs.26 lakhs as compensation apart from the institution 35 Com.A.P.No.4/2021 of a legal proceedings in respect of the schedule property which was suppressed by the defendant and the defendant well aware about the litigations which are pending before the court of law which was not disclosed by the defendant. Because of that reason delay has been caused in the progress of the construction and while doing the construction found the hard rock which known by the defendant has not been disclosed at the time of entering into the registered lease deed nor addendum to the said lease deed and there were residential houses adjacent to the schedule property blasting could not be restored to and the hard rock had to be removed by chipping which took a long time which is within the knowledge of the defendant who suppressed the same and earlier the Arch Bishop who is the whole and sole of the defendant had requested the managing director to exorbitantly inflate the rental which they were to pay with a promise to reduce the same to market rent at the time of the bid and the plaintiff had paid a sum of Rs.44 crores as advance which nearly ¾th of the market value of the property. When the huge amount has been paid by the plaintiff by way of advance rental will be less than even the market rent and the fraud and misrepresentation has been committed by the defendant at the time of entering into the lease deed, since the defendant has not disclosed the facts which 36 Com.A.P.No.4/2021 known by the defendant and there was default in payment of monthly rent to the defendant by the plaintiff and by virtue of the addendum to the lease deed, amending certain terms of the conditions regarding the rent security deposit, moratorium period and bank guarantee which was not taken into consideration by the sole arbitrator. Though this fact was brought to the notice of the sole arbitrator, but the sole arbitrator has not taken into consideration of these aspects which are on record and as per the addendum to the lease deed, the moratorium period will be till the completion of the construction, but the sole arbitrator has wrongly interpreted the moratorium period while passing the award which is against to the law. The sole arbitrator has not taken into consideration not only the oral evidence but also the documentary evidence which placed by the plaintiff and rejected the counter claim which filed by the plaintiff without considering the oral and documentary evidence which placed by the plaintiff, though there are clear admissions on the part of the witnesses of the defendant but it was not taken into consideration by the sole arbitrator and the lease deed was taken place on 07.01.2007 in between the plaintiff and the defendant and there are terms and conditions has been incorporated in the said lease deed which was breached by the defendant, same was brought to the notice 37 Com.A.P.No.4/2021 of the sole arbitrator which was not taken into consideration by the sole arbitrator and the plaintiff has invested huge amount for the construction of the hotel and due to the defaults on the part of the defendant delay has been caused which was not caused on account of the plaintiff. Therefore it is just and necessary for interference of this court to set the award which passed by the sole arbitrator since the entire award which passed by the sole arbitrator is perverse and suffers from illegality and the fraud and misrepresentation which played by the defendant was not taken into consideration by the sole arbitrator and failed to notice the admitted facts and the construction of the hotel and prays for allow the suit and set aside the award which passed by the sole arbitrator and drawn the Court attention on the following judgments:
1. 2021 SCC online SC 508
2. 2007(13) SCC 434
3. 2010(11) SCC 296
4. 2019 (7) SCC 236
5. 2017 (5) SCC 743
6. 2006 (4) SCC 445
7. 2003 (8) SCC 154
8. 2004 (9) SCC 619 9.2014 (9) SCC 263
10. 2015 (3) SCC 49
11. AIR 1968 SC 1413
12. 2003(8) SCC 204
13. 2012(8) SCC 148
14. 1999 (3) SCC 573
15. 2007 (12) SCC 27
16. 2014 (1) SCC 113
17. AIR 1951 SC 16
18. 1992 (1) SCC 534
19. 2003(8) SCC 319 38 Com.A.P.No.4/2021
20. 2011 (8) SCC 613
21. 1999 (4) SCC 262
22. 1987 (2) SCC 555
23. AIR 1966 SC 735
24. AIR 1936 PC 70 ILR 1935 PC 446
25. 2003(6) SCC 595
26. 2017(7) SCC 716
27. 2016(1) SCC 762
28. 1979(4) SCC 60
29. 2004(4) SCC 794
30. 1977 (1) KAR LAW JOURNAL 181 & 1982(1) SCC 4
31. AIR 1923 Oudh 45
32. AIR 1917 Calcutta 186
33. 2006 (6) Maharashtra Law Journal 752
34. AIR 1959 SC 24 & 2010 (13) SCC 147
35. 2009(5) SCC 678
21. Per contra, the learned counsel for the defendant No.1 apart from the written arguments has submitted that the defendant is not disputed about the lease deed and addendum to the lease deed which taken place in between the plaintiff and the defendant and the plaintiff has not placed any materials on record that the grounds which are enumerated under Sec.34 of the Arbitration and Conciliation Act falls within the ambit of Sec.34 of the Arbitration and Conciliation Act for interference of this court and to set aside the award. Though the plaintiff in the plaint has alleged that there is patent illegality which committed by the sole arbitrator while passing the award, but nothing is placed on record to substantiate the same and there were no pleadings of the plaintiff on reduction of lease rent amount and the defendant has not suppressed anything at the time of lease deed which taken 39 Com.A.P.No.4/2021 place in between the plaintiff and the defendant and the sole arbitrator has taken into consideration not only the oral evidence but also the materials on record and passed the award. So question of interference of this court does not arise. Though the plaintiff has pleaded the fraud and misrepresentation which alleged to have been committed by the defendant No.1, but nothing is placed on record to substantiate the same and the sole arbitrator while passing the award held that the plaintiff has failed to prove the fraud which alleged to have been committed by the defendant No.1. The defendant at the time of entering the lease deed has brought to the notice of the plaintiff about the situation of the schedule property and the plaintiff after acceptance of those facts has entered into the registered lease deed which taken place in between the plaintiff and the defendant and both have signed the document by agreeing the terms and conditions of the lease deed. Now the plaintiff cannot contend that the defendant has suppressed the material facts at the time of entering into the lease deed and adverse inference cannot be taken for non-examination of Arch Bishop as the defendant has placed the oral and documentary evidence and the sole arbitrator after considering the said aspect passed the award. So question of interference of this court does not arise, though the plaintiff has 40 Com.A.P.No.4/2021 sought for damages on the ground of delay which alleged to have been caused by the defendant, but nothing has been placed on record to substantiate the same. So considering all the aspects placed on record, sole arbitrator passed the award. Thus question of granting the damages to the plaintiff does not arise. Though the plaintiff has sought for 578 crores towards misrepresentation which alleged to have been committed by the defendant, but nothing is placed on record to substantiate the same. That is the reason why the sole arbitrator after considering the oral and documentary evidence held that the plaintiff has failed to establish the misrepresentation which alleged to have been committed by the defendant, though the plaintiff has sought for Rs.13,00,000/- which alleged to have been incurred by the plaintiff towards eviction of tenants from the schedule property and Rs.13.25 lakhs which alleged to have been incurred by the plaintiff towards shifting of the senior citizens from the schedule property, but nothing is placed on record to substantiate the same. When the plaintiff had entered into lease deed with the defendant, whatever the conditions which incorporated in the said deed binding on the plaintiff and the plaintiff after coming to know the factual aspect on the spot signed the document which is binding on the plaintiff, thereby the sole arbitrator after 41 Com.A.P.No.4/2021 considering all the oral and documentary evidence held that the plaintiff is not entitled the said amount. The plaintiff also sought for 100 crores towards the loss of profits and Rs.750 crores towards loss of reputation as well as Rs.10 crores towards the legal expenses, but nothing is placed on record to substantiate the same. Thereby the sole arbitrator after considering the materials on record held that the plaintiff has failed to prove the same through oral and documentary evidence and held that the plaintiff is not entitled the said relief, though the plaintiff has sought for interest @ 24% p.a. for which the sole arbitrator held when the plaintiff has utterly failed to prove its case to grant the relief, question of awarding the interest does not arise and the plaintiff has utterly failed to prove its case as sought in the counter claim. That is the reason why the sole arbitrator after considering the oral and documentary evidence has rightly rejected the counter claim which filed by the plaintiff and passed the award in favour of the defendant.
22. So question of interference of this court does not arise and prays for dismiss the suit and drawn the court attention on the following judgments:
1. Civil Appeal No.4779/2019 of Hon'ble Supreme Court of India
2. 2015 (3) SCC 49
3. 2003(5) SCC 705
4. 1991 (4) SCC 93 42 Com.A.P.No.4/2021
5. MANU/HP/0264/1997
6. 1976(1) SCC 747
7. 2004 (8) SCC 588
8. ILR 2012 KAR 3431
9. ILR 2016 KAR 1941
10. 2005 SCC Online KAR 536
11. 2005 (5) SCC 100
12. 2011 SCC online AP 762
13. MANU/BH/0314/1991
14. 2013 (2) SCC 606
15. 2013 (4) SCC 97
16. 1995 (1) SCC 198
17. MANU/SC/1272/2017
18. 2003 (6) SCC 595
19. 1993 SCC Online Calcutta 4
20. 1963 (3) SCR 339
21. 2016 SCC Online Delhi 3882
22. 1960(2) SCR 906
23. 2010 SCC Online Madras 3972
24. 2016 SCC Online Bombay 10037
25. 1990 (4) SCC 147
26. 1993 SCC Online Bombay 116
27. 2005 (1) SCC 705
23. It is an admitted fact the plaintiff being the respondent and the defendant being the claimant before the arbitral tribunal feeling aggrieved by the award which passed by the sole arbitrator has filed the instant suit. The learned counsel for the plaintiff while canvassing his arguments has much argued that the sole arbitrator has failed to appreciate the oral and documentary evidence on record and rejected the counter claim which filed by the plaintiff. So, before considering the materials on record and the arguments which advanced by both the counsels, it is just and necessary to consider the legal aspects first for the proper appreciation which reads like this:
1. What is arbitration?
2. When court can interfere with arbitral award?43 Com.A.P.No.4/2021
3. What is the scope of Court's power to interfere with the arbitral award?
4. What are the grounds are required to set aside the award?
5. Setting aside of arbitral award when permissible?
Let me decide one after another for the proper appreciation of the materials on record. Thus this court drawn its attention on Sec.2(1)(a) of the Arbitration and Conciliation Act, 1996 which reads like this:
2(1)(a). The definition arbitration means any arbitration whether or not administered by permanent arbitral institution.
Arbitration is a private dispute resolution mechanism agreed upon by the parties.
Arbitration is a binding voluntary alternative dispute resolution process by a private forum chosen by the parties.
Arbitration is a process of settlement extra curses curiae and the parties are at liberty to choose their judge. "The essence of arbitration without assistance or intervention of the court is settlement of dispute by a tribunal of the own choosing of the parties." Law of arbitration aids in implementation of arbitration agreement contract between the parties which remains a private adjudication by a forum consequently chosen by the parties and made on consequential reference.
Now let me know when court can interfere with the arbitral award.
Thus this court drawn its attention on Sec.34(43) of the Arbitration and Conciliation Act, 1996 which reads like this:
43. Principles of interference with arbitral award:-
The principles of interference with an arbitral award under Sec.34(2) of the Act are as follows:
(1) An award, which is -
(i) contrary to substantive provisions of law; or
(ii) The provisions of Arbitration and Conciliation Act, 1996, or
(iii) against the terms of the respective contract; or
(iv) Patently illegal or 44 Com.A.P.No.4/2021
(v) Prejudicial to the rights of the parties; is open to interference by the court under Sec.34(2) of the Act. (2) The award could be set aside if it is contrary to:
(a) fundamental policy of Indian Law; or
(b) the interest of India; or
(c) justice or morality.
(3) The award could also be set aside, if it is so unfair and unreasonable that it shocks the conscience of the court.
(4) It is open to the court to consider whether the award is against the specific terms of the contract and if so interfere with it on the ground that it is patently illegal and opposed to the public policy of India.
So, by virtue of the provision which stated above, the court can interfere with the arbitral award in the grounds which mentioned above.
Now let me know what is the scope of Court's power to interfere with the arbitral award? Thus this court drawn its attention on Sec.34 of the Arbitration and Conciliation Act which reads like this;
Scope of Court's power to interfere with the arbitral award:
The scope of the interference by the court's in regard to arbitral award is limited. Courts do not sit in appeal over the findings and decision of the arbitrator, nor can it reassess or re-appreciate evidence or examine the sufficiency or otherwise of the evidence.
So, by virtue of the provision which stated supra, the scope of interference by the court in regard to the arbitral award is limited scope. The scope of interference under Sec.34 of the Act is limited 45 Com.A.P.No.4/2021 in view of the judgment of the Hon'ble Supreme Court of India which reported in AIR 2003 SC 2629 in between Oil and Natural Gas Corporation Ltd., V/s Shah Pipes Ltd., and in the said judgment, their Lordship held that;
'an award can be set aside if it is contrary to fundamental policy of Indian Law, the interest of India, justice or morality, if it is patently illegal and unfair and unreasonable it shocks the conscience of the court'.
Now let me know what are the grounds are required to set aside the award which passed. Thus this court drawn its attention on Sec.34(18) of the Arbitration and Conciliation Act which reads like this:
18. Grounds to set aside award:- Under the new Act, 1996 misconduct of arbitrator is no ground to set aside an award but court may set aside an award in the following grounds:
(1) if the composition of the arbitral tribunal was not in accordance with the agreement of the parties.
(2) falling such agreement, the composition of arbitral tribunal was not in accordance with the part I of the Act.
(3) if the arbitral proceeding was not in accordance with -
(a) the agreement of the parties.
(b) failing such agreement - the arbitral procedure was not in accordance with part I of the Act. However exception for setting aside the award on the ground of composition of arbitral tribunal or illegality of arbitral procedure is that the agreement should not be in conflict with the provisions of part I of the Act from which parties cannot derogate;
(c) if the award passed by the arbitral tribunal is in contravention of the provisions of the Act or any other substantive law governing the parties or is against the terms of the contract.
An award can be set aside, if it is against the public policy of India that is to so it is contrary to:
(1) fundamental policy of Indian law, 46 Com.A.P.No.4/2021 (2) the interest of India, or (3) justice or morality , or (4) if it is patently illegal.
It could be challenged -
(a) as provided under Sec.13(5); and
(b) Sec. 16(6) of the Arbitration and conciliation Act. So the court can set aside the award, if the grounds found which stated supra.
So, if the petitioner is made out the grounds which stated supra, court can set aside the award. Now let me know about the setting aside of arbitral award when permissible. Thus this court drawn its attention on Sec.34(4) of the Arbitration and Conciliation Act, 1996 which reads like thus:
4. Setting aside of arbitral award when permissible:-
That the court can set aside the arbitral award under Sec.34(2) of the Arbitration and Conciliation Act if the party making the application furnishes the proof that:
(i) a party was under some incapacity
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for time being in force.
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or otherwise unable to present his case.
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitrator or it contains visa decisions on matters behind the scope of the submission to arbitration.
(2) The court may set aside the award:47 Com.A.P.No.4/2021
(I) (a) if the composition of the arbitral tribunal was not in accordance with the agreement of the parties.
(b) falling such agreement, the composition of the arbitral tribunal was not in accordance with part-1 of the Act.
(ii) if the arbitral procedure was not in accordance with:
(a) the agreement of the parties, or
(b) failing such agreement, the arbitral procedure was not in accordance with part-1 of the Act.
However exception for setting aside the award on the ground of composition of arbitral tribunal or illegality of arbitral procedure is that the agreement should not be in conflict within the provisions of part-1 of the Act from which the parties cannot derogate.
(c) If the award passed by the arbitral tribunal is in contravention of provisions of the Act or any other substantive law governing the parties or is against the terms of the contract.
(3) The award could be set aside if it is against the public policy of India, that is to say, if it is contrary to:
(a) fundamental policy of Indian Law;
(b) the interest of India; or
(c) justice or morality; or
(d) if it is patently illegal.
(4) It could be challenged-
(a) as provided under Sec.13(5); and
(b) Section 16(6) of the Act."
"B. Further held as follows in this case: (1) The impugned award requires to be set aside mainly on the grounds:
(I) There is specific stipulation in the agreement that the time and date of delivery of the goods was the essence of the contract;
(ii) in case of failure to deliver the goods within the period fixed for such delivery in the schedule, ONGC was entitled to recover from the contractor liquidated damages as agreed;48 Com.A.P.No.4/2021
(iii) it was also explicitly understood that the agreed liquidated damages were genuine pre-estimate of damages;
(iv) on the request of the respondent to extend the time limit for supply of goods, ONGC informed specifically that time was extended but stipulated liquidated damages as agreed would be recovered;
(v) liquidated damages for delay in supply of goods were to be recovered by paying authorities from the bills for payment of cost of material supplied by the contractor;
(vii) there is nothing on record to suggest that stipulation for recovering liquidated damages was by way of penalty or that the said sum was in any way unreasonable.
(viii) in certain contracts, it is impossible to asses the damages or prove the same. Such situation is taken care by section 73 and 74 of the Contract Act and in the present case by specific terms of the contract" - Oil and Natural Gas Corporation V Shah Pipes Ltd. (2003)5 SCC 705 : AIR 2003 SC 2629; see also Moona Abousher V M/s. Cholamandalam DBS Finance Ltd. AIR 2019 Mad 233.
Apart from the legal aspects which referred above, it is just and necessary to reproduce the relief which sought by the defendant and the relief which sought by the plaintiff in the counter claim which reads like this:
CLAIM Wherefore, the claimant respectfully prays that this Hon'ble Tribunal may kindly be pleased to:
I. Direct the respondent to quit, vacate and deliver possession of the schedule property as per Clause 21 of the lease deed;
II. Deleted.49 Com.A.P.No.4/2021
II(a) Direct the respondent to make payment of entire rent amount Rs.36,33,80,123/- due and payable; Ref. Annexure 28A.
III. Deleted.
III(a) Direct the respondent to make payment of interest on unpaid rent calculated at the rate of 12% from the date of which the payments were due till the date of thie statement of claim amounting to Rs.16,35,12,044/-
IV. Direct the respondent to make payment of interest calculated at the rate of 12% from the date of filing of the statement of claim along with compound interest till the date of the award and future compound interest on the sum awarded (including the interest pendent lite and legal costs) at the rate of 12% from the date of the award till the date of payment;
V. Direct the respondent to pay Rs.5 crores as damages per month from 01.01.20215 onwards till the date of filing of statement of claim amounting to Rs.98,06,45,157/- for illegal and unauthorized use of the schedule property.
VI. Direct the respondent to pay damages from the date of filing of statement of claim till the date of delivey of possession of the schedule property.
VII. Direct the respondents to make payment of the service tax due on rent at rate specified as per Government norms, totaling to Rs.5,08,39,283/-
VIII. Direct the respondent to make payment of interest on the service tax on rent totaling to Rs.3,34,58,713/-
IX. Direct the respondent to make payment of the service tax up to date of delivery of possession of the schedule property.
X. Direct the respondent to pay costs of the present proceedings before this Hon'ble Tribunal.50 Com.A.P.No.4/2021
XI. Grant such other relief as this Hon'ble Tribunal deems fit to grant in the facts and circumstances of the case, in the interests of justice and equity;
COUNTER CLAIM Wherefore, the respondent/counter claimant above named respectfully prays that this Hon'ble Court may be pleased to:
a. Declare that the action of termination of lease by the claimant vide notice dated 11.12.2014 is illegla and non-est in the eye of law.
b. Direct the claimant to pay a sum of Rs.578 crores to the respondent incurred by the respondent due to misrepresentation of the claimant;
c. Direct the claimant to pay a sum of Rs.13 lakhs to the respondent incurred by the respondent towards eviction of tenants from the schedule property;
d. Direct the claimant to pay a sum of Rs.13.25 lakhs to the respondent incurred by the respondent towards shifting the senior citizens from the schedule property;
e. Direct the claimant to pay a sum of Rs.100 crores towards loss of profits;
f. Direct the claimant to pay a sum of Rs.750 crores towards loss of reputation;
g. Direct the claimant to pay a sum of Rs.10 crores towards the legal expenses.
h. Direct the claimant to pay interest at the rate of 24% per annum on the amounts mentioned in prayer column NO.(b),
(c), (d), (e), (f) and (g) from the date of its due and till the filing of counter claim;
I. Direct the claimant to pay interest at the rate of 24% per annum on the amounts mentioned in prayer column No.(b), 51 Com.A.P.No.4/2021
(c), (d), (e), (f) and (g) from the date of this counter claim till the date of payment;
j. Grant such other and further reliefs are just including the costs of this proceeding.
The above reliefs which sought by the plaintiff and the defendant are clear that the plaintiff and the defendant were sought the relief in the claim petition and the counter claim which stated supra before the sole arbitrator.
24. Now let me know the admitted facts which admitted by both the parties, as the plaintiff and the defendants were not disputed the registered lease deed which taken place in between them on 11.01.2007 and they were also not disputed about the first addendum to the lease deed which taken place in between the plaintiff and the defendant on 13.08.2009 and they were also not disputed about the 2nd addendum which taken place in between the plaintiff and the defendants on 28.03.2022 and they were also not disputed about the lease period for 40 years and the moratorium period of 24 months.
25. So, keeping the legal aspects and the relief of the plaintiff and the relief of the defendant in the claim statement and counter claim which referred above in mind, now let me know the arguments which advanced by both the counsels as the learned counsel for the plaintiff while canvassing his arguments has much 52 Com.A.P.No.4/2021 argued that the defendant has not brought to the notice of the plaintiff regarding the hard rock in the schedule property as well as tenants who are in the schedule property and also senior citizens and old age home in the schedule property which was suppressed by the defendant who committed fraud and misrepresentation.
26. Now let me know the definition of fraud and misrepresentation for the proper appreciation of the arguments which advanced by learned counsel for the plaintiff. Thus this court drawn its attention on Sec.17 of the Indian Contract Act, 1872 which reads like this:
17. 'Fraud' defined.--'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent1, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:
-- --'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent1, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract\:--"
(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent. Explanation.--Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the 53 Com.A.P.No.4/2021 circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak2, or unless his silence, is, in itself, equivalent to speech.
The above provision defined the definition of the fraud. So, whenever the party pleads about the fraud has to bring the case within the ambit of Sec.17 of the Indian Contract Act to show that the fraud has been committed.
27. The learned counsel for the plaintiff while canvassing his arguments has submitted that the defendant has committed misrepresentation while entering the lease deed with the plaintiff. Thus this court drawn its attention on Sec.18 of the Indian Contract Act which reads like this:
18. "Misrepresentation" defined.
--"Misrepresentation" means and includes
-- --"Misrepresentation" means and includes--"
(1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
(2) any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; (3) causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.
The above provision defines the definition of misrepresentation. So, in order to prove the misrepresentation one has to bring the 54 Com.A.P.No.4/2021 case within the ambit of Sec.18 of the Indian Contract Act which referred above.
28. Now the question is whether the plaintiff has entered the lease deed without knowing all these facts and whether the defendant has not disclosed the facts which alleged by the learned counsel for the plaintiff while canvassing his arguments. Thus this court drawn its attention on the lease deed which admitted by both the parties dated 11.01.2007 Clause G which reads like this:
(I) That a portion of the schedule property, which was in the occupation of a tenant, has been retrieved by settling the issue amicably with the tenant by the confirming party at its own cost and expense. The tenant has vacated the said portion of the schedule property and the same has been reported to the Hon'ble High Court of Karnataka.
(ii) Subsequent to the confirming party agreeing to take the schedule property on long lease basis, the Lessor has had the property bifurcated and obtained the khatha with property No.99 assigned to the schedule property vide Khatha Certificate dated 08.01.2007 and Khatha Extract dated 08.01.2007.
(iii) That the senior citizens, who were accommodated in a separate building on the schedule property, have been rehabilitated and provided accommodation elsewhere to their satisfaction and to the satisfaction of the lessor at the sole cost of the confirming party. 55 Com.A.P.No.4/2021 The above clause are very much clear, the defendant has brought to the notice of the plaintiff at the time of entering the lease deed regarding occupation of tenants in the schedule property and also informed that the senior citizens who are accommodated in a separate building on the schedule property have been rehabilitated and provided accommodation elsewhere to their satisfaction of the lessor at the sole cost of the confirming party. So, one thing is clear from the clause which referred above, the defendant has brought to the notice of actual condition of the schedule property as on the date of entering the lease deed, as the confirming party has been shown as the plaintiff.
29. It is an admitted fact, the defendant not only brought to the actual situation of the schedule property but also placed the documents. So, after considering all these aspects the plaintiff has accepted the same and put the signature on the lease deed which taken place in between the plaintiff and the defendant, as Clause K of the lease deed clearly reflects the defendant has brought to the notice of actual position of the schedule property and also placed the documents after considering the said facts the lessee has been satisfied i.e. the plaintiff. So, for the proper appreciation of the clause which appeared in the lease deed is necessary for reproduce which reads like this: 56 Com.A.P.No.4/2021
K. AND WHEREAS based on the aforementioned representations and the documents furnished by the Lessor, the Lessee, being satisfied with regard to the rights, title and interest of the Lessor over the schedule property, has agreed to take the schedule property on lease, and both the parties have agreed to reduce the agreed terms and conditions in writing as hereunder.
The above clause is very much clear the plaintiff after satisfaction of the actual situation of the schedule property and the documents has entered into the lease deed. So, question of fraud and misrepresentation which advanced by the learned counsel for the plaintiff does not arise and nothing has been suppressed by the plaintiff at the time of entering into the lease deed in between the plaintiff and the defendant, otherwise question of putting the signature by the plaintiff on the lease deed which taken place in between them does not arise. So, in order to bring the case within the ambit of Sec.17 of the Indian Contract Act, has to establish that the fraud is an intentionally deceptive action designed to provide the perpetrator with an unlawful gain or to deny right to victim and fraud include tax fraud, credit fraud, wire fraud, security fraud and bankruptcy fraud. Fraudulent activity can be carried by one individual, multiple individuals or a business firm as a whole and the fraud involves the false representation of facts whether by intentionally withholding important information or 57 Com.A.P.No.4/2021 providing false statement to another party for the specific purpose of gaining something that may not have been provided without the deception. So, one has to give false representation of the facts to gain something, but in the instant case nothing has been placed to establish that the defendant has committed fraud in view of the provision which stated supra.
30. The learned counsel for the plaintiff has much argued on misrepresentation that the defendant has committed misrepresentation at the time of entering into the lease deed. It is an admitted fact whenever the misrepresentation has been pleaded, it should be plead and prove that the defendant has misrepresented the false facts during the negotiations. So, in order to bring the case within the ambit of misrepresentation has to establish that the misrepresentation is a false statement of a material fact made by the defendant which effects the decision of the plaintiff, but nothing has been placed on record to substantiate the same. On this aspect the arbitral tribunal not only considered the oral evidence but also considered the materials on record and held the plaintiff has failed to establish not only the fraud but also misrepresentation which alleged by the plaintiff and the plaintiff has failed to bring the case within the ambit of Sec.34 of the Arbitration and Conciliation Act to show 58 Com.A.P.No.4/2021 that the finding which recorded by the sole arbitrator falls within Sec.34(2)(b)(ii) of the Arbitration and Conciliation Act, as if the grounds which pleaded by the plaintiff are summarized it is clear that the plaintiff in the grounds which alleged in the plaint are in respect of oral and documentary evidence which was not considered by the Sole Arbitrator and requested for re- appreciation of oral and documentary evidence which on record. Admittedly this court cannot sit as a appellate court and cannot re-appreciate the oral and documentary evidence and the views which expressed by the sole arbitrator. Thus this court drawn its attention on the judgment of Hon'ble Supreme Court which reported in 2021 SCC Online SC 508 in between PSA SICAL Terminals Pvt. Ltd. Vs Board of Trustees of Vo Chidambranar Port Trust, Tuticorin. In the said judgment, their lordship held that it is an well settled that this court does not sit in appeal over the arbitral award and may interfere on merits of the limited ground provided under Sec.34(2)
(b)(II) of the Arbitration and Conciliation Act and the court cannot undertake an independent assessment of the merits of the award and must only ascertain that the exercise of power by the court under Sec.34 has not exceeded the scope of the provision. So, by virtue of the clauses which mentioned in the lease deed and the judgment of the Hon'ble Supreme Court which referred above, are 59 Com.A.P.No.4/2021 clear the plaintiff has failed to bring the case within the ambit of Sec.34 of the Arbitration and Conciliation Act. Therefore, the arguments which advanced by learned counsel for the plaintiff on this aspect holds no water.
31. The learned counsel for the plaintiff while canvassing his arguments has much argued on moratorium period and for non consideration of evidence on record. Thus this court drawn its attention on Clause 4 and Clause 2 of moratorium period which are incorporated in the lease deed dated 11.01.2007 and addendum to the lease deed dated 13.08.2009 which reads like this:
4. MORATORIUM PERIOD:
The moratorium period shall mean the initial period of this lease during which the Lessee makes its own arrangements to obtain the necessary permissions, commences and proceeds with the preliminary work on the schedule property and / or completes construction. It is agreed between the parties that the moratorium period under this lease deed shall be twenty four months from the lease commencement date i.e. up to 11th day of January, 2009 time being the essence of the contract, and which moratorium period shall not be extended beyond twenty four months from the lease commencement date. The lessee represents that the moratorium period shall be used by them for obtaining at relevant approvals and permits for the construction of the hotel at the risk and cost.
2. MORATORIUM PERIOD:60 Com.A.P.No.4/2021
The moratorium period shall mean the initial period of this lease during which the lessee makes its own arrangements to obtain the necessary permissions commences and proceeds with the preliminary work on the schedule property and / or completes construction. Due to hard rock condition of the site the building has been redesigned which resulted in extended construction schedule for the project. Further sorting out of FAR issues with the BBMP also consumed considerable time before the plan was sanctioned. In view of the above twenty four months extension of moratorium period (Extended Moratorium Period) from 11.01.2009 is accepted. The lessee represents that the moratorium period shall be used by them for the construction of the hotel, at their risk and cost.
By virtue of the above clauses which appeared in the lease deed dated 11.01.2007 and addendum to the lease deed dated 13.08.2009 are very much clear, initially moratorium period has been granted for 24 months and it was extended upto 24 months from 11.01.2009, for which the learned counsel for the plaintiff has much argued that the sole arbitrator has wrongly interpreted the moratorium period, though it was extended and accepted till completion of the construction, but whereas the addendum to the lease dated 13.08.2009 is very much clear the moratorium period has been extended from 11.01.2009 because of the reasons which mentioned. So, for the proper appreciation of the reasons 61 Com.A.P.No.4/2021 and extension of moratorium period is necessary for reproduction which reads like this:
A. The lessor and lessee have entered into the lease deed dated 11.01.2007 (hereinafter referred to as the principal lease deed).
B. That the moratorium period is completed on 11.01.2009 as per the principal lease deed.
C. Due to hard rock condition of the site the building has been redesigned which resulted in extended construction schedule for the project. Further sorting out of FAR issues with the BBMP also consumed considerable time before the plan was sanctioned.
D. That in view of the above the lessor and lessee agreed for the moratorium period to be extended as per the addendum for a period of twenty four months due to the above said reasons.
The above clauses which appeared in the addendum to the lease deed are very much clear that the moratorium period as per the lease deed dated 11.01.2007 has been completed on 11.01.2009 as per the principal lease deed and due to the hard rock condition of the site the building has been redesigned which resulted in extended construction schedule for the project and for shortening out of FAR issues with the BBMP also consumed considerable time before the plan was sanctioned and the lessor and lessee were agreed for the moratorium period to be extended as per the addendum for the period of 24 months for the reasons which 62 Com.A.P.No.4/2021 referred above and moreover in the very addendum to the lease deed has explained the period of extended moratorium period for 24 months as per Clause 3 of the very addendum to the lease deed which reads like this:
a) During the extended moratorium period i.e. from 11.01.2009 for the period of twelve (12) months (11.01.2009 to 10.01.2010) the lessee shall pay the lessor a monthly rent of Rs.39,36,625/- per month at the rate of Rs.35/-
per sq.ft. for 1,12,475/- sq.ft. For the period of subsequent twelve months (11.01.2010 to 10.01.2011), the lessee shall pay the lessor a monthly rent of Rs.64,67,312/- at the rate of 57.50/- per sq.ft. for 1,12,475 sq.ft.
The above clause clearly reflects that during the extended moratorium period i.e. from 11.01.2009 for the period of 12 months i.e. from 11.01.2009 to 10.01.2010 the lessee shall pay to the lessor a monthly rent of Rs.39,36,625/- per month @ Rs.35/- per sq.ft. for 1,12,475/- sq.ft. for the period of subsequent 12 months i.e. from 11.01.2010 to 10.01.2011 the lessee shall pay to the lessor a monthly rent of Rs.64,67,312/- @ Rs.57.50 per sq.ft. for 1,12,475 sq.ft. So, if the recitals which appeared in the above clause are taken into consideration the moratorium period has been extended only for a period of 24 months from 11.01.2009 not more than that. If that is so, neither the lease deed nor addendum to the lease deed would have reflects as submitted by learned counsel for the plaintiff. Therefore, the arguments which 63 Com.A.P.No.4/2021 advanced by the learned counsel for the plaintiff on this aspect holds no water.
32. The learned counsel for the plaintiff while canvassing his arguments has much argued that the sole arbitrator has not appreciated either the oral and documentary evidence and drawn the court attention on the judgment of Hon'ble Supreme Court which reported in 2021 SCC Online SC 508 in between PSASICAL Terminals Pvt. Ltd., Vs Board of Trustees of VO. Chidambarnar Port Trust Tuticorin & Others, 2007(13) SCC 434 in between ONGC Ltd., Vs Garware Shipping Corporation Ltd., and 2010(11) SCC 296 in between Sumitomo Heavy Industries Limited Vs. Oil and Natural Gas Corporation Ltd., On careful perusal of the said judgment, in the said judgment their lordship held that a finding is perverse if it is based on no evidence or if the Arbitral tribunal takes into account something irrelevant to the decision which it arrives at or it ignores the vital evidence in arriving at its decision the court can interfere the award which passed by the Arbitrator and if the conclusions are perverse and the Arbitrators award is wrong, but the plaintiff has not placed any materials on record nor bring the case to show that the finding which recorded by the Sole Arbitrator either perverse nor illegal or which is against to the contract which taken place in between the parties. If that is so 64 Com.A.P.No.4/2021 the judgments which relied by the learned counsel for plaintiff would have applicable to the case on hand, but the facts and circumstances of the present suit and the facts which involved in the said judgments are different.
33. The learned counsel for the plaintiff while canvassing his arguments has submitted that the award which passed by the Sole Arbitrator contrary to the evidence which on record which against to the contract which taken place in between the parties and ignorance of the terms of the contract by the Arbitrator amounts to jurisdictional error and such errors can be corrected by the Court and the award is contrary to the contract and the Arbitrator cannot act arbitrarily, irrationally, capriciously or independent of contract and passes the award contrary to the terms of the contract and the Arbitrator cannot ignore the important clauses of the lease agreement and addendum to the lease agreement and the Arbitrator ignores crucial evidence and wrong inference has been drawn for wrong conclusion and the said counsel drawn the court attention on the following judgments.
1. 2019 (7) SCC 236
2. 2017 (5) SCC 743
3. 2006 (4) SCC 445
4. 2003 (8) SCC 154
5. 2004 (9) SCC 619 6.2014 (9) SCC 263 65 Com.A.P.No.4/2021
7. 2015 (3) SCC 49 On careful perusal of the above said judgments, in the said judgments their lordship held that the court can interfere the award the which passed by the Arbitrator if found which is contrary to the evidence on record and the Arbitrator ignore the terms of the contract which taken by the parties and the award contrary to the terms of the contract and the award being patently illegal and oppose to the public policy of India and misconduct on the parties and were the Arbitrator ignored the important clauses court can interfere the award which passed by the Arbitrator, but in the instant case the plaintiff has not placed any materials nor bring the case within the ambit of Sec.34 of Arbitration and Conciliation Act or established that the award which passed by the Sole Arbitrator is perverse, capricious or against to the public policy and the award is contrary to the lease deed nor the clauses which appeared not only in the lease deed but also in the addendum to the lease deed nor established that the Arbitrator ignores crucial evidence and the materials on record. Therefore, I do respect to the judgments which relied by the learned counsel for the plaintiff, but the facts and circumstances of the present case and the judgments which relied and different.
66 Com.A.P.No.4/2021
34. The learned counsel for the plaintiff while canvassing his arguments has submitted that the Sole Arbitrator has not drawn the adverse inference for non examination of material witness, it shows fraudulent motive on the part of the defendant which was not taken into consideration by the Sole Arbitrator and the Sole Arbitrator has not taken into consideration either fraud and misrepresentation which committed by the defendant and drawn the Court attention on the following Judgments:
1. AIR 1968 SC 1413
2. 2003(8) SCC 204
3. 2012(8) SCC 148
4. 1999 (3) SCC 573
5. 2007 (12) SCC 27
6. 2014 (1) SCC 113
7. AIR 1951 SC 16
8. 1992 (1) SCC 534
9. 2003(8) SCC 319
10. 2011 (8) SCC 613 On careful perusal of the said judgments, in the said judgments their lordship held that court can draw adverse inference for non examination of material witness, if a person in possession of the best evidence fails to produce it draw adverse inference and party not entering the witness box nor offered for cross examination court can consider the case which setup by him is false. But in the instant case the plaintiff being the Respondent before the Sole Arbitrator has come up with instant suit on the grounds which are alleged in the plaint falls within the purview of Sec.34 of 67 Com.A.P.No.4/2021 Arbitration and Conciliation Act, therefore the burden on the plaintiff to establish its case that the grounds which urged in the suit falls within the purview of Sec.34 of Arbitration and Conciliation Act and the court has to consider all the materials which are on record, only on the ground that the defendant has not been examined the material witness it does not mean whatever the case which pleaded has not been proved and the court has to consider other materials which are produced before the Court to arrive conclusion and the plaintiff has utterly failed to bring the case within the ambit of Sec.34 of Arbitration and Conciliation Act. Therefore, I do respect to the judgments which relied by the learned counsel for the plaintiff, but the facts and circumstances of the present case and the judgments which relied are different.
35. The learned counsel for the plaintiff while canvassing his arguments has submitted the pleading in case of fraud need not be elaborate and the materials on record reflects the defendant has committed not only fraud but also misrepresentation but the Sole Arbitrator has not taken into consideration about the fraud and misrepresentation which committed by the defendant, though these facts are brought to the notice of the Sole Arbitrator and the 68 Com.A.P.No.4/2021 said counsel has drawn the Court attention on the following judgments:
1. 1999(4) SCC 262
2. 1987(2) SCC 555
3. AIR 1966 SC 735 On careful perusal of the said judgments, in the said judgments their lordship held that if a fraud is being pleaded the particulars necessary for establishing the fraud should be stated in the pleadings and there can be no quarrel with regard to the requirement of law as found in Order 6 Rule 4 which merely requires that if fraud is being pleaded the particulars necessary for establishing the fraud should be stated in the pleadings. If plea relates to terms and conditions of an oral agreement absence of written deed of agreement not fatal to the plea as the terms can be gathered from the circumstances and conduct of the parties. In the instant case the plaintiff has failed to establish the fraud and misrepresentation which alleged in the objection statement filed before the Sole Arbitrator and if the materials which placed on record are taken into consideration the plaintiff failed to establish the fraud and misrepresentation. Therefore, I do respect to the judgments which relied by the learned counsel for the plaintiff, but the facts and circumstances of the present case and the judgments which relied are different.69 Com.A.P.No.4/2021
36. The learned counsel for the plaintiff while canvassing his arguments has submitted the oral agreement is recognized under law which is also enforceable and the parties can prove the oral agreement in view of Sec.91 & 92 if Indian Evidence Act and when party pleads there is no contract at all are contract is sham, oral evidence is permissible and the party can establish that the receipt which was issued were wrong and the said counsel has drawn the court attention on the following judgments.
1. AIR 1936 PC 70 ILR 1935 PC 446
2. 2003(6) SCC 595
3. 2017(7) SCC 716
4. 2016(1) SCC 762
5. 1979(4) SCC 60
6. 2004(4) SCC 794
7. 1977 (1) KAR LAW JOURNAL 181 & 1982(1) SCC 4
8. AIR 1923 Oudh 45
9. AIR 1917 Calcutta 186
10. 2006 (6) Maharashtra Law Journal 752
11. AIR 1959 SC 24 & 2010 (13) SCC 147
12. 2009(5) SCC 678 On careful perusal of the said judgments, in the said judgments their lordship held that there is nothing in either Sec.91 or 92 of Indian Evidence Act to exclude oral evidence to establish that there was an agreement and oral agreement for sale of immovable property is permissible but heavy burden lies on the person who relies it and the bar of Sec.92 would not apply when the correctness of whole or part of the recitals of the fact in the document is in question and oral evidence in departure from the 70 Com.A.P.No.4/2021 terms of the written deed is admissible to show that what is mentioned in the deed was not the real transaction between the parties and when a party pleads that there was no contract at all are that an instrument which had been brought into existence earlier was only a sham one not intended to be acted upon it would be open to him to establish by oral evidence that there was no intention on the parties to bring into existence a contract or an effective document, but in the instant case the plaintiff has failed to prove its case through oral and documentary evidence as the documentary evidence which on record reflects about the contract was taken place by virtue of the lease deed and addendum to the lease deed and a conditions which are incorporated in the very documents are binding on the plaintiff and the defendant and the plaintiff has to discharge its obligations in terms of the said documents, if failed the very contract and the documents empowers the defendant to take legal course against the plaintiff in terms of the agreement which taken in between them. Accordingly the defendant has initiated the legal course in terms of the contract. Therefore, I do respect to the judgments which relied by the learned counsel for the plaintiff, but the facts and circumstances of the present case and the judgments which relied are different.
71 Com.A.P.No.4/2021
37. The learned counsel for the defendant while canvassing his arguments has rightly submitted that the plaintiff has not made out any of the grounds which are enumerated U/Sec.34 of Arbitration and Conciliation Act to bring the case within the Ambit of Sec.34 of Arbitration and Conciliation Act and the plaintiff has not made out the award which passed by the Sole Arbitrator is in conflict with the public policy of India nor established that the award falls within Sec.34(2)(b)(ii) of the Arbitration and Conciliation Act and the award was not passed in accordance with the terms of the contract and the award passed by the Sole Arbitrator behind the limits of the contract and the said counsel has drawn the court attention on the following judgments:
1. Civil Appeal No.4779/2019 of Hon'ble Supreme Court of India
2. 2015 (3) SCC 49
3. 2003(5) SCC 705
4. 1991 (4) SCC 93
5. MANU/HP/0264/1997 On careful perusal of the said judgments, in the said judgments their lordship held that if the award passed by the Arbitrator breaches the fundamental principles of justice and which is contrary to the agreement and shocks the consciousness of the court, court can interfere with an Arbitral award. On the ground that justice has not been done in the opinion of the Court to set aside the award and if the court found that the Arbitrators approaches is neither arbitrary nor capricious no interference is 72 Com.A.P.No.4/2021 called for on facts. In the instant case the plaintiff has utterly failed to prove that the award which passed by the Arbitrator either breaches the fundamental principles of justice nor shocks the consciousness of the courts or establish that the award which passed is arbitrary or capricious. Therefore, the judgments which relied by the learned counsel for the defendant are applicable to the case on hand.
38. The learned counsel for the defendant while canvassing his arguments has submitted that when the plaintiff has pleaded fraud and misrepresentation, the burden on the plaintiff has to prove that the defendant has committed fraud and misrepresentation, but the plaintiff has failed to prove neither the fraud nor the misrepresentation which alleged and the said counsel has drawn the court attention on the following judgments;
1. 1976(1) SCC 747
2. 2004 (8) SCC 588
3. ILR 2012 KAR 3431
4. ILR 2016 KAR 1941
5. 2005 SCC Online KAR 536 On careful perusal of the said judgments, in the said judgments, their lordship held that proof of fraud in civil and criminal matters must be proved beyond reasonable doubt and it must be proved that the representation made was false to the knowledge of the party making such representation or that the party could have no 73 Com.A.P.No.4/2021 reasonable belief that it was true and the general allegation either the fraud or misrepresentation are insufficient and the party pleading be require to plead the precise nature of fraud, the manner of use and the unfair advantage obtained and to give material particulars regarding the fraud. So the sole arbitrator after considering the oral and documentary evidence on record held that the plaintiff has not proved either the fraud nor misrepresentation, but the reasons best known to the plaintiff has not made out any of the grounds which are enumerated under Sec.34 of the Arbitratoin and Conciliation Act to show the finding which recorded by the sole arbitrator falls within the purivew of Sec.34 of the Arbitration and Conciliation Act. Therefore, the judgments which relied by the learned counsel for defendant are applicable to the case on hand.
39. The learned counsel for the defendant while canvassing his arguments has submitted that when the plaintiff has not discharged its initial burden by placing oral and documentary evidence, question of draw adverse inference against the defendant for non-examination of the material witness does not arise and the presumption under Sec.114 of the Evidence Act is non-obligatory in nature of presumption, importance of background facts justifiability of intentional non-productoin of 74 Com.A.P.No.4/2021 evidence need for addusal of some evidence on the part of the party seeking the benefit of Sec.114. So adverse inference for non production of evidence had not even called for, since the plaintiff has not discharged its initial burden in view of Sec.101 of the Evidence Act and drawn the court attention on the following judgments:
1. 2005 (5) SCC 100
2. 2011 SCC online AP 762
3. MANU/BH/0314/1991 On careful perusal of the said judgments, in the said judgments, their lordship held that the presumption as to adverse inference for non-production of evidence is always optional and one of the factors which is required to be taken into consideration is the background of facts involved in the lis. The presumption is not obligatory because not withstanding the intentional non-
production other circumstances may exist upon which such intentional non-production may be found to be justifiable on some reasons grounds.
40. In the instant case, the sole arbitrator on considering the arguments of both side and the materials on record held that the plaintiff has not proved its case. So once it is found that has not proved, question of drawn the presumption under Sec.114 of the Evidence Act does not arise and the plaintiff has not established 75 Com.A.P.No.4/2021 that the finding which recorded by the sole arbitrator on this aspect falls within the ambit of Sec.34 of the Arbitration and Conciliation Act. Therefore, the judgments which relied by the learned counsel for the defendant are applicable to the case on hand.
41. The learned counsel for the defendant while canvassing his argument has submitted the obligation is on the plaintiff to deal with each allegation which he was alleged and mere general denial of the facts which alleged are not sufficient about the specific denial and the plaintiff being the respondent before the arbitral tribunal has not denied the facts which pleaded by the defendant being a claimant before the arbitral tribunal reflects that he has not denied the facts which alleged by the defendant specifically and the said counsel has drawn the court attention on the judgment of Hon'ble Supreme Court reported in 2013 (2) SCC 606 in between Gian Chand Vs Ratan Lal. On careful perusal of the said judgment, in the said judgment their lordship held that the obligation on the defendant to deal with each allegation in the plaint and the defendant must specifically deal with each and every allegation of fact in plaint and general denial of facts alleged in the plaint is not sufficient. In the instant case, the plaintiff being the respondent and the defendant being the 76 Com.A.P.No.4/2021 claimant who filed the statement of claim before the sole arbitrator, for which the plaintiff being the respondent has filed the statement of objection and the counter claim, but did not specifically denied the allegations which made in the statement of claim. Therefore, the judgment which relied by the learned counsel for the defendant is applicable to the case on hand.
42. The learned counsel for the defendant while canvassing his arguments has submitted that the court has to consider the quality of the evidence which led by the parties and the lease deed and the addendum to the lease deed are valid until challenged and set aside and Sec.91 and 92 apply only when the document on the face of it contains or appears to contain all the terms of the contract. Sec.91 is concerned solely with the mode of proof of a document while limitation imposed by Sec.92 relates only to the parties to the document, after the document has been produced to prove its terms under Sec.91, proviso of Sec.92 come into operation for the purpose of excluding evidence of any oral agreement or statement for the purpose of contradicting, varying, adding or subtracting from its terms. Sec.91 and 92 in effect supplement each other and commercial hardship does not frustrate the contract and certificate from CA is not sufficient evidence and examination is necessary before relying upon 77 Com.A.P.No.4/2021 evidence and burden of proof of oral agreement is upon the party who asserting it and the plaintiff has not established its damages and the said counsel drawn the court attention on the following judgments:
1. 2013 (2) SCC 606
2. 2013 (4) SCC 97
3. 1995 (1) SCC 198
4. MANU/SC/1272/2017
5. 2003 (6) SCC 595
6. 1993 SCC Online Calcutta 4
7. 1963 (3) SCR 339
8. 2016 SCC Online Delhi 3882
9. 1960(2) SCR 906
10. 2010 SCC Online Madras 3972
11. 2016 SCC Online Bombay 10037
12. 1990 (4) SCC 147
13. 1993 SCC Online Bombay 116
14. 2005 (1) SCC 705 On careful perusal of the said judgments, in the said judgments, their lordship held that it is well settled principles of law that that a person who asserts a particular fact is required to affirmatively established it. If the plaintiff asserts that the defendant had acknowledged the signature, it is obligatory on his part to substantiate the same, but the question would be what would be the consequence in a situation where the signatures are proved and there is an evasive reply in the written statement and what should be construed as substantiating the assertion made by the plaintiff and credibility of the consideration and relevant factors cannot be labeled as that of an interested witness. Sec.19 of the Act provides for determination of rules of procedure sub clause (1) 78 Com.A.P.No.4/2021 of Sec.19 provides that the arbitral tribunal shall not be bound by the code of civil procedure or the Indian Evidence Act and the said words do not prohibit the arbitral tribunal from drawing sustenance from the fundamental principles underling the code of civil procedure or Indian Evidence Act, but the tribunal is not bound to observe the provisions of the code with all of its rigour.
So the principles which are laid down in the above said decisions are applicable to the case on hand.
43. Now the question arises whether this court can re- appreciate the evidence which placed on record. Thus this court drawn its attention on the judgment of Hon'ble Supreme Court passed in SLP (Civil) No.14767/2012 in between Associate Builders Vs DDA. In the said judgment their lordship held that the court while considering the challenge to an award does not sit in appeal over the findings and decision of the arbitrator by reassessing or re- appreciating the evidence. So, question of re-appreciate the evidence which on record does not arise in view of the decision which referred above. Therefore, the arguments which advanced by learned counsel for the plaintiff on this aspect holds no water. So one thing is clear the plaintiff has not made out any of the grounds which are enumerated under Sec.34 of the Arbitration and Conciliation Act to set aside the award.
79 Com.A.P.No.4/2021
44. The learned counsel for the plaintiff has much argued that the defendant has committed fraud, misrepresentation and suppressed the facts without disclosing neither the litigations and hard rock, but the materials on record clearly reflects the defendant has brought to the notice of everything which appeared in the suit schedule property and the plaintiff after coming to know all the aspects which appeared in the suit schedule property has signed the lease deed and addendum to the lease deeds which taken place in between them. Now the plaintiff cannot contend that the defendant has committed fraud, misrepresentation and suppressed the facts and he was not brought to its knowledge regarding the litigation and the hard rock. Therefore, looking from any angle the plaintiff has not bring the case within the ambit of Sec.34 of the Arbitration and Conciliation Act to set aside the award. So the sole arbitrator after considering the materials on record passed the award. Thus the award which passed by the sole arbitrator is not warranted for interference of this court to set aside the award as sought for.
45. The learned counsel for the plaintiff while canvassing his arguments has submitted that the sole arbitrator has not considered the termination of the lease which terminated by the defendant is illegal and non-est in the eye of law and because of 80 Com.A.P.No.4/2021 misrepresentation which made by the defendant the plaintiff has sustained loss of Rs.578 crores which was not taken into consideration by the sole arbitrator. The sole arbitrator has not taken into consideration towards the amount which spent by the plaintiff for eviction of the tenants from the schedule property, but whereas in the lease deed which taken place in between the plaintiff and the defendant, it is clear that it is the obligation on the plaintiff to take necessary steps for eviction of the tenants who are in the schedule property, thereby the sole arbitrator after considering the lease deed and addendum to the lease deed held that the plaintiff has not proved that he has incurred a loss of Rs.578 crores nor spent Rs.13 lakhs towards eviction of the tenants and held the plaintiff is not entitle the relief as sought for and he has also held that the termination of the lease which made by the defendants is legal.
46. The learned counsel for the plaintiff while canvassing his arguments has much argued that the plaintiff has incurred a sum of Rs.13.25 lakhs towards shifting of the senior citizens from the schedule property and the defendant is liable to pay a sum of Rs.1 crore towards the loss of profit because of fraud, misrepresentation and suppression of facts, the plaintiff has spent Rs.10 crores towards legal expenses, thereby the defendant is 81 Com.A.P.No.4/2021 liable to pay interest @ 24% p.a. but the materials on record reflects the plaintiff has utterly failed to prove the said aspects through oral and documentary evidence and the sole arbitrator after considering all these aspects passed the award and the plaintiff has failed to establish its case through oral and documentary evidence that the case which pleaded in the plaint falls within the ambit of Sec.34 of the Arbitration and Conciliation Act. Hence, I am of the opinion that the point No.1 is answered as Negative.
47. POINT NO.2: In view of my answer to point No.1 as stated above, I proceed to pass the following;
ORDER The petition under Sec.34 of the Arbitration and Conciliation Act r/w Sec.10 of Commercial Court Act 2015 filed by the plaintiff is hereby dismissed.
No order as to costs.
(Dictated to the Stenographer, transcript thereof corrected by me and then pronounced in the open court on this the 14th day of July, 2022) (P.J. Somashekara) LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City.