Full Judgment Text
IN THE HIGH COURT OF DELHI AT NEW DELHI
O.M.P. 381/2011
Reserved on: November 17, 2011
Decision on: November 28, 2011
SUNIL KHANNA & ANR. ..... Petitioner
Through: Mr. Umesh Sharma, Advocate.
versus
M/S VODAFONE ESSAR
MOBILE SERVICES LTD. ..... Respondent
Through: Mr. Tarun Sharma with Ms. Monica
Sharma, Advocate.
CORAM: JUSTICE S.MURALIDHAR
JUDGMENT
28.11.2011
Caveat No. 452/2011
Since Mr. Tarun Sharma, Advocate enters appearance on behalf of the
Respondent, the caveat stands infructuous and is disposed of as such.
O.M.P. 381/2011 & I.A. No. 8255/2011
1. The challenge in this petition under Section 34 of the Arbitration and
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Conciliation Act, 1996 („Act‟) is to an Award dated 14 February 2011
passed by the learned Sole Arbitrator directing the Petitioners herein to pay
to the Respondent Vodafone Essar Mobile Services Ltd. („VEMSL‟) a sum
of Rs. 26,89,954/- and further to pay simple interest on the said sum @
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10% per annum from 16 January 2009 up to the date of the payment.
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2. By a lease deed dated 7 February 2008 the Petitioners leased out their
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premises bearing No. FF-03, First Floor, Commercial Complex, “The
Metropolitan” at Commercial Plot No. A-2, Saket Place, Saket, New Delhi-
110017 („the premises in question‟) to VEMSL at a monthly rent of Rs.
4,31,659/- for a period of nine years. The possession of the premises in
st
question was given to VEMSL on 1 February 2008.
3. In terms of the Clauses 3 and 5 of the lease deed the VEMSL deposited
with the Petitioners an interest-free security deposit of Rs. 25,89,954/-
equivalent to six months‟ rent. Further, VEMSL in terms of Clause 6
deposited with the Petitioners a refundable maintenance security deposit of
Rs. 1,00,000/- .
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4. VEMSL served on the Petitioners a notice dated 16 October 2008
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terminating the lease with effect from 16 January 2009. In response to the
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said letter on 12 December 2008 the Petitioners wrote to VEMSL drawing
its attention to Clause 9 of the lease deed and stating that VEMSL should
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settle all the maintenance charges raised by the mall management up to 16
January 2009 and obtain a no dues certificate while handing over the shop
“to enable us to hand over the Security Amount.” The case of VEMSL is
that the premises in question was restored to its original unfurnished
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condition and was vacated by it on 15 January after clearing all the
subsisting dues in respect of maintenance charges owed to the mall
management. VEMSL states that despite its requests, the Petitioners failed
refused to acknowledge receipt of possession of the premises on one pretext
or the other with the object of evading the refund of the security deposit.
5. The case of the Petitioners, however, is that VEMSL failed to hand over
vacant possession of the premises in question. They state that they wrote to
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VEMSL on 4 , 7 and 27 February 2009 asking it to hand over vacant
possession of the premises in question. They state that ultimately actual
physical possession was handed over only when keys of the premises were
handed over during the pendency of this petition.
6. It is not in dispute that the Petitioners herein filed Civil Suit No. 463 of
2009 in the Court of the Additional District Judge („ADJ‟), South-II, New
Delhi against VEMSL for recovery of damages for use and occupation of
the premises in question. In the said suit VEMSL filed an application under
Section 8 of the Act referring to the arbitration clause in the lease deed and
praying that the disputes be referred to arbitration. The said application was
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allowed by the learned ADJ by an order dated 20 July 2009 with a
direction to the Petitioners to refer their disputes to arbitration. VEMSL
meanwhile filed Arbitration Petition No. 252 of 2009 in this Court under
Section 11 of the Act seeking the appointment of an Arbitrator. A separate
application was filed by the Petitioners herein for a direction to VEMSL to
hand over possession of the premises in question. An order was passed on
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17 August 2009 by this Court noting respective contentions of the parties
and in particular submission of learned counsel for VEMSL that keys of the
premises in question have been delivered to the Petitioners herein. This
Court then permitted the Petitioners herein to remove the locks, if any, on
the door/shutter of the premises in question and to enter into the premises.
With the consent of the parties, the learned Arbitrator was appointed by the
said order.
7. Before the learned Arbitrator, VEMSL filed its statement of claim and
the Petitioners herein filed counter claims seeking to recover from VEMSL
a sum of Rs. 69,06,544/- along with interest, costs and certain other reliefs.
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Both parties examined their respective witnesses.
8. One of the key issues before the learned Arbitrator was whether the
possession of the premises in question was transferred in favour of the
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Petitioners herein with effect from 15 January 2009. On behalf of VEMSL
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reliance was placed on a gate pass dated 15 January 2009 and e-mails sent
to the Petitioners. The Petitioners, however, maintained that till an order
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was passed by this Court on 17 August 2009 actual physical possession
was not delivered to the Petitioners and therefore the Petitioners were
entitled to adjust the said amount against the security deposit apart from the
rent for the notice period.
9. The learned Arbitrator analysed the evidence presented by the parties. In
particular, he found that although the Petitioners claimed that they were
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ready with the demand draft for the security amount on 15 January 2009
they did not issue any notice to VEMSL to that effect. The learned
Arbitrator noted that the Petitioners had not either in Suit No. 463 of 2009
filed in the Civil Court or in the counter claims or in reply to the claim of
VEMSL before the learned Arbitrator mentioning the fact of they were
ready with the demand drafts. It is only during the cross-examination of the
witness of the Petitioners herein that this fact was disclosed. Further, there
was nothing on record to show that the Petitioners approached the mall to
ascertain the exact amount payable by VEMSL. The learned Arbitrator
concluded that “for reasons best know to them the respondents kept the
taking of the drafts to themselves without informing the claimant and
insisted on an NoC from the mall before they could take possession. If that
is the position then the corollary will be who could be responsible for the
present situation. The answer undoubtedly is that the Respondents are
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responsible.”
10. Before this Court, it is urged by Mr. Umesh Sharma, learned counsel
for the Petitioners that the impugned Award is contrary to the express terms
of the contract and contrary to the substantive provisions of law and
therefore is vitiated by “patent illegality”. It is submitted that the handing
over of possession of a property can only be proved by way of a document
and not by any other evidence. Further, in the rejoinder filed by VEMSL
they had admitted that only constructive possession of the premises in
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question was handed over on 15 January 2009. Consequently, the finding
of the learned Arbitrator to the contrary was without any basis. The ledger
showed that maintenance and electricity charges were paid by VEMSL
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even after 15 January 2009. This belied its contention that it had handed
over the possession of the premises in question on that date. The gate pass
relied upon by VEMSL was issued only by a Security Guard and showed
only the movement of stock and not the handing over of possession.
11. Countering the above submissions, Mr. Tarun Sharma, learned counsel
appearing for VEMSL pointed out that the Petitioners deliberately refused
to take possession of the premises in question in order to avoid refunding of
the security deposit. VEMSL validly issued the termination notice three
months in advance in terms of Clauses 24 and 25 of the lease deed. At no
stage before the Civil Court or in reply to the claims or in their counter
claims did the Petitioners disclose that they were ready with the demand
drafts for the amount of the security deposit. Therefore, the said plea
belatedly raised in these proceedings was not bona fide . Mr. Sharma
pointed out that there was nothing to show that VEMSL had paid any
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maintenance or electricity charges after 15 January 2009. The entries
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regarding such payment were in the ledger maintained by the mall
management. He finally submitted that the scope of interference by this
Court with the Award under Section 34 of the Act was limited and no
grounds had been made out for such interference.
12. The above submissions have been considered. The key issue in the
present case concerns the handing over of the possession of the premises in
question by VEMSL to the Petitioners. It is correct that neither in the suit
filed in the Civil Court nor in the reply to the claims of VEMSL before the
learned Arbitrator or in their own counter claims before the learned
Arbitrator did the Petitioners make any mention of their having kept ready
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three demand drafts for the security deposit amount on 15 January 2009
itself. For the first time in the present proceedings the Petitioners have
enclosed photocopies of the said demand drafts. This justifies the
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interference drawn by the learned Arbitrator that the drafts dated 14
January 2009 were retained by the Petitioners in order to make VEMSL
first furnish to the Petitioners a no due certificate. If the Petitioners
harboured doubts that maintenance charges were owed to the mall
management they could easily have made enquiries. The Petitioners‟ letters
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dated 4 , 17 and 27 February 2009 do not make any mention of the
drafts supports the conclusion of the learned Arbitrator. As regards the
payment of maintenance and electricity charges, it does appear that the
ledger account in question was maintained by the mall management. There
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is nothing to show that the entries evidencing payment after 15 January
2009 were on account of payment made by VEMSL to the mall
management. The gate pass is but one document that supports the plea of
VMSL that it removed its belongings and vacated the premises in question
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on 15 January 2009. There is nothing to show that they used the premises
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in question thereafter. Cumulatively considered in light of the depositions
of the witnesses it cannot be said that the conclusion of the learned
Arbitrator was erroneous or suffered from any „patent‟ illegality.
13. The petition is accordingly dismissed with costs of Rs. 20,000/-, which
will be paid by the Petitioners to the Respondent within a period of four
weeks from today. The pending application is disposed of.
S. MURALIDHAR, J.
NOVEMBER 28, 2011
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