Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Decision reserved on:11.01.2022
Decision delivered on:25.01.2022
+ FAO(OS) (COMM) 5/2022 and CM Nos. 1846-48/2022
MANOJ GULSHAN AND ANR ..... Appellants
Through: Appellant No. 1 in person.
Mr. Rakesh Kumar Gautam,
Advocate for appellant No. 2.
versus
ZEE LEARN LTD ..... Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MR. JUSTICE TALWANT SINGH
TALWANT SINGH, J.:
[Court hearing convened via video-conferencing on account of COVID-19]
1. The appellants have filed the present appeal under Section 37 of the
Arbitration and Conciliation Act, 1996 read with Section 13 of the
Commercial Court Act for modifying the impugned order dated 29.09.2021
passed by learned Single Judge in OMP (I) (COMM) No. 425/2020 titled as
“ Manoj Gulshan & Anr. vs. Zee Learn Limited”, by which the learned
Single Judge had disposed of the present appellant’s petition filed under
Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred
to as “the Act”).
2. In brief, the case of the appellant is that appellant no. 1 is the owner of
the premises bearing No. A9/20, Ground Floor, Vasant Vihar, New Delhi-
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KUMARI SHARMA
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110057, which was given on a licence to the respondents for a period of ten
years and the appellant no. 2 has done the furnishing and fittings in the said
premises. The parties have entered into an agreement dated 06.02.2018 for a
period of five years w.e.f. 01.02.2018. The rent was payable @
Rs.2,10,000/- per month from 01.03.2018 till 28.02.2019 and thereafter the
rent was to be increased @5% annually.
3. As per the appellants, respondents had paid the rent till August, 2019
and thereafter no payments were made. The agreement was terminated by
Appellants by a letter dated 27.10.2019 and thereafter the respondent is
liable to pay the user charges @ Rs.12,500 plus taxes per day. Since, the
premises were not vacated, so they filed the petition under Section 9 of the
Act in this Court. The prayer clause of the said petition is reproduced
hereunder:
1. “Direct the Respondent to immediately pay to Petitioners
Arrears of ₹59,02,918 [ RUPEES FIFTY NINE LAKH TWO
THOUSAND NINE HUNDRED EIGHTEEN ONLY], on
account of outstanding Invoices [Nos. 19-B Dt. 01.09.2019 to
32-B Dt. 01.10.2020] @ pre-settled “Per Day Charges” for
425 days till 31.10.2020, Plus amounts becoming due till the
Date of the Order.
2. Direct the Respondent to continue to deposit from the date
of order in each succeeding month the consolidated charges
each month @ ₹12,500 per day Plus applicable Tax thereon,
till the premises is “Re-instated and “handed-back to
Petitioners”;
3. In alternative direct the Respondent to vacate the premises
forthwith after Reimbursing and clearing the following dues:-
(i) ₹79,115=00 [RUPEES SEVENTY NINE THOUSAND
ONE HUNDRED FIFTEEN ONLY], ON ACCOUNT OF
UPAID ELECTRICITY BILLS PLUS ‘ELECTRICITY
REINSTATEMENT CHARGES) TO BE PAID TO BSES
SERVICE PROVIDER;
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(ii) ₹95,35,903=00 [RUPEES NINETY FIVE LAKH
THIRTY FIVE THOUSAND NINE HUNDRED AND
THREE ONLY] on account of “REINSTATEMENT
COSTS” as per Clause(s) V(a), V(f), besides others, of
Contract Dt. 6.2.2018, payable by Respondent to Petitioner
No 1/Owner/Licensor Mr. Manoj Gulshan.
(iii) ₹22,70,650=00 [RUPEES TWENTY TWO LAKH
SEVETY THOUSAND SIX HUNDRED FIFTY ONLY]
“REINSTATEMENT COSTS” as per Clause(s) V(a), V(f),
besides others, payable by Respondent to Owner/Licensor
M/s. Mona International India/Petitioner no 2.
4. Direct the Respondent to secure and deposit before this
Hon Court ₹91,50,000=00 [RUPEES NINETY ONE LAKH
FIFTY THOUSAND ONLY], on account of Mense profits /
Damages claimed by Petitioners from Respondent, for
illegally “Sub-Letting and Misusing” the Premises for
diverse Un-Authorized Commercial Activities and generating
many fold Income by running these illegal activities from
premises in question.
5. Pass Ex-Parte Ad-interim Orders as interim measure for
the preservation and protection of the Premises and items
therein inundated in floodwaters and save / salvage the
premises / items from irreparable loss and damage.
6. To restrain respondent from alienating or creating any
third party rights or interest in the premises taken on License
by the respondent from petitioner;
7. Pass award cots of the present proceedings for and in
favour of Petitioners and against the Respondent herein.”
4. Notice in the petition under Section 9 of the Act was issued by the
learned Single Judge on 21.01.2020. Although it has been observed by the
learned Single Judge that the respondent did not file the reply but as per the
appellant, reply was filed by the respondent, to which rejoinder was also
filed. Arguments were heard thereafter. Learned Single Judge was pleased
to pass the impugned order dated 29.09.2021. The operative portion of the
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said order is as under:
“12. At this stage, this Court does not consider it apposite
to pass any order for securing the petitioner in respect of
its claim for damages for per day charges (@ Rs.12,500/-
plus taxes) as agreed between the parties. However, since
it is contended that the respondent is being pursued by
several creditors, this Court considers it apposite to
secure the petitioner at least to the extent of
Rs.58,49,000/-. Accordingly, the respondent is directed to
furnish an unconditional Bank Guarantee of the aforesaid
amount in favour of the Registrar General of this Court
within a period of four weeks from today and/or to
deposit the said amount with the Registry of this Court
within the said period.
13. This Court also appoints Ms. Sowjhanya Shankaran,
Advocate (Mob. 9945469905)as the Local Commissioner
to visit the demise premises and break open the locks. She
shall also take photographs of the demise premises so as
to indicate the state of the demise premises in question.
He will thereafter handover the possession of the demise
premises jointly to the petitioners. The fees of the Local
Commissioner is fixed at Rs. 1,00,000 which shall be paid
by the petitioners in the first instance.
14. It is clarified that the above order is without
prejudice to the rights and contentions of the parties and
any claims or counter-claims that the parties may prefer.
The Bank Guarantee or the amount deposited by
respondent in this regard will be subject to further orders
that may be passed by the Arbitral Tribunal as and when
constituted. It is clarified that if the Arbitral Tribunal is
not constituted within a period of three months from
today, the Bank Guarantee or the amount deposited with
this Court shall be returned to the respondent.
15. The petition is disposed in the aforesaid terms.”
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5. It is pertinent to note herein that the respondent had also filed an
appeal bearing number FAO(OS) (COMM) 136/2021 titled Zee Learn Ltd. v
Manoj Gulshan & Anr. , which was heard by a coordinate Bench of this
Court and the said appeal was disposed of on 27.10.2021 by passing the
following order:
“After some arguments, since we are not inclined to
Mr.
interfere with the impugned order, Singla, on
instructions, states that the appellant shall furnish the Bank
Guarantee in terms of the impugned order dated
29.09.2021 passed by the learned Single Judge in
OMP(I)(COMM) No.425/2020 within 15 days from today.
Time for furnishing Bank Guarantee is extended by 15 days
from today.
The appeal stands disposed of.”
6. The appellants have challenged the impugned order dated 29.09.2021 on
the following grounds:
a. Serious impropriety in law has been committed by
totally ignoring 'substantive evidence,' pleaded and
admitted case before court, which Hon’ble Court had to
examine;
b. In an 'ad-interim order': deducting Rs. 6,30,000/-,
security deposit of owner. That too from an 'Amount to
'secure same owners', with a bank Guarantee', cannot be
sustained, as contra to Agreement terms and settled law:
c. Fails to mention in impugned order, the most relevant
fact that the 'sole' false defence of respondent stood
demolished in Toto, instead recorded contrary findings to
facts/record, ', Cannot be sustained:
d. Despite respondent's actual positive fraud upon Court
by criminal contempt of court, stood exposed/confirmed:
that respondent has deliberately lied before court to
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mislead on 'fundamental fact to Entitlement of relief' qua
'handing of possession" - Suo-moto cognizance neither
taken nor this material fact recorded in impugned orders,
but petition disposed-off arbitrarily by a 'non speaking' &
'non reasoned' order- cannot be sustained:
e. Clear bias shown towards respondent by recording a
patently false finding of fact: that respondent has not filed
its "reply" and passed "non-speaking" and "non-
reasoned" impugn Order, disposing-off petition thus
favoured a dishonest defaulter respondent corporation:
f. Failed to take cognizance that defaulting respondent
tenant, in the 'same set pattern', has held under
seize/under its lock-key, properties taken on rent/license
of all 7 owners/licensors in Delhi, (as done with
appellants) without paying a penny-which fact was also
dishonestly concealed & suppressed from Hon’ble court:
g. Sec.9 petition is a step in aid of enforcement and is
intended to ensure that enforcement of the award results
in a realizable claim and that the award is not rendered
illusory by dealings that would put the subject of the
award beyond the ambit of execution.
h. Respondent has created third party interest in the
property in question, due to which only part possession
and/or inferior possession of property has been handed
over to appellants by the local commissioner appointed
by the Hon’ble court.”
7. The appellants have appeared in person and arguments on admission
have been heard. It emerged during arguments that till the date of the filing
of the petition under Section 9 of the Act before the learned Single Judge, no
petition under Section 11 of the Act was moved for appointment of an
Arbitrator for adjudicating the main dispute between the parties; the petition
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was filed before the learned Single Judge only to protect the rights of the
appellants/petitioners in the interim period.
8. The stand of appellants is that till August, 2019 rent was paid, and
thereafter, no rent was paid from September, 2019. The other grievance of
the appellants is that they have terminated the lease agreement via letter
dated 12.09.2019, and, thereafter, they are entitled to damages @ Rs.
12,500/- plus taxes on daily basis. The notice was served but till filing of
petition, premises were not vacated. The respondent was stated to be not in
good financial health; hence, they have prayed for interim protection by
filing petition under Section 9 of the Act.
9. The appellants have also placed on record the reply filed by the
respondent company before the learned Single Judge. In the said reply the
stand of the respondent is that the premises was vacated on 22.02.2020 after
giving the termination notice dated 17.01.2020, which was sent through
Blue Dart Courier and the keys were handed over to the Guard of the
appellants on 04.03.2020. In view of this, the respondent has prayed that the
petition under Section 9 of the Act was not maintainable. Copy of the
termination notice dated 17.01.2020 has been also placed on record. It was
further stated that respondent was liable to pay licence fee from November
2019 upto 17.04.2020 and the security deposit could have been adjusted
against the said dues. Till 17.04.2020 a sum of Rs.12,55,811/- was shown as
due and payable by the respondents, which was further reduced by
Rs.6,30,000/- being the security amount, leaving an unpaid balance of
Rs.6,25,811/-. It was the case of the respondent that the appellants had
knowingly raised a false claim with an ulterior motive to extort money from
the respondent even after the appellants had received the keys of the
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KUMARI SHARMA
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premises. The learned Arbitrator has the jurisdiction to entertain the claim,
if any. Till date no claim was raised by the appellants before the Arbitrator.
All other claims of the appellants were denied by the respondent. It is also
reiterated that the appellants have acknowledged the receipt of the notice of
termination sent by the respondents, but they chose to file the petition before
the learned Single Judge. As per the appellants, they have filed a rejoinder
to the reply of the respondents before the learned Single Judge denying all
the averments made by the respondents in their reply.
10. It is pertinent to note that in the list of dates and events filed by the
present appellants, they have stated that on 29.02.2020 the respondent had
sent a notice of termination, pre-dated as 20.02.2020 and thereafter an e-
mail dated 02.03.2020 was sent mentioning about the vacation of premises
on 17.04.2020. However, in the present appeal, which has arisen from an
order passed by learned Single Judge on a petition under Section 9 of the
Act, we refrain ourselves from entering into the controversy regarding the
actual date of vacation of the premises. It will be competent for the learned
Arbitrator to enter into the said controversy as both the parties will have
ample opportunity to prove their claim/counter claim before the learned
Arbitrator, as and when the said Arbitrator is appointed.
11. Here in the present case at this stage, we are only concerned with
securing interest of the appellants, in the meantime, till the time of proper
adjudication of their claim or the counter claim (if any) to be filed by the
respondent before the learned Arbitrator. At page 317 of the case file, as
Annexure-A-26, the appellants have filed the statement as per the admitted
liability of the respondent company till 30.09.2021, which comes to
Rs.64,79,005/-. The same statement was also filed before the learned Single
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Judge as noticed by him in para 9 of the impugned order. The learned Single
Judge has rightly adjusted the security deposit of Rs.6.30 Lacs from this
amount and had ordered the respondent to furnish an unconditional bank
guarantee of Rs.58.49 Lacs in favour of the Registrar General of this Court
within a period of four weeks or to deposit the said amount with the Registry
of this Court in the said period.
12. Whether the appellants are entitled to damages @ Rs. 12,500/- plus
tax from the date of the alleged service of the notice of the termination or
not or the controversy as to whether the respondent company had vacated
the premises on 17.04.2020 or not; these controversies are to be decided by
the learned Arbitrator after allowing both the parties to lead evidence and
after giving a chance to both the parties to cross-examine the witnesses of
the opposite side.
13. Let’s take the grounds raised by the appellants in the present appal
one by one. The first ground raised is that the learned Single Judge had
ignored the substantive evidence while passing the impugned order. We are
of the view that the admitted position regarding there being an agreement
between the parties to pay a monthly rent of Rs.2,10,000/- w.e.f. 01.03.2018
to be increased by 5% annually is the unquestioned and admitted document
before the learned Single Judge and he has rightly placed reliance on the
said document and has rightly ordered the respondent to secure the interest
of the appellants till 30.09.2021 on the basis of the calculation submitted by
the appellants themselves. All the averments raised by the appellants have
been seriously challenged by the respondent and similarly the averments of
the respondent are seriously contested by the appellants, hence the said
averments are to be decided on the basis of evidence to be led before the
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KUMARI SHARMA
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learned Arbitrator, as and when one is appointed. The reliance placed by the
appellant on the case titled as Uttam Singh Duggal & Co. Ltd. v. United
Bank of India AIR 2000 SC 2740 is misplaced. In that case, learned Single
Judge was considering the implications of an order passed under Order XII
Rule 6 of CPC, where the matter is to be decided only on admissions.
Moreover, in the present case, there are no such admissions; respondent has
seriously contested the stand of the appellant regarding termination of the
agreement and vacation of the premises.
14. The second grievance of the appellants is regarding the deduction of
Rs. 6.30 Lacs security deposit against the amount secured for the appellants.
As per them, the said deduction was not sustainable. In our view, the
learned Single Judge has secured the entire amount due till date of passing
of the order by him, without entering into controversy as to whether the
respondent had vacated the premises earlier or not as the said controversy is
to be decided by the learned Arbitrator. In our considered view, learned
Single Judge is right in ordering adjustment of Rs.6.30 Lacs, which was
lying with the appellants as security deposit. We found nothing erroneous
with the said order.
15. Reliance is placed on the judgment rendered by this Court in Sona
Corporation India Pvt Ltd v. Ingram Micro India P. Ltd & Anr. , OMP (I)
COMM 249/2018. In the said case, the tenant continued to occupy the
premises and the learned Single Judge had ordered for payment of monthly
rent during the pendency of arbitration proceedings. The facts of the present
case are quite different. The agreement stands terminated, although there is
dispute about the date; respondent claimed to have vacated the premises but
appellants denied the same and Local Commissioner has handed over the
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possession to Appellants. Reliance is also placed on judgment titled as
Permanand Verma & Anr v. Vimal Chand Jain [1995 SCC Online
Del326: 59 (1995) DLT 515], which is again of no help to the appellants as
the said case was under the Delhi Rent Control Act and court was
considering compliance of the provisions of the said Act. The learned Single
Judge had observed in Permanand Verma (Supra) as under:
“The present case is in the context of the Delhi Rent Control
Act which does not contain any such provision. There is nothing in
the Delhi Rent Control Act requiring adjustment of any advance rent
or other amounts paid by the tenant to the landlord contrary to the
provisions of the Act.”
16. In the present case, final termination of the agreement has already
taken place. The learned Single Judge has passed the order to secure the
rent of the premises till the date of passing of the order by him (rather till a
day after passing of the order ) without entering into the controversy as to
whether termination of the agreement had taken place on the date when the
appellants claim or on the date which respondent claimed. The petition
before learned Single Judge being under Section 9 of the Act, he was right in
ordering adjustment of the security deposit.
17. It is to be kept in view that there were delay and latches on the part of
the present appellants also as they claim that from September, 2019 onwards
the respondent had not paid any rent and on 12.09.2019 they had terminated
the agreement, however they came to the Court by filing a petition under
Section 9 of the Act only on 27.11.2020, i.e., after more than one year, so
the entire blame cannot lie at the door of the respondent. The appellants are
to be equally blamed and to balance the equity, the learned Single Judge was
right in ordering the adjustment of the security deposit lying with the
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appellants and the money secured by him by passing the impugned order.
18. Ground ‘C’ taken by the appellant says that the learned Single Judge
has failed to mention that the sole defence of the respondent stood
demolished. In our view, no such findings were required while passing the
impugned order on a petition under Section 9 of the Act as it is not the final
adjudication of the disputes between the parties and any comments made by
the learned Single Judge on that issue would have prejudiced one party or
the other, when they will present their case before the learned Arbitrator.
19. The next plea taken by the appellants is that the respondents have
made false averments and have shifted their stand one after the other. In our
view, the appellants are at liberty to take whatever steps they wish to take
about the shifting of stand or making false averments made by the
respondents and they do not need any permission from any Court in this
regard.
20. The appellants have alleged that the learned Single Judge has shown
bias towards the respondent by recording that the respondent has not filed its
reply. It might be an oversight at the end of learned Single Judge but he has
taken note of the submissions of both the sides and thereafter has passed a
reasoned order balancing the equity and securing the interest of the
appellants to a reasonable and justified extent and it is for the appellants to
carry forward the matter regarding the other reliefs claimed by them by
filing the claim before the learned Arbitrator to be appointed.
21. We have gone through the reply filed by the respondent before learned
Single Judge and the rejoinder filed by the appellants. We have formed our
opinion after considering all the pleadings and documents on record of the
file of learned Single Judge and the contents of the appeal preferred by the
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appellants.
22. Ground ‘F’ taken by the appellants is that the learned Single Judge
has not taken cognizance of the fact that there were other properties in
Delhi, which were allegedly put under lock by the present respondent. In
our view, the said fact is not material for deciding the dispute in hand and
that is why learned Single Judge has not taken any cognizance of the same.
23. The ground ‘G’ agitated by the appellants is that the steps taken under
Section 9 of the Act are to ensure that the award, as and when passed, is
enforced. In the present case, the learned Single Judge has, without entering
into the controversy regarding the date on which the termination/vacation
had taken place, rightly secured the interest of the appellants and the
respondent has been ordered to deposit the admitted rent till the date of the
order, which in our view, secures the interest of the appellants to the
maximum possible extent because whether or not the termination/vacation
had taken place on a particular date, the said question is still open and it has
to be decided by the learned Arbitrator. Consequential reliefs, subject to
determination of the moot question by learned Arbitrator, shall follow.
24. Ground ‘H’ taken by the appellants is that the premises were damaged
or only part possession has been handed over to them by the Local
Commissioner. It cannot be a ground against an order passed under Section
9 of the Act and in case there are any damages noticed by the appellants at
the time of handing over the possession of the premises by the Local
Commissioner to them, then, it is always open to them to raise the claim for
the same before the learned Arbitrator.
25. In view of the above, we do not find any merit in the appeal to admit
the same. The present appeal is liable to be dismissed at admission stage and
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it is ordered accordingly. Pending applications are also closed.
TALWANT SINGH, J
RAJIV SHAKDHER, J
JANUARY 25, 2022/ mr
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