2014 (5) TMI 1210 - HC - Indian Laws

Grant of relief during the pendency of the suit - termination of lease due to non-payment of lease rentals - HELD THAT - Order XXXIX Rule 10 of the CPC empowers the Court to direct deposit/payment of admitted amounts. The appellant as aforesaid does not controvert that it continued to be the tenant of office unit B-1 and had not terminated the tenancy with respect thereto. There is thus an admission by the appellant of the liability for rent at least of office unit B-1. The appellant if had been a defendant in a suit could have thus been directed by an interim order in the suit to make such payment to the respondent. The denial by the appellant of the entire rent as agreed on the ground of having determined the tenancy of one of the two office units taken on rent is clearly vexatious as in law the appellant as a tenant could not determine tenancy of part of the premises taken on rent. It is not the case of the appellant that it was entitled to do so as part of terms of its tenancy. In that view of the matter the appellant could under Order XV-A of the CPC have been directed to pay the rent of the entire premises notwithstanding having given notice of termination of tenancy of part thereof. Appeal is dismissed with costs of Rs. 25, 000/- payable by the appellant to the respondent within six weeks of today.

Summary

Issues:
1. Interpretation of Section 9 of the Arbitration and Conciliation Act, 1996 regarding the issuance of directions for payment in a proceeding under the Act.
2. Whether the Court has the power to issue directions for payment of rent in a Section 9 proceeding.
3. Application of Order XXXIX Rule 10 of the CPC in directing payment during the pendency of a suit.
4. Consideration of the appellant's conduct in failing to pay rent and vacating the leased premises.
5. Analysis of the legal implications of terminating part of the leased premises while continuing to occupy the rest.

Analysis:
1. The appeal challenged an order under Section 9 of the Arbitration Act, seeking payment of dues and possession of leased premises. The appellant stopped paying rent, leading to the respondent filing a petition for payment and possession based on the arbitration clause in the Lease Deed.
2. The Single Judge directed the appellant to pay arrears of rent and continue monthly payments in advance. The appellant vacated the premises during the appeal, leaving only the issue of payment due. The appellant contended that such payment directions were beyond the scope of a Section 9 proceeding.
3. The Court examined the powers under Section 9, emphasizing "interim measures of protection." The appellant's liability for rent of one office unit was admitted, justifying a payment direction. The Court compared this to Order XXXIX Rule 10 of the CPC and Order XV-A, enabling payment directions even for disputed amounts.
4. The appellant's conduct in not paying rent and terminating part of the leased premises was questioned. The Court noted the appellant's failure to provide a valid defense or reason for non-payment, highlighting the need for compliance with court orders.
5. The Court addressed the legality of terminating part of the leased premises while continuing to occupy the rest. It found such action vexatious and not in line with the terms of the tenancy, justifying the payment direction issued under Section 9. The Court dismissed the appeal, upholding the payment direction and imposing costs on the appellant.