2017 (9) TMI 1945 - HC - Indian Laws

Modification of amount payable to the respondent as an interim measure - appellant had failed to pay the admitted rent with effect from 15.03.2015 forcing the respondent to terminate the lease through legal notice - entitlement to liquidated damages - balance of convenience - HELD THAT - Order XV-A of CPC, applicable to Delhi, provides that in any suit of a owner/lessor for eviction of an unauthorized occupant/lessee or for the recovery of rent and future mesne profit from him, the Court may direct the defendant to deposit such amount on account of arrears, upto date of the order and thereafter continue to deposit in each succeeding month the rent claimed in the suit. Similarly, Order XXXIX Rule 10 of CPC empowers the Court to order payment of money which the other party admits to be due - though the said provisions have not been expressly mentioned in Section 9 of the Act, the principles thereof would certainly apply to such proceedings. These provisions are in the nature of interim protection which can be passed by the Courts. The respondent has made out a strong prima facie case based on the admitted Lease Deed, which is a registered document. We further find that the balance of convenience is also in favour of the respondent and against the appellant. The respondent had taken a loan facility from Bank of India and a tripartite agreement had also been executed where under the appellant had undertaken to deposit the monthly rent in the designated escrow account. Therefore, the respondent shall suffer great irreparable injury in case the appellant is not directed to deposit the outstanding rent, till the date of its occupation of the Leased Premises, to the respondent. Appeal dismissed.

Issues Involved:
1. Challenge to the judgment and orders of the Learned Single Judge regarding the amount payable as an interim measure.
2. Dispute regarding the Lease Deed terms, specifically the rent payable and the interpretation of certain clauses.
3. Jurisdiction and powers of the Court under Section 9 of the Arbitration and Conciliation Act, 1996.
4. Admissibility of oral agreements in the context of a written Lease Deed.
5. Entitlement to liquidated damages and other claims.
6. Procedural aspects and the commencement of arbitration proceedings.

Detailed Analysis:

1. Challenge to the Judgment and Orders:
The appellant challenged the judgment and order dated 29.04.2016 and the subsequent order dated 14.09.2016 by the Learned Single Judge. The primary contention was regarding the amount payable to the respondent as an interim measure. The Learned Single Judge initially directed the appellant to pay ?13,04,490/-, which was later corrected to ?1,30,71,460/- due to a clerical error.

2. Dispute Regarding Lease Deed Terms:
The dispute arose from the Lease Deed dated 27.03.2014, where the appellant leased certain premises from the respondent. The appellant argued that no rent was payable from 01.04.2014 to 31.12.2014, and there was an oral agreement to reduce the rent during specific periods. The Learned Single Judge rejected these defenses, emphasizing the written terms of the Lease Deed and the inadmissibility of oral agreements under Section 92 of the Evidence Act.

3. Jurisdiction and Powers Under Section 9 of the Arbitration Act:
The appellant contended that the Learned Single Judge exceeded jurisdiction under Section 9 of the Act by directing the payment of money. The court referred to several judgments, including Firm Ashok Traders and Ratnagiri Gas and Power Pvt. Ltd., to establish that Section 9 grants wide powers to the Court to issue interim measures of protection, including securing the amount in dispute.

4. Admissibility of Oral Agreements:
The court held that in the presence of a written contract, oral agreements cannot be sustained. The appellant's plea of an oral agreement to reduce rent was dismissed based on the principle that written agreements take precedence over oral agreements, as supported by the judgment in M/s. Kusum Enterprises.

5. Entitlement to Liquidated Damages and Other Claims:
The respondent claimed liquidated damages of ?2 lacs per day for the appellant's failure to vacate the premises post-termination of the lease. The Learned Single Judge directed that such claims should be raised before the Arbitral Tribunal. The appellant's claims for payments made towards electricity misuse charges and mixed land use charges were also directed to be addressed in arbitration.

6. Procedural Aspects and Commencement of Arbitration:
The appellant argued that the respondent had not initiated arbitration proceedings after obtaining interim relief. The court noted that the respondent had invoked the arbitration clause and nominated an arbitrator, thus commencing arbitration as per Section 21 of the Act. The responsibility for expediting arbitration lies with both parties, not solely the respondent.

Conclusion:
The appeals were dismissed, affirming the orders of the Learned Single Judge. The court found that the respondent had a strong prima facie case based on the Lease Deed and that the balance of convenience favored the respondent. The court emphasized that the observations made were prima facie and should not influence the final arbitration award. There was no order as to costs.

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