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TMI Blog2020 (10) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... eason the business activities remained closed from April, 1991 to November, 1995. On a detailed consideration of the materials on record, the Learned Arbitrator had come to the conclusion that the appellants are liable to pay the damages. After finding the appellants liable to pay damages, the Learned Arbitrator has arrived at the quantum of damages as per the statement of accounts, furnished by the appellants based on their audited accounts, that too after deduction of TDS for a period of preclosure i.e. 15.08.1990 to 22.02.1991 and postclosure i.e. November 1995 to November 1997. The payment of damages for the closure period i.e. March 1991 to October 1995 has been arrived at as an average of commission actually paid preclosure and the commission payable postclosure as per the statement of accounts of the appellants, after deducting TDS. The Division Bench of the High Court while dismissing the appeal has reduced the rate of interest from 16% per annum to 9% per annum from the date of the Award till the date of its judgment, subject to the appellants paying the decretal amount to the respondents on or before 30.06.2010 - the rate of interest is reduced from 16% per annum to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no.3Bhim Sain Jain. 3. According to the appellants, the respondents started violating the terms of the agreements after commencement of the business and raised obstacles in the smooth running of the business. The premises which were handed over to the appellants had only two electricity connections one meter of 1 KV and the other of 0.25 KV respectively. Since the sanctioned capacity of the said connections was less than required, the appellants allege that the respondents had agreed to apply and obtain electricity connection with a sanction to load of 2.5 KV. However, in order to harass the appellants, the respondents did not make arrangements for sufficient electricity supply. On the other hand, it was due to their acts of omission and commission that the then Delhi Electricity Supply Undertaking (DESU) disconnected electricity supply to the entire building on 22.10.1990. The business could not be operated and the same was stopped in February 1991. The shop thereafter remained closed from March 1991 to October 1995. 4. On account of the appellants nonpayment of commission and failure to handover the vacant possession of the premises to the respondents, the respondents f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle Judge, apart from allowing a reduction in the rate of interest applicable to postaward interest. 9. We have heard learned counsel for the parties. Appearing for the appellants Mr. Rakesh K. Khanna, learned senior counsel, has submitted that the appellants were not liable to pay any rent. He argued that the parties had only agreed to pay commission on the gross sales and that there was no clause in the Agreement which contemplated payment of damages for the use and occupation of the premises. Therefore, the Arbitrator was not justified in declaring the Agreements as Licence Agreements and awarding damages on the basis of commission paid prior to the closure of the premises before March 1991 and the commission payable after re7 starting of the business after 1995. He has further argued that learned Single Judge erred in holding that the appellants were liable to pay damages and further holding that even if the appellants argument is accepted and they are deemed to be tenants, even then would have been liable to pay rent even if the shop remained closed and there were no sales. It was further argued that the Agreements did not contain any clause for damages. Therefore, the aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mained closed from April, 1991 to November, 1995. On a detailed consideration of the materials on record, the Learned Arbitrator had come to the conclusion that the appellants are liable to pay the damages. 13. This question was again considered by the learned Single Judge. The learned Single Judge noticed the plea of the appellants that the transaction between the parties was of tenancy and not licence. After dealing with this plea, the learned Single Judge upheld the award of damages by the Learned Arbitrator. The finding of the learned Single Judge in this regard is in paragraph 20 which reads as under: I find it has been the case of the respondents that the transaction between the parties was of tenancy and not of a licence. It is so pleaded in the objections also. Even if the respondents consider themselves to be tenants at the rent equivalent to commission @ 11% per month, the respondents would under Section 108 of the Transfer of Property Act have continued to remain liable for payment of rent, notwithstanding not carrying on business in the premises. It has been held by the Division Bench of this Court in State Bank of Patiala v. Chandermohan 1996 RLR 404 held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement to arbitrator, did direct the same. The objections now that such deduction was wrongly done is not tenable? This contention has been raised on the ground that the statement filed by the appellants was not correct since the appellants were only liable to pay commission at 6% and 5% under two agreements on the gross sales and the responsibility to provide electricity was on the respondents. We are of the view that the appellants cannot be permitted to withdraw their own statement made before the Learned Arbitrator which is predicated to on a mode of calculation, the same not being disputed by the respondents and accepted by the Arbitrator as correct. We are also of the view that the appellants are not justified in raising a contrary plea other than what was their defence and statement of counter claim in the arbitral proceedings. 17. We are also of the view that the Learned Arbitrator has rightly relied on the appellants statement of accounts for awarding commission for the period when the business was restarted postclosure between November 1995 and November 1997. The formula adopted by the Learned Arbitrator for arriving at this commission amount as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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