Final Order 11

Order Details: COPY OF ORDER
Pdf Text: IN THE COURT OF SH GURVINDER PAL SINGH,
DISTRICT JUDGE (COMMERCIAL COURT)-02,
PATIALA HOUSE COURT, NEW DELHI
OMP (I) (Comm.) No. 132/2022
M/s. Gulab Farms Private Limited
Through its Authorized Representative
Asset 5B, Hospitality District,
Delhi Aero City, IGI Airport,
New Delhi-110032
E-mail:amit.paliwal@centralpark.in
Contact: +91 9315097069 .... Petitioner
Versus
M/s. Nibbos Retails Private Limited,
Shop No. 99, Huda Market
Sector 56, Urban Estate
Gurgaon, Haryana-122004
Also at-
C-610, M3M Urbana,
Sector-67, Gurgaon, Haryana – 122102
Email: harendraitm@gmail.com
Contact: +91 9999538100 .... Respondent
ORDER
1. Lessor/petitioner had filed this petition under Section 9 of
The Arbitration and Conciliation Act, 1996 (in short The Act)
alleging lessee/respondent has not paid payable lease rental,
interest on delayed payment, outstanding dues towards electricity
charges and payable damages for leased premises under
registered lease agreement having arbitration clause intending to
invoke arbitration clause claiming respondent/lessee having
defaulted since March, 2021 whereas lessor/petitioner has
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 1 of 10
-- 1 of 10 --
terminated the lease by sending notice of termination to
lessee/respondent.
2. Petition contains four prayers. First prayer is to direct the
respondent/lessee to deposit claimed payable sum with petitioner;
though pending adjudication of dispute by arbitration. Second
prayer is direction to respondent to ensure leased premises to be
maintained in good condition till adjudication by arbitration.
Third prayer is for direction to respondent/lessee for ensuring
ingress and egress of petitioner with respect to leased premises
and non obstruction. Fourth residuary prayer is for other
orders/directions as deemed fit by the Court.
3. Vide detailed order dated 07/12/2022, this Court held that
there exists no prima facie case in favour of applicant/petitioner
for any ex parte ad interim order for prayed for any of the above
said reliefs by applicant/petitioner and finding it expedient in the
interest of justice, notice of the application/petition was issued to
respondent. Respondent was served with notice of petition on
17/12/2022 by email whereas copy of petition was served upon
respondent on 09/01/2023 by email.
4. Neither respondent appeared nor any reply of respondent to
the petition was filed despite grant of opportunities.
5. I have heard Sh. Aditya Srinivasan, Ld. Counsel for
petitioner and perused the record of the case, including petition,
filed brief written arguments on behalf of petitioner, relied upon
precedents on behalf of petitioner. Despite opportunities
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 2 of 10
-- 2 of 10 --
respondent did not file any written submissions/arguments.
6. Ld. Counsel for petitioner argued that obligations of
respondent/lessee are clearly spelt out in the registered Lease
Deed, as enumerated below:-
“a. Clause 2.1 casts an obligation on the LESSEE to pay to the
LESSOR a monthly rent (excluding applicable GST and/or
other statutory levies) and further imposes an obligation to
pay interest @ 12% p.a. on the amount of unpaid rent in the
case of delay / default of lease rental;
b. Clause 5.13 casts an obligation on the LESSEE to make
payment for the electricity / power consumed and the water
charges in respect of the Demised Premises at applicable
statutory rates;
c. Clause 7.3 casts an obligation on the LESSEE to keep the
Demised Premises in hygienic condition;
d. Clause 9.5 obligates the LESSEE to permit the LESSOR to
inspect the premises during working hours after giving
twenty-four hours' notice in writing;
e. Clause 10.2 permits the LESSOR to terminate the Lease
Deed by giving notice of 30 days to the LESSEE upon arrears
of lease rental remaining unpaid for two consecutive months
and/or non-compliance with any of the terms of the Lease
Deed; and
f. Clause 10.3 entitles the LESSOR to receive damages
@ 6,000 per day for illegal occupation of the Demised
Premises by the LESSEE.”
Ld. Counsel for petitioner argued that by serving notice of
termination dated 06/08/2022 petitioner terminated the Lease
Deed of respondent calling upon to pay the amount detailed
therein. Ld. Counsel for petitioner relied upon the case of S.C.
Mehta vs Aviral Kaushik, 2006 SCC OnLine Del 1561 and
argued that therein also Court had directed payment of rent by
tenant/lessee to the landlord/lessor in a petition seeking interim
protection under Section 9 of the Act. Ld. Counsel for petitioner
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 3 of 10
-- 3 of 10 --
also argued that wordings of prayer (a) of the petition requests
this Court to direct the deposit of an amount with the petitioner
“pending final adjudication of the dispute between the parties
way of arbitration”. The use of these words conveys that the
intent of petitioner with respect to relief requested in prayer (a) is
not to treat any relief that comes to be granted to it by this Court
as final relief rather interim relief that may ultimately be
confirmed, modified, set aside etc. through the outcome of the
arbitration. Ld. Counsel for petitioner argued that Section 9(1)(ii)
(e) of the Act permits a party to apply to the court for such other
interim measures of protection as may appear to the Court to be
just and convenient. Ld. Counsel for petitioner argued that as
such, prayer (d) of the petition, which calls upon this Court to
“pass any other orders or directions as it may deem fit in the
interest of equity, fairness and good conscience” is essentially a
restatement of Section 9(1)(ii)(e) of the Act. Ld. Counsel for
petitioner argued that this Court may read prayers (a) and (d)
together and pass an interim measure of protection that would
secure the ends of justice and preserve the sanctity of the arbitral
process. Ld. Counsel for petitioner relied upon the cases (i)
Indiana Travels Pvt. Ltd. vs Insion Private Limited, FAO
(COMM) 63/2021 decided by Delhi High Court on 08/03/2021
and (ii) Tata Capital Financial Services Ltd. vs Unity
Infraprojects Ltd. & Ors., 2015 SCC OnLine Bom 3597. Ld.
Counsel for petitioner argued that the amount claimed in prayer
(a) represents only a portion of the total amounts owed by the
respondent to the petitioner. As such, if this Court were to
ultimately grant prayer (a) in terms of which it has been sought,
such relief would at most constitute an ‘interim payment’. Ld.
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 4 of 10
-- 4 of 10 --
Counsel for petitioner accordingly prayed for allowing the
petition.
7. Petition under Section 9 of the Act was filed way back in
October, 2022. When arguments were concluded by Ld. Counsel
for petitioner on 06/03/2023, it was submitted by him that till
then petitioner had not given any notice under Section 21 of the
Act for commencement of arbitral proceedings by serving notice
upon respondent that dispute be referred to arbitration. Notice
dated 06/08/2022 terminating the lease sent by petitioner/lessor
to respondent/lessee merely demanded to vacate the leased
premises and giving back its possession on or before 05/09/2022
reserving rights of petitioner/lessor to claim balance outstanding
dues as per Lease Deed and terming respondent/lessee to be also
liable to pay damages @ Rs. 6000/- per day for alleged illegal
possession of leased premises. Nowhere in said notice dated
06/08/2022 is there any term/averment of petitioner for reference
of dispute to arbitration to construe said notice to be a notice
under Section 21 of the Act. In case of Firm Ashok Traders vs
Gurmukh Das Saluja, (2004) SCC 155, Supreme Court held
that a party invoking Section 9 of the Act may not have actually
commenced the arbitral proceedings but must be able to satisfy
the Court that the arbitral proceedings are actually contemplated
or manifestly intended and/or positively going to commence
within a reasonable time. On the face of record, from the act and
conduct of petitioner/lessor, there appears to be no manifest
intention on part of petitioner/lessor to take recourse to arbitral
proceedings.
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 5 of 10
-- 5 of 10 --
8. Following is the arbitration clause 12 of registered Lease
Deed inter se parties to lis:-
“12. ARBITRATION
12.1 Any dispute or difference arising between the parties shall
be resolved amicably at the first instance. Unresolved
disputes, controversies, contests, disputes, if any shall be
submitted to arbitration to a sole arbitrator to be appointed
mutually by the both the parties. The arbitration shall be
conducted in accordance with the provisions of the
Arbitration and Conciliation Act 1996 along with the Rules
there under and any amendments thereto. The arbitration
shall be conducted in English. The decision/award of the
arbitrator shall be final/conclusive and binding on the
Parties. The seat of the arbitration shall be at New Delhi.”
9. Section 9 of the Act reads as follows:-
“9. Interim measures, etc. by Court.—(1) A party may, before or
during arbitral proceedings or at any time after the making of the
arbitral award but before it is enforced in accordance with section
36, apply to a court—
(i) for the appointment of a guardian for a minor or a
person of unsound mind for the purposes of arbitral
proceedings; or
(ii) for an interim measure of protection in respect of any
of the following matters, namely:—
(a) the preservation, interim custody or sale of any
goods which are the subject-matter of the
arbitration agreement;
(b) securing the amount in dispute in the
arbitration;
(c) the detention, preservation or inspection of any
property or thing which is the subject-matter of
the dispute in arbitration, or as to which any
question may arise therein and authorising for
any of the aforesaid purposes any person to
enter upon any land or building in the
possession of any party, or authorising any
samples to be taken or any observation to be
made, or experiment to be tried, which may be
necessary or expedient for the purpose of
obtaining full information or evidence;
(d) interim injunction or the appointment of a
receiver;
(e) such other interim measure of protection as
may appear to the court to be just and
convenient,
and the Court shall have the same power for making orders as it has
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 6 of 10
-- 6 of 10 --
for the purpose of, and in relation to, any proceedings before it.
(2) Where, before the commencement of the arbitral
proceedings, a Court passes an order for any interim measure of
protection under sub-section (1), the arbitral proceedings shall be
commenced within a period of ninety days from the date of such
order or within such further time as the Court may determine.
(3) Once the arbitral tribunal has been constituted, the
Court shall not entertain an application under sub-section (1),
unless the Court finds that circumstances exist which may not
render the remedy provided under section 17 efficacious.”
10. In case of Tata Capital Financial Services Ltd. (supra), the
petitioner therein had sought a deposit order and in default of
such deposit an order for attachment before judgment and in the
alternative, an interim injunction restraining the respondent from
selling their movable and immovable assets or even dealing with
them as part of the CDR Scheme. In the case in hand the facts are
not akin to the facts of the case in relied upon precedent Tata
Capital Financial Services Ltd (supra) and the first and
foremost prayer in the petition is seeking direction to respondent/
lessee to deposit claimed payable sum with petitioner and not in
the Court as a security, pending adjudication of dispute by
arbitration.
11. Section 9 of The Act, 1996 embodies the interim measures
of protection which can be sought by a party to arbitration
agreement from Court of competent jurisdiction. Under the garb
of any interim measures, a party to arbitration agreement cannot
seek any relief for the adjudication of the dispute/claim raised
finally from the Court; the domain of which vests with Ld. Sole
Arbitrator to adjudicate in terms of agreed arbitration
clause/agreement.
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 7 of 10
-- 7 of 10 --
12. In the case of Indiana Travels Pvt. Ltd. vs Insion Private
Limited (supra) the appellant was aggrieved for non grant of
relief of appointment of Receiver with respect to the premises
and Division Bench of Delhi High Court inter alia held therein
(i) The Court, in exercise of powers under Section 9 of the
Arbitration Act and which, carving out an exception to Section 5
of the said Act barring interference by Court in arbitral
proceedings, empowers the Court to issue interim measures, that
too normally till the Arbitral Tribunal is not constituted, but
cannot make an order in the nature of granting a final relief. It
cannot be lost sight of that the substantive dispute is to be
adjudicated by the Arbitral Tribunal in which the parties, at the
time of entering into the agreement, have reposed faith; (ii) once
the parties have agreed to adjudication of their disputes by
arbitration, they are bound therewith and cannot approach the
Courts, stating that the Courts are more effective than the Arbitral
Tribunal. Arbitral Tribunal is not bound by the Rules of The
Code of Civil Procedure, 1908 and The Indian Evidence Act,
1872. If the parties do not have faith in Arbitral Tribunals, agreed
to by them, why the parties, while entering into contracts, agreed
for the arbitration clause; (iii) if the respondent/tenant, by an
interim order is directed for final relief claimed by the landlord;
which is a final relief claimed in arbitration proceedings; and
once the said relief is granted at the interim stage, there will be
nothing left for the Arbitral Tribunal to decide qua said claimed
final relief and respondent/tenant would have lost, without
having a chance to contest the claim of the landlord. In said case
the law laid in the case of S.C. Mehta vs Aviral Kaushik (supra)
of Single Bench of Delhi High Court was appreciated.
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 8 of 10
-- 8 of 10 --
13. If the respondent/lessee is directed by this Court under
Section 9 of the Act to deposit with petitioner/lessor the claimed
sums for allegedly payable lease rental, interest on delayed
payment, outstanding dues towards the electricity charges and
alleged damages payable for alleged illegal occupation of leased
premises by lessee/respondent; without even adjudication by
arbitration on facet of quantum of payable damages as per law
laid in case of Kailash Nath Associates vs Delhi Development
Authority & Anr., (2015) 4 SCC 136 nothing will be left for the
Arbitral Tribunal to decide qua the claims of claimant/
petitioner/lessor and respondent/lessee would have lost, without
having chance to contest the claim of petitioner/lessor/ landlord
before agreed forum of arbitration as per law. Interim measures
elicited in Section 9 of the Act cannot be in the form of grant of
final relief, for which competent adjudicatory forum would be
Arbitral Tribunal. It would be travesty of justice, if the
lessee/tenant is asked to pay/deposit with lessor/landlord the
entire claimed amount and in case final adjudication in
arbitration is in terms of defence taken by respondent/lessee
before Arbitral Tribunal and lessor/petitioner is held not entitled
for claimed sums, then in that event the respondent/lessee would
have to undergo the ordeal for recovery of his paid sums on this
count and would result in multiplicity of litigation. Petitioner/
lessor has not sought any direction for deposit of any claimed
sums in this Court as a security, pending adjudication of dispute
by arbitration. Pleadings in this petition are also bereft of any
foundation laid through allegations against respondent/lessee for
not maintaining in good condition the leased premises or
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 9 of 10
-- 9 of 10 --
obstructing ingress and egress of lessor/petitioner from/in leased
premises.
14. In this fact of the matter, there exists no prima facie case in
favour of applicant/petitioner for grant of any reliefs prayed for,
as interim measures under Section 9 of the Act, in view of
pronouncements in case of Indiana Travels Pvt. Ltd. vs Insion
Private Limited (supra).
15. In view of foregoing discussions, the present petition is
dismissed.
16. No order as to costs.
17. File be consigned to record room.
ANNOUNCED IN (GURVINDER PAL SINGH)
OPEN COURT District Judge (Commercial Court)-02
On 10th April, 2023. Patiala House Court, New Delhi.
(DK)
OMP (I) (Comm.) No. 132/2022 M/s. Gulab Farms Private Limited vs M/s. Nibbos Retails Private Limited Page 10 of 10
-- 10 of 10 --