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K.M. Dhoundiyal and Others V/S Aranya Hospitality Management Services Pvt. Ltd. and Others.

    O.M.P. (I) No. 100/2015 and I.A. No. 150/2016
    Decided On, 21 April 2016
    At, High Court of Delhi
    By, THE HONORABLE JUSTICE: MANMOHAN SINGH
    For Petitioner: Manish Sharma, P.R. Singh and Chandni, Advocates And For Respondents: Dinesh Agnani, Senior. Advocate and Rohit Agarwal, Advocate


Judgment Text

1. The petitioners have filed the abovementioned petition under Section 9 of the Arbitration and Conciliation Act, 1996 for interim measures.

2. Brief facts of the case are that the petitioners are husband and wife. The petitioner No. 2 purchased the portion of the property bearing No. 1768/1, Central School Road, behind Spinal Injury Hospital, Vasant Kunj, New Delhi through an Agreement to Sell dated 10th May, 1994. Thereafter, the remaining portion of the said property was purchased by petitioner No. 1 through two separate Agreements to Sell dated 29th March, 1996 and 21st January, 1999. Vide Lease Deed dated 1st October, 2013, the petitioner No. 1 gave his portion of the said property to respondent No. 1-Company acting through Mr. S.K. Singh on lease for a period of 9 years, commencing on 1st October, 2013 and expiring on 30th September, 2022. The rent was initially fixed at Rs. 2 lac per month. The said lease is an unregistered document. It also contained an arbitration clause in terms of clause 21. Consequent upon the said Lease Deed, the petitioner No. 2 entered into an agreement for providing fittings, fixtures, furniture and maintenance, on the same date with respondent No. 1. It is stated in the petition that respondent No. 1 started defaulting in the payment of rent. Even, since March, 2014, respondent No. 1 has not paid any rent at all. The total outstanding as on 31st March, 2015 is Rs. 57,24,250/-. Besides, the respondent No. 1 also misused the said property by running the restaurant without a license from the concerned authorities. Complaints in this regard were made by the petitioners to the police authorities. Even, on 11th November, 2014, the respondent No. 1 was served a notice under Sections 417, 421 & 397 of the DMC Act, 1957 by respondent No. 2 which was subsequently followed by a closure notice dated 2nd December, 2014.

3. Thereafter, the petitioners sent a legal notice dated 15th December, 2014 to respondent No. 1 whereby they terminated the tenancy as well as both the agreements on account of non-payment of rent and misuse of the property. On 6th January, 2015, the property was sealed on account of lack of license. Finding no other alternative, the petitioners in terms of the agreement appointed an Arbitrator to enter reference with regard to all disputes between the parties by issuing a notice dated 14th January, 2015 to the respondent No. 1 and Mr. S.K. Singh. The respondent No. 1 replied to the said notice while not acceding to the appointment of the Arbitrator.

4. It is further stated that the de-sealing exercise even for 3 days was done unilaterally by respondent No. 2 without informing the petitioners and by ignoring the various letters and representations given by them. Respondent No. 1 is seeking to get the property desealed so that it can recommence its illegal activities. Hence, the present petition has been filed by the petitioners seeking directions to the respondents to maintain status-quo with regard to the property in question and to restrain the respondent No. 1 from operating any restaurant in the said property till the said respondent obtains a Municipal Health Trade License and Police License for the property. A direction was also sought to the respondent No. 1 to pay the outstanding dues to the petitioners.

5. When the present petition along with Section 11 petition being Arb.P. No. 141/2015 was listed before Court on 23rd March, 2015, the following order was passed:--

"Mr. Rohit Agarwal, learned counsel who appears for the respondent No. 1, states that with regard to appointment of an Arbitrator to adjudicate upon the dispute(s) arising out of lease deed dated 1st October, 2013 whereby the petitioner has leased out property bearing No. 1768/1, Central School Road, Behind Spine Injury Hospital, Vasant Kunj, New Delhi, the respondent No. 1 has no objection.

In so far as the relief sought in OMP(I) No. 100/2015 under Section 9 of the Arbitration and Conciliation Act, 1996 (in short, 'the Act'), he states that he wants to take instructions from his clients.

Mr. Kuldeep Kumar, learned counsel who appears for respondent No. 2/SDMC in OMP(I) No. 100/2015, states that the premises were sealed on 6th January, 2015 on account of the fact that the respondent No. 1 was running a restaurant thereon without a licence. He further states that on an undertaking given by the respondent No. 1 that he would not run the restaurant without obtaining a licence from SDMC, the property was de-sealed on 17th March, 2015.

Learned counsel for the respondent No. 1 further states that the respondent No. 1 would not start the restaurant without the permission given by the SDMC. The statement is taken on record.

Re-notify on 23rd April, 2015 to enable the counsel for the respondent No. 1 to take instructions on the petition under Section 9 of the Act i.e. OMP(I) No. 100/2015.

Copy of the order be given dasti to the counsel for the parties."

6. It appears from the said order that respondent No. 1 had informed the Court that it would not start the restaurant without the permission to be given by the SDMC. The said statement was accepted by the Court. The matter was adjourned at the request of respondent No. 1 to take the instructions on the petition under Section 9 of the Act. On 18th May, 2015, the respondent No. 1 agreed before Court for appointment of the Arbitrator to adjudicate the disputes between the parties. The statement in this regard was recorded.

7. When the matter was listed on 25th May, 2015, the following order was passed:--

"1. This is a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996, seeking the following reliefs:

a) Pass ex-parte ad-interim orders directing the respondents to maintain status quo with regard to the property in question i.e. 1768/1, Central School Road, behind Spinal Injury Hospital, Vasant Kunj, New Delhi comprising of the first floor being a hall of 1625 sq. ft., open deck of 2000 sq. ft., Kitchen of 465 sq. ft., Washrooms of 110 sq. Ft. and other areas of 500 sq. ft. by not utilizing the said property in any manner contrary to the terms of the lease deed dated 01.10.2013 (in particular clause 6 thereof) and to restrain the respondent No. 1 from operating any restaurant in the said property till the respondent No. 1 obtains a Municipal Health Trade License and Police License for the property.

b) Direct the respondent No. 1 to deposit without prejudice a sum of Rs. 48,01,500/- being the amount payable by the respondent No. 1 to the petitioners as on 15.12.2014 pending arbitration between parties.

2. Mr. Manish Sharma, learned counsel for the petitioner has drawn my attention to page 56 of the documents to state that the total dues payable by the respondent till March 2015 is Rs. 57,24,250/-.

3. The learned counsel for the respondent would state that the rent in terms of the lease agreement for the period March to November 2014 has been paid. He concedes that the rent for the period December till May 2015 has not been paid. He states that rent from May to December 2015 shall be deposited in this Court. Let the same be deposited within a period of four weeks from today. On such deposit, the said amount shall be kept in FDR with periodical renewals.

4. He also states that the respondent No. 1 shall continue to deposit the rent as per the lease deed dated October 1, 2013 on or before 7th day of month in this Court till such time the matter is referred to and decided by the Arbitrator. The said statement is taken on record. The rent to be deposited every month henceforth shall also be kept in FDR with periodical renewals.

5. Let reply be filed on the issue of rent for the period March 2014 to November 2014 within a period of four weeks. Rejoinder within two weeks thereafter.

Renotify on 14th September, 2015."

8. After passing the said order on 25th May, 2015, there was no compliance on behalf of respondent No. 1. The petitioners left with no option but to file the fresh application being I.A. No. 17203/2015 for seeking certain directions. Learned counsel for the petitioners had also made the statement that the respondent No. 1 has misled the Court by making the statement that the rent in terms of the lease deed for the period, i.e. from March to November, 2014 was paid. However, in fact, the said amount was not paid. Due to non-compliance and disrespect of the order dated 25th May, 2015, this Court on 19th August, 2015 left with no other option but to pass the following order:--

"IA No. 17203/2015

Issue notice to the respondents through Ordinary Process, Speed Post and Courier, returnable before the Court on 14.9.2015, the date already fixed.

This application seeks the following prayer:

"a) Attach the bank account No. 000383800002612 maintained by the respondent No. 1 with Yes Bank, Chankyapuri Branch to the tune of Rs. 21,76,875/- pending final disposal of the OMP."
It is the petitioners' case that despite an assurance to the Court given on 25.5.2014 that the respondents would continue to pay the rental for occupation of the petitioners premises', there have been successive defaults by them. The petitioners seek to secure their interest through the aforesaid relief prayed for. On 25.5.2014, this Court had noted that:

"3. The learned counsel for the respondent would state that the rent in terms of the lease agreement for the period March to November 2014 has been paid. He concedes that the rent for the period December till May 2015 has not been paid. He states that rent from May to December 2015 shall be deposited in this Court. Let the same be deposited within a period of four weeks from today. On such deposit, the said amount shall be kept in FDR with periodical renewals.

4. He also states that the respondent No. 1 shall continue to deposit the rent as per the lease deed dated October 1, 2013 on or before 7th day of month in this Court till such time the matter is referred to and decided by the arbitrator. The said statement is taken on record. The rent to be deposited every month henceforth shall also be kept in FDR with periodical renewals."

According to the learned counsel for the applicant, the monthly rental is Rs. 2,41,875/- and the outstanding amount till date is Rs. 21,76,875/-. In view of the successive defaults in payment of the monthly rent and non-compliance of the assurance/statement given to the Court on 25.05.2014, the bank account No. 000383800002612 of defendant No. 1 maintained with Yes Bank, Chankyapuri Branch, New Delhi be attached to the tune of Rs. 21,76,875/-.

Dasti, under the signatures of the Court Master."

9. Learned counsel for the petitioners has informed that despite of various orders passed by the Court, none of the orders has been complied by the respondent No. 1 who failed to pay the rent either for the arrears of outstanding amount or for the subsequent period as agreed by him which is recorded in para 3 of the order dated 25th May, 2015. The petitioners thereafter filed an application being I.A. No. 150/2016 for amendment of the petition disclosing the details of the outstanding amount of rent due for the subsequent period. Prior to the filing of the said application, respondent No. 1 filed an application being I.A. No. 22201/2015 for recalling of the order dated 14th September, 2015. The Managing Director of respondent No. 1 was called. There was no valid reason given as to why statement made in the Court has not been complied. The matter was adjourned from time to time for settlement, but the settlement could not be arrived at and the respondent No. 1 was bent upon not to pay the outstanding amount of rent and current rent to the petitioners. The respondent No. 1 has been enjoying possession of the suit property without paying any agreed rent without any valid justification.

10. Reply to the amendment application was filed. The main petition as well as the amendment application listed before the Court were heard. As far as the amendment application is concerned, the learned counsel for the petitioners has submitted that the petitioners have filed the said application in view of the undertaking given by respondent No. 1 before Court on 25th May, 2015 whereby the statement was made that the respondent No. 1 would keep on paying the admitted rent to the petitioners. However, the said undertaking is not obeyed by respondent No. 1. As of today, if the total amount as well as the interest is calculated on the amount due, the same is more than Rs. 1 crore. Therefore, it is a formal amendment. He has also made a very fair statement, without prejudice that in case the respondent No. 1 is ready to hand over the peaceful and vacant possession of the suit property to the petitioners, the petitioners may only press for half of the amount due from the respondent No. 1. He has also shown certain documents in the shape of invoices in support of his submissions which would establish that the respondent No. 1 is running the hotel.

11. The reply on behalf of respondent No. 1 is that the respondent No. 1 has spent certain amounts on renovation, therefore, he is entitled to adjust the said amount. Secondly, it is stated by the counsel that when the original petition was filed, in prayer (b), the direction was sought against respondent No. 1 to deposit a sum of Rs. 48,01,500/- till 15th December, 2014, therefore, this Court is not empowered either to amend the petition or to decide the matter on merits.

12. I do not agree with the arguments of the respondent No. 1. No doubt, when the original petition was filed, the rent due as on 15th December, 2014 was for a sum of Rs. 48,01,500/-. However, the said amount was not paid by the respondent No. 1. It is a matter of record that the respondent No. 1 has misled the Court by making the statement that the rent in terms of the lease deed for the period, i.e. from March to November, 2014 was paid whereas the said amount was not paid, nor any proof is produced before the Court.

13. At the time of hearing, the learned counsel for the respondent No. 1 has admitted that an incorrect statement was made by the earlier counsel who appeared on behalf of respondent No. 1 and admits that the respondent No. 1 has no proof to show tha

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t any rent is paid during the period, i.e. from March to November, 2014. I do not agree with the learned counsel for the respondent No. 1 that this Court has no jurisdiction to try the present petition as well as to allow the amendment sought for, in view of the reason that respondent No. 1 had made incorrect statement before the Court which was recorded in para 3 of the order dated 25th May, 2015. Further, the recovery of the rent in terms of the lease deed for subsequent period is a recurring cause of action. Therefore, there is no impediment but to allow the amendment and to recover the said amount due towards the lease agreement up to the date of hearing. 14. Even otherwise, I have been informed that if the total amount due along with interest is calculated, the same is more than Rs. 1 crore. Thus, the amendment application is accordingly allowed. The main petition is also disposed of with the directions that the respondent No. 1 in view of the statement/undertaking already given shall pay the arrears of rent for the period, i.e. from March, 2014 till 30th April, 2016 to the petitioners, within two weeks from today. The said respondent shall also keep on paying the rent to the petitioners as per the lease deed dated 1st October, 2013 on or before 7th day of every month till such time the arbitration proceedings are finally decided. In case the order is not complied with by the respondent No. 1, liberty is granted to the petitioners to take the necessary steps to enforce the order. 15. Copies of this order be given dasti to the learned counsel for the parties.
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