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2015 Supreme(AP) 530
IN THE HIGH COURT OF JUDICATURE AT HYDERABAD
M.S. RAMACHANDRA RAO, J.
M/s. Viom Networks Ltd. - Petitioner
Versus
M. Veeramani - Respondent
CRP No. 2699 of 2014
Decided on : 25-08-2015
Advocate Appeared:
For the Petitioner: M. Balaji
For the Respondent: A. Gopala Krishna
Headnote:
Constitution of India, Article 227 – Arbitration and Conciliation Act, 1996 – Section 8 – Revision – Stay – Refusal of - Revision is filed challenging order of 2012 on the file of III Senior Civil Court, refusing to stay the said suit petitioner herein is defendant in the above suit premises belonging to respondent was granted under a leave and licence to the petitioner under a deed period of leave and licence was initially for five years, but was renewed later and ultimately expire. Alleging that the petitioner has not removed a cell tower and electricity power generator erected in his property respondent filed the suit seeking vacant possession of plaint schedule property from petitioner. He also sought for a direction to petitioner to pay licence fee at the rate of Rs.22,000/- per month till the end petitioner herein filed I.A.No.850 of 2013 invoking Section 8 of the Arbitration and Conciliation Act, 1996, and contending that the leave and licence agreement had contained in Clause-15 an arbitration clause, and because of that clause, the present suit is barred Counter-affidavit was filed to the said application by the respondent contending that the leave and licence agreement itself expired that in spite of its expiry petitioner is trying to grab the land since the agreement itself had lapsed and had not been renewed subsequently, the question of arbitrator under the said agreement entertaining the dispute between the parties, does not arise –Held, Uninfluenced by authorities or case-law logical outcome of the earlier discussion would be that the arbitration clause perished with the original contract – Whether the said clause was a substantive term or a collateral one, it was nonetheless an integral part of the contract, which had no existence de hors the contract. It was intended to cover all the disputes arising under the conditions of, or in connection with, the contracts phraseology was of the widest amplitude, it is inconceivable that the parties intended its survival even after the contract was mutually rescinded and substituted by a new agreement fact that the new contract not only did not provide for the survival of the arbitration clause but also the circumstance that it contained both substantive and procedural terms indicates that the parties gave up the terms of the old contracts, including the arbitration clause case-law referred to by the learned counsel in this connection does not arbitration clause contained in the leave and license deed and the plea of the petitioner that its application under Section 8 of the Act should be allowed and the suit filed by the respondent cannot be proceeded with/the plaint should be rejected raised in I.A.No.850 of 2013, is not tenable and is liable to be rejected – Miscellaneous applications, pending if any in this Revision.
1. This Revision is filed under Article 227 of the Constitution of India challenging order dt.18.02.2014 in I.A.No.850 of 2013 in O.S.No.597 of 2012 on the file of III Senior Civil Judge, City Civil Court, Secunderabad refusing to stay the said suit.
2. The petitioner herein is defendant in the above suit.
3. The premises belonging to respondent was granted under a leave and licence to the petitioner under a deed dt.01.08.2003. The period of leave and licence was initially for five years, but was renewed later and ultimately expired on 31.08.2011.
4. Alleging that the petitioner has not removed a cell tower and electricity power generator erected in his property, the respondent filed the suit on 21.08.2012 seeking vacant possession of plaint schedule property from petitioner. He also sought for a direction to petitioner to pay licence fee at the rate of Rs.22,000/- per month from 01.09.2011 till the end of July, 2012.
5. The petitioner herein filed I.A.No.850 of 2013 invoking Section 8 of the Arbitration and Conciliation Act, 1996, (for short, ‘the Act’) and contending that the leave and licence agreement dt.01.08.2003 had contained in Clause-15 an arbitration clause, and because of that clause, the present suit is barred.
6. Counter-affidavit was filed to the said application by the respondent contending that the leave and licence agreement itself expired on 31.08.2011; that in spite of its expiry, the petitioner is trying to grab the land; since the agreement itself had lapsed and had not been renewed subsequently, the question of arbitrator under the said agreement entertaining the dispute between the parties, does not arise.
7. By order dt.18.02.2014, the Court below dismissed the said I.A. It held that the leave and licence agreement had ended on 31.08.2011 and had not been renewed subsequently, and therefore the petitioner cannot rely on the terms and conditions of he said agreement which had worked itself out, and was no longer in force.
8. Challenging the same, the present Revision is filed.
9. Heard Sri M. Balaji, counsel for petitioner; and Sri A. Gopala Krishna, counsel for respondent.
10. The counsel for petitioner contended that the order passed by the Court below is incorrect and that when there is an arbitration agreement between the parties, the Court below is bound to stay the suit leaving it to the arbitrator to decide under Section 16 of the Act, whether the arbitration clause is attracted or not. He placed reliance on the following decisions of the Supreme Court in Hindustan Petroleum Corporation Limited v. Pinkcity Midway Petroleums (2003 (5) ALD 26 (SC), and Branch Manager, Magma Leasing and Finance Limited and another v. Potluri Madhavilata and another (2009) 10 SCC 103).
11. I have noted the submissions of the counsel for the petitioner.
12. The facts narrated above clearly point out that in the leave and license deed dt.01.08.2003 entered into for a period of five years by the respondent with the petitioner with respect to installation of cell phone tower in the suit schedule property belonging to the respondent, no doubt contained an arbitration clause in Clause 15 thereof. It states:
“15. ARBITRATION :
15.1 It is mutually agreed between the parties, that in the event of any dispute, or difference of opinion in the matter of interpretation, execution or carrying out the objects and functions of this deed, the same shall be referred to a sole arbitrator, within the two months from the date of any dispute who shall be appointed with joint concurrence of both the parties, who shall decide the matters, whose decision shall be binding on the parties to the dispute shall be Hyderabad Jurisdiction only.”
13. This leave and license agreement was renewed twice, i.e., on 21.05.2008 and again on 01.01.2011. Thereafter, the leave and licence period expired on 31.08.2011. The respondent’s contention is that in spite of the said period having expired, the petitioner has not vacated the licenced property and has also stop
