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2009 Supreme(Del) 612
IN THE HIGH COURT OF DELHI
Honble Judge: Shiv Narayan Dhingra, J.
MTNL – Appellants
Vs.
S.P.S. Rana – Respondent
OMP No. 654/2007
Decided On: 15.05.2009
For Appellant/Petitioner/Plaintiff: Ravi Sekri, Adv.
For Respondents/Defendant: J.P. Gupta, Adv.
The court emphasized the importance of mutual agreement in lease agreements and the need for claims to be based on actual contractual provisions and conduct of the parties.
Headnote:
Arbitration & Conciliation Act - Lease Dispute - 18.8.1999, 8.10.2003 - 3, 7, 9 - The court discussed the provisions of the lease deed, including rent, house tax, and repair responsibilities, and the conduct of the parties. The court set aside the award on the grounds of lack of provision for interest on delayed rent payment, introduction of new terms without mutual agreement, and improper claim for repair charges.
Fact of the Case:
The petitioner filed objections against an arbitration award favoring the respondent in a lease dispute. The petitioner was a lessee in New Delhi, and a lease deed was signed in 1999 with a provision for renewal. Disputes arose regarding rent, possession, and responsibilities.
Finding of the Court:
The court set aside the award on the grounds of lack of provision for interest on delayed rent payment, introduction of new terms without mutual agreement, and improper claim for repair charges.
Issues: Dispute over interest on delayed rent payment, liability for house tax, and claim for repair charges.
Ratio Decidendi: The court held that interest on delayed rent payment must be inferred from the contract or conduct of the parties. Introduction of new terms without mutual agreement is not binding. Claim for repair charges must be based on actual repairs, not estimates.
Final Decision: The court set aside the arbitration award in favor of the respondent and directed the parties to bear their own costs.
Shiv Narayan Dhingra, J.
1. By this petition under Section 34 of the Arbitration & Conciliation Act, 1996, the petitioner has filed objections against an award dated 9.8.2007 passed by the learned Arbitrator in favour of the respondent and against the petitioner for a sum of Rs. 14,14,261/-.
2. Brief facts relevant for the purpose of deciding this petition are that the petitioner was a lessee in respect of premises No. GN-4, Vishal Enclave New Delhi and respondent was the lessor. The premises was leased out to the petitioner vide a registered lease deed dated 18.8.1999 at rent for a period of three years with a stipulation for renewal. It was stipulated in this lease deed of 18.8.1999 that after three years if the lease is renewed the rent will be increased by 15%. In terms of clause 3 of the lease deed, it was respondent/lessor, who was to pay the house tax/property tax to MCD. The lessor did not pay house tax as a result, MCD attached the rent. After issuance of attachment orders under Section 162 of DMC Act, petitioner sent the attached rent to MCD. This order of attachment of rent was withdrawn by MCD on 19.9.2003. The lease had also expired in August, 2002. The parties had started negotiating for renewal of the lease. The correspondence shows MTNL/Petitioner was not interested in renewing the lease with increased rent thus, after negotiations it was agreed by the respondent that lease deed will be renewed on the same old rent and same terms and conditions. A new lease deed was signed between the parties and registered on 8.10.2003 w.e.f. 18.8.2002 for a period of three years.
3. The petitioner vide a letter dated 6.11.2004 informed the respondent that part of the premises was no more required by the petitioner and had been vacated. The petitioner wanted respondent to take over the possession of the premises. The respondent wrote back to the petitioner raising certain issues and the possession was not taken over. Thereafter, the petitioner vide letter dated 3.12.2004 served a notice on the respondent about its vacating ground floor and first floor of the premises. Again correspondence started between the parties and possession was not taken over. Vide letter dated 24.1.2005, the petitioner requested respondent to send certificate of taking over vacant possession of 2nd and 3rd floor on 6.11.2004. In response to this letter, the respondent raised issues regarding payment of house tax/property tax and payment of rent by the petitioner and again possession was not taken over. On 18.2.2005 the petitioner enclosed the keys of second and third floors of the premises along with a letter and sent the same to the respondent. The respondent vide letter dated 22.2.2005 refuted that the keys of the premises had been enclosed with the letter or the premises were lying vacant and told petitioner that the petitioner/MTNL would have to give a fresh notice and that dues and rent be paid at enhanced rates. Vide letter dated 25.2.2005, the petitioner again informed the respondent that ground floor and first floor were also lying vacant and ready for possession. The respondent against refuted the fact that ground floor and first floor were lying vacant and raised an issue that no joint inspection had been carried out of the premises to show that the premises had been restored to its original condition. In view of these disputes being raised by the respondent, the matter was referred by this Court to Indian Council of Arbitration in terms of clause 4.1 of the lease agreement for settlement of disputes.
4. Before the learned Arbitrator, respondent raised 11 claims and the Arbitrator framed following issues in respect of claims as made by the respondent:
1) Whether claimant is entitled to Rs. 4,50,000/- towards interest for the
delayed payment of rent from 10.08.1999 to 30.09.2005.?
2) Whether Claimant is entitled to the rent of Second and Third floors from November, 2004 to March, 2005 amounting to Rs. 2,66,140/-.?
3) Whether Claimant
