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2013 Supreme(Del) 1408
High Court of Delhi
RAJIV SHAKDHER, J.
Egon Zhender International Pvt. Ltd.
Versus
M/s. Namgayal Institute For Research on Ladakhi Art & Culture (NIRLAC) & Others
OMP No. 637 of 2012
Decided on : 25-10-2013
For the Petitioner:Sanjay Parikh, Ms. Mamta Saxena, Advocates.
For the Respondents:R2 & R3, J.P. Sengh, Senior Advocate with Sumeet Batra, Ms. Ankita Gupta, Advocates.
Headnote:
Arbitration and Conciliation Act, 1996 - Section 34 - Transfer of Property Act, 1882 - Section 107 - Registration Act, 1908 - Section 17 (1)(d), 49 - Lease - Renewal - Non-registration - Effect of - A lease deed had been executed in 2001, which was registered for three years - Lease deed could be "renewed" at the "option" of the lessee at an enhanced rate of 12% over the last paid rent and security deposit was to be "increased by 12% on each renewal - Petitioner was required to give notice of its intention - For second tenure lease was executed but not registered - It was not an extension of the earlier lease deed - A fresh lease would create a fresh interest in property - It would require registration in consonance with provisions of 107 of TP, Act, read with Section 17 (1)(d) and 49 of the Registration Act - Liquidated damages are no different from non-liquidated damages - Both require proof of injury or damage caused - No such proof is shown - Petitioner's claim for exemplary damages has been rejected by the arbitrator - Held, arbitrator rightly came to the conclusion that there was no material before him to award the claim in favour of the petitioner - There is no merit in the petition - Petition is dismissed.
Evidence Act, 1872 - Section 58 - Immovable property - Registration of document - Admissibility of - Section 58 of the Evidence Act cannot be invoked to override the provisions of Section 17(1) of the Registration Act - It is a matter of public policy require registration of documents which affect immovable properties - Proviso to Section 58 of the Evidence Act would oblige the court to render unregistered documents inadmissible in evidence as they would militate against public policy.
Rajiv Shakdher, J.
1. The captioned petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (in short the Act) is directed against award dated 31.12.2011/07.02.2012 passed by the sole arbitrator.
1.1 The challenge is laid to that part of the award whereby the learned Arbitrator declined to grant reliefs prayed for by the petitioner qua liquidated damages and aggravated/exemplary damages.
1.2 The learned arbitrator allowed the petitioner’s claim with respect to security deposit and interest thereof demanded by the petitioner. Towards refund of security deposit, the petitioner was awarded a sum of Rs.25,44,000/-. On this amount, the petitioner was also awarded interest at the rate of 9% p.a. from the date the refund of the security deposit became due till the date of the award. The award thus freezes the period as : 01.02.2007 to 07.02.2012. Therefore, interest at the rate of 9% per annum has been crystalized as, a sum of Rs.11,25,720/-. The total amount thus, awarded, in favour of the petitioner, which includes interest, is a sum of Rs.36,69,720/-. Future interest is also awarded at the rate of 9% per annum from the date of the award till the date of its payment. In addition, costs in the sum of Rs.2,50,000/- are also awarded in favour of the petitioner.
1.3 It is common ground that the petitioner has been paid the amounts awarded in its favour.
1.4 Therefore, the only issue that requires examination is whether the learned Arbitrator rightly declined the reliefs prayed for by the petitioner vis-à-vis liquidated damages and aggravated/ exemplary damages.
1.5 In so far as liquidated damages are concerned, the learned arbitrator has declined the same on the ground that it is based on a term in the lease agreement, which was not registered and hence, could not be admitted in evidence.
1.6 As regards, aggravated/exemplary damages are concerned, the learned Arbitrator came to the conclusion that no amount could be awarded under this head in favour of the petitioner as nothing was placed on record to demonstrate as to how the petitioner was entitled to exemplary damages.
2. The background in which the challenge arises to the aforesaid two findings of the learned Arbitrator thus requires to be briefly noticed. These facts are largely not in dispute.
3. Respondent no.1, was accorded lease hold rights by virtue of a perpetual lease deed dated 22.11.1995, by the President of India, through the aegis of Delhi Development Authority (DDA) in respect of plot no.B-25, South of IIT, Institutional Area, New Delhi, admeasuring 5234.40 sq. mtrs. (in short the plot). The said perpetual lease deed was registered with the Sub Registrar of Assurances, New Delhi on 23.11.1995.
3.1 Respondent no.1 entered into a construction agreement with Turner Morrison Land Limited i.e., respondent no.2. This construction agreement was executed on 11.12.1995. The said agreement was assigned in favour of respondent no.2 by respondent no.1 vide agreement dated 02.08.1996. Evidently, by virtue of this agreement, respondent no.2 was conferred with a right to give on lease a part of the built up portion with the right vested in it, to receive the rent qua such part.
3.2 The super structure built on a plot comprised of basement and four floors.
3.3 By a registered lease deed dated 17.10.2001 (in short 2001 lease), respondent no.1, along with respondent no.2, conferred leasehold rights on the petitioner vis-à-vis the second floor of the super structure built on the said plot. Under the lease, petitioner was granted rights to a super area admeasuring 5122 sq. ft. The area occupied was shown as 3610 sq. ft., while an area admeasuring 1783 sq.ft., was described as the area comprising of the terrace, built on the second floor.
3.4 The tenure of this lease was three (3) years commencing with effect from 20.10.2001.
3.5 The rent payable was Rs.2 Lakh per month. In addition, the petitioner was also required to pay interest fee refundable security d
