High Court of Delhi
N.V. RAMANA & RAJIV SAHAI ENDLAW, JJ.
Value Source Mercantile Ltd.
Versus
Span Mechnotronix Ltd.
FAO (OS) No. 141 of 2014
Decided On: 28-05-2014
Arbitration and Conciliation Act, 1996 - Section 9, 37 - Civil Procedure Code, 1908 - Order 39 Rule 10, Order 15-A - Lease - Non-payment of rent - Arrears - Direction for payment of arrear- Appellant neither paying the rent nor vacating the leased premises - Respondent filed petition, seeking a direction to the appellant for payment of the dues as per the said Lease Agreement and for a direction for delivering the possession of the premises - Single Judge has granted opportunity to the appellant to file a reply to the petition, directed the appellant to make payment of arrears of rent / damages at the rate at which it was last paid - During the pendency of this appeal, the appellant has vacated the entire premises and delivered possession thereof to the respondent - Payment of the amounts due to the respondent remains - Appellant contended that no such direction for payment could be issued under Section 9 of the Arbitration Act - appellant could under Order XV-A of the CPC have been directed to pay the rent of the entire premises notwithstanding having given notice of termination of tenancy of part thereof - Held, impugned order satisfies the test of being in exercise of the same power for making orders as the Court has for the purpose of a Civil Suit and is thus within the ambit of Section 9 of the Arbitration Act - Appeal is without merit and the same is dismissed with costs.
Rajiv Sahai Endlaw, J
1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 impugns the order dated 7th February, 2014 of the learned Single Judge of this Court in OMP No.1258/2013, under Section 9 of the said Act, filed by the respondent. The appeal came up for hearing on 18th March, 2014 when the counsel for the respondent appeared on advance notice and though notice of the appeal was not issued but the matter was adjourned from time to time to enable the parties to amicably settle the same. Finding the parties to be not able to settle, a direction for their appearance in person before this Court was made. We were informed that of the three Directors of the appellant, two namely Mr. Rajiv Goyal and his wife Ms. Alka Goyal were abroad on account of illness of Mr. Rajiv Goyal. On 22nd May, 2014 Mr. Jaswinder Singh, stated to be the third Director of the appellant appeared before us. However he stated that he had ceased to be a Director and feigned ignorance of the facts. We accordingly heard the counsels on the appeal.
2. Undisputed facts are that the appellant, in or about February, 2012 took on lease from the respondent, office at B-1 & B-2 Basement ad measuring 5030 sq. ft. on plot No.H-10, Express Arcade, Netaji Subhash Place, Delhi on rent of Rs.1,62,000/- per month and on the other terms and conditions contained in a Lease Agreement dated 25th February, 2012 signed by the parties. The appellant, after October, 2012 stopped paying the lease rentals and issued a notice dated 1st November, 2012 to the respondent for vacation of the office at B-2 only, while wanting to continue to occupy the office situated at B-1. The respondent got sent a reply dated 14th December, 2012 to the aforesaid notice inter alia contending that the lease was composite, of commercial units bearing No.B-1 & B-2 and the appellant could not terminate the lease of part of the premises. The appellant was thus called upon to either vacate the entire leased premises or to pay the rent due thereof.
3. Upon the appellant neither paying the rent nor vacating the leased premises, the respondent, on the basis of the arbitration clause in the Lease Deed, filed the petition under Section 9 of the Arbitration Act from which this appeal arises, seeking a direction to the appellant for payment of the dues as per the said Lease Agreement and for a direction for delivering the possession of the premises.
4. The learned Single Judge has vide impugned order dated 7th February, 2014, while granting opportunity to the appellant to file a reply to the petition, directed the appellant to make payment of arrears of rent / damages at the rate at which it was last paid and to continue to pay the same in future every month in advance. The arrears were directed to be paid within two weeks.
5. We may record that during the pendency of this appeal, the appellant, on 25th March, 2014, has vacated the entire premises and delivered possession thereof to the respondent. Now only the question of payment of the amounts due to the respondent remains.
6. The contention of the counsel for the appellant is that no such direction for payment could be issued under Section 9 of the Arbitration Act.
7. We asked the counsel for the appellant as to what is the defence of the appellant to the claim of the respondent. We further asked the counsel for the appellant whether the appellant, having taken lease even if of two different units / flats but vide one transaction only, could in law have terminated the lease of one of the units / flats only i.e. of part of the premises taken on rent. On request of the counsel for the appellant to check law on the said aspect, the matter was adjourned from 16th May, 2014 to 22nd May, 2014. The counsel on 22nd May, 2014 fairly admitted that he had not found anything. His only contention was that this has to be decided before the Arbitral Tribunal and not in a Section 9 proceeding.
8. We further enquired from the counsel for the
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