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2016 Supreme(Del) 4317
IN THE HIGH COURT OF DELHI AT NEW DELHI
RAJIV SAHAI ENDLAW, J.
M/S SRM INFRACON PVT. LTD. & ANR. – Plaintiffs
Versus
M/S AN ELEGANT HOSPITALITY & ANR. – Defendants
CS(OS) 409 of 2016
Decided On : 07-12-2016
For the Plaintiffs: Mr. Dinesh Garg, Ms. Rachna Agrawal & Mr. Pradeep Goel
For the Defendant : Mr. Yogesh K. Jagia, Mr. Amit Sood & Ms. Sushma Yadav
The main legal point established is that the expiry of the lease term during the pendency of a suit renders the tenant liable to ejectment, and technicalities should not hinder the granting of relief.
Headnote:
Arbitration - Ejectment Suit - Arbitration & Conciliation Act, 1996, Section 8
Fact of the Case:
The defendants sought reference to arbitration in a suit for ejectment from immovable property on determination of lease. The term of the registered lease deed had expired, and the defendants admitted to it.
Finding of the Court:
The court found that there was no dispute to be referred to arbitration regarding the ejectment of the defendants, as the lease term had expired. The court also referred to legal principles from previous cases to support its decision.
Issues: The main issue was whether the dispute regarding ejectment of the defendants should be referred to arbitration, considering the expiry of the lease term.
Ratio Decidendi: The court held that the expiry of the lease term during the pendency of the suit rendered the defendants liable to ejectment, and there was no need to refer the dispute to arbitration. The court also emphasized the principle that technicalities should not hinder the granting of relief, citing relevant legal precedents.
Final Decision: The court passed a decree in favor of the plaintiffs for recovery of possession of the property and referred the claim for arrears of rent and other charges to arbitration.
IA No.14694/2016 (of both the defendants under Section 8 of the Arbitration & Conciliation Act, 1996)
1. This application came up first before this Court on 28th November, 2016 when the following order was passed:
“1. The defendants in this suit for ejectment from immovable property on determination of lease seek reference to arbitration in accordance with Clause 24 of the registered lease deed.
2. The counsel for the plaintiffs appears on advance notice and states that the defendants have not filed the written statement and hence their defence is liable to be struck off and the suit be decreed and for which purpose, an application under Order VIII Rule 10 CPC has already been filed.
3. Even if that be so, that in my view would not defeat the application.
4. Section 8 of the Arbitration & Conciliation Act, 1996 would be applicable as long as the written statement on the merit of the defence has not been filed and which has admittedly not been filed.
5. The counsel for the plaintiffs next contends that as per the arbitration clause itself, the same is not applicable in case of default of rent. He contends that the determination of lease was on the ground of default in payment of rent and in any case, the term of the lease has also expired.
6. I have enquired from the counsel for the defendants/applicants as to what is the dispute to be referred to arbitration qua the claim for ejectment if the term of the registered lease has expired.
7. The counsel for the defendants/applicants first states that he has not examined whether the term of the lease has expired.
8. Finding it to be preposterous, the counsel for the defendants/applicants has been asked to check just now whether the term of the lease has expired or not but seeks time to obtain instructions.
9. The plaintiffs, if feels the need to file a reply to the application, may file a reply to the same or before 2nd December, 2016 with advance copy to the counsel for the defendants/applicants.
10. List for hearing on 7th December, 2016 as already scheduled.”
2. The counsel for the defendants today fairly admitted that the term of the registered lease deed has expired.
3. Once that is the admitted position, there appears to be no dispute to be referred to arbitration as far as the claim of the plaintiffs for ejectment of the defendants from the premises earlier leased out to the defendants is concerned.
4. The counsel for the defendants states that the term of the registered lease has expired on 14th October, 2016; however the present suit was filed prior thereto on the ground of determination of the lease prior to the expiry of term thereof and has to be decided on the cause of action on which it has been filed and not on a cause of action which may have accrued to the plaintiffs subsequent to the filing of the suit. It is argued that as far as the cause of action for the relief of ejectment on the basis of determination of lease prior to the expiry of term thereof is concerned, the same is arbitrable in accordance with the arbitration cause between the parties and the parties have to be referred to arbitration. It is yet further contended that if the plaintiffs now desire the relief of ejectment of the defendants from the property on the cause of action of determination of the lease by efflux of time, the plaintiffs have to file a fresh proceeding therefor.
5. I am unable to agree. The question is no longer res integra.
6. It has been held in Hindustan Petroleum Corporation Ltd. Vs. Uma Rani (1996) 2 LW 568, T.B. Nath Vs. Hindustan Petroleum Corporation Ltd. (1999) 2 LW 552, Mohinder Pal Singh Vs. Sunil Kumar 2013 SCC Online Del 3292 and in judgment dated 28th July, 2015 of this Court in Case No.RFA 285/2015 titled Dilip Nigam Vs. Sanjay Kumar that even where the suit for ejectment has been filed prior to expiry by efflux of time of the term for which the premises are let out, if the said time expires during the pendency of the suit or where the renewal/extension of lease period pleaded
