Back
2018 Supreme(Del) 1819
IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
SONA CORPORATION INDIA PVT.LTD - Petitioner
Versus
INGRAM MICRO INDIA PVT. LTD. & ANR - Respondents
O.M.P.(I)(COMM.) 249 of 2018
Decided on : 25-07-2018
Advocate Appeared:
For the Petitioner: Mr.A.K. Singla, Sr. Adv. with Mr.Rahul Shukla, Adv.
For the Respondent: Mr.Sudhir Kumar and Ms.Ashna Abrol, Advs.
The IFRSD is meant to secure the landlord against defaults of the tenant and cannot be adjusted at interim stages. The court can grant interim relief under Section 9 of the Act based on the principles of CPC.
Headnote:
Arbitration - Lease Dispute - Arbitration and Conciliation Act, 1996 - Section 9
Fact of the Case:
The petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking relief to restrain the respondent from terminating the Lease Deed and to recover lease rent. The respondents terminated the Lease Deed and requested adjustment of the Interest Free Refundable Security Deposit (IFRSD) against the lease rent.
Finding of the Court:
The court found that the respondents were not entitled to seek adjustment of the lease rent against IFRSD and directed them to pay the quarterly lease rents to the petitioner. The court also directed future payments to be made in compliance with the lease deed.
Issues: Dispute over termination of Lease Deed, adjustment of IFRSD against lease rent, and appointment of an Arbitrator.
Ratio Decidendi: The court held that the purpose of IFRSD is to secure the landlord against defaults of the tenant and cannot be adjusted at interim stages. The court also applied the principles of Order XV-A and Order XXXIX Rule 10 of CPC to grant interim relief under Section 9 of the Act.
Final Decision: The court directed the respondents to pay the quarterly lease rents and appointed an Arbitrator to resolve the disputes between the parties.
NAVIN CHAWLA, J.
1. This petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) has been filed by the petitioner inter-alia praying for the following reliefs:
“(i) Restrain the Respondent No. 1 from acting in terms of the Notice dated 30.04.2018 illegally terminating the Lease Deed dated 18.06.2013;
(ii) Direct the Respondent No. 1 to pay the Petitioner Rs.21,24,000/-, being the lease rent for the months of March to May, 2018 due under the registered Lease Deed dated 18.06.2013 along with interest at the rate of 21% p.a. from due date, i.e. 07.03.2018;
(iii) Direct the Respondent No. 1 to pay the Lease Rent amounts payable on the 7th day of the first month of every quarter as per the Rent Invoices raised by Petitioner in terms of the Lease Deed dated 18.06.2013;
(iv) Appoint a Local Commissioner and direct inspection, forthwith, of the entire premises at G-9, Block B-1, Mohan Co-operative Industrial Estate, Mathura Road, New Delhi- 110044, including the Leased property, and the common areas mentioned in the Lease Deed;
(v) Direct the Respondent No. 1 to comply strictly with the conditions in the Lease Deed dated 18.06.2013;”
2. The petitioner had entered into a Lease Deed dated 18.06.2013 with the respondents whereunder it had granted a lease of the fully constructed second floor of the property bearing no.G-9, Block-I, Mohan Co-operative Industrial Estate, Mathura Road, New Delhi-110044 to the respondents along with common amenities and common area as described in Schedule-I, Schedule-II and Schedule-III to the Lease Deed. The lease was for a period of 9 years with effect from 18.06.2013. Clause 3(a) of the Lease deed provides for the lease rent to be paid by the respondents to the petitioner during the lease period and is reproduced hereinbelow:
“3 LEASE RENT, ESCALATION AND INTEREST FREE REFUNDABLE SECURITY DEPOSIT
(a) LEASE RENT
i. The Lessee shall pay to the Lessor a lumpsum of Rs.5,00,000/- (Rupees Five Lacs only) per month as rent ("Lease Rent"). The Lease Rent shall be paid, in advance, on quarterly basis on or before the 7th calendar day of the first month of every quarter ("Due Date"). In the event of delay in payment of Lease Rent in full and in advance upto 7th day of the English calendar month of the respective quarter as stipulated above, the Lessee shall be liable to pay interest at the rate of 21% per annum, on the Lease Rent past due, from the Due Date. However, in case the quarterly Lease Rent is not paid by Due Date, the Lessor shall issue a demand notice, after the expiry of seven (7) days from the Due Date, in writing to the Lessee and the Lessee shall pay the Lease Rent within ninety (90) days of receipt of such notice along with interest to the Lessor. In case of failure on part of the Lessee in payment of Lease Rent within ninety (90) days of receipt of such notice, the same shall be constituted as a breach of the terms of this Lease Deed and the Lessor shall be entitled to terminate the Lease Deed and also to recover the outstanding Lease Rent along with interest calculated at the rate of 21% per annum over the delayed period. The above period of ninety (90) days shall be read as thirty (30) days in case of any subsequent default when a demand notice as above is already issued once. The aforesaid Lease Rent is in respect of the leasing of the Leased Property, the Common Amenities and the Common Areas by the Lessor to the Lessee.
ii. ESCALATION - The Lease Rent escalation in respect of the Leased Property, the Common Amenities and the Common Area shall be @ 20% of the last paid Lease Rent and shall be effective after the expiry of every 3 (three) years from the Lease Commencement Date. For the sake of clarity, following shall be the Lease Rent during different periods:
Period
Lease Rent Per Month (Rs.)
18th June, 2013 to 17th June, 2016
