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2023 Supreme(Del) 964

IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Alsorg Interiors India Pvt. Ltd. – Appellant
Versus
Kunal Suri & Anr. – Respondents
Arb.P. 1220 of 2022
Decided On : 20-03-2023

Advocates appeared:
Mr. Govind Rishi and Mr. Rohit Taneja, Advocates, for the Petitioner.
Mr. Sandeep Phogat, Advocate, for the Respondents.

When a pre-existing special mechanism is present for the adjudication of a specific type of dispute, it is not desirable to resort to other common methods. The special mechanism has been specifically set in place for the adjudication of such disputes effectively.

Headnote:

Arbitration and Conciliation Act - Lease Dispute - Section 11(6) - 16.7 - [Arbitration and Conciliation Act, 1996, Section 11(6), Clause 16.7]

Fact of the Case:

The petitioner entered into a lease agreement for a property with the owner. Due to COVID-19, the petitioner requested a waiver of rent, which was agreed upon. Subsequently, the property was sold to new owners who demanded rent as per the original terms. The petitioner invoked the arbitration clause of the lease deed and filed a petition for the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

Finding of the Court:

The court found that the dispute fell under 'excepted matters' excluded from the purview of the Arbitration and Conciliation Act, 1996, as it was governed by the Haryana Urban (Control of Rent and Eviction) Act, 1973. The court dismissed the petition, stating that the special mechanism under the 1973 Act was already in place for effective adjudication of the dispute.

Issues: The main issue was whether the dispute between the parties could be subjected to arbitration under the Arbitration and Conciliation Act, 1996, or if it fell under the 'excepted matters' governed by the Haryana Urban (Control of Rent and Eviction) Act, 1973.

Ratio Decidendi: The court held that when a pre-existing special mechanism is present for the adjudication of a specific type of dispute, it is not desirable to resort to other common methods. The special mechanism has been specifically set in place for the adjudication of such disputes effectively. When such an option exists, it is to be understood that such mechanism is set up in the interest of the general public and to ease their dilemma.

Final Decision: The court dismissed the petition, stating that the dispute fell under 'excepted matters' excluded from the purview of the Arbitration and Conciliation Act, 1996, and that the special mechanism under the Haryana Urban (Control of Rent and Eviction) Act, 1973 was already in place for effective adjudication of the dispute.

ORDER

Chandra Dhari Singh, J. (Oral)--The instant petition under Section 11 of the Arbitration and Conciliation Act, 1996 has been filed on behalf of the petitioner seeking the following reliefs:

    "(i) Appoint an impartial arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 to decide the disputes between the parties; and

    (ii) pass any other further orders/directions as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case."

FACTUAL MATRIX

2. The facts relevant for the adjudication of the instant petition is that vide Lease Agreement dated 14th September 2018, the petitioner company entered into a lease for the suit property bearing no. GS-I 05, First Floor, DLF Grand Mall, MG Road, Gurgaon, admeasuring 1151 square meter (hereinafter referred as 'Suit Property') with the erstwhile owner namely, Mrs. Geeta Devi. The period of the lease under the terms and conditions of the Agreement was 5 years commencing from 1st July 2018 with 24 months lock-in period on a monthly rent of INR 75,000 excluding electricity, water, and maintenance charges to be paid to the maintenance agency of the DLF Grand Mall.

3. The terms and conditions provided that the petitioner had to pay rent every month and the lessor had the right to terminate the lease if the lessee defaulted in making the payment of rent or maintenance charges for a continuous period of two months after serving 15 days' notice to the lessee in writing.

4. Between March 2020 to June 2020, the government imposed a country-wide lockdown due to COVID-19 due to which the petitioner was also affected, and, thus, vide email dated 6th August 2020 requested a complete waiver of rent for the months of April-May-June 2020, for the months July-August-September 2020 a 60% waiver, and for the month October-November-December 2020 a 50% waiver in the monthly rent, which was agreed by the owner vide email dated 8th August 2020.

5. Accordingly, a revised proposal for the monthly rent for the month of January 2021 was then shared with the previous owner and the same was agreed upon in a physical meeting at the revised rate of INR 55 per sq. ft. and the petitioner started paying rent in terms of INR 55 per sq. ft. till June 2022.

6. Respondents no. 1 and 2 vide Sale Deed dated 8th June 2022 purchased the suit property from Mrs. Geeta Devi. Pursuant to the sale of the property, respondents no. 1 and 2 adorned the attornment of the suit property qua the rights and responsibility arising out of the Lease Deed dated 14th September 2018.

7. The respondent demanded rent from the petitioner as per the terms and conditions of the Lease Deed dated 14th September 2018 for which communications vide emails took place between the parties.

8. On 16th September 2022, after the alleged threats and influence from the respondents, the petitioner vide its notice invoked Arbitration Clause 16.7 of the Lease Deed dated 14th September 2018.

9. A petition under Section 9 of the Arbitration and Conciliation Act, 1996 was also filed before the Patiala House Courts, New Delhi against the respondents and maintenance agency restraining them from disconnecting, discontinuing, and disallowing the amenities of the suit property. In the said matter a stay vide Order dated 20th September 2022 was granted to the petitioner, restraining the respondents from doing the same till the next date of hearing i.e., 31st October 2022.

10. The petitioner has now filed the present petition for the appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 to adjudicate upon the disputes between the parties pursuant to Clause 16.7 of the Lease Deed dated 14th September 2018.

SUBMISSIONS

(On behalf of the petitioner)

11. Learned counsel for the petitioner submitted that a proposal for payment of rent for the months of April-May-June 2020, July-August-September 2020 at 60% waiver, and October-November-December 2020 at 50% waiver was mutually decided b

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