M/S V2 Retail Ltd vs M/S S.S Enterprises

SUMMARY OF THE AWARD CLAIMS OF THE CLAIMANT,,,

Srl. No.,Amount claimed,Amount allowed,

1.,"Claims No.1 to 3 and 6

regarding Rent for the period

1.10.2008 to 31.5.2010 @

Rs.3,30,000/- per month","(a)@ Rs.3,30,000/- per

month from 1.10.2008 (cid:51)ll

30.4.2009(upto lock-in

period)","Rs. 23,10,000/-

,,"(b)@ Rs.1,65,000/- from

1.5.2009 to 31.5.2010 (upto

handing over the

possession)","Rs. 21,45,000/-

2.,"Claim No. 7 towards

damages Rs. 40,00,000/-",,"Rs. 5,00,000/-

3.,"(a) Cost of Arbitra(cid:51)on

proceedings/li(cid:51)ga(cid:51)on Rs.

2,00,000/-

(b) The share of arbitra(cid:51)on

fee and expenses payable by

respondent but as per the

paid by the claimant

Arbitration Act 1996","Rs. 2,00,000/-

Rs. 82,500/-","Rs. 2,82,500/-

4.,"Interest claimed @12% per

annum","Interest allowed @12% per

annum",

TOTAL AMOUNT ALLOWED IN FAVOUR OF THE CLAIMANT,,,"Rs.52,37,500/- (Plus

interest)

TOTAL AMOUNT ALLOWED IN FAVOUR OF

RESPONDENT","TRHs.E9,90,000/- (adjusted)",,

AMOUNT DUE AND RECOVERABLE FROM

RESPONDENT","RTsH.4E2,47,500/- (Plus interest @

Rs.12% p.a)",,

Sr. No.,Description,Point of Payment,

1.,One month security deposit.,At the time of signing of MOU.,

2.,Two Months security deposit,"At the (cid:51)me of handing over the

renovated demised premises along

with complete amenities to the Lessee.",

(d) Direct the defendant to accept the vacant possession of the premises bearing No.3/1/22, Site IV, Sahibabad Industrial Area, Ghaziabad (U.P.)",,,

after allowing the plaintiff to take out its belongings, material, equipment etc. or in alternate the plaintiff be allow to deposit the keys of the above said",,,

premises in the Hon’ble Court.,,,

(e) Any other relief that this Hon’ble Court deem fit be allowed in favour of the plaintiff as against the defendant.â€​,,,

In the said suit, an application under Section 8 came to be moved and thereafter in Arbitration Application No.33/2009, the Learned Sole Arbitrator",,,

was appointed. Despite the stand of the Respondent in the suit that it was willing to hand over peaceful and vacant possession of the property as of,,,

1st October, 2008, a perusal of the proceedings before the Arbitrator clearly shows that it was not until May, 2010 that the actual vacant peaceful",,,

possession was handed over. The arbitral record shows that issues were framed on 3rd December, 2009 as under:",,,

“1. Whether the respondent had taken the premises in question on a monthly rent of Rs.3,30,000/-? OPC",,,

Whether the respondent has validly terminated the tenancy at any point of time? OPR,,,

Whether the respondent has handed over the possession of the premises to the claimant? OPR,,,

Whether the respondent failed to execute the lease deed in terms of clause 14 of the Memorandum of Understanding dated 25.12.2007?OPC,,,

Whether the respondent is guilty of committing breach of Memorandum of Understanding dated 25.12.2007?OPC,,,

Whether the claimant is entitled to receive rent from the respondent from October 2008, onwards? OPC",,,

Whether the claimant is entitled to receive damages from the respondent on account of expenses incurred on the building by the claimant in order to,,,

bring it in shape with the requirement of respondent? OPC,,,

Whether the claimant is entitled to receive interest on the outstanding rate? If yes, at what rate and for what period? OPC",,,

Whether the claimant has failed to perform its part of the Memorandum of Understanding and failed to take the requisite permission from UPSIDC,,,

to allow the respondent to run its office from the claimant's premises? If yes, its effect? OPR",,,

Whether the claimant is liable to pay damages to the respondent on account of not seeking permissions and allow the respondent to run its office,,,

by making adjustment with the concerned department and also for not returning the material/goods of the respondent?,,,

OPR,,,

Whether the respondent is entitled to the relief in terms of the counter- claim? OPRâ€​,,,

Repeated adjournments were sought by the Claimant prior to framing of issues and even after framing of issues. Order dated 12th December,",,,

2010 passed by the Arbitrator is important and is set out herein below:,,,

“12.2.2010,,,

Present Mr.Sudhir Naagar with Mr.Tarun Chaudhary,,,

Advocates for the claimant,,,

Mr.Shishupal partner of the claimant,,,

Mr.Rohit Singh, representative of the respondent",,,

Mr.Rohit Singh, representative of the respondent submits that the respondent has given an application in Corporate Debt Restructuring Cell (CDR",,,

Cell), therefore, their records practically stand seized and they can not make any debit transactions. However, credit transactions can be made.",,,

Today, no document is available in support of this plea. Mr.Rohit submits that documents in this regard, can be filed on the next date. Evidence by way",,,

of affidavit has not been filed on behalf of the respondent despite this being the past opportunity.,,,

Learned counsel for the claimant submits that adverse order be passed and at least possession of the property should be handed over to the claimant,,,

in accordance with the memorandum of understanding (by 15 days notice).,,,

Mr.Rohit has contacted his office on telephone and has then submitted that learned counsel for the respondent will contact learned counsel for the,,,

claimant on 15.2.2010, on this aspect and it can be mutually agreed to hand over the possession.",,,

The arbitration fee, as mentioned in the proceeding dated 30.1.2010, has not been paid by the respondent. It is, therefore, directed that fee payable by",,,

the respondent, as mentioned in the proceedings/order dated 30.1.2010 be paid by the claimant by or before the next date (section 38 of the Arbitration",,,

& Conciliation Act).,,,

Meanwhile, one final opportunity is granted to the respondent for filing evidence by way of affidavit by or before the next date, with advance copy to",,,

the learned counsel for the claimant, failing which adverse order may be passed.",,,

To come up on 1.3.2010 at 5.00 pm, for further proceedings.â€​",,,

In this order, it is clearly recorded that it was the Claimant which sought the possession of the property in accordance with the MOU.",,,

In response to this order, counsel for the Respondent addressed letter dated 16th February, 2010, which is on the arbitral record and reads as",,,

under:,,,

“REGD.A.D.,,,

To,",,,

Sh. Sudhir Nagar,",,,

Advocate,",,,

Ch. No.106, Western Wing,",,,

Tis Hazari Courts,",,,

Delhi-110054.,,,

Sub: Arbitration case of M/s S.S. Enterprises.,,,

Sir,",,,

With respect to this case, the proceedings are pending",,,

before the Ld. Arbitrator. In terms of the discussions,,,

which took place after moving application before Ld.,,,

Arbitrator for withdrawing the material from the,,,

premises in question which took place on 12.02.2010,",,,

our clients shall start operation to withdraw all its,,,

material/equipments etc. from the premises bearing,,,

No.3/1/22, site No. IV, Sahibabad Industrial Area,",,,

Ghaziabad U.P. w.e.f. 19.02.2010. Please advise your,,,

client to co-operate in this regard, as agreed before the",,,

Ld. Arbitrator.,,,

Thanks,,,

For Vishal Retail Ltd.,,,

(NARENDRA KALRA),,,

ADVOCATEâ€​,,,

Thus in this letter, the Respondent claimed that the removal of material from the premises would start from 19th February, 2010. In response to",,,

this letter, on 20th February, 2010, the Claimant’s counsel addressed a reply and stated that the notice dated 16th February, 2010 shall be",,,

construed as a notice of 15 days as per the MOU and that the Respondent ought to hand over vacant and peaceful possession on 3rd March, 2010 at",,,

12:00 noon. In fact, an application was then moved by the Respondent seeking Police help for removal of goods. On this application, the Learned",,,

Arbitrator passed order dated 25th March, 2010 which reads as under:",,,

“25.3.2010,,,

Present Mr.Sudhir Naagar with Mr.Tarun Chaudhary Advocates for the claimant,,,

Mr.Shishupal partner of the claimant Mr.Narendra Kalra, Advocate for the respondent",,,

Evidence by way of affidavit has already been filed on behalf of the respondent. However, the document (Ex.RW-1/2) mentioned in para 3 of the",,,

affidavit, is not attached with the affidavit. The same be filed and copy thereof be supplied to the learned counsel for the claimant.",,,

Another application dated 24.2.2010 filed on behalf of the respondent, for directions stating that the claimant is not allowing the respondent to remove",,,

belongings &goods from the tenancy premises.,,,

On this aspect, both the learned counsel have given statements which are recorded separately to the effect that respondent will remove all goods from",,,

the tenancy premises and the claimant will not create any hindrance. After vacating the tenancy premises the keys will be handed over by the learned,,,

counsel for the respondent to the learned counsel for the claimant on 15.4.2010 before me.,,,

These statements are without prejudice to the rights and contentions of the parties in the matter pending before me and will not be read for settling,,,

anyother past, present and/or future disputes between the partiesâ€​.",,,

Thus, the Arbitrator directed that the keys of the premises should be handed over on 15th April, 2010. Despite this order, repeated communications",,,

were exchanged between the parties and on 15th April, 2010, the keys were not handed over before the Arbitrator. Thereafter on",,,

24 th April, 2010, the Arbitrator again recorded that the handing over of keys did not materialize on 15th April, 2010 and thus the same was re-",,,

scheduled for 8th May, 2010. Again on 13th May, 2010, the Arbitrator recorded the submissions of counsel for the Claimant that the Respondent had",,,

only removed some goods and the remaining goods were to be removed in due course. Admittedly, all the goods were finally removed only on 31st",,,

May, 2010.",,,

The above chronology of events has been recorded as the Arbitrator in view of these facts came to the conclusion that the tenancy has not been,,,

validly terminated by the Respondent. The findings of the Arbitrator are as under:,,,

i) that the Claimant had applied to the UPSIDC only on 21st April, 2008. However, the Respondent had never been harassed by any government",,,

authority or agency from running its operations. Moreover, by the time, the Respondent allegedly started to remove its goods i.e. on 1st October, 2008,",,,

UPSIDC had already recommended the approval for change of user subject to deposit of requisite charges from 25th September, 2008;",,,

ii) the keys were all along in the possession of the Respondent which had its goods stored until May, 2010;",,,

iii) the Respondent never handed over possession in September, October, 2008 as was alleged;",,,

iv) the tenancy could only have been terminated after the lock-in period and that too by giving notice of at least three months;,,,

v) further the Respondent had also not paid the rent as agreed ;,,,

The Arbitrator, taking into consideration the suit filed by the Respondent, thus awarded full rent for the lock in period and half rent thereafter. The",,,

Arbitrator further awarded the damages to the Claimant as the Claimant had re-done the premises as per the requirements of the Respondent. The,,,

Arbitrator then awarded interest at 12% per annum on the rent due from October, 2008 till date of realization. Since the Respondent vacated the",,,

premises for its own reasons, it is not entitled to any counter claims or damages except the refund of security deposit which was adjusted in favour of",,,

the Respondent. The vacant and peaceful possession was handed over just before 1st June, 2010 during the course of the arbitration proceedings.",,,

The Claimant justifies the application to the UPSIDC in April, 2010, inasmuch as it wanted the Respondent to be in complete occupation of the",,,

premises as the Respondent had moved in to the premises in a staggered manner. Upon the Respondent fully occupying the premises, the Claimant",,,

applied for change of user which was in any case recommended in September, 2008.",,,

The cross-examination of Mr. Arun Gupta â€" Ex. Legal Head of the Respondent is very relevant and is set out herein below:,,,

“RW-1 Statement of Mr.Arun Gupta Legal Head &Company Secretary of the respondent on SA,,,

I tender my affidavit Ex.RW-1/1 in evidence Xxxxxxx by Sh.Sudhir aagar Advocate for the claimant,,,

My knowledge about this case is based on documents as well as my personal knowledge.,,,

I have not seen the property in question. Mr.Rajesh Verma who has signed the MOU dated 25.12.2007 is not in service as of now. I believe that no,,,

notice from any Government Authority was ever received regarding the use of the property in question. It is incorrect to suggest that no such notice,,,

was received as the property in question was being used lawfully. Vol. It was meant for industrial purpose and not for the purpose for which it was let,,,

out. It is correct that no Government authority came to stop or obstruct our business physically. Vol. In fact, we could not properly start our work as",,,

the claimant failed to prove the requisite permission which he was supposed to do within three months from the date of MOU.,,,

We did not write any letter regarding non supply of the above said permission by the claimant but had been verbally requesting to send the requisite,,,

permission.,,,

Mr.Rajesh Verma had been requesting Sh.Shivkumar ji, as I was told by Sh.Rajesh Verma as I had been asking Mr.Rajesh Verma about the matter. I",,,

used to discuss these issues with Mr.Rajesh Verma. I personally did not contact the claimant party.,,,

It is wrong to suggest that even Mr.Rajesh Verma did not speak to the claimant party on this issueâ€​.,,,

From the above cross-examination, it is clear that no governmental authority had troubled the Respondent’s occupation on the premises and",,,

the Respondent did not write any letter in respect of change of user permission to the Claimant.,,,

The Respondent had claimed that it had served termination letter dated 6th November, 2008 of the MOU, however, the witness could not produce",,,

the said letter. He also admitted that no letter was written to any authority by the Respondent that the Claimant was not allowing them to remove the,,,

goods. The witness of the Respondent could also not show any legal notice issued in the year 2008 for termination of lease. The second witness of,,,

Respondent â€" Mr. Umesh Sharma who was the Personal Assistant to CMD of the company also admitted that the Claimant had not misrepresented,,,

to him about the user of the premises. He also admitted that he had not signed any notice of termination dated 6th November, 2008. From the",,,

evidence on record, it is quite clear that the Respondent never terminated the lease as alleged in the pleadings. It was not able to show any notice of",,,

termination sent by it. The lease having not been terminated in terms of MOU, the earliest date that can be considered as notice of termination is",,,

before the Learned Arbitrator when letter dated 16th February, 2010 was issued. If the three months period is calculated from February, 2010, the",,,

lease would actually come to an end on 15th May, 2010. The actual physical possession was given on 31st May, 2010.",,,

The analysis of the facts, the chronology of the events as also after considering the submissions of the parties, it is clear that the Respondent",,,

defaulted in the payment of rent. It never terminated the tenancy as per the MOU by giving proper 15 days’ notice and handing over of vacant,,,

and peaceful possession. Though, it pleaded in the suit for injunction filed by it that it was wanting to move its goods out on 25th September, 2008, as is",,,

evident from the evidence which transpired thereafter, it did not hand over possession until May, 2010. Even before the Arbitrator, from February,",,,

2010 until May, 2010, repeated disputes were raised in respect of handing over of possession. This shows that the Respondent was wanting to enjoy",,,

the possession of the property and simultaneously avoid the payment of rent under the garb of the user having not been changed by the UPSIDC,,,

within the three months period as stipulated in the MOU.,,,

There being no termination of lease and it having been admitted on record that the delay in the change in user having not affected the operations of,,,

the Respondent in any manner, the view of the Arbitrator cannot be termed to be perverse or a patent illegality. The Arbitrator has in fact given the",,,

benefit of doubt to the Respondent by reducing the rent amount after the lock in period, to 50% of the actual payment. Thus, the award of the",,,

Arbitrator does not deserve to be interfered with.,,,

In the present petition, there was a delay in re-filing of the petition. The petition had been dismissed on 25th September, 2014. In the appeal, Ld.",,,

Division Bench had directed the Respondent to deposit the sum awarded together with interest vide order dated 27th May, 2015. However, it was",,,

thereafter recorded that the Respondent has deposited the entire amount of the award along with interest before the Executing Court.,,,

On 14th March, 2016, the Division Bench set aside the order of dismissal and condoned the delay in refiling the objections. The matter was to be",,,

thereafter heard on merits.,,,

The discussion herein above clearly shows that the award does not warrant any interference. However, the interest payable on the awarded",,,

amount is reduced to 8% keeping in mind the prevalent interest rates. The Executing Court, may release the amount awarded along with simple",,,

interest at 8% to the Claimant in the manner awarded by the Arbitrator. Remaining sum be refunded to the Claimant. The award is upheld except with,,,

the modification of rate of interest.,,,

OMP is disposed of.,,,