Tristar Hotels Pvt Ltd v. M/S Select Infrastructure Pvt Ltd

Delhi High Court · 05 Mar 2013 · 2013:DHC:1202

Manmohan Singh

OMP No.779/2012

2013:DHC:1202

civil petition_dismissed Significant

AI Summary

The Delhi High Court allowed the petitioner to withdraw its arbitration petition, vacated interim relief, and directed the disputed deposit to remain with the Court pending arbitral award, while permitting the respondent to pursue recovery from the new owner.

Full Text

OMP No.779/2012 HIGH COURT OF DELHI

JUDGMENT

delivered on: March 05, 2013 OMP No.779/2012
TRISTAR HOTELS PVT LTD ..... Petitioner
Through Mr.P.V.Kapur, Sr.Adv. with Mr.Aman Anand & Mr.Sidhant
Kapur, Advs.

versus

M/S SELECT INFRASTRUCTURE PVT LTD ..... Respondent
Through Mr.Ravi Gupta, Sr.Adv. with Mr.Ankit Jain, Adv. for respondent.

CORAM:

HON'BLE MR. JUSTICE MANMOHAN SINGH MANMOHAN SINGH, J. (ORAL)

1. By order dated 27th August, 2012 passed in the abovementioned petition, this Court passed the following order:-

“1. Notice. Mr. Ankit Jain, Advocate accepts notice on behalf of the Respondent. 2. The present petition has been filed by Tristar Hotels Private Limited („Tristar‟) under Section 9 of the Arbitration of Conciliation Act, 1996 („Act‟) seeking interim relief against Select Infrastructure Private Limited („Select‟) arising out of a sale deed dated 3rd November 2009 read with agreement to sell dated 8th November 2007 with regard to provisions of electricity, water, chilled water for heating ventilation air conditioning („HVAC‟), hot water and gas supply for Svelte Hotel and Personal Suits being run by Tristar at District Centre, Saket, which property was purchased by Tristar from Select by the aforementioned sale deed. 3. The main reason for Tristar approaching this Court is a legal notice dated 23rd August 2012, issued by Select

2013:DHC:1202 demanding payment in the sum of Rs.4,68,04,385 towards security deposit, common area maintenance and management („CAMM‟) charges and other sums totaling Rs. 4,68,04,385. According to Tristar, Select has been overcharging it on various counts including, CAMM charges, HVAC charges, etc. Tristar also disputes certain other amounts demanded towards hot water charges, etc. for which it states that no invoices have been raised till date. This is, however, denied by Select.

4. The apprehension expressed by Select is that Tristar has already agreed to sell its hotel property to Advent Hospitality Private Limited and the agreed terms of that transaction have been recorded in an order dated 7th August 2012 passed by the Division Bench of this Court in FAO(OS) No. 349 of 2012.

5. The said order records, Tristar‟s acknowledgment that there is an outstanding payment of Rs.2.68 crores owing to Select. Tristar nevertheless contends that it can be asked to pay Select only that sum which is legitimately due to it. Tristar sent Select a legal notice dated 4th June 2012 claiming an amount of Rs.3.89 crores.

6. Mr. P.V. Kapur, learned Senior counsel appearing for Tristar and Mr.Ravi Gupta, learned Senior counsel appearing for Select, on instructions, agree that this Court may appoint any independent person to help both the parties resolve their outstanding disputes arising out of Tristar‟s legal notice dated 4th June 2012 and Select‟s legal notice dated 23rd August 2012.

7. Accordingly, this Court appoints Mr. Ratan Lal, a retired Executive Engineer (Electrical), CPWD r/o B- 105, Mahalaxmi Apartment, Sector-2, Dwarka, New Delhi-110075 (Mob. 9716210436) to hold meetings with the representatives of both Tristar and Select beginning Wednesday 29th August 2012 at a mutually convenient time and place and help them resolve their disputes. Select will make available all the relevant records for this purpose both to Mr. Ratan Lal and Tristar. The fee of Mr.Ratan Lal is fixed at Rs.[1] lakh, which will be equally shared by both the parties and will be paid to him within a period of one week from today.

8. This Court directs that Tristar will, without prejudice to its rights and contentions, pay Select a sum of Rs.20 lakhs by 6 p.m. today i.e. 27th August 2012 and that sum will be accepted by Select without prejudice to its rights and contentions. In addition, Tristar will place in a fixed deposit („FD‟), in the name of the 30th August 2012 and the FD receipt will be filed in the Court by that date. The FD will be subject to further orders by the Court.

9. Mr. Ratan Lal is requested to furnish a report to this Court by 3rd September 2012.

10. List on 5th September 2012.

11. Till the next date of hearing there will be no disconnection by Select of any of the utilities, power supply, or maintenance services to Tristar at the hotel property.”

2. It is recorded in the order dated 5th November, 2012 that the hotel in question has been sold to M/s Advent Hospitality Pvt. Ltd.

3. The respondent has not denied of having received the sum of `20 lac in terms of the above said order. The petitioner has admittedly deposited the sum of `50 lac in this Court in fixed deposit. Mr.Ratan Lal, the Local Commissioner appointed by this Court has given his report against which the petitioner has filed the objections. As per his report, the sum of `2,58,79,420/- is payable by the petitioner to the respondent. The statement of outstanding amount as on 15th January, 2013 is reproduced here as under:- “Total amount outstanding as per books of SIPL 3,56,87,253/- Less: Credits to be given as per Report of Local Commissioner (Mr.Ratan Lal, Retd. - 2,42,67,394/- Executive Engg. CPWD) 1,14,19,859/- Add:

1) Refundable Deposit towards CAMM Charges 61,62,293/as per report of Local Commissioner

2) Interest on delayed payments 82,97,268/- Total amount Payable 2,58,79,420/- (Rupees Two Crores Fifty Eight Lakhs Seventy Nine Thousand Four Hundred and Twenty Only)”

12,348 characters total

4. Mr.P.V.Kapur, learned Senior counsel appearing on behalf of the petitioner has submitted that it is the admitted position that the legal notice for recovery of the sum of `3,89,83,312/- has been issued by the petitioner to the respondent and also to cease and desist from overcharging the petitioner in respect of HVAC billing, electricity billing and CAMM charges. In the said notice dated 4th June, 2012, it is also stated that in failure to pay the said amount by the respondent, the said notice be treated as notice for invoking arbitration under Clause 28 of the sale deed dated 3rd November, 2009. According to Mr.Kapur, total more than `7 crores are recoverable from the respondent.

5. The submission of the respondent‟s counsel is that the respondent is at least at present entitled to receive sum of `50 lac deposited by the order dated 27th August, 2012. He relied upon the final report of Mr.Ratan Lal who was appointed with the consent of the parties. He argues that after enjoying the interim order which was passed with consent, now the petitioner cannot oppose his prayer for release of amount in favour of respondent. He stated that Mr.Ratan Lal in his report has dealt with each and every aspect as well as claims of the petitioner. According to his report more than `2,50,00,000/- is payable by the petitioner. He further states that the petitioner has now sold the hotel to M/s Advent Hospitality Pvt. Ltd. who is also not paying the utility charges. His submission is that process of appointment of the Arbitral Tribunal would take some time. Therefore why his client should suffer by not receiving the utilities charges. Thus, the amount deposited by the petitioner to the tune of `50 lac be released in favour of the respondent. Learned counsel has also referred to the following decisions in support of his submissions: i) Mihir Kumar Talukdar v. Pradip Kumar Sengupta & Ors., AIR 2011 Cal 211. The relevant para reads as under: “31.Abandoning a suit being a voluntary action of the plaintiff, ordinarily a Court does not refuse the prayer for abandonment if one does not wish to continue with the suit and relinquish his claim once and for all. The object of Rule 1 and its sub-rules embodied in Order 23 is clear: the plaintiff should not be allowed opportunity to commence trial afresh unless there be sufficient grounds therefore and the defendant is not unduly prejudiced. It is always open to the Court to examine, while permitting a party to abandon his suit or withdraw there from, as to whether he has derived any material advantage by virtue of any interim order that was passed thereby placing the defendant in a disadvantageous position.” ii) Ashok Pratap Singh v. State of Uttar Pradesh and Ors., (2204) 2 UPLBEC 1909/MANU/UP/0354/2004. The relevant paras read as under:

“35. There can be no quarrel to the legal proposition that no party can suffer by the action of the Court and when the High Court in exercising of its powers under Article 226 of the Constitution of India grants interim relief; the interest of Justice requires that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the Court must be neutralized. The institution of litigation by a party should not be permitted to confer an unfair

advantage on the party responsible for it. (Vide Grindlays Bank Ltd. v. Income-tax Officer, Calcutta and Ors., AIR 1980 SC 656; Ram Krishna Verma etc. etc. v. State of Uttar Pradesh and Ors., AIR 1992 SC 1888; State of Madhya Pradesh and Ors. v. M.V. Vyavsaya and Co., AIR 1997 SC 993; and Smt. Rampati Jaiswal etc. etc. v. State of U.P. and Ors., AIR 1997 All 170).

36. No litigant can derive any benefit from mere pendency of case in a Court of Law, as the interim order always merges in the final order to be passed in the case and if the writ petition is ultimately dismissed, the interim order stands nullified automatically. A party cannot be allowed to take any benefit of his own wrongs by getting interim order and thereafter blame the Court. The fact that the writ is found, ultimately, devoid of any merit, shows that a frivolous writ petition had been filed. The maxim "Actus Curiae neminem gravabit", which means that the act of the Court shall prejudice no-one, becomes applicable in such a case. In such a situation the Court is under an obligation to undo the wrong done to a party by the act of the Court. Thus, any undeserved or unfair advantage gained by a party invoking the jurisdiction of the Court must be neutralised, as institution of litigation cannot be permitted to confer any advantage on a suitor from delayed action by the act of the Court. [Vide Dr. A.R. Sircar v. State of Uttar Pradesh. and Ors., 1993 Suppl. (2) SCC 734; Shiv Shankar and Ors. v. Board of Directors, UPSRTC and Anr., 1995 Suppl (2) SCC 726; Committee of Management, Arya Nagar Inter College, Arya Nagar, Kanpur and Anr. v. Sree Kumar Tiwary and Anr., AIR 1997 SC 3071; and GTC Industries Ltd. v. Union of India and Ors., (1998) 3 SCC 376].”

6. Mr.Kapur, learned Senior counsel appearing on behalf of the petitioner has refuted the arguments of the learned Senior counsel appearing on behalf of the respondent. He submits that the petitioner wishes to withdraw the present petition. His client has no objection if the ex parte ad interim order be vacated. The petitioner has already sold the hotel to M/s Advent Hospitality Pvt. Ltd. This Court has already clarified that if M/s Advent Hospitality Pvt. Ltd. is not paying the utility charges, the respondent is at liberty to take the appropriate action against them in accordance with law. He states that in normal course the petitioner is entitled for refund of the amount of `50 lac in view of the withdrawal of the present petition, but in order to show the bonafide on the part of the petitioner, let the said amount already kept with the Registrar General of this Court be not released to either party till the final award passed by the Arbitral Tribunal.

7. After having considered the rival submissions of both the parties, the following directions are passed:- (a) The petitioner is permitted to withdraw the petition. The same is dismissed as withdrawn. (b) The interim order as passed on 27th August, 2012 is vacated.

(c) The respondent is at liberty to initiate proceedings with regard to default for non-payment of utility charges by M/s. Advent Hospitality Pvt. Ltd. in accordance with law.

(d) As far as deposit of `50 lac by the petitioner in terms of order dated 27th August, 2012 is concerned, it is directed that the said amount be not released in favour of either of the parties. The same be kept with the Registrar General of this Court who will keep on renewing the same till further order of this Court. The respondent is granted liberty to file an appropriate application before the Arbitral Tribunal, if necessary, when Arbitral Tribunal constituted for release of the said amount and is also allowed to rely upon the report submitted by Mr.Ratan Lal, Local Commissioner, in support of his submission. The learned Arbitral Tribunal, as and when constituted, will consider the arguments of the respondent including the report of Mr.Ratan Lal, at the time of passing the said order on merit.

8. The petition is disposed of with these directions. No costs.

JUDGE MARCH 05, 2013

Tristar Hotels Pvt Ltd v. M/S Select Infrastructure Pvt Ltd

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JUDGMENT

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