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HIGH COURT OF DELHI
CM (M) 1538/2009 & CM APPL No. 18914/09
BLUE COAST INFRASTRUCTURE DEVELOPMENT LTD & ORS Petitioners
Through: Mr. Amit Sibal with Ms. Divya Jam, Advocate
$-.
HIGH COURT OF DELHI
CM (M) 1538/2009 & CM APPL No. 18914/09
BLUE COAST INFRASTRUCTURE DEVELOPMENT LTD & ORS Petitioners
Through: Mr. Amit Sibal with Ms. Divya Jam, Advocate
VERSUS
SURENDER PAL GARG & ANR Respondents
Through: None.
Through: None.
CM (M) 1539/2009 & CM APPL No. 18916/09
DEVELOPMENT LTD& ORS Petitioners Advocate
DEVELOPMENT LTD& ORS Petitioners Advocate
VERSUS
RADHA GARG Respondent And
CM (M) 1540/2009 & CM APPL No. 18918/09
DEVELOPMENT LTD & ORS Petitioners Advocate
DEVELOPMENT LTD & ORS Petitioners Advocate
VERSUS
SURENDER PAL GARG & ANR Respondents ¶3 2010:DHC:7738
To be referred to the Reporter or not?=& Whether the
To be referred to the Reporter or not?=& Whether the
JUDGMENT
should be reported in Digest?
ORDER
19.04.2010 Despite service none appears for the Respondents.
On 23rd December 2009 this Court passed the following order:
"These three petitions under Article 227 of the Constitution of
India have been preferred by the defendants in the three suits instituted by the respondents in each of the cases, for the relief
. of ejectment after termination of tenancy and for recovery of mesne profits and against the order in each suit, dismissing the application of the defendants under Section 8 of the Arbitration
Act, 1996. The registered lease deed in each of the three cases contains an Arbitration Clause which appears to be wide enough to cover the dispute of the nature, subject matter, of the suit. The trial court has dismissed the application inter alia on the ground that the suits had been filed by the respondents/landlords who were lessers in each of the lease deed, not only against the petitioner no.1/tenant but also against petitioners 2 and 3 who are stated to be group companies of the petitioner no.!; The petitioners 2 and 3 were impleaded as defendants on the averment that though the letting was to the petitioner no.1 only but the petitioners 2 and 3 were also found in use/occupation of the premises. The trial court has held that since the non parties to the arbitration clause were also parties to the suit, arbitration was not the appropriate remedy.
The reasoning of the trial court prima facie appears to be erroneous. The respondents/plaintiffs had claimed ejectment as other capacity. The petitioners have also in the petition reiterated that only the petitioner no.1 is in occupation of the premises and the petitioners 2 and 3 are not even stated to be in use of the premises.
Issue notice to the respondents by all modes including dasti on the petitioners taking requisite steps, returnable on 19th April, 2010.
Dasti under signature of the Court Master.
CM No.18914/2009 (u/s 151 CPC for stay) in CM(M)
No. 153 8/2009, CM No.18916/2009 (u/s 151 CPC for stay) in
. CM(M) No.1539/2009 and CM No.18918/2009 (u/s 151 CPC for stay) in CM(M) No.1540/2009
Till the next date of hearing, there shall be stay of proceedings in the suits.
CM No.18915/2009 (u/s 151 CPC for exemption) in CM(M)
No.1538/2009, CMNo.18917/2009 (u/s 151 CPC for exemption) in CM(M) No.1539/2009 and CMNo.18919/2009
(u/s 151 CPC for exemption) in CM(M) No.1540/2009
Allowed, subject to just exceptions." This Court has heard the submissions of Mr. Amit Sibal, learned counsel for the Petitioners.
It is stated that the Petitioners herein took the suit premises i.e. Flat No.
218, together with parking space LB-8 in Antariksh Bhawan, 22 Kasturba
Gandhi Marg, New Delhi on tenancy for a period of three years beginning on 151h February 2005. While it is the case of the Respondents/Plaintiffs that
C] i.e. Blue Coast Hotels & Resorts Limited, Petitioner No. 2 herein and
Morepen Laboratories Limited, Petitioner No. 3 herein to whom they were sub-let without any authority or permission from the Plaintiffs/Respondents herein. It is further stated in para 4 of the plaint that "this breach being fatal to even the grant of the lease further warrants the eviction forthwith of the
Defendants from the suit premises." What is also significant is that there is no specific relief prayed for in the suit against Defendant Nos. 2 and 3. A copy of the lease deed shows that the
• parties intended all disputes arising out of the tenancy to be referred to arbitration. The relevant clause 28 reads as under:
"28. In the event of difference or dispute arising out of, under or in connection with this agreement over the rights of obligation of parties hereto, the dispute or difference shall be referred to the Arbitration of a Sole
Arbitrator to be appointed with mutual conent of the
Lessor and the Lessee. The venue of the Arbitrator shall be at New Delhi and the Courts in the City of Delhi/New Delhi alone shall have the jurisdiction in relation to the
Arbitration and the provisions of the Arbitration &
Conciliation Act 1996 shall be applicable to such
Arbitration." On the strength of the above clause, the Petitioners filed an application under Section 8 of the Arbitration & Conciliation Act 1996 ('Act') praying that the disputes be referred to arbitration. The Petitioners placed reliance decision of Sukanya Holdings (F) Limited v. Jayesh H. Pandya (2003) 5
SCC 531. The learned Additional District Judge ('ADJ') by the impugned order dated 21 s' November 2009 dismissed the Petitioners' application under
Section 8 of the Act on the ground that there was no arbitration agreement between the Plaintiff and Defendant Nos. 2 and 3 (Petitioners 2 and 3 herein) in whose favour the sub-tenancy was created by Defendant No. 1.
T. In the considered view of this Court, the learned ADJ was in error in coming to the above conclusion. It is the case of the Plaintiffs that by the alleged sub-letting of the premises in favour of Defendant Nos. 2 and 3, Defendant No.1 was in breach of the terms of the lease. The arbitration clause clearly covers such a breach. As explained by this Court in Virender
Yadav v. Aerosvit Airlines 153 (2008) DLT 25, merely because some of the parties to the suit are not parties to the arbitration agreement, the request by the entity which is a party to the arbitration agreement that the dispute be referred to arbitration cannot be negatived. Recently this Court in M/s.
• Tandav Films Entertainment P. Limited v. M/s. Four Frames Pictures
2009 (41) PTC 515 (Del) also held likewise. If at all, the Defendant Nos. 2 and 3 herein could claim rights only under Defendant No. 1 and as long as
Defendant No. 1 is a party to the arbitration agreement that should be sufficient for referring the disputes to arbitration.
On 23rd December 2009 this Court passed the following order:
"These three petitions under Article 227 of the Constitution of
India have been preferred by the defendants in the three suits instituted by the respondents in each of the cases, for the relief
. of ejectment after termination of tenancy and for recovery of mesne profits and against the order in each suit, dismissing the application of the defendants under Section 8 of the Arbitration
Act, 1996. The registered lease deed in each of the three cases contains an Arbitration Clause which appears to be wide enough to cover the dispute of the nature, subject matter, of the suit. The trial court has dismissed the application inter alia on the ground that the suits had been filed by the respondents/landlords who were lessers in each of the lease deed, not only against the petitioner no.1/tenant but also against petitioners 2 and 3 who are stated to be group companies of the petitioner no.!; The petitioners 2 and 3 were impleaded as defendants on the averment that though the letting was to the petitioner no.1 only but the petitioners 2 and 3 were also found in use/occupation of the premises. The trial court has held that since the non parties to the arbitration clause were also parties to the suit, arbitration was not the appropriate remedy.
The reasoning of the trial court prima facie appears to be erroneous. The respondents/plaintiffs had claimed ejectment as other capacity. The petitioners have also in the petition reiterated that only the petitioner no.1 is in occupation of the premises and the petitioners 2 and 3 are not even stated to be in use of the premises.
Issue notice to the respondents by all modes including dasti on the petitioners taking requisite steps, returnable on 19th April, 2010.
Dasti under signature of the Court Master.
CM No.18914/2009 (u/s 151 CPC for stay) in CM(M)
No. 153 8/2009, CM No.18916/2009 (u/s 151 CPC for stay) in
. CM(M) No.1539/2009 and CM No.18918/2009 (u/s 151 CPC for stay) in CM(M) No.1540/2009
Till the next date of hearing, there shall be stay of proceedings in the suits.
CM No.18915/2009 (u/s 151 CPC for exemption) in CM(M)
No.1538/2009, CMNo.18917/2009 (u/s 151 CPC for exemption) in CM(M) No.1539/2009 and CMNo.18919/2009
(u/s 151 CPC for exemption) in CM(M) No.1540/2009
Allowed, subject to just exceptions." This Court has heard the submissions of Mr. Amit Sibal, learned counsel for the Petitioners.
It is stated that the Petitioners herein took the suit premises i.e. Flat No.
218, together with parking space LB-8 in Antariksh Bhawan, 22 Kasturba
Gandhi Marg, New Delhi on tenancy for a period of three years beginning on 151h February 2005. While it is the case of the Respondents/Plaintiffs that
C] i.e. Blue Coast Hotels & Resorts Limited, Petitioner No. 2 herein and
Morepen Laboratories Limited, Petitioner No. 3 herein to whom they were sub-let without any authority or permission from the Plaintiffs/Respondents herein. It is further stated in para 4 of the plaint that "this breach being fatal to even the grant of the lease further warrants the eviction forthwith of the
Defendants from the suit premises." What is also significant is that there is no specific relief prayed for in the suit against Defendant Nos. 2 and 3. A copy of the lease deed shows that the
• parties intended all disputes arising out of the tenancy to be referred to arbitration. The relevant clause 28 reads as under:
"28. In the event of difference or dispute arising out of, under or in connection with this agreement over the rights of obligation of parties hereto, the dispute or difference shall be referred to the Arbitration of a Sole
Arbitrator to be appointed with mutual conent of the
Lessor and the Lessee. The venue of the Arbitrator shall be at New Delhi and the Courts in the City of Delhi/New Delhi alone shall have the jurisdiction in relation to the
Arbitration and the provisions of the Arbitration &
Conciliation Act 1996 shall be applicable to such
Arbitration." On the strength of the above clause, the Petitioners filed an application under Section 8 of the Arbitration & Conciliation Act 1996 ('Act') praying that the disputes be referred to arbitration. The Petitioners placed reliance decision of Sukanya Holdings (F) Limited v. Jayesh H. Pandya (2003) 5
SCC 531. The learned Additional District Judge ('ADJ') by the impugned order dated 21 s' November 2009 dismissed the Petitioners' application under
Section 8 of the Act on the ground that there was no arbitration agreement between the Plaintiff and Defendant Nos. 2 and 3 (Petitioners 2 and 3 herein) in whose favour the sub-tenancy was created by Defendant No. 1.
T. In the considered view of this Court, the learned ADJ was in error in coming to the above conclusion. It is the case of the Plaintiffs that by the alleged sub-letting of the premises in favour of Defendant Nos. 2 and 3, Defendant No.1 was in breach of the terms of the lease. The arbitration clause clearly covers such a breach. As explained by this Court in Virender
Yadav v. Aerosvit Airlines 153 (2008) DLT 25, merely because some of the parties to the suit are not parties to the arbitration agreement, the request by the entity which is a party to the arbitration agreement that the dispute be referred to arbitration cannot be negatived. Recently this Court in M/s.
• Tandav Films Entertainment P. Limited v. M/s. Four Frames Pictures
2009 (41) PTC 515 (Del) also held likewise. If at all, the Defendant Nos. 2 and 3 herein could claim rights only under Defendant No. 1 and as long as
Defendant No. 1 is a party to the arbitration agreement that should be sufficient for referring the disputes to arbitration.
8. In the instant case, the averments made in the plaint show that the disputes fall within the scope and ambit of Clause 28 of the lease deed. It is the case I the averments made in the plaint, Defendants 2 and 3 can claim rights only under Defendant No. 1 which is a party to the arbitration clause. The claim of Petitioner No. 1 to have the disputes referred to arbitration in terms of Clause 28 of the lease deed cannot be defeated only because the Petitioner Nos. 2 and 3 are not parties to the arbitration agreement.
9. The facts in Sukanya Holdings (F) Limited are different. There, the Supreme Court was concerned with the question whether the claims could be bifurcated into arbitrable and non-arbitrable claims and only the arbitrable ones 'referred to arbitration. On the facts of that case, it was held that the disputes could not be split and referred to arbitration. The decision in Sukanya Holdings (F) Limited, therefore does not apply to the facts of the present case. For all the aforementioned reasons the impugned order dated 20th November 2009 is hereby set aside. The Petitioners' application under • Section 8 of the Act stands allowed. Accordingly, the parties are directed to take steps under the Act to have Clause 28 of the lease deed operationalized and have the disputes referred to arbitration. The petitions and the pending applications are disposed of. Order be given dasti to learned counsel for the Petitioners.