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2014 DAILYLAW 3501 (DEL)

Davinder Kaur & Ors. v. YNC Restro (India) & Ors.

2014-03-14

Rajiv Sahai Endlaw

body2014
I.A. No. 4927/2014 (of D-2 and 3 under Section 8 of the Arbitration and Conciliation Act, 1996) 1. The Counsel for the applicant/defendant Nos. 2 and 3 claims the application to have been filed today itself. 2. The same be got numbered and be requisitioned from the Registry. 3. In the meanwhile, a copy of the application has been handed over and has been perused. 4. The four plaintiffs have instituted this suit for recovery, from the defendant No. 1 Firm, of which the defendant Nos. 2 to 5 are stated to be partners, of possession of property No. J-111, Main Market, Rajouri Garden, New Delhi and for recovery of a sum of Rs. 12,35,000/- towards arrears of rent/ use and occupation charges of the said property and for future damages/mesne profits @ Rs. 5 lakh per month and for permanent injunction restraining the defendants from inducting any other person into possession of the said premises, claiming that the four plaintiffs had let out the said premises to the defendant No. 1 Firm through its partners defendant Nos. 2 to 5 vide registered Lease Deed dated 29th December, 2012 for a period of six years; that the defendants have defaulted in payment of rent and the plaintiffs have determined the tenancy of the defendants. 5. Summons of the suit and notice of the application under Order 39 Rules 1 and 2 of the Civil Procedure Code (CPC), 1908 were issued to the defendants and vide ex parte ad interim order dated 20th December, 2013, the defendants were restrained from parting with possession of the property or assigning their rights therein in favour of any third party and were also directed to make payment of the last paid rent in terms of the registered Lease Deed every month and also to clear the arrears within eight weeks. 6. This application has been filed drawing attention to the following clause in the registered Lease Deed: “25. If any dispute arises out as the stipulated arguments conditions it is mutually agreed by the sole arbitrator and the decision will be binding on both the parties.” 7. Notice has been issued to the Counsel for the plaintiffs and it has been enquired as to why the parties are not to be referred to arbitration. 8. If any dispute arises out as the stipulated arguments conditions it is mutually agreed by the sole arbitrator and the decision will be binding on both the parties.” 7. Notice has been issued to the Counsel for the plaintiffs and it has been enquired as to why the parties are not to be referred to arbitration. 8. The Counsel for the plaintiffs has contended: (i) that the defendants are in defiance of the order dated 20th December, 2013 and have neither paid the arrears of rent nor an amount at the rate of last paid rent month by month as they were directed and their defence is liable to be struck off; and (ii) that the defendant No. 2 in his application under Order 39 Rule 4 of the CPC has stated that the premises are lying sealed and the defendants No. 2 and 3 are surrendering legal possession of the property to the plaintiffs. It is thus argued that if the defendants surrender legal possession, the relief of recovery of possession would disappear and the reference to arbitration would only be of the monetary claims. 9. The Counsel for the defendant Nos. 4 and 5 states that the defendants No. 4 and 5 have already surrendered all their rights in the said premises in favour of the defendant Nos. 2 and 3 and do not claim any rights in the said property. 10. Of course, the Counsel for the defendant Nos. 2 and 3 controverts. 11. None has appeared for the defendant No. 1 Firm. The Counsel for the defendant Nos. 2 and 3 states that the defendant No. 1 Firm has not even been served and has also drawn attention to order dated 14th February, 2014 recording the statement of the Counsel for the plaintiffs that the service of defendant No. 1 Firm is not necessary being a formal party as defendant Nos. 2 to 4 are partners of the defendant No. 1 Firm. 12. The Counsel for the defendant Nos. 2 and 3 and the Counsel for the defendant Nos. 4 and 5 also admit that the defendant No. 1 Firm was a firm of defendant Nos. 2 to 5 only. 13. 2 to 4 are partners of the defendant No. 1 Firm. 12. The Counsel for the defendant Nos. 2 and 3 and the Counsel for the defendant Nos. 4 and 5 also admit that the defendant No. 1 Firm was a firm of defendant Nos. 2 to 5 only. 13. In the circumstances, notwithstanding the summons issued having not been served on the defendant No. 1 Firm, since all its partners are before the Court, the defendant No. 1 Firm is deemed to have been served. 14. The Counsel for the defendant Nos. 4 and 5 states that he has no objection to arbitration, save for his plea in the said proceedings, of the defendant Nos. 4 and 5 being not liable for any monetary claim. 15. As far as the argument of the Counsel for the plaintiffs of the parties being not required to be referred to arbitration and the defence of the defendants being liable to be struck off for non-compliance of the order dated 20th December, 2013 is concerned, the same is to be noted to be rejected; even if the defence is to be struck off, it being not in dispute that the subject matter of this suit is the subject matter of arbitration agreed to by the parties, the parties have necessarily to be referred to arbitration. 16. In the circumstances, the suit is disposed of by referring the parties to arbitration and leaving them to bear their own costs of the suit. 17. All the Counsel state that for the sake of expediency, this Court only may appoint an Arbitrator. 18. With the consent of the Counsel, Mr. S.L. Khanna, retired Additional District Judge is appointed as the Arbitrator. His fee is tentatively fixed at Rs. 1 lakh, besides out of pocket expenses and of which Rs. 50,000/- is to be paid by the plaintiffs and Rs. 25,000/- by the defendant Nos. 2 and 3 and Rs. 25,000/- by the defendant Nos. 4 and 5. 19. The fee be paid in advance. 20. The parties to appear before the Arbitrator with prior appointment on 3rd April, 2014.