TaxTMI 
TaxTMI 
2013 (1) TMI 240
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.... in the agreement dated December 14, 1993 entered into with him. Accordingly, an agreement was entered into entrusting the appellant to look after the said shop on the terms and conditions stipulated therein. The agreement was initially for 13 (thirteen) years with option for renewal for the identical period. The terms and conditions as would appear from the agreement would inter alia provide as follows : i) The appellant would look after the flower unit by organizing sale and supply of flowers, cut-flowers and other agricultural and horticultural products from the sale counter of the society. He would be entitled to the profit of sale subject to 15 per cent commission to the society having a lower limit of Rs.5,000/- (Rupees five thousand) per month being minimum guarantee provision payable to the society. ii) He would have to maintain the counter engaging manpower at his cost. He would also have to discharge all statutory outgoings electricity charges and other incidentals to run the counter. iii) He or his representative would visit the society every morning and would collect the key from the society's office. iv) The initial period of 13 (thirteen) years could be....
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....ide of the Award. From the grounds mentioned in the said application, we would find the principal issue that was raised by the appellant as to the authority of the Arbitrator in deciding the issue of possession. According to the appellant, the subject agreement was nothing but an agreement for tenancy and appellant being a tenant was entitled to the protection of the tenancy law and the dispute could not be resolved through arbitration. On merits, the appellant contended that on the expiry of the agreement on December 13, 2006, fresh agreement came into existence that would be apparent from the conduct of the parties. Such agreement for tenancy, even on termination, would not come within the scope of adjudication by the Arbitrator. On the money claim, the appellant contended that there was no basis to assess the liquidated damage. The appellant also raised the plea that the Arbitrator did not give them reasonable opportunity to defend the Statement of Claim. The society contested the arbitration by filing affidavit-in-opposition. In the affidavit the society annexed the minutes of the meeting of the arbitration to show that the appellant had prayed for adjournment and those acco....
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.... following three issues before us:- (i) The agreement was in effect an agreement of tenancy that would be outside the scope of arbitration. (ii) The Arbitrator violated the principle of natural justice by not extending suitable opportunity to the appellant to defend the action, (iii) Award was opposed to public policy. Elaborating his argument, Mr. Mukherjee construed the Clauses 11, 17 and 21 of the agreement that would indicate the obligations of the appellant to maintain the shop by discharging statutory outgoings, electricity charges, engagement of manpower for a fixed period having two subsequent renewals on the same term. According to him, he was entitled to be in possession till 2032. He contended, in terms of the order of the Court he was paying Rs.15,000/- (Rupees fifteen thousand) per month to run the shop. Hence, the society was obliged to approach the Tenancy Tribunal for his eviction upon compliance of the statutory provision of the tenancy law. He contended, tenancy not having been terminated in accordance with the tenancy law, the appellant was entitled to remain in possession and the Arbitrator could not have directed his eviction. On the money claim, he....
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....rom the society's office every morning and deposit the same in the evening after closure of the unit. Mr. Basak contended that such clause would clearly show that no exclusive possession was handed over to the appellant that would foreclose the claim for tenancy. He relied on the Apex Court decision in the case of Naraindas Lilaram Adnani Vs. Narsingdas Naraindas Adnani & Ors. reported in All India Reporter 1995 Supreme Court page-763 and in the case of Boozallen & Hamilton Inc. Vs. SBI Home Finanace Ltd. & Ors. reported in 2011 Volume 5 Supreme Court Cases page-532. According to him, since the appellant took possession of the counter and remained with the same wrongfully to the execution of the society he would not be entitled to the protection of the tenancy law. Even if it was contended, revocation of licence would attract delivery of vacant and peaceful possession that could be adjudicated upon by an alternate dispute resolution mechanism. He put emphasis on the Apex Court decision cited above. On the money claim, Mr. Basak relied on Clause-24 that would attract quantified damage of Rs.5,000/- (Rupees five thousand) per day on the agreement being terminated e....
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....e grievance of the appellant was not justified that they were not given adequate opportunity. Adjournments galore were taken. The arbitration continued for about one and half years. Though the Statement of Claim was filed on July 16, 2007 the Award was published on December 17, 2009. The allegation of undue haste was far from truth. The Delhi High Court decision in the case of Wazir Chand Karan Chand (supra) and the Apex Court decision in the case of S.L. Kapoor (supra) were cited by Mr. Mukherjee. In paragraph 8 of the Delhi High Court decision would show, "Thread of natural justice should run through the entire arbitration proceedings and the principles of natural justice require that the person who is to be prejudiced by the evidence ought to be present to hear it taken to suggest cross-examination or himself to cross-examine and to be able to find evidence, if he can, that shall meet and answer it, in short to deal with in an ordinary course of legal proceedings." In case of S.L. Kapoor (supra) the Apex Court observed "where on the admitted or indisputable facts only one conclusion is possible and under the law only one penalty is permissible, the Court may not issue its ....
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....ellant would have to deposit the duplicate key of the doors with the society that would remain with them. It was agreed further that the appellant would deposit the key to the security or any authorised representative after the close of the day and collect the key on the next day. Interpreting Clause 3 it could not be said, the appellant was in exclusive possession. iii) If the appellant were not in exclusive possession neither he would be entitled to claim protection under the tenancy law as a tenant or property law as permissive occupant with exclusive possession. iv) The agreement admittedly expired on December 13, 2006. He remained in permissive possession up to May 2007 when the society asked him to vacate. As per Clause 24, he would attract penalty of Rs.5,000/- (Rupees five thousand) per day as liquidated damage. On the above factual matrix, let us apply the law on the subject. Three decisions, Mr. Mukherjee cited would relate to permissive occupation. In the case of Smt. Rajbir Kaur (supra) the Apex Court considered dispute under the tenancy law where landlord sought eviction of the tenancy. Paragraph 10 and 23 were relied upon. The Apex Court in paragraph 10 obser....
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....f C.M. Beena (supra). Mr. Mukherjee relied on Boozallen & Hamilton Inc. (supra) on the issue of arbitrability. It was a case of mortgage. The Apex Court held, "an agreement to sell or an agreement to mortgage does not involve any transfer of right in rem but creates only a personal obligation." If a specific performance was sought either with regard to sale or mortgage the issue could be resolved through arbitration. However, when such claim would also involve possession that would be outside the scope. When it was a case of transfer either through sale or mortgage or enforcement of any such right that would be a right in rem attracting the adjudication of civil forum as it would no longer be an action in personam. Mr. Basak also relied upon this decision, particularly paragraphs 34, 35 and 36, those are quoted below : "34.The term "arbitrability" has different meanings in different contexts. The three facets of arbitrability, relating to the jurisdiction of the Arbitral Tribunal, are as under: (i) Whether the disputes are capable of adjudication and settlement by arbitration? That is, whether the disputes, having regard to their nature, could be resolved by a privat....
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....reed upon arbitration as the forum for settlement of such disputes. 36. The well-recognised examples of non-arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary maters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special status where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes." Paragraph-36 clearly excluded eventuality, the scope of arbitration that would include eviction or tenancy matters. He contended that clause 3 of the agreement would make it clear that it was not an agreement against tenancy. He also relied upon the decision of the case of Naraindas Lilaram Adnani (supra) particularly paragraphs 8, 9 and 10. In paragraph-8 the Apex Court observed "it would not now be fair to direct the appellant t....