In the Court of Ms. [ENTITY] : Additional District Judge -03, South District, Saket Court Complex, New Delhi. Arbt No.: 20662/2016 CNR No : DLST01-000588-2013 In the matter of :- [ENTITY], (now Viom Networks Ltd.) Registered office at: D-2, 5th Floor, Southern Park, Saket Place, Saket New Delhi-110017 Petitioner VERSUS Smt. [ENTITY], W/o [ENTITY], R/o Village Rajpur Khurd, P.O. Maidan Garhi, New Delhi -110068 Respondent Date of institution : 19.03.2013 Reserved for order : 31.05.2017 Date of decision : 03.06.2017 Appearance: Sh. [ENTITY], Counsel for petitioner. Sh. [ENTITY], Counsel for respondent. JUDGMENT
1. This petition under [SECTION] of the [ACT] (hereinafter referred to as 'the Act') is made on behalf of the petitioner [ENTITY] (now Viom Networks Ltd.) for setting aside the Arbitral Award dated 19.1[SECTION]012, passed by Sole Arbitrator, in Arbitration case titled as "[ENTITY] versus [ENTITY]".
2. Facts necessary for disposal of present petition are that petitioner is in the business of providing value added services and a passive infrastructure facilities to telecommunication service providers and has an IP-1 registration from Department of Telecommunications, Government of India as "Infrastructure Provider". The petitioner entered into a Leave & Licence Agreement on 04.07.2008 with the respondent to install a tower at the terrace of the building belonging to the respondent for a period of 20 years. It was agreed that license fees shall be Rs.13,000/- per month which will commence from 01.09.2008 i.e. effective from the expiry of license fee free period of 60 days. At the time of execution of agreement, the petitioner will pay an interest free refundable security of Rs.39,000/-. It was also agreed in clause 2.3 of the agreement that if the licence comes to an end, whatsoever, in accordance with the terms of lease & licence agreement, the said security deposit was required to be refunded by the respondent to the petitioner without any necessity of the petitioner making any formal demand. It was also agreed that the petitioner will surrender the licence by way of handing over the said premises in a vacant condition after removing its tower and other properties subject to normal wear & tear only when and / or after the receipt of security deposit by the respondent by means of a demand draft or pay order payable at its office or such other place as the petitioner would have intimated in writing. Upon the failure on the part of the respondent in refund of security amount, notwithstanding the licence coming to an end, the petitioner having offered surrender of premises in vacant condition, the respondent was required to pay to the petitioner an interest of such security deposit @18% compounded on a monthly basis during the period of such delay namely from the date of offer to vacate the sadi premises till the date of repayment of security deposit and the petitioner was not liable to pay licence fee and other charges arising out of continued occupation of the said premises by it on account of said default on the part of the respondent i.e. in not refunding the security amount and such continued occupation was to be treated as extended licence without payment of any licence fee and other charges.
3. It is further averred that it was also agreed that in case the petitioner for any reason which includes but not limited to technical feasibility, desire to vacate and surrender the licence, could do so by giving 6 months written notice to the respondent. Further, upon such a notice being given by the petitioner to the respondent, the respondent was required/ responsible to give due adjustment or abatement of the rent for 6 months from and out of the said security deposit remitted by the petitioner with the respondent. It is further agreed that in the even the petitioner decides to terminate the said agreement on various business, technical and commercial reason, the petitioner was entitled to remove the tower installed on the said premises by giving 30 days prior written notice to the respondent without any interruption from the respondent and in such circumstances the petitioner was not required to pay any fee whatsoever for the remaining period and respondent was required to refund the amount paid as refundable security deposit immediately after the expiry of notice period of 30 days.
4. It is averred in the petition by the petitioner that the petitioner, before expiry of two months period, due to some technical and policy related reasons, could not install the cell tower in the premises. The same was duly communicated to the respondent. It is also alleged that the petitioner had only made some minor additions without making any substantial changes/ damages in the original structure so that it could take the load of the cell tower. It is further stated that it was verbally agreed that if the technical problems being faced by the petitioner is sorted out then only the petitioner will consider the installation of cell tower and would then only be in a position to fulfill the terms of leave and license agreement and start paying the licence fee to the respondent. It is also alleged that the petitioner made it clear to the respondent that there is a possibility of not installing the cell tower and suggested the cancellation of agreement. The respondent, however, requested not to formally cancel the agreement and to explore the possibility of installation of cell tower. It is also agreed that petitioner may leave any civil structure erected by it at the said premises in "as is where" condition, if the Licensor so desires or pay a sum of Rs.50,000/- if it is ground based tower and Rs.30,000/- if it is roof top tower or a sum equivalent to (10) ten months Licence fee, calculated on the basis of the Licence fee paid in the immediate preceding month, whichever is higher. The Licensor confirms and undertakes that the Licensor shall not make any claim or dispute in respect of the abovesaid at any point of time.
5. It was case of the petitioner that respondent did not allow the petitioner to take the material lying on the rooftop of the premises as the sole motive of the respondent was to avoid losing the security deposit and monthly license fee. It is further alleged that the petitioner on 15.07.2009 issued a formal notice terminating the agreement dated 04.07.2008. It is alleged that sending of the abovesaid was only a formality to make the respondent understand that there was no possibility of installation of cell tower in the premises.
6. It is alleged by the petitioner that the respondent initiated the process of recovery of licence fee etc. only after receiving the notice of termination dated 15.07.2009 i.e. by sending notice dated 15.01.2010. Though the respondent had right to terminate the agreement after six months from 01.09.2008 but the respondent did not terminate the agreement. Pursuant thereto the respondent preferred Arbitration petitioner before Hon'ble High court of Delhi for appointment of arbitrator, vide petition bearing [CASE NUMBER], Sh. [ENTITY] was appointed as Sole Arbitrator by Hon'ble High Court who passed the impugned award dated 19.1[SECTION]012 thereby granting license fees till 2010 and damages @ Rs.13,000/- per month since 2010 till handing over of vacant possession of the premises. He has also granted damages of Rs.2,00,000/-.
7. Aggrieved by this, the petitioner has challenged the impugned award on the ground that learned sole arbitrator has failed to appreciate the terms as contained in clause no(s) 2.3, 3.1, 9.1 and 9.2 of the [ACT]. Learned arbitrator has failed to appreciate that the terms and conditions of the agreement clearly stipulates that in the event of termination, there would be abatement of any fee payable under the leave & licence agreement for the remaining period. Further as per [SECTION], upon termination the parties were released for any liability with respect to any matter under the leave & license agreement. It is further argued that learned sole arbitrator has awarded damages to the tune of Rs.2,00,000/- merely on surmises and conjunctures. The learned arbitrator has further/ additionally granted @Rs.13,000/- per month as damages w.e.f. 15.01.2010 till handing over the vacant possession of the rooftop of premises in question, which is contrary to the terms and conditions as per clause 9.2 (ii) of the agreement. It is further contended that only small civil work was done by the petitioner in order to strengthen the existing structure and the same was never objected to by the respondent prior to filing of the notice/claim. The learned arbitrator has failed to appreciate that the respondent, in her alleged letter dated 05.1[SECTION]009, had nowhere mentioned about any damages being caused to the building and allowing the petitioner to remove the material from the premises or repair the alleged damages. It is further contended that the actual possession of the roof/premises remained with the respondents at all times and not with the petitioner and therefore awarding of damages for usage and possession is not justified.
8. The respondent contested the present petition filed by the petitioner inter alia raising pleas that the learned arbitrator has followed the due process of law and entire proceedings have been done inconsonance of principles of natural justice and by affording sufficient opportunity to both the parties to lead evidence. It is further contended that no security amount was ever paid to the respondent which can be gathered from the cross- examination of RW1 conducted on 19.07.2012 wherein he had admitted that he has verified from the office i.e. petitioner that security deposit was not paid to the respondent. The respondent has filed counter-objections/ counter-claim that while deciding issue no. 3, the learned arbitrator has not awarded any interest on the award amount and it is liable to be modified as there is a specific provision under the Act,1996 wherein while passing the arbitral award, the arbitral tribunal has the power to award interest as per [SECTION] of the Act,1996.
9. I have arguments advanced by learned counsel for parties and gone through the arbitral record.
10. The scope of [SECTION] of [ACT] is limited to the stipulations contained in [SECTION] of the Act,1996. In the case of [PRECEDENT] in paragraphs 52, 58, 59 and 60 the Hon'ble Apex Court held as follows:-
"52. The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, scheme of the provision aims at keeping the supervisory role of the court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the court's jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it.
58. In [ENTITY] Power Co. Ltd. v. General Electric Co. this Court laid down that the arbitral award can be set aside if it is contrary to (a) fundamental policy of Indian Law, (b) the interests of India; or (c) justice or morality. A narrower meaning to the expression 'public policy' was given therein by confining judicial review of the arbitral award only on the aforementioned three grounds. An apparent shift can, however, be noticed from the decision of this Court in [PRECEDENT] (for short 'ONGC'). This Court therein referred to an earlier decision of this Court in [PRECEDENT] wherein the applicability of the expression 'public policy' on the touchstone of [SECTION] of the [ACT] and [SECTION] of the [ACT] came to be considered. This Court therein was dealing with unequal bargaining power of the workmen and the employer and came to the conclusion that any term of the agreement which is patently arbitrary and/ or otherwise arrived at because of the unequal bargaining power would not only be ultra vires [SECTION] of the [ACT] but also hit by [SECTION] of the [ACT]. In ONGC (supra), this Court, apart from the three grounds stated in [ENTITY] (supra), added another ground thereto for exercise of the court's jurisdiction in setting aside the award if it is patently arbitrary.
59. Such patent illegality, however, must go to the root of the matter. The public policy violation, indisputably, should be so unfair and unreasonable as to shock the conscience of the court. Where the Arbitrator, however, has gone contrary to or beyond the expressed law of the contract or granted relief in the matter not in dispute would come within the purview of [SECTION] of the Act. However, we would consider the applicability of the aforementioned principles while noticing the merit of the matter.
60. What would constitute public policy is a matter dependant upon the nature of transaction and nature of statute. For the said purpose, the pleadings of the parties and the materials brought on record would be relevant to enable the court to judge what is in public good or public interest, and what would otherwise be injurious to the public good at the relevant point, as contradistinguished from the policy of a particular Government. (See [PRECEDENT],)"
11. In the case of [PRECEDENT], Division Bench of Hon'ble Court held, inter alia, in an application under [SECTION], the Court shall not exercise appellate powers but that proposition cannot be extended to the extent of providing an umbrella to those awards where justice has been a casualty.
12. Further, in the case of [PRECEDENT] in paragraph 14 of the judgment held as follows:-
"14. Considering the declaration of the law by the Supreme Court in [PRECEDENT] (Supra), I find that the present case is not one where the arbitral tribunal has ignored the terms of the contract. What the arbitral tribunal has done is to arrive at a particular interpretation after considering the relevant terms of the contract and, just because the interpretation that has been arrived at by the tribunal is not palatable to the petitioner, is not ground enough for interfering with the award. Such interference can only be justified where the award is contrary to the substantive provisions of law or the provisions of the Act or if it is against the terms of the contract. The award must be so patently illegal that it goes to the root of the matter. If the illegality is of a trivial nature, the award cannot be said to be against public policy. The award must be so unfair and unreasonable that it shocks the conscience of the Court. It is then that such an award can be said to be opposed to Public Policy of India. I do not find the present award to contain any such patent illegality, much less an illegality which goes to the root of the matter. The award is also not of such a kind that it shocks the conscience of the Court. The arbitral tribunal has merely interpreted [SECTION] and [SECTION] in a manner which is plausible. This being the case, no interference is called for."
13. In the case of [PRECEDENT], Hon'ble Delhi High Court in paragraph 9 of the judgment held as follows:-
"9. Arbitrators are not required to give elaborate judgments dealing with each and every ground or reason. They have to consider the entire facts in proper perspective and give an indication of the grounds and reasons that prevailed upon them to decide the matter. Law requires arbitrators to give reasons and nothing more. If the reasons are clear and indicate the basis for the decision, the award should be upheld and cannot be set aside. Law does not require arbitrators to give detailed judgments dealing with each and every contention raised by the parties. What is required to be indicated is the basis on which the arbitrators have taken a particular view. Arbitrators need not be legal luminaries, well versed with legal skills and having benefit of legal training. Arbitrators can be men from the trade or relatives, etc. and enjoy substantial latitude and flexibility in deciding matters in a just and equitable manner. If the arbitrators have set out grounds and reasons in the award why they are taking a particular view while deciding claims, the award will be a reasoned award. Requirement in law is that the arbitrators must give reasons. It is not the requirement of [SECTION] of the Act that the arbitrator must elaborately discuss all contentions raised by the parties. To satisfy the requirements of the Act, reasons should be intelligible and comprehensible, but need not be unnecessarily lengthy or elaborate. Reasons should indicate and provide a precise link between questions/issues and the conclusion reached in regard thereto. It is sufficient if the arbitrator makes his mind clear in the award on what and why decision is made. Short intelligible indications of the grounds should be discernible to indicate the mind of the arbitrator. Sufficiency of reasons depends upon facts of each case."
14. In the case of [PRECEDENT], Hon'ble Delhi High Court held that when the view taken by the Arbitrator is a plausible view, it is not permissible for the court to interfere with the Arbitrator's view merely because another view of the matter is possible. It is not permissible for the Court to re-appreciate the evidence placed before the Arbitrator. It is well-settled that the Arbitrator is the best Judge of the quality as well as quantity of evidence and it will not be for the Court to take upon itself a task of being a Judge of the evidence before the Arbitrator.
15. Reverting back to the case in hand, the learned arbitrator has awarded the following claims to the respondent:
a) A sum of Rs. 2,14,500/- has been awarded as a license fee for the period commencing from 01/09/2008 till 15/01/2010 at the rate of Rs. 13,000/- per month. The commencing date has been started from as provided in the agreement dated 04/07/2008. The date has been taken as 6 months after the date of notice being dated 15/07/2009;
b) A sum of Rs.2,00,000/- has been awarded in the form of damages to the building for carrying out the necessary repairs.
c) The claim for the future monthly rent at the rate of Rs. 13,000/- has been awarded with effect from 15/01/2010 to the time they can position of the rooftop of the demised premises is handed over to the claimant.
16. Appropriately guided by the legal position enumerated in the judgments (supra) as discussed in preceding paragraphs, I have given careful consideration to the aforesaid claims awarded by the learned Sole Arbitrator and find that there is no infirmity in respect of the claim mentioned at point No. (a) and (b) above. The learned arbitrator has duly considered the factual gamut of entire facts and circumstances put before him and gave an indication of the grounds and reasons that prevailed upon him to give reasoning. There is nothing on record which is suggestive of the fact that the security amount was ever deposited by the petitioner with the respondent. The learned arbitrator has duly considered the relevant provisions of [SECTION] and [SECTION] of the agreement and ultimately came to the conclusion that respondent is entitled for the recovery of Rs.214,500/- as licence fee @Rs.13,000/- per month w.e.f. 01.09.2008 till 15.01.2010. Further, the learned arbitrator, while awarding damages, has taken note of cost of construction prevailing in the market and area of the rooftop in question and thereafter awarded a sum of Rs.2,00,000/- as damages to carry out repair of the building. The learned Sole Arbitrator relied upon the testimony of Ms. [ENTITY] which has remained unimpeached. The arbitrator also relied upon photographs of the impugned structure and also was persuaded from the fact that no witness was produced by the tenant. There is nothing to interfere into the impugned award in view of the settled law that the award of the arbitrator may not be interfered with on the ground that same was erroneous or on the ground that a different view could be taken on merits of the controversy.
17. However, in respect of the claim (c), it need to be appreciated that the leave & licence agreement between the parties as per clause 9.2 contemplates that in an event licencee intends to vacate the premises and also intends to leave the structure placed on the licenced premises on as it is and where it is basis, the liability of the licencee in case of rooftop tower would be restricted to Rs.30,000/- or a sum equivalent to 10 months of license fees, whichever is higher. In the present case the monthly license fees is admittedly Rs.13,000/- and for a period of 10 months the total sum would be Rs.130,000/-. Ld. Sole arbitrator was persuaded by the fact that since building material was still lying at the rooftop and the licensee vide letter dated 15/07/2009 promised to remove the equipment installed which has not been done, therefore awarded licence fees at the rate of Rs.13,000/- commencing from the date 15/01/2010 to the vacant possession is handed over. In this regard, I find that the awarded claim is not in accordance with the agreement between the parties which clearly lays down as discussed above that the licensee can leave behind any structure on as is where basis and pay to the licensor a sum equivalent to 10 months license fees. Thus, in the present case when the licensee has terminated the licence with effect from 15/01/2010 and has left behind the structure as such, there remains no question of handing over the possession in a vacant format. There is no justification of insisting upon handing over of the vacant possession. This claim is not justified and hence need to be disallowed. The maximum liability as per the leave & licence agreement between the parties for leaving the structure behind at the rooftop cannot exceed Rs.130,000/-. The award suffers infirmity to the extent that the claim for leaving behind alleged structure need to be restricted to the aforesaid amount of Rs.130,000/- and modified accordingly.
18. Now coming to counter-claim as sought by the respondent, it is evident from impugned arbitral record that learned Arbitrator has duly observed that there is no provision in the leave & licence agreement providing for payment of interest on the unpaid licence free, therefore, the respondent is not entitled for interest on the unpaid licence fee. It is relevant to refer here the decision in the case of [PRECEDENT] where it is observed that if there is a bar against payment of interest in the contract, the Arbitrator cannot award any interest for such period.
19. In view of the afore-stated reasons, there is no ground for setting aside of the impugned award, however, the impugned award is modified to the extent that respondent no. 1 is entitled for Rs.1,30,000/- from the petitioner instead of sum awarded for the future monthly rent @Rs.13,000/- w.e.f 15.01.2010 till the time the petitioner hand over the vacant possession of rooftop of the premises in question to the respondent no. 1. No order as to costs.
File be consigned to record room.
Announced in the Open Court on 03.06.2017 ([ENTITY]) Additional District Judge-03 South District / Saket Court Complex New Delhi