FAO No.64 of 2010 Page 1 of 4 UNREPORTABLE * IN THE HIGH COURT OF DELHI AT NEW DELHI FAO No.64/2010 Date of Decision: April 27, 2010 RELIANCE SECURITIES LTD ..... Appellant through Mr. Joydip Bhattacharya, Advocate versus JAG MOHAN CHHABRA & ORS ..... Respondents through Mr. Vibhu Shankar, Advocate with Mr. R. Vishal Dass, Advocate CORAM: HON'BLE MISS JUSTICE REKHA SHARMA 1. Whether the reporters of local papers may be allowed to see the judgment? No 2. To be referred to the reporter or not? No 3. Whether the judgment should be reported in the „Digest‟? No REKHA SHARMA, J. (ORAL) This appeal has been preferred against the order of Additional District Judge, Shri N.P.Kaushik dated February 15, 2010 directing the appellant herein to hand over possession of the suit premises to the respondents on February 20, 2010 in the presence of Shri Vinod Kumar Sachdeva, Advocate who has been appointed as local commissioner in the case. By the same order, the respondents have been directed to deposit security amount as per lease deed on or before February 19, 2010 and show the receipt thereof to the local commissioner before the possession is handed over before him. FAO No.64 of 2010 Page 2 of 4 It is not in dispute that the lease deed between the parties has come to an end and the premises in question are lying locked since April 30, 2009. The appellant is refusing to hand over the possession of the premises to the respondents on the ground that the respondents are liable to refund security of the appellant amounting to Rs.9,00,000/-. In this regard, reference has been made by learned counsel for the appellant to clause I(4) of the lease agreement dated May 01, 2006 which runs as under:- “4. In the event, the Lessors fail to refund the Security Deposit specified above as per the terms of this lease agreement on termination of the lease by efflux of time or upon its early termination, the Lessors shall pay interest at the rate of 18% p.a. compounded monthly for the delayed period and the Lessee shall be entitled to retain the possession of the premises till the amount is refunded by the Lessors. The Lessors shall not have any claim on the rent when the Lessee is in possession of the premises for non-refund of Security Deposit, duly affirmed by the Lessors. This shall be without prejudice to the rights of the Lessee to seek appropriate remedy in law or otherwise for repayment of the Security Deposit.” On the strength of the aforementioned clause, it is contended that the appellant is well within its right in not handing over the possession to the respondents. On the other hand, it is submitted by learned counsel for the respondents that the appellant had agreed to pay Service Tax to the respondents, which comes to about Rs.10 lacs and despite having so agreed, the appellant has not paid the Service Tax and hence, the respondents have withheld the security payable to the appellant. It is also the case of the respondents that as per clause III(3) of the lease agreement, if after the determination of the lease the appellant fails to hand over the peaceful and vacant possession to the lessors, the FAO No.64 of 2010 Page 3 of 4 lessee shall be liable to pay an amount of Rs.20,000/- per day to the lessors, from the date of the expiry of the lease agreement. It is submitted that in view of this clause, the respondents are entitled to claim Rs.20,000/- per day as damages from the date of determination of the lease agreement. This, according to the respondents, is an additional reason why the security amount has not been refunded. It is not in dispute between the parties that the lease agreement contains an arbitration clause and it provides that in case of a dispute between the lessors and lessee, the same shall be referred to the arbitration by a panel of three arbitrators, one each to be appointed by the parties and the third arbitrator to be appointed by the prior two appointed arbitrators. From what has been noticed above, it is clear that the disputes have arisen between the parties. Whereas, according to the appellant, it can retain the possession of the premises even after the determination of the lease agreement if the security amount is not refunded to it, as per the respondents the appellant having not paid the Service Tax, the security amount is liable to be adjusted towards any claim which they have against the appellant towards the Service Tax and also towards the damages in terms of the clause III(3) of the lease deed. I am informed that the parties have already invoked the arbitration clause and two out of three arbitrators have been appointed and the third will be appointed in terms of the arbitration clause. FAO No.64 of 2010 Page 4 of 4 In so far as the impugned order passed by the learned Additional District Judge is concerned, I feel that in the facts and circumstances of the case, the order so passed is just and proper. There is no point in keeping the premises vacant and not allowing the respondents to take possession of the same when admittedly the lease agreement has come to an end. In so far as other claims of the parties against each other are concerned, they shall be adjudicated upon by the arbitrators and the parties shall be governed by the outcome of the same. The appeal has no merit. The same is accordingly dismissed. It is stated that the respondents have already deposited the security amount with the trial Court. The appellant is directed to hand over the possession of the premises to the respondents within 15 days from the date of the present order in the presence of the local commissioner. The appellant is also directed to pay the fee of the local commissioner. Dasti. REKHA SHARMA, J. APRIL 27, 2010 ka