Case: M/S ARUN KUMAR KAMAL KUMAR &amp; ORS.  Vs. M/S SELECTED MARBLE HOME &amp; ORS.

the business was not running and no commission payments were made. Thus, it was argued that the findings of fact recorded by the courts below do not call for interference in this appeal. 11. We have carefully considered the submissions of the learned counsel made at the Bar and perused the materials placed on record. 12. As per Clause 10 of both the Agreements, in case of any dispute, it was incumbent on the appellants to handover vacant possession of the premises to the respondents. On this issue, it is clear that disputes had arisen between the parties. However, it is an admitted position that possession of the premises was not handed over to the respondents by the appellants until the arbitration proceedings had commenced and has, in fact, only been handed over on 13 March 2000. Therefore, the Arbitrator framed Issue No. 15-A regarding damages payable to the respondents. The Learned Arbitrator has rejected the plea of the appellants that they had to close the business because of the obstructionist tactics adopted by the respondents and for that reason the business activities remained closed from April, 1991 to November, 1995. On a detailed consideration of the materials on record, the Learned Arbitrator had come to the conclusion that the appellants are liable to pay the damages. 13. This question was again considered by the learned Single Judge. The learned Single Judge noticed the plea of the appellants that the transaction between the parties was of tenancy and not licence. After dealing with this plea, the learned Single Judge upheld the award of damages by the Learned Arbitrator. The finding of the learned Single Judge in this regard is in paragraph 20 which reads as under: I find it has been the case of the respondents that the transaction between the parties was of tenancy and not of a licence. It is so pleaded in the objections also. Even if the respondents consider themselves to be tenants at the rent equivalent to commission @ 11% per month, the respondents would under Section 108 of the Transfer of Property Act have continued to remain liable for payment of rent, notwithstanding not carrying on business in the premises. It has been held by the Division Bench of this Court in State Bank of Patiala v. Chandermohan – 1996 RLR 404 held that a tenant continues to be liable for rent/damages even if the premises are destroyed and the only option of the tenant if desirous to stop the running of rent is to surrender the premises. Thus as per the respondents own understanding of the relationship also, the respondents were liable for payment of rent. 14. We do not find any error in the said finding of the learned Single Judge. 15. After finding the appellants liable to pay damages, the Learned Arbitrator has arrived at the quantum of damages as per the statement of accounts, furnished by the appellants based on their audited accounts, that too after deduction of TDS for a period of pre-closure i.e. 15.08.1990 to 22.02.1991 and post closure i.e. November 1995 to November 1997. The payment of damages for the closure period i.e. March 1991 to October 1995 has been arrived at as an average of commission actually paid pre closure and the commission payable post closure as per the statement of accounts of the appellants, after deducting TDS. 16. There is also no merit in the contention of the learned senior counsel for the appellants that the appellants statement of accounts erroneously deducted expenses incurred on electricity and water from the sales instead of deducting the same from commission of the respondents. The admitted position is that there was no electricity supply and the appellants used generator set for electricity. The contention of the appellants is that the expenses incurred towards generator ought to have been deducted from the gross commission payable and not from the gross sale amount and then the commission should have been calculated at the contractually stipulated rates of 6% and 5%. This plea has been dealt with by learned Single Judge as under: The other mistake pointed out of deduction of expenses on diesel generator set from sales rather than from commission payable, even if made out, also cannot be permitted to be withdrawn at this stage especially when the respondents have already deducted and paid taxes on the basis of said statement. Under the agreement the electricity and water charges of the premises were to be borne by the petitioners. Admittedly, the premises/shop on reopening were without electricity and diesel generator set arranged. There is no dispute that the expenses therefor were to be borne by the petitioners. The respondents while furnishing the statement to arbitrator, did direct the same. The objections now that such deduction was wrongly done is not tenable? This contention has been raised on the ground that the statement filed by the appellants was not correct since the appellants were only liable to pay commission at 6% and 5% under two agreements on the gross sales and the responsibility to provide electricity was on the respondents. We are of the view that the appellants cannot be permitted to withdraw their own statement made before the Learned Arbitrator which is predicated to on a mode of calculation, the same not being disputed by the respondents and accepted by the Arbitrator as correct. We are also of the view that the appellants are not justified in raising a contrary plea other than what was their defence and statement of counter claim in the arbitral proceedings. 17. We are also of the view that the Learned Arbitrator has rightly relied on the appellants statement of accounts for awarding commission for the period when the business was restarted post closure between November 1995 and November 1997. The formula adopted by the Learned Arbitrator for arriving at this commission amount as well as the damages has been accepted by learned Single Judge as also the Division Bench of the High Court.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. As per Clause 10 of both the Agreements, in case of any dispute, it was incumbent on the appellants to handover vacant possession of the premises to the respondents. On this issue, it is clear that disputes had arisen between the parties. However, it is an admitted position that possession of the premises was not handed over to the respondents by the appellants until the arbitration proceedings had commenced and has, in fact, only been handed over on 13 March 2000. Therefore, the Arbitrator framed Issue No. 15-A regarding damages payable to the respondents. The Learned Arbitrator has rejected the plea of the appellants that they had to close the business because of the obstructionist tactics adopted by the respondents and for that reason the business activities remained closed from April, 1991 to November, 1995. On a detailed consideration of the materials on record, the Learned Arbitrator had come to the conclusion that the appellants are liable to pay the damages.13. This question was again considered by the learned Single Judge. The learned Single Judge noticed the plea of the appellants that the transaction between the parties was of tenancy and not licence. After dealing with this plea, the learned Single Judge upheld the award of damages by the Learned Arbitrator. The finding of the learned Single Judge in this regard is in paragraph 20 which reads as under:I find it has been the case of the respondents that the transaction between the parties was of tenancy and not of a licence. It is so pleaded in the objections also. Even if the respondents consider themselves to be tenants at the rent equivalent to commission @ 11% per month, the respondents would under Section 108 of the Transfer of Property Act have continued to remain liable for payment of rent, notwithstanding not carrying on business in the premises. It has been held by the Division Bench of this Court in State Bank of Patiala v. Chandermohan – 1996 RLR 404   held that a tenant continues to be liable for rent/damages even if the premises are destroyed and the only option of the tenant if desirous to stop the running of rent is to surrender the premises. Thus as per the respondents own understanding of the relationship also, the respondents were liable for payment of rent.14. We do not find any error in the said finding of the learned Single Judge.15. After finding the appellants liable to pay damages, the Learned Arbitrator has arrived at the quantum of damages as per the statement of accounts, furnished by the appellants based on their audited accounts, that too after deduction of TDS for a period of pre-closure i.e. 15.08.1990 to 22.02.1991 and post closure i.e. November 1995 to November 1997. The payment of damages for the closure period i.e. March 1991 to October 1995 has been arrived at as an average of commission actually paid pre closure and the commission payable post closure as per the statement of accounts of the appellants, after deducting TDS.16. There is also no merit in the contention of the learned senior counsel for the appellants that the appellants statement of accounts erroneously deducted expenses incurred on electricity and water from the sales instead of deducting the same from commission of the respondents. The admitted position is that there was no electricity supply and the appellants used generator set for electricity.This contention has been raised on the ground that the statement filed by the appellants was not correct since the appellants were only liable to pay commission at 6% and 5% under two agreements on the gross sales and the responsibility to provide electricity was on the respondents. We are of the view that the appellants cannot be permitted to withdraw their own statement made before the Learned Arbitrator which is predicated to on a mode of calculation, the same not being disputed by the respondents and accepted by the Arbitrator as correct. We are also of the view that the appellants are not justified in raising a contrary plea other than what was their defence and statement of counter claim in the arbitral proceedings.17. We are also of the view that the Learned Arbitrator has rightly relied on the appellants statement of accounts for awarding commission for the period when the business was restarted postclosure between November 1995 and November 1997. The formula adopted by the Learned Arbitrator for arriving at this commission amount as well as the damages has been accepted by learned Single Judge as also the Division Bench of the High Court.