Bharat Sewa Sansthan vs U. P. Electronics Corporation Limited

2. Background facts in a nutshell are as follows:

3. It is the case of the appellant-Sansthan that in the month of June, 1981 the respondent-Corporation expressed its requirement to the appellant-Sansthan for some additional accommodation on the first floor of the building adjoining to the accommodation which the respondent-Corporation had earlier occupied for setting up a Marketing Office and a Registered Office of M/s Uptron India Limited, which is the subsidiary of the respondent-Corporation. M/s Uptron India Limited was established for the manufacturing of electronic equipments and components, such as the television, computer, capacitors, process control, EPABX systems etc. It was mutually agreed between the appellant-Sansthan and the respondent-Corporation that additional accommodation measuring 3000 sq. ft. in area shall be leased out to the respondent-Corporation w.e.f. 25.06.1981 on a monthly rent of Rs. 9,750/- i.e. @ Rs. 3.20 per sq. ft., which comprised of (a) basic rent @ RS. 2/- per sq. ft. amounting to Rs. 6000/- and

4. It is further the case of the appellant-Sansthan that the tenancy of both the portions of the accommodation let out to the respondent-Corporation had continued without any interruption from the respective dates of commencement of lease, subject to periodical escalation of the rent including other charges on the basis of mutual agreement with the result that the consolidated monthly rent of the two portions of the accommodation let out to the respondent-Corporation had risen to Rs. 79,083.75p. (Rupees Seventy nine thousand and eighty three and seventy five paise only) well before 29.07.1999, on which day the lease was determined. The appellant-Sansthan on 10.03.2000 filed Suit No. 16/2000 for eviction and recovery of arrears of rent against the respondent-Corporation in the Court of learned Additional District Judge (Special Judge, E.C. Act) at Lucknow. In the said suit, the respondent-Corporation presented two applications before the Trial Court before filing of the written statement. The first application being C-12 was moved under Section 8(1) of the Arbitration and Conciliation Act, 1996 (for short "Arbitration Act") and the second application No.C-17 was filed under Order XI Rule 14 of the Civil Procedure Code for summoning of the original lease deeds from the appellant- Sansthan.

5. Learned Additional District Judge (Special Judge, E.C. Act), Lucknow, had rejected both the above-said applications. Being aggrieved, the respondent-Corporation has assailed the order of the Trial Court by way of Writ Petition before the High Court. The learned Single Judge of the High Court allowed the writ petition and held that the learned Trial Court has wrongly rejected the application under Section 8 of the Arbitration Act as the subject-matter of the suit is arbitral with further direction to the learned Additional District Judge (Special Judge, E.C. Act), Lucknow, to refer the matter to arbitration and both the parties may appoint their Arbitrator as per the arbitration clause in the lease agreement.

21. It is not in dispute that on 11.11.1980 the respondent- Corporation took from the appellant-Sansthan an area measuring 14,925 sq. ft. on monthly rent under a lease agreement. In June 1981, the appellant-Sansthan let out additional accommodation measuring 3000 sq. ft. area on monthly rent for setting up Marketing Office of M/s Uptron India Limited, which is the subsidiary of the respondent- Corporation. The appellant-Sansthan filed suit for recovery of arrears of rent and ejectment of the respondent-Corporation from the demised premises. In the trial court, the respondent- Corporation preferred two applications, i.e. one under Section 8(1) of the Arbitration Act and second under Order XI Rule 14 CPC for summoning of the original lease deed from the appellant-Sansthan. The learned Additional District Judge (Special Judge, E.C. Act), Lucknow, has rejected both the applications. The High Court in writ petition filed by the respondent-Corporation against the order of the trial court, allowed the application of the respondent-Corporation filed under Section 8(1) of the Arbitration Act. It was the specific case of the respondent-Corporation before the High Court that the original agreements are in the possession of the appellant- Sansthan, whereas the stand of the appellant-Sansthan was that the original agreements are not in its possession. The respondent-Corporation placed on record of the trial court photocopies of the agreements along with an application under Section 8(1) of the Arbitration Act. The High Court, in our view, has rightly held that the photocopies of the lease agreements could be taken on record under Section 8 of the Arbitration Act for ascertaining the existence of arbitration clause. Thus, the dispute raised by the appellant-Sansthan against the respondent-Corporation in terms of the arbitration clause contained in the lease agreement is arbitral.

Since the undertaking has not been complied by M/s. U.P. Electronics Corporation Limited further time is given to them to comply with the undertaking by three weeks from day. The clause (c) of the Memorandum shall be complied with in full and the entire portion shall be handed over to the appellant within that time and also the construction of the wall shall be completed in time.

Call after four weeks for reporting compliance."

26. In this view of the matter, we do not find any perversity or infirmity in the order of the High Court to warrant any interference.

27. For the afore-stated reasons, the appeal deserves and it is accordingly dismissed. The order of the learned Single Judge dated 14.09.2004 passed in Writ Petition No.3388 (M/S) of 2004 shall stand affirmed. However, the parties are left to bear their own costs.

28. Before parting, we may make it clear that any observation made in this judgment shall not be construed as an expression of opinion on the merits of the case. The dispute raised by the parties shall be adjudicated upon by the Arbitrator(s) on its own merit in accordance with law.