Case: Bharat Sewa Sansthan Vs. U.P. Electronics Corpn. Ltd

Background facts in a nutshell are as follows :Bharat Sewa Sansthan [hereinafter referred to as the ‘appellant-Sansthan] is a charitable society registered under the Societies Registration Act. The main object of the appellant-Sansthan is to work for the social, economic, educational and cultural upliftment of the people. The appellant-Sansthan is the sole and exclusive owner of multi-storeyed building known asBhanu Gupta Smarak Nav Chetnalocated at No. 10, Ashok Marg in the city of Lucknow (U.P.). On 11.11.1980, the respondent-Corporation took for office accommodation an area measuring 14,925 square feet on the first floor of the multi-storeyed building of the appellant-Sansthan on monthly rent of Rs. 47,760/- @ Rs. 3.20p per square foot, which comprised, (a) basic rent @ Rs. 2/- per square foot amounting to Rs. 29,850/- and (b) the balance amount of Rs. 17,910/- @ Rs. 1.20p per square foot towards the ancillary services provided for the said accommodation in the form of elevators (lifts), a designated area for parking of vehicles, lights for public and common passages and sewerages etc. under a lease granted by the appellant-Sansthan to the respondent-Corporation onis 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 (b) balance amount of Rs. 3750/- @ Rs. 1.20p. per sq. ft. towards such ancillary charges as has been included in the case of the lease in respect of the first portion of the accommodation let out to theis 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 29.7.1999, on which day the lease was determined. The appellant-Sansthan on 10.3.2000 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) 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 theAdditional 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 leaseaggrieved, the appellant-Sansthan has filed this appeal, by special leave, challenging the correctness and validity of the impugned judgment and order of the learned Single Judge of the High Court.

Court's reasoning:
16. The Divisional Incharge (Personnel), working in the respondent-Corporation in his reply affidavit to calculation statement filed by the appellant-Sansthan on 26.2.2007, states that in terms of the order dated 12.7.2006 of thisCourt, the entire amount is paid in respect of the portion in possession of the respondent-Corporation. The possession of 60% area which was previously in use and occupation of M/s. Uptron India Limited, which is a Sick Industrial Company, has already been given to the appellant-Sansthan and the payment of rent for the said area is not covered under the directions of this Court. It is stated that the calculation chart submitted by the appellant-Sansthan showing the amount due and payable pertains to 60% portion for which rent was paid by M/s. Uptron India Limited through the respondent-Corporation and the first part of the calculation chart filed by the appellant-Sansthan indicating total amount of Rs.66,74,131.50 due, is in respect of 60% portion of the leased area. It is also stated that the respondent-Corporation was always ready and willing to make payment of agreed rent for the portion under its occupation and, in fact, it had tendered the amount, which was not accepted by the appellant-Sansthan. It is also stated in the affidavit that Clause I(3) of the lease agreement as alleged by the appellant-Sansthan is not applicable in the present case and as such no interest at the rate of 12%, as claimed, is payable and the appellant-Sansthan has calculated the interest on total amount of rent payable in respect of total area including the one which was under use and occupation of M/s. Uptron India Limited.17. We have heard the learned Counsel for the parties and examined the material on record.18.Mr. Shanti Bhushan, learned Senior Counsel appearing on behalf of the appellant-Sansthan, submitted that this Court in exercise of its jurisdiction under Article 142 of the Constitution of India for doing complete justice to the appellant-Sansthan is empowered to pass an order of payment of arrears towards water and sewerage tax and payment of interest at the rate of 12% p.a. on the arrears of rent in terms of the agreement. He submitted that sending the matter at this stage to the Arbitrator will prolong the agony of the appellant-Sansthan in getting its legitimate claims settled as per the calculation statement submitted before this Court in terms of its interim orders.r contra, Mr. Manoj Swarup, learned Counsel for the respondent-Corporation, submitted that the balance amount of arrears of rent, payment of water and sewerage tax and the amount of interest as claimed by the appellant-Sansthan in its calculation statement cannot be decided by this Court in the absence of any satisfactory and tangible evidence appearing on record of this appeal. He next submitted that in terms of the Clause of the Agreement, this Court will be slow in exercise of its jurisdiction under Article 142 of the Constitution of India as the parties are governed by the procedure of the Arbitration Act, which is speedy and less expensive for effective adjudication of the dispute in issue.We have carefully considered the respective contentions of the learned Counsel for the parties.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.22. Now, the question pressed before us is whether we should, in exercise of our power and jurisdiction under Article 142 of the Constitution of India as submitted by Mr. Shanti Bhushan, grant the payment of balance of arrears of rent, payment of balance arrears of water and sewerage tax and interest on the arrears of rent to the appellant-Sansthan, which amounts are disputed by the respondent-Corporation before us. The nature and ambit of the power of this Court under Article 142 of the Constitution of India, no doubt, is meant to do complete justice between the litigating parties, but at the same time this Court has to bear in mind that the power is conceived to meet the situations which cannot be effectively and appropriately tackled by the existing provisions of law. Human and equitable approach should be balanced to do complete justice to both the parties and not be tilted in favour of either party without ignoring the statutory provisions. This Court in exercise of its jurisdiction can grant appropriate relief where there is some manifest illegality, or where there is manifest want of jurisdiction, or where some palpable injustice is shown to have resulted to the parties.23. In the light of above factual aspects, the claim relating to balance arrears of rent, balance arrears of water and sewerage tax and rate of interest on payment of arrears of rent raised by the appellant-Sansthan in its calculation statement filed before this Court is at variance with the calculation statement submitted by the respondent-Corporation. The respondent-Corporation has denied the payment of interest to the appellant-Sansthan. The above-said disputed claims can be appropriately tackled and adjudicated upon by the Arbitrator in terms of the arbitration clause. The main objectives of the Arbitration Act is to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration and to minimise the supervisory role of Courts in the arbitral process and to permit an arbitral Tribunal to use mediation, conciliation or other procedures during the arbitral proceedings in settlement of disputes, etc. etc. This Court ordinarily will not be obliged to bypass the provisions of the Arbitration and Conciliation Act, 1996 in exercise of its power and jurisdiction under Article 142 of the Constitution of India.24. In the backdrop of this case, we do not find it a fit case to grant relief to the appellant-Sansthan as claimed by it in its calculation statement which is vehemently disputed by the respondent-Corporation. Therefore, the contention of the appellant-Sansthan that this Court can grant the payment of balance amount of arrears of rent and arrears of water and sewerage tax and interest on arrears of rent detailed in calculation statement submitted before this Court, does not merit acceptance.25. Mr. Shanti Bhushan, learned Senior Counsel, has fairly stated that in Civil Suit No. 16/2000 the appellant-Sansthan has not claimed the arrears of rent and water and sewerage tax for the additional area of 2000 sq. ft., which was subsequently let out to the respondent-Corporation, as such the claim to that extent in terms of the calculation statement filed before this Court is not pressed in this appeal. He submitted that for claiming the relief for 2000 sq. ft. area, the appellant-Sansthan will take appropriate proceedings before the Court/Forum. We do not wish to express any views on this aspect of the matter in this appeal.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.