Reliance Communication Ltd & Anr. v. Bant Singh

Plaintiff Bant Singh filed a suit for permanent injunction restraining the defendants and their employees from installing any tower etc. in the suit land. During the pendency of the suit, petitioners-defendants moved an application under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') for referring the dispute to the Arbitrator. Vide the impugned order dated 10.11.2006, the said application was dismissed. Hence, the present revision petition has been filed under Civil Revision No. 982 of 2007 2 Article 227 of the Constitution of India by the defendants. Learned counsel for the petitioners, has submitted that the lease agreement between the parties was entered into on

9.7.2004. The same had been duly acted upon by the parties. The plaintiff had been receiving the lease money in terms of the lease agreement. The lease money had been paid up to September, 2009 including the enhanced rate as settled between the parties vide the lease agreement. The tower had also been installed in the suit land. In these circumstances, the dispute was liable to be referred for arbitration. Even though the lease agreement was an un-registered one. In support of his arguments, learned counsel has placed reliance on Intouch Technologies (India) Pvt, Ltd. vs. Ashwarya Builders 2005(1) Arb.L.R.634 (AP), wherein it was held as under:- “10. Though the respondent contended that the lease deed being an unregistered document, inadmissible in evidence, invalid and unenforceable, and as such, the contents thereof, including the arbitration clause, cannot be looked into or acted upon, but as observed above, the applicant and the respondent after entering into the agreement, have acted upon it, and as such, it would not be proper for the respondent to contend that the lease deed being an unregistered one, the contents thereof cannot be looked into.

Be that as Civil Revision No. 982 of 2007 3 it may, a reading of the contents of Clause 29 of the lease deed, would lucidly disclose that the deed is to be governed by India Law and any dispute between the parties arising from the agreement or the subject matter thereof, including the existence and validity of the deed, will be settled by the arbitrators under the provisions of the Act. In as much as the arbitration clause itself states that even the question of existence and validity or otherwise of the deed, would be settled by the arbitrators under the provisions of the Act, the respondent having acted upon the lease agreement, now cannot be allowed to contend that the very lease deed itself being invalid for want of registration, the contents thereof, including the arbitration clause cannot be looked into or acted upon.” Learned counsel for the petitioners has further placed reliance on Sanjay Rooplal Jaiswal vs.

Gangulal Dhannulal Jaiswal and others 2007 (suppl.) Arb. LR 208 (Bombay), wherein it was held as under:- “9. Shri Patni, learned advocate, has placed reliance on the decisions in the cases of Masood Mohammed Husain vs. Gulam Rasul Mohammed Ali 2007(2) Bombay CR Civil Revision No. 982 of 2007 4 291= 2006(Suppl.) Arb.LR 449 (Bombay) (DB) and Qassim Mohd. Yousuf Aquil Bastaki vs. Sultana Abdul Ahad Narvel, 2003(5) Bom.CR 807= 2003(3) Arb.LR 75 (Bom.). It is held that an application under Section 9 can be considered in case of unregistered partnership firm in view of Section 69 of the Indian Parnership Act, 1932. Application under Section 11 is for appointment of the sole arbitrator or arbitral tribunal. Application under Section 9 can be filed seeking interim measures. In my view, judgment of the Division Bench of this Court can be considered even in case of an application for appointment of arbitrator under Section 11 (5) and (6) of the Act.

In this view of the matter, even the deed of partnership, unregistered document, can be accepted and considered for an application under Section 11 of the Act of 1996.” Learned counsel for the respondent, on the other hand, has submitted that since the lease agreement was an unregistered document, the same was inadmissible in evidence. Consequently, the same could not be read in evidence. In support of his arguments, learned counsel has placed reliance on the decision of this Court in Surinder Kumar v. Rattan Lal 2006(3) RCR (Civil) 291, wherein, it was held that the unregistered lease deed was inadmissible in evidence. Learned counsel for the respondent has further placed Civil Revision No. 982 of 2007 5 reliance on the decision of the Apex Court in M/s Bajaj Auto Limited v. Behari Lal Kohli AIR 1989 Supreme Court 1806, wherein it was held as under:- “Moreover, the clause of the lease deed could not be looked into for want of registration.

It could not also be said that as far as the consent of the landlord permitting sub-letting was concerned, it did not require registration and the clause, therefore, must be excepted from the requirement of registration and consequent exclusion from evidence. The question whether a lessee was entitled to create a sub-lease or not was.” Learned counsel for the respondent has further placed reliance on the decision of the Apex Court in ikishan Das Mull vs. Luchhiminarain Kanoria and Co. AIR 1974 Supreme Court 1579, wherein, it was held that when a contract is in valid, every part of it, including clause as to arbitration contained therein must be invalid. Learned counsel for the respondent has also placed reliance on the decision of the Apex Court in Sukanya Holdings Pvt. Ltd. vs. Jayesh H.Pandya and another, AIR 2003 Supreme Court 2252(1), wherein, it was held as under:- “It would be difficult to give an interpretation to Section 8 under which bifurcation of the cause of action that is to say the subject matter of the suit or in some cases bifurcation of the suit between parties who are parties to Civil Revision No.

982 of 2007 6 the arbitration agreement and others is possible. This would be laying down a totally new procedure not contemplated under the Act. If bifurcation of the subject matter of a suit was contemplated, the legislature would have used appropriate language to permit such a course. Since there is no such indication in the language, it follows that bifurcation of the subject matter of an action brought before a judicial authority is not allowed. Secondly, such bifurcation of suit in two parts, one to be decided by the arbitral tribunal and other to be decided by the civil Court would inevitably delay the proceedings. The whole purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by such procedure. It would also increase the cost of litigation and harassment to the parties and on occasions there is possibility of conflicting judgments and orders by two different forums.” After hearing learned counsel for the parties, I am of the opinion that the present revision petition deserves to be allowed.

Admittedly, the lease agreement was entered between the parties on 9.7.2004. The plaintiff has averred that the lease agreement had been obtained by playing fraud upon him. The lease agreement (Annexure P-1) was duly signed by the parties. After the lease agreement was entered into between the parties in July, 2004, Civil Revision No. 982 of 2007 7 the parties have acted upon the terms of the lease deed. The plaintiff has accepted the rent in terms of the lease deed. Learned counsel for the petitioners has submitted that the enhanced rent in terms of the lease agreement had been accepted by the plaintiff up to September, 2009. The tower, in terms of the lease agreement, has already been installed. In these circumstances, since the parties had acted upon the lease agreement, it would not be proper for the respondent to contend that the lease deed being an un-registered document, could not be looked into.