Bangalore District CourtOmar Abdullah Sait vs M/S Navneet Motors Pvt. Ltd. Having Its on 31 March, 20221\n                                         Com.A.P.No.58/2021\n\nIn The Court of LXXXIV Additional City Civil and Sessions\n     Judge (CCH-85 - Commercial Court) Bengaluru\n\n         Dated this the 31st day of March 2022\n\n    Present: Smt.H.R.Radha B.A.L., LL.M.\n             LXXXIV Addl.City Civil and Sessions Judge,\n             (CCH-85 - Commercial Court)\n             Bengaluru\n\n                   Com.A.P.No.58/2021\n\n  Petitioners: 1. Omar Abdullah Sait, S/o Late Mr. Hajee\n               Abdullah Sait, aged about 70 years\n\n                2. Mrs. Parveen Omar, W/o Mr. Omar\n                Abdullah Sait, aged about 58 years\n\n                3. Mr. Ateef Omar, S/o Mr.Omar Abdullah\n                Sait, aged about 28 years\n\n                Claimants No.2 and 3 are represented by\n                their GPA Holder, Mr. Omar Abdullah Sait,\n                having office at ""Grace Towers", Rear\n                Ground    Floor,  No.70,  Millers  Road,\n                Bengaluru - 560 052\n\n                       (By Sri.Joseph Anthony, Adv.)\n\n\n                            Vs\n\n\n  Respondents 1. M/s Navneet Motors Pvt. Ltd. having its\n                office at Sy.No.4, Konappana Agrahara,\n                Begur Hobli, Hosur Road, Near Electronic\n                City, Bengaluru - 560 100 Represented by\n                its Chief Executive Officer Mr.Vishwanathan\n                Karthikeyan\n\n                2. Hon'ble Mr.Justice      A.N.Venugopala\n                Gowda, Former Judge,       High Court of\n                Karnataka\n                                     2\n                                             Com.A.P.No.58/2021\n\n                    3. The Director, Arbitration & Conciliation\n                    Centre Bengaluru having office at 3rd Floor,\n                    East Wing, Khanija Bhavan, Race Course\n                    Road, Bengaluru - 560 001\n\n                     (R1 by Smt. Revathy Adinath Narde, Adv.)\n\n\n   Date of Institution                  23-07-2021\n\n\n   Nature of the petition       U/s 34 of theArbitration and\n                                   Conciliation Act, 1996Date    on     which\n   judgment pronounced                  31-03-2022\n\n   Total Duration            Years       Months       Days\n\n                               00          08          08\n\n\n\n\n                         LXXXIV Addl.City Civil and Sessions Judge\n                          (CCH-85 Commercial Court) Bengaluru\n\n\n\n                             JUDGMENTThis petition U/s 34 of theArbitration and Conciliation Act,\n\n1996('the Act' in short) is filed by the claimants 1 to 3 in\n\nA.C.No.46/2020 seeking to set aside the arbitral award dated\n\n09-12-2020 passed by the sole arbitrator, the 2 nd respondent\n\nherein ('Arbitral Tribunal' for short) and also the memorandum of3Com.A.P.No.58/2021\n\ncosts dated 12.12.2020 of the 3rd respondent herein. The\n\nclaimants have also sought for a direction to the 1 st respondent\n\nherein [the respondent in A.C.No.46/2020] to refund the amount\n\npaid by them in compliance of the impugned award including\n\nthe cost of arbitration proceedings.2.   The parties are referred as per their original rank before\n\nthe Arbitral Tribunal for the sake of clarity and for convinience.3.   Admitted facts of the case are that the claimants are the\n\nowners of 'Grace Towers' on Millers Road, Bangalore. The\n\nrespondent was in occupation of the ground and mezzanine\n\nfloors therein from July 2009 till the end of May 2019; and\n\nRs.50,00,000/- paid under the first lease deed dated 03-07-2009\n\n(Ex.P2) towards interest free refundable security deposit was\n\nheld by the claimants until such time. Though the first lease\n\nexpired on 31-07-2014, the respondent continued to occupy the\n\npremises upto 04-10-2017 by paying agreed rent in terms of the\n\ninvoices raised by the claimants. On 04-10-2017, fresh lease\n\ndeed was executed by the parties (Ex.P3) for a period of five\n\nyears starting from 01-09-2017 to 31-08-2022 on monthly rent\n\nof Rs.8,25,000/- with escalation at 10% every two years once.4Com.A.P.No.58/20214.   When things stood thus, the respondent addressed letter\n\ndated 30-05-2019 (Ex.P4) unilaterally handing over possession\n\nof the leased premises to the claimants referring to its earlier\n\nletter dated 27-02-2019 (Ex.R2). The claimants denied receipt of\n\nany such letter in their legal notice dated 06-06-2019 (Ex.P6)\n\nand claimed that the respondent was liable to pay rent upto\n\nAugust 2022 besides arrears of rent and maintenance charge\n\nfrom August 2015 to 2017 amounting to Rs.53,54,621.55+\n\nRs.15,00,000/- towards cost of replacing the tiles + Rs.7.50\n\nlakhs towards wiring as well as replacing the light fittings. While\n\nthe claimants alleged short payment by the respondent against\n\ntheir invoices at Ex.P11, the respondent claimed in its reply\n\n(Ex.P8) that the claimants had acknowledged receipt of letter\n\ndated 27-02-2019. To this, the claimants too issued reply dated\n\n24-06-2019 (Ex.P9).5.   In the meanwhile, the claimants got issued notice dated\n\n17-06-2019 (Ex.P7) invoking the arbitration clause in Ex.P3, filed\n\nCMP 315/2019 before the Hon'ble High Court. The same was\n\nallowed by order dated 06-12-2019 and the arbitral tribunal\n\ncame to be constituted.5Com.A.P.No.58/20216.    The claimants submitted the claim for Rs.92,33,031/- in all\n\ntowards rents with agreed escalation from June to August 2019\n\nand September to December 2019 at Rs.8,25,000/- p.m. and\n\nRs.9,07,500/- p.m. respectively; maintenance charges with\n\nagreed escalation from June to August 2019 at Rs.27,500/- p.m.\n\nfrom September to December 2019 at Rs.30,250/- p.m.; arrears\n\nof rent and maintenance from October 2015 to August 2017\n\nRs.6,74,531/- and damages of Rs.22,50,000/-.7.   The respondent contested the same by filing Statement of\n\ndefence denying the allegations and contending that it regularly\n\npaid the monthly rents and maintenance charges as and when\n\nthe same became due. After discussing with the claimants about\n\nits decision to close the showroom in the leased premises, letter\n\ndated 27-02-2019 (Ex.R2) was issued in terms of Clause 41 of\n\nthe lease deed (Ex.P3) and only thereafter, the premises was\n\nvacated by delivering possession in good tenable condition\n\nunder letter dated 30-05-2014 (Ex.P4). Yet the claimants failed\n\nto refund of the security deposit; even in the reply at Ex.P8 and\n\nP9, it demanded the same. After expiry of the lease period under\n\nEx.P2,   it   continued   in   the       leased   premises   on   mutual\n\nunderstanding by making all payments from time to time and6Com.A.P.No.58/2021\n\nthere was no arrears, as such even the claimants did not make\n\nany demand before entering into Ex.P4. It is not liable to pay any\n\namount towards arrears of rent or maintenance charges from\n\nOctober 2015 to August 2017. There is no need to replace the\n\nfloor, tiles, wiring or the electrical fitting, as claimed. Since the\n\nleased premises was in good condition at the time of handing\n\nover the possession to the claimants and it did not require any\n\nrepairs, another tenant has already occupied the same.8.     Further, the respondent raised counter claim against the\n\nclaimants for refund of security deposit of Rs.50,00,000/- with\n\n24% interest, damages of Rs.36,00,000/- on account of non\n\nrefund of the security deposit on time, Rs.8,00,000/- towards\n\ncompensation for mental harassment due to unnecessary\n\nlitigation with cost of the proceedings.9.     The Arbitral Tribunal framed as many as eleven issues,\n\nrecorded the evidence of the claimants and the respondent.\n\nWhile Ex.P1 to P9, P14 were marked for the claimants with the\n\nconsent of the respondent, Ex.P10 to P13 were marked through\n\nPw1; and Ex.R1 to R9 were marked for the respondent through\n\nRw1.7Com.A.P.No.58/202110.   After hearing arguments on both sides and considering the\n\nmaterial on record, the arbitral tribunal passed the impugned\n\naward rejecting the claim in toto. The counter claim was allowed\n\nin part by directing the claimants to refund the security deposit\n\nof Rs.50,00,000/- to the respondent with interest at 9% p.a. from\n\n01.08.2019 within 90 days or in the event of default, to pay\n\ninterest at 12% p.a. from the date of award and pay the cost.\n\nThat apart, the parties were directed to enter into a deed of\n\ncancellation of the lease and to get it registered.11.   Based on the memo of cost filed by the respondent on\n\n17-12-2020 after serving a copy on the claimants, the 3 rd\n\nrespondent herein drew up the memorandum of costs on\n\n21-12-2020 for Rs.11,47,500/-.12.   Aggrieved by the impugned award and the memorandum\n\nof costs, the claimants/petitioners have filed this petition on the\n\nground that it is perverse, irrational and based on irrelevant\n\nconsiderations and in conflict with the public policy of India. The\n\nfinding that the Arbitral Tribunal had no jurisdiction to decide on\n\nthe arrears from August 2015 to 2017 is contrary to clause 34 of\n\nthe lease deed dated 03-06-2009. Improper appreciation of\n\nEx.P5, P10 and P11 has resulted resulting in an erroneous8Com.A.P.No.58/2021\n\nfinding with regard to the rents received during the said period.\n\nSubject to the conditions in the lease deed, only the lessors had\n\nthe right to determine the lease before expiry of the lease period\n\nand not the lessee. The 1 st claimant's signature on Ex.R2 was\n\ndenied stoutly. Yet, the Arbitral Tribunal, without referring the\n\ndisputed signature to hand writing expert, compared it with his\n\nsignature on the vakalath and the same is not permissible. The\n\nclaimants did not accept termination of the lease or delivery of\n\nthe premises as is clear from the endorsement on Ex.P4 that it\n\nwas received without prejudice to their rights. The finding of the\n\nArbitral Tribunal in this behalf is perverse and contrary to the\n\nevidence on record. The respondent had no right to seek refund\n\nof the security deposit with interest. The cost is determinable in\n\nterms ofSec.31an d31(a) of the Act by the Arbitral Tribunal. The\n\nquantum of cost or how it should be determined is not spelt out\n\nin the impugned award and the memorandum of cost is drawn\n\nup by the 3rd respondent herein without proof of the cost.Under\n\nthe Karnataka Stamp Act, the awardee has to pay the Stamp\n\nduty. They are directed to pay an astronomical figure of\n\nRs.11,47,500/-, but not liable to pay the same. The impugned\n\naward rejecting their claim is illegal and therefore should be set\n\naside.9Com.A.P.No.58/202113.   The respondent / respondent No.1 has filed the statement\n\nof objections contending that the claimants have already paid\n\nRs.56,11,570/- with interest at 9% p.a., from 01-08-2019 through\n\ncheque bearing No.91802 dated 28-12-2020 and complied with\n\nthe award. Ex.P.No.1061/2021 filed for recovery of the cost is\n\npending; this petition is filed after service of shown cause notice\n\non the claimants. The interpretation of Clause 34 of the lease\n\ndeed dated 02.06.2009 by the Arbitral Tribunal and resultant\n\nfinding that the dispute regarding arrears of rent fell outside the\n\nscope of the said clause, cannot be interfered with by this court.\n\nClause 41 of the leased dated 04-10-2017 required the lessee to\n\nformally handover possession of the leased premises to the\n\nlessors on early termination or expiry of the lease, subject to\n\nissuing three months prior notice in writing. The two letters\n\ndated 27-02-2019 and 30-05-2019 satisfy the requirement of the\n\nsaid clause 41. There was no arrears of rent or maintenance\n\ncharges and no damage was caused to the leased premises as\n\nalleged. The Arbitral Tribunal rightly rejected the claims in this\n\nbehalf on appreciation of the evidence on record. The said\n\nfinding of fact cannot be set aside in this petition U/s 34 of the\n\nAct. Even the cost awarded in the arbitration proceedings is\n\nreasonable considering the financial loss and distress undergone10Com.A.P.No.58/2021\n\nby it. This petition is filed just to cause harassment and to stall\n\nthe execution proceedings.14.   Heard arguments.15.   Both parties have filed written arguments. I have perused\n\nthe same and also the records.16.   The respondent has relied upon the following judgments:(a) Patel Engineering Limited vs North\n         Eastern Electric Power Corporation Ltd., -\n         (2020) 7 SCC 167 wherein it is held that the\n         ground of patent illegality for setting aside a\n         domestic award U/s 34(2A) of the Actis\n         available only if the decision of the arbitrator is\n         found to be perverse, or, so irrational that no\n         reasonable person would have arrived at the\n         same; or the construction of the contract is\n         such that no fair or reasonable person would\n         take [test there for is the onelaid down inpara\n         42.3 of Associate Builders, (2015) 3 SCC 49, as\n         affirmed in para 40 of Ssangyong Engg., (2019)\n         15 SCC 131]; or, that the view of the arbitrator\n         is not even a possible view.(b) P.R.Shah Shares and Stock Brokers\n         Pvt. Ltd., vs BHH Securities Pvt. Ltd., and\n         Others - (2012) 1 SCC 594 wherein it is\n         clarified that reappreciation of evidence by the\n         court U/s 34 of the Act is not pemissible\n         holding that the court cannot sit in appeal over\n         the award or find out whether different11Com.A.P.No.58/2021\n\n         decisions could be arrived at as against the\n         findings of the Arbitral Tribunal, in the absence\n         of the grounds U/s 34(c) Indu Engineering and Textiles Ltd. vs\n         Delhi Development Authority- (2001) 5\n         SCC 691 wherein, explaining the scope of\n         Secs. 30 and 33 ofArbitration Act, 1940, it is\n         held that an arbitrator is a judge appointed by\n         the parties and as such an award passed by\n         him is not to be lightly interfered with, unless\n         the view taken by him is vitiated by manifest\n         error on the face of the award or wholly\n         improbable or perverse; and conclusions of\n         arbitrator on facts, even if erroneous in the\n         opinion of the court cannot be interfered with.(d) Mahindra Chandra Nandi vs Ashwini\n         Kumar Acharjya - ILR 1921 Cal. 427 for the\n         proposition that costs are allowed as incidental\n         damages to indemnify a party against expense\n         of successfully vindicating his rights in a court.\n         Only in a very special or exceptional cases cost\n         on special scale should be allowed.17.   As submitted by the learned counsel for the respondent/ 1 st\n\nrespondent herein, the claimants have already deposited\n\nRs.6,74,000/- towards 50% of the cost in Ex.P.No. 1061/2021, as\n\nper   the    directions   of   the    Hon'ble    High    Court    in\n\nW.P.No.18833/2021. Even the learned counsel for the claimants\n\nby memo dated 04-102021, took return of the certified copy of\n\nthe order on memorandum of costs, submitting that the12Com.A.P.No.58/2021\n\nclaimants are not pressing the grounds challenging the same.18.   Therefore,   following    are    the   points   that    arises   for\n\nconsideration in this petition U/s 34 of the Act :1. Whether the claimants/petitioners have\n           made out the grounds for setting aside the\n           impugned     award     U/s    34(2)(b)(ii)   and\n           34(2A) of the Act?2. Whether the claimants/petitioners are\n           entitled for refund of Rs.56,11,570/- from\n           the respondent/1st respondent as prayed?3. What order?19.   My findings on the above points are :Point No.1: In the Negative\n           Point No.2: In the Negative\n           Point No.3: As per the final order for the following\n\n\n                               REASONS20. Point No.1: The learned counsel for the claimants\n\nvehemently argues assailing the interpretation placed by the\n\narbitral tribunal on clause 34 of the lease deed dated\n\n03.06.2009, Ex.P2 and submits that the arbitral tribunal's fiding\n\nthat it could not adjudicate on the claim for arrears of rent from13Com.A.P.No.58/2021\n\nAugust 2015 to August 2017, for want of jurisdiction is contrary\n\nto the terms of contract between the parties. Drawing the\n\nattention with regard to the findings on Ex.R2, it is argued that\n\nthe 1st claimant's signature thereon was disputed, But the\n\narbitral tribunal disregarded the claimants pleas to appoint an\n\nexpert to compare the same with admitted signature and went\n\nto compare the signatures, by itself. The claimants also argue\n\nthat Arrears of rent not being recorded in the subsequent\n\nagreement is not a good ground for rejecting their claim when\n\nthe invoices Ex.P10, P11 and the bank statement Ex.P5 was\n\nproduced to establish it. The claimants therefore, urge that the\n\nimpugned award should be set aside as being in contravention\n\nof the terms of the contract, the provisions ofIndian Evidence\n\nActand for ignoring the evidence on record.21.   On the other hand, the learned counsel for the respondent\n\nargues to sustain the award and submits that the arbitral\n\ntribunal has properly appreciated the evidence on record and\n\nreasonably interpreted the terms of contract. No application was\n\nmade by the claimants seeking reference of 1 st claimant's\n\nsignature on Ex.R2 for comparison to the handwriting expert and\n\ntherefore it was not referred to an expert. Taking the court14Com.A.P.No.58/2021\n\nthrough paras 24 to 38 of the impugned award, the learned\n\ncounsel, argues that every aspect of the matter was considered\n\nby the arbitral tribunal including Ex.P5, P10 and P11, Pw1's\n\nevidence and that the reference was made invoking clause\n\nclause 65 of subsequent lease deed at Ex.P3 and therefore, the\n\nfindings with regard to arrears of rent cannot be interfered with\n\nby way reappreciating evidence in this petition U/s 34 of the Act.22. Before considering the rival contentions of the parties it is\n\nnecessary to note that as laid down by the Hon'ble Supreme\n\nCourt in the following judgments, an application for setting aside\n\nthe arbitral award can be entertained only if the grounds U/s 34\n\nof the Act are made out; every contravention of law cannot be\n\nbranded as a patent illegality and the court cannot reappreciate\n\nthe evidence to conclude that the award suffers from patent\n\nillegality.(i) Delhi Airport Metro Express Pvt. Ltd.Vs Delhi Metro Rail Corporation Ltd.,\n              (Civil Appeal No.5627/2021 dated 09.09.2021)(ii) National Highways Authority of India\n              Vs M. Hakim & Anr.reported in 2021 SCC\n              Online SC 473(iii)  Ssangyong   Engineering   and\n              constructionCompany Ltd. Vs National15Com.A.P.No.58/2021\n\n            Highways Authority of Indiareported in\n            (2019) 15 SCC 131(iv)  Associate  Builders    Vs    Delhi\n            Development Authorityreported in (2015)\n            SCC 49.23.   Admittedly the claim for arrears of rent of Rs.53,54,621/-\n\nrelated to the period from August 2015 to August 2017. By then,\n\nthe five years lease period under Ex.P2 dated 03-07-2009 had\n\nexpired and the parties did not choose to enter into any kind of\n\nagreement from 01-08-2009 till the fresh lease deed Ex.P3 dated\n\n04.10.2017. Though clause 34 of Ex.P2 provided for resolution of\n\ndisputes by arbitration, the parties did not invoke the same; and\n\nreference of disputes was under clause 65 of Ex.P3. The arbitral\n\ntribunal, on appreciation of oral evidence of Pw1, the documents\n\nat Ex.P5, P10 and P11 has concluded that it had no jurisdiction\n\nto decide the claim for arrears of rent for the period not covered\n\nby Ex.P3.24.   The next bone of contention is Ex.R2. The claimants\n\ndispute receiving the said letter and also the 1 st claimant's\n\nsignature thereon acknowledging such receipt. Ex.P2 was\n\nentered into between the 1st claimant and the respondent. As\n\nsuch, his signature thereon was an admitted signature. Further16Com.A.P.No.58/2021\n\nEx.P4 is letter under which the respondent handed over vacant\n\npossession of the property and it is addressed to the 1st\n\nclaimant. The Arbitral Tribunal has extracted the letters Ex.P4\n\nand R2 as it is, in paras 45 and 46 of the impugned award; and\n\nthis shows that Ex.R2 was referred to in Ex.P4. Interestingly, the\n\n1st claimant has acknowledged receipt of Ex.P4 by endorsing\n\n"received without prejudice" and without denying the receipt of\n\nEx.R2.25.      It is not the claimants' case that they had filed any\n\napplication before the arbitral tribunal for referring Ex.R2 to the\n\nhandwriting expert for comparing the 1 st claimant's signature\n\nwith his admitted signature on Ex.P4 or P2. The discussion at\n\nparas 45 to P55 of the impugned award makes it clear that the\n\nfindings of the arbitral tribunal on Ex.R2 falls in the realm of\n\nappreciation of evidence.26.   The arbitral Tribunal has given proper reasons for the\n\nfindings recorded in the impugned award and those findings are\n\nbased on the material evidence on record. This court can neither\n\nreapreciate the same in a petition U/s 34 of the Act nor sit in\n\nappeal over the arbitral award. Therefore, I am of the considered\n\nopinion that the claimants/petitioners have failed to make out a17Com.A.P.No.58/2021case for setting aside the impugned award on the grounds U/s\n\n34(2)(b)(ii) and 34(2A) of the Act. The point for consideration is\n\naccordingly answered in the negative.27. As could be gathered from para 8 of the petition U/s 34 of\n\nthe Act, in terms of the arbitral award the claimants have\n\nalready made payment of Rs.56,11,570/- to the respondent vide\n\ncheque bearing No.91801 dated 28.12.2020 and the said\n\namount is inclusive of interest at 9% from 01.08.2019.28.   It is not the claimants' case that they made payment under\n\nprotest. Thus, having complied with the arbitral award, the\n\nclaimants appear to have filed this petition just to harass the\n\nrespondent. The same amounts to abuse of process of law. In\n\nview of the same and my findings on Point No.1, I am of the\n\nopinion that the claimants are not entitled for refund of the\n\namount as prayed, that too in a petition filed U/s 34 of the Act.\n\nThe Point No.2 is therefore answered in the negative.29. Point No.3: For the foregoing reasons, I am of the view that\n\nthe petition is liable to be dismissed with exemplary cost of\n\nRs.25,000/- and accordingly following order is passed18Com.A.P.No.58/2021\n\n                              ORDER\n\n\n                The     petition    U/Sec.34of   the\n\n           Arbitration and Conciliation Act is hereby\n\n           dismissed with cost of Rs.25,000/-.Issue copy of the judgment to the\n\n           parties through e-mail as provided U/o\n\n           XXRule 1 of CPC, if mail ID is furnished.(Dictated to the stenographer, transcribed and typed by her,\ncorrected and then pronounced by me in the open court on this the\n31st day of March 2022)\n\n\n\n\n                                 (H.R.Radha)\n                      LXXXIV Addl. City Civil and Sessions Judge,\n                        (CCH-85 Commercial Court) Bengaluru