{"id":236050,"date":"2001-10-05T00:00:00","date_gmt":"2001-10-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/gaajra-international-vs-food-corporation-of-india-on-5-october-2001"},"modified":"2016-04-22T23:48:26","modified_gmt":"2016-04-22T18:18:26","slug":"gaajra-international-vs-food-corporation-of-india-on-5-october-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/gaajra-international-vs-food-corporation-of-india-on-5-october-2001","title":{"rendered":"Gaajra International vs Food Corporation Of India on 5 October, 2001"},"content":{"rendered":"
Delhi High Court<\/div>\n
Gaajra International vs Food Corporation Of India on 5 October, 2001<\/div>\n
Equivalent citations: 2002 IIAD Delhi 209, 96 (2002) DLT 581, 2002 (62) DRJ 217<\/div>\n
Author: A Sikri<\/div>\n
Bench: A Sikri<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT<\/p>\n
  A.K. Sikri, J.   <\/p>\n
 1. The petitioner has filed this petition under
\nSection 20 of the Arbitration Act, 1940. The prayer
\nmade is that the respondent be directed to appoint an
\narbitrator in terms of the arbitration clause contained
\nin the agreement to resolve the disputes and
\ndifferences arisen between the parties.\n<\/p>\n
 2. It is stated in the petition that vide
\nagreement dated 1st October, 1985 the respondent had
\ntaken on rent the premises belonging to the petitioner
\nsituated in Udyog Vihar, Palam Road, Gurgaon comprising
\nof covered sheds of about 33,000\/- sq.ft. in area as also
\nanother area measuring about 4,000\/- sq.ft. situated in
\nthe administrative block, together with other
\nfacilities at a monthly rent of Rs. 35,000\/- exclusive
\nof water and electricity charges. A detailed agreement
\nwas executed between the parties, wherein the contents
\nof letter dated 12th June, 1985 issued by Zonal Manager
\nof the respondent to its Regional Manager, were made
\npart of the agreement and were duly embodied in Clause\n<\/p>\n
(xi) of the agreement. It is also stated that without
\nany rhyme or reason and to the utter surprise of the
\npetitioner, the respondent wrote letter dated 17th
\nJuly, 1987 (received by the petitioner on 30th July,
\n1987) informing that the respondent did not require the
\ndemised premises and that the respondent would vacate
\nthe same and surrender possession on or about 17th
\nAugust, 1987. The respondent gave a semblance of
\ngiving one month notice commencing from 17th July, 1987
\ni.e. the date of the letter. In the said letter
\nreference of Clause 1 of the agreement was made and it
\nwas emphasised that the notice was being given in terms
\nof the said clause. The monthly rent payable by the
\nrespondent to the petitioner was quantified at
\nRs. 30,257.70 paisa. The agreement was for three years
\ncommencing from 1st October, 1985. Extension of one
\nyear or less period could be granted, after the
\nexpiration of three years, through mutual consultation.
\nHowever, vide letter dated 17th July, 1987 (received by
\nthe petitioner on 30th July, 1987) the respondent
\ninformed the petitioner that the respondent did not
\nrequire the demised premises and would vacate the same
\non or about 17th August, 1987. The petitioner replied
\nthe said letter challenging the contention of the
\nrespondent reiterating that Clause 1 of the agreement
\nnowhere stipulated that tenancy could be terminated by
\nthe respondent by giving any notice much less notice of
\na duration of one month period. The contention of the
\npetitioner was that the tenancy was for a fixed period
\nof three years and could not be terminated prematurely.
\nIt is also alleged in the petition that the respondent
\nhowever did not vacate the premises or hand over the
\nvacant possession in all respects in the condition in
\nwhich it existed before letting, and therefore, the
\nrespondent continued to remain bound to pay the monthly
\nrent of Rs. 30,257.70 paisa. The rent is paid up to
\nJune, 1987. In this way the petitioner claims the rent
\nfor the period from July, 1987 to September, 1988. The
\npetitioner has also claimed water and electricity
\ncharges and has alleged that even telephone bills have
\nnot been paid by the respondent. The aforesaid demand
\nof rent was obviously negated by the respondent as
\nagreement dated 1st October, 1985 provided arbitration
\nclause being Clause (xi) thereof, present petition is
\nfiled for appointment of an arbitrator. This
\narbitration clause reads as under:\n<\/p>\n
 “All disputes and differences arising out
\nof in any way touching or concerning this
\nagreement whatsoever, shall be referred
\nto the sole arbitrator of any person
\nappointed by the Managing Director of the
\nFood Corporation of India. It will be no
\nobjection to any such appointment that
\nthe person appointed is or was an
\nemployee of the Food Corporation of India
\nthat he had to deal with the matters to
\nwhich the agreement relates, and that in
\nthe course of his duties as such employee
\nof the Corporation had expressed views on
\nall or any of the matters in dispute of
\ndifferences. The award of such
\narbitrator shall be final and binding on
\nthe parties to this agreement. It is a
\nterms of this agreement that in the event
\nof any such arbitrator to whom the matter
\nis originally referred being transferred
\nor vacating his office or being unable to
\nact for any reason the Managing Director
\nof the Food Corporation of India at the
\ntime of such transfer, vacation of office
\nor inability to act, shall appoint
\nanother person to act as an Arbitrator.
\nSuch person shall be entitled to proceed
\nwith the reference from the state at
\nwhich it was left by his predecessor. It
\nis also term of this lease agreement that
\nno person other than a person appointed
\nas aforesaid should act as arbitrator and
\nif for any reason that is not possible,
\nmatter is not to be referred to
\narbitrator at all.\n<\/p>\n
 Provided further that any demand for
\narbitration in respect of any claim(s) of
\nthe Lessers under the lease agreement
\nshall be in writing and made within one
\nyear of the date of termination or
\ncompletion (expiry of the period, of the
\nlease agreement and where such demand is
\nnot made within the period of claim(s)
\nthe Lessers shall be deemed to have been
\nwaived and absolutely varied and the
\nCorporation shall be discharged and
\nreleased of all liabilities under the
\nlease agreement in respect of those
\nclaims.”\n<\/p>\n
 3. Various disputes are mentioned in para 12 of
\nthe petition as per which a total claim of
\nRs. 16,60,575\/- is made against the respondent.\n<\/p>\n
 4. The respondent has contested this petition and
\nfiled reply to the same. Maintainability of the
\npetition is challenged on the ground that lease of
\nimmovable property for a period of three years was
\ncompulsorily registrable under Section 17 of the
\nRegistration Act, 1908 and as the lease was not
\nregistered, no right flows in favor of the petitioner.
\nIt is also stated that in the absence of registration
\nof this lease, agreement cannot be looked into and as
\nthe arbitration clause is contained in the said lease,
\nthis also cannot be acted upon by the petitioner.
\nVarious other objections have been taken on the merits
\nof the claims raised by the petitioner in the petition.
\nOn the basis of the pleadings following issues were
\nframed:\n<\/p>\n
 1. Whether the petitioner firm is a duly
\nregistered firm under the Partnership Act
\nand the petition has been signed,
\nverified and filed by a duly authorised
\nperson?\n<\/p>\n
 2. Whether the agreement dated 1st October,
\n1985 did not require registration?\n<\/p>\n
 3. If issue No. 2 is proved, whether the
\narbitration clause contained in the said
\nagreement can be read in evidence?\n<\/p>\n
 4. Relief.\n<\/p>\n
 5. The parties were allowed to lead evidence by
\nway of affidavits. Both the parties have filed the
\naffidavits.\n<\/p>\n
    Issue No. 1   <\/span><\/p>\n
 6. It may be mentioned that the petitioner has
\nfiled document of registration of the petitioner as a
\npartnership firm with the Registration of Firms which is
\nEx. P-1 from which it stands established that the
\npetitioner is a duly registered firm under the
\nPartnership Act of which Sh. G.S. Bhatia is one of the
\nregistered partners and therefore, competent of sign
\nand verify the petition and file the same. Even
\notherwise, this issue was conceded by the learned
\ncounsel for the respondent.\n<\/p>\n
   Issues Nos. 2 & 3.\n<\/p>\n
 7. It may be stated here that both the parties
\nagreed that lease agreement dated 1st October, 1985
\nrequired registration. However, the submission of the
\nlearned counsel for the petitioner was that even in the
\nabsence of a registration arbitration clause contained
\nin the said agreement could be read into evidence. The
\nsubmission of the learned counsel for the respondent
\nwas to the contrary. Therefore, the whole thrust of
\narguments by both the parties was on the question as to
\nwhether arbitration clause in an unregistered agreement
\ncould be looked into. Naturally, maintainability of
\nthe present petition would depend upon this issue.\n<\/p>\n
 8. Section 2(a) of the Arbitration Act, 1940
\ndefines arbitration clause as under:\n<\/p>\n
   “Section 2(a):  “Arbitration agreement”
\nmeans a written agreement to submit
\npresent or future differences to
\narbitration, where an arbitrator is named
\ntherein or not.”\n<\/p>\n
 9. Admittedly, the arbitration agreement does not
\nrequire any registration. No form is also required.
\nAll that is required is that this arbitration agreement
\nhas to be in writing. The agreement dated 1st October,
\n1985 containing the arbitration clause is in writing
\nand signed by both the parties. Even in case of
\nunregistered lease deed, the same can be looked into
\nfor collateral purpose. Therefore, even if the said
\nlease agreement cannot be looked into evidence for
\nother purpose, the arbitration agreement can still be
\nsegregated and treated as independent agreement in
\nwriting duly signed by both the parties which is
\nbinding on the parties. The law on this point is no
\nmore res integra and stands settled by the following
\njudgments:\n<\/p>\n
 1.     Rai Chand Jain v. Chandra Kanta
\nKhosla<\/a>     .\n<\/p>\n
 2.   Damodar Valley Corporation v. K.K. Kar<\/a>
\n   .\n<\/p>\n
 3.   M. Dayanand Reddy v. A.P. Industrial
\nInfrastructure Corporation Limited and
\nOrs.<\/a>       .\n<\/p>\n
 4.   The Union of India v. Kishorilal Gupta
\nand Bros.<\/a>     .\n<\/p>\n
 5.   Prem Lata and Anr. v. Ishar
\nDass Chaman Lal and Ors.<\/a>\n<\/p>\n
   .\n<\/p>\n
 6.   Prabhu Shankar Jaiswal v. Sheo
\nNarain Jaiswal and Ors.<\/a>     .\n<\/p>\n
 10. Following observations in the case of
\n  M. Dayanand Reddy v. A.P. Industrial Infrastructure
\nCorporation Limited and Ors.<\/a>    would be apposite:\n<\/p>\n
  “Under the Arbitration Act, 1940, only an
\narbitration agreement in writing is
\nrecognised by the Act. It has been held
\nby this court in Jugal Kishore
\nRameshwardass v. Goolbai,
\nHormusji,<\/a>  that it is not necessary that the
\ncontract between the parties should be
\nsigned by both the parties. But it is
\nnecessary that the terms should be
\nreduced in writing and the agreement
\nbetween the parties on such written terms
\nis established. It has also been held by
\nthis court in Union of India v. Rallia
\nRam<\/a> , that it is not necessary that all
\nthe terms of the agreement should be
\ncontained in one document. Such terms
\nmay be ascertained from the
\ncorrespondence consisting of number of
\nletters. In Rukmanibai Gupta v.\n<\/p>\n
The Collector, Jabalpur, ,
\nthis court has laid down that an
\narbitration clause is not required to be
\nstated in any particular form. If the
\nintention of the parties to refer the
\ndispute to arbitration can be clearly
\nascertained from the terms of the
\nagreement, it is immaterial whether or
\nnot the expression arbitration or
\n‘arbitrator’ or ‘arbitrators’ has been
\nused in the agreement. It is also not
\nnecessary that agreement to arbitration
\nshould appear in the document containing
\nthe other terms of agreement between the
\nparties. Law is well settled that
\narbitration clause may be incorporated by
\nreference to a specific document which is
\nin existence and whose terms are easily
\nascertainable. it is to be noted,
\nhowever, that the question whether or not
\nthe arbitration clause contained in
\nanother document is incorporated in the
\ncontract is always a question of
\nconstruction. It should also be noted
\nthat the arbitration clause is quite
\ndistinct from the other clauses of the
\ncontract. Other clause of agreement
\nimpose obligation which the parties
\nundertake towards each other. But
\narbitration clause does not impose on any
\nof the parties any obligation in favor
\nof the other party. Such arbitration
\nagreement embodies an agreement between
\nthe parties that in case of a dispute,
\nsuch dispute shall be settled by
\narbitrator, or umpire of their own
\nconstitution or by an arbitrator to be
\nappointed by the court in an appropriate
\ncase. it is pertinent to mention that
\nthere is a material difference in an
\narbitration agreement inasmuch as in an
\nordinary contract the obligation of the
\nparties to each other cannot, in general,
\nbe specifically enforced and breach of
\nsuch terms of contract results only in
\ndamages. The arbitration clause however
\ncan be specifically enforced by the
\nmachinery of the Arbitration Act. The
\nappropriate remedy for breach of an
\nagreement to arbitrate is enforcement of
\nthe agreement to arbitrate and not to
\ndamage arising out of such breach.
\nMoreover, there is a further significant
\ndifference between an ordinary agreement
\nand an arbitration agreement. In an
\narbitration agreement, the courts have
\ndiscretionary power of dispensation of a
\nvalid arbitration agreement but the
\ncourts have no such power of dispensation
\nof other terms of contract entered
\nbetween the parties. This very
\ndistinctive feature of an agreement for
\narbitration has been highlighted in the
\ndecision in Heyman v. Darwins Ltd.
\n1942, AC 356. It has been held in North
\nWestern Rubber Company, (1908) 2 KB 907
\n(overruled in 1961(1) AC 1314 on other
\npoints), that an arbitration agreement
\nno way classifies the right of the
\nparties under the Contract but it relates
\nwholly to the mode of determining the
\nrights….”\n<\/p>\n
   Issue No. 4.\n<\/p>\n
 11. This petition is accordingly allowed. The
\nrespondent is directed to file the original agreement
\ndate 1st October, 1985 and as per the arbitration
\nagreement, Managing Director of the respondent is
\ndirected to appoint an arbitrator within four weeks
\nfrom the date of receipt of the communication of this
\norder and refer the disputes mentioned in para 18 of
\nthe petition to the said arbitrator for adjudication.
\nIt is made clear that in case no arbitrator is
\nappointed by the Managing Director within the aforesaid
\nperiod, the petitioner shall be at liberty to approach
\nthe court for appointment of an arbitrator by the
\ncourt.\n<\/p>\n
 12. This petition stands disposed of.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court Gaajra International vs Food Corporation Of India on 5 October, 2001 Equivalent citations: 2002 IIAD Delhi 209, 96 (2002) DLT 581, 2002 (62) DRJ 217 Author: A Sikri Bench: A Sikri JUDGMENT A.K. Sikri, J. 1. The petitioner has filed this petition under Section 20 of the Arbitration Act, 1940. The prayer […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-236050","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nGaajra International vs Food Corporation Of India on 5 October, 2001 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/gaajra-international-vs-food-corporation-of-india-on-5-october-2001\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gaajra International vs Food Corporation Of India on 5 October, 2001 - 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