M/S Wingsfield Knitwear Pvt Tld v. Nanak S Bamrah & Ors

judgment has been reserved. The petitioner has received the letter from respondent Nos. 1 and 2 during the first week of May, 2011 asking the petitioner to pay the rent as well as the service tax. As far as the rent, maintenance charges and electricity bills are concerned, the same are being paid accordingly as stated. As already mentioned, the rent is being paid to the respondent Nos. 1 and 2 and electricity and maintenance charges are being paid as per the bill raised by the respondent No.3. During the course of hearing, the learned counsel for the petitioner has informed that the petitioner is prepared to file an undertaking that if any amount is due towards respondent No.3, the petitioner would deposit the same. The respondent No.3 is admittedly not a party to the agreement. In support of his submissions, the learned counsel for the petitioner has referred the following judgments: v. Municipal and Ors. : { I. Rsmeslt Hirucltand Kundunmul Corporationof Greater Bombay 1ee2(2)UJ 181 (SC) OM P No.430/201 1, OMP No.585/201 I & .4rb. P. 280/2011 Page No.S of I3 g

¶2aJ. .J Firm Asltok Traders and Anr. etc. v. Gurumuklt Das Saluja ond Ors. etc.: AIR 2004 SC 1433. Goyal MG Guses Pvt. Ltd. v. Air Liquide Deutschland GmbH and Ors. :

¶4CREF Finance Ltd. v. Puri Construction Ltd. & Ors. : 2000 (3) ARBLR 331 (Delhi) Issue notice to the respondents, on filing process fee and registered A.D. cover, returnable on 22.07.201I. In the meanwhile the respondents, particularly respondent No.3, are directed to restore the electricity supply of the premises bearing No. UG-15, on upper Ground Floor, measuring 1t21.06 super area and 728.68 built up area in West Gate Mall, Rdu Garden, New Delhi. Dasti. As agreed, an undertaking be filed by the petitioner within one week from today."

¶5In the reply to this petition, the respondents/ Nanak S. Bamrah and Mrs Manjeet Kaur have stated that real lease agreement is dated

20.02.2008 which is a registered agreement and that the petitioner/M/s Wingsfield Knitwear Pvt. Ltd. have filed a forged document in the form of Annexure P-2 (lease agreement dated 29.03.2008). And in the real lease agreement there is a provision, as per which the petitioner/At7s Wingsfield Knitwear Pvt. Ltd. is liable to pay the service tax in respect of the property in dispute and that the petitioner/\4/s Wingsfield Knitwear Pvt. Ltd. is in default of payment of service tax since July 2009. The respondents/ Nanak S. Bamrah and Ms. Manjeet Kaur have also filed I.A. No. 152511201I seeking interim directions and Crl. A. No. tI26812011 under Section 340 of the Code of Criminal Procedure" 1973. vt Otr'IP No.430/2011, OMP No.585/201I & Arb. P. 280/2011 Page No.6 of I J -1

¶6On 04.08.207I, Nanak S. Bamrah and Ms. Manjeet Kaur, who were respondent Nos. | &2 ih O.M.P. No.+:O of 2011 filed O.M.P. bearing No.585 of 2011 praying that the respondent/ IWs Wingsfield Knitwear Pvt. Ltd. be directed to pay anears of rent since April 20tl till 3l.07.20I1wherein it is stated that the respondent/ IWs Wingsfield Knitwear Pvt. Ltd. has failed to pay the amount of service tax since July 2008 in terms of Clause 7 of the agreement 20.02.2008 and supply the copies of T.D.S. certificates from the rent and also pay a sum of Rs.8,50,000/- to the petitionersArlanak S. Bamrah and Ms. Manjeet Kaur being the amount deposited by them with the Government on account of service tax for the period from July 2008 till March 2011 and also the amount due after March 2011 till the vacant possession of the demised premises is handed over to the petitioners/ Nanak S. Bamrah and Ms. Manjeet Kaur. Further to direct the respondent/ IWs Wingsfield Knifwear Pvt. Ltd. to pay all the maintenance and electricity charges up to date in respect of the demised premises as per the registered agreement dated

20.02.2008 and to also pay to the petitioners / Nanak S. Bamrah and Ms. Manjeet Kaur the user 'and occupation charges, 'the last paid rent Rs.10,000/- per day with effect from 01.08.2011 till it gives them the vacant possession of the demised premises.

¶7It is stated by the petitioners/ Nanak S. Bamrah and Ms. Manjeet Kaur that the demised premises was leased out to the respondent/ i\ills J OMP No.430/201 1. On{P No.585/201 I & Arb. P. 280/201 I Page No.7 oJ'13 -t to Wingsfield Knitwear Pvt. Ltd. at monthly rent of Rs.229805/- calculated @ Rs.205/- per sq. ft. of super built area which was payable in advance by 7th day of each month subject to deduction of tax at source but, the respondent/ IWs Wingsfield Knitwear Pvt. Ltd. has neither been paying the rent on time nor providing the petitioners/ Nanak S. Bamrah and Ms. Manjeet Kaur with the TDS certificates and has even failed to pay the service tax since July 2008 and rent since April 2011 which was payable subject to escalation of I5o/o on the last rent paid which is Rs.2,29,805/- . It is also stated that in their letter dated 27.04.2011 the petitioners/ Nanak S. Bamrah and Ms. Manjeet Kaur demanded butstanding rent for the period from March and April 2011 and also service tax amounting to Rs.8,50,000/- and then reiterated their demand for service tax by another letter dated 05.05.2011 but in this letter dated 05.05.2011 due to typographical error the service tax overdue since July 2008 is wrongly mentioned as service tax overdue since July 2009. However, despite of these letters, the respondent/lr4/s Wingsfield Knitwear Pvt. Ltd. has not paid the outstanding amount except for the rent for March 20t1. The above mentioned petition was listed before Court on

08.08.2011 and notice was issued to the respondent fot 22.09.201I. By the interim order, the respondent was directed to deposit the rent payable to the petitioners with effect from 01 .04.2011 till 3I.07.2011 with the Registrar General of this Court. Upon service, the learned counsel appearing on behalf of respondent has informed the Court that respondent has deposited ,t OMP No.430/2011, OLIP No.585/201 I & Arb. P. 280/201I Page No.8 of 13 t' the rent in terms of order dated 08.08.201 1.

¶8Thereafter, on 20.09.2011 N4r. Nanak S.'Bamrah and Ms. Manjeet Kaur, filed an arbitration application bearing No.280 of 2011 for appointment of an arbitrator to adjudicate the disputes between the parties. ln this application it is stated that the applicants/ Nanak S. Bamrah and Ms. Manjeet Kaur have deposited the service tax form July 2008 to March 2011 amounting to Rs.8,50,000/- to avoid any complications. Thus, the applicants/ Nanak S. Bamrah and Ms. Manjeet Kaur are entitled to the recovery of all service tax amounts that they have already paid as the respondent/ IWs Wingsfield Knitrvear Pvt. Ltd., being the lessee is liable to pay the service tax both previous as well as future. It is also stated that since the respondent/lWs Wingsfield Knitwear Pvt. Ltd. is in breach of registered lease agreement dated 20.02.2008 and has failed tb recti$' the said breach therefore, the applicants/ Nanak S. Bamrah and Ms. Manjeet . Kaur issued a legal notice dated 04.06.2011 to the respondent/M/s Wingsfield Knifwear Pvt. Ltd. terminating the lease w.e.f. 31.07.201I. Thus, w.e.f. 01.08.2011 the respondent/ IWs Wingsfield Knitwear Pvt. Ltd. is in illegal possession of the said premises. As the respondent/ M/s Wingsfield Knitwear Pvt. Ltd. failed to comply with the legal notice dated

04.06.2011, therefore, the applicantsAlanak S. Bamrah and Ms. Manjeet Kaur have invoked the arbitration clause i.e. clause 28 of the agreement dated 20.02.2008 have issued a notice dated 17.09.2011 suggesting the .-J OMP No.430/2011, OiIIP No.585/2011 & Arb. P. 280/201I Page No.9 of 13 l)- names of persons to act as a sole arbitrator to adjudicate the disputes between the parties but, the respondent/ IWs Wingsfield Knitwear Pvt. Ltd. has failed to reply to the said notice. Hence the applicants/ Nanak S. Bamrah and Ms. Manjeet Kaur have filed the instant application for appointment of an arbitrator.

¶9The learned counsel appearing on behalf of a '-{' made their submission in all the three matters. Both agreeable to appoint Mr Anil Sapra, Senior Advocate, to disputes as per the suggestion of the respondent. both the parties the parties also adjudicate their

¶10Mr Bindra, the learned counsel appearing on behalf of the AzI/s .-l Wingsfield Knitwear Pvt. Ltd., is agreeable to pay rent as per lease agreement dated 23.03.2008 regularly to the respondents directly till the final determination of dispute along with the maintenance charges. He submits that the petitioner has no objection if the amount deposited with the Registrar General be released in favour of the respondents. ' Mr Chauhan who is appearing on behalf of Nanak S. Bamrah and Mrs. Manjeet Kaur has agreed that subject to the payment of rent, maintenance charges and service tax, his clients shall not disconnect the electricity of the petitioner. He has also informed the Court that the lease agreement has already been terminated. However, he has no objection if the matter be referred to the sole arbitration to adjudicate the dispute between the parties.

¶11Lastly, Mr R.S. Chauhan, counsel appearing on behalf of Nanak Oh[P No.430/201I, OMP No.585/2011 & Arh. P. 280/20] I PageNo.l0of13 )t v' J S. Bamrah and Mrs. Manjeet Kaur, has argued that a huge amount of service tax is payable by the petitioner and his clients have deposited the service tax from July 2008 to March 2011 ahounting to Rs.8,50,000/- to avoid any complication and therefore, the petitioner is liable to pay the previous amount due as well as future.

¶12On the other hand, Mr Bindra has stated that by Finance Act, 2010, the decision of the Government pertaining to renting of immovable properly amenable to service tax was challenged by many parties by filing of the writ petitions and the Full Bench has reserved the judgment in this regard. Therefore, the Court should wait the outcome of the said decision of the Full Bench. . It is pertinent to mention that after making of the submissions by the parties, the case of Home Solutions Retuils (India) Ltd. v. (Inion of India & Ors., being Writ Petition (C) No.3398/2010, has been decided on 23 .09.201 1 by the Full Bench, wherein the Court has dismissed the petition. The operative portion of the order reads as under: "'75. In view of the aforesaid analysis, we proceed to enumerate our conclusions in seriatim as follows:

(a) The provisions, namely, Section 65(105)(zzzz) and Section 66 of the Finance Act, 1994 and as amended by the Finance Act, 20l0,are intra vires the Constitution of India.

(b) The decision rendered in the first Home Solution case does not lay down the correct law as we have held that there is value addition when the premises is let out for use in the course of or WP(C) No.3398/2010 with connected mat[ers furtherance of business or commerce OMP No.430/201I, OI{P No.585/2011 & Arb. P. 280/2011 PogeNo.ll of 13 t\

¶13and it is, accordingly overruled.

(c) The challenge to the amendment giving it retrospective effect is unsustainable and, accordingly, the same stands repelled and the retrospective amendment is declared as constitutionally valid.

¶76Consequently, the writ petitions, being sans substratum, stand dismissed without any order as to costs." In view of the aforesaid circumstances, all the above said -Y petitions are disposed of with the following directions: a. The petitioner IWs Wingsfield Knitwear Pvt. Ltd. shall pay the rent, maintenance charges as well as the service tax in terms'of the agreement to lease dated 29.03.2008. The respondents shall not disconnect the electricity. The petitioner shall also supply the T.D.S. Certificate to the respondents, if for any period lying with the petitioner. The service tax in terms of the agreement shall be paid by the petitioner to the respondent within four weeks from today. The amount deposited by the petitioner IWs Wingsfield Knitwear Pvt. Ltd. with the Registrar General in terms of order dated 08.08.2011 would be released by the Registry in favour of the respondents. d. As per the suggestion of the respondents, which is acceptable to the learned counsel for the petitioner, Mr Anil Sapra, Senior b. c. OMP No.430/201I, OMP No.585/201I & Arb. P. 280/201I Page No.l2 of I3 t( Advocate, Mob. 9999993385, R/o B-64, Sector-14, Noida-2030I, is appointed as the sole arbitrator to adjudicate the disputes between the parties with liberfy to file their respective claims. The learned sole arbitrator will issue notice to the parties and counsel concerned before commencement of first meeting. e. Both the parties are also entitled to move an application for interim measure before. the learned sole Arbitrator. \/ f. Fee of the learned arbitrator would be as per the schedule of the Delhi Hieh Court Arbitration Centre. In view of the order passed, all the above mentioned petitions and pending applications also stand disposed of. \nrnFffs\ J-l-/\.-5 MANMOHAN SINGH,J SEPTEMBER 22,2OIT jk OMP No.430/20I I, OL{P No.585/201 1 & Arb. P. 280/201 1 Page Na.l3 of l 3

p' * HIGH COURT OF DELHI: NEW DELHI % Judgment decided on:22.09.2017 + O.M.P. No.430 of 2011 & I.A. No. 15251/2011 & Crl. M.A. No. 11268/20L1 M/s Wingsfield Knitwear PvL Ltd. .......Petitioner Through: Mr. P.S. Bindra, Adv. Versus Nanak S. Bamrah & Ors. .......Respondents Through: Mr. R.S. Chauhan & Mr. A.K. Talesara, Advs. for R-l & 2. Mr. Sumesh Dhawan & Mr. Vatsaua Kak" Advs. for R-3. A.ND + O.M.P. No.585 of 20LL Nanak S. Bamrah & Another .......Petitioners Through: Mr. R.S. Chauhan & Mr. A.K. Talesara. Advs. Versus IWs Wingsfield Knitwear Pvt. Ltd. .....Respondent Through: Mr. P.S. Bindra, Adv. AND + Arb.P. No.280 of 20ll Nanak S. Bamrah & Another .......Petitioners Through: Mr. R.S. Chauhan & Mr. A.K. Talesara. Advs. Versus iWs Wingsfield Knifwear Pvt. Ltd. .....Respondent Through: \4r. P.S. Bindra, Adv. OITIP No.430/201I, OMP No.585/201I & Arb. P. 280/2011 Page No.l of13 ? 2. aJ. Coram: HON'BLE MR. JUSTICE MANMOHAN SINGH 1. Whether the Reporters of local papers may be allowed to see the judgment? To be referred to Reporter or not? Whether the judgment should be reported in the Digest? MANMOHAN SINGH. J. (Oral) 1. By this common order, I propose to decide the following petitions filed by the parties: (a) O.M.P. No.430 of 2011 has been filed by IWs Wingsfield Knifwear Pvt. Ltd. under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') for interim measures against Nank S. Bamrah, the respondent No.1 and Mrs Manjeet Kaur, the respondent No.2. (b) O.M.P. No.585 of 2011 has been filed by Nanak S. Bamrah under Section 9 of the Act against XzVs Wingsfield Knitwear Pvt. Ltd. (c) Arb. P. No.280 of 2011has been filed Nanak S. Bamrah and" Mrs. Kanjeet Kaur under Section 11 (6) of the Arbitration and Conciliation Ac! 1996 for appointment of arbitrator against M/s Wingsfield I(nitwear Pvt. Ltd. 2. Brief facts of the case as stated in O.M.P. No.430/2011 are that ) OIUIP No.430/201 I, OMP No.585/2011 & Arb. P. 280/201I Page No.2 of I3 AI by virtue of agreement to lease dated 29.03.2008 property bearing No.UG- 15, on upper Ground Floor, West Gate Mall, Raja Garden, New Delhi were let out by the respondent Nos. 1 & 2 to the IWs Wingsfield Knitwear Pvt. Ltd. for a period of 9 years commencing from 22.02.2008 that is the date of possession and since then the iWs Wingsfield Knitwear Pvt. Ltd. has been in possession of the said properly. It is stated that apart from paying the rent M/s Wingsfield Knitwear Pvt. Ltd. is also liable to pay electricity and maintenance charges to respondent No.3 directly, as per the bills raised by the said respondent. According to clause 7 of the agreement, respondents are liable to pay all the land and building taxes, lease/ground rent towards ownership of the said premises that may be due and payable to the Government or any other public authority. However, after the agreement dated 29.03.2008 had been signed, the respondents 1 and 2 insisted tilat the IWs Wingsfield Knitwear Pvt. Ltd. should pay" the service tax as well, otherwise they will terminate the lease agreement. 3. It is further stated that bv Finance Act 2010. the Government made renting of immoveable properly amenable to service tax, this decision of the Government was challenged by many parties by way of writ petitions. Therefore the same is a matter of challenge before the full bench of this court the judgment in the same has been reserved and is yet to be pronounced. In the May 2009 the iWs Wingsfield Knitwear Pvt. Ltd. received a letter from the respondents/ Nanak S. Bamrah and Mrs Manjeet ? OIyIP No.430/201L OMP No.585/2011 & Arb. P. 280/2011 Page No.3 of l3 sa Kaur demanding service tax form the IvOs Wingsfield Knitwear Pvt. Ltd. for the months of March and April, 2011 and stating that the service tax had been long overdue since July, 2009. 4. Thereafter, the respondents/ Nanak S. Bamrah and Mrs Manjeet Kaur sent various invoices pertaining to service tax to the M/s Wingsfield Knitwear Pvt. Ltd. and s