ASHIM KUMAR BANERJEE,J. - (1.) AGRI Horticultural Society of India was a society registered under the provisions of the West Bengal Society Registration Act, 1961. It was maintaining a huge garden in the southern part of the city of Calcutta principally espousing the case of agriculture and horticulture. It had a florist shop having an independent entry from the main road measuring about 350 square feet. In or about 1993 the society intended to engage someone to run the said shop inter alia selling the products of the society. It was agreed that the person would be engaged on commission basis on the terms and conditions stipulated in the agreement dated December 14, 1993 entered into with him. Accordingly, an agreement was entered into entrusting the appellant to look after the said shop on the terms and conditions stipulated therein. The agreement was initially for 13 (thirteen) years with option for renewal for the identical period. The terms and conditions as would appear from the agreement would inter alia provide as follows : i) The appellant would look after the flower unit by organizing sale and supply of flowers, cut-flowers and other agricultural and horticultural products from the sale counter of the society. He would be entitled to the profit of sale subject to 15 per cent commission to the society having a lower limit of Rs.5,000/- (Rupees five thousand) per month being minimum guarantee provision payable to the society. ii) He would have to maintain the counter engaging manpower at his cost. He would also have to discharge all statutory outgoings electricity charges and other incidentals to run the counter. iii) He or his representative would visit the society every morning and would collect the key from the society's office. iv) The initial period of 13 (thirteen) years could be renewed for another 13 (thirteen) years period having a minimum commission to the society at the rate of 20 per cent provided there was no breach of any terms and conditions by the appellant. v) Society would be entitled to terminate the agreement as per Clauses 8 and 15 upon failure of the appellant to run the same by committing breach of any of the terms and conditions of the agreement and in such event he would forthwith hand over possession back to the society, default of which, would attract penalty of Rs.5,000/- (Rupees five thousand) per day. vi) Clause 25 would be denote that any dispute between the parties would be resolved by alternative resolution of dispute mechanism through arbitration.
(2.) THE appellant accordingly took possession. The agreement expired by afflux of time. On December 13, 2006 the society did not renew the agreement, however allowed him to continue for an additional five months on his request coupled with an assurance on the part of the appellant that he would vacate the premises by that period. Such period expired on May 13, 2007. The appellant did not vacate that resulted in a dispute between the parties that was referred to arbitration under the agreement. Initially the arbitration was conducted by the then President Mr. B.D. Bose and on his retirement Mr. B.K. Nahata, ultimately President for the year 2009 Sri Gourav Swarup published an Award on December 17, 2009 appearing at pages 152-167 of the paper book. The Arbitrator held that the appellant committed breach and was obliged to hand over possession. He failed to do so. Hence, the society was entitled to get peaceful possession of the flower unit coupled with a liquidated damage of Rs.3.3 crores calculated up to July 15, 2007 and thereafter at the rate of Rs.5,000/- (Rupees five thousand) per day on and from July 16, 2007 until he would deliver possession to the society. Pertaining to note, when the dispute arose the appellant did not hand over key to the Society as agreed by and between the parties and retained possession of the flower unit to the exclusion of the society. Initially, the society filed a Statement of Claim inter alia claiming damage for wrongful retention of the flower unit. Subsequently, on their prayer, the Statement of Claim was amended by incorporating the prayer for recovery of possession. The appellant filed an application for setting aside of the Award. From the grounds mentioned in the said application, we would find the principal issue that was raised by the appellant as to the authority of the Arbitrator in deciding the issue of possession. According to the appellant, the subject agreement was nothing but an agreement for tenancy and appellant being a tenant was entitled to the protection of the tenancy law and the dispute could not be resolved through arbitration. On merits, the appellant contended that on the expiry of the agreement on December 13, 2006, fresh agreement came into existence that would be apparent from the conduct of the parties. Such agreement for tenancy, even on termination, would not come within the scope of adjudication by the Arbitrator. On the money claim, the appellant contended that there was no basis to assess the liquidated damage. The appellant also raised the plea that the Arbitrator did not give them reasonable opportunity to defend the Statement of Claim. The society contested the arbitration by filing affidavit-in-opposition. In the affidavit the society annexed the minutes of the meeting of the arbitration to show that the appellant had prayed for adjournment and those accommodations had been given by the Arbitrator. Two Arbitrators could not conclude the proceedings during their tenure. Ultimately Sri Swarup concluded the proceeding resulting in an Award after giving adequate opportunity to the appellant. The learned Single Judge dismissed the petition by judgment and order dated August 24, 2011 appearing at page 329-358 of the paper book. His Lordship's painstaking judgment dealt with all issues that were raised before him and ultimately gave a conclusion that as per the agreement the society was entitled to terminate and was also entitled to get possession back. The liquidated damage was calculated on the basis of fixed amount as agreed by and between the parties in the agreement. His Lordship rejected the contentions of the appellant that they were tenant and they had exclusive possession of the flower shop. His Lordship based His judgment on the Apex Court decision in the case of McDermatt International Inc. Vs. Burn Standard Co. Ltd. reported in 2006 Volume II Supreme Court Cases page-181. His Lordship quoted paragraphs 112 and 113 of the said decision which are reproduced below : "It is trite that the terms of the contract can be expressed or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law. (See Pure Helium India (P) Ltd. Vs. ONGC and D.D. Sharma v. Union of India)." "Once, thus, it is held that the arbitrator had the jurisdiction, no further question shall be raised and the court will not exercise its jurisdiction unless it is found that there exists any bar on the face of the award."
(3.) BEING aggrieved, the appellant preferred the instant appeal that was heard by us on the abovementioned dates. Mr. Arindam Mukherjee, learned Advocate appearing for the appellant raised following three issues before us :- (i) The agreement was in effect an agreement of tenancy that would be outside the scope of arbitration. (ii) The Arbitrator violated the principle of natural justice by not extending suitable opportunity to the appellant to defend the action, (iii) Award was opposed to public policy. ;