- (1.) Both the cases are connected and the facts are taken from CWP No. 24847 of 2013.
(2.) The petitioner who has an agreement with Punjab Grains Procurement Corporation Ltd (PUNGRAIN) for construction of godown under Annexure P/3, has a grievance that the 1st respondent has not paid rent from the date when the 1st respondent took possession on 3.7.2012. The petitioner's further grievance is that the PUNGRAIN is deducting 20% TDS from the amount payable, when the requirement in law for rent paid shall be only 10% under the provision of the Income Tax Act. The petitioner would have even a more fundamental objection that it is not liable for any TDS at all.
(3.) Respondents No. 1 and 2 have denied the assertions made by the petitioner that the property was put in possession of the 1st respondent on 3.7.2012 itself. The infrastructure was not made available and the possession was taken only on 11.12.2012. The TDS was deducted at two stages, 10% at the time when the amount was released by the 2nd respondent to the 1st respondent and the 1st respondent was also subjecting to 10% TDS at the time when the amount was released to the petitioner. The amount deducted is, therefore, correct. Both the respondents have also taken the objection regarding jurisdiction that the agreement between the petitioner and the 1st respondent contained an arbitral clause, which is Clause 18 that sets out that all the differences arising out of or in any way touching or concerning this contract whatsoever shall be rendered to the sole Arbitrator i.e. the Managing Director of the PUNGRAIN or any person authorized by him in writing. Clause 11 provides that the parties to the agreement agree that on completion of the construction, the same shall be granted through conveyance and handed over possession along with premises, fixture, fittings installation etc. Clause 2 talks about the rate of rent. The dispute which the petitioner raises ought to be taken as a dispute which the contract contemplates. The counsel for the petitioner, however, would argue that the arbitration clause cannot be taken for two reasons; one, even a clause for arbitration cannot exclude the jurisdiction of the court under Article 226 of the Constitution as laid down by decision of the Supreme Court in Union of India Versus Tantia Construction Pvt Ltd, 2011 5 SCC 697. Two, the denial of entitlement of the petitioner is raised by the respondents on the ground that the FCI was making a recovery of certain sums from the Department and the said amount was to be deducted from the rent. It was also stated there in the same communication that the PUNGRAIN will not be liable to pay any amount for the time the godown remained vacant and the amount could not be given to the petitioner by way of rent. Since the denial arises by some deduction made by the FCI, it ought to be seen that it is an inter-se issue between respondents No. 1 and 2 and not a dispute denying the petitioner's entitlement for which arbitration clause could be invoked.;