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M/S Arun Kumar Kamal Kumar & Ors. v. M/S Selected Marble Home & Ors.

Civil Appeal · 2020 INSC 571Decided 1 Oct 2020
Civil Appeal No. 8980 of 2017
Justice N.V. Ramana · Justice S. Abdul Nazeer · Justice Surya Kant

Background

The appellants ran a restaurant/sweets business ("Nathu's Sweets") under two 1990 licence agreements with the respondents to operate out of the respondents' premises on a commission basis. Disputes arose over electricity supply, the business shut for years, and the respondents eventually went to arbitration seeking commission dues and damages for the period the appellants kept possession without running the business. An Arbitrator awarded damages against the appellants in 1998, which the Delhi High Court's Single Judge and then Division Bench upheld (the Division Bench only reduced the post-award interest rate).

Decision Breakdown

The Supreme Court dismissed the appeal, holding that the appellants, having themselves filed the statement of accounts used to calculate damages and having had tax already deducted on that basis, could not now claim the figures were mathematical errors. The Court agreed that a licensee who retains possession of premises remains liable for rent/damages even when the business is shut, following the Delhi High Court's earlier ruling in State Bank of Patiala v. Chandermohan. It also upheld the Arbitrator's method for calculating commission for the period the business operated after reopening in 1995. As a concession, the Court extended the same reduced 9% interest benefit (instead of 16%) that the High Court had given, provided the appellants paid the full decretal amount by 31 December 2020.

Lesson Learnt

A party cannot disown figures and calculations it voluntarily submitted and relied upon in arbitration simply because the outcome is unfavourable; and a tenant/licensee who retains possession of premises generally stays liable for rent or damages even while the business itself is not operating.

Official source (sci.gov.in)View Judgment (PDF)

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