SUPREME COURT OF INDIA
M.R. SHAH, B.V. NAGARATHNA, JJ.
Evergreen Land Mark Pvt. Ltd. – Appellants
Versus
John Tinson & Company Pvt. Ltd. & Anr. - Respondents
Civil Appeal No. 2783 of 2022
Decided on : 19-04-2022
Arbitration and Conciliation Act, 1996 – Sections 17 and 37(2)(b) – Appeal against arbitral award – Dispute with respect to rental amount – Liability to pay rentals for the period during lockdown is yet to be adjudicated upon and considered by Tribunal – As such, no order could have been passed by Tribunal by way of interim measure on applications filed under Section 17 of Arbitration Act in a case where there is a serious dispute with respect to liability of rental amounts to be paid, which is yet to be adjudicated upon and/or considered by Arbitral Tribunal – Impugned order modified. (Paras 6 and 7)
Facts of the case:
Feeling aggrieved and dissatisfied with impugned judgment and order dated 10.02.2022 passed by the High Court of Delhi at New Delhi in ARB.A. (Comm.) No.9/2022 under Section 37(2)(b) of the Arbitration & Conciliation Act, 1996, by which High Court has dismissed the said appeal in which appellant herein challenged order dated 05.01.2022 passed by the Arbitral Tribunal in two applications filed by respondent No. 1 and 2 herein under Section 17 of Arbitration Act, seeking deposit of the rental amount for period between March, 2020 and December, 2021, appellant herein – lessee has preferred the present appeal. Dispute is with respect to two separate premises owned by respondent No. 1 and 2 herein which were given on lease to the appellant, who is running a Restaurant and Bar in the premises in question.
Findings of Court:
The balance amount as per the present order shall be deposited by appellant as observed by Arbitral Tribunal in para 43(b) of interim order. Tribunal to conclude the arbitration proceedings at the earliest preferably within a period of nine months, subject to cooperation of both the parties.
Result : Appeal allowed in part.
JUDGMENT :
M.R. Shah, J.
1. Feeling aggrieved and dissatisfied with impugned judgment and order dated 10.02.2022 passed by the High Court of Delhi at New Delhi in ARB.A. (Comm.) No.9/2022 under Section 37(2)(b) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the “Arbitration Act”), by which the High Court has dismissed the said appeal in which the appellant herein challenged order dated 05.01.2022 passed by the Arbitral Tribunal in two applications filed by respondent No. 1 and 2 herein under Section 17 of the Arbitration Act, seeking deposit of the rental amount for the period between March, 2020 and December, 2021, the appellant herein – lessee has preferred the present appeal.
2. The dispute is with respect to two separate premises owned by respondent No. 1 and 2 herein which were given on lease to the appellant, who is running a Restaurant and Bar in the premises in question. The lease agreement came to be terminated by respondent No. 1 and 2 – original owners. The dispute with respect to the termination of lease agreement is the subject matter before the Arbitral Tribunal. Before the Arbitral Tribunal, respondent No. 1 and 2 filed two separate applications under Section 17 of the Arbitration Act seeking deposit of the rental amount due and payable for the period between March, 2020 to December, 2021. By way of an interim measure, in exercise of powers under Section 17 of the Act, the Arbitrator vide order/orders dated 05.01.2022 directed the appellant to deposit 100% of rental amount due and payable of the period between March, 2020 to December, 2021. At this stage, it is required to be noted that before the Arbitral Tribunal, it was the case on behalf of the appellant that due to the Covid-19 Pandemic, there was a lockdown declared by the Government and therefore, there was a complete closure/partial closure and therefore, invoking clause 29 (Force Majeure) of the lease deed, the appellant disputed the liability to pay the rental amount for the period during which there was a lockdown/complete closure/partial closure. Despite the above submissions, the Arbitral Tribunal directed the appellant to deposit the rental amount from March, 2020 onwards and up to December, 2021. The Arbitral Tribunal also passed an order that amount so deposited shall be kept in fixed deposit accounts. The operative portion of the order contained in para 43 is as under:
(b) The amounts of money equivalent to the arrears computed as above shall be deposited by the Respondent in Fixed Deposit (FD) accounts separately in relation to the respective Claimants in a public sector Bank, initially for a period of six months with provision of autocredit of Interest and periodical auto-renewal within four weeks of this order.”
2.1 Feeling aggrieved and dissatisfied with the order passed by the Arbitral Tribunal by way of an interim arrangement in exercise of powers under Section 17 of the Arbitration Act, the appellant preferred an appeal before the High Court under Section 37(2)(b) of the Arbitration Act. By the impugned judgment and order, the High Court has dismissed the said appeal and has confirmed the interim order passed by the Arbitral Tribunal passed in exercise of powers under Section 17 of the Arbitration Act. Hence, the prese
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