Back
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. KULKARNI, J.
BXIN Office Parks India Pvt. Ltd. – Petitioner
Vs.
Kailasa Urja Pvt. Ltd. – Respondent
Arbitration Petition (L) Nos. 1692, 22526 of 2022, Arbitration Petition No. 351 of 2022
Decided On : 20-08-2022
The Court held that the exclusive jurisdiction of the Court of Small Causes under Section 41 of the Presidency Small Cause Courts Act, 1882 (PSCC Act) would remain sacrosanct and stand unaffected even if the parties agree to an arbitration agreement in the leave and license agreement. The reason being that the exclusive jurisdiction of the Court of Small Causes under Section 41 of the PSCC Act would remain sacrosanct and stand unaffected even if the parties agree to an arbitration agreement in the leave and license agreement.
Fact of the Case:
The petitioner, a company incorporated under the Companies Act, 1956, was the owner of a building called "One World Center." The respondent, also a company incorporated under the Companies Act, 1956, was granted a leave and license to use a portion of the building for a period of sixty months, which expired on July 31, 2021. Despite the expiry of the license, the respondent continued to occupy the premises. The petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (Act), seeking interim measures, including an order to the respondent to vacate the premises and deposit a sum of money as security for the petitioner's claim.
Finding of the Court:
The Court held that the dispute between the parties was not arbitrable as it related to the recovery of possession of the licensed premises, which was a matter exclusively within the jurisdiction of the Court of Small Causes under Section 41 of the PSCC Act. The Court further held that the arbitration agreement between the parties was invalid and inoperative as it was against public policy to allow the parties to oust the exclusive jurisdiction of the Court of Small Causes.
Issues: 1. Whether the dispute between the parties was arbitrable. 2. Whether the arbitration agreement between the parties was valid and operative.
Ratio Decidendi: The Court held that the dispute between the parties was not arbitrable as it related to the recovery of possession of the licensed premises, which was a matter exclusively within the jurisdiction of the Court of Small Causes under Section 41 of the PSCC Act. The Court further held that the arbitration agreement between the parties was invalid and inoperative as it was against public policy to allow the parties to oust the exclusive jurisdiction of the Court of Small Causes.
Final Decision: The Court dismissed the petition filed by the petitioner under Section 9 of the Act.
JUDGMENT :
G.S. KULKARNI, J.
1. These are three petitions filed under Section 9 of the Arbitration and Conciliation Act, 1996 (for short, “the Act”) whereby the petitioners are praying for interim measures pending the arbitral proceedings.
2. Arbitration Petition (L.) No. 22526 of 2022 (BXIN Office Parks India Pvt. Ltd.) has been argued as the lead petition. The subject matter of the proceedings is quite common, namely, a dispute as raised by the petitioner in the capacity of licensors against the respondent in all these proceedings being the licensees under the respective leave and licence agreements as entered between the parties.
3. For convenience, the facts in the lead petition are required to be noted:
4. The respondent is also a company incorporated under the Companies Act, 1956. It is stated that the respondent requested the IPPL to allow it to use a cumulative area of 16,256.70 sq. ft. in Tower 1 of the One World Centre for the purposes of operating a food court.
5. On 06 January, 2017, a Leave and Licence Agreement was entered between the parties granting the respondent a license to use the premises admeasuring 16,256.70 sq. feet in Tower – 1 of the building which comprises of the seating, preparation and wash area situated on the 1st floor. The term of the licence was for sixty months which has expired on 31 July, 2021.
6. In accordance with Clause 4 of the Leave and Licence Agreement, a monthly fee of Rs.10,000/- was payable within a period of 10 days of the beginning of the successive month.
7. Clauses 2, 6, 9.6, 16 and 22 of the Leave and Licence Agreement are required to be noted which read thus:-
LICENCE TERM:- The Licensor hereby grants on a Leave and license to the Licensee and the Licensee hereby takes on leave and license from the Licensor, to use and occupy the Licensed Premises for the purpose of setting up a Food Court for a period of 60 (sixty) months (the License Period commencing from License Commencement Date of 1st August 2016 and expiring on the completion of 60 (Sixty) from the License Commencement Date i.e. 31 July 2021 unless terminated earlier in accordance with the terms of this Agreement. There shall be 60 (Sixty) months Lock in period for the Parties during which period neither Party shall be entitled to terminate the Leave and License Agreement save and except as set out herein.
Clause 6 of the Agreement – Possession and Occupation of Premises
6.1 The Licensee hereby acknowledges that on the commencement and during the continuation of the use and occupation of the Licensed Premises, the Licensor shall not assign its rights in relation to operation of the Food Courts. However, Licensee shall be free to sub-let, sub-license, grant the right to use the Licensed Premises to third parties for any activities it may consider fit in its sole discretion.
6.2 Except to the extent set out above, it is hereby agreed between the Parties hereto that at all times the juridical possession of the Licensed Premises shall be of the Licensor.
Clause 9 of the Agreement – Covenants of the parties
9.6 Upon the expiry of this License Period or on earlier determination/ termination of this Agreement, the Licensee shall on its own remove all articles and things belonging to the Licensee, Sub-Licensee (being the Third Parties) or t
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
