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2014 Supreme(Del) 635
High Court of Delhi
THE HONOURABLE MR. JUSTICE MANMOHAN SINGH
Mayar Health Resorts Ltd.
Versus
Indian Tourism Development Corporation
O.M.P. No. 260 of 2014
Decided On : 28-02-2014
For the Petitioner:Sanjay Jain, Sr. Adv. with A.K. Tandon, Manjula Gandhi, Noor Anand, Aastha Jain, Shivanshu Kumar, Advocates.
The binding nature of findings from arbitration proceedings and the requirement for fairness and non-arbitrariness in the conduct of parties.
Headnote:
Arbitration and Conciliation Act - License Agreement - 9
Fact of the Case:
The petitioner sought to restrain the respondent from eviction and calling for tenders for the premises under a License Agreement. Disputes arose regarding alleged encroachment, leading to arbitration and subsequent challenges to the award.
Finding of the Court:
The court found that the petitioner had exclusive possession within the licensed area and that the findings of the Local Commissioner were binding. The respondent's conduct was scrutinized for fairness and arbitrariness.
Issues: Dispute over alleged encroachment, renewal of License Agreement, and fairness of respondent's conduct.
Ratio Decidendi: The court emphasized the binding nature of the Local Commissioner's findings and the need for fairness and non-arbitrariness in the conduct of the respondent.
Final Decision: The court issued notice to the respondent and restrained any coercive action against the petitioner until the next hearing.
Manmohan Singh, J. (Oral)
I.A. No.3866/2014 (exemption)
Exemption allowed, subject to just exemptions.
The application is disposed of.
OMP No.260/2014
1. The petitioner has filed an affidavit of Mr.Om Shanker Pandey, informing the Court that on 27th February, 2014 at around 3.00 p.m., the termination notice dated 27th February, 2014 was delivered to the petitioner. Copy of the said notice is annexed as Annexure-M.
2. In the original petition under Section 9 of the Arbitration and Conciliation Act, 1996, the following prayers have been sought:
“a) restraining the Respondent from initiating any process of eviction/dispossession against the Petitioner from the said premises in possession and occupation of the Petitioner.
b) restraining the Respondent from going ahead with the process of calling for tenders vis-a-vis the said premises in possession and occupation of the Petitioner.”
3. Few facts of the matter are that the petitioner and the respondent entered into agreement for setting-up an International Standard SPA and Health Club under the name and style of Amatrra in the building premises of Ashok Hotel situated at Chanakyapuri, New Delhi-110021 for a period of 10 years commencing from 1st March, 2004 till 28th February, 2014. In the year 2004, certain disputes arose between the parties with respect to alleged encroachment in the premises which has been litigated at various levels including the Court of law.
4. The respondent vide letters dated 10th August, 2004 and 25th August, 2004 accused the petitioner of violating the terms of the License Deed. Some efforts were made, however, the issue of alleged encroachment could not be resolved. In August, 2006, second report was prepared by the Chief Technical Examiners. The case of the petitioner was that the investigation was carried by it in the absence of the representative of the petitioner. On 31st May, 2007, a Local Commissioner was appointed by this Court in CS(OS) No.1038/2007 filed by the petitioner seeking injunction against the respondent from interfering its peaceful possession and occupation of the premises during the subsistence of the period of licence. In November, 2007, the Local Commissioner filed his report who took measurement of the entire area. In para 10 of the report of the Local Commissioner, it was stated that the petitioner was in exclusive possession of 19,569 sq. ft. which was well within the 20,000 sq. ft. licensed to it under the License Deed and thus, the petitioner was not guilty of encroachment.
5. The respondent in the pending suit filed by the petitioner moved an application in the year 2007, under Section 8 of the Arbitration and Conciliation Act, 1996. An order was passed by referring the matter to the sole Arbitrator appointed by this Court on 28th April, 2008. It is alleged that in November, 2008, the respondent in its letter addressed to the petitioner has admitted the veracity of the said report of the Local Commissioner, inter-alia, to the effect that, “.....The area occupied by Amatrra at The Ashok was measured and documented by the Commission of Court, which was mutually accepted and signed both by you and The Ashok....” At the same time, statement of claims was also submitted by the respondent before the Arbitrator. In March, 2009, the respondent formulated a new Licensing Policy wherein it prescribed the procedure for licensing of Restaurants/business premises and provided for an automatic first time renewal and further categorized the licenses on the basis of investment involved and fixed the tenure, i.e. First Agreement – 10 years and One Time Renewal – 5 years. Further, para 2 of the new draft License Deed states that, “The Licensee shall be entitled to a one time renewal after the expiry of the original license period, unless he has committed a breach of the terms and conditions of the agreement or has been defaulter in the payment of license fee or guilty of proven misconduct...”
6. The Award was passed by the sole Arbitrator on 6th
