The main legal point established in the judgment is that for a dispute to be referred to arbitration, there must be an arbitrable dispute between the parties as per the terms of the arbitration agreement.

IA No.3091/2014 (u/S. 8 of the Arbitration & Conciliation Act, 1996)

1. This suit for possession, recovery of Rs. 8,12,220/- towards arrears of license fee, service tax, recovery of Rs. 9,00,000/- towards arrears of damages, mesne profits, pendente lite interest and future damages, etc. has been filed by the Plaintiff against the Defendant with the averment that the Defendant through its Director approached the Plaintiff Company in May, 2011 for taking the suit premises, i.e. commercial office space bearing unit no.502, 5th Floor, Elegance Tower, Jasola, New Delhi-110025, admeasuring 2310 square feet on license basis. After due negotiations, the License Deed dated 31.05.2011 was executed between the parties, which was duly registered in the office of the Sub-Registrar V, Delhi. The License Agreement was for a period of three years commencing from 1st June, 2011 with a lock-in period of 18 months on monthly license fee @ Rs. 171/- per square feet of the total super area of 2310 sq. ft.

2. It is the case of the Plaintiff that the Defendant also deposited refundable security amount equal to three months license fee, i.e. Rs. 11,85,030/- which was to be refunded to the Defendant upon vacation of the suit premises by it after making necessary deductions, if any, on account of license fee dues or other dues.

3. As per Clause 7.1 of the License Agreement, it was agreed between the parties that if the Licensee (the Defendant) failed to pay the license fee to the Licensor (the Plaintiff) for three consecutive months, it will be construed to be a case of non regular payment of license fee and the Licensor (the Plaintiff) by its own sole discretion would be entitled to terminate the License Agreement. According to the Plaintiff, the Defendant stopped making payment of the agreed license fee w.e.f. 01.11.2012. However, on pressing hard and asking the Defendant to vacate the suit premises, the Defendant issued a cheque bearing no.290318 dated 02.01.2013, drawn on Corporation Bank, New Friends Colony for a sum of Rs. 3,99,450/- towards part liability qua the arrears of monthly license fee. The cheque, however, was dishonoured whereupon a complaint under Section 138 of the Negotiable Instruments Act, 1881 was filed by the Plaintiff against the Defendant. The Plaintiff consequently revoked the license granted in favour of the Defendant by a legal notice dated 14.03.2013 and hence, this suit.

4. Written statement to the suit was not filed by the Defendant. On the other hand, the Defendant moved an application under Section 8 of the Arbitration and Conciliation Act, 1996 (the Act) stating that under the terms and conditions of the Agreement, the Licensor/Plaintiff was under an obligation to perform the following:-

(i) The Licensor has paid all the charges, dues and taxes, including payable in respect of the said premises and shall continue to pay such charges in a timely manner;

(ii) The Licensor shall carry out at its own cost all major external structural repairs to the said premises;

(iii) Maintenance Agreement and Payment of Maintenance Deposit and Charges/ outgoings to the Maintenance Agency.

5. It is the case of the Defendant/Applicant that there were frequent disturbances in the peaceful enjoyment of the premises by the Applicant on account of defaults on the part of the Plaintiff. There were issues raised by the Plaintiff with the maintenance agency time and again because of which the maintenance agency regularly disrupted the basic services to the license premises. The Defendant also raised these issues with the Plaintiff orally as well as in writing. However, the parties were unable to amicably resolve the said issues.

6. According to the Defendant/Applicant, all disputes arising between the parties in respect of the License Agreement were referable to arbitration. The suit is therefore, not maintainable and the disputes are liable to be referred to arbitration. Clause 16 of the License Agreement extracted in Para 4 of the applicati