2016 Supreme(Del) 1839
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN SINGH, J.
FRIENDS MOTEL PRIVATE LIMITED – Petitioner
Versus
SUPERTRACK HOTELS PRIVATE LIMITED – Respondent
O.M.P. (I) No. 643 of 2015
Decided On : 29-04-2016
For the Petitioner:Mr. Sandeep Sethi, Senior Advocate with Mr. Sahid Anwar, Mr. S.P. Sinha and Mr. Rakesh Mishra, Advocates.
For the Respondent:Mr. Satish Kumar and Mr. Sunil Gupta, Advocates.
The main legal point established is that non-payment of rent and material breach of lease can lead to termination, and the court can enforce payment of outstanding rent and vacate the premises.
Headnote:
Arbitration and Conciliation Act - Lease Termination - Section 9 - [FRIENDS MOTEL PVT. LTD.] - [LEASE TERMINATION] - [Section 9 of the Arbitration and Conciliation Act, 1996] - The court discussed the lease deed, material breach, non-payment of rent, and termination clause under the lease agreement. The key legal provisions of the lease deed, including the termination clause and the consequences of material breach, influenced the court's decision to direct the respondent to pay outstanding rent and vacate the premises.
Fact of the Case:
The petitioner, Friends Motel Pvt. Ltd., filed a petition seeking interim reliefs, including direction to pay outstanding rents and vacation of the premises. The respondent failed to pay rent and committed material breach by making unauthorized structural changes.
Finding of the Court:
The court found that the respondent committed material breach by non-payment of rent and unauthorized structural changes, leading to the termination of the lease. The court directed the respondent to pay outstanding rent and vacate the premises.
Issues: Non-payment of rent, material breach of lease, unauthorized structural changes, and lease termination were the key issues in the case.
Ratio Decidendi: The court relied on the lease deed, termination clause, and evidence of non-payment of rent and material breach to decide in favor of the petitioner.
Final Decision: The court directed the respondent to pay outstanding rent and vacate the premises, while allowing both parties to raise their claims before the Arbitral Tribunal.
MANMOHAN SINGH, J.
1. The petitioner Friends Motel Pvt. Ltd. has filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 who is, inter alia, seeking many interim reliefs.
2. One of the reliefs sought is to issue direction to the respondent to pay the outstanding rents for the last seven months, i.e. from 15th March, 2015 to 15th October, 2015 being due and payable to the petitioner amounting to Rs. 1,30,44,960/- and a sum of Rs. 1,00,00,000/- from 16th October, 2015 the date of termination of lease period i.e. from 16th October, 2015 to 4th December, 2015 being due and payable to the petitioner at the rate of Rs. 2,00,000/- per /day along with interest as a result a total outstanding against the respondent is of Rs. 2,30,44,960/- along with interest.
2.1 The petitioner has apprehension that the respondent can fled away at any time by taking the huge amount. Thus, in other relief direction is sought against the respondent to deposit the outstanding amount of Rs. 2,30,44,960/- along with interest with the Registrar General of this court to be maintained in a fixed deposit pending arbitration and award or by way of giving direction to the respondents to provide a bank guarantee in favour of the petitioner for an amount of Rs. 2,30,44,960/- to secure the amounts as the petitioner is entitled to under the lease agreement pending arbitration and award.
2.2 In other relief, the petitioner is seeking the interim direction for the vacation of the premises as the petitioner is having apprehension of damages of the furniture and fixture and the whole infrastructure which were given on rent to the respondent for the purpose of running hotel.
3. Before considering any prayer, it is necessary to refer certain facts:
a) The petitioner executed a nine years lease deed of the Plot No. 104 Babar Road, New Delhi 110001 a residential premises approximately 18,000 square feet (hereinafter refer as "said premises), in the favor of the respondent on the date 1st April 2014, in which respondent agrees to pay monthly rent of Rs 18,00,000/- payable on or before the 15th day of each calendar month in advance to the petitioner and also both the parties agreed to abide all the terms and conditions mentioned in the lease deed.
b) The petitioner leased out the premises to the respondent along with the fixtures as described in the lease for running the business of guest house by the respondent. Subject to obtaining all necessary permissions and certificate from various authorities, namely NDMC, police, traffic, fire etc. The respondent obtained the necessary permissions and has been successfully operating from the suit premises. It is informed by the respondent to the petitioner that all necessary permission/license have been obtained by law full means, which are valid till 31st March, 2016 the respondent have been uninterruptedly operating business in the name and style of Friend's Motel Pvt. Ltd. and earning huge profit.
c) As per the lease deed clause 11.2 (Termination Clause), it is clearly mentioned that lease may be terminated by the petitioner if any kind of Material Breach of Lease done by the respondent, after providing a 15 days curative period by way of "Lessee Material Breach Notice". If in given period respondent fail to cure the material breach of the lease by the operation of the said clause the lease shall be terminated.
d) Clause 11.2 of the Lease is reproduced for the ready reference of the Court:
"a) Material Breach of Lessee: this lease may be terminated by the Lessor in case of Material Breach by the lessee. Upon the issue of a notice by the Lessor of Material Breach by the Lessee ("lessee material breach notice), the lessee shall be provided with a curative period of 15 days, where such material breach is capable of being cured and within which the Lessee would be required to cure such material breac