Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
ARANYA HOSPITALITY MANAGEMENT SERVICES PVT. LTD. – Appellant
Versus
K.M. DHOUNDIYAL & ANOTHER – Respondents
ARB. A. (COMM.) No. 6 of 2017
Decided On : 21-03-2017
Arbitration - Lessee - Arbitration and Conciliation Act, 1996 - Section 37
Fact of the Case:
The Lessee defaulted in payment of rent and the Lessors filed a petition under Section 9 of the Act, claiming outstanding rent and termination of agreements. The court directed the Lessee to deposit arrears of rent and continue paying rent as per the lease deed. The Lessee failed to comply, leading to contempt proceedings and subsequent appeals.
Finding of the Court:
The court found the Lessee's conduct to be dishonest and less than fair, and dismissed the petition with costs. The court clarified that its observations would not preclude the parties from pursuing their claims before the arbitrator.
Issues: Default in rent payment, termination of agreements, contempt of court, interpretation of lease deed clauses, force majeure events, possession of property.
Ratio Decidendi: The court held that the Lessee's inability to obtain necessary permissions or a water connection did not justify non-payment of rent or continued possession of the property. The court emphasized that the Lessee's conduct was dishonest and dismissed the petition with costs.
Final Decision: The petition and pending application were dismissed with costs of Rs. 1,00,000/- to be paid within two weeks.
I.A. No. 3610/2017
1. Allowed, subject to all just exceptions.
2. The application stands disposed of.
ARB. A. (COMM.) No. 6/2017 & I.A. No. 3609/2017
3. Aranya Hospitality Management Services Private Limited (hereafter ‘the Lessee’) has filed the present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act') impugning an order dated 10.03.2017 passed by the sole arbitrator (hereafter 'the impugned order'). By the impugned order, the sole arbitrator has dismissed the Lessee's application under Section 17 of the Act for modification of the order dated 21.04.2016 passed by this Court in a petition preferred by the respondents under Section 9 of the Act (being OMP (I) No. 100/2015), whereby this Court had inter-alia directed the Lessee to deposit the arrears of rent from March, 2014 till 30.04.2016 within two weeks from the said date. This Court had further directed the Lessee to continue paying rent as per the lease deed dated 01.10.2013, on or before 7th day of each month till the conclusion of the arbitration proceedings.
4. Briefly stated, the relevant facts necessary to address the present appeal are as under:-
4.1 Respondent Nos. 1 and 2 are husband and wife (hereafter jointly and severally referred to as “the Lessors”). The Lessors had purchased the property bearing No. 1768/1, First Floor, Central School Road, Behind Spinal Injury Hospital, Vasant Kunj, New Delhi (hereafter ‘the property’). The Lessors entered into a lease deed dated 01.10.2013, whereby the respondent no. 1 leased a portion of the property to the Lessee for a period of nine years commencing on 01.10.2013 and expiring on 30.09.2022 at a monthly rent of Rs. 2,00,000/- per month. The Lessors (respondent no. 2) also simultaneously entered into an agreement for providing fittings, fixtures, furniture and maintenance with the Lessee. The Lessee defaulted in payment of rent; in their petition under Section 9 of the Act, the Lessors claimed that the Lessee had not paid any rent since March, 2014 and as on 31.03.2016, the total amount outstanding was Rs. 57,24,250/-. It was also alleged that the Lessor has misused the said property for running a restaurant without any licence. Consequently, the Lessee was served with the notice dated 11.11.2014 under Section 417, 421 and 397 of the Delhi Municipal Corporation Act, 1957 and this was followed by a closure notice dated 02.12.2014.
4.2 The Lessors terminated the two agreements (lease deed dated 01.10.2013 as well as the agreement for fittings, fixtures, furniture and maintenance) on 15.12.2014. Notwithstanding the termination, the Lessee did not vacate the property and continues to occupy the same till date.
5. In view of the disputes that had arisen, the Lessors invoked the arbitration clause and by a notice dated 14.01.2015, appointed an arbitrator. However, the Lessee did not accept the appointment of arbitrator. Consequently, the Lessors filed a petition (being Arb. Pet. 141/2015) which was disposed of on 14.09.2015 and the sole arbitrator was appointed to adjudicate the disputes between the parties. It was further directed that arbitration shall be conducted under the aegis of Delhi International Arbitration Centre (DIAC).
6. As stated above, the Lessors also filed an application under Section 9 of the Act (OMP (I) No. 100/2015) inter-alia praying for ad interim orders directing the Lessee to maintain status quo with regard to the property and further restraining the Lessee from operating the restaurant without obtaining Municipal Health Trade Licence and Police Licence. Lessors also prayed for an order directing Lessee to pay a sum of Rs. 48,01,500/- being the amount claimed as payable till 15.12.2014.
7. The said petition was taken up for hearing on 25.05.2015 and after hearing the parties, this Court passed the following orders:-
"1. This is a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996, seeking the following reliefs:
(a) Pass ex-parte ad-interim
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
