The failure to adhere to the terms of the lease agreement, including rent payment, termination, and possession, led to the court upholding the arbitrator's award.

Prathiba M. Singh, J.

1. The Petitioner, who was the Respondent in the arbitral proceedings (referred to as ‘Respondent’ for the sake of consistency) has preferred the present petition challenging the award dated 27th December, 2012 passed by Justice J.P. Singh (Retired) – Learned Sole Arbitrator.

2. The Respondent had entered into a Memorandum of Understanding (hereinafter ‘MOU’) dated 25th December, 2007 with M/s. S.S. Enterprises-Claimant in the arbitral proceedings (referred to as ‘Claimant’ for the sake of consistency), by which the Respondent took on lease suit property i.e. part of 3/1/22, Site IV, Sahibabad Industrial Area, Ghaziabad (U.P.) constituting of Basement plus Ground Floor, First Floor, with wall to wall covered area of 21840 sq. ft. (approximately) (hereinafter ‘suit property’). The monthly lease amount was Rs.3,30,000/- for a period of 9 years with a lock in period of 15 months. After the expiry of the lock in period, if the lessee wished to terminate the agreement prior to the period of expiry, three months’ notice in writing could be given by the lessee. However, the lessor did not have the option of terminating the lease. One of the clauses in the agreement imposed an obligation on the Claimant lessor, to get the user of the premises property changed from ‘manufacturing corrugated boxes’ to ‘software development unit’.

3. The Respondent paid rent till September, 2008. However, in the month of October, 2008, it did not pay rent which resulted in issuance of notice dated 22nd October, 2008. Vide this notice, the Claimant called upon the Respondent to execute the lease deed in terms of the MOU and also pay the rent amount. Vide letter dated 10th November, 2008, the Claimant invoked the arbitration clause. In the mean time, the Respondent had filed an injunction suit before the Civil Judge seeking injunction and declaration.

4. Thus, disputes had arisen between the parties. Vide letter dated 3rd July, 2009, Learned Sole Arbitrator was appointed who entered reference.

5. The Learned Sole Arbitrator, vide award dated 27th December, 2012 awarded the following amounts in favour of the Claimant. The operative portion of the award is set out herein below :

“75. It is evident that the respondent for the reasons best known to it was not willing to continue its business in the tenancy premises and started vacating the same but there was confrontation with the claimant and there were some objections on behalf of the claimant, which resulted in disputes. It has been established on record that the claimant had taken steps for change of the user and no govt. or municipal authorities had prevented the respondent from continuing its business. The dispute of removing goods and handing over vacant possession was resolved amicably during the arbitration proceedings. Therefore there is no question of the goods still lying in the premises. The security amount is to be adjusted from the outstanding amount as ascertained above. Both the sides do suffer some damage when the premises are vacated. But the respondent has neither pleaded nor given break up of the expenses allegedly incurred on maintenance. The claimant's pleadings and contentions on damages are on reliable footing. Considering all the facts and circumstances, I do not find any merit in the counter-claim and resultantly the same is dismissed.

SUMMARY OF THE AWARD CLAIMS OF THE CLAIMANT
Srl. No.	Amount claimed	Amount allowed
1.	Claims No.1 to 3 and 6 regarding Rent for the period 1.10.2008 to 31.5.2010 @ Rs.3,30,000/- per month	(a)@ Rs.3,30,000/- per month from 1.10.2008 till 30.4.2009 (upto lock-in period)	Rs. 23,10,000/-
		(b)@ Rs.1,65,000/- from 1.5.2009 to 31.5.2010 (upto handing over the possession)	Rs. 21,45,000/-
2.	Claim No. 7 towards damages Rs. 40,00,000/-		Rs. 5,00,000/-
3.