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IN THE HIGH COURT OF DELHI AT NEW DELHI
Sanjeev Narula, J.
Narangs International Hotels Private Limited - Appellant
Versus
Delhi International Airport Limited - Respondent
O.M.P.(I) (Comm.) 294/2021 & I.A. 10860/2021
Decided On : 27-08-2021
Arbitration - Lease Extension - Arbitration and Conciliation Act, 1996 - Section 9 - 20th August 1982 Lease Deed - Agreement dated 2009 - Supplementary Lease Agreement dated 17th May 2013 - OMDA - Flight Catering Business - Extension Clause - License Agreement - Specific Relief Act, 1963 - Public Premises (Eviction of Unauthorised Occupants) Act, 1971
Fact of the Case:
The Lessee, NIHPL, sought urgent interim relief against the Lessor, DIAL, due to the expiry of the lease on 31st August 2021. NIHPL contended that DIAL pressurized it to enter into a license agreement instead of the lease, threatening to disallow access to the Airport. NIHPL invoked arbitration after DIAL asked it to vacate the premises. The court heard arguments from both parties and examined the contractual obligations.
Finding of the Court:
The court found that the SLA was subsisting and governed the relationship between the parties until 31st August 2021. However, it concluded that NIHPL did not establish a prima facie case for grant of interim relief. The court also determined that the contract was determinable and could not be specifically enforced. It dismissed the petition and disposed of the pending application.
Issues: The issues involved the interpretation of the extension clause in the lease agreement, the enforceability of NIHPL's right under the terms of the SLA, and the applicability of the Public Premises Act. The court also considered the nature of the injunction sought by NIHPL and the refusal of DIAL to extend the lease.
Ratio Decidendi: The court held that NIHPL did not establish a prima facie case for grant of interim relief and that the contract was determinable and could not be specifically enforced. It also found that NIHPL did not have an automatic right of extension and that DIAL's refusal to extend the lease was not unfair or arbitrary.
Final Decision: The court dismissed the petition and disposed of the pending application, finding no merit in NIHPL's claims.
JUDGMENT
Sanjeev Narula, J. (Oral). - The present petition under Section 9 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as 'the Act'] has been filed by the Lessee - Narangs International Hotels Pvt. Ltd. [hereinafter referred to as "NIHPL"], seeking urgent interim relief against the Lessor - Delhi International Airport Limited [hereinafter referred to as 'DIAL'], being aggrieved by DIAL's email dated 02nd July 2021 asking NIHPL to initiate steps for vacation of DIAL's premises in view of the expiry of lease on 31st August 2021.
2. NIHPL seeks the following urgent reliefs:
"[A] Direct that pending the adjudication of the arbitration proceedings between the Parties status quo as on date be maintained by the Parties regarding the flight catering operations of the Petitioner;
[B] Restrain the Respondent from taking any coercive steps to impede the flight catering operations of the Petitioner, including discontinuing issuance of necessary permits/ passes to its personnel/vehicles for entry to the Airport premises, or taking any steps to oust it from the leased land;
[C] Pass ad-interim exparte orders in terms of the above prayers. "
3. The facts leading to the filing of the present petition, as narrated therein, are briefly captured below:
3.1. International Airports Authority of India granted lease of airport land to NIHPL for the "purpose of carrying on flight catering business at the Delhi Airport, Palam" for a period of 30 years (ending on 31st August 2011), by way of a Lease Deed dated 20th August, 1982 [hereinafter referred to as 'Original Lease Deed']. Clause 19 of the General Conditions of Contract appended thereto contained an arbitration clause.
3.2. The Delhi Airport / Palam Airport was renamed in 1986 as the Indira Gandhi International Airport [hereinafter referred to as 'IGI Airport' or the 'Airport']. The International Airports Authority of India was renamed in 1995 as Airports Authority of India [hereinafter referred to as 'AAI].
3.3. DIAL became AAIs successor-in-interest for the Original Lease Deed by way of an Operations, Maintenance and Development Agreement dated 04th April 2006, executed between AAI and DIAL, in respect of IGI Airport. [hereinafter referred to as 'OMDA']
3.4. The Original Lease Deed also provided "an option of extension upto 10 years" in its recital. Later, as recorded in the minutes of meeting dated 27th November 2009 held between NIHPL, DIAL and AAI, the lease was extended for a further period of 10 years (i.e. till 31st August 2021). A separate agreement was also entered into between NIHPL, DIAL and AAI regarding the same in 2009 [hereinafter referred to as the 'Agreement dated 2009']. Thus, NIHPL continues to operate at the IGI Airport on the same terms and conditions as contained in the Original Lease Deed, except for certain modifications as recorded in the minutes of meeting referred above.
3.5. NIHPL contends that shortly thereafter, DIAL started pressurizing it to enter into a license agreement instead of the lease, and threatened to disallow access of airport to NIHPL for providing in-flight catering services.
3.6. Faced with DIAL's refusal to grant NIHPL's personnel and vehicles access to the Airport, NIHPL was constrained in 2013 to file a petition under Section 9 of the Act for necessary reliefs, which included access to the Airport. During the course of the proceedings, NIHPL and DIAL executed a Supplementary Lease Agreement dated 17th May 2013 [hereinafter referred to as 'SLA'], on the basis whereof, the Section 9 petition was withdrawn.[1] The said agreement also contained an arbitration clause.
[1] Order dated 20th May 2013 passed by a coordinate bench of this court in OMP No. 435/2013.
3.7. In 2016, once again, faced with DIAL's denial of access to the Airport, NIHPL approached this court by way of a writ petition, which was disposed of by recording statement of DIAL that the Original Lease Deed stands extended till August 2021 and that DIAL would extend the necess
The court determined that the contract was determinable and could not be specifically enforced, and that NIHPL did not establish a prima facie case for grant of interim relief.
The relief sought under Section 9 of the Arbitration Act must be in the nature of interim measures to protect the subject matter of the arbitration and cannot extend to permanent injunctions.
The main legal point established is that Section 9 proceedings are for grant/non-grant of interim measures, not for adjudicating disputed facts, and the principles of granting interim measures should....
An Arbitral Tribunal under the Arbitration and Conciliation Act cannot grant interim orders that effectively render final decisions on substantive claims, as this exceeds its jurisdiction.
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The court emphasized the importance of considering relevant evidence and court orders in arbitration proceedings and held that a decision based on irrelevant or unproven evidence can be considered pe....
Point of law: Existence of an arbitration clause cannot be a ground for non maintainability of a writ petition under Article 226 of the Constitution of India. But it is the discretion of the High Cou....
The determination of the Lease Agreement's nature and the establishment of a prima facie case for restraining the respondent from acting on the Termination Notice were central legal points in the jud....
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