IMPORTANT POINT
The court upheld the Arbitral Award, emphasizing limited grounds for interference and confirming the validity of the Sole Arbitrator's findings regarding the Lease Deed.

JUDGMENT :

TARA VITASTA GANJU, J.

1. This Appeal has been filed by Aktivortho Private Limited earlier known as M/s International Orthopedic Rehabilitation and Prevention (India) Private Limited [hereinafter referred to as the “Appellant/Lessee”] under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the “Arbitration Act”] impugning a judgment passed by the learned District Judge Commercial Court-03, West, Tis Hazari, Delhi dated 29.01.2024 in O.M.P. (COMM.) 19/2023 [hereinafter referred to as “Impugned Order”]. The Appellant is aggrieved by the Impugned Order which upheld the award dated 08.08.2022 as amended by the Arbitral Award dated 17.03.2023 [hereinafter referred to as “Arbitral Award”]. By the Arbitral Award the sole arbitrator appointed by the learned Trial Court on 20.12.2018 [hereinafter referred to as “Sole Arbitrator”] adjudicated upon a landlord-tenant dispute in relation to the Upper Ground Floor, comprising of a total super area of 3400 sq. ft. of property bearing No. 63, West Avenue Road, West Punjabi Bagh, New Delhi, 110026 [hereinafter referred to as “Premises”]. The Appellant/Lessee was the Petitioner before the learned Commercial Court and the Respondent in the arbitration proceedings. Conversely, the Respondents/Lessors in this Appeal were the original claimant before the Sole Arbitrator.

BRIEF FACTS

2. Under and by virtue of a registered Lease Deed dated 18.03.2015 [hereinafter referred to as the “Lease Deed”], the Appellant/Lessee took on lease the Premises from the Respondents/Lessors. The salient feature of the Lease Deed included the following:

(i) The monthly rental of Rs. 3,55,000/- payable on or before the 7th day of each calendar month;

(ii) Interest free security deposit equivalent to six months rent in the sum of Rs. 21,30,000/- was to be paid by the Appellant/Lessee;

(iii) The Lease Deed would commence on 23.05.2015 for a duration of three years with a rent free fit out period of 45 days;

(iv) The lease would automatically extend for another two terms of three years each with an escalation of the rental by 15% for such successive terms unless a written notice is received six months in advance by the lessor terminating the tenancy priorly; and

(v) The lock-in period of 36 months from the date of commencement of lease also form part of the Lease Deed.

3. The tenancy commenced and the Appellant/Lessee carried out its fit out in the Premises and commenced its business from the Premises. The Appellant/Lessee made rental payments until February, 2017 after which the rental payments were stopped. Disputes arose between the parties and on 07.04.2017, the Appellant/Lessee issued a legal notice terminating the lease owing to defaults of Lease Deed by the Respondents/Lessors. The Appellant/Lessee contended that the Respondents/Lessors failed to honour the terms of the Lease Deed and on the ground of non-performance, terminated the Lease Deed between the parties. As per the legal notice, the breaches included:

(i) Non payment of entire conversion charges;

(ii) No structural insurance cover was taken;

(iii) Non payment of annual maintenance charges for the lift;

(iv) Denying the access to the respondent and its staff etc. to use the common area; and

(v) Refusal to upkeep the common area on the ground floor.

4. Simultaneously, the Respondents/Lessors sent a legal notice dated 10.04.2017 to the Appellant/Lessee raising a demand for the unpaid rent for the months of March, 2017 and April, 2017. A reply to the legal notice dated 07.04.2017 was also sent by the Respondents/Lessors denying any breach of the Lease Deed. The Premises were vacated by the Appellant/Lessee on 31.05.2017.

5. A suit for recovery was filed by the Respondents/Lessors against the Appellant/Lessee in the Court of learned District Judge at Tis Hazari Courts, Delhi. By an order dated 20.12.2018, pursuant to an Application filed under Section 8 of the Arbitration Act by the Appellant/Lessee and with the consent of bo