The court upheld the Arbitrator's decision to require the lessee to continue depositing rent pending arbitration while defining the obligations for necessary permits as a disputed matter requiring adjudication.

JUDGMENT

[VIA VIDEO CONFERENCING]

Sanjeev Narula, J. (Oral)--The present cross-appeals under Section 37 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as `the Act'], have been filed by the parties, being aggrieved by the Order dated 20th May 2021 of the learned Sole Arbitrator in the ongoing arbitral proceedings [hereinafter referred to as `Impugned Order'], wherein certain directions were passed while adjudicating an application under Section 17 of the Act. The Dispute

2. Briefly stated, the facts of the case are as follows:

2.1. Cinepolis India Pvt. Ltd. [hereinafter referred to as `Cinepolis'] entered into a Lease Deed dated 21st April 2014 [hereinafter referred to as the `Lease Deed'] with the Respondent - Sarita Multiplex Pvt Ltd. [hereinafter referred to as `SMPL'], in respect of a three-screen multiplex with a capacity of 800 seats, comprising 1902.10 sq. mt. of super area, [hereinafter referred to as the `Multiplex'] situated in North Square Mall, constructed on Plot No. F-1, 2 & 3, Kabirdas Marg, Netaji Subhash Place, District Centre, Pitampura, New Delhi-110034 [hereinafter referred to as the `Mall'].

2.2. Cinepolis, as the successor-in-interest of Fun Multiplex Pvt. Limited (the original lessee), is the Claimant in the ongoing arbitration proceedings, and SMPL is the Counter-Claimant.

2.3. Under Clause III of the aforenoted ongoing Lease Deed, Cinepolis has to pay monthly rent with service tax by the 7th of every month in advance. Delay in payment of rent attracts interest @ 15% for the delayed period.

2.4. On 12th March 2020, lockdown restrictions were issued by the Government of NCT of Delhi directing closure of Malls and Multiplexes in Delhi till 31st March 2020 in light of the COVID-19 pandemic. Resultantly, on 16th March 2020, Cinepolis invoked Force Majeure under clause XV of the Lease Deed and sought to be excused from payment of rent of the leased premises.

2.5. Apart from Force Majeure, Cinepolis also claimed suspension of payment of rent on the ground that SMPL failed to fulfil its reciprocal promise of obtaining NOC for Fire Safety Certificate of the Mall [hereinafter referred to as `Fire NOC']. It is stated that the Fire NOC of the Multiplex is a subset of the Fire NOC of the Mall. The same expired in 2019, and has not been renewed to date; this fact was only discovered by Cinepolis in 2020.

2.6. SMPL, on the other hand, seeks re-possession of the Multiplex on the ground that the Lease Deed stood terminated vide its notice dated 12th May, 2020 effective from 1st June, 2020 and the issue of Fire NOC raised by the respondent is contrary to the terms of Lease Deed. It also claimed arrears of rent and use and occupation charges for continuing in possession beyond termination.

2.7. In this background, consequent to the petitions filed by Cinepolis under section 9 of the Act, this court passed interim orders of protection in its favour and directed the payment of rent to be deposited in the court. Parties were then referred to arbitration.¹

2.8. During the pendency of the arbitral proceedings, parties filed applications under Section 17 of the Act. These were decided by the Impugned Order that is now assailed in the instant appeals.

Cinepolis's Contentions:

3. Mr. Jayant K. Mehta, senior counsel for Cinepolis, argues as follows:

3.1. Cinepolis's challenge to the Impugned Order is limited to the dicta issued by the Tribunal, directing Cinepolis to make continuous deposit of rental payment before the Registrar General of this Court, pending culmination of arbitration proceedings. Cine