The court affirmed that an arbitrator's decisions are upheld unless a patent illegality is evident, reinforcing limited jurisdiction under Section 34 against award modifications.

JUDGMENT :

SUNITA AGARWAL, J.

1. Heard Mr.Sudhir Nanavati, the learned Senior Counsel with Mr.Tarak Damani and Ms.Prachiti Shah, the learned counsels for the appellant and Mr.Unmesh D.Shukla, the learned Senior Counsel with Mr.Shashvata U. Shukla, Ms.Aashka Shah and Mr.Heet B. Jhaveri, the learned counsels for the respondent.

2. For convenience, reference to the appellant and respondent hereinafter would be as per the description of the parties in the First Appeal No.1022 of 2025 filed by the lessee.

3. Two connected appeals under Section 37 of the Arbitration and Conciliation Act’ 1996 (for short, ‘the Act’ 1996’) have been filed by the rival parties challenging the judgment and order dated 21.03.2025 passed by the Judge, Commercial Court, City Civil Court, Ahmedabad in Commercial Misc.Application No.160 of 2023 under Section 34 of the Act’ 1996.

4. The challenge under Section 34 was to the eviction award dated 17.8.2023 passed by the learned Arbitrator appointed by this Court. As per the final directions contained in the award, the appellant namely Rajhans Cine World Ltd. in First Appeal No.1022 of 2025 is required to handover vacant and peaceful possession of the property, subject matter of the lease deed dated 04.07.2022, within a period of four weeks from the date of the award. Another direction was to make payment of unpaid rent and other amount as under:-

“i Rent as agreed in the lease deed from 15.03.2020 till 24.03.2020.

ii. Rent @ 50% of the lease rent for the period commencing from 16.4.2020 to 31.7.2020.

iii. Rent w.e.f. 1.08.2020 till the possession of the lease property is handed over to the Claimant Rs. 15,14,045/- (as discussed in para 39 hereinabove).

iv. Interest @ 18% from the day when the amounts mentioned hereinabove in clauses (I), (ii) and (iii) became due.

v. All municipal and other taxes and cess payable in respect of lease property. including penalty if any, imposed upon unpaid amount shall be paid forthwith to the Claimant till the date of handing over of possession of the lease property to the Claimant as per the terms of the lease deed.

vi. As the entire litigation had been initiated on account of non-payment of rent and due to not handing over possession of the lease property to the Claimant even after completion of the lease period, the Claimant was unnecessarily dragged to these proceedings and therefore the Respondent is liable to pay the cost of litigation which is quantified at Rs.25 lakhs (Rupees twenty five lakhs), which the Respondent shall pay to the Claimant within four weeks from the date of the award, failing which it shall pay interest @ 18% per annum from the date of date of the award till the date of payment of the cost.”

5. The Commercial Court, though, while allowing the application under Section 34 of the Act’ 1996 in part, has refused to interfere in the award of eviction, however, a portion of the award providing for payment of unpaid lease rent and interest for the delay in payment of rent has been set aside granting 100% relaxation for the period between 16.04.2020 to 31.07.2020.

6. Undisputed facts of the case relevant to decide the controversy at hands noted by the Commercial Court are that the property in question belonging to Zen Matrix Pvt. Ltd., comprising of four floors admeasuring 25,008 sq.ft. situated at Ahmedabad City, has been given on lease to the appellant Rajhans Cine World Ltd. As per the lease deed, the tenure of the lease was from 01.08.2011 to 31.07.2020, however, the lessee failed to handover the possession of the property after expiry of the lease period. As a result, the owner/lessor inv