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2024 Supreme(HP) 377

IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
SATYEN VAIDYA, J.
State of Himachal Pradesh and Others - Appellants 
Versus
E.I.H. Limited and Others - Respondents
OMP No. No. 612 of 2023, Ext. Pet. No. 19 of 2023
Decided On : 05-01-2024

Advocates Appeared:
For the Appellants : Dhruv Mehta, Prabhat Kumar, I.N. Mehta, Vivek Negi
For the Respondents: R.L. Sood, Arjun Lall, Sanjeevni Sood, Aakash Thakur

Compliance with arbitral awards requires actual execution of terms, not mere expression of intent, to avoid revival of prior rights as stated in the award.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Compliance with arbitral award - State of Himachal Pradesh entitled to take possession of 'Wild Flower Hall Hotel' property due to non-compliance of non-applicants with the arbitral award dated 23.07.2005. Applicants sought directions for possession, facilitating the transfer of shares, resignation of directors, and vacation of property; non-applicants challenged maintainability. (Paras 1-4, 27-28)

Facts of the case:
The State of Himachal Pradesh claimed possession of the property following non-compliance with an arbitral award, asserting that non-applicants failed to execute a lease deed within the stipulated period.

Findings of Court:
Non-applicants did not comply with the award, leading to revival of prior government resolutions allowing the State to reclaim possession.

Issues: Whether non-applicants complied with terms of the arbitral award? Was the application maintainable without final adjudication?

Ratio Decidendi: The court confirmed that expressions of willingness do not suffice for compliance; actual execution of the lease deed was required.

Result: Application allowed; non-applicants directed to vacate property.

Table of Content
1. application for possession of property. (Para 1 , 3 , 4)
2. state's claim based on award compliance. (Para 2 , 5 , 6)
3. clarification of award's compliance requirements. (Para 8 , 9 , 12 , 14)
4. nature of compliance required under the award. (Para 18 , 21 , 24)
5. court's order for possession and management. (Para 27 , 28 , 29 , 30 , 31)
JUDGMENT :
SATYEN VAIDYA, J.

1. By way of instant application, applicant/State of Himachal Pradesh, has prayed for following reliefs:-

a) Issue a warrant of possession for the possession of Wild Flower Hall Property including the land, building and structures and any other immovable assets which might have been raised by the Joint Venture Company on the Wild Flower Hall Estate;

b) direct that EIH/MRL shall facilitate and co-operate fully to give immediate peaceful possession of the Wild Flower Hall Property as detailed above;

c) direct EIH/MRL to facilitate and co-operate in giving full effect to the Resolutions of the Board of Directors and the Government decision taken on 07.03.2002 forthwith;

d) direct EIH to facilitate transfer of shares held by EIH and/or its nominees in MRL in favour of the Applicant State forthwith as per the applicable law and accept amount payable to EIH on this account of Rs Nine crores and ten as per calculations in the termination letter dated 06.03.2002;

e) direct EIH/MRL to facilitate vacation/resignation of office of the nominee directors of EIH including the Managing Director on the board of MRL forthwith as per the applicable law;

f) direct EIH to facilitate withdrawal of all power of attorneys forthwith given by their nominee directors, if any;

g) direct EIH to facilitate immediate change in authorization to operate bank accounts of MRL in favour of the Applicant State as per applicable procedure;

h) direct that all sums deposited by the EIH/MRL with the Registrar General of this Hon'ble Court from the bank accounts of MRL be reverted/returned to MRL immediately;

i) direct EIH/MRL to facilitate and co-operate in the takeover process of MRL as per law forthwith.

2. It is averred that since the EIH limited has failed to comply with the directions/conditions of the arbitral award dated 23.07.2005 (for short ‘the award’), the State of Himachal Pradesh has taken a decision to resume the “Wild Flower Hall” property and take its possession in terms of the award.

3. As per applicant/State of Himachal Pradesh, it has furnished its decision, by way of instant application, in compliance to direction issued vide para-38(i) of the order dated 17.11.2023, passed by this Court in Ext. Pet. Nos. 5 of 2023 and 19 of 2023.

4. Non-applicants have filed their short reply to the application. It has been submitted that the application was not maintainable till the rights of the parties, arising out of the award dated 23.07.2005, were not finally adjudicated upon by this Court and attained finality thereafter. It has also been contended that as per the terms of the award, non-applicants have already exercised the first option awarded in their favour, by the Arbitrator. Reference has been made to communication dated 18.10.2022, made by EIH Limited to the Principal Secretary (Tourism and Civil Aviation) Government of H.P., whereby non-applicants purportedly had accepted the award and had written to the applicant/State of Himachal Pradesh about their intention to retain the possession of the property by EIH Limited on lease hold basis. The maintainability of application has also been challenged on the ground of pendency of Review Petition No. 130 of 2023, filed by non-applicants, seeking limited review of order dated 17.11.2023, passed by this Court. On aforesaid grounds, non-applicants have prayed for dismissal of the application.

5. Notice in the application was issued on 15.12.2023. Notice was accepted on behalf of the non-applicants by learned counsel representing them and time was sought to file reply. Another submission was made on behalf of the non-applicants that OMP No.


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