IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
M.L. Bhat, J.
Gh. Hassan Dar - Appellant
Versus
Controller Of Aerodrome & Anr. - Respondent
Arbitration Application No. 239/1983
Decided On : 27 June, 1986
ARBITRATION - PUBLIC PREMISES (EVICTION OF UNAUTHORIZED OCCUPANTS) ACT, 1971 - LEASE DEED - LICENCE DEED - ARBITRATION CLAUSE - EXPIRY OF LICENCE PERIOD - JURISDICTION OF ARBITRATOR - SECTION 20 OF THE INDIAN ARBITRATION ACT - SECTION 4 AND 5 OF THE PUBLIC PREMISES (EVICTION OF UNAUTHORIZED OCCUPANTS) ACT, 1971 - SECTION 106 OF THE TRANSFER OF PROPERTY ACT - SUMMARY: The court held that the petitioner, who was a licensee, could not invoke the arbitration clause in the agreement to retain possession of the premises after the expiry of the license period. The arbitration clause was only effective during the term of the agreement and could not be used to extend the petitioner's occupation of the premises.
Fact of the Case:
The petitioner, a caterer, entered into an agreement with the respondents to run a restaurant at a civil aerodrome. The agreement was for three years and contained an arbitration clause. After the expiry of the agreement, the respondents initiated eviction proceedings against the petitioner under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971. The petitioner filed an appeal against the eviction order, claiming that he was a lessee and not a licensee and that his lease could only be terminated under the provisions of the Transfer of Property Act. The petitioner also filed an application under section 20 of the Arbitration Act, seeking to refer the dispute to arbitration.
Finding of the Court:
The court found that the petitioner was a licensee and not a lessee. The court also found that the arbitration clause in the agreement was only effective during the term of the agreement and could not be used to extend the petitioner's occupation of the premises. The court dismissed the petitioner's application.
Issues: 1. Whether the petitioner was a lessee or a licensee. 2. Whether the arbitration clause in the agreement could be invoked to extend the petitioner's occupation of the premises after the expiry of the license period.
Ratio Decidendi: 1. The court held that the petitioner was a licensee and not a lessee based on the following factors: - The agreement between the parties was termed a "license deed" and not a "lease deed". - The petitioner had not claimed to be a lessee in his appeal against the eviction order. - The District Judge, in his judgment on the appeal, had distinguished between a lease and a license and had found that the petitioner was a licensee. 2. The court held that the arbitration clause in the agreement could not be invoked to extend the petitioner's occupation of the premises after the expiry of the license period because: - The arbitration clause was only effective during the term of the agreement. - The petitioner's rights under the agreement had lapsed by efflux of time.
Final Decision: The court dismissed the petitioner's application.
"If any dispute difference or question shall at any time or times hereafter arise between the Government and the Caterers or any persons or person or corporation claiming under them respectively on account of the breach of any of the covenants, conditions, or agreement here-in contained or otherwise touching or in any way relating to the construction meaning or effect or these presents or any clause or thing here-in contained or the rights duties or liabilities of the said parties respectively touching any valuation matter or thing hereinbefore provided to be determined then every such dispute, difference or question (except such matter the decision where of is other wise expressly hereinbefore provided for) shall be referred to the sole arbitration of the Director General of Civil Aviation, or in case his designation is changed or his office is abolished, to the sole arbitration of the (officer, who for the time being is entrusted, whether or not in addition to other functions, with the function of the Director General of Civil aviation by whatever designation such officer may be called (hereinafter referred to as the said officer and if the Director General or the said officer is unable or unwilling to act, to the sole , arbitration of some other person appointed by the Director General of Civil Aviation or the said officer willing to act as such arbitrator. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant that he had to deal with the matter to which this agreement relates and that in the course of his duties as such Government servant he has expressed views on all or any of she n after in dispute difference or question .The award of the arbitrator so appointed shall be final and binding on the parties .The provisions of the Arbitration Act 1940 or any statutory modification or reenactment thereof for the time being in force and of the rules there under shall apply and this deed shall be deemed to be a submission to arbitration within the meaning of the Indian Arbitration Apt, 1940 or the statutory modification or reenactment there of as aforesaid. The arbitrator may with the consent of the parties enlarge from time to time the time for making and publishing the award. "
2. The aforesaid clause is embodied in an agreement which was executed on 29-6-1981 between the respondents and petitioner. The agreement was for running of restaurant at Civil aerodrome, Srinagar, The petitioner was, contractor of catering and premises were offered to Mm with furniture on hire on the conditions given in the agreement. The agreement was executed for three years that is, from 19th November 9?9 to 18ih November, 1982. The licence fee for the furnished restaurant was Rs. 2400/- per month. Charges of account of electricity, water, conservancy were in addition to the premium. Rights and obligations of the petitioner as licence and respondents as licensors are laid down in the agreement and differences and disputes or any question which may arise between the parties was to be settled in accordance with para 26 of the agreement.
3. After the expiry of he period of agreement eviction proceedings seem Jo have been started against the petitioner under the public Premises (Eviction of Unauthorized Occupants) Act, 1971 and order for eviction under section 5 of the said Act was passed on 17-5-1983 against which an appeal was filed by the petitioner before the District Judge, Budgam. The said appeal was decided on 24-9-1983. The appeal was accepted, order of eviction was set aside and the case was remitted back to the Estate Officer with a direction that he will decide the matter afresh in presence of the parties and in the light of the judgement passed by the D
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