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2025 Supreme(Mad) 4546
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Abdul Quddhose, J.
G. Thiruvengadam (Deceased) and ors. - Petitioners
Versus
Maharishi Institute of Creative Intelligence - Respondent
Arb.O.P.(Com. Div.) No.473 of 2023
Decided On : 12-06-2025
For Petitioners:Mr.D.R. Raghunath; For Respondent: Ms. Jayalakshmi P., Mr. Satish Chandrasekaran
Arbitration awards are upheld unless found to be perverse; possession requirements under lease agreements must be strictly adhered to, reflecting that acknowledgment of payment does not constitute acceptance of occupancy.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - Dispute regarding non-payment of rent under a lease deed - The petitioner claimed to have constructed 30,000 sq. ft. but did not hand over possession, leading to a counterclaim for the security deposit - The arbitrator dismissed the petitioner's claim and partly allowed the respondent's counterclaim directing a refund of the security deposit. (Paras 1-19)
(B) Nature of Lease - Construction of the building must meet stipulated conditions for occupancy; mere acknowledgment of payments does not equate to possession. (Paras 6, 12)
(C) Jurisdiction of Court under Arbitration - Courts do not re-evaluate evidence post-arbitration unless findings are perverse. (Paras 17, 19)
Facts of the case:
The petitioner and respondent entered a lease agreement for school construction but disputes arose over possession and payment; the petitioner claimed completed works while the respondent contested this assertion.
Findings of Court:
The arbitrator ruled in favor of the respondent, noting the lack of evidence from the petitioner to support claims of possession, and ordered the return of the security deposit.
Issues: The court addressed whether the petitioner achieved completion as per the lease agreement and the corresponding legal implications of possession and rental obligations.
Ratio Decidendi: The petitioner failed to conclusively demonstrate that he fulfilled his obligations under the lease; therefore, the arbitrator’s findings were upheld by the court.
Result: Petition dismissed, with no costs.
| Table of Content |
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| 1. arbitration initiated due to rent claims. - What are the essential facts leading to the arbitration dispute? (Para 1) |
| 2. dispute arose from lease deed regarding possession. - What are the essential facts leading to the arbitration dispute? (Para 2 , 3 , 4 , 9) |
| 3. claimant claims rent; respondent disputes possession. - What arguments were presented by the claimant and respondent? (Para 5) |
| 4. petitioner's claims based on non-possession and assumptions. - What arguments were presented by the claimant and respondent? (Para 6 , 7 , 8) |
| 5. court's analysis on possession, completion, and lease terms. - How did the arbitrator evaluate the claims and counterclaims? (Para 10 , 11 , 12 , 13 , 14) |
| 6. petitioner liable to refund due to non-completion. - What conclusions did the court reach regarding the validity of the arbitrator's award? (Para 15) |
| 7. court affirms arbitrator's findings, dismisses petition. (Para 16 , 17 , 18 , 19) |
ORDER :
Abdul Quddhose, J.
This petition has been filed under Section 34 of the Arbitration and Conciliation Act, challenging the impugned arbitral award dated 01.06.2023 passed by the sole arbitrator.
2. The petitioner is the claimant in the arbitration and the respondent is the respondent in the arbitration. There arose disputes between the petitioner and the respondent under the lease deed dated 13.02.2020. The petitioner, under the lease deed dated 13.02.2020, agreed to construct 60,000 sq. ft. of built up area for the purpose of running a school by the respondent in the premises owned by the petitioner. The petitioner claims that the petitioner had constructed 30,000 sq. ft. built up area and the possession of the same was also handed over to the respondent, and since the respondent failed to pay rent for the same, they are entitled to recover arrears of rent from the respondent for the 30,000 sq. ft. built-up area. While entering into the lease deed dated 13.02.2020, the petitioner has acknowledged the receipt of a sum of Rs. 3 Crores from the respondent by way of security deposit.
3. There exists an arbitration clause in the lease deed dated 13.02.2020. The petitioner initiated arbitration by invoking the arbitration clause and this Court had appointed an arbitrator to adjudicate the dispute between the petitioner and the respondent under Section 11 of the Arbitration and Conciliation Act. The arbitrator acted upon the reference. In the arbitration, the petitioner made various claims including the claim for arrears of lease rentals from the respondent. However in the arbitration, a categorical plea was taken by the respondent that the petitioner never handed over physical possession of the property (30,000 sq. ft. built up area) as claimed by him to the respondent and therefore, they are not liable to pay any arrears of rent to the petitioner. The respondent also made counter claim in the arbitration against the petitioner seeking recovery of a sum of Rs.3 Crores, which they had paid as security deposit to the petitioner together with interest.
4. Based on the pleadings of the respective parties, the arbitrator framed issues. The arbitrator under the impugned arbitral award has rejected the claim of the petitioner but has partly allowed the counter claim made by the respondent, by directing the petitioner to refund the sum of Rs.3 Crores to the respondent together with interest at 12% per annum from the date of the counter claim till the date of realization. Aggrieved by the impugned arbitral award dated 01.06.2023, the petitioner, who is the claimant in the arbitration, has filed this petition under Section 34 of the Arbitration and Conciliation Act, 1996.
5. Heard Mr. D. R. Raghunath, learned counsel for the petitioner and Ms. Jayalakshmi P. and Mr. Satish Chandrasekaran, learned counsels for the respondent.
6. The learned counsel for the petitioner would submit the following:
a) Despite having produced sufficient evidence before the arbitrator that the petitioner was always ready and willing t
