Back
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Sudhir Mittal, J.
Innovative Facility Solutions Private Limited - Appellant
Versus
M/s. Aec Digitial Studio Private Limited & Anr. - Respondent
First Appeal From Order No. 2917 of 2020
Decided On : 19-01-2021
Arbitration and Conciliation Act - Sub-lease Dispute - Section 9
Fact of the Case:
Dispute arose between sub-lessor and sub-lessee due to COVID-19 lockdown affecting rent payment and maintenance charges. Sub-lessee invoked Force Majeure clause, sub-lessor terminated sub-lease and invoked arbitration. Sub-lessee filed petition under Section 9 of the Act for interim relief.
Finding of the Court:
The court found that the impugned order failed to examine the intention of the parties to refer the dispute to arbitration, which is a prerequisite for granting interim relief under Section 9 of the Act. The court set aside the impugned order and left other issues open for consideration.
Issues: The main issue was whether the impugned order deserved to be set aside due to the failure to examine the intention to refer the dispute to arbitration.
Ratio Decidendi: The court emphasized that a party invoking Section 9 of the Act must have the immediate intention of referring the dispute to arbitration for the interim protection to remain valid. Lack of intention to refer the dispute to arbitration would render the petition for interim relief unsustainable.
Final Decision: The impugned order was set aside, and the sub-lessee was given the liberty to obtain appropriate interim relief from the arbitrator if it agrees to refer the dispute to arbitration.
JUDGMENT
Sudhir Mittal, J . - This appeal has been filed against order dated 08.10.2020 passed by the learned Additional District Judge, Gurugram in a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'). The appellant is the Maintenance Agency (hereinafter referred to as 'MA'). Respondent No.1 is the sub-lessee under sub-lease dated 06.02.2018 (hereinafter referred to as 'the sub-lessee') and respondent No.2 is the sub-lessor under said sublease deed (hereinafter referred to as 'the sub-lessor'). The sub-lease dated 06.02.2018 is in respect of area measuring 7045 square feet on the fourth floor of a building known as AIHP Horizon and was let out for the purpose of office use of IT/ITES.
2. The aforementioned sub-lease deed is an unregistered document. Lock in period of three years has been provided in terms thereof. Interest free refundable deposit payable thereunder was Rs. 20,00,780/- i.e. four months rent in terms of Clause 5.1. The sub-lessee was bound to execute a separate maintenance agreement with the appointed maintenance agency on the terms and conditions stipulated by the said maintenance agency. Thus, maintenance agreement dated 01.06.2018 was executed between the sub-lessee and the MA and the same is also on registered document.
3. Difficulties arose amongst the parties on account of order dated 23.03.2020 issued by the State of Haryana ordering closure of all commercial establishments due to the outbreak of COVID-19 pandemic. Vide order dated 24.03.2020, Ministry of Home Affairs ordered a country wide lock down. Thus, rent could not be paid for March 2020. Some maintenance charges were also in arrears. The sub-lessee issued notice dated 15.04.2020 invoking Clause 12.1 of the sub-lease agreement which gives a right to sub-lessee not to pay rent for the period the area under the sub-lease could not be used on account of Force Majeure. This was responded too by the sub-lessor vide its letter dated 16.04.2020 objecting to invocation of the said clause on the ground that the COVID-19 pandemic was not included in the definition of Force Majeure. Ultimately, the sub-lessor issued notice dated 14.06.2020 terminating the sub-lease followed by notice dated 27.06.2020 invoking Clause 9.1 of sub-lease for referring the dispute to arbitration. The sub-lessee responded vide letter dated 17.07.2020 and inter alia submitted that no action could be taken under the sub-lease as the same was insufficiently stanked and unregistered. Instead refund of Rs. 15,00,195/- was demanded, after deduction of rent for the month of March 2020 from the security amount. I have been informed that on refusal to refer the dispute to arbitration, a petition under Section 11 of the Act has been filed in the High Court and the same is pending. The sub-lessee is hotly contesting the said petition on the ground of sub-lease deed being unregistered, apart from other grounds. Meanwhile on account of the dispute, the sub-lessee was not permitted to enter its office space or to remove its belongings/equipments/movable property therefrom. Thus, a petition under Section 9 of the Act was filed for grant of interim relief and the same has been allowed.
4. This appeal has been filed by MA and along therewith, e-mails dated 12.08.2019, 19.08.2019, 26.08.2019, 02.09.2019, 24.09.2019, 30.09.2019 and 01.10.2019 have been annexed to establish that the sub-lessor had all along been requesting the sub-lessee to come forward to pay its share of stamp duty and registration charges so that the sub-lease deed may be registered. Based thereon it has been submitted that said document had remained unregistered on account of the inaction of the sub-lessee.
5. Learned counsel for the appellant has argued that the order impugned in the appeal deserves to be set aside because the same is based upon an assumption that the actual dispute is between the sub-lessee and the MA and by placing reliance upon the terms of the mainte
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
