Delhi High Court
M/S Milestone Games Pvt Ltd vs Anil Kumar Mehta (Huf) & Anr on 17 May, 2017
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% DECIDED ON: 17.05.2017
+ FAO (OS) (COMM) 91/2016
M/S MILESTONE GAMES PVT LTD ..... Appellant
Through: Mr. Parikshit Kumar, Advocate.
versus
ANIL KUMAR MEHTA (HUF) & ANR ..... Respondents
Through: Mr. Ekansh Bansal, Advocate.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MS. JUSTICE PRATHIBA M. SINGH
S.RAVINDRA BHAT, J.(ORAL)
1. The appellant is aggrieved by an order of the learned Single Judge
whereby its petition under Section 34 of the Arbitration and Conciliation
Act, 1996 was rejected.
2. The relevant facts are that the appellant entered into lease
arrangement on 15.03.2012 with the respondents (hereafter referred to as
lessor/owner). In sum, the arrangement contemplated letting out of a
property for three years at monthly rent of `2,62,960/-; the appellant has
also paid `10,51,840/- (equivalent to four month's rent as interest free
security deposit). The agreement contained an arbitration clause. The
owners complained that the lessee paid only a month's rent, i.e., for May,
FAO (OS) (COMM) 91/2016 Page 1of 4
2012 and after which it ceased to fulfill its obligations. The lessors,
therefore, proceeded to first issue notice and thereafter terminate the
arrangement. The lessors resorted to the arbitration clause claiming
possession as well as recovery of the amounts payable under the contract.
3. Before the Tribunal, the lessee's principal defences were (i) the owner
had misrepresented with respect to the premises. In that, according to it, the
footfalls of the mall were supposed to be more substantial. It was stated that
70% of the shops in the mall - according to the lessor - had been leased to
major retail brands which would have ensured (according to the lessee's
position a more substantial footfall to its premises). The lessee also relied
upon a condition in the agreement which according to it enabled retention of
the premises till such time the security deposit amounts were refunded.
These defences as well as the counter claim made by the lessee were
rejected by the Tribunal. According to the Tribunal, the arbitration
proceedings were essentially by way of recovery of amounts which had been
assured payment by the lessee in terms of the contract arrived at by the
parties. The Tribunal considered all contentions and awarded recovery of
`1,11,65,234/- which included the rentals payable after adjustment of
security deposit, i.e., for the period till 30.09.2012 together with interest on
the monthly rent and user charges due for the period October 2012 till
September 2014. The Tribunal rejected the lessor's claim for a sum of
`50,000/- per day after termination of the lease. The lessee claiming to be
aggrieved sought recourse to Section 34 contending that the Award was in
conflict with the public policy in India, as it was patently illegal. The
learned Single Judge by the impugned order was of the opinion that facially
the Award did not disclose any such error; the Single Judge relied upon
FAO (OS) (COMM) 91/2016 Page 2of 4
Associate Builders v. Delhi Development Authority (2015) 3 SCC 49 in
rejecting the lessee's petition.
4. In the present appeal, the lessee urges more or less same contentions
and urges that the interpretation by the Tribunal of clause 2 (d) of the lease
agreement dated 15.03.2012 is contrary to law and is unreasonable as it was
plainly intended to ensure the lessee's continuance in the premises till such
time the security deposit was not refunded. It was also argued that the
Bombay High Court by an order has directed the winding up of the lessee
company and that in the circumstances, the Court should be cognizant of the
legal position and not proceed to dispose of the appeal on its merits.
5. The narrow window provided to the Court to consider challenges to
arbitral award under the Act is well defined. It is only in rare and
exceptional cases that the Courts are satisfied that the given award discloses
a patent illegality, an approach that is plainly inconsistent with the Indian
law or facially discloses findings that are so unreasonable that no reasonable
man would arrive at in such given circumstances, would the Court interfere
with the arbitral award. The facts of the present case disclose that the
controversy revolves around the interpretation of clause 2 (d). It is well
established that the interpretation of contract is within the exclusive domain
of the Arbitrator. The Court cannot per se guess such findings unless the
three enumerated features exist. In the present case, the lessee's contentions
were considered and the Tribunal rendered its findings at paragraph 57 of
the Award as to why they were not acceptable. This Court in the
circumstances is of the opinion that there is no reason to upset the findings.
Such an approach is neither unreasonable nor patently erroneous according
FAO (OS) (COMM) 91/2016 Page 3of 4
to Indian law. Consequently, the Single Judge too did not fall into error in
refusing to interfere with the Award under Section-34.
6. The appeal is, therefore, dismissed as unmerited.
S. RAVINDRA BHAT
(JUDGE)
PRATHIBA M. SINGH
(JUDGE)
MAY 17, 2017
/vikas/
FAO (OS) (COMM) 91/2016 Page 4of 4
