Gujarat High Court
Tata Aia Life Insurance Company Ltd. ... vs Sujay Pankajbhai Shah (Huf) on 4 September, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/FA/3100/2025 ORDER DATED: 04/09/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3100 of 2025
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2025
In R/FIRST APPEAL NO. 3100 of 2025
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TATA AIA LIFE INSURANCE COMPANY LTD. (FORMERLY KNOWN AS
TATA AIA LIFE INSURANCE COMPANY LTD.)
Versus
SUJAY PANKAJBHAI SHAH (HUF) & ANR.
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Appearance:
MR ZALAK B. PIPALIA, ADVOCATE FOR MR VISHAL C MEHTA(6152) for
the Appellant(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS.
JUSTICE SUNITA AGARWAL
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 04/09/2025
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
1. There is a leave note filed by learned advocate Mr.
Vishal C. Mehta. However, Mr. Zalak Pipalia, learned
advocate has put in appearance to submit that he has
instructions to argue the matter. We, therefore, proceeded
with the matter.
2. This is an appeal under Section-37 of the Arbitration and
Conciliation Act' 1996 [in short referred to as "The Act'
1996"] challenging the award dated 22.02.2016 which has
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been affirmed with the dismissal of the application under
Section 34 of the Act' 1996 by judgment and order dated
09.05.2025.
3. Assailing the correctness of the award, learned counsel
for the appellant made submissions on the merits of the
award. However, the fact remains that the dispute referred to
arbitration arose out of a lease agreement dated 05.09.2008,
wherein the tenure of the lease was fixed for 06 years with
effect from 25.07.2008. The lease period, thus, had expired on
24.07.2014. In the meantime, the lease property was sold to
the respondents on 06.09.2011 by way of a registered sale-
deed. The appellant lessee raised a dispute with regard to the
payment of lease rent on the premise that he had given a
notice dated 16.07.2012 to the lessor intimating that he
wanted to vacate the lease premises after the locking period
of 03 years, as per the lease-deed, was over. The dispute was
raised with regard to the service of notice dated 16.07.2012
sent through UPC [Under Postal Certificate].
4. The submission of the learned counsel for the appellant
is that though the service of notice dated 16.07.2012 sent
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through UPC could not be proved, but the fact remains that
no dispute could be raised before the Arbitrator of two other
notices served through E-mail dated 03.08.2012, 08.09.2012
and the reminder letter sent on 26.10.2012. The contention,
thus, is that after sending the said notices, the appellant
asked the lessor to refund the security deposit which was not
acceded to and hence, the appellant invoked arbitration
clause to initiate arbitration proceedings. The contention is
that the arbitrator has erred in allowing the counter claim
though the breach was on the part of the lessor.
5. Considering the above, suffice is to note that a finding of
fact has been returned by the learned arbitrator to the effect
that the appellant/ original claimant had not paid the lease-
rent for the use and occupation of the lease premises even
after 24.07.2014, when he continued to occupy the lease
premises beyond the period of lease. The damages and
compensation has, thus, been awarded by the learned
Arbitrator besides the dues towards the lease-rent and the
electricity charges which remained unpaid during the period
of occupation. The operative portion of the award reads as
under:-
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"(1) The claim petition of the claimant insurance
company is rejected and the claim of the claimant is also
rejected.
(2) the counter claim of the respondents is allowed. The
claimant is directed to pay the amount of Rs.18,62,636=00
for arrears of rent, service tax and electric charges to the
respondents. The claimant is also directed to pay
compensation of Rs.27/- Lacs for the wrongful retention of
the premises in question from 25/07/2014 till the date of
this award and is further directed to continue to pay the
compensation at the rate of Rs.1,50,000/- per month from
the date of this award till the possession of the premises in
question is handed over to the respondents. This total
amount shall be payable within three months from the
date of this order and if not paid, the same shall be
payable with interest at the rate of 10% p.a. from the date
of award till the amount is paid.
(3) The claimant is further directed to hand over vacant
possession of the premises admeasuring 8975 sq.ft. On the
First Floor bearing No.1, 2, 3 of the building known as
"Wide Angle" situated at Nagalpur, Tal. Mehsana on
Ahmedaband-Mehsana Highway to the respondents within
three months from the date of this award.
(4) The claimant is also directed to bear the cost of this
arbitration proceedings and shall pay the cost to the
respondents. The cost is quantified at Rs.30,000/-."
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6. The Court under Section-34 proceedings has rejected
the application noticing that the dispute raised before it was
beyond the scope of Section 34 of the Arbitration and
Conciliation Act' 1996.
7. Taking note of the above, on a query made by the Court
as to whether the physical possession of the lease property
has been handed over by the appellant to the lessor, it is
submitted by the learned advocate for the appellant that the
appellant - lessee is still in the occupation of the lease
premises and neither the awarded amount towards lease rent
etc has been paid nor even the current rent of the lease
premises is being paid to the lessor.
8. Taking note of the above, finding that the appellant has
no right to occupy the lease premises beyond the period of
lease, moreover, there was no stay to the arbitral award in the
proceedings under Section 34 of the Arbitration and
Conciliation Act' 1996 and further for the fact that the
appellant has not paid lease rent since after 24.07.2014, when
the lease period had expired, we dismiss the present appeal
outrightly.
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9. However, in addition to the amount awarded by the
learned Arbitrator, looking of the conduct of the appellant, we
dismiss the present appeal with the cost of Rs.10,00,000/-
[Rupees Ten Lac Only], which shall be deposited with the
Registrar General of the High Court within a period of three
weeks from today. The deposits so made shall be transmitted
to the Executing Court for payment to the lessor in the
execution of the award.
Consequently, the pending Civil Application would not
survive and is disposed of, accordingly.
(SUNITA AGARWAL, CJ )
(D.N.RAY,J)
A. B. VAGHELA
