AI Structured Summary
Not yet generated for this judgment
Judgment
This application under Section 11 (6) read with Section 12(1) (b) and 12(5) of the Arbitration and Conciliation Act, 1996 (hereafter `the Act of 1996') has been filed for appointment of an arbitrator in view of clause 6 of the registered Lease Deed dated 14- 2-1995 as renewed on 24-12-2014 incorporating inter alia clause 6 of the lease deed dated 14-2-1995.
The facts of the case are that the applicant company is engaged in the business of owning managing and operating five star deluxe star hotels in major tourist destinations throughout India. The predecessor of the applicant company Indus Hotel Corporation Limited was awarded leasehold land in Khasra No.102 to 105 and 111 to 115 measuring 5 bigha 12 biswas opposite Jal Mahal, in village Nahargarh District and Tehsil Jaipur by the registered lease deed dated 14-2-1995 executed by the District Collector on behalf of the HE Governor of Rajasthan. The lease deed was registered on 15-2-1995. Clause 6 of the lease deed provided for arbitration stating "that if any time any dispute, doubt or question shall arise between the parties hereto touching the interpretation, meaning or effect of this deed or any clause thereof or their respective rights and liabilities hereunder, the same shall be referred to the Arbitration of the Revenue Secretary to the Government of Rajasthan Jaipur whose decision thereon shall be final and binding on the parties".
Following the execution of the lease deed dated 14-2-1995, requisite permissions the leased land was developed investing about Rs.300 crores to build high-end world class hotel known as Trident Jaipur which commenced operation on 15-10-1997.
During the subsistence of lease agreement dated 14-2-1995 the original lessee Indus Hotels Corporation Limited merged with the applicant company vide order of High Court of Kolkata, whereupon the applicant became the lessee of the leasehold property for respondents. That is not in dispute nor an issue in this application.
In terms of clause 6 of the lease deed dated 14-2-1995 the applicant company requested the respondents for renewal of the lease deed for another period of twenty years. The respondent No.2 in terms of circular dated 1-4-2011 and notification dated 2-2- 2012 vide order dated 8-12-2014 sanctioned the renewal of lease for a further period of twenty years and accordingly a renewed lease deed was executed on 24-12-2014 to be effective 14-2-2015. The renewed lease deed by clause 7 thereof incorporated the terms and conditions under the original. That included arbitration of disputes and differences between the parties arising out of the renewed lease deed dated 24-12-2014. The renewed lease deed, again with a condition of renewal, was to be operative till 13-2-2035.
It has been submitted that purporting to act under the order dated 2-8-2017 passed by the Hon'ble Revenue Minister, the respondent No.2 Collector Jaipur vide order dated 8-9-2017 sought to withdraw the renewal of the lease deed on 24-12-2014 without as much as issuing any notice or providing any opportunity of hearing to the applicant company. The order of withdrawal passed on 8-9-2017 does not even attribute any breach of the terms and conditions of the lease deed by the applicant company. The applicant's case is that neither the registered lease deeds dated 14-2- 1995 nor the registered renewed lease deed dated 24-12-2014 could be withdrawn or cancelled unilaterally or otherwise by the respondent No.2 the Collector-himself a party to the lease deeds. It has been submitted that in terms of the Specific Relief Act, 1963 a registered document can be cancelled only by a competent civil court.
The case of the applicant company is that the order dated 2-8- 2017 passed by the Revenue Minister, pursuant to which the impugned order dated 8-9-2017 has been passed is wholly without jurisdiction. And the District Collector's order dated 8-9-2017 withdrawing the renewed lease deed by a registered instrument is in breach of the condition of the renewed lease deed dated 24-12- 2014. And in any event the order dated 2-8-2017 passed by the Revenue Minister is under challenge in SBCWP No.13256/2017 which is still pending and has therefore not attained finality. Further in the pending writ petition the Additional Advocate General had also given an undertaking before the court not to proceed further pursuant to order dated 2-8-2017. The impugned order dated 8-9- 2017 despite the Additional Advocate General's undertaking in SBCWP No.13256/2017 is wholly non-est, null and void, but in any event, the applicant has filed a Contempt Petition on 13-9-2017 aggrieved therefrom.
It has also been submitted that the applicant has also preferred an application under Section 9 of the Act of 1996 before the District Judge Jaipur, wherein vide order dated 28-10-2017 where the parties were directed to maintain status quo.
In the aforesaid circumstances, it has been submitted that in view of the disputes between the applicant and the respondents qua the registered lease deed dated 24-12-2014, which has an arbitration clause for adjudication of disputes and differences in regard thereto, the applicant vide letter dated 14-11-2017 required the respondents to appoint an independent sole arbitrator with reference to the arbitration clause in the lease deed. This in view of the fact that under Section 12(5) of the Act of 1996 read with Schedule VII thereof, the Secretary Revenue, as otherwise agreed to the arbitrator cannot act in that capacity owing to his intrinsic connection to the respondent State as its employer. Hence this application for appointment of a sole independent arbitrator.
The defence of the State in the reply to the application under consideration is that the applicant has moved this application prematurely without waiting for a response to its letter dated 14-11- 2017 for appointing an independent arbitrator from amongst the two proposed by it. It has been submitted that even otherwise the letter dated 14-11-2017 demanding appointment of an arbitrator for resolution disputes/ differences between the parties arising out of/ relating to the lease deed in issue is not in accordance with the clause 7 of the renewed lease deed dated 24-12-2014 and hence the application is not maintainable. It has been submitted that the order dated 8-9-2017 for withdrawal of the renewed lease deed has been passed pursuant to order dated 2-8-2017 under the hand of the Revenue Minister and hence no dispute can arise therefrom which is arbitrable with reference to the terms and conditions of the lease deed in issue i.e. dated 24-12-2014. On these defences, dismissal of the application under Section 11(6) of the Act of 1996 is prayed for.
Heard counsel for the parties and perused the material available on record.
Clause 6 of the lease deed dated 14-2-1995 clearly provided for arbitration of disputes relating to or arising out of the lease deed in issue. That terms of arbitration has been incorporated in the renewed lease deed dated 24-12-2014 under clause 7. In the instant case the applicant vide notice dated 14-11-2017 prayed for appointment of arbitrator in the matter subsequent to withdrawal of the renewed lease deed dated 24-12-2014 vide order dated 8-9- 2017 passed by the Collector Jaipur. Withdrawal of the renewed lease deed is clearly a dispute relating to and arising out of the registered renewed lease deed dated 24-12-2014. A dispute is legally recognized as obtaining where a party asserts a fact which is denied by the other. On that test a dispute between the applicant and respondents with regard to the lease deed dated 14-2-1995 as renewed on 24-12-2014 with similar terms and conditions obtains. Whether the withdrawal of the renewed lease deed dated 24-12- 2014 vide order dated 8-9-2017 is legal and sustainable with reference to the terms and condition of the lease deed is an arbitrable dispute under the renewed, registered and subsisting lease deed dated 24-12-2014.
I am of the considered view on submissions of Mr. Narendra Sharma for the applicant and Mr. Anil Mehta, AAG for the respondent and in the facts of the case that this application under Sections 11(6) read with 12(1)(b) and 12(5) of the Act of 1996 deserved to be allowed. Hon'ble Mr. Justice A.C. Goyal (Mob.9414737697), D-19/B, Meera Marg, Bani Park, Jaipur, is appointed as sole Arbitrator to adjudicate all disputes/ differences between the parties relating to and arising with regard to the lease deed dated 14-2-1995 as renewed and registered on 24-12-2014 for a further period of twenty years clause. The Arbitrator shall if warranted make requisite disclosure under Section 11(1) of the Act of 1996. Payment of the cost of Arbitration proceedings and arbitration fee shall be made as per the fourth schedule of the Act of 1996 as amended from time to time and so computed as directed by the Arbitrator.
A copy of this order be communicated to Hon'ble Mr. Justice A.C. Goyal for entering upon the reference and proceed thereon as per the Act of 1996 as amended from time to time and adjudicate all disputes/ differences between the parties arising out of/ relating to registered lease deed dated 14-2-1995 as renewed on 24-12-2014 and registered.
The application stands allowed accordingly.