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2022 (4) TMI 927 - SC - Indian LawsTermination of lease agreement - Seeking deposit of the rental amount for the period between March, 2020 and December, 2021 - Section 17 of the Arbitration Act, 1996 - HELD THAT:- The dispute is with respect to the rental amount for the period between March, 2020 to December, 2021, for which the Arbitral Tribunal has directed the appellant to deposit while passing the order by way of an interim measure on the applications under Section 17 of the Arbitration Act. The liability to pay the lease rental for the period between March, 2020 to December, 2021 is seriously disputed by the appellant by invoking the force majeure principle contained in clause 29 of the lease agreement. It is the case on behalf of the appellant that for a substantial period there was a total closure due to lockdown and for the remaining period the appellant was allowed with 50% capacity and therefore, the force majeure principle contained in clause 29 shall be applicable. When the same was submitted before the Arbitral Tribunal, no opinion, even a prima facie opinion on the aforesaid aspect was given by the Arbitral Tribunal. The applicability of the force majeure principle contained in clause 29 is yet to be considered by the Arbitral Tribunal at the time of final adjudication. Hence, the liability to pay the rentals for the period during lockdown is yet to be adjudicated upon and considered by the Tribunal. Therefore, no order could have been passed by the Tribunal by way of interim measure on the applications filed under Section 17 of the Arbitration Act in a case where there is a serious dispute with respect to the liability of the rental amounts to be paid, which is yet to be adjudicated upon and/or considered by the Arbitral Tribunal. Thus, no such order for deposit by way of an interim measure on applications under Section 17 of the Arbitration Act could have been passed by the Tribunal - As the applicability of force majeure principle (clause 29) is yet to be considered at least, for the period during the complete closure, it would not be justified to direct the appellant to deposit the rental amount for the said period of complete closure by way of an interim measure, pending final adjudication. The order passed by the Arbitral Tribunal passed in applications under Section 17 of the Arbitration Act, directing the appellant to deposit the entire rental amount for the period between March, 2020 to December, 2021, confirmed by the High Court by the impugned judgment and order, is modified and it is directed that the appellant to deposit the entire rental amount for the period other than the period during which there was complete lockdown i.e., 22.03.2020 to 09.09.2020 and for the period between 19.04.2021 to 28.06.2021. However, nondeposit of the rental amount for the aforesaid period during which there was a complete closure/lockdown shall be subject to the ultimate outcome of the Arbitration Proceedings and the Arbitral Tribunal shall have to adjudicate and consider the principle of force majeure contained in clause 29 as contended on behalf of the appellant in accordance with law and on its own merits - The learned Tribunal to adjudicate and consider the aforesaid issue in accordance with law and on its own merits uninfluenced by the present order and observations by this Court in the present order shall be treated to be confined to while deciding the applications under Section 17 of the Arbitration Act and the interim measure order in exercise of powers under Section 17 of the Arbitration Act only, and the same shall not have any bearing on the final adjudication on the liability to pay the rentals even for the aforesaid period. Appeal allowed in part.
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