TMI Blog2016 (12) TMI 1675X X X X Extracts X X X X X X X X Extracts X X X X ..... U For the Petitioner : Mr Rajiv Nayar, Senior Advocate with Mr Sudhir Sharma, Mr Sanjeev Kumar Sharma, Mr Abhishek Swaroop, Mr Abhishek and Mr Ritesh Kumar, Advocates. ORS. For the Respondent : Mr Manish Sharma, Ms Chandni Mehra, Mr Abhishek Agarwal, Advocate O R D E R VIBHU BAKHRU, J IA No.15671/2016 1. Allowed, subject to all just exceptions. CAV. No.1065/2016 2. The learned counsel for the respondent no.3/caveator has entered appearance. The caveat stands discharged. O.M.P. (COMM) 570/2016 and IA No. 15670/2016 3. Store One Retail India Limited (hereafter Store One ) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter the Act ) impugning an arbitral award dated 09.09.2016 (hereafter the impugned award ) made and published by the Sole Arbitrator, Justice Dr Mukundakam Sharma (Retired), a former Judge of the Supreme Court of India. 4. The disputes between the parties relate to the payment of lease rent and fees for facility management, in respect of the premises (hereafter 'the said premises'), which were taken on lease by Store One in a commercial complex known as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d plot on the representation that it had already entered into an arrangement (MOU dated 23.03.2004) for leasing out 70,000 square feet of covered area to Store One. Accordingly, an Agreement to Sell dated 09.12.2004 was executed between Pragya on one part, and Annapurna and Paliwal on the other part whereby Pragya agreed to sell and Annapurna and Paliwal agreed to purchase the plot in question. Thereafter, a lease deed (hereafter the Lease Deed ) was also executed between Pragya and Store One on 23.11.2005 whereby Store One agreed to lease approximately 52,000 square feet of space in the Shopping Mall Arcade, Shop in Park (North) - which at the relevant time was under construction -for an initial period of 10 years with an option for extension of two further terms of 10 years and five years respectively. 7.3 Store One also agreed to pay a sum of ₹ 1,43,00,000/- (One Crore Forty Three Lacs) to Pragya as interest free refundable security deposit. After the mall was constructed, Store One was put in possession of the said premises, admeasuring 67,613 square feet for its outlet. In terms of the Lease Deed between Store One and Pragya, Store One commenced payment of monthly re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a sole arbitrator to adjudicate the disputes between the parties. Whereas Annapurna and Paliwal filed a statement of claims, inter alia, claiming rent for the period from April, 2008 to September, 2012, Pragya filed a statement of claims, inter alia, claiming CAM charges from 08.08.2008 to 19.03.2012 from Store One, Annapurna and Paliwal and electricity charges up to 08.08.2008 from Store One. On the other hand, Store One, inter alia, claimed refund of the security deposit of ₹ 1,43,00,000/-. 8. The Arbitrator held that the notice dated 05.08.2008 served by Store One calling upon Pragya to cure the deficiencies was vague and untenable. Further the notice of termination was not sent to Annapurna and Paliwal. Accordingly, the Arbitrator held that the termination of lease was not valid. The Arbitrator held that Annapurna and Paliwal were entitled to damages equivalent to rent for the unexpired period of the lock-in period but were also obligated to mitigate the damages by letting out the said premises; therefore, the Arbitrator limited the damages to rent equivalent to six months. 9. The operative part of the impugned award is set out below:- 10. CONCLUSIONS: 10.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008 was not vague inasmuch as Store One had specified the deficiencies. He submitted that the finding of the Arbitrator in this regard was wholly perverse and unsustainable. 11. Secondly, he submitted that the Arbitrator had also held the termination of the lease to be invalid on the ground that the notice of termination had not been served on Annapurna and Paliwal, although they were owners of the property. He submitted that Paliwal and Annapurna were always aware of the notice of termination sent by Store One to Pragya and there was ample material on record to substantiate the same. He contended that this was also clear from the fact that Annapurna and Paliwal had sought impleadment in the petition filed by Store One under Section 9 of the Act (OMP 528/2008). 12. Lastly, he contended that the Arbitrator had grossly erred in awarding rent for a period of six months after Store One had admittedly handed over the possession of the said premises. He submitted that Arbitrator had assumed that six months was a reasonable time for Annapurna and Paliwal to find alternate tenant(s). However, there was no material or evidence on record on the basis of which the Arbitrator could have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 5. As you may be aware that we have already planned for the coming season and will soon be commencing the stock takeover very shortly. We have already made our business plans for our customers. However, with the problems now surfacing, it seems that a permanent solution to the same from your end are required. The problems for the Demised Premises Includes but are not limited to (a) Security misdemeanour, (b)AC and its standard temperature are not maintained at desired levies and require maintenance. (c)Dedicated Chillers not performing and requires maintenance. (d)Frequent breakdown of lifts and escalators. 17. It is apparent from the above that the complaint made by Store One was general in nature and did not specify any particular covenant of the Lease Deed that had been breached. The deficiencies pointed out also lacked the necessary specifics. In view of the above, the Arbitrator s conclusion that the notice was vague and untenable cannot by any stretch be held to be perverse or patently illegal. The Arbitrator further held that the notice of termination dated 08.09.2008 was also untenable since the same had not been addressed to Annapurna and Paliwal. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with the most basic notions of morality or justice. And, this Court is not persuaded to accept that the impugned award is in contravention with the fundamental policy of Indian Law. Clearly, the expression Fundamental Policy of Indian Law does not mean violation of any particular statute but the policy of law on which the edifice of Indian law is based. Thus unless the award is in contravention with any of the fundamental principles of Indian law, the impugned award cannot be held to be in conflict with the Public Policy of India. 22. It is also relevant to mention that by introduction of Explanation 2 to Section 34 (2) (b) (ii) of the Act, it has been further explained that the test as to whether there is a contravention of fundamental policy of Indian law would not entail a review on the merits of the dispute. In the present case, the submission that the conclusion of the Arbitrator, that the termination of lease by Store One was invalid, cannot by any stretch be held to be contravening a fundamental policy of Indian law. 23. The contention that the Arbitrator had grossly erred in arbitrarily fixing the period of six months for award of damages is also wholly bereft of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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