On 27th August, a bench of Delhi High Court consisting of Justice Sanjeev Narula held that Section 14 of the Specific Relief Act, 1963, enumerates contracts which cannot be specifically enforced. One such category of contracts, given in Sub-section (d), is a contract which, by its very nature, is determinable. The bench also stated that a lease which is of a specified term is determinable in nature.
Facts of the case:
The present petition under Section 9 of the Arbitration and Conciliation Act, 1996 has been filed by the Lessee – Narangs International Hotels Pvt. Ltd. seeking urgent interim relief against the Lessor – Delhi International Airport Limited being aggrieved by DIAL’s email dated 02nd July 2021 asking NIHPL to initiate steps for vacation of DIAL’s premises in view of the expiry of lease on 31st August 2021.
Contention of the petitioner:
Mr. Kapil Sibal and Mr. Akhil Sibal, Senior Advocates, who appear for NIHPL make the following submissions:
- DIAL has been constantly pressurizing NIHPL to enter into a License Agreement with it, notwithstanding the fact that DIAL and NIHPL were signatories to the minutes of meeting dated 27th November 2009, wherein, the parties agreed to extend the Original Lease Deed for a period of 10 years.
- Despite entering into the Agreement dated 2009 as well as the SLA dated 17th May 2013 with NIHPL, DIAL has been taking a dishonest stand that there is no valid lease.
- DIAL has not made any proposal for extension of lease, and rather, has proposed a license instead, which is contrary to the understanding between the parties.
- The livelihood of 1500 employees along with their families will be at stake, if relief is not granted to NIHPL with immediate effect.
- The balance of convenience lies in favour of NIHPL and irreparable loss and injury would be caused, in case an interim relief is not granted.
Contention of the respondent:
Dr. Abhishek Manu Singhvi, Senior Counsel for DIAL, on the other hand, strongly contested the present petition by making following submissions:
- There is unexplained delay and laches on the part of NIHPL in not approaching the court earlier. On this ground alone the petition deserves to be dismissed.
- DIAL, in good faith and without prejudice to its rights, made an adhoc offer for a license to NIHPL, which was expressly rejected. Multiple correspondences between the parties would show that NIHPL was unagreeable to enter into a fresh license for a period one year post the expiry of the present lease.
- The Clause 2 of the SLA did not give any automatic right of extension in favour of NIHPL. It only obligates the parties to discuss and mutually finalize the mode, terms and conditions of the extension prior to the Term.
- The SLA is void and invalid, and thus NIHPL has no right to seek extension of the lease.
Observation and judgement of court:
The following observation has been made by the learned bench of the hon’ble court:
- For grant of relief of injunction, the court is guided by the principles applicable to Order 39 Rules 1 & 2 of the Code of Civil Procedure, 1908. In order to succeed, NIHPL has to meet the three-pronged tests of (i) prima facie case, (ii) balance of convenience and (iii) irreparable harm or injury.
- Although NIHPL is correct in saying that the scope, effect and enforceability of the extension clause will be the subject matter of arbitration, yet NIHPL has to certainly satisfy and establish a prima facie case and manifest the necessary ingredients enumerated above, for grant of interim relief.
- The terms of the SLA do not create a vested right in favour of NIHPL. The terms of the SLA could only have been relied upon for initiating a negotiation. Therefore, in the opinion of the Court, NIHPL has not made out any outline of a prima facie case, balance of convenience or irreparable loss, in its favour.
In the light of the above, NIHPL has failed to establish a case for grant of interim relief and thus, the petition was dismissed accordingly.
Read Judgment;
SOURCE ; //www.latestlaws.com/
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