ING VYSYA BANK LIMITED Vs. MODERN INDIA LIMITED

JUDGEMENT

(1.) The principal issue which falls for the determination of the Court is whether the provisions of Section 41 of the Presidency Small Cause Courts Act, 1882 would bar the jurisdiction of an arbitral tribunal to entertain a claim for specific performance of an agreement of renewal contained in an agreement of licence executed between a licensor and licensee. The relief which has been sought in these proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 is an order of injunction restraining the licensor from terminating the agreement of licence and acting upon a communication calling upon the licensee to hand over vacant possession and in particular, restraining the licensor from initiating proceedings for the recovery of possession of the licensed premises. An injunction has also been sought restraining the licensor from disturbing the use and occupation of the premises by the licensee; from entering into any third party rights in respect of the licensed premises. Other consequential reliefs restraining the licensor from interfering with the use of common facilities have been sought.

(2.) The Respondents are licensors and the Petitioner is a licensee in respect of commercial premises consisting of Unit No.7 in the A Wing on the first floor of a building known as Modern Centre situated at Mahalakshmi, Mumbai. The Petitioner has been in occupation of the premises from 1st January 2002. A leave and licence agreement is stated to have been initially entered into on 19th October, 2001 for a term of three years commencing from 1st January 2002 which was to expire on 31st December, 2004.

(3.) Clause 6 of the agreement provided that the agreement was terminable for a breach on the part of the other party. During the period of renewal the Petitioner was entitled to terminate the agreement with a notice of six months while on the other hand the Respondents did not have any right to terminate the agreement other than for a breach of the conditions of the agreement. Under clause 7(a)(i) the agreement was to be terminable by efflux of time. Sub clause ( c) of clause 7 provides that upon the termination of the agreement the Petitioner would hand over vacant and peaceful possession to the Respondents failing which the Respondents were entitled to remove the belongings of the Petitioner upon the expiry of seven days. In the event that the Petitioner continued to use the premises after the expiry of the agreement, it was provided that charges of Rs.50,000/per day would be levied until possession was handed over. Sub clause (n) of Clause 11 of the agreement provides for a reference to arbitration in the following terms :