MOULIN ROUGE PRIVATE LTD. Vs. NEW DELHI MUNICIPAL COMMITTEE

JUDGEMENT

(1.) This is an application on behalf of Moulin Rouge Private Ltd., under Sec. 33 of the Arbitration Act, 1940, for determination of scope of arbitration clause being clause No. 21 of an agreement executed between the Petitioner and New Delhi Municipal Committee on September 23, 1966. The Petitioner has asked for various other reliefs including an injunction restraining the New Delhi Municipal Committee from referring the alleged disputes to arbitration or from proceeding in any way with the purported reference. The application has been made under the following circumstances:

(2.) By the said agreement in writing dated September 23 1966, the Respondent agreed to grant a licence and/or lease to the Petitioner to run a hotel business at a building to be constructed by the Respondent on certain terms and conditions. The relevant portion of the said agreement are set out below:

(3.) Mr. R.C. Deb, counsel on behalf of the Petitioner, has contended that the disputes raised between the parties referred to a period prior to the grant of licence and as such, the arbitration clause is not attracted and the purported reference is not warranted in law. The words used in the said arbitration clause show that the parties agreed to refer a limited class of disputes to arbitration. The disputes between the parties relating to the said agreement dated September 23, 1966, are not the disputes which are referable to arbitration under Clause 21. On a proper construction of the said agreement, according to them, reference to arbitration can only arise after grant of the licence. It is urged that the licence agreed to be granted was a licence for user of a thirteen -storied building for running a hotel business. The construction of the said building has not yet been completed. It was only on the intimation by the Respondent to the effect that the building is complete, the grant of licence would arise. Under Clause 5 of the agreement the annual licence fee is to be paid by the Petitioner to the Respondent amounting to Rs. 16,70,000. It has been, therefore, argued that the purported reference of the dispute to the Lieut. Governor of Delhi should be set aside and stopped.