D.P. Wadhwa, J.
(1) The petitioner in these proceedings is a public company limited under the Companies Act, 1956 and is running a hotel at 8, Windsor Place New Delhi, called ''Hotel Le Meridian .This application has been filed under clause (b) of section 41 read with Ii Schedule of the Arbitration Act 1940 (Act for short) and section 151 of the CPC (Code) seeking an order restraining the third respondent the Estate Officer under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (for short ''P.P. Act'') from proceeding further in pursuance to two notices issued by him u/s 4(1) and section 7(3) of that Act. First notice is dated 12-3-1990 for showing cause against order of eviction respecting plot of land measuring 4.29 acres along with entire structure constructed thereon at the crossing of Janpath and Raisina Road at Windsor Place, New Delhi, and the second notice is dated 2-4-1990 for requiring the petitioner to pay arrears of license fee, damages and interest amounting to Rs. 27,62.17,839.89. The application (I.A. 2957190) itself has been filed in proceedings initiated u/s 20 cf the Act. There are three respondents, namely, New Delhi Municipal Committee (N.D.M.C.) with which the petitioner claims there is an arbitration agreement, the Lt. Governor of Delhi who is the named arbitrator, and the Estate Officer as aforementioned. It is not clear to me how the Estate Officer could be party in the proceedings u/s 20 of the Act and how, Therefore, can any interim order issue against him. But it can be looked this way that the petitioner seeks restraint on the N.D.M.C. from proceeding with its applications under the P.P. Act before, the Estate Officer.
(2) On filing of the petition and the application on 16-4-1990 notices were issued to the respondents. Only N.D.M.C. appeared to oppose them. Earlier to this the petitioner also filed two. proceedings-one under sections 5 and 12 of the Arbitration Act (O.M.P. 45190) and the other under clause (b) of section 41 read with Ii Schedule of the Act and section 151 of the Cod" (O.M.P. 44190). Both these proceedings were filed on 8-3-1990. In O.M.P. 4-5190 there are two respondents, namely, N.D.M.C. and the Lt. Governor of Delhi and in this the petitioner had prayed that the authority of the Lt. Governor of Delhi to act as an arbitrator be revoked and that a sole arbitrator be appointed by the court. In O.M.P. 44190 again there arc two respondents and the prayer is for stay of operation of the notice dated 6-3-1990 issued by the N.D.M.C. pending the determination and finalisation of the disputes through arbitration. When these two O.M.Ps. were filed again only N.D.MC. appeared. Mr. Nayyar, learned counsel for the N.D.M.C., on his first appearance stated that N.D.M.C: would not dispossess the petitioner except in due course of law". He stated that proceedings had to be initiated under the P.P. Act and that till the final order of eviction is passed in those proceedings no action would be taken. While arguments were being heard in these O.M.Ps. the present petition u/s 20 of the Act was filed. Petitioner is not now seeking stay of the notice dated 6-3-1990 issued to it by N.D.M.C. as stated at the Bar. By this notice N.D.M.C. had claimed an amount of over Rs. 13 crores as on 28-2-1990 and since petitioner had committed default in not paying this amount in terms of an agreement between the parties, the petitioner was in fact asked to step the user of the land and the hotel building constructed thereon for any purpose and to hand over the vacant possession of the same to N.D.M.C. The petitioner was informed that if the arrears of license fee and other amounts due to N.D.M.C. were net paid and if N.D.M.C. was prevented from exercising its right of re-entry legal action would he taken against the petitioner in accordance with law.
(3) Hotel Le Meridien has been constructed by the petitioner on a plot of land measuring 4.29 acres at Windsor Place, New Delhi. This plot of land was allotted to N.D.M.C by the Central Government for construction of a five star hotel accommodation for Asian Game? to be held 1982 and the land was allotted at the rate of Rs. 2,400 per sq. yd. for F.A.R. (Floor Area Ratio 150. It was clearly stipulated that N.D.M.C. would not sublease the land in favor of any other party and it would, however, make such arrangement for constructing and running the hotel as would not involve sub-leasing the plot. N.D.M.C. invited offers from parties for the purpose. In response to an advertisement put in by N.D.M.C. seventeen parties gave their offers. As a result of general discussion only fourteen parties furnished their offers and the offer of Pure Drinks (New Delhi) Ltd. being the highest was accepted. It was for a land area of 4.5 acres and Pure Drinks had offered to pay at the rate of 2.68 crores per annum or 23 per cent of the gross turnover of the hotel business which was higher. Since the land which was handed over was actually measuring 4.29 acres the percentage of gross turnover was reduced to 21 per cent while the minimum guaranteed license fee of 2.68 crores annually remaining the same. Negotiations for construction of this five star hotel, thus, first took place between N.D''.M.C. and Pure Drinks. The first document on record is letter dated 9-3-1981 of Pure Drinks to N.D.M.C. In this letter a reference has been made to an earlier letter dated 12-2-1981 of Pure Drinks to N.D.M.C. and to personal discussions held when Pure Drinks gave a revised offer as under :- Fixed rental cf Rs. 2.68 crores p.a. or 23 per cent of the gross turnover, whichever is higher for use of land and building etc." The offer of the Pure Drinks having been accepted a license agreement dated 16-4-1981 was executed between NDMC and Pure Drinks. The license was in respect of the plot of land for construction of five star hotel building vesting in N.D.M.C. The possession of the plot was given in bits from 15-6-1981 to 28-9-1981. license fee was payable in advance for each year commencing from 28-9-1981, license fee commencing only when entire possession of the plot had been given to the petitioner and that was on 28-9-1981. By a supplementary agreement dated 13-1-1982 Pure Drinks was allowed to float a Public Limited Company. This was in the name of M/s. C.J. International Hotel Limited, the petitioner herein. The petitioner is for all intent and purposes successor of Pure Drinks and a fresh license agreement dated 14-7-1982 was executed between N.D.M.C. and the petitioner & the recital therein mentioned that a sum of Rs. 2.68 crores had been paid being advance license fee for the first year commencing from the date of handing over possession of the plot in question. Under the license agreement the petitioner was to construct and commission a five star hotel building by 31-12-1984. Further, in the license agreement the petitioner was granted moratorium from making payment of license fee falling due in 1982 and 1983 and these payments were agreed to be made in ten half yearly Installments payable with the license fee falling due in the year 1984 onwards. Petitioner has filed on records documents showing that meeting were being held by N.D.M.C. with the representatives of the hoteliers for monitoring the progress of the construction of hotels for the Asian Games which were to be held in late 1982. Minutes of one of such meetings held on 16-9-1981 would show that a representative of Bharat Hotels limited, who were constructing a hotel in Barakhamba Complex, New Delhi, also attended the meeting. Plans for construction of the hotel at the plot in question were submitted on 31-7-1981 and were sanctioned on 4-2-1982 by the NDMC., but permission had been granted earlier for excavation work at the site which was by letter dated 1-9-1981 of N.D.M.C. By letter dated 7-6-1982 to N.D.M.C. Pure Drinks brought to its notice that the area of the plot was 4.29 acres while originally it was 4.5 acres. It was also pointed out that under an agreement entered into by N.D.M.C.IDDA (Delhi Development Authority) with Indian Hotels Company for a hotel site at Sardar Patel Marg, New Delhi, license fee of 17.25 per cent of the gross turnover only had been agreed to N.D.M.C. was thus requested to revise the terms in conformity with those under the agreement with Indian Hotels Company. Admittedly, license deed with the petitioner was entered into on 14-7-1982. Then under clause 10 of the license Agreement, the petitioner sought permission of N.D.M.C. by its letter dated 19-7-1982 for permission for creating security to obtain funds from financial institutions. Before the start of Asian Games, the petitioner was able to complete construction of 100 rooms and a temporary occupancy certification was granted by N.D.M.C. by letter dated 29-10-1982. By letter dated 23-3-1983 the petitioner asked for extension for completion of hotel building for a further period of six months ending on 30-6-1985. Under the agreement it was to complete the construction by 31-12-1984. The reasons given were that plot was handed over piecemeal and there was delay in sanctioning the building plans. It was also stated that clearance from Urban Arts Commission/D.D.A. for building plans also took considerable time. On these accounts six months extension was requested. By letter dt. 29-3-1984 the petitioner requested for grant of moratorium in the payment falling due in 1984. It was stated that this was ^"in order to facilitate the construction expeditiously" and further stated that accumulated license fee for the period of moratorium would be payable in 15 half yearly Installments. Some reason were given for grant of moratorium i.e. handing over of the plot in piecemeal and also of an area of 4.29 acres instead of 4.5 acres and delay in sanctioning the building plans. It was also stated that N.D.M.C. took considerable time in granting sanction for securing loan from the financial institutions for construction of the hotel building. It appears by letter dated 30-4-1984 N.D.M.C. demanded interest on account of delayed remittances of advance license fee. The petitioner by letter dated 28-5-1984 contested this claim and stated that the claim for interest on account of delayed payments was much less than the loss suffered by the petitioner for which the petitioner stated it would be submitting a separate claim against N.D.M.C. It, Therefore, requested that the matter be settled amicably and the interest claimed to waived off. The petitioner estimated that its project cost had gone up at least by 221.20 lakhs on account of delays caused by N.D.M.C. A statement showing the increase in project cost financial losses caused by N.D.M.C. was attached by the petitioner with this letter. Then, by letter dated 23-8-1984 the petitioner sought extension of time for completion of the hotel up to 31-12-1985, moratorium in payment of license fee falling due in 1985 and payment of accumulated license fee for the period of moratorium 1982, 1983, 1984 and 1985 to be paid in twenty half yearly Installments. NDMC replied by its letter dated 22-10-1984. It granted permission for completion of the building up to 31-12-1985. Moratorium of payment was also granted and it was stated that no interest would be charged from the petitioner on the deferred payments if paid punctually failing which interest would be charged at 15 per cent per annum for the entire period till such time the accounts were finally squared up. The demand of the petitioner as contained in its letter dated 28-5-1984 was rejected. At the same time, NDMC demanded payment of Rs. 37,29,331.89 which demand had been made earlier and comprised of the following items :
1. Interest on delayed payment of advance license fee for the first year as the rate of 15% p. a. Rs. 33,80,032.27 2. Interest on delayed payment of depreciated value of the bungalows which existed of the hotel sits. Rs. 41,572.62 3. Shifting of electric cables from the hotel site. Rs. 1,61,870.00 4. Shifting of filtered water lines and connections of Sewer lines etc. Rs. 1,45,857.00 Total: Rs. 37,29,331.89
(4) The petitioner by its letter dated 9-11-1984 sought waiver of interest and referred to its earlier claim of Rs. 221.21 lakhs on account of delays caused by N.D.M.C. By letter dated 9-12-1985 the petitioner asked for further extension for completion of the project by six months up to 30-6-1986. Yet again by letter dated 16-8-1986 the petitioner further asked for extension for completion of the building. By letter dated 26-12-1986 NDMC granted extension to complete and commission the hotel up to 30-9-1987. On the request of the petitioner it also granted moratorium in payment of license fee up to 30-11-1987 and arrears of accumulated license fee being payable in twelve half yearly Installments, first, Installment falling due on 10-12-1987. Interest was also to be charged as aforesaid on delayed payments. The petitioner was told that the first Installment of deferred payment and current license fee for the period from 28-9-1987 to 27-9-1988 would be payable by 10-12-1987.
(5) In letter dated 29-9-1988 (is it 28-9-1988?) received by N.D.M.C. on 3-10-1988, the petitioner noted the delay in handing over the whole of the plot of land, delay in granting permission to raise loan, delay in granting occupation certificate en trivial grounds refusal of N.D.M.C. to grant provisional occupancy certificate for 110 rooms after it had granted a partial occupancy certificate at the time of November 1982 Asiad, and delay in granting full load of electric power for the hotel project. On all these accounts the petitioner stated that the project which was conceived to cost Rs. 44.S6 crores, in fact cost Rs. 98.16 crores. It claimed to have sustained loss not only by way of increase of cost but also by way of loss of revenue (from 1-4-1985 to 31-8-1987) totalling Rs. 78.074 crores for which claim was laid and N.D.M.C. asked to compensate. Details of alleged increase in cost and the estimated income find expenditure (loss of revenue) were annexed with this letter, but these are figures Just in abstract and without there being any basis on which these figures are sustainable. This letter of the petitioner, as would be seen above, was written on the eve when advance license fee falling due in 1988 (28-9-1988 to 27-9-1989) fell due. Before this letter could reach N.D.M.C., N.D.M.C. wrote a letter, dated 30-9-1988 to the petitioner staling that an amount of Rs. 16,08,00,000 apart from interest had become due on account of arrears of license fee for the period from 28-9-1982 to 27-9-1988 and further that the minimum guaranteed amount of Rs. 2.68 crores towards advance license fee for the year 1988 commencing from 28-9-1988 had become due. It was also pointed out that the first Installment of Rs. 53,60,000 of the accumulated arrears for the period of moratorium was also payable along with the annual license fee falling due on 28-9-1988.-Besides this, N.D.M.C. also claimed the aforesaid amount of Rs. -37,29,331.89. It also called upon the petitioner to make the payment of the license fee falling due on 28-9-1988, the first Installment of the accumulated careers of license fee for the period of moratorium and the amount of Rs: 37,29,331.89 totalling Rs. 3,58,89,331.89. The petitioner acknowledged this letter of N.D.M.C. by its letter dated 3-10-1988. It said that the amounts of Rs. 1,61,870 and Rs. 1,45,857 out of the amounts of Rs. 37,29,331.89 had already been paid. N.EXM.C. by its letter dated .6-1-1989 rejected the claim of the petitioner in its letter dated 28-9-1988 and 3-10-1988. By letter dated 7-2-1989 N.D.M.C. rejected the request of the petitioner for revaluation of the license fee contained in its letter dated 17-1-1989. By letter dated 10-5-1989 N.D.M.C. acknowledged the receipt of payment of Rs. 50 lakhs from the petitioner and said that after adjusting this amount, a.n amount of Rs. 3,62,49,331.89 was still due and payable by the petitioner. It may be noted that by this time a further Installment of Rs. 53,60,000 had become due being the second half yearly Installment of the license fee of the period of moratorium. Petitioner was told that the amount of interest due from it would be intimated to it in due course. The amount of Rs. 50 lakhs the petitioner had sent by its letter, dated 12-4-1989. By letter dated 7-12-1989 N.D.M.C. again called upon the petitioner to make payment of arrears of license fee which by this time had totalled up to Rs. 6,84,09,331.89. Petitioner was called upon to show case as to why allotment I license of the hotel site in question might not be withdrawn /cancelled on account of non-payment of license fee besides disconnection of electric supply and taking action under sections 5 and 7 of the P.P. Act. By this time advance license fee falling due on 28-9-1988 and the third Installment "f the moratorium period had become due. Ultimately, by letter dated 6-3-1990 NDMC after detailing the facts called upon the petitioner to stop the use of plot of land along with the structure constructed thereon for any purpose whatsoever forthwith and to hand over the vacant possession of the same to the NDMC and further to pay the amount of Rs. 13,11,24,758.89 on account of arrears of license fee and other charges as detailed in the letter. This led the petitioner to file all these proceedings, earlier first having referred the disputes to arbitration of the Lt. Governor, Delhi.
(6) The petitioner earlier filed a writ petition in this court being Cwp 3562/89 challenging the show cause noticed dated 7-12-1989 of N.D.M.C. whereby disconnection of electric supply was threatened and further action initiated under sections 5 and 7 of the P.P. Act. I have been told that this petition is pending and by interim order disconnection of electric supply to the hotel of the petitioner has been stayed.
(7) Reference at this stage may be made to the lease agreement. Under clause 10, license is for a period of 99 years and the land on lease with the N.D.M.C. in whom the building constructed thereon would vest. Petitioner has, however, been given right to raise loans on the security of She structure/building fixtures and fittings etc. The license could, however, be terminated earlier for any of the breach of the terms committed by the petitioner. Under various other clauses it has been stipulated that the building constructed on the plot of land in question would vest in the NDMC Under para (xii) of clause. 20. no house-tax is payable as the building vests in the NDMC "for all intents and purposes". It may be noticed at this stage itself that u/s 65 of the Punjab Municipal Act, 1911 as applicable to Delhi and which governs the N.D.M.C. notice? were sent to the petitioner demanding house-tax for the hotel building. For the year 1-4-1988 to 31-3-1989 house-tax was demanded at the rate of 12-112 per cent of the annual value and amounting to Rs. 1,47,82,500. For the year 1983-84 the demand of house-tax was Rs. 26,28,000. Petitioner, however, refused to pay the house-tax on the ground that since the property vested in the N.D.M.C. no house-tax was payable and reference was drawn to para (xii) of clause 20 of the agreement aforesaid. After the termination of the license agreement the land and the structure put thereon shall remain to the use and be vested in the N.D.M.C. The various clauses in the agreement which unmistakably show that the parties agreed that the structure on the land in question shall vest is the NDMC Under clause 23, N.D.M.C. shall have a pre-emptive right to purchase the property built on the site after deducting the market value of the land at the market price then prevalent. Under clause 32 on revocation of the license and/or vacation of the premises by the petitioner for any reason whatsoever, the petitioner shall not remove from the premises furnishings, fittings and fixtures of the movable types belonging to the petitioner without prior written permission of the NDMC and if required the NDMC shall have the option to retain the same with payment of compensation as may be mutually agreed upon, and in case of NDMC deciding not to retain the same, the petitioner shall remove the same peacefully and restore the space to the condition or existing at the time of completion of the building at the petitioner''s cost. Clause 55 contains the arbitration agreement between the parties and as under :
55.In the event of any question, disputes or difference or differences arising in regard to the terms and conditions and their interpretation, the same shall be referred to the Sole Arbitration of the Lt. Governor of Delhi and award of the said Arbitrator shall be binding on the licensee and the Licensor
Clause 9 may also be set out as under :
9.In the event of the licensees failing to make the payment of license fee, interest due thereupon or any other payment due against the licensees for any reason whatsoever of the amount demanded by the Licensor in full or in part, the Licensor shall have absolute discretion without further reference to the licensees to revoke] cancel the license with immediate effect for running the said hotel in terms of this license, to take possession of the licensed premises by recourse to law as provided in the Public Premises (Eviction of Unauthorised Occupants) Act) 1971 or any other such law in force, at that time, after revocation of the ''license and the licensees shall have no claim on the premises but only seek arbitration under clause 55 of this agreement.
clause 31 is as under :-:
31.The allotment will be made on license basis and the licensed premises including the building to be constructed will be a public .premises within the meaning of the Public-Premises (Eviction of Unauthorised occupants) -Act,: 1971 - or such acts, as may be enforced from time to time in this behalf.
(8) Other clauses to the agreement I will refer to, if necessary, during the course of discussion.
(9) Narration of the above facts show that the disputes between the parties are quite simple. In a petition u/s 20 of the: Act, .the court has to see if there is an arbitration agreement-between the parties and if the subject disputes are covered under-that agreement. The claim of the N.D.M.C. is towards arrears of license fee, interest on the. overdue payments and other charges under the license agreement. Petitioner, however, has stated a claim of damages against the N.D.M.C. for various delays on the part of the N.D.M.C. resulting in completion and commission of. the hotel project at a much later date hereby increasing the cost of the project and the consequent loss of revenue. The-claim, as noted above, is for a sum over Rs. 78 crores. In the -petition u/s 20 of the Act the petitioner has raised as many as 50 disputes/questions for determination by the arbitrator. Human ingenuity is certainly limitless sin carving out disputes out of nothing. I find It unnecessary to set out the disputes/questions raised by the petitioner. These can be gone into at the time of final-determination of the petition itself.
(10) The petitioner , wants stay of. proceedings before the Estate Officer lender the P.P. Act started in pursuance to two notices mentioned in the beginning of this order. Dr. Singhvi, learned counsel for the petitioner, himself, for the purpose of the present application, confined his attack principally on two grounds, namely, (1) that in view of the terms of the license agreement hotel building was not a public premises as declined under the P. P. Act, and (2) the NDMC has raised its demand towards license fee etc. from little over Rs. 3 crores to over Rs. 27 crores showing the arbitrary nature of the demand. He also countered the argument of Mr. Nayyar, learned counsel for the N.D.M.C. that section 60 of the Indian Easements Act, 1882, was no bar to revoke the license. Under this section a license may be revoked by grantor, unless (a) it is coupled with a transfer of property and such transfer is in force. and (b) the licensee acting upon the license, has executed a work of a permanent character and incurred expenses in the execution. Dr. Singhvi said that since hotel building was ft work of permanent character and the petitioner incurred expenses in the execution thereoF. the license had become irrevocable. He said the parties could not contract against the provisions of law to agree to say that license could be revoked.
(11) The principles for grant of temporary injunction are well settled. Also it is well settled that in a petition u/s 20 of the Act it had to be seen firstly whether there was any valid claim for reference, and secondly, whether the claim to be adjudicated by the arbitrator was barred by any law. These two aspects cannot be mixed up. Second matter is certainly for the arbitrator to decide unless on admitted facts a claim appears to be barred by any law. (See
(12) Reference at this stage may also be made to clauses (e) and (g) of section 2 as well as to section 15 of the P.P. Act. These are as under :
"2(e) "public premises" means- (1) any premises belonging to, or taken on lease or requisitioned by, or on behalf of, the Central Government, and includes any such premises which have been placed by that Government, whether be- fore or after the commencement of the Public Premises (Eviction of Unauthorised Occupants) Amendment Act, 1980, under the control of the Secretariat of either House of Parliament for providing residential accommodation to any member of the staff of that Secretariat; ; (2) any premises belonging to, or taken on lease, by, on behalf of- (1) any company as defined in Section 3 of the Companies Act, 1956 (I of 1956), in which not less than fifty-one per cent of the paid- up share capital is held by the Central Government or any company which is a subsidiary (within the meaning of that Act) of the first mentioned company. (ii) any corporation (not being a company as defined in Section 3 of the Companies Act, 1956 (1 of 1956), or a local authority) established by or wider a Central Act and owned or controlled by the Central Government, (iii) any University established or incorporated by any Central Act, (iv) any Institute incorporated by the Institutes of Technology Act, 1961 (59 of 1961), (V any Board of Trustees constituted under the Major Port Trusts Act, 1963 (38 oi 1963), (vi) the Bhakra Management Board constituted u/s 79 of the Punjab Reorganisation Act, 1966 (31 of 1966), and that Board as and when renamed as the Bhakra-Beas Management Board under sub-section (6) of Section 80 of that Act; and (3) in relation to the Union territory of Delhi, (i) any premises belonging to the Municipal Corporation of Delhi, or any municipal committee or notified area committee, and (ii) any premises belonging to the Delhi Development Authority, whether such premises are in the possession of, or leased out by, the said Authority;"
"15.Bar of jurisdiction-No court shall have jurisdiction to entertain any suit or proceeding in respect of- (a) the eviction of any person who is in unauthorised occupation of any public'' premises, or (b) the removal of any building. structure or fixture or goods, cattle or other animal from any public premises u/s 5-A. or (c) the demolition of any building or other structure made, or ordered to be made, inder Section 5-B, or (cc) the sealing of any erection or work or of any public premises u/s 5-C, or (d) the arrears of rent payable under sub-section (1) of Section 7 or damages payable under subsection (2), or interest payable under sub-section (2-A), of that section, or (c) the recovery of- (i) costs of removal of any building, structure to fixture or goods, cattle or other animal u/s 5-A, or (ii) expenses of demolition u/s 5-B, or (in) costs awarded to the Central Government or statutory authority under sub-section. (5) of Section 9. or (iv) any portion of such rent. damages, costs of removal, expenses of demolition or , costs awarded to the Central Government or the statutory authority.
(13) In Ms. Oriental Building & Furnishing Co. Ltd. v. Union of India. Air 1981 Del 293.(2) certain premises belonged to the railways which had granted lease of the same to the petitioner for a particular period. There was a term for renewal as well. Lease could, however, be terminated earlier. Lease deed contained an arbitration, clause which constituted the arbitration agreement between the parties. Dispute arose and the railways started proceedings under the P.P. Act for the eviction of the petitioner. On a petition filed u/s 20 of the Act the petitioner sought stay of proceedings before the Estate 0ffice.r under the P.P. Act. Railways contended that in view of the bar contained in section 15 of the P. P. Act, proceedings u/s 20 of the Act on the question of eviction of the petitioner from the public premises were incompetent. A Single judge of this Court was of the view that the court was merely considering the question whether the It after was referable to arbitration and was not considering or was not concerned with the question of eviction of the petitioner as an unauthorised occupant from the public premises. The court was influenced by the fact that the railways itself chose to have an arbitration clause in spite of the that the property in question was public premises covered under the P.P. Act. The learned Judge held that it was open to the parties to have an arbitration agreement whenever there was a dispute. According to him "if there is an arbitration agreement between the parties then the provisions of the Arbitration Act have to apply." The wording of the the section (section 15)......... states that the court shall not have jurisdiction of entertain any suit or proceeding in respect of eviction of a person who is in unauthorised occupation of any public premises. .......". Then the learned Judge finally observed as under :
'' THE contention of learned counsel For the respondent is that section 15 bars this court from dealing with the arbitration proceedings as, in effect, the Court is dealing with a proceeding which relate? to the eviction of a person who is in unauthorised occupation or relates to the recovery of damages. I do not agree with this contention The parties have agreed to have an arbitration relating to matters arising out of the lease. Once there is an arbitration agreement, the parties are free to refer the matter to arbitration in accordance with the agreement. The Court is not adjudicating on any dispute relating to eviction or recovery of rent. etc. The Court is concerned rather with the enforcement of the rights of the parties under the Arbitration Act. The disputes have to be dealt with by the arbitrator appointed hv the parties, I, Therefore, hold that Section 15 of the public Premises (Eviction of Unauthorised Occupants) Act, 1971, has nothing to do with this Court''s jurisdiction under the Arbitration Act which is quite an independent jurisdiction. In fact, if title parties do go to arbitration, and an award is given, then there is no choice for the parties but to approach the Court under the Arbitration Act for the purpose of making the award a rule of the Court or for getting those matters arising in arbitration proceedings or relating. to the same "settled through the Court. By no means can it be said that the court will then be dealing with a proceeding for the eviction of a person in unauthorised occupation or for recovery of rent or damages. The court is merely concerned with the arbitrator, the arbitration agreement, the award and the Subsequent stages through which that award or arbitration proceedings may pass. I, Therefore, overrule the objection relating to the jurisdiction of this Court.
(14) With due deference to the learned Judge, though I am bound by the observations ,I must admit my inability to understand the reasoning given. In fact it stares at the face that you can do indirectly what otherwise you are prohibited to do directly. I would certainly have referred the matter to a larger bench on this question, but I find that in view of the recent decision of the Supreme Court in Ashoka Marketing Ltd. and & another v. Punjab National Bank and others. IT. 1990 (3) S.C. 417,(3) the statement of law in Oriental Building & Furnishing Co. case (supra) no longer holds good. Further, it may be that though it may not be possible to take the point that the award is bad as it relates to eviction from public premises and as such could not be taken into consideration in a proceeding u/s 30 or 33 of the Act but it can be so taken u/s 14 of the Act when the award is sought to be filed in court and the court is called upon to pass a decree in accordance with the award. (See
(15) Petitioner admits that agreement is a license agreement and though license is granted for 99 years it is not lease. Dr. Singhvi in fact said that the agreement was in the nature of a partnership arrangement or a collaboration agreement. In spite of various clauses in the agreement whereby parties agreed that the building constructed an the land provided by the N.D.M.C. would vest in NDMC and also specifically agreeing to the applicability of the provisions of the P.P. Act, the contention of the petitioner has been that the building was not public premises to which the P.P. Act would apply. In the alternative the argument has been that even if it is so, in view of the arbitration agreement between the parties the arbitrator has to proceed first. This alternative submissions I have already held to be of no avail because of the bar created by section 15 of the P.P. Act. Petitioner contended that since premises in question were not "belonging to" N.D.M.C. these were not "public premises" within the meaning of clause (c) of section 2 of the P.P. Act and also that the petitioner was not in" unauthorized occupation" of any public premises as provided in clause (g) of section 2.Distinction was sought to be drawn with reference to the wordings of paras (1), (2) and (3) of clauses (e) of section 2. In
(16) Section 60 of the Casements Act is inapplicable in the present case inasmuch as the building vests in the licensor. It is not that such an agreement is not legal. Petitioner himself admits it to be in the nature of a collaboration agreement. Moreover, although a license may be prima facie irrevocable either because it is coupled with a grant or interest or because the licensee has erected works of a permanent nature, there is nothing to prevent the parties from agreeing expressly or by necessary implication that the license should be revocable.
(17) Apart from the provision of section 60 of the Easements Act, there is the law of contract as well. In Bhagwanna and others v. Sheikh Anwaruzzaman and others 1980 All. L.J. 368. (7) the court held that where a licensee agreed in express term to vacate land whenever asked by owner, he was precluded from raising plea that his construction was protected u/s 60(b) of the Easements Act. In
(18) As a matter of fact, it was not the petitioner who had invoked the provisions of section 60 to contend that the license was revocable. It was only in answer to argument, advanced by Mr. Nayyar, learned counsel for the N.D.M.C., that license was revocable and that section 60 did not apply, that such plea was raised by the petitioner. I find in the circumstance of the present case. the decision of the Supreme Court in Express Newspapers case (supra) is in applicable as it is confined to the facts of that case and was so held in Ashoka Marketing case (supra).
(19) It was, then the contention of the petitioner that it was only after arbitration proceedings had commenced and sward given that clause 9 of the agreement would become applicable. Petitioner said it was only after that it would be known if any amount was due to the petitioner. Dr. Singhvi referred to the words "in the event of" in support of this contention which, according to him, meant that. jurisdiction of the Estate Officer under the P.P. Act could be invoked, only under clause 9 after disputes had been decided by the arbitrator. I am afraid I cannot, agree to this submission. Clause 9 excepts the disputes felling under this clause from the operation of dans''; 55 which constitutes the arbitration agreement between the parties respecting recovery of possession of the premises in question. Clause 9 means that the licensee cannot stop payment of license fee, interest and any other payment due against the licensee under the license deed for any reason whatsoever and if it does so it will be at its own peril at the pain of cancellation]revocation of the license and then proceedings would be initiated under the P.P. Act for recovery of possession and after the license has been revoked/cancelled If. however, the licensee claim any other amount under the agreement otherwise he can invoke the arbitration clause as contained in clause 55 of the agreement if that applies to the disputes so raised by the licensee. In the present case, it cannot be disputed that amounts running in crores of rupees are due to N.D.M.C. from the petitioner towards payment of arrears of Hence fee and overdue interest even assuming that certain other payments of few lakhs of rupees as claimed by N.D.M.C. are disputed by the petitioner. Arguments by the petitioner have been oft repeated that claim by the N.D.M.C. which was first for only little over Rs. 3-l./2 crores on 30-9-1988 has shot up to over Rs. 27.50 crores as mentioned in the notice issued u/s 7(3) of the P.P. A, but the petitioner has been unable to point out defect in the claim set up by the N.D.M.C. it must. not be forgotten that the petitioner was granted moratorium in payment of license fee for the period 28-9-1982 to 27-9-1988 which amount it was to pay in certain half yearly Installments. Any default, in payment of Installment was to carry interest at the rate of 15 per cent per annum. The accumulated arrears of license fee totalled over Rs. 16 crores as on 28-9-88. and apart from making the payment of Rs. 50 lakhs on 12-4-89 no payment has been made by the petitioner and by now arrears of license fee falling due in the years 1989 and 1990 and amounting to Rs. 5,36,00,0001- have also fallen due. Thus, arrears of license fee payable to the N.D.M.C. by the petitioner are around Rs. 21,00,00,0001- apart from the overdue interest, lit could be even more depending upon the turnover of the hotel business by the petitioner. On this basis itself it appears to me that the license of the petitioner has been rightly revoked under the terms of the license agreement between the parties and proceedings under the P.P. Act initiated both for recovery of arrears of license fee and possession. Petitioner has right to defend those proceedings and machinery is provided under that law for filing an appeal before the District Judge against the order of the Estate Officer.
(20) Tile defense of the petitioner has been that an amount of Rs. 45.77 crores is due to it from the N.D.M.C. towards increase in cost of the construction and Rs. 32,30,45,000 towards loss of revenue from 1-4-1985 to 31-8-1987 due to delays caused by N.D.M.C. Earlier also in May 1984 the petitioner had advanced a claim of Rs. 2,21,21,000 for delay caused by N.D.M.C. which was rejected by the N.D.M.C. Any such claim now would certainly be barred by limitation. But that apart, all this period the petitioner has been taking time for completion of the hotel project and for moratorium on payment of license fee- There has been no whisper of any loss sustained by the petitioner. Once the petitioner commissioned the hotel project after the extended period and the period of moratorium ended he came up with the present claim. The letter with which the claim was sent was on the eve of the date when license fee falling due in 1988 (28-9-1988) fell due for payment. Nothing to my mind can be said of more malafide then the conduct of the petitioner. It has not been shown to Tits as how the loss of revenue could be a dispute covered under clause 55 of the license agreement. I asked Dr. Singhvi in view of such a huge claim by the petitioner why an amount of Rs. 50 lakhs was paid by the petitioner to N.D.M.C. in April 1989. His reply was that was done to buy peace. There is no basis on their record for such a submission and I think it is only resourcefulness of the counsel that such a plea has been advanced. I reject the same. This payment of Rs. 50 lakhs goes to show that the petitioner knew that dues were payable to the N.D.M.C. and by making his payment he was only gaining time. I asked the petitioner to file on affidavit statement of gross turnover for the last four years. The affidavit was to contain complete statements of the permanent occupants and the amounts being charged from them and other income from the hotel business. This was not done. A pre-emptive direction was again given, but the petitioner never filed the accounts. I must, Therefore, raise a presumption against the petitioner firstly, that there was no loss, that amounts as claimed by way of losses are not reflected in the books of the petitioner. and further that on the basis of gross turnover the amount of license fee would be more than that the minimum prescribed under the license agreement. The accounts would have also shown as to what according to the petitioner was the amount due to the N.D.M.C. towards license fee and otherwise. Then, as noted above, the petitioner has saved lakhs of rupees towards house-tax on the pica that the building was owned by N.D.M.C.
(21) I asked Dr. Singhvi as to what the petitioner was prepared to pay as there could be no dispute about the minimum charges of license fee payable. He said the petitioner was ready to pay (1) monthly amount of Rs. 8.5 lakhs secured by bank guarantee, or (2) bank guarantee of the amount due and also falling due, or (3) Rs. 20 lakhs a year, or (4) 6 per cent to 8 per cent of the gross turnover. He then sough! to compare the petitioners hotel business with that of Hotel Holiday Inn of Bharat Hotels Ltd. at Barakhamba complex. He said that the land under the petitioner''s hotel was 4.29 acres and that of Bharat Hotels 6 acres. F.A.R. (Floor Area Ratio) for the petitioner was 150 which that of Bharat Hotels 250. Rooms in the petitioner''s hotel number 305 while that in Bharat Hotels numbered 500. Dr. Singhvi said that under an agreement with the N.D.M.C. Bharat Hotels was to pay Rs. 12 lakhs per month and he on his part was offering Rs. 8.44 lakhs per month taking the number of rooms as the criteria. Dr. Singhvi said this offer was only ad invite though, he was not required to pay anything under the, law. He also said that lie would not farther encumber the hotel building which valued over Rs. 200 crores. His further argument was that hotel business had to be preserved as it was a running business and avoidance of multiplicity of proceedings required grant of an interim order as prayed. Dr. Singhvi in fact invoked Article 14 of the Constitution when he compared the petitioner''s hotel with that of Bharat Hotels Ltd. Grant of license to Bharat Hotels Ltd. was a subject-matter of a writ petition in this court. It is S. S. Sobti v. Union of India & Ors Air 1982 Delhi 51. (10) It will be appropriate. to refer to this judgment. It was some time in 1976 that highest tender of M/s. Delhi Automobiles Pvt. Ltd. (later Bharat Hotels Ltd.) for construction of a five star hotel at Barakhamba Complex, New Delhi, was accepted. The whole of the land in the complex was about 36 acres and was placed at the disposal of N.D.M.C. The area of the. plot of hotel was 6 acres and license fee fixed was Rs. 37.78 lakhs per year. The licensee paid Rs. 20 lakhs to N.D.M.C. and the balance was to be paid at the time of delivery of possession of land. In March 1977, however, after the change of the Government at the Centre, N.D.M.C. on reconsideration, it appears, refused to finalise the deal and in fact in March 1978 cancelled the allotment. The licensee filed a suit in this court which resulted in a compromise as by that time earlier Government had again come back to power. Now the license fee was fixed at Rs. 1.44 crores annually in place of Rs. 37.78 lakhs annually. The license deed was executed on 11-3-1981. Central Government in its letter allotting the land to N.D.M.C. in order to set up a five star hotel for meeting the requirements of hotel accommodation for Asian Games in 1982 had stated that a formal lease deed would be drawn up later. It was provided that. land should not be sublet but such arrangement could be made for constructing and running a hotel as would not involve the subletting of the plot. One of the grounds of challenge to the transaction was that it was invalid because of Article 299 of the Constitution which had not been complied with. The court held that it was clear from the letter of allotment that intimation had been given and later a formal lease deed was to be drawn up. If no such lease was granted and the transaction did not go through, as contemplated, then, of course, the license by which the hotel was to be set up and run would also fall through.
(22) Now in the present case before me, offers had been invited and that of the petitioner being the highest, was accepted. The license agreement with Pure Drinks is dated 16-4-81 and that with the petitioner 14-7-1982. It was much after the license agreement with the Bharat Hotels Ltd. had been entered into. Then, as noted above, many meetings had been held by N.D.M.C. with various hotels for construction of hotel project and those meetings had been attended by representatives of Bharat Hotels Ltd. as well as the petitioner. As far back as in 1981 the petitioner was well aware of the license fee paid by Bharat Hotels Ltd. and yet it had agreed to offer at a higher rate. The land of the petitioner hotel is far better located than that of the Bharat Hotels Ltd. Rights of the parties even otherwise arise out of contractual obligations and any comparison with Bharat Hotels Ltd. is not only misplaced but thoroughly inappropriate. In the circumstances, N.D.M.C. cannot be restrained from exercising its rights under the license agreement on the failure of the petitioner to abide by the terms of the license agreement in making payments. Court would be loathe to exercise any discretion in favor of a party in the grant of interim stay when it seeks to back out from its solemn obligation undertaken in a mutually agreed upon contract. The court also cannot start with any presumption that a solemn obligation need not be adhered to on account of some specious plea. Hers are two parties bargaining on equal terms. They have agreed to certain terms which seemed to them to be good. It is too late in the day for the petitioner to contend that any terms under the lease agreement were unreasonable or wrong.
(23) N.D.M.C. has been constituted under the Punjab Municipal Act, 1911 as extended to Delhi. It has various functions to perform as a local body. The license fee and other charges payable to the N.D.M.C. under the agreement form parts of its principal funds. But for the claim raised by the petitioner are certainly due to N.D.M.C. under the agreement. While granting moratorium of the payments falling due it was agreed that these payments will be made in equal half yearly Installments and in case of delay interest was payable at the rate of. 15 per cent per annum. Now when the petitioner has itself given a go bye to the agreement regarding payment of license fee and the license is revoked/cancelled on that account, the whole of the arrears of license fee with interest becomes due and payable to the N.D.M.C. N.D.MC. is a local body and funds needed for various functions to be performed by it under the Punjab Municipal Act. Balance of convenience certainly lies in favor of the N.D.M.C. Further I am of the view that the disputes raised by the petitioner are not bona fide. Its only purpose appears to be in raising the disputes to delay the payment of lawful dues to N.D.M.C. under the agreement. Petitioner is using prime land where hotel building has been constructed without paying anything for it It has offered to pay during the course of hearing only Rs. 1 crore only against an agreed minimum amount of Rs. 2.68 crores. It has suppressed its accounts and has raised claims which are not tenable. It got extensions in the completion and commission of the hotel project and also moratorium on. the license fee payable. When the hotel project got into operation and license fee became due and payable and moratorium ended, is it that only then it dawned upon the petitioner that the license fee was excessive or that it had claim for damages which points it never raised while seeking extension or moratorium. It was contended before me that the hotel of the petitioner Le Meridien was the best in the chain of hotels of similar names in the world over and that irreparable loss would occasion to the petitioner if N.D.M.C. was allowed to exercise its right of re-entry. I could not appreciate the type of argument. N.D.M.C. has invoked the provisions of the P.P. Act and it is not that it has taken the law into its own hands. Further if under the agreement a right accrues to N.D.M.C. on account of any default committed by the petitioner, the petitioner certainly cannot complain about that. Petitioner must have known the consequences of his default. Conduct of the petitioner does not commend to me and this conduct disentitles the petitioner to any discretionary relief.
(24) I find that it is the petitioner who is in breach. It is utilising land and building in breach of the agreement. Equip certainly is not in its favor. N.D.M.C. put thrust on the respondents of the petitioner and granted extension of time for completion and commission of the hotel project and also agree to moratorium on payments running into crores of rupees and to accept the same in twenty half yearly Installments. It even agreed to forgo interest on the amounts which had already fallen due and accepted the request of the petitioner to charge interest only if the Installments were delayed. It appears the petitioners never honestly intended to pay This application is, Therefore, dismissed with costs. Counsel tee Rs. 2,000.00
