| SooperKanoon Citation | sooperkanoon.com/909635 |
| Subject | Arbitration |
| Court | Delhi High Court |
| Decided On | Jan-28-2011 |
| Case Number | CS(OS) No.1507A/2000; CS(OS) No.1532A/2000 |
| Judge | RAJIV SAHAI ENDLAW, J. |
| Acts | Arbitration Act, 1940 - Sections 14, 17, 20; Specific Relief Act - Section 21; Registration Act |
| Appellant | Airports Authority of India |
| Respondent | M/S Grover International Ltd. and anr. |
| Appellant Advocate | Mr. S.C. Agarwala; Mr. Digvijay Rai, Advs. |
| Respondent Advocate | Mr. Rahul P. Dave; Mr. Bhaskar Tiwari And Ors. |
| Cases Referred | (iii) Bharat Coking Coal Ltd. v. L.K. Ahuja |
2. To be referred to the reporter or not? No
3. Whether the judgment should be reported No in the Digest?
1. Both arbitration suits have been filed by the two parties to the arbitration namely the Airports Authority of India (AAI) and Grover International Ltd. (GIL) under Sections 14 & 17 of the Arbitration Act, 1940 for filing of the arbitration award dated 1st June, 2000 in this Court. GIL in its suit being CS(OS) 1532A/2000 has also sought making of the award rule of the Court. Upon the award being filed in this Court, AAI filed objections thereto being I.A. No.550/2001 in CS(OS) 1507A/2000 and which objections now fall for adjudication. No objections to the award have been filed by GIL. However GIL in its suit has filed applications for interim relief.
2. Arbitrable disputes arose between the parties out of "Agreement regarding land for Five Star Hotel including Hotel Shopping Arcade" dated 7th September, 1989. In the said agreement AAI is described as lessor and the GIL as the lessee. AAI vide the said agreement granted lease to GIL of 28000 sq. mtrs. of land for a term of 30 years for the purpose of constructing and running of not less than 400 living rooms Five Star Hotel including the Hotel Shopping Arcade. After the expiry of the term of the lease, the Hotel with the fixtures and fittings was to become the property of AAI without payment of any further compensation. The said agreement in Clause 37 thereof provided for reference to the sole arbitration of a person to be appointed by the Chairman of the AAI, of all disputes and differences arising out of or in any way touching or concerning the agreement except those, the decision whereof was otherwise provided for in agreement or to which the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (PP Act) and the Rules framed thereunder were applicable.
3. GIL filed a Suit being CS(OS) No.2287/1994 in this Court under Section 20 of the Arbitration Act, 1940, seeking reference of disputes which had arisen between the parties, to arbitration. It was the case of the GIL that though under the agreement aforesaid, AAI was required to hand over possession of the land subject matter of the agreement to GIL on 7 th September, 1989 and though on 22nd February, 1990 some papers regarding delivery of possession were signed but when on 24 th February, 1990 the site was inspected, it was found that there was an electric sub-station on the land along with underground and overhead live electrical cables/poles and owing whereto GIL could not take over the actual possession of the land; that a lot of correspondence was exchanged between the parties in this regard and it was only on 3rd November, 1993 that GIL was informed that the electrical sub-station had been removed from the land and whereafter GIL could be delivered possession of the land on 11th November, 1993 only. It was the case of GIL that though it had not been put into possession of the land but AAI unilaterally enhanced the rate under the agreement and had served a notice dated 7th /9th June, 1994 upon GIL to show cause as to why the agreement be not terminated. It was the case of GIL that since it had been put into possession on 11th November, 1993 only, it was not liable to pay any amounts agreed to be paid by it under the agreement to AAI for any period prior thereto. According to GIL the following disputes had arisen between the parties:-
(i) What is the date of handing over possession of the site to GIL.
(ii) From what date AAI is entitled to claim rent from GIL.
(iii) Whether AAI has justifiable cause of action to issue notice of cancellation of lease and carry out its threat to cancel the lease.
(iv) Whether GIL has suffered any loss/damage and if so, how much.
(v) Whether GIL is entitled to claim the amount of loss/damage, if any, from AAI and if so, to what extent.
4. AAI contested the said suit under Section 20 of the Arbitration Act, 1940 filed by GIL. According to AAI, possession of the land was delivered on 22nd February, 1990; that GIL was aware of and was supposed to be aware of the site conditions, having been required to inspect the same prior to entering into the agreement; that the hindrance in the form of sub-station and cables were not on the entire stretch of land but towards one side of land and were not in any way likely to affect the construction project; GIL had breached the terms of the agreement by not constructing the hotel on the plot; that the electrical sub-station, cables or poles could not in any manner affect construction; that it was GIL which had failed to perform its part of the agreement.
5. The said CS(OS) 2287/1994 under Section 20 of the Arbitration Act, 1940 was disposed of vide judgment dated 8 th May, 1995 in which it is recorded:-
(A) That it was the contention of AAI that the cancellation of lease/agreement could not be a part of reference before an arbitrator.
(B) That the claims of GIL were in the nature of specific performance of the agreement and which was not arbitrable.
(C) It was held by this Court that GIL was not seeking specific performance of the agreement and the disputes raised by GIL were only about the validity of the notice of cancellation of lease, the date of commencement of rent or damage or injury.
(D) Accordingly, the disputes aforesaid as enumerated in para 3 hereinabove and which is equivalent to para 31 of the petition/plaint of GIL under Section 20, were referred to the sole arbitration of a retired Judge of this Court.
(E) It was also ordered that the Arbitrator will have jurisdiction to entertain the counter claim of AAI.
(F) On the application of GIL for interim relief, it was also directed that GIL shall not be dispossessed without due process of law from the premises in question.
6. The Arbitrator appointed having died, a substitute Arbitrator, also a retired Judge of this Court, was appointed and who has rendered the award dated 1st June, 2000 (supra). The award records that the following issues were framed:-
(i) Whether the termination of the lease was wrongful and illegal. If so, to what amounts were the claimant (GIL) entitled as damages.
(ii) Whether the claimants (GIL) entitled to interest on the amount of damages found due. If so, at what rate and for what period.
(iii) What amount, if any, were the respondents (AAI) entitled towards license fee, minimum guarantee royalty.
(iv) Were the respondents (AAI) entitled to interest on the amount found due from the claimant (GIL). If so, at what rate and for what period.
7. The Arbitrator on issue no.(i) aforesaid found:-
(A) That even if GIL before tendering had inspected the site and was aware of the electrical sub-station, cables, poles etc., the same did not absolve AAI of its liability to hand over the site free from all encumbrances.
(B) That it was obligatory for AAI to get the site cleared of the sub- station.
(C) That the correspondence exchanged showed that GIL was anxious to start the construction of the Hotel and had even got approved from the competent authority the plans therefor.
(D) The contention of AAI that the electrical sub-station was in one corner of the land and GIL could have commenced the construction was negatived and it was held that GIL could not have commenced construction till the removal of the electrical sub-station, poles, cables etc.
(E) It was therefore held that the possession of the plot was delivered to GIL only on 11th November, 1993.
(F) That GIL was entitled to suspend the payment of lease money for the period during which it was deprived of the use of the plot in question.
(G) Issuance of show cause notice dated 7th / 9th June, 1994 for determining the lease on account of non-payment of lease money was not justified and contrary to law and the order dated 17th October, 1994 of termination of lease is illegal.
(H) AAI was entitled to lease amount only from 11 th November, 1993 and not for the period before that.
(I) That GIL was not financially sound enough to immediately start the project or capable of starting the project at the time of delivery of possession on 22nd February, 1990 or on 11th November, 1993 when the electrical sub-station was removed.
(J) At least till 17th October, 1994 when AAI had terminated the agreement, there was no movement or activity of starting the construction of the Hotel project.
(K) That there was thus no financial loss to GIL owing to delay by the AAI in removing the sub-station and delivering the actual physical possession of the land after three years of the commencement of the lease agreement and GIL has not suffered any damages.
8. Accordingly, it was also held in the award that AAI having not delivered possession of the land to the GIL, was also not entitled to any monies under the agreement/lease.
9. The Arbitrator accordingly declared:
(i) the order dated 17th October, 1994 of termination of lease/agreement is illegal not enforceable in law and was set aside.
(ii) the period of lease agreement shall stand extended for a period of 30 years from the date of making/publishing the award minus the period from 11th November, 1993 to 17th October, 1994, on the same terms and conditions as incorporated in the agreement dated 7th September, 1989 between the parties.
(iii) GIL was not held entitled to any damages or interest.
(iv) AAI was not entitled to any damages or interest.
(v) the amounts already paid by GIL were directed to be adjusted for the period from 11th November, 1993 to 17th October, 1994.
10. As aforesaid, GIL has not filed any objections to the award. AAI has objected to the award on the grounds:-
(a) of the same being on the subject with respect to which no issues were framed.
(b) that the Arbitrator having held that GIL was not ready and willing to perform its part of the agreement has erred in setting aside the termination of the contract.
(c) that the Arbitrator having held that GIL was not ready and willing to perform its part of the contract erred in granting extension of the lease term.
(d) that the award is beyond jurisdiction of the Arbitrator
(e) that the Arbitrator had wrongly allowed suspension of rent.
11. On application being I.A. No.8132/2007 of GIL in CS(OS) 1532A/2000, a Local Commissioner was appointed vide order dated 9 th August, 2007 to ascertain the status of the plot of land aforesaid. The Local Commissioner filed his report and which was discussed in the order dated 23rd November, 2007 in CS(OS)1532A/2000 and certain directions issued for removal of batching plant, generator house, cement storage house found on the plot. I.A. No.6619/2008 has been filed by GIL in CS(OS) 1532A/2000 averring disobedience of the order dated 23 rd November, 2007 by which AAI was directed to remove batching plant, cement storage house, generator etc.
12. An application being I.A. No.7605/2008 has been filed by Delhi International Airport Pvt. Ltd. (DIAL) for impleadment in CS(OS)1532A/2000 for the reason that it had been given an exclusive right and authority for performing the functions of operating and maintaining the Indira Gandhi International (IGI) Airport and has stepped into the shoes of AAI and the land in question is a part of the IGI Airport and as per the new Master Plan of IGI Airport, is a part of the operational area of the IGI Airport and is required for development, modernization and re-structuring of Delhi Airport. Though no formal order on the application allowing impleadment has been made but the counsels for DIAL have also been heard.
13. Though AAI has not objected to the award expressly on the ground of the findings in the award of the termination of the agreement by AAI being bad for the reason of being not arbitrable, it was at the outset enquired from the counsels as to how the said findings in the award could be sustained. It is felt that when the arbitration clause expressly excludes the matters covered by the PP Act and when it is also the law that the disputes which are in the exclusive jurisdiction of the Estate Officer under the PP Act cannot be arbitrable (see Kesar Enterprises v. UOI (1994) 30 DRJ 176), how the Arbitrator could return the finding of termination being illegal; under the PP Act, it is the Estate Officer who is vested with the jurisdiction to determine whether possession of any public premises, as the land in question admittedly is, is unauthorized or not; the said question would necessarily entail a finding on the validity of termination effected by a public authority. If it were to be held that the Arbitrator though not entitled to pass an order of eviction with respect to the public premises, is nevertheless entitled to adjudicate whether the possession is authorized or unauthorized, whether the termination is valid or not, it will be in the teeth of the enquiry which the Legislature has contemplated to be done by the Estate Officer. It was as such also enquired whether AAI has initiated any proceedings under the PP Act. The answer is in the negative.
14. The senior counsel for AAI has contended:-
(i) that GIL had not claimed the relief of extension of the lease; the same also did not find mention in the order of reference to the Arbitrator and the grant of the relief of extension of lease by the Arbitrator is bad.
(ii) that the term of the lease was 30 years from the date of commencement thereof, mentioned in the lease deed as 7th September, 1989; it was not provided in the lease that the term thereof would be for 30 years from the date of possession; that thus even if the finding of the arbitrator of the possession having been delivered on 11th November, 1993 were to be correct, the same would not alter the term of the lease which would remain 30 years from 7th September, 1989 and the arbitrator could not have made the same 30 years with effect from the date of the award;
(iii) that neither the Court nor the arbitrator has power to frame a new contract for the parties; such power has only been vested in the labour/industrial jurisdiction;
(iv) that GIL had only claimed damages from AAI for non-delivery of possession by AAI and had not claimed the relief of extension of the lease;
(v) GIL rather by electing to claim damages only under Section 21 of the Specific Relief Act and not damages in addition to specific performance had rather elected to walk out of the contract;
(vi) that the said question had arisen at the time of arguments in C.S.(OS) No.2287/1994 under Section 20 of the Arbitration Act, 1940 also and GIL had expressly stated that it was not claiming specific performance;
(vii) attention is invited to the claim petition of GIL before the arbitrator to also demonstrate that no claim for extension of lease was made;
(viii) that the substratum of the contract has disappeared; with effect from 7th September, 1989, 21 years out of 30 have already passed and the terms of the agreement can by no stretch of imagination be performed in the remaining 9 years; the only question remaining is thus of damages and which GIL has been held to be not entitled;
(ix) that the contract of lease by its very nature is determinable and for this reason also is not specifically enforceable;
(x) attention is invited to
(a) E.Venkatakrishna v. Indian Oil Corporation JT 2000 (10) SC 558 laying down that the question of restoration of distributorship did not arise under the agreement and was thus not arbitrable;
(b) Orissa Mining Corporation Ltd. v. Prannath Vishwanath Rawlley (1977) 3 SCC 535 on the proposition that the arbitrator cannot enlarge the reference;
(c) Associated Engineering Co. v. Government of Andhra Pradesh (1991) 4 SCC 93 also laying down that umpire cannot widen the jurisdiction;
(d) State of Rajasthan v. Nav Bharat Construction Company (2006) 1 SCC 86 where award on claims not referred was set aside;
(xi) though the senior counsel for AAI has also challenged findings of the arbitrator of the construction being not possible till the electrical sub-station was removed but the same being findings of fact were not allowed to be entertained.
The senior counsel for AAI thus contended that the part of the award declaring the term of the lease/agreement to have been extended is liable to be set aside.
15. The senior counsel for DIAL has contended that the implementation of the agreement in favour of GIL is now not feasible for operational reasons; it will disrupt the airport; that the GIL in its claim petition before the arbitrator had not made any claim for setting aside of the determination of the contract. It is urged that the same is indicative of GIL being satisfied with the claim for damages only and which has been rightly denied by the arbitrator. The counsel for GIL of course strongly opposed the right of DIAL to address arguments.
16. The counsel for GIL has contended
(A) that the present is a oppressive litigation and owing whereto GIL has been made to suffer.
(B) that though under the agreement, GIL was to get three years to construct the hotel but at no point of time it got three clear years for constructing the hotel; after the removal of the electrical sub-station also, it got only six months time whereafter notice to show cause against termination was issued;
(C) that there are no equities in favour of AAI in as much as it has put DIAL, a private party into possession and DIAL has its own commercial interests in as much as it is developing a hospitality district housing hotels also which are directly in conflict to the agreement with GIL;
(D) that the agreement is a lease deed pure and simple and not a joint venture which is terminable as suggested by AAI and thus not terminable prior to the expiry of term thereof; merely by sharing profits in lieu of rent does not convert the lease of immovable property into a joint venture;
(E) that AAI before accepting the tender of GIL had satisfied itself as to the financial capacity of GIL;
(F) the conduct of AAI is malafide since beginning; though there was no provision for furnishing a Bank Guarantee of nationalized Bank but the same was insisted upon;
(G) attention is invited to proviso to Clause 27 of the agreement providing for relief against forfeiture;
(H) that the spirit of the agreement was that GIL would have about 30 years of operation of the hotel in as much as all the monies and other expenses to be incurred by GIL in building and setting up the hotel was to after 30 years, belong to AAI free of cost;
(I) that thus extension of lease was necessary in as much as GIL could not be asked to build the hotel in the year 2010 and to hand over the same to AAI in the year 2019 when 30 years from the execution of the lease would expire; attention is invited to Faqir Chand Gulati v. Uppal Agencies Pvt. Ltd. (2008) 10 SCC 345 to contend that the nature of the agreement in the present case was such whereunder rights in property in favour of GIL were created;
(J) reliance is placed on McDermott International Inc. v. Burn Standard Co. Ltd. (2006) 11 SCC 181 to contend that interpretation of agreement is in the domain of the arbitrator;
(K) that the arbitrator felt that clear 30 years should be provided to GIL to do complete justice between the parties. Reliance in this regard is placed on Food Corporation of India v A. M. Ahmed & Co. (2006) 13 SCC 779 (para 32) and on Associated Construction v. Pawanhans Helicopters Pvt. Ltd. AIR 2008 SC 2911 (para 7);
(L) Reference is made to Satish Kumar and Ors. v. Surinder Kumar AIR 1970 SC 833 (para 22) to contend that where there is no contractual prohibition, the arbitrator may make such award as meets the end of justice and that in the event of the award creates rights in property, at the time of being made rule of the Court, the decree thereupon may be registerable under the Registration Act;
(M) attention is invited to the finding of the arbitrator in the award that till the underground cables were removed, nothing could be done on the land;
(N) that the arbitrator had framed an issue as to the validity of the termination of the agreement without any objection from AAI;
(O) attention is invited to Section 39(1)(iv) of the Arbitration Act, 1940 and it is contended that the order dated 8th May, 1995 of this Court of reference to arbitration was/is deemed to be after due regard to the question of arbitrability of the dispute and no appeal was preferred thereagainst and has attained finality and the arbitrability of the dispute cannot now be gone into. Attention in this regard is invited to Telecommunications Consultants India Ltd. v. Nangia Constructions (India) Pvt. Ltd. 72 (1998) DLT 733 (para 9);
(P) that no ground of arbitrability was raised before the arbitrator. Attention is invited to JG. Engineers (P) Ltd. v. NBCCL Ltd. (2009) 107 DRJ 557 (para 9) holding that ground not taken before arbitrator cannot be agitated;
(Q) with reference to ITPO v International Amusement Ltd. 142 (2007) DLT 342 (DB) to which attention of the counsel for the GIL had been invited during the course of hearing, it is contended that it is the case where the Estate Officer had issued notice under the PP Act; in the present case no such notice has been issued and as such there was no fora before which GIL could have raised the said issues except before the arbitrator. It is contended that thus it cannot be held at this stage that the arbitrator had no jurisdiction to determine the validity of termination of agreement. Attention is invited to Oriental Building & Furnishing Co. Ltd. v. Union of India AIR 1981 Del 293 wherein (para 14) it was held that a party cannot be left remediless. It is further contended that the dispute of validity of termination is not barred under Section 15 of the PP Act;
(R) With reference to the reply to IA No.6619/2008, it is shown that the hotel project still is within the Master Plan and that the existing leases are to be honoured;
(S) Attention is also invited to Reliance Airport Developers P. Ltd. v. Airports Authority of India(2006) 10 SCC 1 (para 21 & 23) in this regard;
(T) Attention is invited to ONGC v. Western Company of North America (1987) 1 SCC 496 in para 14 whereof it was held that life is infused into the award when it becomes enforceable. On the basis thereof it is argued that upon dismissal of the objections of AAI, 30 years time is to be granted to GIL;
17. The senior counsel for AAI in rejoinder besides reiterating the earlier arguments has contended that complete justice has to be within the realm of jurisdiction and after GIL in the earlier proceedings under Section 20 of the Arbitration Act, 1940 had expressly stated that it was not seeking specific performance, no relief of grant of 30 years of lease could have been or can be granted to GIL.
18. The aforesaid exhaustive record of proceedings and arguments would show that the bone of contention between the parties is the extension of lease allowed in the award, of 30 years from the date of award and which GIL now claims of 30 years from the date the award becomes enforceable. Else there is no objection to the remaining award denying the claim of AAI as well as GIL of damages and other charges against each other.
19. Section 30 of the Arbitration Act, 1940 permits setting aside of an award inter alia when an award is otherwise invalid. An award would be invalid when it purports to do something which is not permissible in law. What thus has to be first determined is whether the arbitrator or for that matter even the Court has any power to so extend the term of a lease or an agreement. If it is found that there is no such power, the award would certainly be invalid.
20. For the aforesaid purposes, first the nature of the agreement between the parties is to be determined. The agreement though not titled as a lease of immovable property is nevertheless registered as a lease deed for a term of 30 years as is necessarily required to be. If the intent of the parties had not been to create a lease of immovable property, the question of registration would not have arisen. The agreement also describes the parties as lessor and lessee and records grant of lease of land by AAI to GIL. The provision in the agreement of payment by GIL of a portion of its gross turnover to the AAI in addition to the rents/lease money would not change the character of the agreement from that of a lease.
21. The senior counsel for AAI is correct in contending that the term of the lease was provided as 30 years measurable from the date of commencement mentioned in the agreement i.e. 7th September, 1989. The lease deed does not record that possession of the leased land had been delivered by AAI to GIL. On the contrary, it is clear from the lease that the possession of the land was to be delivered after the execution of the lease. It is the admitted case of parties that documents of delivery of possession were in fact signed on 22nd February, 1990. Thus, though the possession was not being delivered simultaneously with the execution of the lease deed but the parties still chose to measure the term of the lease from the date of execution of the lease deed and not from the date of delivery of possession.
22. The question which arises is, as to what is the remedy of a lessee against a lessor who delays delivery of possession; whether such a lessee can ask for the period of the lease to be counted from the date of delivery of possession or is to be only entitled to compensation/damages for delay in delivery of possession.
23. A lease is a matter of contract. The parties having agreed to count the period of lease from the date of execution of the lease deed and not from the date of delivery of possession, the lessee has no right to claim that the period of the lease should be counted from the date of delivery of possession. Specific performance can be sought only of the terms of the agreement and not of something which is not provided in the agreement. Section 108 of the Transfer of Property Act, 1882 lays down the rights/obligations/liabilities of the lessor and the lessee in the absence of a contract to the contrary. Section 108 (A)(b) of the Act provides that the lessor is bound on the lessee's request to put him in possession of the property. It was held by the Privy Council way back in Ram Lal Dutt Sarkar v. Dhirendra Nath Roy in AIR 1943 Privy Council 24 and in Mt. Razia Begum v. Mohd. Daud AIR1926 Patna 508 that the remedy of a lessee not delivered possession is for damages or the lessee may sue for possession or the lessee may rescind the contract. The Supreme Court also in Ltd. AIR 1966 SC 1361 held that the right of a lessee not put in possession is of suspension of rent.
24. In none of the judgments I find a right in the lessee to have the term of the lease extended.
25. Section 106 of the Transfer of Property Act provides for the term of the lease in the absence of a contract to the contrary. Thus when there is a contract as to the term of the lease, the term of the lease would be governed by the said contract only. In the present case the parties clearly made the term of the lease measurable from the date of execution of the lease and not measurable from the date of delivery of possession though possession was admittedly not delivered on the date of execution of the lease. The remedy against non-delivery of possession thus cannot be extension of term of the lease. I may in this regard also notice that the law [Section 108 (B)(e) of Transfer of Property Act] even in the case of destruction of the leased property vests an option in the lessee only to void the lease and does not vest any option in the lessee to, from the agreed period of the lease exclude the period during which the lessee was deprived of use of the demised premises. Thus it is not the implied term of the lease that a lessee is entitled to enjoy the agreed term of the lease and to exclude therefrom the period during which is prevented for the reasons attributable to the lessor from enjoying the premises. There is no such indication in Section 111 of the Act dealing with determination of leases also.
26. If there is no such right in the lessee, the arbitrator or even the Court cannot give to a party what it is not entitled to in law.
27. Thus the award in so far as it directs the term of the lease to stand extended is clearly contrary to law and invalid and which also amounts to misconduct on the part of the arbitrator.
28. I am also not satisfied with the reply of the counsel for GIL to the query posed at the outset. The question of validity or invalidity of termination of the agreement effected by AAI was a dispute to which PP Act and the rules framed thereunder applied and which was thus excluded from the arbitration clause. A tenant/lessee of a public premises, upon its tenancy/lease being determined cannot, before the public authority has had an opportunity to initiate proceedings for eviction under the PP Act, rush and raise the dispute of validity of termination in a Court or in arbitration proceedings and invite adjudication thereon and contend that the same is maintainable for the reason of the proceedings under the PP Act having not been initiated till then. If the public authority does not initiate the proceedings under the PP Act, the termination in any case would be to no avail, whether it be valid or invalid. However if proceedings under the PP Act are initiated, then the invalidity of the termination has to be set up as a defence in the said proceedings only and cannot be a subject matter of adjudication before any other fora. Under Section 5 of the PP Act the satisfaction to be accorded whether a person is an unauthorized occupant or not is of the Estate Officer and not of any other fora. If the argument of the counsel for GIL were to be accepted, it would frustrate the jurisdiction of the Estate Officer. On the contrary if it were to be held that a finding by a Civil Court or an arbitrator is not binding on the Estate Officer, rendering such a finding would be meaningless and which no Court or arbitrator would return. The finding of invalidity is thus in the teeth of the bar of Section 15 of the PP Act. The Supreme Court in Ashoka Marketing v. Punjab National Bank AIR 1991 SC 855 held PP Act to be a special legislation enacted to deal with the mischief of rampant unauthorized occupation of public premises. The Division Bench of this Court in Fabiroo Gift House v. ITDC 2003 (66) DRJ 243 also held that claims adjudicable before Estate Officer are not arbitrable.
29. The counsel for GIL in the written submissions filed after the oral arguments has also relied upon Beg Raj Singh v. State of U.P. (2003) 1 SCC 726 to contend that where the instrumentality of the State is itself responsible for the delay caused to the project, then the term of the lease can be extended. However the observations in the said judgment and in the other judgments aforesaid cited would not come to the rescue of GIL in the face of the provisions aforesaid of the Transfer of Property Act.
30. The counsel for GIL in the written submissions aforesaid also cited (i) Bhagawati Oxygen Ltd. v. Hindustan Copper Ltd. AIR 2005 SC 2071; (ii) Lily Thomas v. Union of India AIR 2000 SC 1650; (iii) Bharat Coking Coal Ltd. v. L.K. Ahuja (2004) 5 SCC 109 & (iv) Ispat Engineering & Foundry Works v. SAIL (2001) 6 SCC 347 on the scope of interference under Section 30 of the Arbitration Act, 1940. However the relief granted by the arbitrator having been found to be one not permissible in law, the case would squarely fall in the category of invalidity of the award, within the meaning of Section 30 of the Act.
31. Rather I tend to agree with the senior counsel for AAI that the award of extension of the lease is beyond the reference and beyond the claim of GIL before the arbitrator. It is clearly an afterthought. No issue whatsoever also was framed thereon. Claim of GIL was for damages/compensation for delay in delivery of possession; had the claim of GIL been of extension of the lease as has been awarded, there would have been no occasion for the claim of damages. It appears that not finding any claim for damages to have been proved/made out, the relief of extension was granted as a largesse to GIL.
32. In fact the award also suffers from the malady of inconsistencies. On the one hand the arbitrator has found that GIL was not ready and willing to perform its part of the agreement and did not have the resources to build the Hotel and on the other hand granted a fresh lease to GIL. A party which has not been ready and willing has no right to such a relief.
33. Thus, looked at in either way, the award in so far as extends the period of lease or declares the termination invalid cannot be sustained and is set aside. The said part being severable from rest of the award, need is not felt to remit/remand the matter.
34. The judgments cited by the counsel for GIL of the courts/arbitrator being required to do complete justice between the parties are not found apposite. Justice cannot be outside the law. What is sought to be justified in the name of justice is clearly illegal.
35. IA No.550/2001 in CS(OS) No.1507A/2000 therefore succeeds and is allowed to the aforesaid extent. The remaining award is made rule of the Court. I refrain from imposing any costs on GIL.
Decree in terms of award save the part set aside be drawn up.