KESAR ENTERPRISES LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) BY this order I am disposing of both IAs bearing No. 9297/89 and 9302/89 as the point raised in both the applications is identical. IA 9297/89 in S. No. 3405/89 has been filed on behalf of Kesar Enterprises Ltd. (hereinafter referred to as the Company) and IA. 9302/89 in S. No. 3408/89 has been filed on behalf of Petroleum and Petro Chemical Purveyors (hereinafter referred to as the Firm) under Section 41 Schedule II of Arbitration Act read with Section 151 CPC and in both the applications it has been prayed that proceedings under Sections 4 and 7 of the Public Premises Act pending before the Estate Officer, Northern Railway DRM Office, New Delhi be stayed.

(2.) BRIEFLY stated the facts of the case are that the Company in terms of, agreements dated 6.1.62 and 3.9.80 with the President of India acting through the Divisional Supdt. of Northern Railway was allowed as the licensee the use of contiguous pieces of land measuring about 15,352.5 sq. mtrs. adjacent to railway station. On this land the Company constructed storage tank, godown and other accommodation and depots for receiving stores and dealing vegetable oil and kerosene oil, petroleum and petroleum products. The licence fee during period 1955-60 was Rs. 0.48 P. per sq. yard per annum and it was increased to Rs. 9/- per sq. yard in the year 1980 with effect from 1st March, 1982, the licence fee was increased to Rs. 68.31 P. and was further increased to Rs. 119.96 P. per sq metre per year w.e.f. 5.12.82. But later on by letter dated 11.3.86 the licence fee was fixed at Rs. 60/- per sq. metre per year for covered area and Rs. 30/- per sq. metre per year for uncovered area for the period 5.12.82 to 31.3.86. Vide letter dated 27.10.86, the licence fee was revised to Rs. 60/- per sq. metre per year for both covered as well as uncovered area plus 10% increase every year. Vide letter dated 26.10.87, the licence fee was fixed @ Rs. 78/- per sq. mtr. per year for the period 1.4.86 to 31.3.88. Since the Company did not deposit the licence fee at the enhanced rates, the licence was terminated by the respondents on 12.5.88 and thereafter proceedings under Public Premises (Eviction of Unauthorised Occupant) Act, 1971 (in short P.P. Act) were initiated. Hence the Company filed the petition under Section 20 of the Arbitration Act and along with it filed IA No. 9297/89 for stay of the proceedings initiated under the P.P. Act.

(3.) MR . Aggarwal, learned senior counsel appearing on behalf of the Company and the Firm submitted that the increase in the rate of licence fee by the respondents was arbitrary and unreasonable and as such the disputes between the parties on this aspect of the matter be referred to the arbitration in terms of the arbitration clause contained in the agreement between the parties. He further submitted that during the pendency of the arbitration proceedings, Company and the Firm were willing to pay the annual licence fees @ Rs. 32.70 p. per sqr. mtr. per annum in terms of the order dated 27. 10. 89 passed by a learned Single Judge of this court in another similar case titled as M/s. Batra Brothers v. UOI and others, bearing Suit No. 2950A/88. He also submitted that the Estate Officer under the P.P. Act could not go into the question whether the rates of licence fee enhanced by the respondents were reasonable and this question could only be gone into by the arbitrator in terms of the arbitration clause.