BELWAL SPINNING MILLS LTD Vs. ICDS LTD

JUDGEMENT

(1.) THE petition under Section 34 of the Arbitration Act, 1996 has been preferred with respect to the arbitral award dated 25 th November, 2000 of respondent No. 2 Sh. B. I. Sharma, Advocate Udupi, Karnataka.

(2.) THE admitted position is that a lease agreement dated 10th May, 1991 was executed between the respondent No. 1 M/s. Industrial Credit and Development syndicate Ltd. since known as ICDS Ltd. on the one hand and the petitioner on the other hand whereunder the petitioner agreed to take the assets described in schedule A to the Agreement on lease from the respondent No. 1, to be installed at the premises of the petitioner at 14th Floor, Hansalya Buiding, 15 barakhamba Road, New Delhi on the terms and conditions and lease rent as mentioned therein. (Though the petition gives the date of lease agreement as 1st August, 1989 but the same is an error, being the date of another lease agreement between the parties and with respect to arbitral award wherefrom OMP No. 369/1999 was preferred in this court and which is informed to have been dismissed in default long back)2. It is further the admitted position that a letter dated 11th February, 1999 was sent by the respondent No. 1 to the petitioner as well as to Mr. Mahesh belwal and M/s. Impact Advertising Pvt. Ltd. both of which are stated to have stood guarantors for payment of lease rental by the petitioner to the respondent No. 1, stating that a breach had been committed of the terms and conditions of the aforesaid lease agreement dated 10th May, 1991 and a sum of rs. 3,00,060/- was due towards balance lease rental from 10th December, 1991 to 10th April, 1994 and a further sum of Rs. 6,47,269. 99 was due towards overdue compensation at 3% per month from the respective lease due dates and also claiming Rs. 20,000/- towards costs of registered notices and other expenses and either the possession of the assets leased or in alternative thereto claiming Rs. 1,000/-, in terms of the lease agreement. The said letter also notified that the petitioner and the guarantors aforesaid will continue to be liable for overdue compensation at 3% per month on Rs. 3,00,060/- in future also till final payment. The letter dated 11th February, 1999 further proceeds to state that the claim aforesaid of the respondent No. 1 had been agreed to be settled by sole arbitration of the aforesaid Sh. B. I. Sharma, Advocate, Udupi and the respondent No. 1 was making reference of the claims to the arbitrator.

(3.) THE aforesaid letter dated 11th February, 1999 was replied by the petitioner vide its letter dated 27th February, 1999. The petitioner merely stated that as per its books of accounts nothing was payable to the respondent No. 1.