K.K. ENTERPRISES Vs. VGP UNIVERSAL KINGDOM

JUDGEMENT

(1.) THE respondent has entered into a Licence Agreement with the appellant dated 29.06.2012 to run a Speciality Restaurant with Bar, Partying facility, adjacent to VGP Universal Kingdom at Injambakkam, Chennai, owned by the respondent on terms and conditions provided in the Licence Agreement. A sum of Rs. 15,00,000/ - was to be paid towards security deposit on signing the agreement which is refundable on termination of the agreement, without interest, while a sum of Rs. 10,00,000/ - was to be deposited as non -refundable amount within thirty days of the signing of the agreement. The Licence Fee was scheduled over a different period of time, that is, a sum of Rs. 2,50,000/ - per month for the first six months, Rs. 3,00,000/ - per month thereafter for the remaining three year period with further revision of 15% for every three years thereafter and the total period of licence was six years with a fit out period of three months.

(2.) THE obligations of both the parties were set out in the Licence Agreement. In terms of Clause 6.0 of the Licence Agreement, the same was terminable inter alia on default of either party, apart from the situation where there was a persistent closure of business by either party for consecutive 45 days in any business year. Clause 9.0 is the Dispute Resolution Clause and on failure to be able to resolve the disputes, arbitration was provided for by seeking appointment of an Arbitrator by the Madras High Court with the Venue of arbitration at Chennai in case the parties failed to agree on the appointment of Arbitrator. The said Clause reads as under:

(3.) IT appears that though a considerable period has lapsed, the business was not commenced. The parties seem to be blaming each other for it. On 04.09.2014, a notice was issued by the respondent stating that the appellant had done nothing to commence the business and had also stopped payment of licence fee of Rs. 3,00,000/ - per month after making payment for March, 2014. The licence was, thus, sought to be revoked. This was replied to by the appellant vide reply dated 18.09.2014, seeking to put the blame on the respondent and also seeking to refer the disputes to arbitration by proposing an Arbitrator.