P VENKATESWARLU Vs. BHARAT HEAVY ELECTRICALS LIMITED

JUDGEMENT

(1.) By this application under Sections 11(4) and (5) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to "the Act"), the applicant seeks appointment of an Arbitrator for adjudication of the disputes between the parties.

(2.) It is stated that the respondent is a Government Company incorporated under the provisions of the Companies Act, 1956. The said Company had established one of its Unit at Ramachandrapuram in Medak District, which is at the outskirts of the City of Hyderabad. The company has also developed a township at Ramachandrapuram, but, however for want of marketing and other facilities for entertainment, sports etc., it has leased out an extent of 2 acres of land to the applicant for construction and running of a cinema theatre, a restaurant etc. The said extent of 2 acres is situated abutting the National Highway and adjacent to the residential quarters of the employees of the Respondent Company at Ramachandrapuram. Since the applicant agreed to develop the property by establishing the above structures, an agreement was entered on 25-8-1966 containing various terms. The lease was for a period of thirty years from the date of the lease at Rs. 1,154/- per annum.

(3.) It is stated that pursuant to the said agreement, the petitioner had established a theatre, restaurant etc., and successfully ran throughout the lease period. However, before the lese period comes to an end, as the agreement contained renewal clause, the applicant requested the respondent to renew the lease for a further term of 30 years on reasonable rent. In fact, it is stated that hoping the lease would be renewed, the applicant has made additional constructions and installed air-cooling system, generator and replaced the entire seating, expanded the theatre, replaced the entire screen with a new one, changed the furniture and fixtures completely, and even the projector lens were changed for more clarity, by incurring huge amounts, and therefore, the applicant sought for renewal of the lease period. In response to the said request, the respondent constituted a committee to examine the terms of lease for renewal. But, according to the applicant in order to avoid renewal of the lease in favour of the applicant, the respondents have fixed up abnormal rent at Rs.2.50 lakhs per annum. The said quotation, according to the applicant, is 217 times higher than the original rent. It is also stated that the applicant came forward to develop the area when nobody came forward to take up the venture and invested huge sums of money, and at no point of time there was any complaint with reference to the running of the theatre as well as providing facilities to the residents of the quarters. The applicant, however, requested for renewal of the lease by fixing up the rent at Rs. 18,360/- per annum. Further, it was even increased to Rs.25,000/-, as it was not agreed, the applicant sought for reference of the matter to the Engineering wing of the Public Works Department (PWD) for fixing up the rent. In fact, even earlier also, it was conveyed by the applicant to the respondent that if the respondent is not agreeable to the rent proposed by the applicant, the issue may be left open for decision of the Arbitrators. It is further stated that though similar lease granted to an auto-workshop in respect of Ac. 1-00 land adjoining the cinema theatre, was renewed with a nominal increase while in the case of the applicant. The respondent was bent upon to evict him by not renewing the lease thereby discriminating the applicant vis-a-vis the other tenants of the respondent.