HINDUSTAN STEEL LIMITED Vs. D.R. GUPTA

JUDGEMENT

(1.) THIS is an appeal under Section 39 of the Indian Arbitration Act from the order dated 12 -5 -1976 of the Sub -Judge, Rourkela passed in Title Suit No. 19 of 1975, setting aside an a ward.

(2.) THE Respondent took lease of 12.30 acres of land of the Appellant within a specified boundary over which a hotel containing forty guest rooms three lounges, one dinning hall and kitchen and other rooms were standing. A lease deed was executed between the parties on 3 -10 -1963. A sketch map of the demised premises was attached to the lease deed. This lease deed contained the terms, inter alia, that the lessor -Appellant was to supply to the lessee at the demised premises water, electricity and conservancy service at the usual rate and that the lessor would extend the lease -hold area up to Hamirpur road in the west and up to Canteen road on the north for the purpose of enabling the lessee to enlarge his hotel. The lessor also undertook to provide maintenance to the buildings within the leasehold area, and to the approach roads. Under the terms and conditions of the lease the Defendant was to pay to the Plaintiff a sum of Rs. 6/ - per head per day calculated on the total number of guests accommodated in the hotel with a minimum guarantee of Rs. 3,000/ - per month. It was also stipulated that the lessee was bound to accommodate the guests of the lessor as and when so required and reservation for the lessor's guests was liable to be cancelled by giving at least twenty four hours notice. When the lessor's guests were accommodated in the hotel the lessor was to pay Rs. 14/ - per head per day for its guests and in case the guests were accommodated in air -conditioned room, an additional charge of Rs. 8/ - was payable to the lessee. For any accommodation required and reserved by the lessor if not utilised and not cancelled in time, a charge of Rs. 8/ -. per head per day was payable to the lessee by the lessor. The terms and conditions of the lease deed further laid down that the lessee was liable to render accounts to the lessor and the lessee was bound to provide facilities to the lessor or persons authorised by it to verify the number of guests staying at the hotel. The lessee defaulted in rendering accounts and avoided to give inspection and verification of his records by the lessor or its men on various pleas. The lessee except paying only Rs. 36,096/ - towards rent and Rs. 9,858.51 paise towards service charges had paid nothing more all these years since 9 -2 -1963, when the lease was to operate for a term of ten -years, in early 1971 the lessee came with an offer to pay Rs. 50,000/ - towards the arrear dues of the lessor pending rendition of accounts as between the parties and undertook to pay rest of the dues after mutual accounts are rendered. The lessee also wanted extension of the lease period for ten years upon such payments being - made. Some sort of negotiation was commenced for renewal of the lease for another term of ten years and a draft lease deed was sent by the solicitors of the lessee to the lessor. The negotiation for a fresh lease, however, fell through and as the lessor's dues were not paid by the lessee the former filed Title Suit No; 16 of 1972 in the Court of the Sub. Judge, Panposh for a preliminary decree for rendition of accounts as between the parties and after accounts are taken to pass a final decree for recovery of the amount found due to the lessor by the lessee.

(3.) THE Defendant -lessee in the suit filed an application on 22 -6 -1972 before the Subordinate Judge under Section 64 of the Arbitration Act for stay of further proceedings in the suit. After hearing both parties the learned Subordinate Judge allowed the application on 3 -7 -1972 and further proceeding in the suit was stayed In order that parties may go before the Arbitrator for determination of their disputes. By a registered letter dated 21 -9 -1972 the lessee wrote to the Arbitrator to resolve the disputes and differences between him and the lessor, which were indicated therein, by his sole arbitration.