M/S. ASHVICK CONSULTANTS Vs. JKTDC AND OTHERS

JUDGEMENT

(1.) This appeal in terms of Section 37(1) (b) of the J & K Arbitration and Conciliation Act, 1997 (hereinafter referred to as "Act of 1997") is directed against the order/judgment dated 24.11.2013, passed by the learned Principal District Judge, Jammu (hereinafter referred to as the trial Court) in File No. 15/Arbitration whereby Petition filed by the appellant under Section 34 of the Act of 1997 challenging the award dated 29.09.2012 has been dismissed.

(2.) Briefly stated the facts leading to the filing of this appeal are that by virtue of three registered lease agreements, three Tourist Resorts located at Lakhanpur, Dayalachak and Jhajjar Kotli respectively, were leased out by the respondent No.1 in favour of the appellant. The lease agreements between the parties were executed on 07.10.2003, 07.10.2003 and 03.10.2003 respectively. The terms and conditions, subject to which the Tourist Resorts situated at the aforesaid three places were leased, were identical. The leases were initially for a period of five years and were extendable further after every five years subject to a minimum increase of 25% of the rent after every five years term. Apart from other terms and conditions, the lease agreements also contain an arbitration clause. Before the expiry of the initial lease period of five years, it transpires that on the request of the appellant for extension of lease for a period of forty years, the matter was taken up by the Managing Director of the respondents-corporation with the Administrative Department. In the recommendation made by the Managing Director, it was conveyed to the Administrative Department that the appellant intended to invest a huge amount for up-gradation of the infrastructural facilities at all the three Tourist establishments and therefore, would require a certainty of the tenure of the lease. It was also pointed out that the Lessee had undertaken to invest about 13.5 crores for the aforesaid purpose. The Administrative Department conveyed its approval vide its communication UO No.PS/CST/M-3/3532 dated 28.01.2004. The approval was granted by the Administrative Department after taking note of the fact that the relevant clause of the Agreement pertaining to the tenure of the lease was, in fact, open-ended and, therefore, the Corporation should have no hesitation in fixing the period of 25 years.

(3.) As is further gatherable, the respondent-Corporation served upon the appellant a Legal Notice on 16.10.2008, conveying the appellant that it had been decided to terminate his lease after the expiry of five years, i.e., original period of lease and to take back the possession of the demised properties. The appellant was, thus, unequivocally conveyed that his leases granted qua the aforesaid three properties would stand determined w.e.f.111.2008. This is how, the dispute between the parties started.