Aktivortho Private Limited Earlier Known As M/S International Orthopedic Rehabilitation And Prevent vs. Dilbagh Singh Sachdeva And Others

Facts

The Appellant/Lessee, Aktivortho Private Limited, challenges a High Court judgment that upheld an arbitral award concerning a landlord-tenant dispute. The dispute arose from a Lease Deed dated March 18, 2015, for commercial premises. The Appellant stopped paying rent in February 2017 and terminated the lease on April 7, 2017, citing breaches by the Respondents/Lessors, including non-payment of conversion charges, lack of structural insurance, non-payment of lift maintenance, and denial of access to common areas. The Respondents issued a counter-notice demanding unpaid rent for March and April 2017. The Appellant vacated the premises on May 31, 2017. Subsequently, a suit filed by the Respondents was referred to arbitration. The Arbitrator awarded rent for March-May 2017 and six months' rent in lieu of the lock-in period, with interest and costs, rejecting the Appellant's counter-claim for security deposit refund and damages.

Held

The Court held that the Appellant/Lessee was not justified in terminating the Lease Deed. The Sole Arbitrator, after examining the evidence, found that the Appellant failed to prove the alleged breaches by the Respondents. Specifically, conversion charges for 2015-16 were paid, annual lift maintenance charges were paid up to October 27, 2017, and insurance was obtained. The Arbitrator also found no proof of denial of access to common areas or negligence in upkeep. Consequently, the Arbitral Award directing the Appellant to pay rent for March to May 2017 and six months' rent in lieu of the lock-in period, along with interest and costs, was upheld. The Appellant's counter-claim was rejected. The Court reiterated the limited scope of interference under Sections 34 and 37 of the Arbitration Act, emphasizing that awards based on plausible views of evidence are not to be lightly disturbed, especially when the Arbitrator acts within their jurisdiction. The appeal was dismissed as no grounds for interference were found.

Key Issues

1. Whether the Appellant/Lessee was justified in terminating the Lease Deed dated March 18, 2015, based on alleged breaches by the Respondents/Lessors, specifically concerning Sections 6 and 7 of the Lease Deed relating to the Lessors' obligations? - The Appellant argued that the Respondents breached the Lease Deed by failing to pay conversion charges, not obtaining structural insurance, not paying annual lift maintenance charges, denying access to common areas, and refusing to upkeep the common area. These breaches, it contended, entitled them to terminate the lease. - The Respondents argued that they had fulfilled their obligations under the Lease Deed and that the Appellant's termination was unjustified, leading to a claim for unpaid rent and damages for the unexpired lock-in period. 2. Whether the Arbitral Award, as upheld by the Commercial Court, is sustainable in light of the evidence and the scope of interference under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996? - The Appellant contended that the Arbitral Award was erroneous and should be set aside or modified. - The Respondents argued that the Arbitral Award was well-reasoned, based on evidence, and did not suffer from any patent illegality or perversity, thus warranting no interference by the Court.