International Amusement Limited vs India Trade Promotion Organization & ...

The appellant herein was running an amusement park in Pragati Maidan, New Delhi since the year 1984, which was well known as "Appu Ghar". The land for the purpose was initially allotted to the appellant by India Trade Promotion Organisation (for short 'the ITPO) on licence basis as the lease between the Central Government and the ITPO was still pending and as such permanent allotment of the land could not be made in favour of the appellant. Only as an administrative measure, the license agreements were entered into between the appellant and the ITPO. The appellant claimed that it was the permanent allottee of the land for running the amusement park on the similar lines as were allotted in favour of the Statutory Corporations/Instrumentalities of the State and Central Government. It was only on the assurance of the Land & Development Office (for short "the L&DO"), Ministry of Urban Development and ITPO that the appellant made huge amount of investment for establishing and running "Appu Ghar". The last agreement entered into between the parties was on 6.11.1995. In the said agreement, arbitration clauses 27 and 28 were incorporated, which are extracted hereunder :-

The case of the appellant is that it being a permanent allottee of the land at Pragati Maidan, it had made huge investments for opening Water Park, in order to provide additional amusement facilities to the public at large. The ITPO being aware of the permanent status of the appellant in respect of the land as well as the factum of huge investments made by it upon the same towards establishing the Water Park, called upon the appellant to vacate the premises vide letter dated 02.09.1999. The appellant has raised various disputes, claims and counter claims against the ITPO.

Immediately after the notice was received by the appellant, it submitted a detailed representation to ITPO with a request to renew the lease of the land for further period. Being unsuccessful, the appellant commenced proceedings under the Arbitration and Conciliation Act, 1996 (for short "the Arbitration Act") invoking its right under clause 28 of the agreement referred to supra. The arbitration notice dated 11.11.1999 was issued to the ITPO invoking the provisions of clause 28 of the aforesaid licence agreement and filed an application under Section 8 of the Arbitration Act before the Estate Officer for referring the matter for arbitration. On 18.11.1999 ITPO issued notice of eviction under Section 4A of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (for short "the P.P. Act") to the appellant to evict from the land of its unauthorised occupation. The application for arbitration filed by the appellant was rejected by the Estate Officer vide his order dated 28.3.2000 on the ground that the Estate Officer exercises his jurisdiction as provided under the provisions of the P.P. Act. It was further stated that it is an admitted case that the premises in Pragati Maidan for running Appu Ghar was given to the appellant on licence basis and on expiry of the licence period the appellant becomes an unauthorised occupant as defined under Section 2(g) of the P.P. Act and therefore, it was required to vacate the premises and hand over the same to ITPO, hence, the appellant cannot take up the plea that it was a permanent allottee of the premises involved in this case and that there was no dispute at all between the parties, which could be agitated as raised by the appellant.

Aggrieved by the said order, the ITPO filed Writ Petition (C) No.2015 of 2001 before the Division Bench of Delhi High Court, challenging the correctness of the order of appointment of the arbitrator by the High Court. On 12.04.2001, the High Court stayed the arbitration proceeding which has been in force till the disposal of the writ petition. During the pendency of the above matter, some part of "Appu Ghar" land was required by Delhi Metro Rail Corporation for construction of Pragati Maidan Metro Station which was handed over by the appellant to the ITPO. Thereafter, the land of Appu Ghar was resumed by the L&DO and the same was allotted to the Supreme Court Registry for its expansion plan. The High Court vide its common order dated 16.7.2007 allowed Writ Petition (C)No. 2015 of 2001 filed by the ITPO holding that the matters enumerated under Section 15 of the P.P. Act cannot be referred to arbitration for adjudication for arbitrator. The application C.M. (M) No. 553 of 2007 filed by the appellant was also dismissed. Hence, these appeals. It is contended by Mrs. Pratibha M. Singh, the learned senior counsel for the appellant that the legal position prevailing with respect to Section 16 of the Arbitration Act, was that any directions qua-jurisdiction ought to be raised before the Arbitrator and the same cannot be adjudicated under Section 11 of the Arbitration Act by the Judge who is a designate of the Chief Justice under Sections 11(6) and 11(7) of the Arbitration Act as per the law laid down by this Court in its judgments in Konkan Railway Corporation. Ltd. and Ors. v. Mehul Construction Co.[1] and Konkan Railway Corpn. Ltd. and Anr. v. Rani Construction Pvt. Ltd.[2] Further reliance was placed by the learned senior counsel upon the Constitution Bench decision of this Court in SBP & Co. v. Patel Engineering Limited and Anr.[3], wherein this Court has succinctly held that power under Section 11(6) of the Arbitration Act is not an administrative power of either the Chief Justice of the High Court or his designate but a judicial power. The said position of law was re-affirmed and re-emphasized by this Court in Maharshi Dayanand University and Anr. v. Anand Coop. L/C Society Ltd. and Anr.[4] and again in the case of S.N. Prasad, Hitek Industries (Bihar) Ltd. v. Monnet Finance Ltd. and Ors.[5] in support of the above said proposition of law. Further reliance was placed by the learned senior counsel on behalf of appellant on another judgment in the case of Andhra Pradesh Tourism Development Corpn. Ltd. and Anr. v. Pampa Hotels Ltd.[6] It is further contended by the learned senior counsel that under Section 15 of the P.P. Act, the bar of jurisdiction applies only to a Court and placed reliance on the judgments in the cases of Kamal Pushp Enterprises v. D.R. Construction Company[7], Firm Ashok Traders & Anr. v. Gurumukh Das Saluja & Ors.[8] and Ashoka Marketing Ltd. & Anr. v. Punjab National Bank & Ors.[9] Without prejudice to the above legal contentions, the learned senior counsel also contended that though in general, licences may be governed by the P.P. Act, in the case on hand, the agreement and the nature of relationship between the parties was not that of a licensee and licensor, as it is evident from the various documents produced on record by the appellant. There are several documents spanning from 1980s to 1997 which reflect that the Government's intention was always to raise the appellant as permanent allottee of the land. However, for various reasons and subsequent events, the permanent allotment of land was not made despite the huge investments made by the appellant and the appellant was forced to vacate the premises. It was under these circumstances, the Government was conscious of the different nature of the relationship of parties and the arbitration clause was incorporated in the license agreement. On the other hand, Mr. Ravi Sikri, the learned senior counsel appearing on behalf of the ITPO and Mrs. M. Diwan, learned counsel on behalf of Union of India rebutted the above said contentions urged on behalf of the appellant contending that arbitration clause 28 in the agreement does not deal with the arbitration under the provisions of the Arbitration Act. The learned senior counsel contended that the Division Bench of Delhi High Court after examining the provisions of Section 5 and in the light of Section 2(3) of the Arbitration Act, held that Section 2(3) protects the existing laws, both common law as well as statutory law, under which some disputes cannot be made subject matter of arbitration. Further, it is urged that the Division Bench of the High Court has rightly held that Section 15 read with Sections 5 and 7 of the P.P. Act, confers exclusive jurisdiction on the Estate Officer appointed under Section 3 of the P.P. Act, to deal with the application that is filed by the ITPO to evict unauthorised occupants from the public premises and pay the damages as provided under Sections 5 and 7 of the P.P. Act respectively. Further, Section 15 of the P.P. Act bars and prohibits any court from entertaining any suit or proceeding for eviction from the premises etc. as provided under clauses (a) to (e) of Section 15 and that the general power of the Court under Section 9 of the Code of Civil Procedure, 1908 to entertain suit or proceedings is therefore ousted if a dispute raised by the appellant falls in clauses (a) to (e) of Section 15 of the P.P. Act. It was further contended that the Division Bench of the High Court rightly held that the provisions of Sections 5 and 7 of the P.P. Act empower the Estate Officer appointed under Section 3 of the P.P. Act to deal with applications that will be filed by the respondent-ITPO for eviction of unauthorised occupation and for payment of rent and damages in respect of the public premises against the unauthorised occupants. Sections 5 and 7 of the P.P. Act conferred exclusive jurisdiction upon the Estate Officer and makes it very clear that he alone has sole and exclusive jurisdiction to decide such applications of the ITPO in respect of the dispute regarding public premises. The said jurisdiction conferred upon the Estate Officer by the statute cannot be taken away by a contract between the parties by incorporating arbitration clause in the agreement or made subject matter of any dispute in relation to the public premises which will be in occupation of the licensee for reference before an arbitrator to arbitrate the same. It cannot be waiver of statutory provisions of the P.P. Act. The contract between the parties must be within the legal framework and parties cannot contract out of the statute. Further, it was contended that the Estate Officer having exclusive jurisdiction is not arbitrable and parties by a contract cannot agree to refer the matters in respect of which jurisdiction has been conferred upon the Estate Officer. Therefore, the arbitrability of claims of the appellant covered under Sections 5 and 7 of the P.P. Act, is excluded. To arrive at the said conclusion, the Division Bench of the High Court rightly placed reliance upon the Constitution Bench judgment of this Court in the case of Ashoka Marketing Ltd. (supra), wherein the legal question that arose was as to whether the Rent Control Act,1995, which is also a Special Act will override the provisions of the P.P. Act. After interpreting the relevant provisions of the Act, the Constitution Bench of this Court in the above case has held that the P.P. Act, is a special statute relating to eviction of unauthorised occupants from public premises and therefore, the same will prevail over the Rent Control Act. In the said case it was held that the 1971 enactment did away with the option of the parties and conferred exclusive jurisdiction on the Estate Officer in relation to the public premises. The power and jurisdiction of a civil court to adjudicate matters enumerated under Section 15 of P.P. Act was withdrawn.

In view of the above rival legal contentions urged on behalf of the parties, to answer the aforesaid substantial questions of law, it is necessary for us to examine arbitration clause 28 of the license agreement dated 06.11.1995 entered between the parties, which has been extracted in the earlier portion of this judgment.

Accordingly, the civil appeals are dismissed as there is no merit for consideration to interfere with the impugned judgment and order. No costs.

.....................................................................J. [V. GOPALA GOWDA] .....................................................................J. [C. NAGAPPAN] New Delhi, December 17, 2014 ITEM NO.1A-For JUDGMENT COURT NO.11 SECTION XIV S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS C.A. No. ......../2014 arising from SLP (C) No(s). 13982/2007 INTERNATIONAL AMUSEMENT LIMITED Petitioner(s) VERSUS INDIA TRADE PROMOTION ORGANIZATION & ANR Respondent(s) WITH C.A. No. ......../2014 arising from SLP(C) No. 13983/2007 Date : 17/12/2014 These appeals were called on for pronouncement of JUDGMENT today.

Hon'ble Mr. Justice V.Gopala Gowda pronounced the judgment of the Bench comprising His Lordship and Hon'ble Mr. Justice C. Nagappan.

Leave granted.

The appeals are dismissed in terms of the signed reportable judgment.

(Signed Reportable judgment is placed on the file)