Excelsior Correspondent
Srinagar, Sept 16: High Court ruled that the challenge of lease agreement is not amenable to writ jurisdiction and any dispute between the lessee and lessor can be referred and settled through arbitration.
This has been held by the Division Bench of Justice Sindhu Sharma and Justice Shahzad Azeem while allowing the appeal filed by the Indian Oil Corporation (IOC) against the Writ Court Judgment whereby the Corporation was directed either to purchase leased out land or revoke the lease enabling the land owner to sell the property free from all encumbrances.
The appellant-Corporation challenged the writ court verdict on the ground that while granting the land in question for petrol outlet, the land owner and the corporation apart from ‘Dealership Agreement’ entered in a ‘lease agreement’ also which contains an arbitration clause, therefore, in view of availability of alternate and efficacious remedy of arbitration, the Writ Petition was held not maintainable.
The court said that “Dealership Agreement” and “Lease Agreement”, are independent of each other and, if there is any grouse in respect of stoppage of operation of the outlet and termination of dealership, that was an independent cause and, thus the dealer-land owner was not enjoined to bring the cause of actions arising under “Dealership Agreement” and “Lease Agreement”, respectively, in one Writ Petition.
“It has been further held that the dealership agreement was inherently terminable, while as, the Lease Agreement was for a fixed period of 29 years from the date of execution thereof and, as per clause 3 (b) of the Lease Agreement, it was specifically provided that, on the lessee paying the rent as per the lease agreement and performing its conditions, it would be entitled to peaceably hold and enjoy the said premises without any interruption by the lessor or any other person claiming through the lessor”, DB said while underscoring the ruling of Apex Court on the issue.
The Bench has held that in view of the “Arbitration Clause” contained in the Lease Agreement, the Writ Petition under Article 226 of the Constitution of India was not maintainable and ought not to have been entertained by the Writ Court.
“It has been mutually agreed between the parties, while executing the Lease Agreement, that in case of any dispute or difference of any nature whatsoever, the same shall be referred to the sole arbitration of the Managing Director of the lessee”, DB said.
The court added that once the parties are signatory to the instrument, then they are bound to abide by the contractual obligation, thus, as a corollary, the specific mechanism provided therein by way of arbitration for adjudication of any dispute or difference, the parties have to adhere to it in letter and spirit.
The Bench has allowed the appeal of appellant-IOC and set aside the writ court judgment by recording that the same is unsustainable in the eyes of law and dismissed the petition moved by the dealer-landlord accordingly.
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