Licensee challenged dismissal of its Section 34 petition against an arbitral award rejecting extension claims and awarding damages for overholding. Court held disputes were contractual and arbitrable, agreement not void, no excess of jurisdiction or public policy violation; appeal dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
versus
DELHI TOURISM & TRANSPORTATION DEVELOPMENT CORPORATION LTD. .....Respondent Through: Mr. Sandeep Prakash Aggrawal, Sr. Adv. along with Ms. Sujata Kashyap, Ms.Tanya Chanda and Ms. Ishika Rawat, Advocates with Mr. Kapil Chaturvedi (Assistant Legal Manager)
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR
J U D G M E N T
ANIL KSHETARPAL, J.
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by the Appellant, challenging the Arbitral Award dated 20.04.2015 came to be dismissed.
FACTUAL MATRIX
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years. The Respondent filed a counter-claim seeking damages for alleged unauthorized occupation, including loss of revenue and penalties imposed by the Municipal Corporation of Delhi (“MCD”). On 26.08.2011, the MCD sealed the premises on the ground that the property could not be lawfully used for running a banquet hall or other commercial activities.
“1. Whether the claimant, in terms of the lease agreement dated 01.10.2004 executed between the claimant and the respondent regarding lease of the premises located at Azad Hind Gram Tourist Complex, Rohtak Road, Delhi for a period of 5 years with effect from 15-09-2004 and which period expired on 14.09.2009, is entitled to further extension of lease of the said premises for a period of 5 years?
2. If yes, from which date and on what terms and conditions?
3. Relief?
Counter Claim:
1. Whether the respondent is entitled to damages @ Rs.3 lacs per month w.e.f. 14.12.2009, the amount of revenue the premises would fetch at the current market value and damages @ Rs. 20,000/- for the loss of revenue?
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2. Whether the respondent is entitled to cost/penalty imposed by MCD for desealing the premises?
3. Whether the respondent is entitled to the interest on the above amounts and if yes, for which period and at what rate?
4. Relief?”
i. Rs. 1,56,250/- plus service tax per month from 15.12.2009 to 14.09.2010;
ii. Rs. 2,25,000/- plus service tax per month from 15.09.2010 to 03.02.2014;
iii. Rs. 3,10,000/- plus service tax per month from 04.02.2014 till the date of handing over possession to the Respondent;
iv. Interest at 9% per annum on amounts not paid within two months of the Award.
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wrongly awarded license fees and damages for periods when the premises were sealed by the MCD. It was further contended that the License Agreement dated 01.10.2004 was void and unenforceable as being inconsistent with an earlier lease executed in favour of the Respondent, and that the Arbitral Award was contrary to the public policy of India.
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O.M.P. No. 430/2015 was dismissed with no order as to costs.
15. CONTENTIONS OF THE APPELLANT
15.1. Learned senior counsel for the Appellant submitted that the learned Arbitrator exceeded his jurisdiction in entertaining and allowing the counter-claims of the Respondent, which, according to the Appellant, pertained to matters falling within the exclusive domain of the PP Act. It was urged that disputes relating to possession, eviction and recovery of occupation charges from public premises are non-arbitrable, and therefore, the Arbitral Tribunal lacked competence to adjudicate such issues.
15.2. It was contended that the License Agreement entered into between the parties was itself contrary to and in conflict with the Lease Deed dated 27.12.1996 executed by the Gaon Sabha authorities in favour of the Respondent, and therefore, the License Agreement was void, unenforceable and obtained by misrepresentation. On this premise, it was argued that the Arbitral Award, being founded on an illegal and vitiated contract, is liable to be set aside.
15.3. It was further argued that the learned Arbitrator had no authority in law to determine or award compensation or damages, as such determination falls outside the scope of the arbitration clause. It was contended that the Arbitrator could not assume powers that were never conferred under the contract, and therefore the Award travelled beyond the reference and is liable to be annulled.
15.4. Learned senior counsel additionally submitted that the
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quantification of amounts under the Award is erroneous, insofar as it includes the period during which the premises stood sealed by the Municipal Corporation of Delhi. It was urged that the sealing occurred due to alleged misuse, and that the Appellant could neither utilise the premises nor conduct business during such period; consequently, no liability to pay licence fee or damages could arise for that duration.
15.5. It was further urged that the Appellant was entitled to an extension of the License, based upon assurances allegedly given by the Respondent, and that the continued payments made by the Appellant were in reliance upon such representations. It was submitted that the Arbitrator failed to consider this aspect and rejected the claim in an arbitrary manner.
15.6. It was also submitted that the Appellant has already paid a sum of Rs. 1.4 crores under the License Agreement, and in any event, the possession of the premises has been handed over to the Respondent, including during proceedings arising out of contempt. Therefore, it was argued that no further financial liability could survive against the Appellant, and the Award directing further payment is inequitable and unsustainable.
15.7. Learned senior counsel for the Appellant also relied on several judicial authorities to contend that the counter-claims were nonarbitrable or that the Arbitrator exceeded jurisdiction. The cases cited include:
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Amusement Ltd .1 , for the proposition that disputes under the Public Premises Act may fall outside arbitrable domain.
ii. M/s Fortune Grand Management Pvt Ltd v. Delhi Tourism & Transport Dev. Corp .2 , regarding conduct of Estate Officer under the PP Act and limits on arbitration jurisdiction. iii. S.S. Con-Build Pvt. Ltd. v. DDA3 , on arbitrability of disputes under special statutes iv. Kanodia Infratech Ltd. v. Dalmia Cement (Bharat) Ltd.4 , concerning jurisdiction of arbitrator to try disputes arising under special statutes or agreements.
v. M/s C J International Hotels Ltd. v. NDMC5 , on the scope of Section 20 of the Arbitration Act in determining matters within reference. vi. Gayatri Balasamy v. M/s ISG Novasoft Technologies Ltd. , on powers of the Court to modify an award under the Arbitration Act and limitation of judicial interference.
The Appellant submitted that, on the basis of these authorities, the counter-claims for arrears of license fees, damages, and occupation charges under the License Agreement were non-arbitrable, or in the alternative, the Arbitrator exceeded jurisdiction, awarded amounts beyond the reference, and thereby violated the public policy of India.
15.8. Lastly, it was argued that the learned Single Judge erred in dismissing the petition under Section 34 of the AC Act, without
1 2007 (142) DLT 342
2 2016 4 ARB LR 325
3 2023 SCC Online Del 2633
4 2021 284 DLT 722
5 I.A. No. 2957/90 in Suit 1193/90
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appreciating that the Award suffers from patent illegality, jurisdictional errors, and violation of public policy, particularly where the dispute pertains to public premises and is alleged to be nonarbitrable.
16. CONTENTIONS OF THE RESPONDENT
16.1 Per contra , learned senior counsel for the Respondent submitted that the present Appeal is a meritless attempt to reopen issues that stand conclusively determined by the learned Arbitrator, who acted strictly within the contours of the License Agreement, the pleadings, and the evidentiary record. It was contended that the Award is a reasoned determination based on contractual obligations voluntarily undertaken by the Appellant, and therefore, the scope of challenge is extremely narrow, particularly in an Appeal under Section 37 of the AC Act, where the Court cannot reassess evidence, reinterpret contractual terms, or substitute its own view merely because another view is possible.
16.2 It was submitted that the Appellant has attempted to create a false narrative of lack of jurisdiction, whereas the Appellant not only invoked arbitration but actively participated in the proceedings, filed claims and documents, led evidence, cross-examined witnesses, and never raised a jurisdictional objection under Section 16 of the AC Act. It was argued that having submitted to jurisdiction and contested the matter on merits, the Appellant is estopped from challenging the Arbitrator‟s competence after an unfavourable Award. Reliance was placed on the principle that jurisdictional objections must be raised at
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the earliest and cannot be introduced belatedly as an afterthought.
16.3 The Respondent further submitted that the contention that the dispute falls within the exclusive domain of the PP Act is wholly misconceived. It was argued that the present proceedings did not concern eviction, removal, or recovery of possession under the PP Act, and the Respondent never invoked statutory machinery under the PP Act. Rather, the disputes adjudicated pertained to arrears of licence fee, unpaid contractual dues, damages and occupation charges for continued use, and consequences of overholding after expiry of licence. Such issues, it was submitted, are purely contractual and squarely arbitrable. The Appellant cannot artificially re-characterise the dispute to escape monetary liability.
16.4 It was also contended that the counter-claims adjudicated by the Arbitrator were within the scope of the arbitration clause and arose directly from breaches by the Appellant, including unauthorised commercial exploitation, non-payment of agreed charges, and continued occupation despite expiry of the licence period. The attempt to portray the counter-claims as ultra vires or barred by statute was described as an untenable and legally unsustainable device to deny dues payable under the Agreement.
16.5 The Respondent submitted that the plea relating to sealing of the premises by MCD is factually incorrect and legally irrelevant. It was argued that the sealing arose from unauthorised activities attributable to the Appellant; that the Appellant continued to benefit commercially; that sealing did not extinguish contractual payment
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obligations, and that the Arbitrator, after assessing evidence, rejected the sealing-based defence. It was emphasised that the Appellant seeks a re-appreciation of factual findings, which is impermissible under Section 34 of the AC Act and a fortiori under Section 37 of the AC Act.
16.6 It was contended that no contractual or equitable right of extension ever arose, that the licence expired by efflux of time, and that any continuation of possession thereafter was illegal. It was argued that the Appellant continued to operate, earn revenue, and utilise the premises even after expiry, and therefore liability for damages and mesne profits necessarily followed. The Arbitrator‟s findings on this aspect, being based on documents and conduct, cannot be interfered with.
16.7 It was further submitted that the Appellant has already admitted payments made and possession handed over, which reinforces that the dispute relates to quantification of dues and not to rights in land or eviction proceedings. It was argued that the Appellant cannot rely on partial performance to negate remaining liabilities.
16.8 Learned senior counsel for the Respondent further submitted that reliance placed by the Appellant on non-arbitrability under the PP Act is misconceived. It was contended that the Supreme Court in Central Warehousing Corporation v. Sidhartha Tiles & Sanitary Pvt. Ltd .6 has held that contractual disputes, including issues of renewal and enhanced demands arising during the subsistence of a
6 2024 SCC OnLine SC 2983
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contract, are distinct from proceedings under the PP Act, which only governs eviction of unauthorized occupants. Consequently, the dispute in the present case, relating to license fee, overholding, and damages, is squarely arbitrable.
ANALYSIS & FINDINGS
“13. Re: Whether the Public Premises Act, 1971 overrides the Arbitration and Conciliation Act, 1996: This submission has to fail.
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The reasons are simple and straight forward. The dispute that is raised in the Section 11 application relate to promises and reciprocal promises arising out of the agreement dated 26.09.2012. The right of renewal as well as the legality and propriety of the enhanced demand arose during the subsistence of the agreement. It will be on the interpretation, construction and the obligations arising out of the agreement that the respondent's claim rests. On the other hand, The Public Premises Act authorises the ejectment of a tenant in unauthorised occupation of public premises and for consequential directions. The original lease as it were, validly subsisted till 11.09.2015 and the dispute between the parties related to the period commencing from 12.09.2012 to 11.09.2015, when the lease expired. The Public Premises Act would not even cast a shadow on this period. In so far as the dispute relating to this right of renewal is concerned, it depends on the terms of the agreement. The Public Premises Act neither bars nor overlaps with the scope and ambit of proceedings that were initiated under the Arbitration and Conciliation Act.”
Applying the same principle, the disputes before the Arbitral Tribunal pertained to arrears of licence fees, overholding, damages, and quantification of occupation charges under the License Agreement. No proceedings under the PP Act were invoked by the Respondent, and the issues adjudicated were contractual in nature. Consequently, the plea of non-arbitrability is unsustainable.
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be perverse or contrary to the record. None of these decisions lay down any proposition that monetary claims for licence fee, occupation charges, damages for overholding, or quantification of dues arising from continued use of premises after expiry of a licence, fall outside the scope of arbitration. On the contrary, the consistent judicial position, reaffirmed by the Supreme Court in Central Warehousing Corporation (supra), is that such disputes remain purely contractual and are capable of being adjudicated by an Arbitrator. Accordingly, the reliance placed by the Appellant on the aforesaid authorities is misplaced and does not create any ground to interfere with the Award or to fault the conclusion reached by the learned Single Judge.
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there is no basis to disturb this finding. Therefore, the contention that the License Agreement is void on account of conflict with an earlier deed is legally untenable and cannot constitute a ground to interfere with the Award under Section 34, let alone Section 37 of the AC Act. In addition, admittedly the Appellant has successfully carried out his business during the entire period of the lease and 03 months thereafter.
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Respondent is also unsustainable. The record demonstrates that the Appellant requested extension by formal communication on 28.05.2009, and the Respondent granted only a three-month extension. The Arbitral Tribunal examined the conduct of the parties, the License Agreement, and communications exchanged, and held that no contractual or equitable obligation arose in favour of the Appellant for a further five-year extension. Verbal assurances, uncorroborated by any written commitment, cannot override the express terms of a validly executed agreement. The Appellant‟s reliance on such alleged assurances, therefore, does not provide a ground to interfere with the Award.
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indication that the Arbitrator acted in a manner contrary to law, or disregarded fundamental principles of justice. The challenges raised by the Appellant essentially seek re-appreciation of evidence and reassessment of contractual interpretation, which is impermissible in proceedings under Section 34 or Section 37 of the AC Act.
CONCLUSION
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ANIL KSHETARPAL, J.
HARISH VAIDYANATHAN SHANKAR, J. DECEMBER 03, 2025 s.godara/pal
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3 issues framed by the court
Whether disputes over licence fee arrears, damages and occupation charges under a licence agreement over public premises are arbitrable despite the Public Premises (Eviction of Unauthorised Occupants)
Whether the License Agreement dated 01.10.2004 was void as conflicting with the Respondent's earlier lease deed.
Whether the Arbitral Award exceeded jurisdiction or violated public policy so as to warrant interference under Section 34 or Section 37.
Colour shows how this judgement treated each authority
Indian Trade Promotion Organization v. International Amusement LtdReferred
2007 (142) DLT 342 · Who else cites this
M/s Fortune Grand Management Pvt Ltd v. Delhi Tourism & Transport Dev. Corp.Referred
2016 4 ARB LR 325
S.S. Con-Build Pvt. Ltd. v. DDAReferred
2023 SCC Online Del 2633 · Who else cites this
Kanodia Infratech Ltd. v. Dalmia Cement (Bharat) Ltd.Distinguished
2021 284 DLT 722 · Who else cites this
M/s C J International Hotels Ltd. v. NDMCReferred
I.A. No. 2957/90 in Suit 1193/90
Gayatri Balasamy v. M/s ISG Novasoft Technologies Ltd.Referred
Gayatri Balasamy v. M/s ISG Novasoft Technologies Ltd.
Central Warehousing Corporation v. Sidhartha Tiles & Sanitary Pvt. Ltd.Followed¶18
2024 SCC OnLine SC 2983 · Who else cites this
5 provisions across 1 enactments
M/s Kapoor Tent & Caterers thr. its partner, Sh. Vipin Kapoor
Delhi Tourism & Transportation Development Corporation Ltd.
Anil Kshetarpal
Harish Vaidyanathan Shankar
As recorded by the court registry
An appeal to a Division Bench against an order made by a single judge on the original side of the High Court.
Judgements on the same questions, provisions and authorities, from every court
