Naseema Kar vs Sonamarg Development Authority

This Letters Patent Appeal is directed against the judgment passed by the learned Single Bench in Arbitration Application No. 13/2018, whereby and whereunder the application filed by the petitioner/appellant under Section 9 of the J&K Arbitration and Conciliation Act, 1997, for directing the maintenance of status quo with regard to Island Retreat Park Cafeteria and Kiosks at Srinagar, stands dismissed.

The facts leading to the filing of the instant appeal, put in a nutshell, are that the petitioner/appellant claims that by virtue of license deed dated 8th of August, 2013, executed by the respondents on behalf of the Governor of the State of J&K, she, alongwith one Sajad Ahmad Wani S/o Mohammad younis R/o Khanyar, Srinagar, was allowed and handed over the possession of the assets/ building situated at Hung Sonamarg for operating and conducting Island Retreat Park Cafeteria and Kiosks for a period of five years w.e.f. 2012 upto the month of November, 2017. In terms of the said deed of license, the petitioner/ appellant claims to have been authorized to use the premises as a camping site. It is pleaded that although the said deed of license was initially executed by the respondents jointly in favour of the petitioner/ appellant and the said Sajad Ahmad Wani, but, later on, Sajad Ahmad, within the knowledge and notice from the respondents, relinquished his entire rights and interests in favour of the petitioner/ appellant vide relinquishment deed dated 2nd of September, 2015. It is further submitted that the license was executed by the respondents in favour of the petitioner/ appellant pursuant to him being adjudicated as the highest bidder in response to notice inviting tenders (NIT) vide No. CEO/SDA/NIT/1219-23 dated 17th of December, 2012, after completing all the conditions stipulated by the respondents. It is pleaded that the license deed dated 8th of August, 2013, was executed in favour of the petitioner/ appellant for a stipulated period of five years w.e.f. 8th of January, 2013, but, as stated, she was, for various uncontrollable reasons, prevented to utilize the licensed premises for beneficial use despite the huge bid amount paid by the petitioner/ appellant, coupled with a substantial investment made on the premises by setting up of one or the other facilities thereon. It is also stated that huge loss was caused to the petitioner/ appellant by preventing her to utilize the licensed premises on account of floods and disturbances in the Kashmir Valley and, therefore, she suffered huge losses. Accordingly, the respondents, on being approached by the petitioner/appellant, have neither compensated her nor was she given any relief package. It is claimed that despite having approached the respondents for extension of the license period, the respondents in terms of communication No. CEO/SDA/681 dated 30th of March, 2018, proceeded to convey the decision of the authority to the petitioner/ appellant for extension of the period of license for one season only with 10% escalation against the bid amount subject to the clearance of all previous outstanding. Thereafter, on expiry of the next tourist season, the petitioner/ appellant approached the respondents with a request for extension of the period of license for next five years, which was not accepted. Aggrieved thereby, the petitioner/ appellant approached the respondents for reference of the dispute to the Arbitrator within the ambit of Arbitration agreement between the parties. The respondents, having failed to accede to the request of the petitioner/ appellant for reference of the dispute to the Arbitrator, constrained the petitioner/ appellant to approach the competent Court of law for seeking appointment of an Arbitrator in terms of Section 11 of the Arbitration and Conciliation Act, 1997. Pending decision in the Arbitration proceedings, as stated, the petitioner/ appellant filed the application under Section 9 of the J&K Arbitration and Conciliation Act, 1997, for directing maintenance of status quo before the learned Single Bench. The learned Single Bench, vide the order impugned, has considered the said application of the petitioner/ appellant for grant of interim relief and, on consideration with the support of the law applicable to facts and circumstances of the case, has dismissed the same with the observation that the relief claimed in the said application had the propensity of granting of the main relief which, ultimately, may or may not be granted by the arbitral Tribunal, coupled with the fact that the same would result in reviving a contract which has already come to an end.

We have heard the learned counsel for the parties, perused the record and considered the matter.

The main plank of the argument of the learned counsel for the petitioner/ appellant is that the learned Single Bench has, while passing the impugned order, not appreciated the fact that in the process of granting and restricting extension of previous license by a period of one season with 10% escalation against the bid amount, the respondents had completely ignored the relevant facts and circumstances of the case, as projected by the Chief Executive Officer in his recommendations dated 31st of September, 2017, which, very strongly, justified the extension for a further period of five years.

At the outset, what requires to be stated herein this case is that the petitioner/ appellant, through the medium of the Arbitration application filed before the learned Single Bench as well as in the instant appeal before us, is, in essence, seeking extension of the period of license which has come to an end. In our opinion, a Court cannot direct extension of period of a license or lease where it is for a fixed period. For instance, if a license or lease is granted for the period from 1st of January, 2019 till 31st of December, 2019, the Court cannot direct that the period of the said license or lease should be extended beyond 31st of December, 2019, merely because for a part of this period, the licensee or lessee was prevented, for reasons beyond his/ her control, to operate. If the licensee or lessee was prevented to operate for a part of the period of the license or lease, then, in such eventuality, his/her remedy is to get refund of proportionate amount of license or lease fee or compensation for any damage he/she might have suffered, but the period of license or lease cannot, certainly, be extended by the Court.

No doubt, on sympathetic consideration, the respondents extended the period of license in favour of the petitioner/ appellant for one tourist season, but, in our opinion, the aforesaid decision does not, in any manner whatsoever, lay down any principle/ precedent that a Court can extend the period of license or lease. It is entirely for the authorities to decide for what period a license or lease is to be granted and it is not open to the Court to extend the period of license or lease.

Law is no more res integra on the subject that Courts have to maintain judicial restraint and cannot encroach into the domain of the Executive or the Legislature. A similar view was expressed by a Division Bench of the Madras High Court in case titled 'Director General of Foreign v. R. B. & Sons', reported in '2004 (5) CTC 696'.

In view of the preceding analysis, we are of the view that the learned Single Bench has, on proper appreciation of the attending facts and circumstances of the case and after applying the relevant case law, rightly rejected the contention of the petitioner/ appellant by dismissing the application filed under Section 9 of the J&K Arbitration and Conciliation Act, 1997, for grant of ad interim relief. That being so, we do not find any reason to interfere with the judgment of the learned Single Bench, as a sequel thereto, the instant appeal shall stand dismissed in limine alongwith the connected IA.