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THE HIGH COURT OF MADHYA PRADESH

AA-4-2021
(CINEPOLIS INDIA PRIVATE LIMITED VS. D.B. MALLS PVT. LTD. AND OTHERS)

JABALPUR
DATED : 02.07.2021
Heard through Video Conferencing.
Shri D.N. Shukla, learned counsel for the appellant.
Shri Anurag Shrivastava, learned counsel for the respondents.
Heard.
By this appeal under Section 37 of the Arbitration and
Conciliation Act, 1996 (for short ‘the Act’) the appellant has
challenged the order of the Commercial Court dated 06.01.2021
whereby the application under Section 9 of the Act filed by the
appellant has been partly allowed.
The appellant had filed the application under Section 9 of the
Act with the plea that vide lease deed dated 22.02.2010 the
respondents had leased out an area of 47852 sq ft to Fun Multiplex
Private Limited for running a multi-screen multiplex cinema having
six screens and the lease deed was for a period of 10 years with the
renewable clause and subsequently appellant has taken over all the
rights of Fun Cinema. Some dispute had arisen in respect of the
renewal of the lease, therefore, the appellant had sought the interim
relief with the further plea that due to Covid pandemic there was
lockdown and the appellant had suffered the financial loss and the
respondents are now obstructing running of the theater.
The respondents have filed their reply taking the stand that the
lease has already expired and at the renewal stage the appellant is
trying to change the earlier conditions of the lease, therefore, the
dispute has arisen and that the appellant had not paid the rent in spite
of demand notice. Further plea of the respondents is that there is no
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clause in the lease agreement that the rent will not be payable on
account of closer of business due to lockdown.
The court below after considering the respective plea of the
parties and examining the arguments advanced by their counsel has
passed the impugned order directing the respondents not to dispossess
the appellant from the leased premises and not to interfere in his work.
This interim direction is subject to payment of rent of the premises
from the expiry of lease within 30 days from the date of order by
making it clear that the order will come to an end on the execution of
fresh lease or on the appointment of the arbitrator as per clauses 20.1
and 20.2 of the lease deed.
The submission of learned counsel for the appellant is that the
appellant is not liable to make the payment during the period of
lockdown and that the appellant be allowed to continue in possession
without payment of rent as the clause 3.1 of the lease deed contains
the renewal clause, according to which the lease is required to be
renewed.
Opposing the prayer the submission of learned counsel for the
respondents is that the draft lease submitted by the appellant does not
contain the same conditions which were there in the original lease
deed and in terms of clause 3.1 of the lease deed the renewal is
permissible on the same terms. He further submits that there is no
prayer made in application under Section 9 to permit to continue in
possession without payment of rent and that in spite of the relaxation
from October 2020 to April 2021 by the Administration, the appellant
had not chosen to run the multiplex.
We have heard the learned counsel for the parties and perused
the record.
Undisputedly, the lease was for a period of 10 years and the
lease deed was executed on 22.02.2010. The 10 years period of lease
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has come to an end on 22.02.2020. Clause 3.1 of the lease deed which
is relevant for the present controversy reads as under :
“3. TERM
3.1 The term of this Lease Deed shall be for a period of
10 (Ten) years commencing
from the Commencement Date (as defined below)
(“Term”).

Commencement date shall be the date of signing the

lease deed and simultaneously lessor handover the
possession and lessee taking the possession of the
demised premises. Provided further that the Lessee
shall be liable for rent only after lessor obtaining the
cinema operating licenses in the name of lessee and
obtaining the occupation certificate from the
Municipal Authorities for the Mall including
demised premises.

The lessee shall have the option to renew the lease

term for a further term up to 15 years on the same
terms and conditions, except that of the Lock in
period, i.e. Lock in period will not be applicable on
the extend lease terms. The lessee shall give a notice
to the lessor 6 months before the expiry of the term
and in the event the lessee confirms its desire to
extend the term as above the lessor shall have no
right to deny such extension and the parties shall be
bound to execute a fresh lease deed for extending
term. In the event the lessor fails to excute the fresh
lease deed for the extend terms then the lessee can
continue to hold and use the demised premises till
the fresh lease deed is executed.”

As per the aforesaid clause the appellant has the option to renew
the lease for a further term up to 15 years on the same terms and
conditions. The learned counsel for the respondents referring to the
draft lease deed for renewal (Annexure R/3) has pointed out that the
appellant has changed as many as three clauses of the lease deed,
hence there is a dispute about renewal of the lease.
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A perusal of the relief prayed in the application under Section 9

of the Act reveals that the prayer of the appellant was to restrain the
respondents from vacating the premises and further to restrain them
from terminating the lease or from alienating the property to third
party and further direction was sought to immediately sign and renew
the lease deed and permit the petitioner to reopen the multiplex as per
the lease agreement and to restrain the respondents from creating any
destruction or hindrance or obstruction in the use and enjoyment of
the premises. There was no prayer in the application for permission to
run the multiplex without payment of rent nor any such right exists in
favour of the petitioner. It has been pointed out by the learned counsel
for the respondents that from 15.10.2020 to 14.04.2021 there was
relaxation by the local administration by granting permission to run
the multiplexes but the appellant had not opened and run the multiplex
in question during this period.
The Delhi High Court in the matter of Ramanand & others Vs.
Dr. Girish Soni & another passed in RC.REV.447/2017 in the order
dated 21.05.2020 has considered the issue relating to suspension of
payment of rent by the tenant owing to Covid-19 lockdown crisis and
has held that the question of waiver, suspension or any remission in
the rental payments would operate differently for different categories
of agreements. Where there is a contract with the force majeure clause
or any other condition that permit waiver or suspension of the agreed
monthly payment then it would be governed by that but if there is no
contract at all or there is no specific force majeure clause, then the
issue should be dealt with on the basis of the applicable law.
Considering the judgment of the Supreme Court in the matter of
Energy Watchdog v. CERC & Ors., (2017) 14 SCC 80 it has been
held that if the tenant wishes to retain the premises and there is no
clause giving any respite to the tenant, the rent or the monthly charges
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would be payable. Considering Section 57 of the Indian Contract Act

on the issue of frustration of contract, it has been held that a lease is a
complete conveyance though it involves monthly payment and hence
Section 56 cannot be invoked to claim waiver, suspension or
exemption from payment of rent. Considering Section 108 (B) (e) of
the Transfer of Property Act, it has been held that for a lessee to seek
protection under this section there has to be complete destruction of
property, which is permanent in nature due to force majeure event. It
has further been expressed that a tenant has no right to continue and
enjoy the property and seek suspension of rent at the same time. No
force majeure clause or any other clause of the lease deed which
permits suspension of rent in an eventuality like lockdown has been
pointed out in the matter.
The Commercial Court considering the aforesaid relevant
aspects has duly passed a balanced order permitting the appellant to
use the premises subject to payment of rent.
Hence, we are of the opinion that the impugned order does not
suffer from any error and no case for interference is made out. The
appeal is found to be devoid of any merit, which is accordingly
dismissed.

(PRAKASH SHRIVASTAVA) (ARUN KUMAR SHARMA)

JUDGE JUDGE
DV

Digitally signed by
DINESH VERMA
Date: 2021.07.09
15:20:13 +05'30'